[Senate Hearing 113-321]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 113-321

          THE IMPACT OF SEQUESTRATION ON THE NATIONAL DEFENSE

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

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 7, 2013

                               __________

         Printed for the use of the Committee on Armed Services



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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
BILL NELSON, Florida                 JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri           JEFF SESSIONS, Alabama
MARK UDALL, Colorado                 SAXBY CHAMBLISS, Georgia
KAY R. HAGAN, North Carolina         ROGER F. WICKER, Mississippi
JOE MANCHIN III, West Virginia       KELLY AYOTTE, New Hampshire
JEANNE SHAHEEN, New Hampshire        DEB FISCHER, Nebraska
KIRSTEN E. GILLIBRAND, New York      LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut      DAVID VITTER, Louisiana
JOE DONNELLY, Indiana                ROY BLUNT, Missouri
MAZIE K. HIRONO, Hawaii              MIKE LEE, Utah
TIM KAINE, Virginia                  TED CRUZ, Texas
ANGUS KING, Maine

                    Peter K. Levine, Staff Director

                John A. Bonsell, Minority Staff Director

                                  (ii)
















                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

          The Impact of Sequestration on the National Defense

                            November 7, 2013

                                                                   Page

Odierno, GEN Raymond T., USA, Chief of Staff of the Army.........     4
Greenert, ADM Jonathan W., USN, Chief of Naval Operations........    13
Amos, Gen. James F., USMC, Commandant of the Marine Corps........    22
Welsh, Gen. Mark A., III, USAF, Chief of Staff of the Air Force..    28

                                 (iii)

 
          THE IMPACT OF SEQUESTRATION ON THE NATIONAL DEFENSE

                              ----------                              


                       THURSDAY, NOVEMBER 7, 2013

                                       U.S. Senate.
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:37 a.m. in room 
SD-G50, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Reed, Udall, 
Manchin, Shaheen, Gillibrand, Blumenthal, Donnelly, Hirono, 
Kaine, King, Inhofe, McCain, Sessions, Chambliss, Wicker, 
Ayotte, Fischer, Graham, Vitter, Blunt, Lee, and Cruz.
    Committee staff members present: Peter K. Levine, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Jonathan D. Clark, counsel; 
Gabriella E. Fahrer, counsel; Creighton Greene, professional 
staff member; Gerald J. Leeling, general counsel; Jason W. 
Maroney, counsel; Mariah K. McNamara, special assistant to the 
staff director; Michael J. Noblet, professional staff member; 
Roy F. Phillips, professional staff member; John H. Quirk V, 
professional staff member; and William K. Sutey, professional 
staff member.
    Minority staff members present: John A. Bonsell, minority 
staff director; Adam J. Barker, professional staff member; 
Steven M. Barney, minority counsel; William S. Castle, minority 
general counsel; Allen M. Edwards, professional staff member; 
Thomas W. Goffus, professional staff member; Ambrose R. Hock, 
professional staff member; Anthony J. Lazarski, professional 
staff member; Daniel A. Lerner, professional staff member; 
Gregory R. Lilly, minority clerk; and Lucian L. Niemeyer, 
professional staff member.
    Staff assistants present: Daniel J. Harder, John L. 
Principato, and Brendan J. Sawyer.
    Committee members' assistants present: Carolyn A. Chuhta, 
assistant to Senator Reed; Christopher R. Howard, assistant to 
Senator Udall; Patrick T. Day and Joshua Lucas, assistants to 
Senator Shaheen; Brooke Jamison, assistant to Senator 
Gillibrand; Ethan A. Saxon, assistant to Senator Blumenthal; 
Marta McLellan Ross, assistant to Senator Donnelly; Nick Ikeda, 
assistant to Senator Hirono; Karen E. Courington, assistant to 
Senator Kaine; Stephen M. Smith, assistant to Senator King; 
Donelle Harder, assistant to Senator Inhofe; Paul C. Hutton IV, 
assistant to Senator McCain; Todd P. Harmer, assistant to 
Senator Chambliss; Joseph G. Lai, assistant to Senator Wicker; 
Bradley L. Bowman, assistant to Senator Ayotte; Craig R. Abele, 
assistant to Senator Graham; Joshua S. Hodges, assistant to 
Senator Vitter; Charles W. Prosch, assistant to Senator Blunt; 
Robert C. Moore, assistant to Senator Lee; and Jeremy H. Hayes, 
assistant to Senator Cruz.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. The committee 
meets this morning to consider the impact on our national 
security of sequestration required by the Budget Control Act 
(BCA). We welcome today our Nation's Service Chiefs: Chief of 
Staff of the Army, General Raymond Odierno; Chief of Naval 
Operations, Admiral Jonathan Greenert; the Commandant of the 
Marine Corps, General James Amos; and the Chief of Staff of the 
Air Force, General Mark Welsh.
    I'd like to thank our witnesses on behalf of the committee 
for their service to our Nation and for the service provided by 
the men and women with whom they serve, many of whom as we meet 
here are in harm's way. We also appreciate the important 
contribution made by our 800,000 Department of Defense (DOD) 
civilians, a talented workforce that has been hard hit by both 
sequestration and the government shutdown.
    Sequestration is arbitrary and irrational. While we will 
learn more today about its impacts on our national defense, 
with sequestration, as with Continuing Resolutions (CR), 
government shutdowns, and the recurring looming threat of a 
default on the Nation's debt, we not only fail to sustain our 
national security, but also fail to meet our shared obligation 
to protect and promote public safety, health, transportation, 
education, and the environment. When we allow this to happen, 
we put at risk much of what we do and stand for as a Nation and 
we undermine our position in the world.
    Throughout the 2 years since the enactment of the BCA and 
its provisions for sequestration, our military leaders have 
been warning us of its harmful consequences. If sequestration 
continues, the Services will have to cut Active and Reserve 
component end strength, reduce force structure, defer repair of 
equipment, delay or cancel modernization programs, and allow 
training levels to seriously decline, which will reduce our 
ability to respond to global crises, thereby increasing our 
Nation's strategic risk.
    Sequestration has raised questions among our allies about 
our ability to manage our affairs, has introduced uncertainty 
into the availability of resources to support operations in 
Afghanistan and around the world, has accelerated the decline 
of a non-deployed force whose reduction was seriously 
underfunded for more than a decade before sequestration, and 
has painfully furloughed much of our dedicated defense civilian 
workforce.
    I know that our senior military leaders are deeply troubled 
by the impact of sequestration on morale of both our military 
and civilian workforces. It makes little sense to tell members 
of our military that we'll pay their salaries, but we can't 
afford to train them. We can't justify telling our dedicated 
civilian workforce, many of whom are veterans and some of whom 
are disabled veterans, that they aren't essential and that 
they're going to be furloughed and they're not going to be 
paid.
    Another year of sequestration only compounds the damage 
that will be done to our forces and our national security. If 
sequestration is allowed to continue into fiscal year 2014 and 
beyond, we will be left with a smaller and less ready military 
that is significantly less capable of protecting our interests 
around the world.
    I look forward to the testimony of our witnesses on the 
impact that sequestration is already having and will have on 
DOD and on our national security.
    We're all delighted to have Jim Inhofe back with us today 
in full force and looking terrific. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. I appreciate it 
very much. I had made a request to have this hearing and 
another one before this after the House had their Strategic 
Choices and Management Review (SCMR) hearing. It's my concern, 
Mr. Chairman, that everything you said is true, but the general 
public is not aware of the crisis that we're faced with right 
now.
    Over the last 5 years, the significant cuts to our national 
security spending have forced our men and women to endure a 
steep and damaging drop in capabilities and readiness. We'll 
have a chance to talk about this, incidentally, during the 
questions. Our naval fleet is at a historical low level, the 
Air Force the smallest in its history. The Army may shrink to a 
force we haven't seen since the turn of the 20th century.
    As our security is being threatened by terrorism, China and 
rising rogue nations like Iran and North Korea, the men and 
women charged with protecting this Nation are being undermined 
and forced to endure devastating cuts to the tools that they 
need to keep America safe. We've been told that over the next 3 
years as much as $150 billion in sequester cuts will be taken 
from accounts used to make sure that our military men and women 
are better trained and equipped. We'll show that with these 
charts.
    I know some Americans are wondering why this matters. These 
cuts may affect their everyday lives. The simple reality is 
that the world around us is not getting any safer. I've often 
said that recently--I look back wistfully at the days of the 
Cold War. Things were predictable. That's not the case anymore. 
You have rogue nations that have the ability and are developing 
the ability to have weapons of mass destruction (WMD) and 
delivery systems, and we know that's happening. It's just 
something that, hopefully, this hearing will bring this to the 
attention of the American people.
    The tide of war isn't receding. It's America's leadership, 
trust in American security partners, and our ability to protect 
this country that's receding. We're already seeing the effects 
of an absent America. We're at a point where our allies don't 
trust us and our enemies don't fear us.
    As America retreats from its role as a global leader, we'll 
have more failed states like Syria and Libya as breeding 
grounds for terrorism. We'll have more brutal dictators like 
Kim Jong-un acquiring WMD and more aggressive adversaries like 
China attempting to bully our partners in the South China Sea, 
but we'll have fewer options of how to deal with them.
    This is why I'm so troubled with the disastrous path that 
we're on. In the face of the mounting threats to America, we're 
crippling our military, the very people who are vital to our 
security. Our military leaders use the term ``hollow'' to 
define the forces of the future.
    The Chairman of the Joint Chiefs warned us that continued 
national security cuts will, and I'm quoting now, ``severely 
limit our ability to implement our defense strategy, it will 
put the Nation at greater risk of coercion, and it will break 
faith with the American people.''
    Another quote that I carry with me is one that Admiral 
Winnefeld, our number two person in the overall military that 
we have, said: ``There could be a time--it would be for the 
first time in my career instances where we may be asked to 
respond to a crisis and we'll have to say that we cannot.''
    This faith is sacred to me. Our Nation relies on a small 
part of our population to volunteer to risk their lives in our 
behalf. The faith is being threatened by a growing divide 
between the security our Nation expects and the resources being 
provided them to give us that security.
    Our witnesses testified before the House in September about 
the potential of not having the readiness capabilities to 
succeed in even one major contingency operation (MCO). Now, 
that's something that all of us assume and most Americans 
assume, that we still could defend against two MCOs. It's just 
not true. In fact, if we have to go through with sequestration 
we may not be able to do even one. That's why it's so important 
that we hear from you folks that have the credibility to make 
sure that the American people understand this.
    I think about peace obtained through strength. We know that 
Ronald Reagan's probably rolling over in his grave right now, 
seeing what's happened to the military strength of this 
country. That's what this hearing's all about, Mr. Chairman, 
and I look forward to this being an opportunity for all of us 
at this table to use the information that comes from this 
hearing to make America aware of the problems that are facing 
us.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you so much, Senator Inhofe.
    General Odierno.

