[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2014

                              ----------                              


                         TUESDAY, JUNE 11, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Richard J. Durbin (chairman) 
presiding.
    Present: Senators Durbin, Leahy, Mikulski, Murray, Reed, 
Landrieu, Pryor, Cochran, Shelby, Collins, and Graham.

                         DEPARTMENT OF DEFENSE

                   Office of the Secretary of Defense

STATEMENT OF HON. CHUCK HAGEL, SECRETARY OF DEFENSE
ACCOMPANIED BY HON. ROBERT HALE, UNDER SECRETARY OF DEFENSE, 
            COMPTROLLER


             OPENING STATEMENT OF SENATOR RICHARD J. DURBIN


    Senator Durbin. Good morning and welcome.
    The subcommittee meets this morning to receive testimony on 
the fiscal year 2014 budget for the Department of Defense 
(DOD).
    And I am pleased to welcome the Secretary of Defense and 
our former colleague, the Honorable Chuck Hagel--thank you for 
being here, Chuck--Chairman of the Joint Chiefs of Staff, 
General Dempsey; and Bob Hale, the Comptroller of the 
Department of Defense.
    We are going to speak today about budgets and, more 
importantly, about people. All of the services' secretaries and 
chiefs have appeared before the subcommittee this year and have 
expressed great concern over the impact of sequestration, 
particularly how the size and pace of spending reductions have 
the potential to degrade our Nation's defense. Sequester, the 
increase in cost of fuel, shortfalls in overseas contingency 
operation (OCO) accounts have reduced the Department's 
operations and maintenance accounts by nearly $26 billion in 
this fiscal year. The Department's recent omnibus reprogramming 
that the subcommittee is reviewing could offset about $7.3 
billion of the OCO shortfall, but the Army would still have a 
$3.5 billion bill for the war in Afghanistan, with limited 
flexibility in paying it. I would like to know the options that 
are being considered to fill this gap, as well as more detail.
    For fiscal year 2014, the President's budget requests 
$515.6 billion in base funding, $79.5 billion for OCO. 
Secretary Hagel, you initiated a Strategic Management and 
Choices Review to examine options for how the Department would 
absorb the approximately $52 billion in additional cuts under 
sequestration, and I want to hear an update today and I am sure 
I will. We cannot solve the budget issues without being smarter 
and without making certain that we have spending cuts that are 
reasonable.
    Two weeks ago, I discussed the Army's track record on 
acquisition with Secretary McHugh and General Odierno, an 
average of $1 billion spent every year for decades on programs 
that were later canceled.
    Tomorrow, I am holding a hearing on the tuition assistance 
program, again to make sure that the Department's spending is 
focused on getting the best bang for the buck.
    Next week, I am holding a hearing on the Joint Strike 
Fighter so that we can have a clear understanding of where this 
very expensive program is headed.
    Quite simply, we do not have the funds for business as 
usual if we also wish to make investments across the Government 
for a competitive, healthy, educated workforce. I know you 
agree, and the subcommittee is committed to working with you to 
encourage this.
    I also want to hear from you on personnel, people. General 
Dempsey, you said last year at the National Press Club if we do 
not get the people right, the rest of it will not matter. That 
says it all from where I am sitting.
    This weekend, I attended a freedom salute ceremony for a 
National Guard unit in my hometown of Springfield, Illinois. 
They just returned from theater gateway operations in Kuwait. 
It was a great illustration of why people are so important. In 
a little over 9 months, 10 soldiers took care of the needs of 
more than 100,000 servicemembers. They also saw a little bit of 
everything, redeployments, medical issues, sexual assault 
cases, and it was up to them to be leaders in the moment. And 
they were. We are so proud of the work that is being done by 
all of our military, and today I would like to especially 
salute the Guard and Reserve units who have really taken up the 
responsibility so admirably.
    That leadership is what we need to maintain, but we have 
many, many challenges. How do we retain the most skilled 
leaders across each of the services when we shrink personnel? 
How do we preserve the Guard's tremendous value as an 
operational reserve? For instance, the 182nd Airlift Wing in 
Peoria is about to receive its sixth--sixth--outstanding unit 
award since 9/11. During the last 2 years, supporting 
operations in Afghanistan, it has conducted--this National 
Guard unit--3,300 combat missions while maintaining an 
exceptional 94.7 percent mission capable rating.
    The issue of suicide. Last year, we saw deaths by suicide 
outstrip the number of troop combat deaths. In 2013, there was 
a suicide every 18 hours across our force.
    Finally, sexual assault. This issue really threatens to 
undermine basic levels of trust in the military between 
personnel and trust in commanders to maintain discipline. I 
know neither of you take these incidents lightly, but the time 
for action is long overdue. We need a commitment to change the 
culture.
    There was a story that came back with this National Guard 
unit that was activated in Kuwait. It was a story of a young 
woman who was alleging, as a member of our armed services, that 
she was a victim of sexual assault. She was transferred from 
her forward operating base (FOB) to another unit before she was 
being sent back to the States to testify. The treatment she 
received during that transfer was awful. She was placed in a 
living arrangement where she literally had to walk through the 
men's latrine to get to the women's latrine. This sexual 
assault victim really was shattered by the experience. And it 
was noteworthy that the prosecutor in the case said that the 
first kind person she ran into was from this National Guard 
unit who met with her in Kuwait and tried to steady her nerves 
as she faced one of the biggest challenges of her life. This 
culture has to change.
    These concerns cannot be taken to say that we have a broken 
force. We don't. We have the best and strongest military in the 
world. I am so proud to play a small role here in this 
subcommittee to make sure they have what is necessary to be 
successful in keeping America safe.
    We have many questions. Before I turn it over to Senator 
Cochran for opening remarks, I want to sincerely thank both you 
as Senator and now Secretary Hagel, General Dempsey, and Mr. 
Hale for your service to our Nation.
    Senator Durbin. Senator Cochran.


                   STATEMENT OF SENATOR THAD COCHRAN


    Senator Cochran. Mr. Chairman, thank you. I am pleased to 
join you in welcoming the distinguished Secretary of Defense 
and the Chairman of the Joint Chiefs of Staff to review 
Department of Defense's fiscal year 2014 budget request.
    In the current fiscal environment and the uncertainty of 
future funding levels, we need to know the consequences of 
sequestration and its impact on the Department of Defense and 
ultimately on our national security interests.
    Our subcommittee has learned from the service chiefs who 
have testified and other Department of Defense officials about 
the challenges facing our military today and specifically in 
fiscal year 2014.
    We thank you for your service and we welcome your 
suggestions.
    Senator Durbin. At this point, I would like to recognize 
Secretary of Defense Hagel for an opening statement. Your 
entire written statement will be made a part of the record.


                 SUMMARY STATEMENT OF HON. CHUCK HAGEL


    Secretary Hagel. Chairman Durbin, Ranking Member Cochran, 
distinguished members of the subcommittee, thank you for the 
opportunity to discuss the President's fiscal year 2014 budget 
request for the Department of Defense.
    I also appreciate this subcommittee's continued support of 
our men and women in uniform and our civilian workforce and 
their families. As we discuss numbers, budgets, and strategic 
priorities, we will not lose sight of these men and women 
serving across the globe. As you all know, their well-being 
depends on the decisions we make here in Washington.
    The President has requested $526.6 billion for the 
Department of Defense's fiscal year 2014 base budget and $79.4 
billion for overseas contingency operations. My written 
statement, Mr. Chairman, as you know, contains details on both 
budget requests.
    This morning, allow me to very briefly focus on three areas 
before I take your questions: First, the continued budget 
challenges facing the Department in fiscal year 2013, as a 
result of sequestration, as you have noted as well as Senator 
Cochran; second, the Department's fiscal year 2014 budget 
request; and third, how the Department is preparing for the 
future budget uncertainty and the prospect of further reduced 
resources as a result of sequestration.
    As you all know, the Department has been forced to 
implement deep and abrupt cuts in the current fiscal year 
because of sequestration. According to the latest guidance from 
the Office of Management and Budget, the Department must cut 
$37 billion in spending through the remainder of this fiscal 
year. With our internal decision to shift the impact of 
sequestration away from those serving in harm's way and force 
readiness, the cuts fall heavily on DOD's accounts that train 
and equip those who will deploy in the future.
    The Department is also experiencing higher wartime costs 
than expected. As a result of these factors, the Department is 
facing a shortfall of more than $30 billion in our operations 
and maintenance account for fiscal year 2013. To deal with this 
shortfall, the Department has cut back sharply on facilities 
maintenance, instituted hiring freezes, cut overhead spending, 
reduced important but lower priority programs, directed 
furloughs of nearly 700,000 civilian employees, and submitted, 
as you have noted, a $9.6 billion reprogramming request to 
Congress. And we ask this subcommittee for your assistance in 
providing rapid review and approval of this critical 
reprogramming request.
    Given the scale of this shortfall, the reprogramming and 
other steps we have taken to cut non-essential spending are not 
enough. While we have protected spending to sustain the war 
effort and defend America's vital strategic interests, the 
Department's day-to-day activities will be significantly 
disrupted for the remainder of this fiscal year. Each of the 
military services has begun to significantly reduce training 
and maintenance of non-deployable operating forces. As you have 
both noted, you have had the Chiefs before this committee, and 
they have made some very significant, detailed presentations 
and accounted for these cuts.
    For example, the Army has stopped rotations at its key 
combat training centers for all but deploying units. More than 
a dozen combat coded Air Force squadrons either already have or 
will soon stop flying, and the Navy has curtailed many 
deployments.
    To avoid even more significant reductions to military 
readiness, I directed furloughs of up to 11 days for most of 
the Department's 800,000 civilian personnel. Mr. Chairman, I 
made this decision very reluctantly. I made it reluctantly 
because I recognize the significant hardship this places on 
civilian personnel across our country and especially on their 
families. But the current budget environment is requiring 
difficult decisions and options.
    Now, let me turn to fiscal year 2014. The President's 
fiscal year 2014 budget continues to implement the $487 billion 
in spending reductions over the next 10 years agreed to in the 
Budget Control Act of 2011. If the sequester-related provisions 
of the Budget Control Act are not changed, fiscal year 2014's 
funding for national defense programs will be subject to an 
additional $52 billion reduction in DOD funding. And if there 
are no changes, continued sequestrations will result in roughly 
$500 billion in additional reductions to defense spending over 
the next 10 years.
    The President's fiscal year 2014 budget replaces 
sequestration and gives the Department the time and the 
flexibility to plan and implement spending reductions wisely 
and responsibly. In particular, this budget enables the 
Department to support troops still at war in Afghanistan, 
protect readiness, modernize the military's aging weapons 
inventory in keeping with the President's strategic guidance, 
and sustain a high quality of the All-Volunteer Force that you 
noted that was in General Dempsey's speech at the National 
Press Club.
    This budget also continues the Department's approach of the 
last couple of years of targeting growing costs in support 
areas like overhead, acquisition, and pay and benefits. Over 
the next 5 years, DOD has identified $34 billion in new savings 
across these categories. This includes weapons program 
restructuring and terminations that will achieve $8.2 billion 
in savings, slowdowns in military construction, and reductions 
in other lower priority programs.
    Our military compensation package preserves DOD's world-
class pay and benefits while putting our military on a more 
sustainable path for the future. It includes changes to the 
TRICARE program to bring the beneficiaries' cost share closer 
to the levels envisioned when the program was first 
implemented.
    The Department of Defense also must be able to eliminate 
excess infrastructure. The President's fiscal year 2014 budget 
request authorizes for one round of base realignment and 
closure (BRAC) in 2015. BRAC, as well as recognize, is an 
imperfect process, and there are upfront costs. But in the long 
term, there are significant savings. The previous rounds of 
BRAC are saving $12 billion annually. We cannot justify to 
continue funding unnecessary infrastructure when we are 
reducing our force structure. Since 2003, DOD has divested more 
than 100 foreign bases and operations, and we are on schedule 
to close or consolidate over 20 more overseas operations.
    Although there are clearly opportunities to achieve 
significant savings by improving efficiency, consolidations and 
reducing overhead, the scale--the scale--of the current 
spending reductions will also require cuts and changes to 
military operations. The fiscal year 2014 budget request seeks 
to further align budget programs with the President's Defense 
Strategic Guidance. While continuing to reduce the size of the 
ground forces and retire aging aircraft and ships, this budget 
invests in key elements of our defense strategy, including 
implementing our rebalance to the Asia-Pacific region, 
maintaining a safe, secure, and effective nuclear stockpile, 
increasing investment in cyber capabilities, and sustaining the 
growth of special operations forces.
    Finally, this budget seeks to preserve a combat-ready force 
and sustain the high quality All-Volunteer Force.
    Last point. The fiscal year 2014 budget reflects DOD's best 
efforts to match ends, ways, and means during a period of very 
intense fiscal uncertainty. It is obvious that significant 
changes to the Department's topline spending would require 
changes to this budget plan.
    Consequently, I directed, as you have noted, a Strategic 
Choices and Management Review in order to assess the potential 
impact of further reductions and plan for those continued 
reductions. I have received the initial internal results of 
this review, and I am currently reviewing those options and 
those choices.
    The Department of Defense will continue to find new ways to 
operate more affordably, efficiently, and effectively. However, 
as I have stated, continued cuts on the scale and the timeline 
of sequestration will require significant reductions in 
military capabilities and the scope of our activities around 
the world.


                           PREPARED STATEMENT


    The President's fiscal year 2014 budget sustains our 
military strength in an environment of constrained resources, 
giving DOD the time and flexibility to make the necessary 
reductions and adjustments over a 10-year period. Hard choices, 
Mr. Chairman, will have to be made over these next few years. 
In the past, many modest reforms to personnel and benefits, 
along with efforts to reduce infrastructure and restructure 
acquisition programs, were met with fierce political resistance 
and they were never implemented. We are now in a different 
fiscal environment. New realities are forcing us to more fully 
confront these tough and painful choices, and to make the 
reforms necessary to put this Department on a path to sustain 
our military strength for the 21st century and meet these new 
and complicated threats, we will have to do things differently. 
This will require the continued partnership of Congress.
    Thank you.
    [The statement follows:]

                 Prepared Statement of Hon. Chuck Hagel

    Chairman Durbin, Ranking Member Cochran, members of the 
subcommittee, thank you for this opportunity to discuss the President's 
fiscal year 2014 budget request for the Department of Defense.
    Allow me to express my appreciation to this subcommittee for its 
continued support of our men and women in uniform and our civilian 
workforce. They are doing tremendous work and making great sacrifices, 
along with their families, as they have for the more than 11 years our 
Nation has been at war. Whether fighting in Afghanistan, patrolling the 
world's sea lanes, standing vigilant on the Korean peninsula, supplying 
our troops around the world, or supporting civil authorities when 
natural disasters strike, they are advancing America's interests at 
home and abroad. Their dedication and professionalism are the 
foundation of our military strength.
    As we discuss numbers, budgets, and strategic priorities, we will 
not lose sight of these men and women serving across the globe. As you 
all know, their well-being depends on the decisions we make here in 
Washington.

                      FISCAL AND STRATEGIC CONTEXT

    Today, the Department of Defense faces the significant challenge of 
conducting long-term planning and budgeting at a time of considerable 
uncertainty--both in terms of the security challenges we face around 
the world and the levels of defense spending we can expect here at 
home.
    Even as the military emerges--and recovers--from more than a decade 
of sustained conflict in Iraq and Afghanistan, it confronts an array of 
complex threats of varying vintage and degrees of risk to the United 
States, to include:
  --the persistence of violent extremism throughout weak states and 
        ungoverned spaces in the Middle East and North Africa;
  --the proliferation of dangerous weapons and materials;
  --the rise of new powers competing for influence;
  --the risk of regional conflicts which could draw in the United 
        States; and
  --faceless, nameless, silent and destructive cyberattacks.
    Meanwhile, the frenetic pace of technological change and the spread 
of advanced military technology to state and non-state actors pose an 
increasing challenge to America's military.
    This is the strategic environment facing the Department of Defense 
as it enters a third year of flat or declining budgets. The onset of 
these resource constraints has already led to significant and ongoing 
belt-tightening in military modernization, force structure, personnel 
costs, and overhead expenditures. It has also given us an opportunity 
to reshape the military and reform defense institutions to better 
reflect 21st century realities, as I outlined in a speech in April at 
the National Defense University.
    The process began under the leadership of Secretary Gates, who 
canceled or curtailed more than 30 modernization programs and trimmed 
overhead costs within the military services and across the defense 
enterprise. These efforts reduced the Department's topline by $78 
billion over a 5-year period, as detailed in the Department's fiscal 
year 2012 budget plan.
    The realignment continued under Secretary Panetta, who worked 
closely with the President and the Joint Chiefs of Staff to craft new 
defense strategic guidance and a fiscal year 2013 defense budget plan 
which reduced the Department's topline by $487 billion over the course 
of a decade. Even while restructuring the force to become smaller and 
leaner and once again targeting overhead savings, this budget made 
important investments in the new strategy--including rebalancing to 
Asia and increasing funding for critical capabilities such as cyber, 
special operations, global mobility, and unmanned systems.
    The President's request of $526.6 billion for the Department of 
Defense's base budget for fiscal year 2014 continues to implement the 
President's Defense Strategic Guidance and enhances the Department's 
efforts at institutional reform. Most critically, it sustains the 
quality of the all-volunteer force and the care we provide our 
servicemembers and their families, which underpins everything we do as 
an organization. The accompanying OCO request for $79.4 billion 
provides the resources to continue the responsible drawdown in 
Afghanistan and restore equipment damaged or worn out by more than a 
decade of war.
    DOD's base-budget request for fiscal year 2014 does not reflect the 
effects of sequester cuts that would occur if the Budget Control Act 
(BCA) is not changed. However, the President's budget includes balanced 
deficit reduction proposals that are more than sufficient to allow 
Congress to meet BCA goals and then repeal sequester-related 
reductions.

                     CHALLENGES IN FISCAL YEAR 2013

    Before discussing the particulars of this budget request, however, 
allow me to address the profound budget problems facing the Department 
in fiscal year 2013 and beyond as a result of sequester--because they 
have significantly disrupted operations for the current fiscal year and 
greatly complicated efforts to plan for the future. The Congress and 
the Department of Defense have a responsibility to find answers to 
these problems together--because we have a shared responsibility to 
protect our national security. DOD is going to need the help of 
Congress to manage through this uncertainty.
    The fiscal year 2013 DOD Appropriations bill enacted by the 
Congress in March addressed many urgent problems by allocating DOD 
funding more closely in line with the President's budget request, 
giving the Department authorities to start new programs, and allowing 
us to proceed with important military construction projects. 
Nonetheless, the bill still left in place the deep and abrupt cuts 
associated with sequester--some $37 billion in spending reductions. 
With military pay and benefits exempt from the sequester, and our 
internal decision to shift the impact of sequestration away from those 
serving in harm's way, the cuts fall heavily on DOD's operations, 
maintenance and modernization accounts that we use to train and equip 
those who will deploy in the future.
    Furthermore, the military is experiencing higher wartime operating 
tempos, and higher transportation costs than expected when the budget 
request was formulated more than a year ago. As a result of all these 
factors, the Department is now facing a shortfall of more than $30 
billion in our operation and maintenance (O&M) budget for fiscal year 
2013.
    The Department has been doing everything possible to reduce this 
shortfall while ensuring we can defend the Nation, sustain wartime 
operations, and preserve DOD's most critical asset--our world-class 
civilian and military personnel. To that end, we have cut back sharply 
on facilities maintenance, instituted a hiring freeze, cut overhead and 
all non-essential spending, reduced many other important but lower 
priority programs, and worked to shift funds from investment to O&M 
accounts.
    Still, these steps have not been enough to close the shortfall. 
While we have protected spending to sustain the war effort and defend 
America's vital strategic interests, the Department's day-to-day 
activities will be significantly disrupted for the remainder of the 
fiscal year. Each of the military services has begun to significantly 
reduce training and maintenance of non-deployed operating forces--steps 
that are having effects on military readiness.
    Specifically:
  --The Army has stopped rotations at its key combat training centers 
        for all but deploying units. By the end of the year, this and 
        other training cutbacks will leave most non-deployed Army units 
        at unacceptable readiness levels.
  --The Air Force has or will soon stop all flying at more than a dozen 
        combat coded squadrons. These units will soon no longer be 
        ready to fight on short notice.
  --The Navy has curtailed deployments, including the decision not to 
        send a second carrier strike group to the gulf.
    We have also recently submitted a $9.6 billion reprogramming 
request to Congress. Most of this reprogramming seeks permission to 
move unneeded military personnel funding, and non-executable or lower 
priority investment funding, into our O&M accounts that are 
experiencing the largest budget shortfalls. We are counting on approval 
of this reprogramming to avoid even deeper cuts in readiness and 
maintenance, and we ask this subcommittee's assistance in providing 
rapid review and approval.
    To avoid even more significant reductions to military readiness, 
and after extensive review of all options with the DOD's senior 
military and civilian leadership on how we address this budget crisis, 
I have decided to direct furloughs of up to 11 days for nearly 700,000 
of the Department's civilian personnel. I have made this decision very 
reluctantly, because I know that the furloughs will adversely impact 
DOD operations. I also recognize the significant hardship this places 
on our civilian personnel across the country and their families. But 
the current budget is requiring difficult decisions and options.
    After required notifications, we will begin the furlough period on 
July 8 at the rate of one furlough day per week for most personnel. We 
plan to continue these furloughs through the end of the current fiscal 
year. If our budgetary situation permits us to end furloughs early, I 
would strongly prefer to do so. That is a decision I will make later in 
the year.

                    FISCAL YEAR 2014 BUDGET REQUEST

    Let me turn now to fiscal year 2014. If the sequester-related 
provisions of the Budget Control Act of 2011 are not changed, fiscal 
year 2014 funding for national defense programs will be subject to a 
steeply reduced cap, which would cut DOD funding by roughly $52 billion 
further. And, if there is no action by the Congress, roughly $500 
billion in reductions to defense spending would be required over the 
next 10 years covered by the BCA.
    As an alternative, the President's budget proposes some $150 
billion in additional defense savings (measured in terms of budget 
authority) over the next decade when compared with the budget plan 
submitted last year. These cuts are part of a balanced package of 
deficit reduction. Unlike sequester, these cuts largely occur in the 
years beyond fiscal year 2018--which gives the Department time to plan 
and implement the reductions wisely, and responsibly, anchored by the 
President's defense strategic guidance.
    The President's fiscal year 2014 request reflects these changes. It 
continues to balance the compelling demands of supporting troops still 
at war in Afghanistan, protecting readiness, modernizing the military's 
aging weapons inventory in keeping with the President's strategic 
guidance, and sustaining the quality of the all-volunteer force.
    The requested funding of $79.4 billion for fiscal year 2014 OCO 
provides funds to continue the responsible drawdown in Afghanistan and 
is lower than the roughly $89 billion enacted for fiscal year 2013. The 
topline budget request of $526.6 billion for base-budget funding fiscal 
year 2014 is essentially flat compared to the President's request for 
fiscal year 2013, and roughly in line with what both the House and 
Senate have passed in their fiscal year 2014 budget resolutions.
    The following are the major components of the $526.6 billion base 
budget request for fiscal year 2014:
  --Military pay and benefits (including TRICARE and retirement costs): 
        $170.2 billion (32 percent of the total base budget);
  --Operating costs (including $77.3 billion for civilian pay): $180.1 
        billion (34 percent);
  --Acquisitions and other investments (Procurement, research, 
        development, test and evaluation, and new facilities 
        construction): $176.3 billion (33 percent).
    The base budget presented today, at its most basic level, consists 
of a series of choices that reinforce each of the following 
complementary goals:
  --making more disciplined use of defense resources;
  --implementing the President's defense strategic guidance;
  --seeking to sustain the readiness and quality of the all-volunteer 
        force;
  --supporting troops deployed and fighting in Afghanistan.
    As I discuss each of these goals, I must note that, unfortunately, 
many of the reductions we are being forced to make in fiscal year 2013 
as a result of sequester run directly counter to the fiscal year 2014 
goals.