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

    General Odierno. Chairman Levin, Ranking Member Inhofe--
sir, it's great to see you back--and other distinguished 
members of this committee: Thank you for the invitation to 
speak today.
    If you'd just indulge me for just a few seconds, I'd like 
to begin by recognizing the exceptional service and life of 
Congressman Ike Skelton. As the Chairman of the House Armed 
Services Committee, he was an incredible leader, mentor, and 
champion of our soldiers, civilians, and their families. What 
was interesting, though, in his farewell address, he made a 
comment that I think is appropriate for the conversation we're 
having today when he remarked:
    ``I've always considered each young man and woman in 
uniform as a son or daughter. They are national treasures and 
their sacrifices cannot be taken for granted. They are not 
chess pieces to be moved upon a board. Each and every one is 
irreplaceable.''
    I think those words are very important today as we talk 
about the readiness of our force and as we consider future 
budget cuts and their impact on our national defense. It is 
imperative that we keep foremost in our minds the impact that 
this has on the young men and women, our soldiers, who we ask 
to go forward and protect this Nation.
    Previous drawdowns have taught us that the full burden of 
an unprepared and hollow force will fall on the shoulders of 
our men and women in uniform. We have experienced this too many 
times in our Nation's history to repeat this egregious error 
again.
    It may be popular to proclaim that we are entering a new 
age where land wars are obsolete. Yet history is rife with the 
wars that leaders knew would never be fought. In the summer of 
1914, an influential British journal declared that, ``The world 
is moving away from military ideals and a period of peace, 
industry, and worldwide friendship is dawning.'' New 
technologies, such as airplanes, machine guns, dynamite, and 
radios were said to make war ridiculous and impossible. Yet, 
the next year we will mark the 100th anniversary of the War to 
End All Wars.
    I could give you an example like that for every major 
conflict we've been in, that before that conflict there were 
many comments that said we would never fight wars again, we 
would never send our soldiers into harm's way, but we did. In 
each case it was significant consequences to the men and women 
who wore the uniform, whether it be in Korea with Task Force 
Smith or whether it be in Vietnam in the initial days of 
Vietnam. We cannot allow that to happen again.
    Throughout our Nation's history, the United States has 
drawn down military forces at the close of every war. This 
time, however, we are drawing down our Army not only before a 
war is over, but at a time where unprecedented uncertainty 
remains in the international security environment. The total 
Army--the Active Army, the Army National Guard, and the U.S. 
Army Reserves--remains heavily committed in operations overseas 
as well as at home.
    As we sit here today, more than 70,000 U.S. Army soldiers 
are deployed to contingency operations, with nearly 50,000 
soldiers in Afghanistan alone. Additionally, there are more 
than 87,000 soldiers forward stationed across the globe in 
nearly 120 countries.
    During my more than 37 years of service, the U.S. Army has 
deployed soldiers and fought in more than 10 conflicts, 
including Afghanistan, the longest war in our Nation's history. 
No one desires peace more than the soldier who has lived 
through war. But it is our duty as soldiers to prepare for it. 
As Chief of Staff, it's my responsibility to man, train, and 
equip the force to provide America with the best Army possible. 
As a member of the Joint Chiefs of Staff, it's my 
responsibility to provide my best military advice to ensure the 
Army is capable of meeting our national security needs.
    If Congress does not act to mitigate the magnitude, method, 
and speed of the reductions under the BCA with sequestration, 
the Army will be forced to make significant reductions in force 
structure and end strength. Such reductions will not allow us 
to execute the 2012 Defense Strategic Guidance (DSG) and will 
make it very difficult to conduct even one sustained major 
combat operation.
    From fiscal year 2014 to fiscal year 2017, as we draw down 
and restructure the Army into a smaller force, the Army will 
have a degraded readiness and extensive modernization program 
shortfalls. We'll be required to end, restructure, or delay 
over 100 acquisition programs, putting at risk programs such as 
the Ground Combat Vehicle, the Armed Aerial Scout, the 
production and modernization of our other aviation programs, 
system upgrades for unmanned aerial vehicles, and the 
modernization of our air defense command and control systems, 
just to name a few.
    From fiscal year 2018 to fiscal year 2022, we will begin to 
rebalance readiness and modernization. However, this will only 
come at the expense of significant reductions in the end 
strength and force structure. The Army will be forced to take 
additional end strength cuts from a wartime high of 570,000 in 
the Active Army, 385,000 in the Army National Guard, and 
205,000 in the U.S. Army Reserves to no more than 420,000 in 
the Active Army, 315,000 in the Army National Guard, and 
185,000 in the U.S. Army Reserves.
    This will represent a total Army end strength reduction of 
more than 18 percent over 7 years, a 26 percent reduction in 
the Active component, a 12 percent reduction in the National 
Guard, and a 9 percent reduction in the U.S. Army Reserves. 
This will also cause us to reduce our brigade combat teams by 
45 percent.
    Ultimately, the size of our Army will be determined by the 
guidance and funding provided by Congress. It is imperative 
that Congress take action to mitigate the needed sequestration 
reductions.
    I do not consider myself an alarmist. I consider myself a 
realist. Today's international environment's emerging threats 
require a joint force with a ground component that has the 
capability and capacity to deter and compel adversaries who 
threaten our national security interests. The BCA and 
sequestration severely threaten our ability to do this.
    In the end, our decisions today and in the near future will 
impact our Nation's security posture for the next 10 years. 
We've already accepted nearly $700 billion in cuts to DOD. 
Today, we have the premier Army in the world. It is our shared 
responsibility to ensure we remain the premier Army and the 
premier joint force in the world.
    Thank you very much, Mr. Chairman. I appreciate the 
opportunity to talk.
    [The prepared statement of General Odierno follows:]
           Prepared Statement by GEN Raymond T. Odierno, USA
    Chairman Levin, Ranking Member Inhofe, and other distinguished 
members of the committee, thank you for the opportunity to speak with 
you about the reduced discretionary caps in 2014 and the continued 
threat of sequestration under current law, as well as the strategic 
choices facing the Army.
    Let me begin by thanking each member of the committee for your 
support and commitment to U.S. Army soldiers, civilians, and families 
particularly while we remain at war and with the specter of great 
fiscal challenges and strategic uncertainty. The Nation's investment in 
the Army over the past decade has been decisive in ensuring the success 
of American soldiers on the battlefield and achieving our national 
security objectives.
                          resourcing the army
    Throughout our history, we have drawn down military forces at the 
close of every war. This time, however, we are drawing down our Army 
before the war is over and at a time when there is grave uncertainty in 
the international security environment. Today, the Total Army--the 
Active Army, the Army National Guard, and the U.S. Army Reserve--
remains heavily committed in operations overseas and at home. More than 
70,000 soldiers are deployed, including nearly 50,000 soldiers in 
Afghanistan, and more than 87,000 soldiers are forward-stationed across 
the globe.
    We have also learned repeatedly from previous drawdowns that the 
costs of creating an under-resourced and under-prepared Army will 
ultimately fall on the shoulders of our soldiers who will deploy and 
respond to future contingencies. We have experienced this too many 
times to repeat this egregious error again. As Chief of Staff, it is my 
responsibility to provide my best military advice in order to ensure 
the Army will meet our national security needs in the complex, 
uncertain environment of the future. It is imperative that we preserve 
decision space for the Commander in Chief, the Secretary of Defense, 
and Congress. Together, we must ensure our Army can deliver a trained 
and ready force that deters conflict and compels our adversaries and, 
when necessary, has the capability and the capacity to execute a 
sustained, successful major combat operation.
    During my more than 37 years of service, the U.S. Army has deployed 
soldiers and fought in more than 10 conflicts including in Afghanistan, 
the longest war in our Nation's history. No one can predict where the 
next contingency will arise; we only know the lessons of the past. In 
every decade since World War II, the United States has deployed U.S. 
Army soldiers to defend our national security interests. Unfortunately, 
there is little to convince me that we will not ask our soldiers to 
deploy again in the near future.
    If the magnitude and speed of the discretionary cap reductions 
remain, the Army will not be able to fully execute the 2012 Defense 
Strategic Guidance requirements. From fiscal year 2014 to fiscal year 
2017, as we continue to draw down and restructure the Army into a 
smaller force, the Army will have significantly degraded readiness and 
extensive modernization program shortfalls. Only in fiscal year 2018 to 
fiscal year 2023 will we begin to rebalance readiness and 
modernization. But this will come at the expense of significant 
reductions in force structure and end strength, which will not allow us 
to execute the 2012 Defense Strategic Guidance and, in my opinion, will 
make it very difficult for the Army to conduct one sustained major 
combat operation.
                past budgetary priorities and reductions
    In the years since 2003, the Army has relied heavily on Overseas 
Contingency Operations (OCO) funding to build and maintain the core 
competencies and readiness for operations overseas. OCO funds have been 
used to meet immediate operational needs and to fill voids in soldier 
training and modernization procurement.
    Prior to 2003, the Army used major exercises at our combat training 
centers to ensure the readiness of our brigade combat teams (BCT). The 
Army began shifting the focus of these exercises from training for the 
full range of combat operations to preparing for more limited stability 
or counterinsurgency (COIN) operations in support of ongoing wars. In 
2011, the Army began reintroducing training for combined arms with 
scenarios replicating the complex nature of future warfare in an effort 
to restore the core warfighting skills that had atrophied after a 
decade of COIN-focused operations. The Army had intended in 2013 for 
all Army brigades not scheduled to deploy to Afghanistan to train for 
these critical combat functions in their Combat Training Center (CTC) 
exercises. Unfortunately, our goal to begin rebuilding these core 
warfighting skills in fiscal year 2013 has not been realized due to the 
effects of sequestration. This will be compounded as we potentially 
face further reductions to our training accounts in fiscal year 2014 
and fiscal year 2015 due to the reduced caps.
    Over the past 3 years, the Army has absorbed several budget 
reductions in the midst of conducting operations overseas and 
rebalancing the force to the wider array of missions called for in the 
2012 Defense Strategy Guidance. In 2010, under Secretary Gates, DOD 
developed a 10-year plan to achieve nearly $300 billion in 
efficiencies. To comply with the discretionary caps outlined in the 
Budget Control Act of 2011, the fiscal year 2013 budget proposed $487 
billion in DOD funding reductions over 10 years, of which the Army's 
share is an estimated $170 billion. With the end of the Afghanistan and 
Iraq wars and after the collaborative development of the 2012 Defense 
Strategic Guidance, the Army agreed to reduce our end strength in order 
to maintain a balanced, ready and modern force. Ninety-eight percent of 
the Army's end strength reductions were taken from the Active Army. As 
a result, we are in the process of shrinking our Active Army by 14 
percent from a wartime high of 570,000 to 490,000. At the same time, we 
are keeping the Army National Guard relatively constant, with a 2 
percent reduction from 358,000 to 350,000, and retaining the Army 
Reserve at 205,000.
    In conjunction with end strength reductions, on 25 June 2013, we 
announced changes to the Army force structure to reorganize 45 BCTs 
into 32 BCTs. In doing so, we will eliminate excess headquarters 
infrastructure while reinvesting the greater combat power of 95 of 98 
combat battalions across the remaining BCTs. All of these end strength 
and force structure decisions were developed to respond to previous 
budget cuts and prior to the implementation of sequestration.
    If the additional discretionary cap reductions required under 
current law continue, we will be forced to further reduce the Army end 
strength to 420,000 in the Active Army, 315,000 in the Army National 
Guard, and 185,000 in the U.S. Army Reserve. This would represent a 
Total Army endstrength reduction of more than 18 percent over 7 years--
a 26 percent reduction in the Active Army end strength, to include a 45 
percent reduction in Active Army BCTs; a 12 percent reduction in the 
Army National Guard; and a 9 percent in the U.S. Army Reserve.
     sequestration impacts in fiscal year 2013 and fiscal year 2014
    Sequestration has had a profound effect on our efforts to prepare 
units for future contingency operations. The continued implementation 
of the reduced discretionary caps, beginning in fiscal year 2014, will 
have drastic impacts across all aspects of Army readiness in training, 
equipment sustainment and modernization, military and civilian manning, 
and installation support.
                                training
    In fiscal year 2013, the Army was forced to cancel CTC rotations 
for seven BCTs--the equivalent of two divisions--that were not slated 
to deploy to Afghanistan or serve in the Global Response Force. We had 
intended for all Active Army brigades not scheduled to deploy to 
Afghanistan to train on their critical core competencies, but we were 
forced to cancel all CTC rotations for nondeploying units, a total of 
seven cancelled CTC rotations. As a result, the Army has lost leader 
development opportunities for approximately 231 company commanders, 112 
field grade officers, and 42 battalion commanders.
    If sequestration-level reductions continue into fiscal year 2014, 
85 percent of the Army's Active and Reserve component BCTs will not 
meet readiness levels appropriate for contingency requirements. Even 
the seven BCTs that have been funded for collective training at a CTC 
in preparation for an Afghanistan deployment will only be trained for 
the Train and Assist mission required for that theater; they will not 
be prepared for any other contingency operation.
    Significant reductions in home station training combined with 
canceled CTC rotations equates to readiness levels that leave our BCTs 
unprepared to deploy. In the event of a crisis, we will deploy these 
units at significantly lower readiness levels. Our soldiers are 
adaptive and agile; over time they may accomplish their mission, but 
their success will come with the greater cost of higher casualties. 
This means that if these units are called upon to defend South Korea, 
or to secure chemical and biological weapons in Syria, the Commander in 
Chief will be forced to send soldiers into harm's way who have not 
trained as an integrated brigade combined arms team.
    Twelve years of conflict have resulted in an extensive backlog in 
our leadership education and training programs due to reductions in 
schoolhouse capacity. For example, only 68 percent of majors, 75 
percent of warrant officers, and 71 percent of noncommissioned officers 
have completed their critical professional military education (PME) 
courses necessary to effectively lead soldiers in current and future 
assignments. The opportunities lost to train the Army's mid-grade and 
senior leaders in CTC rotations, collective training, and institutional 
education will result in the promotion of Army leaders, who are not 
trained to maneuver units under fire and in combat, leading larger 
units and organizations. Finally, there continue to be extensive 
shortfalls in critical specialties and backlogs in institutional 
training. Fiscal year 2014 cuts will increase the current 200-seat 
backlog in Aviation Flight Training and will continue to erode the 
capacity in our sniper, Ranger, and language schools. Risk taken in 
training readiness cannot be quickly recovered. It takes an Active Army 
BCT 1 year to build full training readiness for unified land 
operations. Missed leader development opportunities will create a 
deficit that cannot be recovered.
                equipment sustainment and modernization
    Sequestration caused the Army to defer approximately $716 million 
of fiscal year 2013 equipment reset (maintenance) into fiscal year 2014 
and fiscal year 2015. For example, the fiscal year 2013 Continuing 
Resolution coupled with sequestration has contributed to a backlog of 
172 aircraft awaiting maintenance. Sequestration has also postponed the 
reset of nearly 700 vehicles, almost 2,000 weapons, over 10,000 pieces 
of communications equipment, Army Prepositioned Stocks, and numerous 
soldier equipment and clothing items. The Army was forced to cut 
routine maintenance for nondeployed units thereby creating an 
additional $73.5 million in deferred maintenance costs that will carry 
over into fiscal year 2014. Sequestration also limited the Army's 
ability field software upgrades necessary to sustain network 
operations; creating substantial risk in the 135 systems that affect 
network security, systems operations, integration and information 
assurance. Altogether sequestration resulted in the release of nearly 
2,600 civilian and contract personnel, eroding critical trade skills in 
fields such as engineering.
    The Army is responsible for maintaining prepositioned sets of 
equipment that serve as the strategic hedge in critical regions of the 
world in order to allow for rapid deployment of soldiers in times of 
crisis. Sequestration has forced the Army to defer maintenance and 
delay the new equipment fielding of these sets--impacting each of the 
combatant commander's war plans.
    In the event sequestration-level discretionary caps continue into 
fiscal year 2014, we will assume significant risk in our combat vehicle 
development and delay the fielding of Abrams training simulators by 2 
years. In our aviation program, we cannot afford to procure a new Armed 
Aerial Scout helicopter; we will have to develop new organizational 
concepts to mitigate our shortfalls in Aerial Reconnaissance. We will 
reduce system upgrades for unmanned aerial vehicles. We will delay the 
modernization of our Apache helicopters. We will delay the 
modernization of Air Defense Command and Control systems. We will also 
delay modernization of critical Mission Command systems and the 
development of the Common Operating Environment that leverages 
enterprise technology to gain better interoperability, information 
security, and capability in our Mission Command software applications.
    If reductions of that magnitude continue into fiscal year 2015 and 
beyond, every acquisition program will be affected. These reductions 
will significantly impact 100 modernization programs by not 
transitioning to production, terminating their funding, restructuring 
the program or significantly delaying their completion. This will be 
necessary to facilitate our ability to concentrate the available funds 
on priority programs in science and technology, Paladin Integrated 
Management, Armored Multi-Purpose Vehicle and the Joint Light Tactical 
Vehicle and multi-year aviation contracts.
    Fiscal year 2013 sequestration cuts greatly impacted Army science 
and technology (S&T)--the seed corn of Army modernization and 
innovation. Sequestration nearly halved new basic research grants in 
fiscal year 2013 and affected grants at more than 120 universities in 
38 States. If additional reductions continue, we expect that increasing 
numbers of Army scientists and engineers will move to private sector 
jobs, impacting Army S&T now and the development of new capabilities 
for the future. Applied research and advanced technology development 
efforts in key capability areas will be further impacted across all 
areas, including armor, high-energy lasers, anti-access/area denial 
technologies, electronic warfare, cyber, mission command, night vision, 
soldier training, medical research, operation and sustainment cost-
cutting initiatives for Army systems and manufacturing technology 
efforts.
    As these lower funding levels continue, we are increasingly 
concerned about the health of the industrial base and the subsequent 
consequences for the Army. Shrinking demands and production rates will 
tend to lead to higher proportional overhead costs and unit costs. 
Lower demand will also lead to the loss of trained and experienced 
workers, which will reduce industry's ability to respond to future 
requirements. Small businesses, which provide components and 
subcomponents for large end items and are less likely to have the 
capital resources to survive gaps in production, may shutter or leave 
the sector. The engineering and technical workforce necessary to design 
and develop new systems may migrate to other sectors or retire. 
Manufacturing skills in highly specialized areas such as aircraft 
integration and large caliber weapons are likewise difficult to replace 
if lost due to downsizing.
                                manning
Military Manning
    The Army will strive to retain its most talented soldiers but will 
be forced to separate large numbers of high quality experienced, combat 
Veterans. For example, in fiscal year 2014, the Army will begin to 
convene boards to separate up to 30 percent of the Captains from Year 
Groups 2007, 2008, and 2009, the majority of whom have served multiple 
deployments in combat. The loss of experienced manpower will negatively 
impact short-term readiness and is likely to affect future recruitment 
and retention. Reductions in end strength will also impair manning 
readiness, as the pool of non-available soldiers is averaging about 13 
percent per year after 12 years of continuous operations.
Civilian Manning
    This year, we furloughed approximately 197,000 civilian employees, 
48 percent of whom are Veterans, forcing them to take a 20 percent pay 
cut for 6 weeks. Furloughs delayed maintenance services; slowed 
contracting; and decremented nearly every support function to include 
medical and family services at every installation. Furloughs have also 
begun to have a tremendous effect on morale as they come on the heels 
of 2 years of frozen pay and performance-based bonuses; we have begun 
to see some of our highest quality personnel seeking employment in the 
private sector. Given the lower discretionary caps and the continued 
threat of sequestration we are preparing to reduce civilian end 
strength to levels proportional to military end strength reductions--an 
estimated 14 percent cut to our dedicated civilian workforce.
                         installations support
    In fiscal year 2013, we reduced our base sustainment funds by $2 
billion, a 70 percent drop from historic levels of funding. In fiscal 
year 2014, facilities sustainment will receive 36 percent of historic 
funding levels which will meet minimum requirements for installation 
sustainment of buildings for Health, Life and Safety, but otherwise 
will significantly impact every service program including municipal, 
fire and emergency, logistics, facilities engineering, and family 
programs. For example, we will not be able to fund municipal services 
contracts for custodial, pest control, or other services and we will be 
forced to eliminate nearly all preventative maintenance programs. The 
backlog of approximately 158,000 work orders is 500 percent above this 
time last year, and will increase future sustainment costs throughout 
the year by 31 percent. We will suspend all restoration and 
modernization projects which includes those projects needed to support 
the consolidation of bases in Europe. The degradation of services to 
soldiers, civilians, and their families, particularly as units continue 
to deploy into and return from theater and in the midst of the 
drawdown, will significantly erode recruitment and retention. Likewise, 
funding for military construction, to include large-scale renovations 
of older infrastructure, will be more than 50 percent below historic 
norms.
                            fiscal year 2014
    The Army remains fully committed to the enactment of President's 
budget for fiscal year 2014. The Army's portion of that budget, $129.7 
billion, is necessary in its entirety to ensure that the Army meets the 
requirements of the 2012 Defense Strategic Guidance. The fiscal year 
2014 budget, however, does not provide the funds necessary to address 
decaying readiness that is the result of earlier cuts made to our 
training programs. As a result, I submitted a $3.2 billion Unfunded 
Request Memo on 6 June 2013. In addition to the fiscal year 2014 base 
budget, the Army has submitted a separate request of $47.6 billion in 
fiscal year 2014 OCO funding for operations in Afghanistan; it is 
critical that this request be fully funded to support our soldiers 
currently deployed and those soon to deploy into theater.
    However, given the necessity to prepare for the reduced 
discretionary caps and threat of sequestration in fiscal year 2014, the 
Army's execution of the fiscal year 2014 budget will proceed along five 
avenues. First, Secretary McHugh and I have directed that we accelerate 
the deliberate downsizing of the Army's Active end strength from its 
current level of 532,530 to 490,000 by fiscal year 2015 instead of 
fiscal year 2017. Second, we are implementing force structure changes--
including the reorganization of our BCTs--to reduce brigade level 
headquarters while sustaining combat power. Third, we will be forced to 
implement a drastic tiered readiness system in which about 20 percent 
of the operating force will receive the funds necessary to conduct 
collective training to reach appropriate readiness levels. Fourth, we 
will reprioritize our modernization programs and determine which ones 
are most critical to filling capability gaps and which ones will be 
delayed or cancelled. Fifth, we will make every effort to recruit and 
retain a high quality, professional, and disciplined All-Volunteer 
Force while we support our veterans transitioning back to civilian 
life.
                           strategic choices
    In March of this year, Secretary Hagel directed a 4-month long 
Strategic Choices and Management Review (SCMR). The SCMR was a valuable 
forum to discuss the projected impacts of sequestration and to 
formulate the choices facing us in the areas of end strength, force 
structure, readiness, and modernization.
    The SCMR review concluded that the Total Army must reduce its end 
strength, combat formations, readiness, and modernization programs 
dramatically to keep pace with each of the proposed budget options. The 
SCMR process concluded that the Active Army end strength could be as 
low as 420,000 while the Army National Guard could be as low as 
290,000. Because the U.S. Army Reserve structure is based on their 
combat support role, the SCMR concluded that their end strength and 
structure should not change.
    We must strike the right balance between end strength, readiness, 
and modernization across the Active Army, the Army National Guard and 
the U.S. Army Reserve as we reduce the size of the force. To date, 98 
percent of end strength reductions have been borne by the Active Army; 
the entire force has been affected by reductions to readiness and 
modernization accounts. If reduced discretionary caps and sequestration 
continue, we will be required to reduce end strength and force 
structure in the Army National Guard and take modest end strength 
reductions in the U.S. Army Reserve in order to ensure we retain a 
ready force. I am committed to every Army soldier and every Army 
formation being ready and prepared to meet the requirements of the 2012 
Defense Strategic Guidance. However, if we retain too great a force 
structure in either the Active Army or the Army National Guard, we will 
not have sufficient money to train those units.
    Ultimately, the size of our Army will be determined by the guidance 
and amount of funding provided by Congress. To that end, the SCMR 
looked at two different funding levels, one that reflects the 
President's budget proposal and another that reflects the reductions to 
the discretionary caps required under current law. In both cases, the 
Army takes significant budget reductions.
    Under the funding levels of the President's budget proposal, which 
defers the effects of sequestration for several years, the Army will 
reach what I believe is the absolute minimum size to fully execute the 
2012 Defense Strategic Guidance: 450,000 in the Active Army, 335,000 in 
the Army National Guard, and 195,000 in the U.S. Army Reserve which 
would include a total of at least 52 BCTs. In this case, because the 
President is proposing to defer the largest funding reductions until 
2018, we can maintain a ready force, albeit a smaller one, that across 
the Total Army, can meet the requirements of the 2012 Defense Strategic 
Guidance. At this size, however, we are at high risk for reacting to 
any strategic surprise that requires a larger force to respond. In 
addition, the Army will only be able to maintain an adequate level of 
future readiness by accepting a high degree of risk across every 
modernization program.
    The second case examined by the SCMR was how to achieve the 
additional budget cuts called for under the current law. In this case, 
the Army was ``sized-to-budget,'' meaning that in order to build and 
sustain a ready force, the Army would be reduced to 420,000 in the 
Active Army, 315,000 in the Army National Guard, and 185,000 in the 
U.S. Army Reserve which would include significantly less than the 52 
BCTs I believe we need. Additionally, it would require us to reduce our 
modernization accounts by nearly 25 percent, with no program 
unaffected. While we have made no final decisions yet, major weapon 
programs will be delayed and while we tried to protect certain 
programs, the impact on the industrial base is likely to be severe.
    In my professional military judgment, these projected end strength 
and force structure levels would not enable the Army to fully execute 
2012 Defense Strategic Guidance requirements to defeat an adversary one 
major combat operation while simultaneously denying the objectives of 
an adversary in a second theater. Additionally, it is unlikely that the 
Army would be able to defeat an adversary quickly and decisively should 
they be called upon to engage in a single, sustained major combat 
operation. Whatever budget decision made by Congress, the Secretary of 
the Army and I have determined that we will reduce the size of the Army 
as needed to ensure that all units--Active Army, the Army National 
Guard, and U.S. Army Reserve--will be ready for their assigned 
missions. Therefore, our deliberations should not solely pivot around a 
discussion of the future Army end strength but also upon the readiness 
and capabilities of the Army given the resources available.
                          congressional action
    As I have detailed above, the fiscal outlook today and in the near 
future continues to be exceedingly difficult due to the blunt 
instrument of sequestration. It is imperative that Congress avoid 
future cuts through the vehicle of sequestration. Sequestration 
continues to have a devastating impact on our ability to train, man, 
and equip the Army. As you continue to work through the issue of 
Continuing Resolutions and dealing with sequestration, we ask you to 
consider the following actions that will allow us to deal with these 
cuts in a more reasonable and rational way.
Compensation Reform
    We are extremely grateful for the high quality care and 
compensation our Nation has shown to our service men and women over the 
last decade. Military manpower costs remain at historic highs and 
consume 46 percent of the Army budget today. As we go forward, we must 
develop compensation packages that reduce future costs but at the same 
time recognize and reward our soldiers and their families for their 
commitment and sacrifice. If we do not slow the rate of growth of 
soldier compensation, it will consume a higher, disproportionate 
percentage of the Army's budget and we will be forced to reduce the 
Army's size below sequestration levels of end strength and further 
reduce investments in training, and modernization. We will not be able 
to afford a force of sufficient capacity, readiness and modernization 
without compensation reform. It is our solemn duty to our soldiers and 
the Nation to ensure that our soldiers are ready to fight when called 
to do so. We must make choices that preserve the high quality, All-
Volunteer Force as the most critical component of a ready Army.
Civilian Workforce
    The furloughing of our civilian workforce in fiscal year 2013 
caused much disruption across our Army and impacted our ability to 
remain focused on critical mission requirements. As we move forward, 
the shaping and restructuring of the Army civilian workforce is 
necessary to ensure we have the right mix of talent and skills to 
support our Army for the future. Additional authorities to increase the 
cap on the Voluntary Separation Incentive Program and the ability to 
offer Voluntary Early Retirement are crucial to us in order to maintain 
our professional and capable civilian workforce.
Base Realignment and Closure
    Due to reductions in military and civilian end strength, force 
structure, and industrial base demand, a future round of base 
realignment and closure is essential to divest excess Army 
infrastructure. BRAC would also allow for a systematic review of 
existing DOD installations to ensure effective joint and multi-service 
component utilization. If we do not make the tough decisions necessary 
to identify inefficiencies and eliminate unused facilities, we will 
divert scarce resources away from training, readiness, and family 
programs and the quality of our installation services will suffer.
                               conclusion
    We must develop a leaner, smaller Army that remains the most 
highly-trained and professional All-Volunteer land force in the world; 
one that is uniquely organized with the capability and capacity to 
provide expeditionary, decisive landpower to the Joint Force, and is 
ready to perform the range of military operations in support of 
combatant commanders to defend the Nation and its interests at home and 
abroad, both today and against emerging threats.
    To ensure that we align resources to set ourselves on course to 
realize this Army, I have established five strategic priorities for the 
force:

    1.  Develop adaptive Army leaders for a complex world;
    2.  Build a globally responsive and regionally engaged Army;
    3.  Provide a ready and modern Army;
    4.  Strengthen our commitment to our Army profession; and
    5.  Sustain the premier All-Volunteer Army.

    The impact of sequestration in fiscal year 2013 coupled with the 
threat of continued sequestration levels of funding are forcing the 
Army to implement significant reductions to end strength, readiness, 
and modernization in order to generate short-term cost savings. 
However, this will leave Congress, future administrations, and the 
Nation with severely reduced options for action. The next 
administration will have less capability to deter conflict and would be 
increasingly reliant upon allies in any future conflict, with no 
guarantee that our allies would be willing or able to provide the 
assistance needed to meet U.S. national security goals. In the event of 
a strategic surprise or upon the completion of hostilities, an 
undersized Army would be unable to conduct long-term stability and 
transition operations.
    The choices we must make to meet reduced funding levels by 
sequestration could force us to reduce our Army in size and capability 
to levels that I, as the Chief of Staff of the Army, am not comfortable 
with. For those that present the choice as one between capacity and 
capability, I want to remind them that for the Army, soldiers are our 
capability. Unlike other Services that man their equipment, the Army 
must train and equip soldiers to achieve decisive strategic results on 
the ground. If the funding dictates a smaller Army, then we must be 
prepared for both reduced capacity and reduced capability. Today, we 
have the best Army in the world. It is our charge, Congress and DOD 
working together, to ensure that by the end of this decade, we still 
have the best Army in the world. Thank you for taking the time to 
listen to us about our budgetary concerns.

          The strength of our Nation is our Army
          The strength of our Army is our Soldiers
          The strength of our Soldiers is our Families.
          This is what makes us Army Strong!

    Chairman Levin. Thank you so much, General Odierno.
    Admiral Greenert.

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

    Admiral Greenert. Chairman Levin, thank you very much for 
mentioning our civilian personnel. Those are our shipmates and 
we still have quite a few who are hurting from the tragedy at 
the Navy Yard. So I appreciate your mentioning them in your 
opening statement.
    Senator Inhofe, welcome back. It's good to have you here.
    We all miss Congressman Ike Skelton, all of us in the 
military.
    Distinguished members of the committee: Thank you for the 
opportunity to testify on the short- and the long-term effects 
of sequestration and our perspective on the SCMR. This morning 
I will address two main points: our budget situation and our 
plan for fiscal year 2014; and the near- and long-term impacts 
of sequestration.
    Mr. Chairman, presence, that remains our mandate, your 
Navy's mandate. We have to operate forward, where it matters, 
and we have to be ready when it matters. We have to be able to 
respond to contingencies with acceptable readiness. Recent 
events this year alone have clearly demonstrated our ability to 
do that with deployed forces. Navy assets were on station 
within a few days, where needed, and offered options to the 
President whenever the situation dictated it, in North Korea, 
Egypt, and in Syria as an example. Now, this ability to be 
present reassures our allies and it ensures that the interests 
of the United States around the world are properly served.
    In 2014, sequestration will further reduce our readiness 
and will surely reduce our ship and aircraft investment. The 
BCA revised discretionary caps will preclude our ability to 
execute the 2012 DSG, both in the near-term and the long-term. 
Restrictions associated with the CR preclude transferring funds 
across programs, increasing needed program quantities, and 
starting important new programs.
    The impacts of sequestration will be realized in two main 
categories: readiness and investment. There are several 
operational impacts, but the most concerning to me is that 
reduction in our operation and maintenance will result in only 
one non-deployed carrier strike group and one amphibious ready 
group trained and ready for contingency response. Our covenant 
with the combatant commanders is to have at least two carrier 
strike groups and two amphibious ready groups deployed and to 
have another three of each in or around the continental United 
States ready to respond to a crisis on short notice.
    So for example, right now we have one carrier strike group 
deployed in both the Arabian Gulf and in the Western Pacific, 
and our one response carrier strike group, the USS Nimitz, is 
in the eastern Mediterranean. So consequently, because of 
fiscal limitations and the situation we're in, we do not 
currently have another carrier strike group trained and ready 
to respond on short notice in case of a contingency. We're 
tapped out.
    In 2014 we'll be forced to cancel aircraft and ship 
maintenance and this will inevitably lead to reduced life in 
our ships and our aircraft. Ashore, we will conduct only 
safety-essential renovation of facilities, further increasing 
the large backlog in that area. We will be compelled to keep a 
hiring freeze in place for most of our civilian positions and 
that will further degrade the distribution of skill, 
experience, and the balance in a civilian workforce which is so 
critical.
    We will not be able to use prior-year funds to mitigate 
sequestration cuts in our investment accounts, like we did in 
fiscal year 2013. Without congressional action, we will be 
required to cancel the planned procurement of a Virginia-class 
submarine, a Littoral Combat Ship, and an Afloat Forward 
Staging Base ship, and we will be forced to delay the delivery 
of the next aircraft carrier, the USS Ford, and delay the mid-
life overhaul of the aircraft carrier USS George Washington. 
Also, we'll have to cancel procurement of at least 11 tactical 
aircraft.
    Mr. Chairman, the key to a balanced portfolio is a spending 
bill and secondarily the option to propose to Congress the 
transfer of money between accounts. This at least would enable 
us to pursue innovative acquisition approaches, start new 
projects, increase production quantities, and complete the 
ships we have under construction. Just to meet minimum 
readiness needs, we need to transfer or reprogram about $1 
billion into the operation and maintenance (O&M) account and 
about $1 billion into our procurement accounts, mostly for 
shipbuilding, and we need to do this by January.
    After the SCMR was completed, our focus has been on 
crafting a balanced portfolio of programs within the fiscal 
guidance that we were provided. Further details of our approach 
into what we call the alternative program objective memorandum 
(POM) are outlined in detail in my written statement, which I 
request be entered for the record.
    Now, in summary, we will maintain a credible and modern 
sea-based strategic deterrent, we will maximize forward 
presence to the extent we can using ready deployed forces, and 
we will continue investing in asymmetric capabilities, while, 
with this committee's help, we'll do our best to sustain a 
relevant industrial base. However, there are several missions 
and needed capabilities which are specified in the DSG that we 
cannot perform or keep apace with potential adversaries, and 
these will preclude us from meeting the operational plan 
requirements as currently written and defined by our combatant 
commanders with acceptable risk. These also are detailed in my 
written statement.
    Applying 1 fiscal and programmatic scenario, we would end 
up with a resultant fleet of about 255 ships in 2020. That's 
about 30 less than we have today. It's about 40 less than was 
planned in our program, our President's budget 2014 submission, 
and it's 51 less than our force structure assessment which we 
validated and submitted of 306 ships.
    So, Mr. Chairman, I understand the pressing need for our 
Nation to get its fiscal house in order, and I'm on board with 
that endeavor. But its imperative that we do so in a thoughtful 
manner to ensure that we sustain the appropriate warfighting 
capability, the appropriate forward presence, and that we be 
ready. Those are the attributes we depend on from our Navy.
    I look forward to working with Congress to find the 
solutions that will ensure our Navy retains the ability to 
organize, to train, and to equip our great sailors and our 
civilians and their families in the defense of our Nation.
    Thank you.
    [The prepared statement of Admiral Greenert follows:]
          Prepared Statement by ADM Jonathan W. Greenert, USN
    Chairman Levin, Senator Inhofe, and distinguished members of the 
committee thank you for the opportunity to testify about the impact of 
sequestration on the national defense.
    In this statement, I will explain the impacts of sequestration 
having occurred in fiscal year 2013 and why I believe current law 
imposing reduced discretionary caps in future years will preclude our 
ability to execute the 2012 Defense Strategic Guidance (DSG) in the 
long term. In the near-term, sequestration in fiscal year 2014 will 
negatively impact our readiness and investments, further degrading 
programs in all appropriations except military personnel. Combined with 
the restrictions associated with a Continuing Resolution on 
transferring funds, increasing program quantities and starting new 
projects, these impacts will be considerably worse in fiscal year 2014 
than they were in fiscal year 2013.
    The Strategic Choices and Management Review (SCMR) directed by the 
Secretary of Defense was an exercise to produce options and identify 
choices that would prepare the way for the Department of Defense (DOD) 
to comply with the BCA. Now that the SCMR is complete, the Navy's focus 
is development of a balanced portfolio of programs within the fiscal 
guidance (fiscal reductions) provided by the Office of the Secretary of 
Defense. That work is in progress. It is not complete.
    The standard that guides our current planning, programming and 
budgeting is the DSG and its objectives for the Joint Force; this 
guidance is benchmarked to the year 2020. The DSG incorporated the 
first set of BCA-mandated budget reductions and directed the military 
to address ``the projected security environment'' and to ``recalibrate 
its capabilities and make selective additional investments to succeed 
in the missions'' of the Armed Forces.
     our president's budget submission for fiscal year 2014 (pb-14)
    Our PB-14 submission was designed to execute the DSG with 
acceptable risk. Applying the reduced discretionary caps through 2021 
will prevent the Navy from executing the DSG. Our January 2013 ``Force 
Structure Assessment'' (FSA) is foundational in this discussion as it 
is our DOD-validated requirement for ships and reflects the direction 
of the DSG in each mission of the Armed Forces.
    The DSG highlights the value of forward presence to support 
partners, sustain U.S. influence and maintain stability. The Navy's PB-
14 submission and associated plans build a fleet that will provide the 
presence required by the DSG. If executed as planned, it will result in 
a fleet of approximately 295 ships in 2020 (300 in fiscal year 2019), 
about 10 more than are in service today. This ``2020 Fleet'' would do 
the following in support of the DSG mission to Provide a Stabilizing 
Presence:

         Increase our global deployed presence from about 95 
        ships today to about 115 in 2020.
         Increase presence in the Asia-Pacific from about 50 
        ships today to about 60 ships in 2020, consistent with the 
        DSG's direction to rebalance to that region.
         ``Continue to place a premium on U.S. military 
        presence in--and in support of--partner nations'' in the Middle 
        East, with about 30 ships. This will include continuous 
        presence of a rotationally-deployed Carrier Strike Group (CSG) 
        and Amphibious Ready Group (ARG), ballistic missile defense 
        (BMD) capable destroyers, and attack submarines. These 
        rotational forces will be augmented by an Afloat Forward 
        Staging Base (AFSB), patrol coastal (PC) and mine 
        countermeasures (MCM) ships homeported in Bahrain, which (late 
        in this decade) will be replaced by forward-stationed littoral 
        combat ships (LCS).
         ``Evolve our posture'' in Europe by meeting our 
        ballistic missile defense European Phased Adaptive Approach 
        (EPAA) requirements with four BMD-capable destroyers homeported 
        in Rota, Spain, and two land-based sites in Romania and Poland. 
        Additional presence will be provided by forward operating Joint 
        High Speed Vessels (JHSV), Mobile Landing Platform (MLP) ships, 
        an AFSB, and rotationally deployed combatants.
         Provide ``innovative, low-cost, and small-footprint 
        approaches'' to security in Africa and South America by 
        deploying on average one JHSV and one LCS continuously to both 
        regions, and maintaining an AFSB off of Africa.

    Our PB-14 budget submission invests in the capabilities and 
capacity required for the other missions described in the DSG with the 
following results:
Counterterrorism and Irregular Warfare
    We would have the capacity to conduct widely distributed 
Counterterrorism and Irregular Warfare (CT/IW) missions. According to 
our FSA, this requires one AFSB in the Arabian Gulf and one AFSB in the 
Gulf of Aden, four LCS, with two deployed in various locations 
worldwide and six MQ-8B/C Fire Scout unmanned air vehicles operating 
from these platforms.
Deter and Defeat Aggression
    We would be able to ``conduct one large-scale operation and also 
counter aggression by an opportunistic aggressor'' in a second theater 
as required by the DSG. According to the analysis conducted as part of 
our FSA, this requires 11 aircraft carriers (CVN), 88 large surface 
combatants (LSC)--cruisers (CG) and destroyers (DDG), 48 attack 
submarines (SSN), 11 large amphibious assault ships (LHA/D), 11 
amphibious transport docks (LPD), 11 dock landing ships (LSD), 52 small 
surface combatants (LCS, frigates and MCM) and 29 combat logistics 
force (CLF) ships. Maintained at an appropriate level of readiness in 
accordance with our Fleet Response Plan, this force structure yields 
three non-deployed CSG and three ARG ready to deploy in response to a 
contingency within about 14 days and an appropriate number of CSG, ARG, 
LSC and SSN able to surge forward in response to crisis. These forces 
would augment and relieve our presence forces described above, which 
includes two CSG and two ARG. Our FSA analysis also determined this 
overall force at the appropriate level of readiness would be sufficient 
to execute Navy elements of the DSG mission to Conduct Stability and 
Counterinsurgency Operations.
Project Power Despite Anti-Access/Area Denial Challenges
    The Joint Force requires assured access to meet security 
commitments to allies and partners, deter aggression and conduct 
military operations from counterterrorism to disaster response. Our PB-
14 submission would implement the Joint Operational Access Concept 
(JOAC) and the Air-Sea Battle concept through investments in:

         Undersea capabilities, including:

                 An inventory of P-8A Poseidon maritime patrol 
                aircraft that meets the program and warfighting 
                requirement of 117 aircraft in 2019, completing 
                transition from the legacy P-3C Orion by 2019.
                 Anti-submarine warfare (ASW) combat system 
                upgrades will be installed in all DDG forward 
                homeported in the Western Pacific by 2018, including 
                addition of a Multifunction Towed Array (MFTA) sonar.
                 An ASW mission package that will be fielded on 
                LCS in 2016, which increases surface ship ASW capacity 
                and delivers improved capability by using a MFTA in 
                combination with a variable depth sonar (VDS).
                 Upgraded sonobuoys and advanced torpedoes to 
                equip all of our helicopters, SSN, and P-8A in the 
                Western Pacific by 2018. PB-14 includes 1,286 Mk 54 
                advanced lightweight torpedoes for aircraft and 809 
                improved Mk 48 heavyweight torpedoes for submarines.
                 The Virginia Payload Module (VPM) fielded in 
                Virginia-class submarines in 2027 to enable Virginia-
                class SSN to replace land attack capacity from guided 
                missile submarines (SSGN) that begin retiring in 2026.
                 An LCS mine countermeasures mission package 
                that employs unmanned vehicles and offboard sensors to 
                locate and neutralize mines while keeping the LCS and 
                its crew outside the mine threat area. The first 
                increment of this mission package will be fielded in 
                2015, and the second in 2019.