1. Making More Disciplined Use of Defense Resources
    In developing the fiscal year 2014 budget, the Department 
identified about $34 billion in savings over the current Future Years 
Defense Program (FYDP), which covers fiscal year 2014 to fiscal year 
2018. These savings were used to help pay the costs of implementing the 
new defense strategy and to accommodate budget reductions.
    These efforts continue the Department's approach of the last 
several years to first target growing costs in areas of support, 
overhead, acquisition, and pay and benefits, before cutting military 
capabilities and force structure.
            Reducing Support Costs
    In order to maintain balance and readiness, the Department of 
Defense must be able to eliminate excess infrastructure. Therefore, the 
President's fiscal year 2014 budget requests authorization for one 
round of Base Realignment and Closure (BRAC) in 2015. While the 
commission would meet in 2015, the actual closing of any bases would 
involve a multiyear process that would not begin until 2016.
    BRAC is a comprehensive and fair tool that allows communities a 
role in reuse decisions for the property and provides redevelopment 
assistance. BRAC is an imperfect process, and there are up-front costs 
for BRAC, and this FYDP adds $2.4 billion to pay them, but in the long-
term there are significant savings. The previous five rounds of BRAC 
are now saving a total of $12 billion annually.
    We cannot justify funding unnecessary infrastructure when we are 
reducing force structure. Since 2003, DOD has divested more than 100 
foreign bases and operations and we are on schedule to close or 
consolidate over 20 more overseas operations.
    We are also taking other important steps to cut back on support 
costs. We have begun a study of our Military Treatment Facilities, 
including many hospitals and clinics that are currently underutilized. 
By the end of this year we will have a plan in place that suggests how 
to reduce that underutilization while still providing high-quality 
medical care. This restructuring, coupled with a BRAC round and other 
changes, would permit us to plan on a cut in our civilian workforce 
that will comply with congressional direction.
    We are also continuing our successful efforts to hold down military 
health system costs. Due primarily to changes in payments to healthcare 
providers, our projected costs for fiscal year 2014 are about 4-percent 
lower than those costs in fiscal year 2012, a significant turnaround 
compared to healthcare trends over the past decade. But costs will soon 
start to grow again. Therefore, we continue efforts to slow the growth 
of medical care costs through actions such as re-phasing military 
construction, making full use of past changes in provider costs, taking 
advantage of the slowing of growth in medical costs in the private 
sector, and modest changes in user fees and co-pays.
    Another important initiative is our effort to improve the 
Department's financial management and achieve auditable financial 
statements. We need auditable statements, both to improve the quality 
of our financial information and to reassure the public, and the 
Congress, that we are good stewards of public funds. We have a focused 
plan and are making progress. Our next goal is audit-ready budget 
statements by September 2014. We are working hard to achieve this goal, 
though the current budget turmoil is hampering our efforts 
significantly. I strongly support this initiative and will do 
everything I can to fulfill this commitment.
    These and many other changes led to total savings of about $34 
billion in fiscal year 2014-2018, including $5.5 billion in fiscal year 
2014. However, we are concerned that these savings from more 
disciplined use of resources could be eroded by sequester, as we are 
forced to make inefficient choices that drive up costs. Today, for 
example, we are being forced to engage in shorter and less efficient 
contracts and cuts in unit buy sizes that will increase the unit costs 
of weapons.
            Restructuring and Terminations of Weapons Programs
    In this budget, the Department has shifted priorities within its 
modernization portfolios and achieved $8.2 billion in savings from 
weapons program terminations and restructuring. For example, by 
revising the acquisition strategy for the Army's Ground Combat Vehicle 
(GCV) program, the Department will save over $2 billion in development 
costs. In other cases the Department proposes evolutionary approaches 
to develop new capabilities instead of relying on leap-ahead gains in 
technology.
    For example, the Department:
  --Realigned investment funding and restructured the SM-3 IIB 
        interceptor--a high-risk, high-cost system--to improve the 
        capabilities of existing missile defense systems, resulting in 
        savings of about $2.1 billion during the Future Year Defense 
        Program (FYDP);
  --Cancelled the Precision Tracking Space Satellite system--another 
        high-risk project--saving $1.9 billion during the FYDP; the 
        Department invested a portion of these savings in technology 
        upgrades to existing ground-based radars and sensors.
    To lessen the potential impact on local communities from the 
reductions in defense procurement, the Department is requesting an 
additional $36 million in support of the Defense Industry Adjustment 
program.
    The Department is continuing to take steps to tighten the contract 
terms and reduce risk in our largest acquisition program, the F-35 
Joint Strike Fighter. The fiscal year 2014 budget request includes $8.4 
billion for the Joint Strike Fighter.
            Military Pay and Benefits
    The costs of military pay and benefits are another significant 
driver of spending growth that must be addressed in the current fiscal 
environment. In this budget, the Department is submitting a new package 
of military compensation proposals that take into consideration 
congressional concerns associated with those from fiscal year 2013. 
These changes save about $1.4 billion in fiscal year 2014 and a total 
of $12.8 billion in fiscal year 2014-2018.
    This package includes a modest slowing of the growth of military 
pay by implementing a 1-percent pay raise for servicemembers in 2014. 
The Department is also seeking additional changes to the TRICARE 
program in the fiscal year 2014 budget to bring the beneficiary's cost 
share closer to the levels envisioned when the program was 
implemented--particularly for working age retirees. Today military 
retirees contribute less than 11 percent of their total healthcare 
costs, compared to an average of 27 percent when TRICARE was first 
fully implemented in 1996.
    The proposed TRICARE changes include:
  --For retirees, increases in TRICARE Prime enrollment fees, 
        instituting an enrollment fee for TRICARE Standard/Extra, and 
        increasing Standard/Extra deductibles.
  --Implementation of an enrollment fee for new TRICARE-for-Life 
        beneficiaries, while grandfathering in those who are Medicare-
        eligible at enactment.
  --Increases in pharmacy co-pays and, where appropriate, mandatory use 
        of mail order delivery of pharmaceuticals.
  --Indexing of fees, deductibles, co-pays and the catastrophic cap to 
        the growth in the annual retiree cost-of-living adjustment.
    Survivors of military members who died on active duty or medically 
retired members would be excluded from all TRICARE increases. Even 
after the proposed changes in fees, TRICARE will remain a generous 
benefit--as it should be.
    These adjustments to pay and benefits were among the most carefully 
considered and difficult choices in the budget. They were made with the 
strong support of the Joint Chiefs of Staff and Senior Enlisted 
Leadership, in recognition that in order to sustain these benefits over 
the long term without dramatically reducing the size or readiness of 
the force, these rising costs need to be brought under control.

2. Implementing and Deepening Our Commitment to the President's Defense 
        Strategic Guidance
    Spending reductions on the scale of the current drawdown cannot be 
implemented through improving efficiency and reducing overhead alone. 
Cuts and changes to capabilities--force structure and modernization 
programs--will also be required. The strategic guidance issued in 
January 2012 set the priorities and parameters that informed those 
choices, and the fiscal year 2014 budget submission further implements 
and deepens program alignment to this strategic guidance.
    The new strategy calls for a smaller and leaner force. Last year we 
proposed reductions of about 100,000 in military end strength between 
fiscal year 2012 and fiscal year 2017. Most of those reductions occur 
in the ground forces and are consistent with a decision not to size 
U.S. ground forces to accomplish prolonged stability operations, while 
maintaining adequate capability should such activities again be 
required. By the end of fiscal year 2014 we will have completed almost 
two-thirds of the drawdown of our ground forces, and the drawdown 
should be fully complete by fiscal year 2017.
    Last year DOD submitted proposals for changes in Air Force and Navy 
force structure; some were rejected by Congress. We continue to 
believe, however, that these reductions are consistent with our defense 
strategy and the need to hold down costs. Therefore, DOD is 
resubmitting several proposals from its fiscal year 2013 budget 
submission that were not supported by Congress, including the 
retirement of seven Aegis cruisers and two amphibious ships at the end 
of fiscal year 2014 when funds appropriated for their operation run 
out. Despite the growing importance of the Asia-Pacific--a mostly 
maritime theater--the high costs of maintaining these older ships 
relative to their capabilities argues strongly for their retirement.
    The fiscal year 2014 budget continues implementation of the Air 
Force total force proposal included in the fiscal year 2013 National 
Defense Authorization Act. In response to state and congressional 
concerns about proposed reductions to the Air National Guard that DOD 
made in the original fiscal year 2013 budget, the Department added back 
44 aircraft to the Guard, 30 aircraft to the Air Force Reserve, and is 
taking away 31 aircraft from the active Air Force.
    These shifts were forced primarily by political realities, not 
strategy or analysis. While this active-reserve compromise allows the 
Air Force to move forward with prior year retirements and transfers, 
and approved mission changes for many reserve units, it does require 
the Department to retain excess aircraft capacity. The Department's 
position continues to be that retaining excess air capacity in the 
reserve component is an unnecessary expenditure of government funds 
that detracts from more pressing military priorities outlined in the 
defense strategic guidance.
    Increased emphasis on the Asia-Pacific and Middle East represents 
another key tenet of the new defense strategic guidance. This budget 
continues to put a premium on rapidly deployable, self-sustaining 
forces--such as submarines, long-range bombers, and carrier strike 
groups--that can project power over great distance and carry out a 
variety of missions.
    As part of the rebalance to the Asia-Pacific, the Department is 
expanding the Marine Corps presence in the region, including rotational 
deployments of Marine units to Australia. We continue to develop Guam 
as a strategic hub, a location where we maintain a rotational bomber 
presence among other capabilities. The Department will stage its most 
capable forces in the region, including an F-22 squadron at Kadena Air 
Force Base in Japan. The Navy has deployed a Littoral Combat Ship to 
Singapore and is increasing port visits in the Western Pacific.
    Additional enhancements and key capabilities supporting the Asia-
Pacific rebalance in the fiscal year 2014 budget include:
  --Protecting investments for new ship construction, enabling the Navy 
        to procure eight new ships in fiscal year 2014--including two 
        Virginia-class submarines ($10.9 billion);
  --Continuing investments to develop a new penetrating bomber ($379 
        million);
  --Investing in new maritime patrol aircraft ($3.8 billion);
  --Continuing investments to maintain and expand undersea dominance, 
        including increasing the cruise missile capacity of the future 
        Virginia-class subs and developing new unmanned undersea 
        vehicles ($223.9 million);
  --Continuing to fund development of an unmanned carrier launched UAV 
        ($427 million);
  --Adding electronic attack EA-18Gs to offset the loss of retired 
        Marine Corps EA-6B (Prowler) squadrons ($2.0 billion);
  --Investing in a new suite of anti-surface warfare weapons ($160 
        million);
  --Increasing the number of attack submarines forward deployed to Guam 
        to four ($78 million);
  --Funding airfield resiliency measures such as dispersal, rapid 
        runway repair, and hardening in the Western Pacific ($440 
        million);
  --The Army is investing in upgraded missile defense capabilities in 
        the region ($40 million); and
  --Increasing funding for joint exercises in the PACOM region ($14 
        million).
    Another tenet of the strategy is to support efforts to build 
partner capacity through innovative mechanisms based on lessons learned 
over the past decade of war. To that end, the fiscal year 2014 request 
builds on our section 1206 program by including $75 million in 
dedicated funding for the new Global Security Contingency Fund, a 
pooled resource between the Department of Defense and Department of 
State that supports common efforts to boost the security capacity of 
partners in regions like Africa. This represents the first time 
dedicated funds have been requested for this new authority.
    This new strategy not only recognizes the changing character of the 
conflicts in which the U.S. must prevail, but also leverages new 
concepts of operation enabled by advances in space, cyberspace, special 
operations, global mobility, precision-strike, missile defense, and 
other capabilities. By making difficult tradeoffs in lower priority 
areas, the fiscal year 2014 budget protects or increases key 
investments in these critical capabilities, including:
  --Cyberspace Operations.--Including the recruitment and retention of 
        world-class cyber personnel ($4.7 billion for fiscal year 2014, 
        an increase of $800 million over fiscal year 2013 enacted 
        levels).
  --Space Operations.--To maintain our superiority in space, the Air 
        Force continues to modernize the GPS program and is investing 
        in improved space surveillance capabilities and a new 
        generation of communications satellites ($10.1 billion).
  --Airborne Intelligence, Surveillance, and Reconnaissance (ISR).--The 
        Department is investing in both sea-based and extended range, 
        land-based ISR platforms ($2.5 billion).
  --Rapid Global Mobility.--To maintain our ability to rapidly deliver 
        and sustain our forces around the globe, the Air Force is 
        upgrading its C-5, C-17, and C-130 transport aircraft--
        replacing the oldest aircraft and modernizing the fleet--and 
        building the new KC-46 aerial refueling tanker ($5.0 billion).
  --Missile Defense.--To protect against ballistic missile threats from 
        Asia-Pacific and the Middle East, the Department is increasing 
        its fleet of Ground Based Interceptors (GBI), continuing the 
        conversion of Aegis ships to provide ballistic missile defense 
        capability, and procuring additional Terminal High Altitude 
        Area Defense (THAAD) interceptors and Patriot PAC-3 missiles 
        ($9.2 billion).
  --Special Operations/Counterterrorism.--To ensure our special 
        operations forces maintain the highest levels of readiness and 
        to expand the global special operations force network ($7.7 
        billion).

3. Seeking To Sustain the Readiness and Quality of the All-Volunteer 
        Force
    The high-quality of our all-volunteer force continues to be the 
foundation of our military strength. This budget seeks to ensure that 
our troops receive the training and equipment they need for military 
readiness, and the world-class support programs they and their families 
have earned. However, as in other areas of the budget, the steep and 
abrupt cuts caused by the fiscal year 2013 sequester has harmed these 
programs. The remainder of this discussion outlines the goals of the 
fiscal year 2014 budget, but they would be significantly impacted if 
sequester-level cuts persist.
            Readiness Investments
    Even in the face of flat and declining defense toplines, this 
budget seeks to press ahead with the transition from a 
counterinsurgency-focused force to a force ready and capable of 
operating across a full range of operations across the globe. The 
service budgets all fund initiatives that seek to return to full-
spectrum training and preparation for missions beyond current 
operations in Afghanistan:
  --The Army would prepare for a rotational presence in multiple 
        regions and has begun training in ``decisive action'' scenarios 
        and is transitioning to training in combined arms conventional 
        warfare.
  --The Marine Corps would return to a sea-going posture, its 
        traditional role in between major conflicts.
  --The Navy would invest in ship maintenance and measures to alleviate 
        the stress on personnel from prolonged and extended deployments 
        required by current operations.
  --The Air Force would re-focus on high-end capabilities required to 
        confront the advanced air forces and air defense systems of 
        other nations.
    The Department continues its work to understand and quantify 
readiness activities as we seek to maximize our preparedness for real-
world missions. We do not yet know the costs of fixing the readiness of 
the force following the 6 months of sequester cuts to training in this 
fiscal year. Therefore these costs are not included in the fiscal year 
2014 budget.
            Family Support Programs
    The Department's budget submission makes clear that people are 
central to everything we do. While sequester cuts would unfortunately 
counter many of these initiatives, especially for our civilian 
workforce, the initiatives remain important statements of the intent in 
this budget.
    The Department continues to support key programs in fiscal year 
2014 that support servicemembers and their families, spending $8.5 
billion on initiatives that include:
  --Transition Assistance and Veteran's Employment Assurance.--The 
        Department continues to support the Transition Assistance 
        Program (TAP) to ensure every servicemember receives training, 
        education, and credentials needed to successfully transition to 
        the civilian workforce.
  --Family Readiness.--The Department continues to ensure that family 
        support is a high priority by redesigning and boosting family 
        support in a number of ways.
    The Department is also providing support to our people with a 
number of other important initiatives, including:
  --Behavioral Health.--The Department maintains funding for 
        psychological health programs and expands those programs that 
        are most effective, such as Embedded Behavioral Health, to 
        provide improved access to care, improved continuity of care, 
        and enhanced behavioral health provider communication.
  --Suicide Prevention.--The Department continues to implement 
        recommendations from the Suicide Prevention Task Force and act 
        on other findings from think tanks, the National Action 
        Alliance's National Suicide Prevention Strategy, and DOD and 
        Department of Veteran's Affairs (VA) Integrated Mental Health 
        Strategy (IMHS).
    Another area of focus has been Sexual Assault Prevention and 
Response. I have no tolerance for sexual assault in the military. This 
is a terrible scourge in our military and it must end. It will end. We 
will fix it. I have directed a number of initiatives to advance DOD's 
efforts to prevent and respond to the crime of sexual assault, along 
five lines of effort:
  --Accountability
      -- I directed DOD's Acting General Counsel to propose to the 
            Congress changes to Article 60 of the Uniform Code of 
            Military Justice (UCMJ) that would eliminate the ability of 
            a convening authority to change findings in courts-martial, 
            except for certain minor offenses. These changes would also 
            require the convening authority to explain in writing any 
            changes made to court-martial sentences, as well as any 
            changes to findings involving minor offenses. These 
            changes, if enacted, would help ensure that our military 
            justice system works fairly, ensures due process, and is 
            accountable.
      -- I have also directed the Service Chiefs to develop methods to 
            evaluate military commanders' performance in establishing 
            command climates of dignity and respect and in 
            incorporating sexual assault prevention and victim care 
            principles in their commands. This includes providing 
            commanders the results of their subordinate's annual 
            command climate surveys in order to enhance accountability 
            and improve insight in command climate at every level of 
            the chain of command.
      -- I have named a set of highly respected and experienced experts 
            to serve on a panel called for in the National Defense 
            Authorization Act for fiscal year 2013. The panel will 
            conduct an independent review and assessment of DOD's 
            systems used to investigate, prosecute and adjudicate 
            crimes involving adult sexual assault and related offenses. 
            It will convene its first meeting no later than July 1. I 
            have spoken to the panel and asked it to accelerate its 
            work and provide a final recommendation within 12 months.
  --Prevention
      -- I have directed the complete and thorough review of 
            credentials and qualifications for DOD's sexual assault 
            victim advocates, coordinators, and recruiters.
      -- I have directed DOD to improve the effectiveness of Sexual 
            Assault Prevention and Response (SAPR) programs in 
            recruiting organizations.
      -- I have directed DOD component heads to direct comprehensive 
            and regular visual inspections of all DOD workplaces to 
            include military academies to ensure that our facilities 
            promote an environment of dignity and respect for all 
            members and are free from materials that create a degrading 
            or offensive work environment.
  --Investigation
      -- Consistent with the fiscal year 2012 and fiscal year 2013 
            National Defense Authorization Acts, DOD has established 
            new policies to retain restricted and unrestricted reports 
            for 50 years, and is developing policy for Special Victim 
            Capability, which includes standards and training for 
            prosecutors and investigators.
  --Advocacy
      -- DOD has implemented a sexual assault crisis intervention line, 
            the DOD Safe Helpline, to give victims 24/7 global access 
            to crisis support staff, implemented an expedited transfer 
            policy for victims requesting transfer to a new unit, and 
            expanded emergency care and services to DOD civilians 
            stationed abroad.
      -- I have directed the Service Secretaries to implement methods 
            to improve victim treatment by their peers, coworkers, and 
            chains of command. Direct victim input will also be 
            incorporated into these methods.
  --Assessment
      -- DOD has added sexual assault questions to DOD Command Climate 
            Surveys and implemented policy to conduct assessments 
            within 120 days for new commanders and annually thereafter, 
            consistent with the fiscal year 2013 NDAA.
      -- I have begun holding a weekly review and progress meeting on 
            DOD's various sexual assault directives to ensure that they 
            are bringing about real change.
    I receive weekly updates on the Department's prevention efforts in 
regularly scheduled weekly meetings. I also have an individual on my 
personal staff that I have tasked to oversee all of these directives 
and Department-wide efforts.
    Everyone in this department at every level of command will continue 
to work together every day to establish an environment of dignity and 
respect, where sexual assault is not tolerated, condoned or ignored, 
where there is clear accountability placed on all leaders at every 
level. The leadership of this department has no higher priority than 
the safety and welfare of our men and women in uniform, and that 
includes ensuring they are free from the threat of sexual harassment 
and sexual assault. I will continue as Secretary of Defense to 
prioritize the Department's efforts to turn this problem around.

4. Supporting Troops Deployed and Fighting Overseas
    The amendment to the fiscal year 2014 President's budget includes 
$79.4 billion for Overseas Contingency Operations (OCO). Military 
operations in Afghanistan comprise a significant portion of the OCO 
request. Over the course of the year, American forces in Afghanistan 
are moving into a support role as Afghan forces take the lead. By 
February 2014, half of our troops there will have returned home, and by 
December 2014, United States' combat operations in Afghanistan will 
have ended. Still, the United States will maintain a commitment to 
Afghanistan's sovereignty and security, and we will continue to equip, 
train, advise, and assist the Afghan National Forces; support economic 
development and governance efforts; and pursue al Qaeda and its 
affiliated groups.
    Of the total OCO request, $78.1 billion is for activities in 
support of Operation Enduring Freedom (OEF) and $1.3 billion is for 
finalizing transition activities in Iraq. In support of Operation 
Enduring Freedom, OCO funding will support several key efforts, 
including:
  --Transitioning the mission in Afghanistan from combat to support as 
        the number of U.S. troops on the ground declines from an 
        average of 68,000 in fiscal year 2013 to an average of 38,400 
        in fiscal year 2014;
  --Continuing to support the 352,000 strong Afghan National Security 
        Forces as they prepare to assume full responsibility for 
        security in Afghanistan by December 2014;
  --Sustaining the fight, together with Afghan and Coalition partners, 
        against al Qaeda and its affiliates who seek to attack the U.S. 
        and our allies;
  --Providing intelligence, surveillance, and reconnaissance (ISR) 
        support to warfighters and continuing to invest in emerging ISR 
        capabilities that have proven essential for success in 
        Afghanistan and around the region;
  --Responsibly closing or transferring to Afghan control most 
        coalition bases by December 2014;
  --Returning tens of thousands of cargo containers and pieces of 
        equipment from Afghanistan to their home stations;
  --Replenishing or replacing expended munitions and ammunition as well 
        as combat-damaged equipment, including helicopters, ground 
        vehicles, and unmanned aerial systems; and
  --Supporting the portion of temporary Army and Marine Corps end 
        strength that currently supports OEF, but that will not be 
        required under the new defense strategy.
    Although the number of U.S. troops in Afghanistan will decline 
substantially over the course of fiscal year 2014, military operations 
in support of the transition to full Afghan responsibility will 
continue at a high pace, and certain costs will grow or remain the 
same. For example, as we reduce our footprint, ISR and contractor 
support requirements will temporarily increase in areas where U.S. 
troops are departing. Transportation and retrograde costs will increase 
substantially as we ship tens of thousands of cargo containers and 
pieces of equipment back home. Funding needed to train and equip the 
ANSF will temporarily increase from the fiscal year 2013 amount in 
order to ensure that Afghan forces are ready to take over full 
responsibility for security throughout the country by the end of 2014. 
There will be increased costs to repair and replace equipment and 
munitions as the Department resets the force over the next few years. 
Finally, OCO funding supports a significant portion of our military 
presence around the Middle East--the bases, ships, and ISR platforms 
outside Afghanistan from which DOD supports OEF and other important 
missions.
    The OCO funding request also supports follow-on costs related to 
the war in Iraq, including the repair and replacement of equipment and 
munitions damage or expended in the war and the operations and 
activities, including site closure, of the Office of Security 
Cooperation--Iraq. Of the total request of $79.4 billion, $1.3 billion 
supports these activities.
    The OCO request also seeks to cancel prior-year unobligated 
balances for activities that are in excess of need, in favor of urgent 
wartime priorities.
         the way ahead: strategic choices and management review
    The fiscal year 2014 budget is a reflection of DOD's best efforts 
to match ends, ways, and means during a period of intense fiscal 
uncertainty. It is a balanced plan that would address some of the 
Department's structural costs and internal budget imbalances while 
implementing the President's defense strategic guidance and keeping 
faith with our men and women in uniform and their families.
    It is obvious that significant changes to the Department's topline 
spending would require changes to this budget plan. The Department must 
be prepared for any additional reductions to the defense budget that 
might result from Congress and the Administration agreeing on a deficit 
reduction plan, and it must be prepared in the event that sequester-
level cuts persist for another year or over the long term.
    Consequently, earlier this year I directed a Strategic Choices and 
Management Review (SCMR) in order to assess the potential impact of 
further reductions up to the level of full sequester. The purpose of 
the SCMR is to reassess the basic assumptions that drive the 
Department's investment and force structure decisions and to search for 
additional management efficiencies.
    It is designed to help understand the challenges, articulate the 
risks, and look for opportunities for reform and efficiencies presented 
by resource constraints. Everything is on the table during this 
review--roles and missions, planning, business practices, force 
structure, personnel and compensation, acquisition and modernization 
investments, how we operate, and how we measure and maintain readiness.
    I have received the initial internal results of the SCMR and am 
reviewing them now. The results will inform our planning for fiscal 
year 2014 as well as our fiscal year 2015 budget request, and will they 
be the foundation for the Quadrennial Defense Review due to Congress in 
February 2014.
    It is already clear to me that achieving significant additional 
budget savings without unacceptable risk to national security will 
require not just tweaking or chipping away at existing structures and 
practices but, if necessary, fashioning entirely new ones that better 
reflect 21st century realities. And that will require the partnership 
of Congress.
    The fiscal year 2014 budget and the ones before it have made hard 
choices. In many cases, modest reforms to personnel and benefits, along 
with efforts to reduce infrastructure and restructure acquisition 
programs, met fierce political resistance and were not implemented.
    We are now in a different fiscal environment dealing with new 
realities that will force us to more fully confront these tough and 
painful choices, and to make the reforms we need to put this Department 
on a path to sustain our military strength for the 21st century. But in 
order to do that we will need flexibility, time, and some budget 
certainty.
    We will also need to fund the military capabilities that are 
necessary for the complex security threats of the 21st century. I 
believe the President's budget does that. With the partnership of 
Congress, the Defense Department can continue to find new ways to 
operate more affordably, efficiently, and effectively. However, 
multiple reviews and analyses show that additional major cuts--
especially those on the scale and timeline of sequestration--would 
require dramatic reductions in core military capabilities or the scope 
of our activities around the world.
    As the executive and legislative branches of government, we have a 
shared responsibility to ensure that we protect national security and 
America's strategic interests. Doing so requires that we make every 
decision on the basis of enduring national interests and make sure 
every policy is worthy of the service and sacrifice of our 
servicemembers and their families.

    Senator Durbin. Thank you, Mr. Secretary.
    General Dempsey, as you can see we have quite a turnout 
here this morning, and I welcome you now to give your 
testimony. Your full written statement will be made part of the 
record. Please proceed.