         Air and missile defenses, including:

                 The Surface Electronic Warfare Improvement 
                Program (SEWIP), that delivers upgraded electromagnetic 
                sensing capabilities in 2014 and upgraded jamming and 
                deception capabilities in 2017. Both of these upgrades 
                are required to counter advances in adversary anti-ship 
                cruise missiles.
                 The new Air and Missile Defense Radar (AMDR) 
                to be fielded on seven Flight III Arleigh Burke DDG 
                that deliver between 2021 and 2024. Longer-range, more 
                accurate, and more agile than legacy ship-based radars, 
                AMDR is needed to counter advanced anti-ship weapons 
                and jamming.
                 The Evolved Sea Sparrow Missile (ESSM) Block 
                II, an improved short-range, ship-based missile that 
                counters attacks by multiple cruise missiles at low 
                altitude, as well as adversary jamming and radar 
                deception. It will be fielded in 2020 with 80 missiles 
                going to the fleet.
                 The F-35C Lightning II, the carrier-based 
                variant of the Joint Strike Fighter, introduced into 
                the fleet by 2019, will integrate into our carrier air 
                wing (CVW) forward homeported in the Western Pacific in 
                2020. The F-35C's advanced sensors, coupled with its 
                data sharing capability and ability to operate closer 
                to threats, will enhance the CVW's ability to find 
                targets and coordinate attacks.
                 An improved air-to-air ``kill chain'' based on 
                infrared (IR) sensors and weapons that circumvent 
                adversary radar jamming and deception. The Infrared 
                Search and Track (IRST) sensor system will be fielded 
                in 2016 and an improved version with extended range 
                will be fielded in 2019. The longer range and accuracy 
                of IRST will be employed by the AIM-9X Block III IR-
                guided missile that delivers in 2021.
                 An improved air-to-air radio-frequency (RF) 
                ``kill chain'' that defeats enemy jamming and operates 
                at longer ranges through upgrades to every F/A-18E/F 
                Block II Super Hornet will be fielded by 2018. This 
                radar will be used with the longer-range ``fire and 
                forget'' AIM-120D, which will be fielded in 2014 and 
                integrated into all Pacific CVW by 2020.
                 The Navy Integrated Fire Control-Counter Air 
                (NIFC-CA) network, which integrates aircraft and ship 
                sensor and weapons capabilities. Fielding begins with 
                the E-2D Advanced Hawkeye aircraft in 2015 and fully 
                equips six CVW by 2020. Full transition to the E-2D 
                will be complete by 2022.
Operate Effectively in Space and Cyber Space
    Cyberspace is a domain in which attacks and intelligence gathering 
already occur every day. In a conflict, we will use our advantages in 
this domain to help defeat adversaries' ability to see, communicate and 
coordinate their forces. Our PB-14 submission places priority on cyber 
defense and efforts to build the Navy's portion of DOD's Cyber Mission 
Forces. It would recruit, hire, and train 976 additional cyber 
operators and form 40 computer attack and defense teams by 2017.
Maintain a Safe, Secure, and Effective Nuclear Deterrent
    We would sustain today's ballistic missile submarine (SSBN) force 
and ensure the future SSBN(X) delivers in 2030 to replace retiring 
Ohio-class while meeting requirements for SSBN presence and surge.
Defend the Homeland and Provide Support to Civil Authorities
    In accordance with Secretary of Defense direction and the FSA, the 
capacity required for these missions is 1 CSG, 1 ARG, 2 P-8A, 4 CG or 
DDG and 10 LCS that are not deployed and ready for all homeland defense 
missions. Our PB-14 submission would maintain this capacity.
Counter Weapons of Mass Destruction
    Our FSA analysis determined that these missions will be met by 
sustaining a continuous overseas presence of two CSG with an additional 
CSG half the year and three ARG to conduct counter-proliferation 
activities and six BMD DDG to counter weapons delivered by ballistic 
missiles. Our PB-14 submission would maintain this level of presence.
Conduct Humanitarian, Disaster Relief, and Other Operations
    Our FSA analysis determined that a presence of two ARG and nine 
JHSV is sufficient to conduct these operations. Our PB-14 submission 
would maintain this level of presence.
 impact of a potential future scenario: ``fiscally constrained to bca 
                     caps: fiscal year 2015-2023''
    Consistent with what the Deputy Secretary of Defense told this 
committee in August, if fiscally constrained to the revised 
discretionary caps, over the long-term (2013-2023), the Navy of 2020 
would not be able to execute the missions described in the DSG. There 
are numerous ways to adjust Navy's portfolio of programs to meet the 
BCA revised discretionary caps. These are currently under deliberation 
within the department. As requested, the following provides perspective 
on the level and type of adjustments that will need to be made.
    Any scenario to address the fiscal constraints under current law 
must include sufficient readiness, capability and manpower to 
complement the force structure capacity of ships and aircraft. This 
balance would need to be maintained to ensure each unit will be 
effective, even if the overall fleet is not able to execute the DSG. 
There are, however, many ways to balance between force structure, 
readiness, capability, and manpower.
    One potential fiscal and programmatic scenario would result in a 
``2020 Fleet'' of about 255-260 ships, about 30 less than today, and 
about 40 less than Navy's PB-14 submission. It would include 1-2 fewer 
CSG, and 1-2 fewer ARG than today. This 2020 fleet would not meet the 
DSG requirements for the mission to Provide a Stabilizing Presence. As 
a result, Navy would be less able to reinforce deterrence, build 
alliances and partnerships, and influence events abroad.

         Navy would not increase our global deployed presence, 
        which would remain at about 95 ships in 2020. The lethality 
        inherent in this presence, based on ship type deployed, would 
        be less than today's 95-ship presence.
         Navy would not increase presence in the Asia-Pacific, 
        which would stay at about 50 ships in 2020. This would largely 
        negate the ship force structure portion of our plan to 
        rebalance to the Asia-Pacific region directed by the DSG.
         Navy would not ``place a premium on U.S. military 
        presence in--and in support of--partner nations'' in the Middle 
        East, since presence would decrease and, assuming we use the 
        same ship deployment scheme in the future, there would be gaps 
        in CSG presence totaling 2-3 months each year.
         Navy would still ``evolve our posture'' in Europe by 
        meeting our ballistic missile defense EPAA requirements with 
        four BMD-capable DDG homeported in Rota, Spain and two land 
        based sites in Romania and Poland. Additional presence would 
        still be provided by forward operating JHSV, MLP, AFSB and some 
        rotationally deployed combatants.
         Navy would still provide ``innovative, low-cost, and 
        small-footprint approaches'' to security in Africa and South 
        America by deploying, on average, one JHSV and one LCS 
        continuously to both regions and maintaining an AFSB in 
        AFRICOM's area of responsibility.

    In order to sustain a balance of force structure (current and 
future), modernization and personnel within our portfolio, continued 
compliance with the BCA revised discretionary caps would compel us to 
reduce our investments in force structure and modernization, which 
would result in a ``2020 Fleet'' that would not meet DSG direction in 
the following mission areas:
Counterterrorism and Irregular Warfare
    We would not have the capacity to conduct widely distributed CT/IW 
missions, as defined in the DSG. There would be inadequate LCS 
available to allocate to this non-core Navy mission, in the amount 
defined by the FSA and concurred upon by Special Operations Command.
Deter and Defeat Aggression
    We would not be able to conduct one large-scale operation and also 
counter aggression by an opportunistic aggressor in a second theater. 
In this scenario, the fleet would have 9 to 10 CVN/CSG and 9 to 10 LHA/
D and ARG. We would be able to sustain about one non-deployed CSG and 
one non-deployed ARG fully certified and able to surge on required 
timelines. Together, our presence and surge forces would be sufficient 
to conduct all missions associated with only one large-scale operation, 
as defined today. This overall force and associated readiness would, 
however, be sufficient to execute Navy elements of the DSG mission to 
Conduct Stability and Counterinsurgency Operations.
Project Power Despite Anti-Access/Area Denial Challenges
    Overall, in this scenario, development of our capabilities to 
project power would not stay ahead of potential adversaries' Anti-
Access/Area Denial (A2/AD) capabilities. We will not meet the projected 
capability requirements to assure Joint access in a plausible 
operational scenario in 2020 due to shortfalls, in particular, in air 
and missile defense:

         Some undersea capabilities will be slowed:

                 Attainment of the required P-8A inventory 
                (117) would be delayed from 2019 to 2020, and 
                transition from the P-3C to the P-8A would be delayed 
                from 2019 to 2020.
                 Anti-submarine warfare combat system upgrades 
                for DDGs and MFTA installations would not be affected.
                 The LCS ASW Mission Package would be delayed 
                from 2016 to 2017.
                 Upgraded sonobuoys and advanced torpedo 
                procurement would still equip all of our helicopters, 
                SSN, and P-8A in the Western Pacific by 2018.
                 Virginia Payload Module (VPM) would still be 
                fielded in 2027 to enable Virginia-class SSN to replace 
                SSGN that begin retiring in 2026.
                 The LCS mine warfare mission package would 
                still field its first increment in 2015 and the second 
                in 2019.

         Air and missile defense improvements would be slowed:

                 SEWIP upgraded electromagnetic sensing and 
                upgraded jamming and deception capabilities would both 
                be delayed 1 year (to 2015 and 2018, respectively). 
                Both of these upgrades are required to counter advances 
                in adversary anti-ship cruise missiles.
                 The new Air and Missile Defense Radar (AMDR) 
                would be delivered on only four ships, as compared to 
                seven under our PB-14 submission, between 2021 and 
                2024.
                 The Evolved Sea Sparrow Missile (ESSM) Block 
                II would still be fielded in 2020, with 80 missiles 
                being delivered to deployed ships.
                 The F-35C Lightning II, the carrier-based 
                variant of the Joint Strike Fighter, would still field 
                in 2019 and join our CVW forward homeported in the 
                Western Pacific in 2020. Overall, the number of F-35 
                procured would decrease by about 30 aircraft in 2020.
                 All components of the improved air-to-air IR 
                ``kill chain'' that circumvents adversary radar jamming 
                would be delayed by 2 years. The Infrared Search and 
                Track (IRST) sensor system would field in 2018 and the 
                improved longer-range IRST would not deliver until 
                2021. The new longer-range AIM-9X Block III missile 
                would not be fielded until 2023.
                 Improvements to the air-to-air RF ``kill 
                chain'' would be slowed down as F/A-18E/F Block II 
                Super Hornet anti-jamming upgrades would be delayed to 
                2020. The longer-range AIM-120D missile would still 
                field in 2014 but equipping of all Pacific carrier air 
                wings would be delayed by 2 years to 2022.
                 The Navy Integrated Fire Control-Counter Air 
                (NIFC-CA) network would still initially field with the 
                E-2D Advanced Hawkeye in 2015, but only four CVW 
                (compared to six in our PB-14 submission) would have it 
                by 2020. Transition to the E-2D would be delayed 3 
                years to 2025.
Operate Effectively in Space and Cyber Space
    Plans to recruit, hire, and train 976 additional cyber operators 
and form 40 computer operations teams by 2017 would not be impacted. 
This is a priority in any fiscal scenario. However, the BCA's reduced 
funding levels would delay replacement of our cyber systems and 
decrease our ability to defend our networks.
Maintain a Safe, Secure, and Effective Nuclear Deterrent
    We would still be able to sustain today's ballistic missile 
submarine (SSBN) force. The SSBN(X) would still deliver in 2030 to 
replace retiring Ohio-class SSBN while meeting requirements for SSBN 
presence and surge. This is the top priority program for the Navy.
Defend the Homeland and Provide Support to Civil Authorities
    We would still meet the capacity requirements for these missions.
Counter Weapons of Mass Destruction
    We would still meet the presence requirements for this mission.
Conduct Humanitarian, Disaster Relief, and Other Operations
    We would still meet the presence requirements for this mission.
    The extent of the fiscal changes in the BCA, when compared to 
current program and budget levels, would compel Navy to request relief 
from several program mandates and force structure capacity limits, in 
order to sustain and build a fleet with a balance of ship types. For 
example, mandated limits govern the size of the force, minimum funding 
for certain activities and facilities, and changes to the number of 
personnel at a base.
              the impact of fiscal year 2013 sequestration
    Looking at the nearer term, the fiscal year 2013 sequestration 
reductions compelled us to reduce our afloat and ashore operations and 
created a significant shore maintenance backlog. However, the effects 
were barely manageable because we received authorization to reprogram 
funds into appropriate maintenance accounts, and we were able to use 
prior-year investment balances to mitigate reductions to investment 
programs. Impact to Navy programs, caused by the combination of a 
Continuing Resolution and sequestration, included:

         Cancelled five ship deployments.
         Delayed deployment of USS Harry S Truman strike group 
        by 6 months.
         Planned inactivation, instead of repairing, USS Miami 
        due to rising cost and inadequate maintenance funds.
         Reduced facilities restoration and modernization by 
        about 30 percent.
         Furloughed DON civilian employees for 6 days, which, 
        combined with a hiring freeze, reduced our maintenance and 
        sustainment capacity by taking away logisticians, comptrollers, 
        engineers, contracting officers, and planners.
         Reduced base operations, including port and airfield 
        operations, by about 20 percent.
         Cancelled the Blue Angels' season and most non-
        essential port visits for Fleet Weeks.
The prospect of sequestration and a Continuing Resolution in fiscal 
        year 2014
    Sequestration in fiscal year 2014, particularly if combined with 
restrictions of a Continuing Resolution (CR), will reduce our readiness 
in the near-term and in the long-term exacerbate program impacts from 
budget reductions required under current law. The impacts below assume 
an approximate 10 percent cut to the Navy's budget; however, with 
military personnel accounts exempted, the cut could increase to 14 
percent in all other appropriations. In addition, the restrictions 
imposed by a CR will reduce our ability to manage the impact of 
sequestration. The impacts of this reduced funding will be realized in 
two main categories of budget accounts: (1) operations and maintenance 
and (2) investments.
    (1) Operation and maintenance accounts will absorb a larger 
reduction than in fiscal year 2013 from a smaller overall amount of 
money; in addition we must begin to address deferred ``carry over'' 
bills from fiscal year 2013 that total approximately $2.3 billion over 
the next 5 years. Because we will prioritize meeting current presence 
requirements, we will be able to preserve 95 percent of the forward 
presence originally directed under the fiscal year 2014 Global Force 
Management Allocation Plan (GFMAP). However, this is still only about 
half of the Combatant Commander's original request. To ensure adequate 
funding for the most important deployments, we were compelled to adjust 
the plan in advance of fiscal year 2014 to remove the deployment of one 
CG to the Middle East, two salvage ships to Africa and South America 
and five large surface combatants to the Western Pacific. Most 
concerning, however, we will have two thirds less surge capacity in 
fiscal year 2014. Our planned presence to meet the GFMAP in fiscal year 
2015 and beyond will also be at risk because maintenance cancelled in 
fiscal year 2014 may result in ships being unable to deploy in future 
years. At a minimum this lost maintenance will reduce the service life 
of these ships.
    Because of the mechanics of sequestration, we cannot reprogram 
(move) funds from other accounts into operations and maintenance to 
make up for the sequestered amount. As a result, within operations and 
maintenance, we have to ``go where the money is'' and find savings in 
training, maintenance, civilian personnel, and shore facilities. The 
reductions in fleet training we are compelled to make will result in 
only one non-deployed CSG and one ARG trained and ready for surge 
operations--notionally without these reductions there would be three of 
each ready to deploy within about 2 weeks.
    We will be compelled to cancel or defer planned fiscal year 2014 
fleet maintenance, including 34 of 55 surface ship maintenance periods 
totaling about $950 million--all in private shipyards--and 191 of about 
700 aircraft depot maintenance actions. This missed maintenance will 
inevitably take time off the expected service life of our ships and 
aircraft, which in turn will make it harder to sustain even the smaller 
fleet we will have if the BCA caps remain in place for the long term. 
For example, a recent Center for Naval Analysis study estimated 
cancelling and not making up one maintenance period at the 10-year 
point in a DDG's life will shorten its overall service life by about 5 
years.
    We will be compelled to keep in place our freeze on hiring for most 
civilian positions. Ashore we will continue to conduct only safety-
essential renovation and modernization of facilities, further 
increasing the large backlog in that area.
    (2) Investment accounts will be particularly impacted by 
sequestration in fiscal year 2014, and we will not be able to use 
prior-year funds to mitigate shortfalls as we did in fiscal year 2013. 
Without congressional action or mitigating circumstances, the 
reductions imposed by sequestration and the limitations of a CR will 
compel us to:

         Cancel planned fiscal year 2014 procurement of an SSN, 
        an LCS and an AFSB; also, delay an SSN planned for fiscal year 
        2015 procurement. Each of these would further worsen the 
        reduction in fleet size, described earlier in this statement, 
        that the BCA would compel us to make over the long term.
         Delay the planned start of construction on the first 
        SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
        cause us to be unable to meet U.S. Strategic Command presence 
        requirements when the Ohio-class SSBN retires.
         Cancel procurement of 11 tactical aircraft (4 EA-18G 
        Growler, 1 F-35C Lightning II, 1 E-2D Advanced Hawkeye, 2 P-8A 
        Poseidon, 3 MH-60 Seahawk) and about 400 weapons, exacerbating 
        future BCA-driven reductions in our capabilities to project 
        power despite A2/AD threats.
         Delay delivery of USS Gerald R. Ford (CVN-78) by 2 
        years, extending the period of 10 CVN in service, and lowering 
        surge capacity.
         Delay the mid-life overhaul of USS George Washington 
        (CVN 73) scheduled for fiscal year 2016, disrupting today's 
        ``heel-to-toe'' CVN overhaul schedule and reducing near-term 
        CVN capacity.

    In order to avoid or remedy some of the fiscal year 2014 impacts 
described above, we need Congress to approve authorization and 
appropriations bills. This would enable the Navy to transfer funds, 
pursue innovative acquisition approaches, start new projects, increase 
production quantities, and complete ships. This would:

         Keep SSBN(X) on schedule to sustain required SSBN 
        capacity after the Ohio class begins to retire.
         Buy two Virginia-class SSN in fiscal year 2014 as 
        planned and keep fiscal year 2015 SSN procurement on schedule. 
        These actions will help maintain our undersea dominance and 
        ability to project power despite A2/AD threats.
         Protect CVN-73's mid-life overhaul and complete CVN-78 
        on time to sustain CVN capacity.
         Build the planned AFSB in fiscal year 2014, which is 
        needed to meet DSG and combatant commander presence 
        requirements for CT/IW capability.
         Restore half of the cancelled surface ship maintenance 
        availabilities to protect fiscal year 2015 presence.
                               conclusion
    We understand the pressing need for the Nation to get its fiscal 
house in order. DOD should do its part, but it is imperative we do so 
in a coherent and thoughtful manner to ensure appropriate readiness, 
warfighting capability, and forward presence--the attributes we depend 
upon from our Navy. Specifically, we need to be able to establish and 
pursue a deliberate plan for future force development. Regardless of 
the level of funding we receive, having a predictable budget and 
associated authorities will enable us to develop and execute an 
achievable strategy. This strategy would guide our efforts to sustain 
the appropriate readiness in today's Navy while building a future fleet 
that is able to deliver the most important presence and capabilities 
and address the most important warfighting scenarios.
    We will continue to view each of our choices through the lens of 
the three tenets I established when I took office as CNO: Warfighting 
First, Operate Forward, and Be Ready. But with each year of 
sequestration, the loss of force structure, readiness, and future 
investments will cause our options to become increasingly constrained 
and drastic; our ability to contribute to the Nation's security will be 
reduced.
    We look forward to working with Congress to find solutions that 
will ensure our Navy remains preeminent and preserve the Nation's 
security and prosperity.
    Chairman Levin. Thank you so much, Admiral.
    Now, General Amos.

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

    General Amos. Chairman Levin, Ranking Member Inhofe--
welcome back, sir--committee members: Thank you for your 
consistently strong support for your military forces and for 
your obvious love of our country and justified concern for its 
defense. All of us sitting before you this morning, my 
colleagues, are mindful of your collective and individual 
sacrifices and are grateful for your unflagging fidelity.
    The sequester defense budget falls short in meeting Marine 
Corps requirements and those of the joint force. Your Marine 
Corps is ready today, but in order to maintain readiness within 
the current fiscal environment we are mortgaging the readiness 
of tomorrow's Marine Corps to do so. We are ready today because 
your marines are resilient and determined to defend the United 
States of America. Despite year after year of CRs, the BCA, 
furloughs, and the government shutdown, the men and women who 
wear my cloth are patriots first. The defense of our fellow 
Americans and our way of life is our number one priority, even 
over the comforts of self.
    Last month's furlough of more than 14,000 of our civilian 
marines was a grave disservice to an honorable and dedicated 
workforce who wants nothing more than to advance the security 
of the American people. Our civilian marines are a vital part 
of our team. They are the technicians, the experts, the 
teachers, the clerks in our commissaries and our exchanges. 
They are our corporate memory. They are our surge capacity at 
our depots who provide unique skills in support of the Active 
and Reserve Force.
    They deserve better, quite frankly. I'm ashamed about the 
way they've been treated through the furloughs and the 
uncertainty.
    During this first year of sequestration, I have realigned 
funds within my authorities to maintain unit readiness to the 
highest extent possible. My priorities have remained 
consistent: first and foremost, the near-term readiness of our 
forward-deployed forces, followed thereafter by those that are 
next to deploy. But this readiness comes at the expense of 
infrastructure, sustainment, and modernization. We are funding 
today's readiness by curtailing future investment in equipment 
and in our facilities.
    This year we are spending approximately 68 percent of what 
is required at a bare minimum to maintain our barracks, our 
facilities, our bases and stations, and our training ranges. 
This is unsustainable and it can't continue over the long term. 
If we are to succeed in future conflicts, we must modernize our 
equipment and maintain the infrastructure that enables our 
training.
    We must also invest in our people. To meet the requirements 
of the DSG, we need a Marine Corps of 186,800 Active Duty. A 
force of 186,800 allows us to meet our steady state operations 
and fight a single major war. It preserves the 1-to-3 dwell for 
our marines and their families. Under the 2011 BCA, the $487 
billion reduction cut our end strength further, to 182,000. 
With sequestration, I can no longer afford a force of 182,000.
    In February, we initiated a parallel study to DOD's SCMR. 
Our internal review determined the force size that I could 
afford under a fully sequestered budget. This was not a 
strategy-driven effort. It was a budget-driven effort, pure and 
simple. Our exhaustive research, backed by independent 
analysis, determined that a force of 174,000 marines, quite 
simply, is the largest force that we can afford. Assuming that 
the requirements for marines remain the same over the 
foreseeable future, a force of 174,000 will drive the Marine 
Corps to a 1-to-2 dwell. It will be that way for virtually all 
my operational units: 6 months deployed, 12 months home 
recuperating, resetting, and training, and 6 months deployed 
once again.
    This is dangerously close to the same combat operational 
tempo we had in Iraq and Afghanistan while fighting in multiple 
theaters and while maintaining steady state amphibious 
operations around the world.
    The 174,000 force accepts great risk when our Nation 
commits itself to the next major theater war as there are 
significant reductions in my Service in ground combat and 
aviation units available for the fight.
    Under sequestration, we will effectively lose a Marine 
Corps division's worth of combat power. This is a Marine Corps 
that would deploy to a major contingency, fight, and not return 
until the war was over. We will empty the entire bench. There 
would be no rotational relief like we had in Iraq and 
Afghanistan. Marines who joined the Corps during that war would 
likely go straight from the drill field to the battlefield, 
without the benefit of pre-combat training.
    We will have fewer forces, arriving less trained, arriving 
later to the fight. This would delay the buildup of combat 
power, allow the enemy more time to build its defenses, and 
would likely prolong combat operations altogether. This is a 
formula for more American casualties.
    We only need to look to 1950 and the onset of the Korean 
War to see the hazard and the fallacy in this approach.
    Thank you again for this opportunity to appear before you. 
I'll continue to work with the members of this committee to fix 
the problems we are faced with. I'm prepared to answer your 
questions.
    [The prepared statement of General Amos follows:]
             Prepared Statement by Gen. James F. Amos, USMC
                              introduction
    The Marine Corps is the Nation's expeditionary force in readiness. 
We are our Nation's hedge against uncertainty; a national insurance 
policy of sorts. Deployed forces, and units in training alike, are 
poised to swiftly respond to crisis and disaster, offering immediate 
options for strategic decisionmakers, while simultaneously buying time 
for the follow on joint force. We mitigate the risk inherent in an 
uncertain world by being ready to respond to today's crisis--with 
today's force--today.
    The Nation and the Defense Department are faced with unprecedented 
budget uncertainty. My fellow Service Chiefs and I are here to talk 
about the effects of sequestration on the budget. We fill two distinct 
roles in this discussion--as chiefs of our respective Services and as 
members of the Joint Chiefs of Staff. In my role as Commandant, I am 
deeply concerned about our inability to get a budget approved that 
facilitates the sound management of precious personnel and limited 
resources from 1 year to the next. As a member of the Joint Chiefs of 
Staff, I am equally concerned with our military's ability to support 
the President's Defense Strategic Guidance and meet the requirements of 
the combatant commanders across the globe.
    Your marines take seriously their sacred oath to defend our Nation, 
our Constitution, and the American people. As we speak, marines are 
deployed to Afghanistan supporting the transition of security and 
responsibility to the Afghan Government and people. As a naval force, 
marines remain afloat on amphibious warships to provide forward 
presence, while engaging our allies and partners. These naval 
expeditionary forces are maneuverable, self-sustaining, operate without 
reliance on host country basing or over flight permissions, and present 
our Nation with flexible force options.
    In the Pacific, we are aggressively rebalancing our force posture, 
to include our Unit Deployment Program in Okinawa. Rotational Marine 
units are training and strengthening our relationship with Australia. 
Additionally, marines stand their posts guarding our embassies, and 
train diligently at our installations to prepare for the next 
contingency. Marines stand ready to answer the Nation's call to action. 
We are keenly aware of the global security environment where our 
collective actions are closely watched, and we share the, concern that 
a disruption of our Nation's ability to protect its global interests 
will have strategic consequences.
    In these troubled times, the Marine Corps remains your frugal 
force. As good stewards of the taxpayer dollar, we will continue to 
prioritize our requirements, determine what is good enough and only ask 
for what is essential for our marines and sailors to succeed every time 
they are called into harm's way. For a small portion of the Department 
of the Defense budget, we continue to provide a strategically mobile, 
rapidly deployable force. While other nations seek to reinvent 
themselves for the new security environment, the American people have 
already invested in a Navy-Marine Corps team that is suited for this 
environment.
    As Commandant, I assure you that we will do everything in our power 
to ensure the security of the American people and protect the global 
interests that secure our prosperity. As we have for 238 years, we will 
meet our responsibility to rapidly respond to crises wherever they may 
occur. Marines will be always faithful to the American people and our 
Nation. We cannot afford to allow our adversaries the opportunity to 
seize the initiative and undermine global security. Already a lean 
organization, your marines will continue to give you the first and best 
option for crisis response.
                            force structure
    Beginning in 2006, the Marine Corps increased its end strength to 
202k to meet global commitments and to reduce the dwell time of marines 
in combat zones. Three years ago, the Marine Corps initiated a Force 
Structure Review with the mission of reshaping the Marine Corps for a 
post-Afghanistan environment. This review sought to find ways to meet 
our national security responsibilities in a resource-efficient manner. 
Our goal was to provide the most ready, capable, and cost-effective 
Marine Corps our Nation could afford as the security environment 
changed. Balancing the President's Defense Strategic Guidance with our 
internal review, we designed a force of 186,800 which was the optimal-
sized Marine Corps considering the likely global security environment.
    As a result of new factors driven by the Budget Control Act (BCA), 
the 186.8K force is no longer affordable. Accordingly, I repo1tecl to 
Congress last year on our multi-year plan to draw clown the Co1ps below 
186.8K reaching 182.1K by the end of fiscal year 2016. This force 
structure goal adjusted our end strength, and assumed more risk by 
making reductions across all elements of the Marine Air-Ground Task 
Force, while still enabling the Marine Corps to support the President's 
strategy. A year ago, we believed a budget deal would be made. Today, 
with sequestration having occurred and current law imposing continued 
cuts in future years we are planning on reducing the Corps even more. 
If cuts of this size continue, we will not be able to afford the 182k 
force structure; the fiscal environment will subsequently put the 
Nation's ability to respond to crisis around the globe at risk.
                        resources and readiness
    I am alarmed by the prospect of even deeper reductions in the next 
fiscal year. There should be no misunderstanding: cuts of this 
magnitude will have a significant impact on the global security 
climate, the perceptions of our enemies, and the confidence of our 
allies. In a so-called ``new normal'' environment of brushfire 
instabilities, violent extremism, non-state threats and struggling 
sovereign entities, the United States will continue to have a role as a 
leader. Our ability to affect this global environment may be measured 
in ready crisis response forces, i.e., ships at sea, planes in the air, 
partnerships on the ground and trust among our allies. In a word, our 
posture and our stature as a global leader in a challenging world is 
measured in READINESS. Readiness is the aggregate of the investment in 
personnel, training, and equipment to ensure that units are prepared to 
perform missions at any given time. Our ability to project a ready 
force is gauged and respected by our friends. But make no mistake about 
it, our foes and those who would challenge us, are measuring our 
readiness just as closely.
    Readiness is directly linked to resources. Sequestration-level cuts 
in fiscal year 2014 will force us to forfeit long-term priorities to 
fund near-term readiness. In fiscal year 2013, the final enacted 
appropriations bill addressed many of our funding priorities; however, 
as we enter a new fiscal year, a full year of sequester matched with 
the likelihood of a Continuing Resolution (CR) provides the context for 
our fiscal planning as we move forward. While I think we all can agree 
that defense resources must be highly scrutinized, the scale and abrupt 
implementation of prospective resource changes have the potential for 
devastating impacts on readiness beginning in the very near future. We 
realize this is not a temporary condition, and are bracing for the 
continued challenges of these lower funding levels.
    The impacts we face in terms of readiness have primary and 
secondary effects. While the primary effects on short-term readiness 
will begin to be observable in fiscal year 2014, the longer-term 
effects will be even more devastating. We are realigning funds from 
longer-term activities to protect the short-term readiness of our 
combat deployed marines. While these adaptations are necessary, the 
continued maintenance of the short-term readiness of our current force 
comes at the expense of those who will follow in their footsteps. We 
are consuming tomorrow's `seed corn' to feed today's requirements, 
leaving ever less to plant for the future.
                   marine corps readiness degradation
    The Defense Strategic Guidance remains a clear articulation of 
future threats, challenges, and opportunities--I continue to support 
its full implementation. Given the continuing threat of sequestration, 
we face an extended period of severely reduced funding bound by rules 
that provide little flexibility to efficiently apply the mandated 
reductions. Analyzing and applying constrained resources requires 
decisions now; decisions that will have strategic impact.
    When we describe our crisis response mandate, we are describing our 
forward deployed forces as well as those marines and units training at 
home. Even when not deployed, Marine units are on a short tether and 
thus required to maintain high levels of readiness. They must be 
prepared to deploy on short notice, with the necessary equipment and 
training to dominate any adversary or confront any crisis. ``Tiered 
readiness'' amongst non-deployed Marine units is unacceptable. Over 
time, tiered readiness creates a hollow force. Degradation in training, 
equipment and manning underpin shallow, unsustainable combat-ready 
forces. America expects her marines to remain most ready when the 
Nation is least ready.
    Our marines on the forward edge of our Nation's security remain my 
number one priority. The forces that currently support the Afghanistan 
mission, those engaged in countering terrorism globally, and those 
preparing to go, will receive the full support they need. We also are 
prioritizing our wounded warriors support services; however, our focus 
on deployed forces, families, and our wounded warriors, comes at a 
cost. As we move forward under sequestration, I will be forced to 
reduce activities necessary to the long-term readiness of the force, 
such as organizational and intermediate maintenance of equipment 
returning from theater, to ensure the full support to our most engaged 
units. For forces not deploying to Afghanistan, the fuel, ammunition, 
and other support necessary for training will be reduced precluding our 
ability to provide fully-trained individuals and ready units to meet 
emerging crises--ultimately impacting even Amphibious Ready Groups and 
Marine Expeditionary Units.
    The abruptness and inflexibility of sequestration will force us to 
mortgage the condition of our equipment and could erode our readiness 
to dangerous levels. The indiscriminate nature of sequestration is 
creating its very own national security problem. Within a year, we will 
see real impact to all home station units and the beginning of impacts 
to our next-to-deploy and some deployed forces . . . the beginnings of 
a hollow force we have fought so hard to avoid.
                        mitigating sequestration
    We have worked diligently to mitigate the effects of sequestration 
and the likelihood of a CR as we enter into fiscal year 2014. As we 
look ahead, our task has been made more challenging by the ever 
increasing demand for ready marines. A resumption of the Marine Unit 
Deployment Program in the Pacific has reestablished a key component of 
our Nation's stabilizing presence in the Asia-Pacific region. The 
establishment of a rotational presence of marines in Darwin, Australia 
has already had a positive impact on the confidence of our allies and 
our ability to respond to crises in the South and Southeast Asian 
littoral. The planned ramp-up of Marine security forces for our 
embassies and consulates is a necessary artifact of the ``new normal.'' 
Marines are in high demand to support the growth of special operations 
and cyber forces as well.
    Maintaining near-term readiness and operational commitments will 
continue to come at the expense of investment in our modernization, 
infrastructure and quality of life accounts. As an example of our 
trade-offs, I am forced to reduce the necessary funding to maintain our 
facilities onboard our bases and stations to support operational 
commitments. Unfortunately, reducing funding levels will accelerate the 
rate of degradation and increase the long-term costs to return these 
facilities to acceptable levels. Our family housing overseas, where the 
preponderance of forward stationed marines and their families reside, 
will not receive planned renovations. Stateside housing will likely 
face reduced oversight, which breaches our priority to 'Keep Faith' 
with our families. Sequestered levels of funding will also cut base 
operating support funding severely, resulting in funding levels well 
below the requirement. Overall, degraded quality of life for our 
marines, sailors, and their families will impact unit and family 
readiness, as well as our efforts to recruit and retain high quality 
people in the All-Volunteer Force.
    While the Marine Corps has a lean civilian workforce with 95 
percent working outside the National Capital Region, sequestration will 
also result in reductions to this force. Since our civilians play 
critical roles in ground equipment maintenance, training range 
operations, installation support services to include police, fire and 
rescue services, housing maintenance and base utilities support, and 
all of our family support programs, fewer civilians over time will 
impact home station readiness. Some essential programs at our bases and 
stations, such as our Wounded Warrior programs, will continue. Other 
very important but less critical programs, like morale and family 
support services, to include the availability of child care, will be 
reduced or eliminated to fund readiness. Additionally, the specter of 
further furloughs or reductions-in-force present significant challenges 
to our ability to attract and retain the talent we need. Sequestration 
undeniably impacts our individual marines as well as every aspect of 
our Corps from the readiness of our next-to-deploy forces to the 
readiness of our depots, maintenance and stations.
                           strategic choices
    The Marine Corps is first and foremost a warfighting organization 
committed to winning our Nation's battles. I do not share the view that 
as the United States transitions out of Afghanistan, our enemies are 
through with us. Instead, this world remains a dangerous place. We do 
not know what is going to happen in Egypt, Syria and Libya, but we know 
terrorist organizations will continue to fester in areas of the world 
ripe for harboring illicit and de-stabilizing actors. We do not know 
what the future is for North Korea. The Marine Corps is going to have 
to operate within this reality. Despite sequestration, history has 
taught us that we must maintain a ready force capable of responding to 
crises anywhere in the world and at a moment's notice. This is why 
America invests in the Navy-Marine Corps team.
    Four months ago, Secretary Hagel directed the Strategic Choices and 
Management Review (SCMR) to better inform DOD's preparation for the 
Quadrennial Defense Review (QDR). In February, I stood up a working 
group focused solely on designing a future force based on likely 
resource constraints. This effort was informed by the realization that, 
if faced with sequestration, the Marine Corps would continue to face 
budget shortfalls and lose its ability to maintain its edge as the 
Nation's force in readiness. As such, we rebuilt a force design 
structure that was based on a reduced fiscal framework that, by 
necessity, assumed greater risk in supporting the requirements of the 
President's national security strategy.
    Although a significant po1tion of the SCMR process addressed Major 
Combat Operation (MCO) requirements, which represent the most dangerous 
of possibilities, we focused on forward presence and crisis response, 
which are the most likely . . . we believe that is what America needs 
from the Marine Corps. America will always need a Marine Corps that is 
ready, forward deployed, and able to respond to crisis on a moment's 
notice.
    As noted above, in the past decade with congressional support, we 
grew to 202K to meet the Nation's defense needs as a Marine Corps 
forward deployed and engaged in Iraq and Afghanistan. As we complete 
our mission and bring home our service men and women, we are planning 
to reshape our force size to meet the new national strategy. As current 
law threatens to further reduce budgets, we proactively initiated an 
examination of further end strength reductions. Let me be clear, the 
primary driver behind the development of this new force strength 
initiative was not the national strategy. The President's National 
Security Strategy is optimized with a Marine Corps of 186,800. The BCA 
forced us to 182,100. Our examination determined that an end strength 
of 174,000 was the best we could do in addressing the operational 
requirements of steady state deployments, crisis response activities, 
and potential major combat operations, while preserving institutional 
health and readiness. As we actively participate in the QDR, this is 
the force that the Marine Corps will use as the recommended basis for 
our contribution to the Nation's defense. Based on extensive analysis, 
falling below this force structure number will significantly increase 
risk in to our steady state security posture, crisis response and major 
combat operations.
    Our working group set out with the basic premise to design a range 
of possible force structures and subject them to both internal and 
external risk analysis. In concert with the Defense Strategic Guidance, 
we designed a force that was also fiscally supportable. We decided to 
accept risk with MCOs, to ensure adequate capability and capacity 
remained in the areas of forward presence and crisis response. Great 
care was taken to ensure that both the strategic landscape and emerging 
demands were properly balanced against force design risks. We had to 
make sure our method avoided simple linear reductions of numbers from 
our current planned end state of 182.1K to achieve a force design that 
kept the Marine Corps as ready as fiscally possible and relevant to the 
security challenges of today and tomorrow. At the end of the day, we 
needed to be modernized, ready and biased for action, integrated into 
the Joint Force structure, expeditionary and right sized, while 
retaining our core combined arms and amphibious structure and 
competencies.
    As a part of our methodology, we began by first looking at what 
marines are doing today and then widened our aperture to include those 
emerging trends that would ultimately frame the future operating 
environment. Today, marines are still joined with the international 
coalition in Afghanistan, providing crisis response in the Middle East, 
providing a stabilizing presence in Africa and the Pacific, and 
standing ready to respond to Humanitarian Assistance/Disaster Relief 
(HA/DR) efforts around the globe. Today's Marine Corps also has the 
capability and capacity to conduct special operations and cyber 
warfare. We can foresee an increasing demand for these capabilities in 
the future operating environment. The bottom line is, we are asking a 
tremendous amount out of our marines today--a trend that will likely 
continue and further bound our future.
    Tomorrow's marines will see violent extremism, battles for 
influence, disruptive societal transitions, natural disasters, 
extremist messages and manipulative politics. We will see criminal 
enterprises wield combat power formerly only associated with nation 
states. We will see separatism, extremism and intolerance that will 
lead to terrorism, protests and violence. We will see new technologies 
place modern weapons into the hands of developing states and non-state 
actors while the development and proliferation of advanced conventional 
weapons challenges our ability to project power or gain access. In this 
security environment, it will be the forward presence, strategic 
mobility, rapid response, and effective power projection capabilities 
of the Marine Corps that define those minimum attributes that must 
endure and frame our future force design. We must maintain a force that 
can balance a focus on the Asia-Pacific with a sustainable emphasis on 
the Middle East, combined with a continuous effort to counter violent 
extremists operating across multiple domains.
    Based on the detailed planning of our working group, in conjunction 
with independent analysis, we have determined that within 
sequestration-level budgets that our force design of 174,000 is the 
lowest temporary level that can retain America's crisis response force. 
This provides a minimum acceptable level of readiness, while 
maintaining forward presence as a part of the Navy-Marine Corps team. 
Further reductions will incur heightened, and in some cases prohibitive 
risk to the National Security Strategy.
    The Marine Corps has faced this challenge before. As was the case 
in the past, our manpower and investments fluctuated with the onset and 
conclusion of wars. We are heading down a similar path today. As our 
Nation reduces its overseas forces, marines will bridge the gap. We 
will maintain forward presence. We will remain on scene to engage with 
partners and allies. We will provide our Nation access where our 
adversaries try to deny it. We will respond to crises around the globe. 
Given a smaller force size our marines will face a greater operational 
tempo, and we will plan for reduced dwell time as a necessary measure 
to meet our global commitments.
    For the foreseeable future, there remains a heightened requirement 
for a very capable crisis response force that can deploy anywhere 
quickly, provide a variety of response options, and buy time for 
national decisionmakers when the need arises. The Marine Corps is and 
will continue to be the answer to this need, and through congressional 
support, we will retain the capability and capacity to do so.
                               conclusion
    Since it emerged in the late 19th century as a great power, the 
United States has needed a capable and well-trained crisis response 
force. Now, more than ever, Congress is faced with difficult choices to 
determine where to appropriate the necessary funds for our national 
defense. Some of the recommendations being offered present illusory and 
short-term thrift . . . America has carefully invested over the years 
and produced the most agile and responsive military force within the 
Navy-Marine Corps team. Our foes, cunning and adaptive, watch carefully 
to take advantage of any decline in American ability or willingness to 
lead in a partnered global order that supports the common good. The 
continued prosperity and security interests of our Nation are dependent 
on resourcing long-term success.
    The Marine Corps is the most ready when the Nation is least ready. 
It is who we are. Paired with the Navy, we are the elements of the 
joint force that must be maintained at high levels of readiness. We are 
the Nation's risk mitigation for the additional cuts that will affect 
other elements of the Department of Defense.
    While Congress and this committee carefully execute its 
responsibility to validate every taxpayer dollar they appropriate to 
our Nation's defense, I can assure you that the Marine Corps will 
continue to uphold our share of this sacred trust. Our reputation as 
the ``frugal force'' comes from an ethos that values both high combat 
readiness and careful stewardship. The Marine Corps will ask only for 
what it needs, not for what it wants. I am committed to building the 
most ready Marine Corps that the Nation can afford. Working together, 
we can map out a resource strategy that protects our global interests 
as a nation, keeps faith with our servicemembers, and provides the 
greatest value to the American people. I thank you for the opportunity 
to engage in this dialogue, for your service to our Nation, and for 
your continued support of your marines. Semper Fidelis.