STATEMENT OF GENERAL MARTIN E. DEMPSEY, CHAIRMAN, JOINT 
            CHIEFS OF STAFF
    General Dempsey. Thank you, Mr. Chairman and Vice Chairman 
Cochran, distinguished members of the committee. Thank you for 
this opportunity to discuss the budget proposal for fiscal year 
2014.
    This hearing comes during a period of extraordinary 
uncertainty. Risks to our Nation's security are increasing 
while the resources for and the readiness of our force is 
decreasing. The will to win of our service men and women 
remains undaunted, but the means to prepare to win are becoming 
more uncertain by the day.
    This budget was purpose built to keep our Nation immune 
from coercion. It is a responsible investment in an unriveled 
joint force that is ready with options for a dangerous and 
unpredictable future. It supports our forward deployed 
operations, upholds funding for emerging capabilities such as 
cyber, and it resources the conventional and nuclear forces 
that have proven so essential to our defense.
    Most importantly, it protects our investments in the true 
decisive advantage we enjoy, and that is our people. It treats 
being the best led, best trained, and best equipped military as 
the non-negotiable imperative. It also makes sure that our 
wounded warriors and their families receive world-class care, 
family and medical services that are worthy of their service to 
our Nation.
    There are some things this budget does not do. It does not 
reflect the full sequestration amount. Rather, it imposes less 
reduction and it gives us more time to implement new cuts. The 
consequences of full sequestration and its attendant risks to 
our national security will gain clarity in the weeks ahead. As 
you may know, the Senate has asked us to provide our assessment 
of the impact on the joint force by the 1st of July.
    Nor does this budget account for the costs of restoring 
lost readiness. We do not yet know the full cost to recover 
from the readiness shortfalls we are experiencing this fiscal 
year. As expected, we continue to curtail or cancel training 
and exercises across all the services and for units that are 
not preparing to deploy. As a result, we are less ready every 
day for an unforeseen crisis or a contingency operation. In 
effect, we are foreclosing on options.
    It is also more expensive to become ready than it is to 
stay ready. This means the cost to recover our lost readiness 
will inevitably compete in the next few years with those costs 
for building the joint force that we think we need for 2020.
    As our military power becomes or could become less 
sustainable, it will become less credible. We risk breaking 
commitments or losing the confidence of our partners and 
allies, our defense industrial base, and our men and women in 
uniform and their families.
    Now, this outcome is not inevitable. Working together, we 
can uphold the readiness and the health of the force at an 
affordable cost. To do this, we need the certainty of a 
predictable funding stream, that is, a reliable topline. We 
also need the time to implement tradeoffs in force structure, 
modernization, compensation, and readiness, and we need the 
full flexibility to keep the force in balance.
    We simply cannot afford to postpone essential reforms to 
compensation and healthcare. Both should be allowed to grow 
more gradually.
    We should stop pouring money into excess facilities and 
unwanted weapons.

                           PREPARED STATEMENT

    Real institutional reform is the only way to avoid 
repeating the mistakes of past drawdowns. We have an 
opportunity and actually, I would suggest, an obligation to do 
this and to account for any future budget in order to restore 
confidence. We have it within us to stay strong as a global 
leader and as a reliable partner.
    Thank you, members of this committee, for all you have done 
in the past to support our military. We are counting on you to 
continue to do so. And I look forward to your questions.
    [The statement follows:]

            Prepared Statement of General Martin E. Dempsey

                              INTRODUCTION

    Chairman Durbin, Vice Chairman Cochran, and distinguished committee 
members, it is my privilege to update you on the state of the U.S. 
Armed Forces and to comment on the President's budget proposal for 
fiscal year 2014.
    This year's posture testimony comes in the context of extraordinary 
uncertainty. Our Nation is going through an historic fiscal correction 
to restore the economic foundation of our power. As resources decline, 
risks to our national security interests rise. A more competitive 
security environment compounds these risks, increasing the probability 
and consequences of aggression.
    This context calls out for our leadership. We can and must find it 
within ourselves to stay strong as a global leader and reliable 
partner. We must restore lost readiness and continue to make 
responsible investments in our Nation's defense.

                 STRATEGIC DIRECTION TO THE JOINT FORCE

    A year ago, I established four priorities to help guide our Joint 
Force through this period of uncertainty. Our way forward must be 
rooted in a renewed commitment to the Profession of Arms. This means 
preserving an uncommon profession that is without equal in both its 
competence and its character. Along the way, we must keep faith with 
our Military Family. This means honoring the commitments we have made 
to our servicemembers and their families. They deserve the future they 
sacrificed so much to secure.
    These two priorities serve as a source of strength for the Joint 
Force as we achieve our national objectives in current conflicts. This 
means achieving our campaign objectives in Afghanistan while 
confronting aggression toward America and its allies in all its forms, 
wherever and whenever it arises. It also means helping to secure the 
flow of commerce in the global commons, building the capacity of our 
partners, providing humanitarian assistance, and maintaining a credible 
nuclear deterrent.
    These three priorities enable us to understand and develop the 
Joint Force of 2020. Our ability to build the force we will need 
tomorrow depends on the decisions we make today. This is a defining 
period in a defining year. Ensuring our future military is unrivaled 
and sustainable requires the right mix between current capacity and new 
capabilities. We must recapitalize current equipment where possible and 
modernize capabilities that preserve our decisive advantages.

                         JOINT FORCE OPERATIONS

    One thing has been certain over the last year--the Joint Force 
stood strong and responded to the Nation's call. After more than a 
decade of continual deployments and tough fighting, I remain humbled by 
the resilience and determination of our warriors.
    In the past year, our service men and women have simultaneously 
fought, transitioned, and redeployed from Afghanistan. Never before 
have we retrograded so much combat power and equipment while continuing 
combat operations. Our forces performed superbly, transitioning to 
Afghan security lead in areas comprising over 85 percent of the 
population. In the process, we redeployed over 30,000 U.S. troops, 
closed over 600 bases, and preserved Coalition cohesion. We were 
challenged by ``insider attacks,'' but responded the way professional 
militaries do. We assessed and adapted. We reaffirmed our partnerships 
and moved forward jointly with more stringent force protection and 
vetting procedures.
    Transition continues. In the weeks ahead, the Afghanistan National 
Security Forces will assume operational lead across all of Afghanistan. 
This milestone represents an important achievement on the Lisbon 
roadmap, reaffirmed at the Chicago Summit in 2012. At the same time, 
the International Security Assistance Force will transition primarily 
to training and advising. We are also working with NATO and the Afghan 
government on options for an enduring presence beyond 2014 to reinforce 
Afghan security and maintain pressure on transnational terrorists.
    When I testified last year, the effects of the November 2011 border 
incident with Pakistan were still fresh, and tensions were as high as 
any time since the Osama bin Laden raid. Measured, but steady civilian-
military engagement with Pakistani leadership led to the reopening of 
the Ground Lines of Communication in July 2012. We are gradually 
rebuilding our relationship--as reflected in the recent signing of a 
tripartite border document to standardize complementary cross-border 
operations--and will continue to do so with Pakistan's new leadership 
following its historic election last month.
    The Joint Force has been vigilant well beyond South Asia and around 
the world. We continue to help deter aggression and counter the 
increasingly bold provocations from North Korea and Iran. We are 
supporting Syria's neighbors in their efforts to contain spillover 
violence while providing assistance to help with refugees. And, we are 
ready with options if military force is called for--and can be used 
effectively--to secure U.S. national interests in Syria without making 
the situation worse.
    Along with our interagency partners, we are also postured to 
detect, deter, and defeat cyber-attacks against government and critical 
infrastructure targets. We are part of interagency and multinational 
efforts to counter transnational crime. And, we remain relentless in 
our pursuit of al-Qa'ida and other violent extremist organizations, 
directly and through our partners. This includes al-Qa'ida-Arabian 
Peninsula (AQAP) in Yemen and, working with French and African 
partners, al-Qa'ida in the Islamic Magreb (AQIM).
    Finally, in the context of a ``new normal''--where the diffusion of 
power fuels insecurity and unrest--we continue to support reform across 
the Middle East and North Africa through military-to-military 
exercises, exchanges, and security assistance. We are also adjusting 
global force posture to reflect these risks in the context of our 
rebalance to the Asia-Pacific region.

                         OUR JOINT FORCE TODAY

    We have an experienced, combat-tested force. Never has our Nation 
sustained such a lengthy period of war solely through the service of an 
All-Volunteer military, which proudly celebrates its 40-year 
anniversary July 1, 2013. Our warriors' will to win is undaunted, but 
the means to prepare to win are becoming uncertain. Military readiness 
is at risk due to the convergence of several budget factors. These same 
factors compound risk to the wellness of the Joint Force and our 
Military Family. As I testified in April, we need the help of our 
elected leaders to gain budget certainty, time, and flexibility.
    Few have borne more of war's burden than our Military Family. For 
12 relentless years, our service men and women have answered our 
Nation's call with unsurpassed courage and skill. Many have fallen or 
been grievously wounded in the service of our Country. We honor them 
most by caring for their families and for those who have come home with 
wounds seen and unseen.
    We are unfailing in our praise for the sacrifices of our warriors 
in battle. But for so many of our veterans, returning home is a new 
type of frontline in their struggle. We cannot cut corners on their 
healthcare. We must continue to invest in world-class treatments for 
mental health issues, traumatic brain injury, and combat stress. Stigma 
and barriers to seeking mental health services must be reduced.
    Suicide is a tragic consequence for far too many. As a Nation, we 
have a shared responsibility to address this urgent issue with the same 
devotion we have shown to protecting the lives of our forces while in 
combat. The Department is working closely with our interagency partners 
and the White House to increase our understanding of the factors 
leading to suicide and how to best leverage care networks to keep our 
veterans alive.
    The risks inherent to military service must not include the risk of 
sexual assault. We cannot allow sexual assault to undermine the 
cohesion, discipline, and trust that gives us strength. Therefore, 
working closely with the Secretary of Defense and Congress, we are 
examining the best ways to leverage additional education, training, and 
the Uniform Code of Military Justice. We are exploring every option, 
and we are open to every idea, that will help eliminate this crime from 
our ranks. As I testified last week, we are acting swiftly and 
deliberately to accelerate institutional change--to better protect 
victims, to prevent and respond to predatory and high-risk behaviors, 
and to ensure a professional work environment while at the same time 
preserving the right of the accused. We will not shrink from our legal 
and moral obligations to treat each other with dignity and respect.
    Future success relies on opening our ranks to all of America's 
talent. The Joint Chiefs and I have supported the expansion of service 
opportunities for women. This decision better aligns our policies with 
our experience in war, and it serves to strengthen the Joint Force. 
Consistent with the law, we also extended some benefits to the same-sex 
domestic partners of servicemembers. We are implementing both 
initiatives deliberately across all Services to ensure we uphold 
essential standards, guard against potential risks, and avoid creating 
new inequities for other members of the Joint Force.
    Keeping faith with our Military Family will take a mutual 
commitment from fellow veterans and a grateful Nation. The next few 
years will define how we, as a Nation, view the 9/11 generation of 
veterans. America's future All-Volunteer force is watching.
    They are also watching as we inflict risk on ourselves. With $487 
billion in planned reductions already reflected in the Department's 
fiscal year 2013 budget, sequestration's additional cuts jeopardize 
readiness not only this year, but also for many years to come. We 
cannot fail to resource the war we are still fighting. At the same 
time, we cannot compromise on readiness in the face of an uncertain and 
dangerous future. Our Joint Force must begin to reconnect with family 
while resetting and refitting war-torn equipment. It must retrain on 
the full-spectrum skills that have atrophied while developing new 
skills required for emerging threats. There are no shortcuts to a 
strong national defense.
    When budget uncertainty is combined with the mechanism and 
magnitude of sequestration, the consequences lead to a security gap--
vulnerability against future threats to our national security 
interests. And, as our military power becomes less sustainable, it 
becomes less credible. We risk breaking commitments to our partners and 
allies, our defense industrial base, and our men and women in uniform 
and their families.
    This outcome is not inevitable. We can maintain the readiness and 
health of the force at an affordable cost, although this gets 
increasingly harder to do as uncertainty persists. But we need help 
from our elected leaders to keep the force in balance and avert the 
strategic errors of past drawdowns. To this end, the Joint Chiefs and I 
continue to request your support for certainty, time, and flexibility.
    Most importantly, we need long-term budget certainty--a steady, 
predictable funding stream. While the passage of the fiscal year 2013 
Appropriations Act provided relief from the continuing resolution, 
uncertainty over the fiscal year 2014 topline budget and the full 
effects of fiscal year 2013 sequestration remains. Last month, we 
submitted an amendment to the fiscal year 2014 President's budget that 
includes $79.4 billion for overseas contingency operations (OCO) to 
support Operation ENDURING FREEDOM--mostly in Afghanistan--as well as 
finalizing the transition in Iraq. We also submitted a reprogramming 
request designed to offset our most critical fiscal year 2013 
shortfalls, especially in wartime funding. We appreciate your expedited 
review and support of both requests, which will bring important near-
term budget certainty and help reduce our most urgent OCO shortfalls.
    Additionally, we need the time to deliberately evaluate trade-offs 
in force structure, modernization, compensation, and readiness to keep 
the Force in balance. We do not yet know the full fiscal year 2013 
impact in these areas as we make key decisions about fiscal year 2014 
and beyond. Finally, we continue to seek the full flexibility to keep 
the force in balance. Budget reductions of this magnitude require more 
than just transfer authority and follow-on reprogramming authority. 
Everything must be on the table--military and civilian force 
reductions; basing and facilities; pay and compensation; and the mix 
among active, Reserve, and National Guard units.
    There are no easy solutions, and no way to avoid sacrifices and 
risks as we work together to make the hard choices. But the fiscal year 
2014 budget proposal helps us rebalance and strengthen readiness 
through these hard but necessary choices. It enables us to lower 
manpower costs, reduce unneeded infrastructure, and shed ineffective 
acquisition programs while maintaining support for the responsible 
drawdown of our military presence in Afghanistan. It provides an 
equitable and practical 2014 military pay raise of 1 percent while 
protecting important education, counseling, and wounded warrior 
programs. Proposed infrastructure reductions include a request for BRAC 
authorization in fiscal year 2015, although any closures would take 
multiple years and not begin until 2016. We simply cannot afford to 
keep infrastructure and weapons we do not need without getting the 
reforms we do need.

                         A JOINT FORCE FOR 2020

    The budget decisions we are making now will indicate whether we 
view our future Joint Force as an investment or an expense.
    America is unmatched in its ability to employ power in defense of 
national interests, but we have little margin for error. An unforeseen 
crisis, or a contingency operation, could generate requirements that 
exceed the capacity of our immediately available forces. We are able to 
deter threats, assure partners, and defeat adversaries when we do so 
from a position of strength. We remain strong--and our Nation is 
secure--because we treat being the best led, trained, and equipped 
force as a non-negotiable imperative.
    The secret to sustaining our strength with this or any future 
budget is simple--preserve investment in readiness, prioritize 
investment in people, and protect investment in decisive capabilities. 
Now, several months since the Joint Chiefs expressed deep concern about 
a readiness crisis, we continue to curtail or cancel training and 
exercises across all Services for units not about to deploy. The costs 
of recovering lost readiness are going up by the day. Inevitably, 
recovery in the years to come will compete with the costs of building 
Joint Force 2020.
    It is our people that make us the most capable military in the 
world. They are our best hedge against threats to our homeland and 
interests abroad. By 2020, we will require even greater technical 
talent in our ranks. But developing technological skill must occur in 
concert with leader and character development. We must resist the 
temptation to scale back on education, including languages and cultural 
knowledge. Military service must continue to be our Nation's preeminent 
leadership experience. It is more important than ever to get the most 
from the potential and performance of every servicemember.
    Investing in people is not just about their development and 
readiness. It is also about the commitment we make to their families. 
Unsustainable costs and smaller budgets mean we must examine every 
warrior and family support program to make sure we are getting the best 
return on our investment.
    We need to reform pay and compensation to reduce costs while making 
sure we recruit and retain the best America has to offer. We must also 
balance our commitment to provide quality, accessible healthcare with 
better management and essential reform to get escalating costs under 
control. The fiscal year 2014 budget would help control rising 
healthcare costs by initiating a restructuring of medical facilities to 
make them more efficient, without sacrificing quality or continuity of 
care, and by proposing fee adjustments that exempt disabled retirees, 
survivors of servicemembers who died on active duty, and their family 
members. The Department of Defense is also working with Veterans 
Affairs to find efficiencies across healthcare systems.
    As we work to get the people right, we must also sustain our 
investment in decisive capabilities. The fiscal year 2014 budget 
continues to fund long-term capabilities that sustain our edge against 
resourceful and innovative enemies, while maintaining critical 
investments in science and technology, and research and development 
programs.
    Emerging capabilities, once on the margins, must move to the 
forefront and be fully integrated with our general purpose forces. 
Special Operations Forces, for example, have played an increasingly 
consequential role over the past 10 years. We have expanded their ranks 
considerably during this timeframe, and now we must continue to improve 
the quality of their personnel and capabilities.
    Closely linked are our intelligence, surveillance, and 
reconnaissance capabilities--from sensors to analysts. We will continue 
to rely on proven systems designed for the low threat environments of 
Iraq and Afghanistan. At the same time, we must also develop and field 
sensors designed to penetrate and survive in high-threat areas. They 
will expand our ability to access and assess hard-to-reach targets.
    This budget also sustains our investment in cyber, in part by 
expanding the cyber forces led by the U.S. Cyber Command. Despite 
significant investment and progress in the past year, the threat 
continues to outpace us, placing the Nation at risk. The fiscal year 
2014 budget increases funding for cyber security information sharing, 
but we need legislation to allow the private sector and U.S. 
interagency to share real-time cyber threat information--within a 
framework of privacy and civil liberty safeguards. In parallel, we must 
establish and adopt standards for protecting critical infrastructure.
    The development and integration of these emerging capabilities will 
by no means amount to all that is new in Joint Force 2020. They must be 
integrated with our foundational and impressive conventional force 
capabilities. The fiscal year 2014 budget protects several areas where 
reinvestment in existing systems--such as the C-130, F-16, and the 
Army's Stryker combat vehicle--sustains our competitive advantage. All 
are backed by our asymmetric advantages in long-range strike, global 
mobility, logistics, space, and undersea warfare. And, they must be 
connected with a secure, mobile, and collaborative command and control 
network.
    This combination of increasingly powerful network capabilities and 
agile units at the tactical edge is a powerful complement to leadership 
at every echelon. It provides the basis to project both discrete and 
overwhelming power across multiple domains. It gives policymakers and 
commanders alike a greater degree of flexibility in how they pursue 
objectives.
    As we set priorities and implement reductions, we must rely more 
on--and invest more in--our other instruments of national power to help 
underwrite global security. Fewer defense dollars only adds to the 
importance of relationships among defense, diplomacy, and development. 
When the political and economic foundations of our bilateral 
relationships are under stress, our military-to-military ties can serve 
as a model of professionalism and restraint for foreign militaries, and 
often help provide a channel for continued dialogue. Advancing American 
interests not only requires integration across all instruments of 
national power, but it also requires that our international partners 
accept a greater share of the risk and responsibility. Some are more 
ready and willing to do that than others.

                               CONCLUSION

    Although I am confident the Joint Force today can marshal resources 
for any specific contingency, our goal is to be able to offer military 
options that restore and maintain readiness while putting U.S. national 
security on a sustainable path to 2020 and beyond. To do this, we must 
recruit and retain the most talented people. We must invest in their 
competence and character so they can leverage emerging and existing 
capabilities in our defense. It is an investment our predecessors made 
in decades past. We must do the same.
    Our consistent first line of defense has been and always will be 
our people. They are our greatest strength. We will rely on our war-
tested leaders to think and innovate as we navigate the challenges and 
opportunities that lie ahead. We need to seize the moment to think 
differently and to be different. But we cannot do it alone. We need the 
help of our elected officials to give us the certainty, time, and 
flexibility to make change. Otherwise, the cuts that have already 
diminished our readiness will only get deeper, and the risks we will 
have to accept in the years to come will only increase.
    We can and must stay strong in the face of declining budgets and 
rising risk. We must have the courage to make the difficult choices 
about our investments, about our people, and about our way of war. The 
Secretary's Strategic Choices and Management Review (SCMR) is helping 
to identify options and opportunities as we move forward in partnership 
with Congress.
    We have been down this road before. We can lead through this 
uncertainty and manage the transition to a more secure and prosperous 
future. I know your Nation's military leaders are ready--as is every 
single Soldier, Sailor, Airman, Marine, and Coastguardsman--to give 
their last breath to defend America and her allies.
    Please accept my thanks to this committee and Congress for all you 
have done to support our men and women in uniform. Together, we serve 
our Nation.

    Senator Durbin. Thanks, General.
    I know Mr. Hale will be here for questions if any are 
directed to the Comptroller.
    I will start. This morning's front page of newspapers all 
across the United States tells the story of Edward Snowden--
Edward Snowden, who was an employee of Booz Allen, working for 
one of our premier national security agencies as a contract 
employee. The story that is told is that he was a high school 
dropout, that he did not finish his military obligation, though 
he attempted, and dropped out of community college. And it is 
also reported that he is being paid in the range of $200,000 a 
year as a contract employee.

                           CONTRACT EMPLOYEES

    Secretary Hagel, I continue to be concerned about the cost 
of the contractor workforce, not just in the National Security 
Agency (NSA) but in the Department of Defense. Recent reports 
have again emphasized that the average contract employee costs 
two to three times as much as the average DOD civilian employee 
for performing similar work. According to DOD information from 
fiscal year 2010, contract employees comprised 22 percent of 
your Department's workforce but accounted for 50 percent of its 
cost, $254 billion.
    So now let us take a look at what is happening when it 
comes to the treatment of the workforce. I wholeheartedly 
support the idea of exempting uniformed personnel from 
sequestration cuts. We owe it to these men and women not to put 
a hardship on them when they are literally risking their lives 
for America. But then if we take a look at the civilian 
workforce in the Department of Defense, here is what we find. 
There has not been a civilian pay raise since 2011.
    So my question to you is this. If we are setting out to 
save money, has the civilian hiring freeze resulted in more or 
fewer contract employees? And if so, how are you tracking the 
cost ramifications? Has contractor pay in the Department of 
Defense increased during the civilian hiring freeze?
    Secretary Hagel. Mr. Chairman, I will defer the specific 
numbers that you asked or the questions to the comptroller here 
in a moment. But let me address your larger context of your 
question on contractors.
    We are currently reviewing all contractors, all the 
contracts we have. We have no choice for all the obvious 
reasons. Contractors are part of any institution. We need them, 
certain skills, certain expertise. But there is no question 
that we are going to have to make some rather significant 
adjustments, which we are.
    And by the way, the furlough process does include 
contractors. It includes companies. It includes acquisitions. 
It includes contracts. And your specific questions on the 
Government Accountability Office (GAO) reports--I will ask Mr. 
Hale to respond, but let me make one other point.
    I do not disagree with any of your general analysis on 
contractors. I think when you look at the buildup over the last 
12 years--and I was in this body during a significant amount of 
that--and as that buildup occurred and the money flowed into 
different departments and institutions, because we felt they 
were required for the national security of this country, there 
will come a time--and it is now where we are going to have to 
make some hard choices in the review of those.
    So wherever you want to go, but if Mr. Hale would like to 
present a response to some of the specific questions on the 
numbers, I would be very happy to ask him to do so.
    Senator Durbin. Certainly. Please.
    Mr. Hale. Just briefly, Mr. Chairman. We are taking a $37 
billion sequestration cut in fiscal year 2013. The majority of 
that is going to come out of contractors. About $2 billion will 
come out of furloughs. There is some additional amount from the 
hiring freezes that will affect our civilian employees. The 
majority will come out of contractors. So we are going to see a 
drop in contractors. I do not know yet how much because the 
year is not over, but I think it will be a sharp drop.
    Senator Durbin. Mr. Hale, do you dispute this finding that 
the average contract employee costs two to three times as much 
as the average DOD civilian employee?
    Mr. Hale. No. It sounds about right. But let me say whether 
or not a contractor or civilian is cheaper or better really 
depends on the circumstances. There are some cases where we 
simply do not have the skills in the Department of Defense that 
we need or it is a short-term job. It would not make any sense 
to grow them. Audit readiness, an excellent point. I am hiring 
a lot of contractors because they know how to do audits. We do 
not yet. And other circumstances. If you are going to have the 
job over a long period of time, you are probably better off, it 
is probably cheaper to have a civilian Government employee do 
it.
    Senator Durbin. When I was on the Bowles-Simpson Commission 
and the Secretary of Defense came to speak, we asked him how 
many contract employees worked for the Department of Defense, 
and he said, ``I cannot tell you. I just do not know.''
    Mr. Hale. You know, I know it sounds bad, but let me tell 
you why that is partly true, and then I will give you the best 
number we have.
    It is partly true because if you do a fixed-price contract, 
the contractor has no obligation to tell you how many people 
are doing it. They just do the work, and if they do it 
satisfactorily, you pay them. We are in the process now of 
asking all our contractors, probably at some expense to the 
Government, to tell us how many people, even if it is a fixed-
price contract. So we will know better. But roughly, we have 
got about 700,000 service contractors right now is our best 
current estimate.
    Senator Durbin. Well, I have found--and I am sure Senator 
Mikulski has some thoughts on this issue--a sense of disdain 
towards civilian DOD employees and a sense of benign neglect 
when it comes to contractor employees. And I think if there is 
going to be sacrifice, it has to be across the board, and if we 
are going to save money, it should not be at the expense of 
those who are willing to work in the Civil Service.
    So my time is up at this point.
    Mr. Hale. You will not get any argument from me on that, 
Mr. Chairman.
    Senator Durbin. Thank you very much.
    I do not know whether to turn to my right or my left. I 
think I will turn to Senator Mikulski. I think I will turn to 
Senator Cochran.

        SHORTFALL IN OVERSEAS OPERATIONS AND MAINTENANCE ACCOUNT

    Senator Cochran. Mr. Chairman, in reviewing the request 
before the committee, I noticed there is an operations and 
maintenance shortfall for the Army's request in excess of $8 
billion in the overseas contingency operations and maintenance 
account. Why are we seeing such a huge difference between what 
was requested and what is available for these activities? Why 
this big disparity?
    Secretary Hagel. Senator Cochran, I will respond generally 
and then ask the Comptroller to be more specific on the 
accounts.
    I noted in my statement here this morning that the costs 
essentially of transitioning and withdrawing from Afghanistan--
and that is principally an Army assignment, as has been the 
situation, as you all know, the last 12 years. The Army has had 
the bulk of certainly the manpower responsibilities in these 
two wars, Iraq and Afghanistan. As we are unwinding those in 
equipment and maintenance, to get that equipment out--it is not 
easy to get out for a lot of reasons--the cost has been 
significantly more than what had been anticipated over the last 
year--2 years. That is part of it.
    But there are other parts to it that I am going to ask the 
Comptroller to address more specifically which will, I think, 
address exactly your numbers. Bob?
    Mr. Hale. The shortfall you are referring to is in fiscal 
year 2013, and the Army is short as much as $8 billion. We do 
these estimates 2 years in advance, Senator Cochran, and it is 
hard to guess what a war is going to cost that far in advance. 
We do not know for sure the operating tempo. Sometimes we have 
guessed too high. We have asked for too much money. I do not 
like to say that but I will. But this year, regrettably, we did 
not ask for enough.
    Several factors. One, we underestimated the level of 
operating tempo that would actually occur. We underestimated 
the transportation costs, as the Secretary alluded to, to get 
equipment out partly because of the issues with Pakistan on the 
ground lines of communication and a variety of other factors. 
So, yes, we are short as much as $8 billion, and it is coming 
at a time when sequestration has greatly limited our ability to 
cover that. So if I can make the pitch here, we need this 
reprogramming, please, a hopeful full approval or close.
    Senator Cochran. We appreciate your efforts to hold down 
the costs and try to eliminate unnecessary or wasteful spending 
in this budget even though we are involved in military 
operations and those are costly and more costly than when you 
do not have a war going on. And we understand that. But it just 
struck me as a pretty high number, and I was curious as to what 
the details were.
    In 2012, the Department of Defense--I guess this is 
directed to the Secretary--announced a strategy that would 
shift focus in military capability to the Pacific theater. 
Since that time, the Department has been forced to deal with a 
lot of uncertainties, sequestration included, and events such 
as what is happening in North Korea and how serious is that, 
and are we going to incur knowable amounts of additional 
spending for dealing with that stressful area of the world?
    Concerning shipbuilding projects for amphibious warship 
inventory, if you look at some of the parts of the budget that 
you would think you might come in for increases, there will be 
decreases. The 30-year shipbuilding plan projects amphibious 
warship inventory will fall to 28 ships in fiscal year 2015. 
This could have a negative impact on our ability to protect our 
interests in the Asia-Pacific region.
    What is your assessment of this? I guess the Secretary and 
then the Chairman.
    Secretary Hagel. Thank you.
    I will respond, and then I know General Dempsey will want 
to respond as well.
    First, your initial question about additional operating 
expenses based on threats in the Asia-Pacific. You mentioned 
specifically North Korea. We have had to place assets 
differently, reposition resources, capabilities over the last 
few months. Essentially since I have been over there, a little 
more than 3 months, a good deal of my time has been devoted to 
that part of the world, and that particular issue, North Korea, 
has consumed a good amount of it. So there have been additional 
costs. There may well be additional costs. Partly what the 
Comptroller was referring to, Senator, in his general 
commentary on answering the chairman's question about 
uncertainties, you plan for uncertainties but you never know. 
We have had to protect our assets there, whether it is Guam, 
Hawaii, Japan, South Korea, and we need to continue to keep all 
options available for the President if we would be required to 
take any kind of additional action.

                              SHIPBUILDING

    Second, shipbuilding. Yes, there will be a dip, as you 
noted, in 2015 as we work toward the 300-ship Navy, and we are 
on course for that. The budget numbers play that out. You 
mentioned specifically why is there a decrease in some of these 
areas. There are decreases in most areas, as you know, because 
the resources are not there. So the tough decisions have had to 
be made--and more will come--have to align with our strategies 
and our commitments and our guidance. We are committed to that 
300-ship Navy. We are finding new capabilities in these new 
ships that we did not have previously. But as you go through 
that cycle of the 30 years--and if the Comptroller wants to go 
into more specifics, he can--you will find a couple of those 
years will dip because we are retiring old ships that would 
cost more to maintain them as we are acquiring new technologies 
in ships.
    So let me stop there and ask General Dempsey, Senator, if 
he would like to respond. Thank you.
    General Dempsey. Thank you, Secretary.
    Senator, if you are asking will the sequestration level of 
cuts have an effect on our ability not only to produce 
capability, but capacity--capability, what we can do; capacity, 
how often--absolutely. We are talking about a $1.2 trillion 
difference when you add up what was done in the $487 billion of 
the Budget Control Act that gauged efficiencies in 
sequestration. $1.2 trillion is going to leave a mark on what 
we plan to do.
    Now, that said, the Strategic Choices and Management Review 
that the Secretary has just led us through will allow us to 
identify the point at which the Defense Strategic Guidance that 
you referred to from last year where we will potentially render 
it infeasible, and that work should become clearer in the weeks 
ahead.
    Senator Durbin. Thank you, Senator Cochran.
    Chairwoman Mikulski.
    Chairwoman Mikulski. Mr. Chairman, thank you and thank you 
for your questions about Mr. Snowden. All of Maryland is 
reeling from this. One, the National Security Agency is in our 
State. Second, Mr. Snowden's mother's name was disclosed, her 
workplace, her home address. That dear woman had nothing to do 
with this incident, and now she is being harassed. And people 
are asking why a kid who could not make it through a community 
college can make 200 grand a year and be exposed to some of our 
most significant secrets. So we will have a lot of hearings on 
this, and thank you for raising it for our civilian employees.
    It is good to see you, Secretary Hagel, General Dempsey, 
Mr. Hale.
    First of all, I want to just acknowledge all of the work 
that you do, and you, General Dempsey, for your service and the 
stress that you are under. I mean, if we just looked at the 
``S'' words, from ``Syria'' to ``sequester'' to ``sexual 
assault,'' that is enough to keep anyone functioning at a 36-
hour day. So I just want to acknowledge that we are in a very 
difficult and transition time both in terms of a military 
mandate and then the money to go with it.
    Today, I want to focus my questions on the troops, their 
families, and their well-being, from recruitment all the way 
through to retirement.
    Secretary Hagel, I want to thank you for your participation 
in the Department of Veterans Affairs (VA) backlog hearing, 
your prompt response, your must-do list, the appointment of Mr. 
Lupton. We look forward to working with you to crack the code 
on the military backlog.
    Second, on healthcare. As you recall in our confirmation 
hearing, I had hoped to work on--I look forward to working with 
these issues with you.

                        HEALTHY BASE INITIATIVE

    Mr. Chairman, there is within the budget a request for 
something called a ``Healthy Base Initiative.'' This is how we 
would organize all the resources of the Federal Government, 
working with the private sector on the base, to really create a 
sense of a healthy base initiative related to everything from 
nutrition to physical fitness, resiliency. I will be working 
with the chairman to fund it.
    I must say on the Healthy Base Initiative, though, I know 
you have selected 13 sites. They read like a National 
Geographic tour. There are three in Virginia. There are none in 
Maryland. Not a good thing to do.
    I would hope you would look at Fort Meade. Fort Meade is in 
the news, but it makes news every day. There are 39,000 
employees, military and civilian and contractors, there. So 
could we take a look at that?
    And I would like to talk more about healthcare, but let me 
move on to something else, which is sexual assault.

                             SEXUAL ASSAULT

    Gentlemen, I have been working on this issue for 25 years 
both as a Member of the Senate and on the Board of Visitors. We 
had the hearing last week, and there was robust response and I 
would like to pick up on it.
    So let me tell you my focus. My focus is on the service 
academies because I want to focus on the training of this 
generation and the next generation of leaders. Secretary Hagel, 
when I read your testimony--let me get to where I want to go 
here--you outline several steps that you are taking, and I want 
to acknowledge these steps and I want to appreciate them. They 
go, though, to current command. You talk about the service 
chiefs to develop military commanders' performance. Excellent. 
I support that. In other words, I support everything you have 
in your testimony.

                           SERVICE ACADEMIES

    But let us go to the service academies. I believe that 
leadership trains leadership, and the tone is set by the 
superintendent of the academy. As you look at how to evaluate 
military commanders' performance in establishing a command 
climate of dignity and respect, which you say in your 
testimony, incorporating sexual assault prevention in the 
selection of superintendents for the United States military, do 
you now or would you consider really evaluating as part of 
their performance, one, how they get their job and how they 
retain their job, that this be a matter that is included in the 
command performance evaluation?
    Secretary Hagel. Absolutely, yes. As you know, there is an 
evaluation process before any of these individuals are given 
these assignments. However, to your point, there has been very 
little emphasis on this issue. But that is across the----
    Chairwoman Mikulski. When you say ``this issue,'' you mean 
the superintendents or sexual assault?
    Secretary Hagel. Sexual prevention, assault, training, 
attitudes, the entire context of this issue.
    I have redirected that effort in recertifying and 
reevaluating all of our senior people from recruiters--there is 
a stand-down in every military organization--all the sexual 
prevention office heads, anybody in those offices, across the 
board. This also includes all of our leaders at the academies, 
the superintendents, the commandants, and that will go down 
into instructors as well. Now, that is a component of this 
problem--academies--but it is not, as you know, the only part 
of the problem.
    Chairwoman Mikulski. I know it is not. But I would like to 
really focus on the superintendents of the academies. For 25 
years, I have watched some outstanding superintendents, 
particularly at the Naval Academy, and I have seen some duds. 
Sixty percent of the generals that we now have serving 
graduated from West Point. Ninety percent of the admirals 
graduated from the Naval Academy. This says what the pipeline 
of leadership is, and that is what it is. That is why we spend 
$400,000 educating these very talented men and women. They need 
leadership that is contemporary and understands the 
contemporary workforce. And I am very concerned that in their 
selection for being a superintendent, what this is.
    So I like your ``from recruitment all the way through.'' I 
support everything you have in your testimony, but I need a 
focus on these superintendents. Could you give us a list of the 
criteria on selecting the superintendent?
    Secretary Hagel. We will provide that to the committee, and 
you, once again, have my commitment, absolute commitment, as I 
know General Dempsey's, our entire leadership on getting this 
right. We will get it right. And I understand exactly what you 
are saying, and we will provide that information.
    [The information follows:]

    During the hearing, you asked me to provide the list of criteria 
used to select Service Academy Superintendents. While there is no 
formal checklist, the Chief of Staff of each Service considers a number 
of criteria before recommending to the Service Secretary a three-star 
flag officer to serve as the Service Academy Superintendent. The 
criteria includes: Extensive command experience to include a successful 
two-star command; combat experience; and having graduated from or 
served at the Service Academy. In addition, as with any four- and 
three-star position, the Secretaries and Chiefs of Staff seek officers 
who have demonstrated highly effective performance in a variety of key 
positions and who have faithfully executed the law, authorities, and 
responsibilities accorded them over their careers.
    Given the tremendous responsibility associated with the 
Superintendent's role in ensuring the best possible development of 
tomorrow's leaders, his/her selection carries with it an added degree 
of scrutiny by the Secretaries and Chiefs of Staff. Beyond selfless 
dedication to and competence in the profession of arms, they seek 
nominees who they are confident will engender the public's trust and 
that of the faculty and students they must lead. The Superintendent 
must also be able to provide direction for all phases of cadet academic 
instruction and military training while leading any needed 
institutional change to ensure each graduate is a commissioned leader 
of character committed to the core values of the Service. Accordingly, 
the Secretaries and Chiefs of Staff carefully consider any potential 
nominee's personal and professional reputation in an effort to ensure 
recommending only those officers who demonstrate leadership, character 
and values commensurate with the honor and privilege of serving as 
Superintendent.
    I look forward to working closely with you and the Subcommittee as 
they consider the fiscal year 2014 Defense Appropriations Bill. Thank 
you for your continued support of our men and women in uniform and our 
entire civilian workforce.

    Chairwoman Mikulski. Well, my time is really up.
    Also, every year you get a report that was mandated in the 
DOD authorization on the sexual assaults at the service 
academies, then how they are handled by the service academies, 
and then the Board of Visitors is enormously uneven. There are 
inconsistent policies, inconsistent implementation of the 
policies. Could we really focus on the service academies? I 
could go through the numbers and statistics.
    Secretary Hagel. We will, we are, and we will continue to 
update the committee. We would be very happy, Senator, to come 
give you a briefing on specifically this issue anytime that you 
request.
    Chairwoman Mikulski. Thank you.
    And my last question on this. Would you support Senate 
confirmation of the superintendents of the service academies?
    Secretary Hagel. I do not have any problem with that at 
all.
    Chairwoman Mikulski. Thank you.
    Senator Durbin. Thank you.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    First, I want to associate myself with the comments of the 
chairman of our Appropriations Committee. It seems to me that 
her points about the service academies are very important, and 
I appreciate her bringing them up today.

                    SHORTFALL IN READINESS ACCOUNTS

    Secretary Hagel, you testified this morning that the 
shortfall in the military readiness accounts for the remainder 
of this fiscal year is about $30 billion. Since unanticipated 
war costs, not the sequester, account for at least 25 percent 
and perhaps up to a third of the shortfall in the readiness 
accounts and about 50 percent of the shortfall in the Army 
readiness accounts, should we not be addressing this portion of 
the fiscal year 2013 budget shortfall with a supplemental OCO 
request?
    We understand that war is uncertain, that it is 
extraordinarily difficult to accurately estimate what the costs 
are going to be, particularly in the situation we find 
ourselves in, in Iraq and Afghanistan. But there is a direct 
link between the unexpected, unfunded war costs and the 
furloughs because they are funded from the same accounts, the 
readiness accounts.
    Now, you have mentioned, as has Secretary Hale, the 
reprogramming request that you have before our committee, but 
that does not give you more funding. It just allows you to 
shift funding around.

                          SUPPLEMENTAL REQUEST

    So my question, Mr. Secretary, is this. Will the Department 
be submitting a supplemental request to Congress to address the 
higher than anticipated war costs?
    Secretary Hagel. Senator Collins, first, as you have noted 
and as you have read and you are aware, one supplemental to 
address this issue is not going to fix this problem. The only 
thing that is going to fix this problem is a change in the 
sequestration, as you have heard, I know countless times.
    Now, to your specific question, we have not considered a 
supplemental. I have not discussed a supplemental. So if that 
occurs, then we would look at it. But that is about as far as I 
can go. We just have not looked at that as a possibility.
    Senator Collins. Well, I would encourage you to do so 
because although I do not support the sequestration process and 
believe we should be setting priorities and I am very worried 
about the detrimental impact on the Department of Defense, the 
fact is that is not the total cause of the shortfall in the 
readiness accounts, and overall across the Department between, 
well, approximately a third of the shortfall is not due to 
sequestration. It is due to higher than anticipated war costs. 
So even if we abolish sequestration today, that does not solve 
the problem of your needing, legitimately needing, more money 
to deal with the unanticipated, underestimated war costs. And 
so I would ask you to look at the possibility of submitting a 
supplemental request.
    Let me just make one more comment. You talked about the 
300-ship Navy being on track, and I, of course, am very pleased 
to hear that. And it is particularly important given the new 
defense policy focusing on the Pacific that the President has 
revealed.

                              10-SHIP PLAN

    The Assistant Secretary of the Navy, Sean Stackley, 
recently testified about the 10-ship plan for destroyers and 
that the marginal cost to acquire that 10th destroyer makes it 
an extremely affordable acquisition and would contribute to the 
cost efficiency of the overall multiyear. In fact, due to 
sequestration, the Department is about $306 million short 
despite the fact that a destroyer costs considerably more than 
that. But there are real economies of scale due to the 
multiyear procurement plan that the Congress has approved.
    Do you support continuing with that multiyear procurement 
plan?
    Secretary Hagel. I am familiar with the specific situation, 
and we are currently closely examining whether a commitment to 
that 10th ship should be made for the reasons you just 
mentioned. That decision, as far as I know, has not been made 
yet. And I will ask Mr. Hale to respond to this. But it is part 
of the overall larger strategic interest, especially as we are 
moving 60 percent of our naval assets into the Asia-Pacific 
area.
    Bob, do you want to respond?
    Mr. Hale. There are some specific problems you are well 
aware of with sequestration effects on the multiyear. We are 
trying to solve them. There is a small amount of money in this 
reprogramming actually to help. But we are going to have to 
look at this in light of what happens in overall sequestration 
before we make that final decision. But we would like the 10th 
ship.
    Senator Collins. Thank you.
    Thank you, Mr. Chairman.
    Senator Durbin. Thank you very much.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.
    I could not help but think on one of the earlier questions 
about sexual misconduct at the naval academy and elsewhere, at 
least what is reported in the press, in most of those cases 
where nothing was done, if that was outside a military 
reservation with the special laws, local prosecutors would be 
prosecuting people. There would be people going to jail. And I 
would hope any local prosecutor who knew what they were doing 
would not be taking the position almost of blaming the victims 
that we saw in some of these cases.
    I mention that because I know there is some reluctance 
expressed in making the chain of command more responsive, but 
with all of you here, let me tell you there is some thought--
and this is a matter that would not be before the 
Appropriations Committee, but before the Judiciary Committee--
to removing the exemption and allowing State prosecutors to 
move in on those cases. And I throw that out. I realize that 
would be quite controversial. But I throw that out as a warning 
to the military chain of command that this ``do things as they 
have always been done'' is not acceptable.
    There are many of us on the Judiciary Committee who had the 
opportunity to serve as prosecutors, both parties, in earlier 
careers. And I just throw that out. I am not looking for an 
answer. I know the Armed Services Committee and others look at 
it. Mr. Secretary, I was heartened by your very, very strong 
statement in this area. General Dempsey, I know of your 
concern. So I will be revisiting this with you privately, but 
it is something that we are considering.
    I think we have talked about what our troops have 
accomplished in Afghanistan. I include Vermont's 86th Brigade 
that was there and they fought with great bravery. Several lost 
their lives. But with Syria and Iraq and much of the Muslim 
world descending into sectarianism, I wonder whether 
Afghanistan faces a similar fate after December 2014. So I 
would ask you, can our efforts be sustained by the Afghan Army 
when we leave? And is it possible that we leave earlier than we 
now plan?
    Secretary Hagel. Thank you, Senator Leahy. Just a very 
brief response to your sexual assault comments.
    You have summarized it pretty well. You know what I have 
done in cooperation with our chiefs. There are going to have to 
be changes made. There will be changes made. But as we make 
those changes and work with the Congress on this, we need to be 
as sure as we can be that the consequences that will come from 
whatever decision is made by the Congress to make those kinds 
of adjustments that we need to make--and you know I agree with 
that in many ways--that they are thoughtful.
    And just the last point on this. As you know, the Congress 
instructed the Department of Defense in its National Defense 
Authorization Act (NDAA) 2013 statement to put together a 
panel, which Congress appointed four representatives to that 
panel, DOD representatives. Five are on that panel. That panel 
will hold its first meeting in the next 2 weeks. I have talked 
with them a couple of times. The objective of that panel is to 
go down into every aspect of this issue, the chain of command, 
authority, Uniform Code of Military Justice (UCMJ), and make 
recommendations to the Congress and to the Department of 
Defense on what needs to be changed, what they think needs to 
be changed. These are very eminent, qualified, respected, 
experienced people, men and women of all backgrounds. So I just 
add that as a last point. And to this point, we are working 
very closely with them.

                              AFGHANISTAN

    As to your questions on Afghanistan, let me respond and 
then I will ask General Dempsey for his thoughts on this.
    First, as you know, we are building toward the transition 
with our allies. I was in Belgium last week. This issue was 
very much a focus of the 50-member International Security 
Assistance Force (ISAF) nations that are in Afghanistan now. 
Many will continue to have a presence and have a role in a 
post-2014 transition effort, which we will lead, the United 
States. As you know, it is train, assist, and advise. A number 
of countries came forward last week at that NATO meeting and 
committed to Germany, Italy--the Turks are looking at seriously 
the consideration of being a framework nation for Kabul and so 
on.
    I mention that because this is going to continue to be an 
international effort. As to your question, can they succeed, 
well, that is the question. We have a very strong feeling that 
they can, they will. They are going through a very difficult 
fighting season now, as you know, every day. Our lead combat 
role is now extinguished. There will be a formal handover to 
that effect in 2 weeks in Kabul. The Secretary General of NATO 
will be there to represent the ISAF forces in NATO. We continue 
to build--and help them in every way--their army, their police, 
their system. Big problems, questions, of course. Uncertainty, 
of course. But we are doing everything we can to assist that 
successful transition and a peaceful and prosperous and free 
Afghanistan.
    General.
    General Dempsey. I will submit a longer answer for the 
record in deference to your time, Senator.
    But I would say one could make a very strong argument that 
what really hangs in the balance in Afghanistan right now is 
the confidence of the Afghan Security Forces and the confidence 
of the Afghan people in them to preserve a measure of stability 
after our departure.
    And I think that everything we do in the next year and a 
half, because that is really what we are talking about here, 
between now and the end of 2014, should serve to reinforce 
their confidence, a bilateral security agreement, some 
commitment to our enduring presence, increasing our commitment 
to accelerating the enablers that we provide them. And anything 
we do to discourage them will probably make it a fait accompli 
that they will not succeed.
    But I will submit a longer response for the record.
    [The information follows:]

    We believe the ANSF will be able to provide security for the Afghan 
population once we leave. In fact, transition is already well underway: 
core al-Qaeda is decimated, the Taliban degraded, and the ANSF enters 
the 2013 fighting season stronger than ever. ANSF is now leading the 
vast majority of combat operations and has the lead for planning and 
execution of combat operations. We still have 19 months until the end 
of the 2014, and we will use that time to continue to focus on 
ministerial capacity, enablers, and leadership development to set ANSF 
up for long-term function. Also along these lines, ISAF casualties are 
now lower than they have been since 2008, the majority of ISAF bases 
have been transferred to the Afghan Government or closed, and 
construction is complete on most Afghan Army bases and Police 
facilities.
    As for whether we will be able to leave earlier than currently 
planned, that decision will be conditions based, and will depend 
largely on Commander ISAF's recommendations. U.S. and coalition forces 
are withdrawing very quickly already, and the effects of even faster 
withdraw would be precipitous and likely negative--especially with 
pending Afghan Presidential elections in 2014, and with hedging 
behavior by many actors (including GIRoA and the Afghan people, not to 
mention the Taliban) evidenced in advance of clear announcement by the 
U.S. of continued support and assistance through the Transformation 
Decade. Earlier this year, President Obama announced that the United 
States would redeploy 34,000 personnel by February 2014, a level one-
half the size of U.S. forces in Afghanistan at the time of the 
announcement. The pace and size of this withdrawal are consistent with 
Commander ISAF's recommendations to draw down in a manner that protects 
our troops and maintains hard-won gains. The current withdrawal plan 
will provide enough forces to support the ANSF through two crucial 
Afghan-led fighting seasons and will also enable us to assist the ANSF 
in providing security for the 2014 elections, the success of which is 
critical to the long-term stability of Afghanistan.

    Senator Leahy. I appreciate it.
    Mr. Chairman, I will submit a question on Strategic Choices 
and Management Review (SCMR) and my concern that--for example, 
in the past, we have cut things off. Like Secretary Gates shut 
down the Joint Forces Command. They just moved most of it to 
the Joint Staff. And I do have a specific question of what 
happens. Are things shut down or just moved around?
    And, General Dempsey, I look forward to your answer. I 
understand it is a very complex issue, but I also worry about 
just what is happening there.
    My time is up.
    Senator Durbin. Thank you, Senator Leahy.
    Senator Shelby.
    Senator Shelby. Thank you.
    Mr. Secretary, welcome back to the Senate where you spent a 
lot of years.