    Chairman Levin. Thank you very much, General Amos.
    General Welsh.

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

    General Welsh. Thank you, Mr. Chairman. Ranking Member 
Inhofe, welcome back. I hope you have your landing currency 
reset.
    Members of the committee: It's always an honor to be here 
with you. Thank you for everything you do for our Nation.
    The real and projected impacts of sequestration are 
sobering. If sequestration remains in place for fiscal year 
2014, our Air Force will be forced to cut flying hours to the 
extent that within 3 to 4 months many of our flying units won't 
be able to maintain full mission readiness. We'll cancel or 
significantly curtail major exercises again, and we'll reduce 
our initial pilot production targets, which we were able to 
avoid in fiscal year 2013 because prior year unobligated funds 
helped offset about 25 percent of our sequestration bill last 
year. Those funds are no longer available.
    While we hope to build a viable plan to slow the growth of 
personnel costs over time and to reduce infrastructure costs 
when able, the only way to pay the full sequestration bill is 
by reducing force structure, readiness, and modernization. Over 
the next 5 years, the Air Force could be forced to cut up to 
25,000 airmen and up to 550 aircraft, which is about 9 percent 
of our inventory. To achieve the necessary cost savings in 
aircraft force structure, we'll be forced to divest entire 
fleets of aircraft. We can't do it by cutting a few aircraft 
from each fleet.
    As we look at which force structure we need to maintain, 
we'll prioritize global long-range capabilities and multi-role 
platforms required to operate in a highly contested 
environment. We plan to protect readiness as much as possible. 
We also plan to prioritize full-spectrum training, because if 
we're not ready for all possible scenarios, then we're 
accepting the notion that it's okay to get to the fight late, 
we're accepting the notion that the joint team may take longer 
to win, and we're accepting the notion that our warfighters 
will be placed at greater risk. We should never accept those 
notions.
    If sequestration continues, our modernization and 
recapitalization forecasts are bleak. It will impact every one 
of our programs and over time these disruptions will cost more 
money to rectify contract breaches, raise unit costs, and delay 
delivery of critical equipment. We're looking at cutting up to 
50 percent of our modernization programs if the fully 
sequestered POM remains reality. We'll favor recapitalization 
over modernization whenever that decision is required. That's 
why our top three acquisition programs remain the F-35, the KC-
46, and the Long-Range Strike Bomber (LRS-B).
    Your Air Force is the best in the world and it's a vital 
piece of the world's best military team. That won't change even 
if sequester persists, but what and how much we'll be capable 
of doing will absolutely change.
    Thank you for your efforts to pass a bill that gives us 
stability and predictability over time. Those two things are 
essential as we try to move forward. My personal thanks for 
your continued support of airmen and their families.
    I look forward to your questions.
    [The prepared statement of General Welsh follows:]
           Prepared Statement by Gen. Mark A. Welsh III, USAF
    Chairman Levin, Ranking Member Inhofe, and members of the 
committee, it's an honor to appear before you. Thank you for your 
continued support of our airmen and their families.
    The U.S. Air Force is the very best at what we do. We hire the best 
people we can find and train them better than any other airmen in the 
world. We bring five core missions to our great joint warfighting team. 
Those missions haven't fundamentally changed since we became a separate 
Service in 1947. We still do: (1) air superiority (we've added space 
superiority); (2) intelligence, surveillance, and reconnaissance (ISR); 
(3) rapid global mobility; (4) global strike; and (5) command and 
control. We do these missions in and through three domains--air, space, 
and cyberspace. The result of the great work our airmen do in those 
mission areas is Global Vigilance, Global Reach, and Global Power for 
America.
    Our airmen know this, and are proud of the critical role they play 
in our Nation's defense. My job is to ensure that whenever America 
calls, our airmen are capable of fighting and winning our Nation's 
wars. As we plan for various budget scenarios, we seek to be ready in 
2014 for a full range of combat operations, while also building an Air 
Force capable of executing our five core missions against a determined, 
well-armed, and well-trained adversary in 2023 and beyond.
    We know the Air Force has a role in helping our Nation get its 
fiscal house in order. However, the abrupt and arbitrary nature of 
sequestration drives the Air Force into a ``ready force today'' versus 
a ``modern force tomorrow'' dilemma. This dilemma is dangerous and 
avoidable. If we are given the flexibility to make prudent cuts over 
time, we can achieve the savings required under current law. However, 
sequestration robs us of that flexibility. We're left with options that 
simply don't make business sense. We need your help. We need funding 
bills that give us stability so we can achieve real savings in a 
strategically and managerially sound way.
                           guiding principles
    Sequestration has forced the Air Force and the entire Department of 
Defense (DOD) to plan for and react to a wide range of budget 
scenarios. This past March, Secretary Hagel directed the Department to 
conduct a Strategic Choices and Management Review (SCMR) to help 
prepare for some of these scenarios. The SCMR analyzed every aspect of 
the defense establishment to find savings while preserving the key 
tenets of the Defense Strategic Guidance.
    As a result of the SCMR, the Air Force established four guiding 
principles to steer our strategy and budget processes. (1) No matter 
the size of our force, we must remain ready for the full spectrum of 
military operations. (2) When forced to cut capabilities (tooth), we 
must also cut the associated structure and overhead (tail). (3) We will 
maximize the contribution of the Total Force. And, (4) we will remain 
strategy driven by focusing on the unique capabilities we provide the 
joint force and our ability to execute those capabilities against a 
high-end threat.
            strategic choices and management review findings
    (1) In all of the budget scenarios we considered, we need 
flexibility. Compensation reform and infrastructure reduction are 
critical. If they are not addressed, then the cuts must come entirely 
from readiness and modernization. This will result in reduced combat 
power from a smaller, less capable, and less ready force, thereby 
increasing national security risk. We appreciate the reprogramming 
assistance Congress has provided, and will seek continued congressional 
support in transferring money between appropriations.
    (2) The SCMR found that, over time, the DOD could achieve the level 
of cuts required under current law, but there is no strategically and 
managerially sound approach to close that gap within the next few 
years. If we must make cuts of this magnitude immediately, the 
draconian measures that we're forced to take will have serious negative 
effects on people, weapons systems, munitions accounts, readiness, and 
modernization.
    (3) The SCMR found that the President's fiscal year 2014 budget 
proposal is the most prudent option of those currently being 
considered. Force reductions in this scenario will still be necessary, 
but if accompanied by efficiency and compensation reforms, they can be 
made in a way that minimizes the additional risk to our national 
defense.
                    sequestration near-term impacts
    We understand the national fiscal challenge, and the defense budget 
can be cut, but the abrupt, arbitrary mechanism of sequestration is not 
the right approach. As the Vice Chairman of the Joint Chiefs of Staff 
said, ``We don't know how much money we're going to have. We don't know 
when we will know how much money we're going to have. We don't know 
what the rules are going to be when we know.'' As a result, if 
sequestration continues, the Air Force will not be able to meet the 
current defense strategy.
    The fiscal year 2013 effects of sequestration are well-documented. 
We were forced to stand down 31 squadrons, including 13 combat-coded 
squadrons. An additional seven squadrons were reduced to flying rates 
that only enable proficiency in basic tasks, such as takeoff and 
landing. It will now cost a minimum of 10 percent more flying hours to 
retrain these squadrons than it would have to simply keep them trained 
all along.
    In addition, we were forced to break faith with our civilian airmen 
by furloughing 164,000 civilians, including Guard and Reserve civilian 
technicians, for 8 hours a week, over a 6 week period. On top of the 
financial hardship of losing 20 percent of their pay during this 
period, we as an Air Force lost 7.8 million man-hours of productivity 
affecting every mission area, including some where civilians are the 
entire mission area, such as Air Education and Training Command 
aircraft maintenance. Sadly, we also sent a message to our civilian 
airmen that we don't sufficiently value their contributions. It will 
take us years to earn back their trust.
    If the reduced discretionary caps, with the threat of 
sequestration, remain in place for fiscal year 2014, we could be forced 
to cut flying hours by as much as 15 percent. As a result, many of our 
flying units will be unable to fly at the rates required to maintain 
mission readiness for 3 to 4 months at a time, we'll cancel or 
significantly curtail major exercises, and we'll reduce our initial 
pilot production targets. We have no plans to furlough civilians in 
fiscal year 2014.
    Sequestration also impacts our space mission. Continued 
sequestration would force us to reduce our network of space launch, on-
orbit, and missile warning sensors to single points of failure. 
Specifically, we would turn off redundant systems and reduce routine 
maintenance on the primary systems. Furthermore, it would slow our 
ability to determine whether space mishaps (collisions in space) are 
equipment failures, hostile actions, or environmental events.
                         continuing resolution
    On top of sequestration's current impacts, the longer we are forced 
to operate under a Continuing Resolution, the greater the damage in 
fiscal year 2014 and beyond. In fiscal year 2013, we paid much of our 
sequestration bill with prior year unobligated funds which we no longer 
have. Meanwhile, our bow wave of future bills continues to grow. For 
example, we're currently doing only critical infrastructure 
sustainment, we're in a civilian hiring freeze, and we have a large 
backlog of aircraft that need to go to the depot. A Continuing 
Resolution would not allow us to address this bow wave, we wouldn't be 
able to start new programs, and it would take away the little 
flexibility we currently have. Beyond these near-term effects, if 
reductions of this magnitude continue, we will be forced to pursue the 
following long-term actions in force structure, readiness, and 
modernization.
               sequestration's long-term impacts to . . .
Force Structure
    We will be forced to get smaller . . . both in terms of people and 
aircraft. When I entered the Air Force in 1976 we had 725,000 Total 
Force military airmen, including 585,000 on active duty. Today we have 
506,000 Total Force military airmen with only 329,000 on active duty. 
There is a limit to how small we can get and still fulfill the DSG 
because our ``supply'' of forces is equal to the strategic ``demand'' 
with almost no margin in capacity. If the reduced discretionary caps 
continue, over the next 5 years we may be forced to cut approximately 
25,000 (5 percent) Total Force airmen and approximately 550 (9 percent) 
aircraft.
    Although we employ fewer people, compensation costs continue to 
climb at unsustainable rates. Together we must address the issue of 
compensation or it will consume our warfighting spending over the next 
few decades. Our airmen and retirees deserve every dollar they earn. 
However, we need to find the right balance going forward and slow the 
rate of growth in compensation. Specifically, I think we need to look 
at slowing pay raises, reforming how housing allowances are determined, 
and restructuring health care to ensure world-class care at a 
sustainable cost. We also need to find the right Total Force mix and 
maximize the unique benefits of the Guard and Reserve, who serve as 
critical force multipliers.
    In terms of aircraft, the same story holds true. We are currently 
smaller and older than ever before. Our aircraft inventory averages 24 
years old and the mainstays of our bomber and air refueling fleets are 
both from the Eisenhower era (B-52 & KC-135).
    As we seek to find savings in aircraft force structure, we will 
prioritize global, long-range capabilities and multi-role platforms 
that are required to operate in highly contested environments. 
Moreover, because every aircraft fleet has relatively fixed costs such 
as depot, training programs, software development, weapons integration, 
spare parts, and logistics support . . . only by divesting entire 
fleets rather than aircraft from multiple fleets will we achieve 
savings measured in the billions rather than ``just'' millions of 
dollars. Therefore, we may have to divest entire fleets with less 
relevance in highly contested airspace, as well as platforms where we 
have excess capacity when measured against the DSG.
    As we get smaller, our excess infrastructure will continue to grow. 
We will seek savings by collocating people and aircraft based on most 
efficient use of people and space. We will continue to seek 
congressional approval to begin the base realignment and closure 
process. While we know we'll lose capacity, we'll work hard to retain 
the warfighting capability to be ready in 2014 for any required 
operations, and to ensure we're able to execute our five core missions 
in 2023 against a high-end threat.
Readiness
    When the Air Force talks about readiness, we're talking about our 
ability to quickly respond to our Nation's demands with Airpower 
delivered by airmen who are appropriately trained and equipped to 
accomplish the mission at hand . . . and then return home safely. Under 
the reduced discretionary caps or if we're further sequestered, our 
ability to do this is severely threatened. Therefore, we will protect 
readiness to the maximum extent of our authority.
    Our Air Force has performed exceptionally well over the last 22 
years in a variety of combat and humanitarian operations. However, this 
high operational tempo has come at a cost to our training and 
readiness. Since 2003, we've honed our skills in counterinsurgency 
warfare in Iraq and Afghanistan at the expense of full-spectrum 
training. For this reason, now more than ever, it is vital to ensure 
readiness across the full-spectrum of operations. We need to continue 
advanced training in exercises like Red Flag and weapons school 
classes. We build international warfighting partnerships and develop 
Ph.D. level instructors in these training areas. If we don't train for 
all scenarios, including a future high-end fight, we are forced to 
accept unnecessary risk. Risk for the Air Force means we may not get 
there in time, it may take the joint team longer to win, and our people 
will be placed in greater danger.
    In addition to full-spectrum training, our Air Force must be 
prepared to act at a moment's notice. Speed is an inherent advantage of 
airpower. Airpower offers the ability to rapidly deliver strategic 
effects anywhere on Earth. With intercontinental ballistic missiles, 
forward basing, stealth technology, tankers, bombers, strategic 
airlifters, and highly-qualified Special Operations Forces . . . we are 
a global Air Force that can hold any target at risk at any time. 
However, if our squadrons are grounded, if it takes weeks or months to 
generate global combat power, then we negate the responsiveness that is 
one of airpower's natural advantages and deprive our Nation of 
deterrence, diplomatic influence, and contingency options.
    For these reasons, we will prioritize funding for training and 
readiness. Despite this prioritization, under a full sequestration 
reduction, we will still see significant eroding of our readiness in 
the near term. Whatever the funding level, we need congressional help 
to ensure that we have the budget flexibility to regain full-spectrum 
readiness and avoid a hollow force.
                             modernization
    As with force structure and readiness, if the reduced caps under 
current law continue, our modernization forecasts are bleak. This 
funding level will impact every one of our modernization programs. 
These disruptions will, over time, cost more taxpayer dollars to 
rectify contract breaches, raise unit costs, and delay delivery of 
critical equipment. When it comes to future investment and 
modernization, the public may not recognize the effects of these 
reductions initially. The damage will be insidious. However, should we 
face a high-end threat in the future--the impact of not modernizing 
will be blatant and deadly. While failing to achieve national 
objectives in the next counterinsurgency fight would be distressing, 
losing a major full-spectrum fight would be catastrophic. If America 
expects its Air Force to dominate the skies in the future battlespace, 
modernization and recapitalization are not optional.
    As we are forced to make tough decisions, we will favor 
recapitalization over modernization. We cannot continue to bandage old 
airplanes as potential adversaries roll new ones off the assembly line. 
For example, the backbone of our bomber and tanker fleets, the B-52 and 
KC-135, are as old as I am, and our fourth generation fighters average 
25 years of age. That's why our top three acquisition priorities remain 
the KC-46, the F-35, and the Long-Range Strike Bomber (LRS-B). The KC-
46 will begin to replace our aging tanker fleet in 2016, but even when 
the program is complete in 2028 we will have replaced less than half of 
the current tanker fleet and will still be flying 200+ KC-135s. 
Similarly, our average bomber is 32 years old . . . we need the range, 
speed, survivability, and punch that the LRS-B will provide. Tankers 
are the lifeblood of our joint force's ability to respond to crisis and 
contingencies, and bombers are essential to keeping our Air Force 
viable as a global force. We must recapitalize these fleets.
    The F-35 is essential to any future conflict with a high-end foe. 
The very clear bottom line is that a fourth generation fighter cannot 
successfully compete with a fifth generation fighter in combat, nor can 
it survive and operate inside the advanced, integrated air defenses 
that some countries have today, and many more will have in the future. 
To defeat those networks, we need the capabilities the F-35 will bring. 
For the past 2 years, the program has remained steadily on track; now 
it needs stability.
    Sequestration-level cuts and/or an extended Continuing Resolution 
will severely threaten each of our top priority programs as well every 
single lower priority program. We cannot afford to mortgage the future 
of our Air Force and the defense of our Nation. Modernization is not 
optional, and it is required to execute our core missions against a 
high-end threat in 2023.
                               conclusion
    The U.S. Air Force is the best in the world and is a vital piece of 
the best military in the world. This will not change even if sequester 
persists. When we are called, we will answer, and we will win. But the 
likelihood of conflict may increase as potential adversaries sense 
weakness and vulnerability.
    Our analysis on the impacts of sequestration to national defense is 
sobering. We understand the national fiscal environment and recognize 
that continued budget reductions are necessary. But the Nation will be 
more secure and will achieve more sustainable savings if reductions in 
defense spending are made in a more reasoned way than the abrupt, 
arbitrary mechanism of sequestration. Being forced into decisions to 
balance between a ``ready force today'' and a ``modern force tomorrow'' 
is dangerous for our national defense. This dilemma is avoidable. 
Through increased budget flexibility, prudent cuts, and an expectation 
that real savings will occur in the latter years of the Future Years 
Defense Program, we can be both ready today and modern in the future. 
However, we will need Congress' support for the tough decisions that 
will be necessary to align our future force to the needs of the 
strategy.
    Therefore, I ask Congress to pass funding bills that give us 
stability, both in the near term and the long term. If not, we'll have 
these same conversations year after year. Help us be ready in 2014 and 
still able to win in 2023. Let us focus on combat capability, on our 
five core missions, and on Global Vigilance, Global Reach, and Global 
Power for America. Our airmen deserve it, our joint team needs it, and 
our Nation expects it.