                              NORTH KOREA

    I want to get in the area of North Korea. A lot of us are 
very concerned--and I know you are--about the developments in 
Korea. It runs hot and then it cools off a little bit. But we 
have a very unstable regime, I believe, there and so forth.
    What role could China play, if they chose to do so, with 
North Korea? You know, they have at times. They have let them 
go at times. And how important are the developments in Korea to 
our national security?
    Secretary Hagel. Senator Shelby, thank you.
    China. As you all know, the President spent a couple of 
days with the new Chinese President Xi in California----
    Senator Shelby. Absolutely.
    Secretary Hagel [continuing]. A few days ago. Obviously, 
North Korea was a significant part of that agenda. I was in 
Singapore about a week ago for the Shangri-La Dialogue. I met 
with my not exact minister of defense level counterpart from 
China but senior representatives from the ministry of defense 
there. General Dempsey has met with his counterpart. And so we 
have a number of tracks that we are working with the Chinese 
on. I say that specifically to address your point about North 
Korea, there is very little question that the Chinese have more 
influence with North Korea than any country.
    And without veering off into the Secretary of State's 
province, I would say that the Chinese have been helpful in 
dealing with the North Koreans. We have different issues, 
different agendas, different interests. But we also have many 
of the same interests that are parallel and intersect. North 
Korea is one.
    How dangerous is North Korea? Dangerous in the sense they 
are unpredictable. They have capacities. We know that. We have 
allies there starting right on the border of the Demilitarized 
Zone (DMZ) with our allies in South Korea. We know the kind of 
armaments and artillery that they have lined up--the North 
Koreans--against Seoul. Their capacity, rocket capacity, thrust 
capacity, weapons capacity, Japan. That is why we responded the 
last 3 months the way we did, Terminal High-Altitude Area 
Defense (THAAD) battery in Guam to protect our assets, some 
other, which this committee is very familiar with, decisions 
that we have made, the President has decided on.
    So we have to be prepared, Senator, for every option, every 
contingency. You said it, I think, correctly. We see this up 
and down diplomatic track and then there will be something to 
occur, and then there is a diplomatic track. The South Koreans 
and North Koreans sat down for the first time in 6 years a few 
days ago. There will be ongoing meetings. I think any of those 
dialogues and any of those venues are helpful, important. But 
North Korea remains still a dangerous and unpredictable 
country, and we need to be prepared for that.
    I do not know if General Dempsey has any response.
    Senator Shelby. General Dempsey.
    General Dempsey. Well, thank you, Senator.
    I mean, you asked about what are our national security 
interests on the Korean Peninsula. I would list four very 
quickly. One, defend the homeland. They are seeking to acquire 
the ability to reach the homeland or some of our territorial 
interests in the Pacific. So we have a very clear interest in 
that national security interest.
    Secondly, preserve the armistice. We are responsible by 
treaty obligation to preserve the armistice that has exited 
there for 60 years. And related to that, we have 29,000 service 
men and women and about 4,000 families living on the peninsula 
to achieve that purpose.
    Third, they are a risk to our security in the way they 
proliferate technology, whether it is nuclear technology or 
ballistic missile technology.
    And fourth, I would say we always have an interest in 
ensuring secure and confident allies. And so our commitment to 
our Republic of Korea allies is it is a reflection of our 
commitment to the region.
    Senator Shelby. Mr. Secretary, would touch--I just have a 
few seconds. You might have a longer answer--on cybersecurity? 
You know, we are all interested in cybersecurity for our 
industries, our private businesses, and so forth. We are being 
attacked everywhere. I know that you are being attacked through 
the defense installations everywhere. How important to--I think 
we all know the basic answer. Cybersecurity is important to the 
services because so much of what you do is based on software 
and the Internet. Do you want to comment on that?
    Secretary Hagel. I will, and in the interest of time, I 
will be brief.
    But I would start with this. It is one of the very few 
areas of the fiscal year 2014 budget where we have asked for an 
increase for obvious reasons.
    I have said many times, Senator Shelby--I said it when I 
was in the Senate--that I think the cyber threat is probably 
the most insidious, dangerous threat overall for this country. 
And there are a lot of threats. But it crosses every line. You 
do not know where it is coming from. You do not know when it is 
coming. This is a very significant threat, and I think everyone 
understands that in the Congress. We do. Just as you noted, it 
takes down industrial base secrets. It can essentially paralyze 
economies, our computers, our satellites.
    Senator Shelby. It could change the whole equation of 
this----
    Secretary Hagel. It changes everything. It could change 
everything.
    As you know, the President spent considerable time with 
Chinese President Xi on this issue. I made in my statements and 
in my speech at the Shangri-La Dialogue in Singapore last 
week--I made that a big part of my speech, and I specifically 
noted that we are aware that many of these attacks are 
emanating from China. And so I do not think we can minimize 
this threat, Senator, and I think it is going to be with us and 
it is as big a threat that I think we have out there in every 
way to our country. And it is not just unique to this country. 
It is unique to every country.
    Senator Shelby. Mr. Chairman, I have some other questions I 
would like to submit for the record, if I could.
    Senator Durbin. Thank you, Senator Shelby.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, gentlemen.

                              TRICARE FEES

    Mr. Secretary, you and your colleagues have made very 
difficult decisions in this budget. One of them, in particular, 
is with respect to the benefits and particularly TRICARE fees. 
And one of the realities is there are expectations in the 
active and retired force based on great sacrifice and service 
that they would receive these benefits or something equivalent 
to it.
    Can you give us the rationale again? I know you mentioned 
in your opening statement about what is compelling you to take 
these steps.
    Secretary Hagel. Yes, I can, Senator Reed, and I may ask 
the Comptroller to give you a couple of numbers on this.
    First, as I said in my opening statement--and everyone on 
this committee knows this--and as the chairman noted a speech 
that Chairman Dempsey gave about a year ago at the National 
Press Club, your people are your most important asset. You take 
care of your people. And we have made commitments to our 
people. Our country has. We have asked them to sacrifice, 
continue to sacrifice, and you know all about that, Senator 
Reed. Therefore, we have an obligation here.
    And the TRICARE program is a very central part of the 
benefit package to our people. Not unlike Social Security, not 
unlike our entitlement programs generally in society, when you 
look out over the next few years, how are we going to sustain 
these programs.
    And so what we are looking at is finding ways to make some 
modest adjustments now so that we are not faced with abrupt 
cuts we will not be able to sustain because we can continue to 
play out the kind of benefits we have now, but what that is 
going to mean is a much smaller force because we are not going 
to be able to afford the same kind of benefits.
    What we are proposing, Senator, is modest increases in the 
enrollment fees. By the way, it does not affect any of the 
Active Duty members. Mainly those who would be affected in the 
still-working age after they leave the military before 65. We 
are asking for a modest increase in that fee, co-pays increase 
for prescription drugs.
    Still, even if we got those, that benefit package, and 
rightly so by the way, would probably be still the best benefit 
package that I am aware of anywhere. And so we have got to do 
this or at least start thinking about it and get serious about 
it because we are just not going to have the resources to 
sustain it out through the years that we are making these 
commitments.
    I will ask the Comptroller if he wants----
    Senator Reed. Mr. Secretary--and I want to hear from the 
Comptroller, but just a follow-up point. Do you have a 
deliberate sort of strategy to engage these different groups, 
the retirees, the active forces--not just you but the Chairman 
or others--so that they understand and they have the 
opportunity to communicate with you and give their impressions 
together with their ideas? Because I think, again, ultimately 
there is a real question here 10 years from now whether the 
soldiers--and there is no one more invested in the success of 
our military forces than these individuals--will have the 
training, equipment, platforms, support that they need to do 
the job. Are you going to do that?
    Secretary Hagel. We do do that and we do it working with 
our military associations that represent certainly our 
retirees. We do it with veterans groups. We reach out to the 
Congress. We are in touch all the time with certainly members 
of your staff and all the appropriate committees, think tanks. 
We ask for ideas. We ask for input. We give everyone an 
opportunity to weigh in.
    I think the last point I would make on this is unless we 
are able to--some of the comments that we have made in our 
testimony here this morning and others--General Dempsey and I--
slow the growth in some of these programs--and it gets to what 
you just noted--what we will find here is that we are going to 
cut our combat power significantly. And that is one thing that, 
as you know, is a centerpiece of readiness and capability and 
options for any threat in the world.
    So we have got to balance this, and we are trying to do 
that so that we do not hurt people, so we keep our commitments 
to people, we do the right thing. If we get at it early and 
make these modest adjustments, then we can work through this.
    General Dempsey. Could I add, Senator? We cannot do this 1 
year at a time. The real problem we are having is these things 
come up once a year, and we keep resubmitting them and we do 
not get them. Unless we look at the impact of sequestration 
over the course of sequestration and recognize the trades--
because strategy is about choice, and we have got to make a 
choice how much force structure, how much readiness, how much 
modernization, how much compensation. But we have got to look 
at it over this 10-year period, and the Strategic Choice Review 
is going to give us the opportunity to do it. And we have to do 
what you just suggested.
    Senator Reed. Mr. Hale, my time is expired. I do not want 
to impose on my colleagues. If you have specific data or 10 
seconds, I would take it now and then yield.
    Mr. Hale. We are going to keep TRICARE generous. By 2018, 
our proposals save $2.5 billion in that year alone. If we do 
not do that and we have to say cut forces to offset it, it is 
about 25,000 troops. We need to slow the growth.
    Senator Reed. Thank you.
    Senator Durbin. Thank you, Senator Reed.
    Senator Graham.
    Senator Graham. Mr. Hale and Mr. Secretary, about 5 years 
ago--maybe longer--every group known to man in the retiree 
community, and military associations, had a summit about 
healthcare. I think we need to do that again. I would love to 
volunteer with you to be part of that.
    Mr. Hale, what percentage of DOD spending will healthcare 
consume in the next decade if we do not change the trajectory?
    Mr. Hale. Well, it is about 10 percent now. Let me supply a 
direct number for the record. A lot depends on what happens to 
the overall budget, but it is going to grow because the budget 
looks like it is getting down. So I would guess it would be in 
the teens, but let me supply a better----
    Senator Graham. Yes. I heard it could be up to 20 percent 
in the next decade if we do not----
    Mr. Hale. It could be especially if the defense budget 
falls.
    Senator Graham. Right.
    [The information follows:]

    Military healthcare costs in the fiscal year 2014 President's 
budget request total $49.4 billion. This equates to 9.4 percent of the 
Department's fiscal year 2014 request of $526.6 billion in 
discretionary budget authority and assumes $0.9 billion in savings if 
the Department's TRICARE fee and co-pay proposals increases are allowed 
by Congress.
    By fiscal year 2023, even with the projected (but very uncertain) 
annual savings from DOD's budget proposals growing to $3.6 billion, 
military healthcare costs are estimated to increase to $68.8 billion of 
the Department's projected discretionary budget authority of $615.5 
billion. Without implementation of DOD's proposed actions to help slow 
this growth, healthcare costs will consume nearly 12 percent of the 
budget by fiscal year 2023. Because healthcare costs are primarily made 
up of medical/pharmaceutical and personnel related costs, which are 
anticipated to increase at a faster rate than the Department's overall 
budget authority, the growth as a percentage of the total budget 
authority is inevitable.

    Senator Graham. When is the last time there was a premium 
increase in TRICARE?
    Mr. Hale. Well, 2 years ago, the Congress did allow about a 
15-percent increase for TRICARE Prime and indexed it. But prior 
to that, it was the mid-1990s. So it was the first time since 
the mid-1990s.
    Senator Graham. I want a generous benefit, but I want a 
sustainable benefit. Do you agree with me that TRICARE is not 
sustainable?
    Mr. Hale. I believe if we are going to sustain it, we are 
going to have a much smaller force and one that is less modern, 
and I think that is not the balance that we want.
    Senator Graham. Well, we are not going to fight our enemies 
with a good healthcare plan.
    Mr. Hale. I could not have said it better, Senator.

                              AFGHANISTAN

    Senator Graham. Now, General Dempsey, when it comes to 
Afghanistan, are we winning or losing?
    General Dempsey. Well, I sincerely believe we are winning.
    Senator Graham. I do too.
    What happens if we lose?
    General Dempsey. Well, the region will become less stable. 
I think there will be problems on Pakistan's border. Iran will 
be encouraged to become even more regionally aggressive.
    Senator Graham. Kandahar could fall back into the hands of 
the Taliban.
    General Dempsey. We could find a reemergence of violent 
extremist groups.
    Senator Graham. And the difference between winning and 
losing is what we do between now and the next 18 months. Would 
you agree?
    General Dempsey. Well, the difference between winning and 
losing is certainly what we do between now and the end of 2014, 
but also I think the commitment we make beyond----
    Senator Graham. I agree with you. Confidence is the key 
here. We do not need 100,000 troops in Afghanistan post-2014. 
But I think we need a residual force to maintain confidence and 
capabilities the Afghans do not have so we can end this war 
well.
    Mr. Secretary, the election in 2014 in Afghanistan. How 
important would you say that is in terms of developing a safe, 
secure, prosperous Afghanistan?
    Secretary Hagel. Senator Graham, I think it is a key 
component because it is about confidence. It is about self-
governance. It is about rights.
    Senator Graham. Do you not think the enemy will do 
everything they can to disrupt that election?
    Secretary Hagel. They will and they are doing it now.
    Senator Graham. Let us go to budgets. If sequestration is 
fully implemented, General Dempsey, how would you describe the 
kind of military we would have 10 years from now?
    General Dempsey. Well, that is the effort that the 
Secretary has us undergoing right now. But at full 
sequestration----
    Senator Graham. You said some pretty dramatic things. Do 
you still stand by----
    General Dempsey. Oh, yes. This will not be a force that 
will be adequate to the task.
    Senator Graham. Fair enough.
    Do you agree with that, Mr. Secretary?
    Secretary Hagel. I do.

                            NUCLEAR WEAPONS

    Senator Graham. Iran. Mr. Secretary, do you believe the 
Iranians are trying to develop a nuclear weapon or peaceful 
nuclear power?
    Secretary Hagel. Well, I think, first, we stay focused on 
our policy and that is preventing the Iranians from acquiring 
any capability to weaponize----
    Senator Graham. Do you think what they are doing with the 
centrifuges is designed to produce nuclear weapons material or 
just peaceful power?
    Secretary Hagel. Well, it is certainly giving them options 
to move in that direction.
    Senator Graham. General Dempsey, do you believe the 
Iranians are trying to develop a nuclear weapon?
    General Dempsey. As I have testified previously, I do not 
think they have made the decision, but as the Secretary said, 
they are positioning themselves to preserve the option.
    Senator Graham. Can you imagine why they would be doing all 
this if they are not trying to make a nuclear weapon?
    General Dempsey. Leverage in all different areas.
    Senator Graham. I mean, do you think they are developing a 
medical isotope reactor?
    General Dempsey. I think that is probably part of it, but 
it is increasing their leverage.
    Senator Graham. I mean, I just find it odd that if you are 
going to have a peaceful nuclear power program, you would go 
through all this hell to get it and have it built at a bottom 
of a mountain.
    Do we have plans to deal with the Iranian nuclear program 
if military force is necessary?
    General Dempsey. I think it is important to mention we have 
options both for their acquisition of a nuclear weapon but also 
for the other things they are doing.
    Senator Graham. Does Israel think they are trying to 
develop a nuclear weapon?
    General Dempsey. I believe that if you were to ask my 
counterpart, he would say yes.
    Senator Graham. Is that true, Secretary Hagel? Would your 
counterpart say yes?
    Secretary Hagel. I think so. And he will be here, by the 
way, this week, and I am going to meet with him.
    Senator Graham. My time is about over. But I think it is 
important that we say to the world as a Nation that, yes, we 
think they are trying to develop a nuclear weapon and we are 
not going to let them. I just think that is important.

                                 SYRIA

    Finally, about Syria, how does Syria affect Jordan, Mr. 
Secretary?
    Secretary Hagel. Well, Syria affects everybody in the 
Middle East, as we are seeing.
    Senator Graham. You are right. You are dead right about 
that. It affects Israel certainly.
    What I worry the most about is the King of Jordan becoming 
the first victim of Syria outside of Syria. Is that a rational 
thing for me to be worrying about?
    Secretary Hagel. I think it is very rational.
    Senator Graham. What would it mean to the region if the 
King of Jordan were deposed?
    Secretary Hagel. Well, I think a further destabilization of 
the entire region, and any way you would frame it or judge it, 
it would be very bad news for all----
    Senator Graham. Last question. Is Iraq getting better, 
worse, or the same? To General Dempsey and Secretary Hagel.
    General Dempsey. Iraq has had probably the toughest month 
in its history since the end of our time in Iraq. And Maliki 
just met with Barzani for the first time in 2 years.
    Senator Graham. That is good news.
    General Dempsey. It is very good news. But they are under 
significant pressure from al Qaeda.
    Senator Graham. What would you say, Mr. Secretary?
    Secretary Hagel. I would agree with the General. There is a 
lot going on here, has been the last 2----
    Senator Graham. And al Qaeda has risen.
    Secretary Hagel. It has risen. You saw the stories this 
morning about the fracturing of the army unit. So they have got 
problems.
    Senator Graham. Thank you all for your service, and all of 
us want to help. You got some amazing, hard decisions ahead of 
you, and sequestration to me is just unconscionable. We need to 
find a way to fix it. But thank you all for your service.
    Senator Durbin. Thank you, Senator Graham.
    Senator Landrieu.
    Senator Landrieu. Thank you very much, Mr. Chairman. It is 
a joy to join this committee, and I look forward to working 
with all of you. I am happy to be here.
    Secretary Hagel, thank you for your service. General 
Dempsey and Mr. Hale.
    Let me just associate myself with the prior remarks of 
Senator Mikulski from Maryland who has been absolutely a 
champion for victims of rape, domestic violence, and child 
abuse I might say. I think that she made an excellent point 
earlier about really focusing, Secretary, on the academies.
    I had the pleasure to serve with Senator Reed for several 
years on the West Point Board of Visitors. He chaired it. And 5 
or 6 years ago, Mr. Chairman, we had a very serious discussion 
at that level about the training of sexual assault. And I am 
going to send you some materials at least that I know were done 
at the West Point Academy. I do not know if I can speak for all 
the academies. But I think it is a very good place to start 
training the next generation, as well as other actions that can 
be done by this chairman and Chairman Levin of the Armed 
Services Committee and the women that are serving as well on 
these committees to really focus on this problem. It is 
shameful and it needs to be addressed in the most direct and 
effective way.

                                 KOREA

    Number two, I want to ask you, following up Senator Shelby, 
about North Korea. I know that we are all concerned, and in the 
newspapers, it is about their nuclear capabilities and their 
long-term intentions and the dysfunction of the society. But, 
Mr. Secretary, what just concerns me terribly is the recent--
well, what concerns me terribly is the existence of these 
concentration camps. I know that there are articles that have 
been coming out, a flurry lately that talks about the 24 
million people in North Korea that live in horrific general 
circumstances. But then reports from human rights activists say 
that there may be as many as 200,000 or 300,000 people in 
concentration camps. And the way you get there is by knowing 
someone that is thinking wrongly and your whole family gets 
sent there.
    There was a remarkable story about a 23-year-old man that 
escaped miraculously, and a lot of this is based on his own 
personal eyewitness.
    Is there anything that you can do with South Korea and with 
China to try to bring some level of relief or focus on these 
concentration camps? I mean, I do not want to sit here as a 
member of this committee like some people did in the 1940s and 
closed their eyes to what was going on in Germany. So are you 
focused at all on this? Is there anything that we can do? 
Because I think this is a serious human rights issue.
    Secretary Hagel. Senator Landrieu, as you know, North Korea 
is probably the most closed country in the world. Our access to 
that country is essentially zero.
    There are some things that have been ongoing and then they 
stop. One I noted here earlier this morning is the resumption 
of talks between the South Koreans and North Koreans, the first 
time in 6 years. The Kaesong facility, as you know, has been an 
opportunity to start integrating and incorporating. It does not 
deal with the problems that you are talking about, but because 
we have such limited influence and ability to change anything 
in that country, it puts us at, obviously, a very significant 
disadvantage to do much.
    Senator Landrieu. Well, I understand.
    I would just finish up this line with saying that there is 
a lot of respect and cooperation between, of course, South 
Korea and our military and for many, many years. And South 
Korea is a remarkable country. I just visited--and as many of 
our colleagues have been there to see. It is just 
extraordinary. It is the 12th largest purchasing power economy 
in the world, and it sits next to this country that is 
virtually closed and dysfunctional.
    But if there is anything that our military can do to bring 
relief to these horrible camps, I am going to continue to work 
with you on that. That is going to be one of my focuses on this 
committee.

                               READINESS

    Second, closer to home, Fort Polk has been training our 
soldiers jointly. You and I spoke about this. Right in central 
Louisiana, no encroachment, expansion, community so encouraging 
of this joint training base.
    The budget has been reduced for training significantly. Let 
us see. The Army reports it has canceled between 6 and 10 
Combat Training Center (CTC) rotations in response to the 
overseas contingency operations shortfall, which Senator 
Collins was referring to.
    How concerned are you about impacts to our military 
readiness over time, reducing the training that goes on at some 
of our premier bases like Fort Polk, Louisiana?
    Secretary Hagel. Well, I am very concerned about it, as is 
General Dempsey and all of our leaders and we expressed that 
concern directly.
    As General Dempsey often says, we are consuming our 
readiness. General Dempsey's comments earlier this morning 
about the cost alone that it is going to take us to get that 
readiness back. It is a huge cost to us and our readiness and 
our capabilities and our future. And we are not unmindful of 
that.
    But we are living with the realities we are living with, 
and our first priority has to be the capabilities of our 
readiness where the threats are and the prioritization of that. 
And, unfortunately, the training is at the back end of that 
because you do not see it now--you do not need it now, but we 
will need it. And I think General Dempsey has made that point 
clear every time he has a chance.
    Senator Landrieu. Good. And I thank you, General. I would 
like to underscore that.
    I am going to submit my final question for the record and 
that is about the role of the National Guard, Mr. Chairman, in 
our cyber fight. You know, we need a million new cyber 
warriors. The Guard has 460,000 general strength, not only 
preventing attacks but responding to attacks that could cause 
civil panic. They are in a particularly important role. And I 
am going to ask you in a written question what you view, Mr. 
Secretary, as the National Guard's role in the cyber fight.
    General Dempsey. Chairman, could I just--there is one image 
I want to leave with you because you are talking about the 
joint readiness training center at Fort Polk. We have the 
national training center. These are Army and the other services 
have similar training centers.
    By canceling those rotations--I will use the sport of the 
moment, the NBA playoffs--what we are doing at local post camps 
and stations now is training individual players on a basketball 
team but not giving them the opportunity to scrimmage before we 
might at some point put them in the game. That is a bad place 
to be.
    Senator Landrieu. And I would just like to underscore that. 
There are only a few joint training centers, and I do not mean 
to be, Mr. Chairman, too parochial, but that is perfect. And 
thank you, Mr. Secretary and General Dempsey. How ready can you 
be if you have not practiced together? That is the question. 
And it is really a problem.
    Senator Durbin. Thank you, Senator Landrieu.
    Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.
    And I would like to echo many of the comments that my 
colleagues made about sexual harassment, rape, and other 
similar actions. But I think that ground has been covered.
    Mr. Secretary, let me ask you, and let me say welcome to 
the subcommittee. It is always good to see you. Let me ask you 
about something that barely predates you, something that you 
have inherited from the fiscal year 2013 NDAA, and it has to do 
with the critical manufacturing capabilities and capacities in 
DOD's organic industrial base.
    In the bill, we asked for a report that was to be due about 
3\1/2\ months ago, and I know you have some extensions through 
the Armed Services Committee, so I am not picking on you about 
that. But I think the way it currently stands is the Army has 
identified the critical manufacturing capabilities in 
accordance with the report but has not identified the level of 
work to sustain those capabilities. And that is really the 
second part of this we need to complete the picture. So a 
little bit of a good news/bad news. We have part of the picture 
but not the whole picture.
    These arsenals are very important for our national 
security. For example, they make things in these arsenals that 
the private sector does not want to make either because they 
are too dangerous or too small volume. One example I know you 
are familiar with from your time in the service is white 
phosphorous. It is made in Pine Bluff, Arkansas. But all the 
arsenals make various pieces and very important pieces of what 
we do.
    So, nonetheless, it is important that these arsenals 
continue to thrive and to be there when we need them. So I am 
curious if you can give me right now an update on the report 
and, secondly, if you know when this workload piece of this 
will be made available.
    Secretary Hagel. Senator, I cannot give you an update. I do 
not know. I will certainly get back to the record.
    But let me ask Bob Hale. Do you know?
    Mr. Hale. I do not. We are going to have to get back for 
the record. I am sorry.
    Secretary Hagel. If that is okay, we will respond 
immediately.
    [The information follows:]

    The Department is completing the final analysis and anticipates 
submitting the report by the end of July 2013. Per your inquiry, this 
report will include workload estimates, in direct labor hours, 
necessary to sustain the identified critical manufacturing 
capabilities. I will ensure you receive a copy of the final report upon 
completion.

    Senator Pryor. Sure. Like I said, you have some extensions 
through the Senate Armed Services Committee (SASC). So I am not 
picking on you about that. We appreciate that. But I think it 
is important. Some of us have these arsenals and other 
facilities that are very important.

                               HEALTHCARE

    Mr. Hale, let me ask you on healthcare. I want to follow up 
on Senator Graham's question about that. He talked about how 
there is now a premium increase that is phasing in. But the 
question for you is--I mean, it is an important question about 
our healthcare for our men and women in uniform. But how should 
we go about reforming our healthcare system for the military? 
Are we looking at some sort of blue ribbon panel? Are we 
looking at Congress doing it? Do you have the authority to do 
it? Are we looking at something like a BRAC-type situation 
where at some point someone comes up with a package of 
recommendations that we either say yes or no to? How do you 
think we ought to reform it?
    Mr. Hale. I think we are looking at a number of options. 
Some of them go to making the healthcare system more efficient. 
For example, in this fiscal year 2014 budget, we have 
undertaken--or there is preparation for it--an overview of our 
military treatment facilities, some of which have very low 
levels of utilization for a variety of reasons and whether they 
should be reformed. There are a number of efforts we have made 
to try to make the healthcare system more efficient to deliver 
the benefits at less cost.
    And as you know, we believe some modest increases are 
appropriate for the retirees especially. When Congress set up 
TRICARE, the retirees were paying about 27 percent of the cost 
of healthcare. It is now about 11 percent. We will not move 
back to 27, but we believe we need to move back in that 
direction.
    So I think we are developing a package. I do not know that 
we need a Blue Ribbon Commission. I think we need to enunciate 
them clearly to you and then we will need the support of the 
Congress because almost all of these require either laws or at 
least the consent of the Congress.

                            NUCLEAR WEAPONS

    Senator Pryor. General Dempsey, let me also follow up with 
you on one of Senator Graham's questions. He asked about Iran 
which is on a lot of people's mind. You know, I see Iran's 
effort to get a nuclear weapon as a threat to U.S. national 
security. And I would just like to hear from you how you feel 
that it is a threat to U.S. national security.
    General Dempsey. Thanks, Senator.
    Iran is a threat to U.S. national security in many ways, 
not simply their move toward the potential to develop a nuclear 
weapon.
    And I choose my words carefully because the intelligence 
community has not yet come to a conclusion that they intend to 
build a nuclear weapon, but as the Secretary said, they are 
certainly preserving and building on their options to do so 
which should be of concern to all of us and is. And we have 
been very clear as a Nation that we are determined to prevent 
them from acquiring a nuclear weapon because it would be so 
destabilizing to the region.
    But they are also active in cyber. They have got surrogates 
all over the region and all over the world. They proliferate 
arms. They are a disruptive influence globally. And so I do 
consider them a threat to our national security.
    Senator Pryor. Mr. Chairman, let me just ask one follow-up. 
You used the term ``destabilizing.'' Can you explain to the 
subcommittee how that event would be destabilizing and also how 
it might change the balance in the Middle East?
    General Dempsey. The acquisition of a nuclear weapon? Well, 
look, this is all playing out in the context of a broader 
Sunni/Shia conflict across the region. It certainly stretches 
visibly from Beirut to Damascus to Baghdad. And Iran is very 
active in fomenting the violence on the Shia side of that 
equation. If they were to acquire a nuclear weapon, it is 
certainly conceivable that someone on the Sunni side of the 
ledger would feel obligated to do the same, and then we are off 
to what could potentially be a regional arms race.
    Senator Pryor. Thank you, Mr. Chairman.
    Secretary Hagel. Excuse me, Mr. Chairman. May I just 
respond to one question very briefly?
    There is a panel, to your earlier point about TRICARE, so 
on, set up by the Congress, as a matter of fact. The two co-
chairs are former Senator Bob Kerrey and former Senator Larry 
Pressler. I think it is nine members--seven members. And their 
objective is to look at future compensation benefits packages. 
So that has not been filled out yet. I think there are still a 
couple of members yet to be appointed. But that panel will be 
very active and they are starting to fill that out now.
    Thank you.
    Senator Durbin. Thank you, Senator Pryor.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman, and 
thank you all for coming before the committee and your service 
as well.

                             MENTAL HEALTH

    Secretary Hagel, I want to start with you. Last year I 
asked Secretary Panetta to begin a DOD-wide review of how the 
Department diagnoses mental health conditions, and he agreed to 
do that. The Army recently completed their review, and there 
are some really valuable lessons we got from that. And it 
really underscored the need to complete the entire DOD-wide 
review and identified gaps in care and improvements that need 
to be made.
    Given the number of suicides we have already seen this year 
and our continued winding down from Afghanistan, I think it is 
really important that this review stay on track and wanted to 
ask you when you expect that review to be completed.
    Secretary Hagel. I am well aware of the review. I am 
absolutely committed, as Secretary Panetta was, to the review 
and addressing it as he said very clearly. When you look at the 
latest numbers--we had 350 suicides last year--and all the 
other extenuating dynamics that play out, it is, as Secretary 
Panetta noted, one of the great internal problems that we have.
    As to your question when is it going to be due out, I do 
not know. Do you know, Bob? We will get back to you.
    Senator Murray. I would like an answer, and then I think we 
have to really make sure we stay on track and make sure we get 
the diagnoses correct and respond right.
    [The information follows:]

    During the hearing you asked me about the status of the DOD-wide 
review on mental health diagnoses and the Department's progress in 
meeting the legislative requirements to create a joint, comprehensive 
suicide prevention policy.
    In May 2012, prompted in part by allegations that certain mental 
health diagnoses and disability ratings of the Integrated Disability 
Evaluation System (IDES) may have been influenced by factors other than 
the medical diagnostic criteria, the Secretary of the Army directed a 
review of behavioral health diagnoses and evaluation, especially Post-
Traumatic Stress Disorder (PTSD), in the context of DES/IDES. In June 
2012, Secretary Panetta ordered all military branches to conduct such a 
review of behavioral health diagnoses for servicemembers who 
participated in a Department's disability evaluation system, to be 
completed no later than March 2014.
    You also asked what progress has been made in meeting the 
legislative requirement to create a joint, comprehensive suicide 
prevention program. The Department is making progress on efforts to 
standardize, centralize, and evaluate all DOD prevention programs and 
policies. We published the Defense Suicide Prevention Program Directive 
on June 18, 2013. It establishes policy and procedures for the entire 
Department and accordingly assigns roles and responsibilities in 
accordance with the requirements for Suicide Prevention and Resilience 
contained in the fiscal year 2013 National Defense Authorization Act. 
The Department's joint efforts are guided by operational and mental 
health representatives from the Military Services, the National Guard 
Bureau, and the Joint Staff. We are also working regularly with the 
Department of Veterans Affairs, the Substance Abuse Mental Health 
Services Administration, think tanks, academia, and experts from a 
variety of civilian-run programs that have proven track records.
    I look forward to working closely with you as the subcommittee 
considers the fiscal year 2014 Defense Appropriations bill. Thank you 
for your continued support of our men and women in uniform and our 
entire civilian workforce.

                                SUICIDES

    Senator Murray. On the same line, the Army recently 
released some statistics saying that there have been 109 
potential suicides so far this year. That is just in the Army. 
That is really high compared to last year and continues a 
disturbing trend you just referred to because we are losing 
more servicemembers today to suicide than we do in combat.
    We have passed a number of initiatives and pieces of 
legislation to combat this problem and to provide some 
additional access to mental health resources.
    I wanted to ask you, Secretary, what progress has the 
Department made in meeting the legislative requirement to 
create a joint comprehensive suicide prevention program.
    Secretary Hagel. Let me ask Bob Hale or General Dempsey 
because I kind of got in the middle of it, so the progress 
report--I do not know. I assume we have made progress. I have 
asked about it. I have gotten briefings on it. I know it is 
ongoing. I know we are doing it. I know Chief Odierno is 
focused on it.
    General Dempsey, anything else?
    General Dempsey. Yes, thanks, Senator. I do not have the 
dates and I cannot give you a progress report from memory. We 
meet as the Joint Chiefs of Staff (JCS) and then we get the 
periodic in-progress reviews. I would like to take that one for 
the record to give you the proper answer.
    Senator Murray. If you could get both of those back to me.
    [The information follows:]

    In May 2012, prompted in part by allegations that certain mental 
health diagnoses and disability ratings of the Integrated Disability 
Evaluation System (IDES) may have been influenced by factors other than 
the medical diagnostic criteria, the Secretary of the Army directed a 
review of behavioral health diagnoses and evaluation, especially Post-
Traumatic Stress Disorder (PTSD), in the context of DES/IDES. In June 
2012, Secretary Panetta ordered all military branches to conduct such a 
review of behavioral health diagnoses for servicemembers who 
participated in a Department's disability evaluation system, to be 
completed no later than March 2014.
    In assessing the Military reviews thus far, records at Madigan Army 
Medical Center, Joint Base Lewis-McChord, confirmed that some did 
contain modified mental health diagnoses, specifically regarding PTSD. 
Army has identified all other relevant cases and notified 99 percent of 
them; Navy has identified 98 percent of relevant cases and notification 
mailings are in progress; and Air Force has identified 72 percent of 
relevant cases and 81 percent of these have been notified. The Physical 
Disability Board Review is in process of obtaining all necessary 
records, including those from VA.
    In regard to suicide prevention, the Department is making progress 
on efforts to standardize, centralize, and evaluate all DOD prevention 
programs and policies. We have drafted the Defense Suicide Prevention 
Program Directive that establishes policy and procedures for the entire 
Department and accordingly assigns roles and responsibilities. Other 
efforts include:
  --The launch of a help-seeking campaign to reduce stigma.
  --The development of an analytic-based method for identifying/
        targeting at-risk members.
  --The Military Crisis Line which provides overall access to services.
  --The development of Suicide Clinical Practice Guidelines and 
        memorandum guidance.
  --The development of training core competencies for gatekeepers, 
        commanders, chaplains and clinicians.
    While these activities are centrally coordinated by the 
Undersecretary of Defense for Personnel and Readiness, they are guided 
by operational and mental health representatives from the Military 
Services, the National Guard Bureau, and the Joint Staff. We are also 
working regularly with the Department of Veterans Affairs (VA), the 
Substance Abuse Mental Health Services Administration (SAMHSA), think 
tanks, academia, and experts from a variety of civilian-run programs 
that have proven track records.
    Again, I look forward to working closely with you as the 
subcommittee considers the fiscal year 2014 Defense Appropriations 
bill. Thank you for your continued support of our men and women in 
uniform and our entire civilian workforce.

                               HEALTHCARE

    Senator Murray. And in your testimony, you actually say 
that DOD is protecting funding for mental health. Can you just 
quickly say how those funds are going to be used, and are there 
programs that are going to be expanded under that?
    Secretary Hagel. I am going to ask the Comptroller to take 
you down through that.
    Mr. Hale. We were referring to the fact that we will not 
sacrifice any of the quality of healthcare because of 
sequestration. We will find ways to meet all of our key 
healthcare needs. There may be some reductions, say, in 
research, development, testing, and evaluation (RDT&E) programs 
based on sequestration, but the healthcare for individuals will 
not be compromised.
    Senator Murray. And the mental health side?
    Mr. Hale. Yes, the same.
    Secretary Hagel. All the current programs that we have will 
be funded.
    Mr. Hale. And in particular, Wounded Warriors will be our 
highest priority. I mean, we will do nothing to affect their 
care.
    Senator Murray. Okay, I appreciate that. I do not want to 
lose track of the mental health side of this.
    My last question is more strategic. Over the last 10 years, 
military installations across our country have grown 
dramatically to sustain the fight in two wars. I have 
personally seen in my home State Joint Base Lewis-McChord grow 
by 64 percent since 2006 to meet the demand.
    Now, as the military shifts its focus to the Asia-Pacific 
region, the DOD is going to increasingly rely on the 
installations in our Western States. And I wanted to ask you 
today to discuss how DOD is taking advantage of the investments 
that we have now made over the last 12 years and the strategic 
value of our installations in the Western States like Joint 
Base Lewis-McChord and the Fairchild Air Force Base in 
Washington State to facilitate your long-term strategic 
decisions.
    Secretary Hagel. I will make a general comment in response 
to your question. Then if General Dempsey or the Comptroller 
would like to add anything.
    Obviously, as you have stated, those assets that we have, 
especially in the western part of the United States, become--
they have always been important, but become more central to 
that shift of our priorities based on threats and interests and 
our ability to defend those interests in the Asia-Pacific. So I 
do not think there is any question that that is going to 
continue, and that means infrastructure. That means all that 
goes with it.
    Now, that does not mean that there will not be any 
adjustments or considerations of consolidations until we get 
down into some of these things as to the implementation of the 
Defense Strategic Guidance and, in particular, the Asia-Pacific 
rebalancing. By my general assessment of it is that they will 
remain critically important to that strategic shift.
    Senator Murray. General Dempsey.
    General Dempsey. The only thing I would add, Senator, is 
that I align myself with the Secretary's general impression 
that our rebalancing in the Pacific will certainly advantage 
that part of our infrastructure that tends to exist on the west 
coast.
    But it is worth mentioning that the Army, for example, has 
not yet announced how it will go from its current strength, 
which is roughly just over 550,000 down to 490,000. Based on 
the last budget cut, the $487 billion, there is going to have 
to be some number of brigades cut, and the Army has not 
announced nor shared with the Secretary where those reductions 
will come from.
    On top of that, then we have got to account for 
sequestration, and I predict it will affect every installation 
in the continental United States and most of those overseas.
    Senator Murray. Thank you very much, Mr. Chairman.
    Thank you to all of you.
    Senator Durbin. Thank you very much, Senator Murray.

                          ACQUISITION STRATEGY

    We have talked about a lot of ways that the Department of 
Defense is going to envision saving money and some of them more 
painful than others. We have not spent much time this morning 
talking about the acquisition strategy at the Department of 
Defense, which consumes a substantial amount of taxpayers' 
dollars each year.
    Are you envisioning, Mr. Secretary, any changes in approach 
either to existing acquisition projects or future projects that 
could save us money and still keep us safe with the best 
technology?
    Secretary Hagel. Mr. Chairman, yes. We are constantly 
evaluating that. We are currently evaluating it. We have to if 
for no other reason than the reality of resource limitations. 
They have to align with our strategic interests with the 
President's strategic defense guidance, what kind of assets do 
we project that we are going to need out into the future. This 
is a constant evaluation.
    I think when Ash Carter was the Under Secretary for 
Acquisition, he started a number of new programs that have been 
followed by the current Under Secretary Frank Kendall--Bob Hale 
will be able to provide some numbers on this--which have given 
DOD significant savings, at the same time enhancing our 
capacity and ability to align our assets and resources with our 
strategic interests and defending those.
    So let me stop there and then General Dempsey may want to 
say something too. But the Comptroller may want to add some 
numbers to what I have just noted.
    Mr. Hale. I do not have a number for better business 
practices that the Secretary was referring to in my head. I 
know that we have had success in kind of sharpening our pencils 
and getting our suppliers to do the same and weapons systems 
like the F-35. We have also, in this budget that is before you 
now, proposed termination or restructurings of weapons that 
will save about $8.2 billion over the 5-year period. The 
precision tracking space system was one, SM-3 IIB missile, and 
also a major restructuring of the ground combat vehicle. So I 
see that continuing regardless of whether we see budget cuts 
and accelerating if we see cuts in the Budget Control Act and 
sequestration.
    Senator Durbin. When I speak to the contractors for the 
major acquisitions, virtually all of them have an argument that 
goes along familiar lines. The marginal cost of the next X, 
whatever it is, is dramatically less. So if you will keep 
buying, it will get cheaper. But, unfortunately, it is like 
going to the store and saying I am just going to buy sale 
items, and it turns out everything is on sale. And you really 
have to decide what is the most important thing.

                             CYBERSECURITY

    A recent briefing on one of these weapons systems brought 
to mind the fact that what we are trying to do is to stay a 
step ahead of the enemy, any potential enemy. And this whole 
cyber war makes it more complex. Our enemies are vaulting ahead 
of where they once were by stealing the best ideas from us.
    So can you address that particular issue in terms of the 
theft of this technology, the cybersecurity issue, and how it 
keeps forcing us to run faster to try to catch this rabbit?
    Secretary Hagel. As I had noted in some earlier comments in 
answering questions here this morning, I put the cyber threat 
as high up on the list of threats to this country as any one 
thing, and there are a lot of threats. We have got nuclear 
threats, terrorism, and so on. And one of the reasons I do is 
for the very reason you just noted, Mr. Chairman. You read 
about it almost every day in the papers about the theft of 
industrial base secrets and all that goes with that.
    So, yes, we do have to stay ahead of it, and yes, we do 
have to work closely with the private sector. Yes, there is a 
mix and there is a balance on this. And we constantly try to 
achieve that right mix with resources and priorities and the 
technology. Technology drives it all.
    Senator Durbin. Thank you.
    Mr. Hale, back to my first line of questioning, when you 
provide me with the information about the contractors' 
employees, if you could also provide me with their salaries. I 
would like to know what kind of sacrifice these contractor 
employees are making compared to civilian DOD employees through 
sequestration.
    Mr. Hale. Will do.
    [The information follows:]

    In our fiscal year 2011 report to Congress on contracted services, 
we estimated the number of contractor full-time equivalents (FTE) to be 
709,879. It is important to note that the 709,879 number equates to the 
full-time level of effort services provided to the Department, not 
necessarily the number of actual employees working for the Department. 
The total cost for this support was $145 billion, equating to an 
average contract employee cost of $205,000 per FTE. This is how much 
the Department pays the contractor for the service they provide. It 
does not necessarily represent how much is paid to the employee. 
Contract employees are paid directly by their companies, who set their 
salaries.
    Additionally, you asked if it is true that the average contract 
employee costs about two to three times as much as the average DOD 
civilian employee performing similar work. It is true that the cost of 
a contractor FTE can be more expensive than Government employees 
performing similar work, in some cases as much as two to three times as 
you noted. At the same time, contract employees can represent the most 
cost efficient option for the Department, particularly for specialized 
demands of short duration and base operating and installation support 
functions. The private sector is a vital source of expertise, 
innovation, and support to the Department and the analysis of what we 
spend on each sector of the workforce must be location specific. I am 
committed to continuing to integrate the information we have about 
contractor costs into our programming and budgeting processes, in order 
to ensure our workload alignment decisions do not result in unnecessary 
expenses.
    I look forward to working closely with you as the subcommittee 
considers the fiscal year 2014 Defense Appropriations bill. Thank you 
for your continued support of our men and women in uniform and our 
entire civilian workforce.

    Senator Durbin. Thank you.
    Senator Cochran.
    Senator Cochran. Mr. Chairman, let me just thank the panel. 
I think the hearing has been very informative, very 
straightforward. I appreciate the fact that they have been 
responsive to our questions, and in situations where we do not 
have the exact dollar amounts for a request, they are getting 
back to us with a more explicit request.
    We want to be sure we cooperate with the Department of 
Defense. I do not know of any other responsibility that we have 
here in the Senate than to try to be sure we get this right. 
Protecting the safety and security of our American citizens is 
our highest priority, and I think we need to convey that from 
this panel, as well as to expect that same kind of commitment 
and attitude from the panel of witnesses before us.
    Thank you.
    Senator Durbin. Thank you, Senator Cochran.
    Senator Shelby.
    Senator Shelby. Mr. Chairman, I have one question. I think 
I will direct it first to Mr. Hale.
    There will be, as I understand it, a significant increase 
in the number of ground-based interceptors located at Fort 
Greely, Alaska. And as the Department of Defense prepares to 
increase this number, as I understand it, from 30 to 44, which 
we believe is the right thing to do, nearly a 50-percent 
increase, what steps will be taken to implement the ``fly 
before you buy'' policy and how will this impact the unit cost 
of each ground-based interceptor in the near term? Mr. Hale, 
have you gotten into that?
    Mr. Hale. Well, we are certainly committed to making sure 
these interceptors work, that testing goes on. It has been a 
little more successful lately.
    Senator Shelby. Absolutely.
    Mr. Hale. That is very hopeful.
    I do not have in my head a unit cost, but as you know, our 
plan is to refurbish one of the missile fields for operational 
use and to buy some additional interceptors, also to refurbish 
some that are now in storage.
    So we will have some time. This is not going to happen 
immediately, and that will give us time to finish the testing 
program. And we are committed, as I said, to being sure this 
works before we expand its numbers.
    Senator Shelby. Thank you.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Durbin. Thank you very much.
    My thanks to our witnesses today, all of you. And we will 
be working with you in preparation of the budget for the fiscal 
year 2014.
    [The following questions were not asked at the hearing but 
were submitted to the Department for response subsequent to the 
hearing:]

                Questions Submitted to Hon. Chuck Hagel
            Questions Submitted by Senator Richard J. Durbin

                    REALLOCATION OF FEDERAL SPECTRUM

    Question. Secretary Hagel, the reallocation of Federal spectrum is 
a topic that continues to receive attention and is a point of focus for 
the Obama administration. Does DOD have a plan for reallocating 
spectrum?
    Answer. DOD has actively been working with the National 
Telecommunications and Information Administration (NTIA), the Federal 
Communications Commission (FCC), other Federal agencies and industry to 
assess spectrum relocation, sharing and other options for repurposing 
spectrum. These efforts have highlighted the importance of ensuring 
that spectrum repurposing decisions are technically sound and 
operationally viable from a mission perspective. The results so far 
have been promising. For example:
  --The 1695-1710 MHz and 3550-3650 MHz bands have been identified for 
        geographic spectrum sharing. Ongoing work through the FCC 
        rulemaking process on the details of the sharing arrangements. 
        DOD has large investment in weather satellite ground stations 
        and critical radar capabilities in these bands.
  --Ongoing assessment of two 5 GHz bands for sharing with unlicensed 
        use; DOD already shares other segments of the 5 GHz band with 
        unlicensed users.
  --DOD has also been actively working with industry through the CSMAC 
        Working Groups to progress the 1755-1850 MHz band evaluation, 
        including working through highly complex technical issues, to 
        assess and recommend practical frameworks. All analysis of this 
        band is pointing to a combination approach which includes both 
        sharing and relocation of Federal systems.
    Question. What are the main concerns for DOD as it assesses 
spectrum reallocation?
    Answer. DOD's main concerns are directly tied to the necessity of 
assured access to spectrum in order to meet its varying current and 
future global mission requirements, consistent with overarching 
Administration goals. From a DOD perspective, both sharing and 
relocation decisions pose potential risks. These risks are further 
complicated for DOD due to the magnitude, complexity and diversity of 
its operations. Successful relocation or sharing of defense operations 
is dependent upon the ability to conduct adequate analysis to determine 
cost and operational feasibility; availability of alternate spectrum to 
relocate systems to; adequate implementation funding; and adequate time 
to implement. If any of these conditions is not met, then the ability 
to transitioning defense and military operations for relocation or 
sharing is at great risk. While no decision to repurpose spectrum is 
``risk free,'' the risks can and must be managed.
    Question. Could proceeds from auctioning DOD-held spectrum help 
alleviate DOD's growing budget constraints?
    Answer. The Commercial Spectrum Enhancement Act (Public Law 108-
494), as modified by the Middle Class Tax Relief and Job Creation Act 
of 2012 (Public Law 112-96), does not allow DOD or any other Federal 
agency to use auction proceeds for any activities other than costs that 
can be attributed to spectrum sharing or relocation associated with the 
auction. Any auction monies that remain in the SRF after the payment of 
relocation or sharing costs must revert to the U.S. Treasury, ``for the 
sole purpose of deficit reduction,'' not later than 8 years after the 
date of the deposit.

              DEFENSE INDUSTRIAL BASE--ROCK ISLAND ARSENAL

    Question. In surge years, there is plenty of work and the rate 
arsenals charge is very competitive. But as workload declines, rates go 
up, pricing the arsenals out of the market in some cases. My colleagues 
and I have pressed the Army to improve its workload planning process, 
and as a result, Army is soon to release a new, Organic Industrial Base 
Strategic Plan to map a way forward.
    How do you believe we can best support our organic industrial base 
during these challenging budget times? Will you work with the Army and 
this subcommittee to implement this plan and preserve these critical 
capabilities?
    Answer. The Department recognizes that maintaining depots and 
arsenals provides readily available base and surge capabilities that 
enable our forces to respond to mobilization, national defense 
contingency situations, and other emergency requirements. Supporting 
the organic industrial base as well as our commercial industrial base 
will be a very difficult challenge in the face of severely restricted 
budgets. Industrial activities are competing with operational 
components for scarce available resources. The Department is taking 
proactive steps to meet these challenges. A draft DOD instruction 
relating to arsenals will be issued this year. This instruction directs 
arsenals to identify critical manufacturing capabilities and sustaining 
workloads annually. The Army's recently published Organic Industrial 
Base Strategic Plan provides a forward-looking management framework 
that will ensure critical capabilities are sustained, balanced with 
private sector industrial base requirements, and available to surge to 
meet future wartime and other emergency operations. We will continue to 
work with the Army and this subcommittee to preserve critical 
industrial capabilities.
                                 ______
                                 
             Question Submitted by Senator Patrick J. Leahy

    Question. Making the situation more difficult, Congress's inaction 
has led to an across-the-board budget sequester. These cuts are the 
opposite of strategy, but they appeal to those who want to duck 
responsibility for their own policies.
    In light of all these challenges, can you tell us how you will 
ensure that the ``Skimmer'' sets the right priorities, and how you will 
implement those priorities? When will the ``Skimmer'' wrap up, and what 
help can this panel offer? Last, what impact does sequestration have on 
your ability to reprioritize Pentagon spending?
    Answer. The Strategic Choices and Management Review (SCMR) was 
designed to prepare us to shape the Department in different budget 
scenarios. It finished its analysis at the end of May and DOD 
leadership has been briefed on its results. The SCMR was guided by the 
2012 Defense Strategic Guidance, which articulated priorities. DOD 
leadership provided further refinement of those priorities, which 
informed the strategic discussion in the SCMR. The SCMR itself did not 
set priorities, nor did it provide recommendations for implementation. 
Those would arise from discussions with the President.
    If sequestration continues, the Department would greatly benefit 
from maximum flexibility to shift resources among appropriations. In 
addition, we will ask for Congress's help in passing legislation that 
will enable DOD to cut spending in areas that Congress has previously 
prevented. For example, the Department needs to be able to shed itself 
of excess bases. A new Base Closure and Realignment Commission (BRAC) 
is an essential step in cutting future spending. The Department also 
needs to be able to reform compensation. The President's budget 
contained a package of military compensation proposals that Congress 
must act on, including a modest increase in the fees and pharmacy co-
pays for TRICARE; and providing servicemembers a 1-percent pay raise in 
fiscal year 2014.
    Sequestration is irrational, it is mindless, and it is damaging. 
The Department sincerely hopes that Congress will work to end it.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