    Chairman Levin. Thank you all for your testimony, and thank 
you also for--by the way, we're going to have a fairly short 
first round because we have votes at 11:45 a.m., two of them, 
and we also have a large number of Senators here. So we're 
going to have to start with a 6-minute first round.
    Thank you for mentioning Congressman Skelton. Most of us 
have worked with Ike Skelton for a long time. Our memories of 
him are extraordinarily fond and warm. He was a unique and 
wonderful human being, and we really appreciate what he did for 
this Nation in war and in peace and we are grateful that you 
made a reference to him, something, frankly, I should have done 
and have already done in a different way, but should have done 
here. Thank you for that reference.
    The successful conclusion of the budget conference between 
the Senate and the House is essential if we're going to address 
the problem of sequestration. They are hopefully looking at 
various alternatives for getting rid of a mindless, irrational 
way of budgeting for 2014, the way it was for 2013, but much is 
going to ride on their success in finding a different approach 
to deficit reduction.
    Now, many of us have made suggestions to them as to how to 
come up with a balanced approach to deficit reduction which can 
substitute a sensible approach for a irrational approach called 
sequestration. We're not going to ask you to get into that kind 
of detail in terms of the work of the Budget Committee, or the 
conference, because, number one, I doubt that you are privy to 
it, but number two, it's a little bit off the subject here 
today, which are the impacts of sequestration, and the clearer 
those impacts are laid out--and you have laid them out very 
clearly--the more likely it is, I believe, that that budget 
conference will find a path to replace the sequestration in 
2014 with something which makes sense in terms of fiscal 
responsibility, but something that makes sense in terms of the 
security of this Nation.
    As you have very powerfully pointed out in both your oral 
testimony, your written testimony, and our prior testimonies, 
sequestration is damaging to the national security of this 
country.
    In fiscal year 2013, DOD was able to minimize impacts, in 
part by using unobligated funds that were carried over from 
previous years, in part by deferring program costs into future 
years, in part by utilizing short-term cost reduction measures 
such as civilian furloughs and reductions in training and 
maintenance, rather than making program decisions that would be 
more difficult to reverse.
    So my question of each of you is: If sequestration 
continues into fiscal year 2014 and beyond, will DOD be able to 
continue to rely on those types of temporary measures? Or, as I 
think you've clearly testified, would you have to start 
reducing force structure and cancelling or curtailing major 
acquisition programs?
    I think you've given us the answer to the second half, but 
can you go into the first half of that question. You were able 
to scramble around to a significant degree in 2013. Are you 
going to be able to rely on those kind of temporary ad hoc 
scrambling measures if sequestration continues into 2014? 
General Odierno?
    General Odierno. Thank you, Mr. Chairman. As we, as you put 
it very well, scrambled in 2013 to come up with the dollars to 
meet our sequestration marks, there's things we did that, 
frankly, mortgage our future. One is obviously we had to take 
money out of two places: readiness, because we could do that 
very quickly, so we stopped training. We stopped sending 
individuals to be prepared at the National Training Center, the 
Joint Readiness Training Center. You can't ever recapture that.
    So it delays the buildup of future readiness. So we will 
have to pay that price somewhere down the road because we 
simply cannot ever get that back. So although we were able to 
do it for 1 year, it comes at risk, our risk to respond, our 
risk to do--if we have a contingency, will our forces be ready? 
That's a really incredible risk that I am definitely not 
comfortable with.
    The second piece if we've had to furlough individuals 
who've worked for this government and, frankly, they're 
beginning to lose faith in their government. Will they be able 
to work, will they be able to continue to serve? So it has an 
impact on the force as well.
    So those are temporary measures that we do not want to 
revisit again, and that we have to have more permanent 
solutions.
    Chairman Levin. Admiral?
    Admiral Greenert. Mr. Chairman, first of all, we have a 
$2.3 billion carryover. So in 2013, we deferred it into 2014. 
Here it is. So that's sitting there, and we have to pay about 
$1 billion of that. You can't defer it. These are contracts and 
things of that nature. So that's issue one.
    Two, in 2013, we actually had a quarter of maintenance and 
training, because we didn't start dealing with this until the 
new calendar year. Well, we got a lot of maintenance done there 
that we won't be able to get done this year. So 34 out of 55 
ship maintenance availabilities we have will be gone. Training; 
we were able to get some training done there; we can't get that 
there.
    So we will have air wings--of the nine air wings, we'll 
have five of them in what we call minimum sustaining, it's 
called tactical hard deck.
    But the one that will affect us the most now will be 
investment. As you mentioned, we used prior year funds. What 
concerns me the most is our SSBN-X. That is our top nuclear 
strategic deterrent follow-on. The fact of the matter is it's 
on a CR and because we want to grow that, that program, in 
2014, we're $500 million off. So that comes to roost in the 
schedule that--and we're heel to toe.
    Other shipbuilding: We'll lose a Virginia-class submarine, 
a Littoral Combat Ship, an Afloat Forward Staging Base, and a 
lot of costs continue. The Ford-class carriers, as I mentioned 
in my oral statement, we need about $500 million again to 
finish that carrier, and by spring we stop work on it, which is 
not very smart because it's almost done.
    Thank you.
    Chairman Levin. Thank you.
    General Amos, can we continue the kind of temporary actions 
that we took in fiscal year 2013 into fiscal year 2014?
    General Amos. Mr. Chairman, there's no more money in the 
carryover from 2013 into 2014. We were 99.8 percent obligated 
at the end of 2013. There's simply no money to bring over. So 
our account is dry. We're going to live with what we have in 
2014 under the CR.
    We've taken measures in the past to lean the force. 
Civilian hiring was frozen 2 years ago. We've already gone 
through our T&E travel accounts. We've taken our Reserves, 
taken them off Active Duty, to reduce the T&E cost. We've done 
all that, sir. There's really no more fat on our bones.
    Chairman Levin. General Welsh?
    General Welsh. Mr. Chairman, I'd echo what you've already 
heard. We paid, as I mentioned, about $1.5 billion out of prior 
year unobligated funds against our sequestration bill last 
year. That was about 25 percent. That will not be available 
this year. We start on a CR for the beginning of 2014 that is 
roughly, just on our O&M account, $500 million less than we had 
programmed for 2014. The program didn't include the funding 
required to recover the readiness that we set aside last year. 
We are behind the power curve and dropping farther behind the 
power curve.
    Chairman Levin. Thank you very much.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    Like the chairman, I appreciate bringing up Ike Skelton. 
There are a lot of people at this table up here who never had 
the opportunity to know him. During the years I served in the 
House, we sat next to each other every Thursday morning at the 
House Prayer Breakfast, and I got to know him quite well, and 
he's sorely missed.
    I had asked to have this chart placed up here so you can 
see it. I think the four of you can see this. This chart was 
put together by both the minority and the majority staff on the 
Senate Armed Services Committee to try to put into perspective 
where we are and where we're going with this thing. I know that 
a lot of improvements have to be made. We had a discussion 
yesterday on the Republican side about some of the things that 
will have to be done with personnel, with TRICARE, and some of 
those things.
    [The chart referred to follows:]



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Inhofe. I would remind you that all of that you 
would find in the blue section down below. So it's not going to 
really address the problem that we have, even though it is 
important.
    Force structure, you can see how important that is. You're 
talking about fiscal years 2014, 2015 on through fiscal year 
2023. So the force structure is a very serious problem.
    Modernization program. The modernization, we all know when 
things get tight modernization is one of the things that goes.
    By far of greatest concern is the orange area. It shows 
clearly that that is where readiness is. That's where training 
takes place. I would like to have each one of you respond to 
your concern about that particular part of this chart, the 
orange part. I've always said that readiness equals risk, risk 
affects lives, lives lost. I'd like to have each one of you 
tell what you think in terms of the people being at risk and 
lives lost might be affected by what you're going to have to do 
in this next fiscal year according to this chart.
    General Odierno. Thank you, Senator. This chart describes 
exactly the problem that the Army has. We have three levers--
end strength, modernization, and readiness. We are taking down 
our end strength and we are looking at speeding up taking down 
our end strength, but you can only speed it up so fast when you 
start to lose the money that you gain by taking end strength 
out.
    So we have a huge readiness issue between 2014 to 2017 
that, frankly, will significantly impact our ability to respond 
in the way we expect to respond.
    The other piece is we'll have to stop some of our 
modernization programs, which means we'll delay getting new 
equipment 5 to 10 years because we have to stop programs. We'll 
have to restart them later on when we get back into balance.
    So for us, it is significant readiness issues. We will not 
be able to train them for the mission they're going to have to 
do. We will have to send them without the proper training and 
actually maybe proper equipment that they need in order to do 
this. So that always relates to potentially higher casualties 
if we have to respond.
    Senator Inhofe. Admiral Greenert?
    Admiral Greenert. For us it is force structure--we man 
equipment, Senator. To deal with a reduction like this, we have 
to reduce force structure. So this chart would underestimate in 
the Navy how much force structure we would have to give up in 
the nearer term in order to garner savings. That means, what do 
you do now? For me it's forward presence, so I make sure the 
forces forward are ready, but those that are there for crisis 
response, right now I'm sitting at two-thirds reduction in that 
alone.
    So you have to be there with confident and proficient 
people, and if they're not confident and proficient then you're 
talking more casualties, and you have to keep apace with the 
capabilities of the future or you're unable to deal with a 
potential adversary, and that's increased casualties.
    So we will be slipping behind in capability, reduced force 
structure, and reduced contingency response. If we're not 
there, then somebody is out there and they're going to have 
increased casualties.
    Senator Inhofe. General Amos, you covered this in a lot of 
detail. Anything you want to add from your opening statement in 
terms of this readiness sacrifices, how it relates to risk and 
lives?
    General Amos. Senator, as I said in my opening statement, 
we've moved money to minimize risk. Each Service has a 
different orange wedge. Mine is smaller than that, but that's 
for the near term right now because I'm paying that price to 
maintain that readiness to be your crisis response force.
    But that will only last probably not later than 2017. I'll 
start seeing erosion in about a year and a half. So we are 
paying that with other money--infrastructure, training.
    Senator Inhofe. That's what you referred to when you said 
in your opening statement, you used the phrase ``a formula for 
more American casualties?''
    General Amos. Absolutely, yes, sir, Senator. We are headed 
towards a force in not too many years that will be hollow back 
home and not ready to deploy. If they do deploy in harm's way 
we'll end up with more casualties.
    Senator Inhofe. In responding to the question, General 
Welsh, I heard yesterday someone talking to you about an 
experience that you had up in Alaska. Could you share that with 
me in terms of some of our flyers? I'd remind people as they 
hear this that the cost, not necessarily for an F-22, but to 
get someone to a level of proficiency on an F-15, F-16, is 
about $7 million. We're talking about huge investments in 
personnel.
    Would you like to repeat the statement you made?
    General Welsh. Senator, I've actually had this conversation 
multiple places in the Air Force. At one of our bases recently 
I was talking to a group of young pilots who are eligible for 
our aviation career incentive bonus. Of that group--there were 
six to eight in the group--none of them had accepted the bonus 
to that point in time.
    Senator Inhofe. Not one?
    General Welsh. Not one. That doesn't necessarily mean 
they're planning to leave the Air Force, but it certainly means 
they're keeping their options open, as a minimum.
    By the way, it's not just pilots. I was at another base 
where a couple of very young airmen told me that they loved the 
Air Force, but they were bored. Their particular squadrons were 
not flying. They were sitting on the ramp because of the 
reductions last year. They said at the end of their enlistment 
they planned to find work that they thought was a little more 
exciting. I haven't heard anybody in our military say they were 
bored in quite some time. So that got my attention.
    Senator Inhofe. I appreciate that. My time has expired, but 
I just want to read one thing, one of the most alarming 
concerns that we have had raised was the belief that your 
Service may not be able to support even one major contingency. 
I'd like for the record--now, when you stop and think about the 
collective service of the four of you is 156 years, so we're 
talking about a lot of experience, a lot of history, and I'd 
like to have you for the record respond to that in terms of not 
being able to meet even one MCO, if you'd do that.
    Thank you, Mr. Chairman.
    [The information referred to follows:]

    General Odierno. The effects of unresolved budget shortfalls, 
budget uncertainty, and sequestration will threaten the Army's 
capability to conduct a multi-phase, combined arms, joint campaign in a 
complex environment that includes a conventional opponent, irregular 
warfare, and counterinsurgency. It is unlikely that the Army would be 
able to defeat an adversary quickly and decisively should they be 
called upon to engage in a single, sustained major combat operation. 
The Army will arrive later to the fight with fewer and less-trained 
trained forces, which will delay the buildup of combat power, allow the 
enemy more time to build its defenses, and, likely, prolong combat 
operations altogether.
    Admiral Greenert. If we are constrained to the Budget Control Act 
revised discretionary caps in the long term, one potential fiscal and 
programmatic scenario would result in a 2020 Fleet with 9 to 10 CVN/CSG 
and 9 to 10 LHA/D and Amphibious Ready Group (ARG). We would be able to 
sustain about one nondeployed Carrier Strike Group and one nondeployed 
ARG fully certified and able to surge on required timelines to meet all 
missions associated with one large-scale operation, as defined today. 
However, Navy would not be able to conduct one large-scale operation 
and also counter aggression by an opportunistic aggressor in a second 
theater.
    General Amos. To be clear, the Marine Corps at 174,000 will be able 
to respond to a major contingency operation. The challenge is that we 
will not be able to respond to a major contingency operation while 
simultaneously covering our current global requirements and maintaining 
a one-to-two deployment to dwell ratio. In the event the Marine Corps 
is required to respond to a major contingency operation we will be 
required to accept risk in other capacities. This could mean 
reposturing crisis response forces or current forward deployed theater 
presence from U.S. Pacific Command while deploying CONUS-based forces 
below a one-to-two deployment to dwell. This is a Marine Corps that 
would deploy to a major contingency, fight, and not return until the 
war was over. We will have the capacity to respond, but will empty the 
entire bench to do so.
    General Welsh. With sequestration-level funding, we will be forced 
to get smaller, both in terms of people and aircraft. When I entered 
the Air Force in 1976, we had 725,000 Total Force military airmen, 
including 585,000 on Active Duty. Today, we have 506,000 Total Force 
military airmen with only 329,000 on Active Duty. There is a limit to 
how small we can get and still fulfill the Defense Strategic Guidance 
(DSG) because our ``supply'' of forces is equal to the strategic 
``demand'' with almost no margin in capacity. If the reduced 
discretionary caps continue, over the next 5 years we may be forced to 
cut approximately 25,000 (5 percent) Total Force airmen and 
approximately 550 (9 percent) aircraft.
    A reduction in our overall warfighting capability diminishes our 
ability to deter war, and any reduction in our ability to deter war 
increases the risk not only for our Homeland, but our national security 
interests abroad. We cannot simultaneously and fully execute all 10 DSG 
missions. If sequestration were to continue, the Air Force's ability to 
execute multiple missions listed in the DSG will continue to erode.
    The U.S. Air Force is the best in the world and is a vital piece of 
the best military in the world. This will not change even if sequester 
persists. When we are called, we will answer, and we will win. But the 
likelihood of conflict may increase as potential adversaries sense 
weakness and vulnerability.