    Question. Do you believe China's military modernization is 
sufficiently transparent?
    Answer. I believe that China should be more transparent about its 
military modernization. The Chinese have taken some steps to increase 
transparency over the past few years, including regularly publishing 
defense white papers and establishing a spokesperson and Web site for 
the Ministry of National Defense. However, China's lack of transparency 
surrounding its growing military capabilities and strategic 
decisionmaking has increased concerns in the region about China's 
intentions. Absent a move towards greater transparency, these concerns 
will likely intensify as the People's Liberation Army (PLA) 
modernization progresses.
    The area of defense spending is one example: It is difficult to 
estimate actual PLA military expenses due to China's poor accounting 
transparency and incomplete transition from a command economy. China's 
published military budget likewise omits several major categories of 
expenditure, such as procurement of foreign weapons and equipment.
    Question. What are the prospects for expanded high level military 
to military engagements, as well as low level joint training 
activities?
    Answer. Within the limits of the National Defense Authorization Act 
(NDAA) of 2000, we continue to work towards a healthy, stable, reliable 
and continuous military to military relationship with China, which is 
an essential component of a positive, cooperative and comprehensive 
United States-China relationship. Our strategy operates along three 
main lines of effort: improving cooperative capacity in areas of mutual 
interest, such as peace-keeping, humanitarian assistance, disaster 
relief missions and counter-piracy operations; fostering greater 
institutional understanding through contacts between armed forces at 
all levels; and building common views of the regional security 
environment and related security challenges, which occurs primarily 
through institutional exchanges. We have made progress in all of these 
areas; however, the relationship currently falls short of a solid 
foundation sufficient to weather natural turbulence in the bilateral 
relationship.
    Question. What are your greatest concerns with respect to China's 
growth in military capabilities?
    Answer. My concerns have less to do with specific capabilities than 
with strategic intent. China publicly states that its rise is 
``peaceful'' and that it harbors no ``hegemonic'' designs or 
aspirations for territorial expansion. However, the Chinese are 
continuing to pursue a long-term, comprehensive military modernization 
program designed to improve the capacity of its armed forces to fight 
and win short-duration, high-intensity regional military conflicts. 
They also appear to be using the capabilities of the U.S. military as a 
``pacing threat'' toward which they have oriented much of their new 
development. We are concerned most with why China is developing these 
new capabilities and under what circumstances China might use them.
    Question. Do you believe the theft of U.S. intellectual policy is a 
matter of Chinese state policy?
    Answer. I believe that at least a significant fraction of the theft 
of intellectual property that has occurred is either attributable to 
Chinese state entities or originates from China, as the Department 
noted in this year's report to Congress on military and security 
developments involving China. The National Counterintelligence 
Executive noted in its 2011 report, Foreign Spies Stealing U.S. 
Economic Secrets in Cyberspace, ``China's intelligence services 
frequently seek to exploit Chinese citizens who can use their insider 
access to steal sensitive business information.'' Additionally, the 
United States Government continues to be concerned about malicious 
cyber-enabled economic theft of intellectual property, trade secrets, 
and confidential business information for commercial gain. We are 
engaging China directly on these issues under the auspices of the 
Strategic and Economic Dialogue, including the newly formed civil-
military Cyber Working Group.
    Question. The Air Force's fiscal year 2014 budget request includes 
funds to continue operating the Global Hawk Block 30's, but the 
Department has so far ignored current law and has not obligated the 
funds provided by Congress for the remaining three Global Hawk planes. 
Recent press reports indicate the Air Force will purchase the planes; 
however, some have speculated the Air Force will not purchase the 
planes sensors. Not purchasing the sensors would be a clear violation 
of congressional intent, as a Global Hawk without its sensors is 
useless to uniformed commanders.
    When will the Air Force purchase the remaining Block 30 aircraft? 
Will the Air Force also purchase the sensors for those aircraft?
    Answer. The Air Force is in negotiation with Northrop Grumman to 
procure three Global Hawk Block 30 Lot 11 aircraft and sensors. The 
program office released a request for proposal on June 25, 2013 
requesting Not-To-Exceed Lot 11 proposals, in writing, due back to the 
Air Force not later than July 18, 2013. Planned request for proposal 
response dates support contract award dates of September 2013 (advanced 
procurement) and September 2014 (low rate initial production).
    Question. Despite these guidelines, I continue to hear stories of 
servicemembers who were prescribed mefloquine when one of the other 
medications would have been appropriate and were not given the FDA 
information card.
    What steps are the services taking to ensure that medical personnel 
prescribing this drug are following DOD and FDA regulations? How many 
servicemembers were issued this drug within the last year?
    Answer. The Services continue to monitor mefloquine utilization. 
The Army and Navy have developed Continuing Medical Education programs 
for healthcare providers and pharmacists on the topic of prescribing 
and dispensing mefloquine. During calendar year 2012 2,261 
prescriptions for mefloquine were given to 1,971 Active Duty 
servicemembers. The revised DOD policy for prophylaxis of malaria was 
released on April 15, 2013. The policy raises the medication 
atovaquone-proguanil to first line consideration along with doxycycline 
and indicates mefloquine should be reserved for individuals with 
intolerance or contraindications to both first-line medications. It 
emphasizes before using mefloquine for prophylaxis, care should be 
taken to identify any contraindications on an individual basis and 
ensure the patient information handouts required by the U.S. Food and 
Drug Administration are available.
    Question. Will you address the issue of mefloquine toxicity by 
making it a focus area for research under the Defense Medical Research 
and Development Program and the War-Related Illness and Injury Study 
Center?
    Answer. At this time a research effort in this area is not planned. 
The Department will continue to evaluate future research needs in this 
area.
    Question. I had the opportunity to travel with Senator McCain and 
White House Chief of Staff Denis McDonough to Guantanamo last Friday, 
and let me commend Admiral Smith and his team, working under very 
difficult circumstance and doing a great job. As I said to them, it is 
the situation and the policy that need improvement, not their efforts.
    Secretary Hagel, do you believe that closing Guantanamo is in our 
national security interest?
    Answer. Yes. The President's goal, which takes into account our 
national security interests, is to cease detention operations at the 
detention facilities at Naval Station Guantanamo Bay, Cuba. I fully 
support that goal.
    Question. The President said he asked the Department of Defense to 
establish a site inside the U.S. to hold Military Commission trials. 
Maybe there will be more than one site eventually designated inside the 
U.S., but I hope that you will work quickly to establish a site inside 
the U.S. where we can start prosecuting, in Military Commissions, some 
of the approximately 30 detainees at Guantanamo who in 2010 the 
Guantanamo Task Force determined there was enough evidence to prosecute 
in either Military Commissions or Federal Court.
    Do you believe that these, or the other detainees at Guantanamo, 
can be brought to the United States and held in secure facilities while 
they await trial or continued detention under the laws of war? Do you 
believe that these detainees scan be transferred in ways that don't 
pose additional security threats?
    Answer. Yes, I believe the Department could house detainees in 
secure facilities in the United States. Throughout our history, the 
United States has held detainees captured during armed conflict both in 
overseas theaters as well as on U.S. soil. The Department has already 
held as many as three detainees at the Naval Consolidated Brig at 
Charleston, South Carolina. The last of these three was transferred to 
Justice Department custody in March 2009.
    However, legislative restrictions with respect to Guantanamo 
detainees have precluded transfers to the United States. Since 2009, 
each National Defense Authorization Act has prohibited the Department 
of Defense from using funds authorized to be appropriated by the Act to 
``transfer, release, or assist in the transfer or release to or within 
the United States, its territories, or possessions'' those detainees 
currently held at the detention facility at Guantanamo. While such 
restrictions are applicable, the Department will not be able to 
transfer any detainees at Guantanamo to the United States.
    Question. How long will it take DOD to establish a site inside the 
U.S. to be able to hold these Military Commission trials? Aren't there 
secure military courtrooms inside the U.S. already in existence where 
Guantanamo detainees could be tried almost immediately? Do you know how 
many of these approximately 30 GTMO detainees who could have charges 
filed against them can only be prosecuted in a Federal criminal court 
because the charges of ``Conspiracy'' and ``Material Support to 
Terrorism'' are no longer available in Military Commissions unless the 
Al-Bahlul decision is overturned?
    Answer. The amount of time needed to prepare a site for holding 
military commission trials depends largely on the status of the 
detainee(s) to be tried. There are heightened security and handling 
requirements for High Value Detainees, such as the six individuals 
already arraigned and currently being tried for complicity in the 9/11 
attacks and the attack on the USS Cole. It would take a number of 
months for the Department to establish a site inside the U.S. to hold 
military commissions for such individuals. For cases not involving High 
Value Detainees, there are already military facilities inside the 
United States capable of holding trials.
    Recent D.C. Circuit decisions in the Hamdan II and Al Bahlul cases 
have limited the Government's ability to pursue charges in military 
commissions for conduct that pre-dates 2006, when Congress passed the 
first Military Commissions Act. The Chief Prosecutor has stated that 
many of the detainees designated for prosecution cannot be tried by 
military commission under current law because of the unavailability of 
material support charges for such pre-2006 conduct. The question of 
which, if any, of the detainees not prosecutable by military commission 
can be prosecuted in Federal court is a question for the Department of 
Justice.
    At the Government's request, rehearing en bane has been granted in 
the Al Bahlul case, and briefing will begin shortly.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray

                         CIVILIAN CREDENTIALING

    Question. Secretary Hagel, I have put much time and effort into 
assisting veterans transition into civilian employment. Too often, I 
have identified that civilian licensing or certification agencies are 
not appropriately recognizing the years of military service that could 
translate into comparable requirements for civilian employment 
opportunities. Recently, I have been informed that the Navy has not 
continued with the re-submission of their training requirements to the 
Coast Guard for approval to recognize naval sea time and training 
requirements for domestic and international commercial service.
    Why has the Navy not renewed their training documents with the 
Coast Guard to maximize the recognition that servicemembers could 
receive for comparable civilian skills in the merchant marine? When 
will the Navy address these issues?
    Answer. As of March 2013, Navy courses that had previously expired 
were approved/renewed by the Coast Guard. There was a brief lapse in 
the submission of Navy training data for Coast Guard approval due to a 
gap in assignment of program responsibility. However, upon discovery of 
the gap during a program review, the material was submitted to the 
Coast Guard for credentialing review. The Navy is continuing analysis 
to identify other applicable training for submission. The Navy also 
remains committed to assisting Sailors as they transition into civilian 
employment by providing Sailors access to the Navy Credentialing 
Opportunities On-Line (COOL) Web site (https://www.cool.navy.mil) which 
helps Sailors find information on certifications and licenses related 
to enlisted ratings, designators, collateral duties/out of rate 
assignments, and officer designators to include comparable requirements 
for the Coast Guard and Merchant Marines.
    Question. The Army is currently doing an exemplary job at 
maintaining their training certification with the Coast Guard and even 
goes so far as incorporating Coast Guard requirements into the Army 
training curriculum so that servicemembers are receiving Coast Guard 
credentials as part of their military training.
    Has the Navy explored this option for servicemembers in the Navy? 
If so, what are the impediments to providing this training so that 
servicemembers have the opportunity to also receive their Coast Guard 
credentials?
    Answer. The Navy has not explored the option of incorporating Coast 
Guard requirements into the training curriculum. The Army tailored its 
training to incorporate Coast Guard licensure which supports their 
material and logistics/transport mission (similar to Merchant Marine 
logistics/transport occupations). The Navy's training curriculum is 
different and supports the mission of delivering credible capability 
for deterrence, sea control, and power projection to deter or contain 
conflict and fight and win wars. However, there are several Navy 
occupations (both Officer and Enlisted) that have roles closely related 
to Merchant Marine occupations and are directly tied to Coast Guard 
licensure. These occupations currently have the opportunity to attain 
Coast Guard licensing based on their existing Navy training and 
experience. The Navy remains committed to assisting Sailors as they 
transition into civilian employment by providing Sailors access to the 
Navy Credentialing Opportunities On-Line (COOL) Web site (https://
www.cool.navy.mil) which helps Sailors find information on 
certifications and licenses related to enlisted ratings, designators, 
collateral duties/out of rate assignments, and officer designators to 
include comparable requirements for the Coast Guard and Merchant 
Marines.

                                BIOFUELS

    Question. I am pleased that recently the Department awarded 
contracts in Phase 1 of its Defense Production Act biorefinery program. 
The Federal funds are being matched--and then some--by private funds. I 
believe that this effort will be a game-changer for the biofuels 
industry, with the projected operational cost of the fuels to be less 
than $4 per gallon. This effort will help advance the timeline for the 
commercialization of drop-in alternative fuels.
    Assuming these companies are successful in Phase I, are you 
committed to making the Phase II awards under the Defense Production 
Act?
    Answer. The Department of Defense is committed to making Phase II 
awards, provided an evaluation of the results of Phase I by interagency 
technical experts shows the project's technical progress, plans, and 
business strategy warrant a move on to Phase II. Phase I will take 
approximately 1 year to complete. Phase II, which is for biorefinery 
construction, will take approximately 36 months to complete.
    Question. I want to clear a few things up about section 526, and 
the impacts on the Department of Defense in particular.
    First, has section 526 in any way limited the Department from 
purchasing the fuels it needs to keep our country safe and our troops 
out of harm's way while fighting overseas?
    Answer. No, it has not. Section 526 of the Energy Independence and 
Security Act (EISA) of 2007 provides DOD a useful baseline as we 
develop the fuels of the future and has not constrained our warfighting 
activities.
    Question. Second, it is my understanding that a lawsuit filed by 
environmental groups seeking to prohibit the Department's ability to 
procure fuels from Canadian oil sands using the argument that it did 
not comply with section 526 was dismissed.
    Despite persistent rumors from special interests to the contrary, 
does section 526 in any way limit or prohibit the Department's ability 
to procure fuels from Canadian oil sands? Why or why not?
    Answer. No, it has not. The Department purchases the vast majority 
of its fuel on the open market without specifying the source of the 
feedstock. Since such a contract is not ``for procurement of an 
alternative or synthetic fuel,'' but simply for fuel meeting our 
performance specifications without regard to source, section 526 does 
not apply.
    Question. How does the Department's Defense Logistics Agency 
evaluate combined purchases of both conventional and alternative fuel, 
such as biofuel, under the requirements of section 526?
    Answer. If the fuels are being purchased as part of the Defense 
Logistics Agency's bulk petroleum program, Section 526 Energy 
Independence and Security Act would not have an effect. Bulk petroleum 
purchases are the vast majority of the Department of Defense's fuel 
purchases. If the DOD were limiting the purchase specifically to an 
alternative fuel, the purchase would have to be evaluated under section 
526. To date, however, DOD has not made combined purchases of both 
conventional and alternative fuel requiring evaluation under section 
526.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

    Question. I am a co-sponsor of the Cyber Warrior Act of 2013, which 
was referred to the Senate Armed Services Committee in March, and 
requires the creation of National Guard Cyber Response Teams in every 
State. I understand the Department of Defense has some concerns with 
legislation. However, even before this legislation was introduced, I 
included a requirement in the fiscal year 2012 Homeland Security 
Appropriations Act explanatory statement requiring DHS and DOD to 
provide a joint report regarding the costs and benefits of deploying 
the National Guard to prevent or recover from a cyber-attack. That 
Appropriations law was enacted on December 2011, the report was due on 
May 1, 2012. Congress has yet to receive it.
    Why specifically is this report delayed?
    Answer. The Department has worked closely with the Department of 
Homeland Security to provide input for this report, and we understand 
that it was delivered to the committee on June 12, 2013.
    Question. What unique capabilities does the National Guard bring to 
the fight that can quickly meet and augment USCYBERCOM's evolving 
mission?
    Answer. National Guard forces should be strategically integrated 
into the national defense cyber mission, including U.S. Cyber Command. 
As part of a Total Force solution, National Guard forces can be a 
source of the skilled cyber operators that we need. A critical element 
of the Total Force solution will be the need to train Reserve Component 
personnel to the same standard as the Active Component personnel. The 
civilian-acquired skills that many National Guard members have may help 
them meet the common training standards that U.S. Cyber Command has 
established.
    Question. Does the ability to switch between title 32 authorities 
and title 10 authorities give the National Guard additional 
capabilities in the monitoring and defense of our Homeland?
    Answer. We are working through the best way to integrate the 
National Guard strategically into the national defense cyber mission. 
National Guard forces should complement the Total Force in the same way 
that they do for other missions. As part of a Total Force solution, 
National Guard cyber personnel will need to be trained to the same 
standard as the Active Component cyber personnel to meet defense 
requirements. The Department of Defense is focused on working with the 
Military Departments and the National Guard Bureau regarding how these 
personnel can be integrated into our cyber force structure. The 
Department is also actively engaged with its interagency partners and 
the States to improve its ability to respond to cybersecurity 
challenges in a whole-of-government approach that leverages all 
appropriate authorities, including what role National Guard personnel 
could play when serving in a State Active Duty status.
    Question. What can you do today to make better use of the capacity 
of the National Guard to address cybersecurity?
    Answer. We are working through the best way to integrate the 
National Guard strategically into the national defense cyber mission. 
National Guard forces should complement the Total Force in the same way 
that they do for other missions. As part of a Total Force solution, 
National Guard cyber personnel would need to be trained to the same 
standard as the Active Component cyber personnel to meet defense 
requirements.
    Question. What training and education needs are there to ensure the 
Guard has robust teams that are ready to meet this very serious threat?
    Answer. As the Military Departments retain training and 
accreditation authorities, each will make determinations regarding what 
civilian skills, experience, and credentials might be credited for 
otherwise required military training. It will be essential that 
National Guard members train to the common standards that U.S. Cyber 
Command is developing for all of its forces. These training 
requirements will ensure that all cyber personnel have the skills 
needed to conduct their particular operational responsibilities.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran

                STRATEGIC CHOICES AND MANAGEMENT REVIEW

    Question. Secretary Hagel, I am told that the Services have 
submitted their input for the Strategic Choices and Management Review 
(SCMR) which you ordered. The results might be useful as we continue to 
look at how to allocate resources to the Departments and Agencies. What 
is the next step in the process of your review, and when do you plan to 
share the results with Congress?
    Answer. The Strategic Choices and Management Review (SCMR) finished 
its analysis at the end of May and DOD leadership has been briefed on 
its results. Next, the I will meet with the President to brief him on 
the results to give him a sense of the choices that will have to be 
made if the DOD topline remains sequestered beyond fiscal year 2013. 
After I have met with the President, I will begin meeting with members 
of Congress to brief them on the SCMR results.
    It is important to understand that the SCMR is not a set of 
recommended actions under various DOD topline assumptions--it is a set 
of options for consideration. The Department remains committed to the 
President's budget for fiscal year 2014 that was submitted to Congress 
as the best plan for allocating resources to the Department and 
Agencies to ensure that our national security requirements are met.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell

    Question. The Pentagon recently reported that in 2012, an estimated 
26,000 U.S. military servicemembers experienced ``unwanted sexual 
contact''--an increase of 35 percent since 2010. What factors has the 
Department of Defense (DOD) attributed to this sharp rise, and what 
specific actions is DOD taking to prevent sexual misconduct in the 
military?
    Answer. Based on responses, to the 2012 Workplace and Gender 
Relations Survey, the Department estimates that 6.1 percent of active 
duty women and 1.2 percent of active duty men experienced some form of 
unwanted sexual contact during the year prior to the survey. Unwanted 
sexual contact is the survey term for the contact sex crimes between 
adults prohibited by military law, which range from rape to abusive 
sexual contact (e.g., groping). The estimated rate of unwanted sexual 
contact experienced by men increased from 0.9 percent to 1.2 percent in 
2012, but this change was not statistically significant. For women, the 
estimated rate increased from 4.4 percent to 6.1 percent, from 2010 to 
2012.
    We do not know what factors could account for the apparent increase 
in the incidence of sexual assaults against women. Our Workplace and 
Gender Relations Survey consolidates responses from active duty 
members--it is not a study of the entire military environment. Even 
victims of sexual assault themselves often do not know why an offender 
decided to perpetrate a crime against her or him. As such, our survey 
research does not provide us with causal explanations. We are working 
to enhance our research methods to help identify factors in the 
military environment that might better account for changes in the 
incidence rate of sexual assaults.
    As part of the 2013 DOD-wide Strategic Sexual Assault Prevention 
and Response Plan, I have directed the Secretaries of the Military 
Departments to make the prevention of sexual assault one of their top 
priorities. Reducing and eliminating sexual assault requires a 
multipronged approach--one that leverages a wide range of initiatives 
and engages every servicemember to prevent the crime from occurring in 
the first place. When an assault occurs, effective processes and 
personnel with specialized training must be in place to respond, care 
for victims, investigate every allegation, and hold offenders 
appropriately accountable.
    Underpinning our efforts is the need for enduring cultural change--
requiring leaders at all levels to foster a command climate where 
sexist behaviors, sexual harassment, and sexual assault are not 
tolerated, condoned, or ignored; a climate where dignity and respect 
are core values we must all live by and define how we treat one 
another; where bystanders are trained and motivated to intervene and 
prevent unsafe behaviors; where victims' reports are taken seriously, 
their privacy is respected, and they are treated with sensitivity; and 
finally, a climate where offenders know they will be held appropriately 
accountable for their actions.
    I have attached an Information Paper describing the Department's 
most recent initiatives to prevent and respond to the crime of sexual 
assault.
                                 ______
                                 
SECRETARY OF DEFENSE SEXUAL ASSAULT PREVENTION AND RESPONSE INITIATIVES
(As of July 1, 2013)

Sexual Assault Senior Leader Accountability and Engagement:
    Secretary Hagel established and/or participates in a series of 
engagements involving military, Congressional, and civilian leaders.
  --SECDEF Weekly Meeting: Secretary Hagel established weekly 
        accountability and assessment meetings with senior DOD leaders 
        from the Secretary's staff and the Services.
  --White House Health of the Force Groups: Senior DOD leaders and Vice 
        Chiefs of Staff of the Services participate in Coordinating and 
        Working Group meetings to discuss DOD's approach and identify 
        additional Executive Branch actions to combat sexual assault in 
        the military.
  --Congressional Outreach: Senior DOD leaders are participating in 
        extensive hearings, meetings and engagements on pending 
        legislation and the development of proposals to address the 
        crime of sexual assault. Specifically, meetings and 
        communications have occurred with numerous Members of Congress, 
        to include Senators Gillibrand, Ayotte, Reed, McCaskill, Reid, 
        Durbin, and Murray, as well as Representatives Speier, Tsongas, 
        Turner and Susan Davis.

Enhancing Administration of Military Justice:
    Secretary Hagel is committed to a comprehensive assessment of the 
military justice system, including the Uniform Code of Military Justice 
and the systems used to investigate, prosecute, and adjudicate adult 
sexual assault crimes.
  --Response Systems Panel: Secretary Hagel recruited experts in their 
        respective fields to serve on this Congressionally-mandated 
        independent panel established under section 576 of the fiscal 
        year 2013 National Defense Authorization Act; he spoke with the 
        Response Systems Panel on May 17 and June 27, 2013 during its 
        administrative meetings and previously called on the panel to 
        deliver its report in 12 rather than 18 months.
  --Secretary Hagel directed the DOD Acting General Counsel to:
    --Develop a method to incorporate the rights afforded to victims 
            through the Crime Victims' Rights Act into military justice 
            practice.
    --Evaluate the Air Force Special Victims Counsel pilot program and 
            other approaches to ensure that victims of sexual assault 
            are provided the advice and counsel they need to understand 
            their rights and to feel confident in the military justice 
            system.
    --Develop a legislative proposal to amend Article 60 of the Uniform 
            Code of Military Justice to severely limit convening 
            authorities' power to overturn convictions. This proposal 
            has been completed and submitted to Congress.

Sexual Assault Stand-Down:
    Secretary Hagel ordered the Joint Chiefs of Staff to develop a 
concept for a sexual assault prevention and response stand-down 
affecting their respective organizations as well as the Combatant 
Commands. The active force stand down was completed July 1. Reserve 
Component will be complete by September 1. The sexual assault and 
prevention stand-down included the following mandatory activities:
  --Active review of credentials and qualifications of current-serving 
        recruiters, Sexual Assault Response Coordinators, and Victim 
        Advocates to ensure they meet applicable selection criteria and 
        standards of conduct.
  --Refresher training for recruiters, Sexual Assault Response 
        Coordinators and Victim Advocates on professional ethics, their 
        critical responsibilities and standards, and the impact on 
        mission readiness for violations of standards.
  --Purposeful and direct commander and leader engagements with 
        servicemembers and civilian employees on SAPR principles and 
        the climate of dignity and respect necessary in every workplace 
        across the DOD.

Implementation of DOD-Wide Sexual Assault Strategic Plan:
    Secretary Hagel directed the military Services to align their 
programs with a revised Sexual Assault Prevention Response Strategic 
Plan by July 31.
    By clearly defining priorities, objectives, and tasks, this plan--
and its effective implementation--will help ensure that the DOD's 
ongoing initiatives to reduce and ultimately eliminate sexual assault 
are being closely tracked and achieving their purpose.

Sexual Assault Accountability, Climate and Victim Advocacy Measures:
    SECDEF directed implementation in the next 6 months of the 
following initiatives as a way to enhance commander accountability, 
ensure appropriate command climate, improve victim response, and ensure 
safety:
  --All commanders must be provided results of subordinates' annual 
        command climate surveys to improve insight into climate at 
        every level of the chain of command (July 31, 2013).
  --DOD component heads must direct visual inspections of all DOD 
        workplaces, to include Military Service Academies, to ensure 
        that facilities promote an environment of dignity and respect 
        and are free from materials that create an offensive work 
        environment (July 31, 2013).
  --The Department must improve the effectiveness of sexual assault 
        prevention and response programs in recruiting organizations, 
        processing stations, and ROTC programs to ensure that new and 
        aspiring servicemembers are aware of critical responsibilities 
        and standards and to ensure safety (September 30, 2013).
  --The Service Chiefs must develop methods to hold military commanders 
        accountable for establishing command climates of dignity and 
        respect, and incorporating sexual assault prevention and victim 
        care principles in their commands (November, 1 2013).
  --The Service Secretaries must implement methods to improve victim 
        treatment by their peers, co-workers, and chains of command. 
        Direct victim input will be incorporated (November 1, 2013).
    DOD has made progress in preventing and responding to sexual 
assault, but we are not satisfied and recognize there is much more work 
to do. Our aim is to reduce, with the ultimate goal to eliminate, the 
crime of sexual assault from the Armed Forces.
                                 ______
                                 
    Question. Of the estimated 26,000 instances of unwanted sexual 
contact that occurred in the military in 2012, 3,374 cases of sexual 
assault were reported. What steps is DOD taking to encourage victims of 
sexual misconduct to report their cases?
    Answer. The Sexual Assault Prevention and Response (SAPR) Program 
has taken many steps to improve victim confidence, which leads to 
increased reporting and ultimately greater accountability for 
offenders. Our SAPR Program is focused on the victim as its foundation. 
We have created, resourced, and trained the entire force on the variety 
of reporting options that provide avenues for victims to seek support 
services. The DOD Safe Helpline, established in April 2011, offers 
anonymous crisis intervention for victims. The Restricted Reporting 
option provides case management and medical care without initiating an 
investigation, and the Unrestricted Reporting option provides case 
management and medical care while initiating an investigation by 
military law enforcement. Other enhancements include:
  --Special Victims Capability: All responders--from investigators to 
        victim advocates to chaplains--have received specialized 
        training on how to best assist sexual assault victims. As we 
        field the Department's new Special Victims Capability, victims 
        will be supported through the military justice system by 
        specially trained investigators, prosecutors, and Victim 
        Witness Assistance Program liaisons.
  --Legal Assistance Pilot Program: DOD is sponsoring a legal 
        assistance pilot program in the Air Force with 24 full-time, 
        specially trained attorneys who are providing legal 
        representation to victims of sexual assault. Under this 
        program, legal assistance attorneys represent victims in a 
        confidential, attorney-client relationship throughout the 
        investigation and prosecution processes. I have directed an 
        evaluation of the pilot by November 1, 2013, to determine 
        whether the program should be extended to other services or 
        otherwise changed.
  --Development of Methods to Improve Victim Treatment: To improve 
        overall victim care and trust in the chain of command, increase 
        reporting, and reduce the possibility of ostracizing victims, I 
        have directed the Secretaries of the Military Departments to 
        assess, monitor, and develop methods to improve victim 
        treatment by their peers, co-workers, and chains of command, 
        and to report their methods to me by November 1, 2013.
    These additional measures are underway to improve victim care and 
inspire greater confidence in the system:
  --Sexual Assault Stand-down: The stand-down will provide purposeful 
        and direct commander and leader engagements with servicemembers 
        and civilian employees on SAPR principles and the climate of 
        dignity and respect necessary in every workplace across the 
        DOD. Also, Service leaders will conduct a review of credentials 
        and qualifications of current-serving recruiters, Sexual 
        Assault Response Coordinators, and Victim Advocates to ensure 
        they meet applicable selection criteria and standards of 
        conduct. It will also include refresher training for 
        recruiters, Sexual Assault Response Coordinators, and Victim 
        Advocates on professional ethics, their critical 
        responsibilities and standards, and the impact on mission 
        readiness for violations of standards.
  --Victim option to request an expedited transfer within the 
        installation or to a new installation or base.
  --Credentialing of Sexual Assault Response Coordinators and Sexual 
        Assault Victim Advocates to ensure that they meet professional 
        standards and certification to a national standard, to enhance 
        care for victims.
  --Expansion of Sexual Assault Response Coordinators and Sexual 
        Assault Victim Advocates across the force to ensure the 
        delivery of services.
    Retention of unrestricted reports and restricted reports for 50 
years to enable documentation and claims within the Department of 
Veterans Affairs and to provide ample time for a victim to decide on 
converting a restricted report to an unrestricted report.
    Question. In 2012, DOD gathered data on sexual misconduct in the 
military primarily by measuring instances of ``unwanted sexual 
contact.'' Does DOD plan to add specificity to future studies and 
surveys by gathering data that distinguishes between various forms of 
contact?
    Answer. The Workplace and Gender Relations Survey of Active Duty 
Members (WGRA) uses the term ``unwanted sexual contact'' (USC) to ask 
military members whether, within the last year, they have experienced 
contact sex crimes between adults, prohibited by military law, which 
range from rape to abusive sexual contact (e.g., groping). Research on 
crime prevalence surveys shows that an analog term like ``unwanted 
sexual contact'' is the most effective means for capturing crime 
prevalence data from laymen. Identification of the kind of crime 
someone experienced is a legal determination and it is unrealistic to 
expect military members who are not judge advocates to understand the 
legal elements of a crime. However, the definition of ``unwanted sexual 
contact'' uses several behavioral anchors which allow us to categorize 
the kinds of unwanted behaviors a member experienced. This approach has 
been used consistently in DOD surveys since 2006.
    USC is measured by asking members to refer to experiences in the 
past 12 months in which they experienced any of the following 
intentional sexual contacts that were against their will or which 
occurred when they did not or could not consent:
  --Sexually touched them (e.g., intentional touching of genitalia, 
        breasts, or buttocks) or made them sexually touch someone;
  --Attempted to make them have sexual intercourse, but was not 
        successful;
  --Made them have sexual intercourse;
  --Attempted to make them perform or receive oral sex, anal sex, or 
        penetration by a finger or object, but was not successful; or
  --Made them perform or receive oral sex, anal sex, or penetration by 
        a finger or object.
    A member is counted in the USC prevalence rate if he or she replied 
``yes'' to any of the behaviors listed.
    In fiscal year 2012, of the 6.1 percent of active duty women who 
indicated they experienced USC in the year prior to being surveyed:
  --31 percent indicated they experienced a completed penetration;
  --26 percent indicated they experienced an attempted penetration;
  --32 percent indicated they experienced unwanted sexual touching; and
  --10 percent did not specify the kind of unwanted sexual contact they 
        experienced.
    Of the 1.2 percent of active duty men who indicated they 
experienced USC in the year prior to being surveyed:
  --10 percent indicated they experienced a completed penetration;
  --5 percent indicated they experienced an attempted penetration;
  --51 percent indicated they experienced unwanted sexual touching; and
  --34 percent did not specify the kind of unwanted sexual contact they 
        experienced.
    The proportions of the behaviors reported by women and men have 
remained statistically unchanged since 2006. While there may be some 
refinement of this item, these behavioral anchors will be used on the 
planned 2014 WGRA survey.
    Question. What mental and physical healthcare and support services 
does DOD provide servicemembers who are victims of sexual assault?
    Answer. Current DOD policy (DODI 6495.02 ``Sexual Assault and 
Response (SAPR) Program Procedures'', Enclosure 7) describes the 
comprehensive elements of the care provided to victims of sexual 
assault. These include four key areas:
(1) Timely and Standardized Healthcare Across the Services
  --It is DOD policy that sexual assault victims presenting to a 
        medical facility must be seen and assessed immediately 
        regardless of evidence of physical injury
(2) Comprehensive Acute and Follow-Up Medical Care
  --All victims receive a comprehensive assessment including a history 
        and physical exam to determine if there are injuries requiring 
        immediate treatment.
  --Once victims are medically stable, they are offered a sexual 
        assault forensic examination (SAFE) and offered the services of 
        a sexual assault response coordinator (SARC).
  --Victims are also offered, at a minimum, testing and prophylactic 
        treatment options for human immunodeficiency virus (HIV) and 
        other sexually transmitted diseases; assessment of pregnancy 
        risk with options for emergency contraception; counseling on 
        any necessary or recommended follow-up care and referral 
        services.
  --When feasible, and with the victim's consent, medical management is 
        linked to the patient's primary care manager for follow-up 
        treatment to facilitate continuity of care and support.
(3) Standardized Forensic Examination Procedures DOD Policy and Policy 
        for Each Service Requires:
  --Victims of sexual assault must be offered a forensic examination.
  --Procedures for conducting SAFEs follow the U.S. Department of 
        Justice Protocol ``A National Protocol for Sexual Assault 
        Medical Forensic Examinations, Adults/Adolescents,'' current 
        version (``National Protocol'').
  --Medical providers conducting SAFEs are trained to follow the 
        ``National Protocol'' Standard.
  --Medical providers in remote areas have access to the ``National 
        Protocol''.
  --Availability of standardized SAFE kits at all Medical Treatment 
        Facilities (MTFs).
  --Providers use these SAFE kits and document their examinations with 
        the most current edition of DD 2911 ``DOD Sexual Assault 
        Forensic Examination Report''.
  --The services of a SARC are offered to the victims. The SARC or a 
        Sexual Assault Response Victim Advocate is available to respond 
        and speak to victims at any time requested.
  --There is communication and coordination of care between the SARC 
        responders and healthcare personnel.
  --SARCs serve as a single point of contact to coordinate services 
        that are provided to victims.
  --SARCs are responsible for counseling victims on the choice between 
        unrestricted and restricted reports, and for coordinating 
        actions following the victim's decision.
  --There is a requirement for MTFs to have available healthcare 
        providers trained to conduct SAFEs or to implement agreements 
        for SAFEs to be conducted by a trained provider at a local 
        civilian facility.
  --Mechanisms exist to assure confidentiality in cases where the 
        victim has elected restricted reporting.
  --After a SAFE has been conducted, the chain of custody is maintained 
        with all specimens being properly labeled and handed off to the 
        Military Service-designated law enforcement agency (in the case 
        of unrestricted reporting). There is a mechanism for the SARC 
        to generate a restricted reporting control number (RRCN) for 
        labeling in cases of restricted reports to preserve 
        confidentiality of the victim while ensuring that the chain of 
        custody for evidence will be retrievable if the victim chooses 
        to proceed with unrestricted reporting at a later date.
(4) Comprehensive Behavioral Health Services
  --Victims are assessed and offered immediate behavioral health 
        services or a referral for follow-up services, as the victim 
        requests or as clinically indicated. Behavioral health services 
        are widely available across DOD to address the comprehensive 
        emotional needs of traumatized persons, DOD has thousands of 
        providers trained in evidence-based therapies for trauma.
    A recent snapshot audit of the Services' compliance with policies 
regarding availability of trained healthcare providers, from MTFs or 
through community partnerships, indicates that the Services are in 
compliance. Sexual assault medical forensic examiners were found to be 
available 24 hours a day, either within the MTF, or through current 
signed agreements with local civilian facilities. Additionally, the 
audit demonstrated that each Service already has written policies 
addressing requirements for medical response to a sexual assault 
victim.
    Question. You have formally expressed support for making changes to 
Article 60 of the Uniform Code of Military Justice (UCMJ), which 
currently allows military commanders to overturn court-martial verdicts 
in major criminal cases. What would the impact be on how DOD addresses 
cases of sexual assault in the military?
    Answer. I do not believe that my proposal would cause any major 
change in the way DOD addresses cases of sexual assault in the 
military. Preventive efforts, care of victims, thorough investigations, 
thoughtful disposition decisions, and the courts-martial themselves 
would remain unchanged. The only change would be post-trial, limiting 
the authority of convening authorities to dismiss findings of guilty of 
serious offenses by courts-martial. This authority is used rarely and, 
in my opinion, is no longer needed because we can trust the members of 
courts-martial and our military judges, who make the decisions of guilt 
or innocence, to exercise their independent judgment and make those 
findings based solely on the facts and the law in each case.
    Question. It has been reported that multiple managers of military 
sexual assault programs throughout the country--including one at an 
installation in my State--Have been relieved of their posts for alleged 
misconduct that conflicts with the duties of their roles. What types of 
training programs and behavioral standards are in place for DOD 
managers and employees of preventive sexual assault or post-assault 
programs? What is DOD doing to ensure that these standards are improved 
or better-enforced?
    Answer. In February 2012, DOD SAPRO contracted with the National 
Organization for Victim Assistance (NOVA) in support of the 
establishment of the Department of Defense Sexual Assault Advocate 
Certification Program (D-SAACP). The goal of the D-SAACP is to ensure 
all DOD personnel working with victims of sexual assault meet national 
standards as established by the National Advocate Credentialing Program 
for training and providing direct victim assistance. The D-SAACP 
requirements include 40 hours of initial training and 32 hours of 
continuing educational requirements every 2 years. D-SAACP requirements 
exceed the national standard by further requiring that all applicants 
pass a background check and include letters of endorsement from 
commanders and supervisors. Training requirements were established in 
collaboration with the Department of Justice, Office of Victims of 
Crime and NOVA. In March 2013, SAPRO and NOVA completed an evaluation 
of DOD-wide Sexual Assault Response Coordinator (SARC) and Victim 
Advocate (VA) training, ensuring each course meets core competency 
standards.
    In addition, I ordered a Sexual Assault Prevention and Response 
stand-down to: review credentials and qualifications of current-serving 
recruiters, SARCs, and VAs to ensure that they meet applicable 
selection criteria and standards of conduct; and conduct refresher 
training for recruiters, SARCs, and VAs on professional ethics, their 
critical responsibilities and standards, and the impact on mission 
readiness for violations of standards.
    The stand-down was completed by the Active Force on July 1, 2013 
and will be completed by the Reserve Force by September 1, 2013. 
Collectively, these efforts are designed to ensure standards are 
communicated, assessed, and enforced across the Department.
    Question. What programs are in place to educate servicemembers 
about sexual assault and sexual harassment prevention and response? Are 
these programs mandatory for all servicemembers?
    Answer. The Department of Defense has separate programs, each with 
separate authorities, to oversee training and policies regarding sexual 
harassment and sexual assault. Sexual harassment training and the 
accompanying complaint process fall under the Equal Opportunity 
Program, while issues regarding sexual assault training and policy rest 
with the Sexual Assault Prevention and Response (SAPR) Program. While 
both programs are under the purview of the Under Secretary of Defense 
for Personnel and Readiness, they have separate leadership and 
different programs. The training requirements for each program are 
described below.
    Department of Defense military equal opportunity (EO) policy, which 
includes the prevention of sexual harassment, requires the Military 
Departments to take the following actions regarding training and 
education programs for all servicemembers:
  --Provide periodic, mandatory education and training in EO and human 
        relations at installation and fleet unit commands, during pre-
        commissioning programs and initial entry training, and 
        throughout professional military education (PME) systems, as 
        part of the overall effort to achieve EO within the Department 
        of Defense.
  --This training is provided to all servicemembers, enlisted and 
        officer, including flag and general officers.
  --The training includes comprehensive material on leadership roles 
        and responsibilities, the prevention of sexual harassment, 
        complaints processing, legal implications, reprisal prevention 
        and detection, climate assessment methodologies, and managing 
        civilian equal employment opportunity systems.
    Examples of Service programs supporting this policy in the area of 
sexual harassment prevention training and education include:
  --First Duty Station Orientation for newcomers and key personnel 
        briefings delivered one-on-one to incoming Air Force leaders 
        address sexual harassment prevention efforts, the unit climate 
        assessment program, and other aspects of the Air Force EO 
        program.
  --Students and staff officers participating in Naval Reserve Officer 
        Training Corps, Officer Candidate School, and Officer 
        Development School receive one hour of training the first week 
        of school as an introduction to the Navy sexual harassment 
        prevention program.
  --All Marine Corps personnel receive annual training on Marine Corps 
        EO policy; prevention of discrimination and sexual harassment; 
        and proper use of the Informal Resolution System.
  --Cadets and midshipmen at the Military Service Academies receive 
        annual prevention of sexual harassment training commensurate 
        with their progression from the first through the fourth year 
        at the Academy.
    The Department of Defense SAPR Office is responsible for ensuring 
SAPR training is consistent throughout the Department and the Services. 
Core competencies and learning objectives for each type of training 
have recently been developed by the DOD SAPR Office and the Services 
based on these core competencies and learning objectives, the revised 
curriculum will be implemented by the end of this fiscal year.
    SAPR training begins with accessions training when all recruits 
receive an initial SAPR brief within the first 14 days of training. 
This brief provides a basic understanding of the SAPR program and 
provides specific information on reporting options, including reporting 
options during training. Additional, more detailed, SAPR training is 
also conducted throughout recruit training and during follow-on initial 
training.
    Mandatory SAPR training is conducted for each servicemember 
annually and SAPR training is also conducted pre- and post-deployment. 
Bystander intervention training is also conducted by Services on a 
regular basis, and SAPR is often included in broader ethics training 
throughout the Department.
    All phases of PME from junior noncommissioned officer schools 
through the War Colleges also provide SAPR training. This PME training 
is designed to address the specific SAPR responsibilities at each grade 
and billet assignment. In addition, prior to assuming command, officers 
and their senior enlisted leaders are given specific SAPR training 
designed to address their roles in all aspects of SAPR.
    Sexual Assault Response Coordinators (SARC), Victim Advocates, 
chaplains, and first responders also receive SAPR training focused on 
their specific billets. In addition, SARC professional certification 
requires a minimum of 40 hours of training for initial certification 
followed by an additional 32 hours of continuing education every 2 
years.
    The Secretary directed a Department-wide SAPR stand-down which was 
completed on July 1, 2013 for the Active Component and will be 
completed September 1, 2013 for the Reserve Component. The stand-down 
included a review of credentials for recruiters, SARCs, and Victim 
Advocates. In addition, they also received refresher training on 
professional ethics, and their critical responsibilities and the 
standards to which they will be held. Commanders also engaged their 
servicemembers on SAPR principles and the climate of dignity and 
respect necessary throughout DOD.
    Question. Despite added attention to and appropriations for DOD 
screening and delivery of care to servicemembers with post-traumatic 
stress disorder (PTSD) and traumatic brain injury (TBI), mental health 
issues remain a very serious problem for servicemembers. Are DOD's 
various mental health initiatives achieving the desired results?
    Answer. The Department is intently focused on ensuring that the 
behavioral health of our servicemembers and their families remains a 
top priority. Over the last several years, DOD has hired more 
behavioral health specialists, brought on Public Health Service medical 
professionals, expanded our TRICARE network, and expanded the ways by 
which our beneficiaries can access mental health services. An important 
element of the Department's strategy has been to embed mental health 
specialists directly within military units, and this approach has 
helped us identify and intervene earlier with servicemembers, and has 
also encouraged our servicemembers to seek assistance when they need 
it. Access to behavioral health services has also been expanded through 
the Department's Patient Centered Medical Home initiative which is 
placing 470 behavioral health providers into primary care clinics. 
These strategies have achieved the desired result of a 40-percent 
increase in mental health providers hired in DOD over a 3-year period 
from 6590 in fiscal year 2009 to 9242 in fiscal year 2012. This 
includes a 37-percent increase in the number of psychologists, a 26-
percent increase in the number of psychiatrists, a 32-percent increase 
in the number of social workers, and a 21-percent increase in the 
number of mental health nurses.
    In addition to expanding access to mental health services, the 
Department has increased its screening and outreach efforts, 
implementing policies and clinical training for providers to ensure the 
early detection of servicemembers with symptoms of PTSD and TBI and to 
provide clear and specific guidelines for the management of acute and 
chronic conditions. New standardized Tri-Service workflow forms for 
routine psychological health screening in primary care and other 
clinical settings have also been implemented. And in fiscal year 2012, 
the Department finalized and implemented a comprehensive revision of 
the Pre-Deployment Health Assessment, Post-Deployment Health Assessment 
(PDHA), and Post-Deployment Health Reassessment (PDHRA) forms which all 
deploying servicemembers are required to complete. Recent data appear 
to indicate that the combined effect of the Department's deployment 
mental health outreach, screening, and treatment efforts has resulted 
in some encouraging trends. At the end of 2012 (4th Quarter) only 3 
percent of returning servicemembers reported symptoms that raised 
concerns about possible PTSD and were recommended for referral to 
mental health specialty or primary care for further evaluation and 
possible treatment. Of those referred, 83 percent chose to follow 
through with their referral within the Military Health System and had a 
successful mental health encounter within 180 days after redeployment.
    Access to TBI care has been also enhanced through establishment of 
the National Intrepid Center of Excellence (NiCoE), which provides 
cutting-edge evaluation, treatment planning, research and education for 
servicemembers and their families dealing with the complex interactions 
of mild traumatic brain injury and psychological health conditions. On 
June 13, 2013, the Department started construction for the third in a 
series of nine National Intrepid Center of Excellence Satellite Centers 
at Ft. Campbell, Kentucky, 1 year after breaking ground on the first 
two centers, built at Camp Lejeune, North Carolina, and Fort Belvoir, 
Virginia. Similar to enhanced mental health screening and outreach 
efforts, new ``Policy Guidance for Management of Concussion/Mild 
Traumatic Brain Injury in the Deployed Setting'' (DOD Instruction 
6490.11) was signed September 18, 2012 to ensure servicemembers 
involved in potentially concussive events during deployment are 
screened and treated promptly for concussion. From October 1, 2011 
through September 30, 2012, a total of 3,601 servicemember exposures to 
potentially concussive events were reported to the Combined Information 
Data Network Exchange/Blast Exposure Concussions Incident Report event-
triggered system, and this TBI screening process identified 541 
provisional cases of concussion, pending comprehensive medical 
evaluation.
    While these efforts are improving access, quality, and transition 
of behavioral healthcare, the Department recognizes the need to further 
quantify the positive impact of its mental health initiatives and 
programs. The National Defense Authorization Act for fiscal year 2013, 
section 739, requires DOD to identify potential gaps and redundancies 
in psychological health and traumatic brain injury services and 
treatments, develop a plan for mitigating gaps and redundancies, and 
identify the individual within DOD responsible for leading the 
implementation of this plan. Additionally, the President signed an 
Executive Order (EO) on August 31, 2012, directing DOD, Department of 
Veterans Affairs (VA), and Department of Health and Human Services, in 
coordination with other Federal agencies, to take steps to ensure that 
Veterans, servicemembers, and their families receive the mental health 
services and support they need. The EO includes a requirement to review 
all existing mental health and substance abuse prevention, education, 
and outreach programs to identify programs that are effective and 
produce the greatest impact on outcomes while additionally identifying 
gaps and redundancies. Multiple initiatives are underway which respond 
to these mandates.
    DOD, pursuant to the timelines of the contingent initiatives, 
charged the Defense Centers of Excellence (DCoE) for Psychological 
Health and Traumatic Brain Injury to begin conducting a mental health 
programs assessment in October 2012. An interim report regarding this 
effort is now under internal review with a subsequent report to follow 
in late 2013. DOD will submit its first phase report to the Committees 
in February 2014, responding to findings stemming from the President's 
Executive Order and studies of the effectiveness of DOD psychological 
health program initiatives. Subsequent annual reports of findings will 
be produced by the fourth quarter of each fiscal year from 2014 to 
2017.
                                 ______
                                 
             Question Submitted by Senator Susan M. Collins

                           RUSSIAN ARMS SALES

    Question. Despite American sanctions against arming the Syrian 
regime, Russia continues to support President Assad. Russia has 
reiterated its intent to provide the S-300 air defense system to Syria. 
What would the United States do if Russia provides Syria the S-300? And 
how can we mitigate this threat to Israel?
    Answer. We have publicly, privately, and repeatedly urged our 
Russian counterparts to cease arms sales and deliveries to Syria, 
urging them to act as more responsible partners. The Administration 
continues its dialogue with Russia at the highest levels, following on 
the mutual understanding that a common approach--the proposed ``Geneva 
II'' conference--would be an important starting point to end the 
violence and to prepare the way for a political transition. The 
Department of Defense continues to develop and refine a variety of 
possible options for the President's consideration. We also continue to 
cooperate closely with Israel and all of our partners in the region who 
would be affected by the transfer of the S-300 so that we can 
understand the threat posed by this and other potential Syrian weapon 
systems.
                                 ______
                                 
            Questions Submitted to General Martin E. Dempsey
             Question Submitted by Senator Dianne Feinstein

    Question. I understand that China is developing a range of new 
military capabilities, including new stealth and conventional aircraft, 
advanced anti-ship missiles, and advanced ships. In fact, within the 
past year, China commissioned its first aircraft carrier.
    What are your greatest concerns with respect to China's growth in 
military capabilities?
    Answer. Our primary concern is with the strategic intent of China's 
military modernization efforts and its implications for cross-Strait 
and regional stability. We assess that China is pursuing a long-term, 
comprehensive military modernization program to improve its capacity to 
fight and win high intensity, short duration regional conflict. We are 
also concerned regarding China's assertiveness in space, cyberspace, 
and on its periphery. These concerns are intensified by elements of 
China's military build-up, particularly anti-access, area denial and 
power projection capabilities that could enable Beijing to use its 
military for coercive purposes. Although there have been modest 
improvements in transparency, there remains uncertainty about how China 
will use its growing capabilities.
    I am committed to increase the frequency and the depth of our 
military-to-military relationship with China to encourage greater 
transparency and understating.
                                 ______
                                 
             Question Submitted by Senator Susan M. Collins

                 UNCHANGING SERVICE SHARE OF DOD BUDGET

    Question. Since 1947, the share of the defense budget that each 
military service receives has remained relatively constant. This 
balance has been maintained even as the world has undergone fundamental 
changes in the strategic environment. The Cold War has ended and 12 
years of land-based counterinsurgency operations in Iraq and 
Afghanistan are over or transitioning to Afghan security forces. 
According to the President's defense strategy, we are implementing a 
strategic rebalance to the Asia-Pacific region, which I believe is the 
right focus--so long as it is properly resourced with the necessary 
assets such as a robust naval presence.
    A 2004 Center for Strategic and International Studies report, 
Beyond Coldwater-Nichols: Defense Reform for a New Strategic Era finds 
that, because the budget process is Service-centric, there is ``weak 
advocacy of the joint perspective.'' How can we, as a Nation, adapt to 
the unique challenges of the 21st century if our budgets will not adapt 
to new strategic realities?
    Answer. The chart below shows the Service's share of the Defense 
budget from 1948 to 2013. The budget balance tips between the Services 
based on national needs--the Cold War increased the Air Force's share, 
the Reagan build-up increased the Navy and Air Force's share, and OIF/
OEF, Gulf War, Vietnam, and Korea all increased the Army's share. All 
of these changes reflect the Department's adoption of fundamental 
changes in the strategic environment.




    Our current conflict has proved that the Joint Force has never been 
stronger, and as Chairman, I established priorities to help guide the 
strategic direction of the Joint Force. The President's budget 
implements and deepens the commitment to the new strategy, across all 
military services, meeting the Department's needs in a complex security 
environment.

                          SUBCOMMITTEE RECESS

    Senator Durbin. The Defense Subcommittee will reconvene 
tomorrow, Wednesday, at 10 a.m. for a hearing on voluntary 
military education programs.
    The committee stands in recess.
    [Whereupon, at 11:47 a.m., Tuesday, June 11, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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