    Chairman Levin. Thank you, Senator Inhofe.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your service to the Nation. I 
think one of the issues that we have to ask, because so much 
turns on readiness, is ready for what? That'll be answered in 
some respects in the Quadrennial Defense Review (QDR), which 
will be affected by the budget, regardless of whether we're 
able to work our way through these obvious problems.
    So could you give us a sense, General Odierno, from the 
Army's perspective, as to what you're looking at in terms of 
ready for what?
    General Odierno. Thank you, Senator. As we learn from the 
past and look to the future, it's about having a capability to 
do a multi-phase, combined arms, joint campaign that operates 
in a very complex environment that includes a conventional 
opponent, irregular warfare, counterinsurgency, because that's 
where future warfare is going. So we have to train our forces 
to do that.
    Right now the Army is great in counterinsurgency. We want 
to continue to keep that expertise, but we have to build our 
combined arms and joint capability to do a multi-phase campaign 
for a MCO. We were supposed to begin training for that in 2013. 
We were not able to because of the cuts we had to make in our 
training dollars. So we are now behind, and that's the problem 
we have.
    Right now we have a limited number of brigades that are 
capable of doing that right now, and we're falling further 
behind as we move forward.
    Senator Reed. One of the reasons that we are so well 
schooled in counterinsurgency is we invested over the last 
decade billions of dollars in counterinsurgency. Looking 
forward, is that going to be a primary sort of mission or 
ancillary mission in your view as you're looking to the QDR? If 
that's the case, we invested a lot of money for a capability 
that we might not be using.
    General Odierno. I would say that it is a capability that's 
going to be needed, but will not be at the forefront as it has 
been in the past.
    Senator Reed. Thank you, sir.
    Admiral Greenert, the same question, essentially. I think 
it embraces a lot of the issues that we want to talk about.
    Admiral Greenert. For us it's ensuring that we have the 
sea-based strategic deterrent on track. That's the top priority 
for us.
    Senator Reed. That's the Ohio-class replacement?
    Admiral Greenert. The Ohio-class replacement, yes, sir. So 
subject to my comments in my opening statement, this issue we 
have with 2014--the CR. We need to grow the program. I can't do 
that until we get a bill in 2014. With sequestration we lose 
$150 million. It sounds sort of nagging, but we have to get 
design engineers hired. So even when we get the money, you 
can't click your fingers and hire 600 specialized design 
engineers. So we have to keep this coherent as we go along 
because we're on a very tight schedule, when the Ohio-class 
phases out, to deliver on time.
    For us also it's the undersea domain. We have to own it, 
quite simply. It's my job as the Navy and to keep that on 
track. So I'm concerned we fall behind in anti-submarine 
warfare, keeping apace of our potential adversaries. So that's 
a priority regardless of sequestration. We will invest in that.
    It's integrated air and missile defense, and that gets into 
the electromagnetic spectrum, cyber, and electronic warfare, 
and bringing those new capabilities in, from jammers to cyber 
warriors, et cetera. It's also just flat-out presence. Quantity 
has a quality of its own, as we state. Being sure that we have 
the right ships with the right capability with my partners to 
my left, the Navy-Marine Corps team, that we can be where we 
need to to take care of these little crises day-in and day-out 
so they don't fester and become bigger crises and we get in the 
situation of a major contingency.
    Senator Reed. Thank you, sir.
    General Amos and then General Welsh.
    General Amos. Senator, the priorities for the Marine Corps 
are forward presence and the ability to respond to any crisis 
today, not a week from now, not a month from now, but today. So 
as we moved money around, as I've said earlier, to maintain 
that level of readiness, we're trying to keep a balanced force. 
So as you go forward into this sequestered force, the QDR 
force, when it's finally settled out, what we need to have in 
my Service is a balance between modernization, readiness, and 
personnel, the right amount, not hollow, but high state of 
readiness forces.
    So to do that we are balancing this thing down, dialing all 
the dials, trying to make sure that we end up with something 
that is not a hollow force and that is a ready force. 
Amphibious Combat Vehicle, the replacement for our 40-plus-
year-old tractors, is the number one priority for me, followed 
right after that by the F-35B, which is performing well.
    So as we go forward my focus, regardless of how big the 
Marine Corps ends up being as a result or how much money I get, 
will be a balanced, high state of readiness force, ready to 
respond to today's crisis today.
    Senator Reed. Thank you, sir.
    General Welsh, please.
    General Welsh. Yes, sir. I think the dilemma that we all 
face is the choice of readiness today versus a modern, capable 
force tomorrow. The Air Force is no different. That's the thin 
line we're trying to walk.
    For us, we have a requirement for readiness to respond 
rapidly. That's what we bring to the joint force. We also have 
a requirement to be viable against the threat 10 years from 
now. We are a high technology force. We are platform-based as a 
force, much like the Navy. We have to invest now to make sure 
we have the proper capability 10 years from now. That's why 
modernization of the F-35, the KC-46, and the LRSB are so 
critical to us.
    The other thing that is a major concern for me is getting 
back to full spectrum training, much like Ray Odierno is 
worried about. We have walked away from that over the last few 
years because of the demand of the war in Afghanistan. Last 
year, we canceled our Red Flag exercises, which are our high-
end training profiles, and we even canceled some of our weapons 
instructor courses because we didn't have enough money to 
conduct them. That is where we train our Ph.D.-level 
warfighters to lead and train the rest of the force. We have to 
get back to that.
    Senator Reed. Thank you very much.
    Just a final brief comment, is that from the appropriations 
perspective giving certainty in terms of a budget, not a CR 
because that would be very difficult in terms of no new starts, 
but 2 years of certainty and some relief, in fact total relief, 
from sequestration would probably put you in the best position.
    I see, let the record show, nodding heads.
    Thank you.
    Chairman Levin. Thank you, Senator Reed.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman.
    I want to thank the witnesses and I wish that every member 
of Congress and every American were tuning in to your testimony 
today so that we would have a sense of urgency that, 
unfortunately, is certainly not significant enough to bring us 
back into, I think, a rational approach to our Nation's 
defense.
    I thank you for your service and we're very appreciative to 
be around four Americans who have the respect and admiration of 
the American people.
    I share all of your views, but you've left out a couple of 
items. One of them is the continued cost overruns of our 
weapons systems. Admiral Greenert, you just talked about you 
need $500 million additional for the USS Gerald R. Ford; is 
that correct? You just mentioned that?
    Admiral Greenert. That's correct, Senator.
    Senator McCain. Now, you didn't mention that we have a $2 
billion cost overrun in the USS Gerald R. Ford. Tell me, has 
anybody been fired from their job as a result of a $2 billion 
cost overrun of an aircraft carrier?
    Admiral Greenert. I don't know, Senator.
    Senator McCain. You don't know. Actually, you should know. 
You should know, Admiral, when we have a $2 billion cost 
overrun on a single ship and now you're asking for $500 million 
more.
    I would ask the same question of General Welsh: Has anybody 
been fired because of the cost overruns of the F-35? I don't 
think so. We've had hearing after hearing after hearing in this 
committee concerning the first trillion dollar defense 
acquisition in history.
    The numbers are astronomical as to the size, increases in 
size of your staffs. We have seen doubling and redoubling size 
of the staffs of the major commands and your own. That's never 
been brought under control.
    We now have 1.5 million civilian contractors and employees, 
civilians and their contractors and employees, and only 1.3 
million uniformed personnel. That has to be cut back, the 
number of civilians, contractors, and personnel. They don't 
fight. They do great jobs, but they don't fight. You're going 
to have to, and this committee may have to, impose cuts in the 
size of your staffs. They have grown astronomically, by the 
thousands.
    Finally, despite what some may think, I agree with former 
Secretary of Defense Gates, who said the ``entitlements are 
eating us alive,'' the major one being growth of health care 
costs, consuming a larger and larger and larger percentage of 
our budget.
    I'd ask if you would favorably be inclined to address: one, 
retirement as far as increasing gradually, prospectively, the 
number of years before retirement; two, increasing fees for 
TRICARE, which there's not been an increase since 1989; and 
also perhaps even looking at things like the contribution that 
used to be made for off-base housing and other costs that have 
grown so dramatically.
    Maybe I could begin with you, General Odierno. Not only 
would I like you to answer that question, I'd be glad to hear 
you respond to my comments, particularly about cost overruns.
    General Odierno. First, on compensation, we have to grapple 
with compensation within the military. The Joint Chiefs are 
working very hard with this issue. The cost of a soldier has 
doubled since 2001. It's going to almost double again by 2025. 
We can't go on like this. So we have to come up with a 
compensation package which deals with this. Not taking money 
away, but reducing the rate of pay increases, of base housing 
allowance, as you brought up; look at the commissaries, look at 
health care. We have to have a total package that allows us to 
reduce this cost.
    Senator McCain. Could I interrupt one second. Do you know 
of a single soldier, airman, or marine that joined the military 
because of TRICARE?
    General Odierno. It would be difficult to answer that 
question. What I would tell you, though, Senator, is they do 
come with very large families and health care is a big issue 
for them. But that doesn't mean we can't work with that.
    In terms of cost overruns, I agree with you. We are 
tackling this problem. What I would tell you is we are holding 
people accountable, but we are not holding them accountable 
enough, and we have to continue to work that, specifically with 
the issue that you brought up.
    Admiral Greenert. Senator, these attributes of changes to 
compensation I would look at favorably. You're speaking my 
language, and I'm sure my colleagues feel the same way. It's 
about 50 percent of every dollar in DOD goes to personnel. 
Predominantly it's compensation, and if we keep going this way 
it'll be at 60 and then it'll be at 70 in about a decade plus. 
We can't do that. I think it's our responsibility to take a 
hard look at it.
    When I talk to my people, they say: ``My quality of life's 
pretty good, Admiral.'' That's the pay, the compensation, the 
stuff you mentioned. They say, ``but my quality of work, I need 
some help; I have gaps; I want training; where's my chief? I 
want to go to the bin and get spare parts.'' That's what I want 
to do with that kind of money.
    Senator McCain. It's been referred to some of the best and 
the brightest are considering their options, which is something 
that never shows up on a profit and loss basis. Is that 
correct?
    Admiral Greenert. Yes, sir, you're absolutely right.
    If I could talk to headquarters staff just a second, we've 
been assigned a goal of 20 percent as we're working to build 
our budget. We're going beyond that. We have a goal of money. 
We're looking at four times that reduction. We were looking 
at--we had a goal of 400, for example, civilian personnel. 
We're looking at five times that. We're taking a hard look at 
that, Senator, and we're going beyond the big headquarters. 
We're working our way down to the sub-headquarters.
    So as you look at this orange and you look at the blue 
efficiencies, our piece of that to get at that, we're looking 
at about 25 percent of our reduction is in overhead and 
contractors. So we're taking a pretty robust look, and we look 
forward to briefing your staff when the time comes.
    General Amos. Senator, you'll find, I think, a ready 
audience up here for benefits. There's more than just TRICARE. 
It's everything that all fits underneath the personnel. I pay 
62 cents on the dollar right now for manpower. That's not 
because marines are more expensive. It's just my portion of the 
budget is smaller. That's going to go well over 70 percent by 
the end of the Future Years Defense Program (FYDP) if something 
is not done.
    So you're going to see the Joint Chiefs come to Congress 
through the President talking about a package of cuts and 
reductions, how we can cut that down. So that's en route. As 
you're aware, the folks are looking at the retirement. So we're 
open to just about anything. It's in our best interest and our 
Nation's best interest.
    We're reducing the Marine Corps, if we stay on the 
sequester budget, by 28,000 marines. Inside that, a well over 
20 percent of headquarters reduction. So I'm eliminating an 
entire Marine Expeditionary Force (MEF), a three-star 
headquarters on the east coast, three MEF--excuse me, two MEF. 
It goes away. I'm reducing infantry battalions, regiments, air 
groups, pretty significantly. So we are paring that down, 
Senator.
    As it relates to somebody getting fired, I can't speak to 
that. I can talk pretty intimately about the maneuvering around 
within the F-35 program with the management both at Lockheed 
Martin and the program manager's office and within my Service. 
We've paid very close attention to it. There have been cost 
overruns, but our vector is actually heading in the right 
direction on the Joint Strike Fighter (JSF) program.
    General Welsh. Senator, the short answer is, yes, I 
absolutely agree with the need to get entitlements and benefit 
reform. There's no question about that. I hope that we would 
roll the savings we can make from that back into the tools and 
the training our people need to be fully ready. If we did that, 
they would understand the reason and they would see the result 
in a meaningful way. If we take the money and use it for 
something else, it'll be a bigger problem for them.
    Cost overruns and growth, I fully agree with everything 
you've said. There's no excuse. We have to fix it.
    We're looking at every headquarters, from the Air Staff to 
the component warfighting staffs. We're in the process in the 
Air Force right now of internally reducing 2 four-stars, 15 
three-star positions, and decreasing the number of people in 
headquarters around them. We have to take this seriously, 
Senator. There's no other option.
    Senator McCain. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCain.
    Senator Udall.
    Senator Udall. Good morning, gentlemen.
    I'll admit that I'm frustrated that this committee's once 
again asked you to come up here and testify about the harm 
caused by sequestration. We in Congress created this monster 
and we keep dragging you up to the Hill to have you tell us how 
much damage that it's done.
    I've met recently with my constituents in the great 
community of Colorado Springs last month. They made it real 
clear to me that they're tired of Congress' unwillingness to 
compromise and solve the problem. That view is echoed 
everywhere I travel.
    The bottom line is that we all know that we've done serious 
harm to critical programs and our people, and it's very clear 
that none of this is really going to save us any money. I think 
you have made that case very powerfully. In fact, it's going to 
cost us more in the long-run than if we'd just buckled down and 
put in place strategic budget architecture based, for example, 
on the Simpson-Bowles plan.
    You and the people you lead have been paying the price for 
our failure to lead and to act and I'm sorry for that. I 
apologize for that. But what we've been hearing from our 
constituents and from you should make it clear that we need to 
reach a bipartisan agreement, pass a budget, and get back on 
track.
    Let me, in that spirit, General Welsh, turn to you. In your 
opening statement you said that if you were given the 
flexibility to make prudent cuts over time we could make the 
savings required under current law. Could you be more specific 
about the kind of flexibility that you're asking for? I've been 
working with Senator Collins and others on pushing for better 
budget flexibility when it comes to making cuts government-
wide, and it's important to know how we could get this right 
and how it could be most helpful.
    General Welsh. Senator, in my view--and I think everybody 
in the room would agree--sequestration is a horrible business 
model. The mechanism of sequestration is a horrible business 
model. No successful business would try and downsize its 
product line or its costs doing it this way. Anybody would take 
a time period, determine what kind of savings you needed over 
the time period or what kind of reductions you needed over the 
time period. You take the beginning of that time period to 
actually close product lines, reinvest the capital or the 
manpower or the force structure saved into the successful 
product lines you wanted to continue, restructure your 
organization, and create savings at the back end of this.
    If we had nothing more than a 10-year period to save 
whatever the number is, we understand we have to be part of the 
solution for the Nation, the financial solution for the Nation. 
No one is resisting that. This mechanism that makes us take big 
chunks of money the first 2 years is what is putting us into 
the readiness versus modernization dilemma. The overall cost of 
sequestration reduces our capability and capacity over time, 
but it doesn't break us. The mechanism is what breaks us.
    So I would just say that if we had the trust available to 
believe that DOD would return $1.3 trillion over 10 years and 
we could show you a plan of how to do that, eliminating this 
abrupt nature of the mechanism at the front end would be a 
much, much more sensible approach.
    Senator Udall. General, that's very helpful. I know this 
committee is going to listen as we move forward.
    Let me turn to the economies of the military communities if 
sequestration remains in place. I was thinking about, General 
Odierno, the situation you face. We're cutting down to 450,000, 
perhaps as low as 390,000. There could be real damage done to 
cities like Colorado Springs and many around the country. The 
same, General Welsh, would apply to the Air Force if you were 
forced to roll back more critical space and aviation missions.
    In Colorado over the last couple years, we've had some real 
challenges. We've had to battle floods and wildfires. Without 
the incredible support from soldiers and airmen, I can't 
imagine how much worse the losses would have been if we didn't 
have assets like the new aviation brigade at Fort Carson or the 
great airmen at Peterson and Schriever.
    Could you comment on that and whether those studies have 
been done and what additional information we might need to be 
smart about how these cuts are made?
    General Odierno. What a lot of people don't understand is 
in many cases--Fort Carson in Colorado, Fort Hood in Texas, 
Fort Bragg in North Carolina, Fort Campbell in Kentucky--they 
are probably some of the biggest generators of revenue for the 
States, period. They don't realize that as installations go 
away you're just not losing the soldiers and what they do; all 
the businesses that are around those installations for probably 
a 50-mile radius are impacted by the shutdown and the loss of 
the impact of those installations losing people.
    So the impact to the local and State governments is 
substantial. We have studies. I don't have the numbers with me 
for every installation, but we have numbers for every 
installation. When I go visit, they always brief me: This is 
the first, this is the leading employer of the State, second. 
It's either first, second, third, but it's very close to the 
top of leading employer in the State. People, many forget about 
this as we look at these reductions. So that's in addition to 
what I'm concerned about is the national security impacts it 
has.
    Senator Udall. General Welsh, would you care to comment?
    General Welsh. Senator, a $1.3 trillion reduction to DOD 
over 10 years is going to leave a bruise in lots of places. We 
have to understand how significant the pain is at each place 
before we make final decisions. But I think it's going to 
affect a lot of people in a lot of places.
    I was just in Colorado, by the way, sir, visiting with a 
bunch of the firefighters from Fort Carson, from Colorado 
Springs, from the Air Force Academy, and Schriever and 
Peterson, and walking through the actions they took in battling 
the fires last year and this year. I was struck by the 
contribution they make to the community every day, not just 
when catastrophes occur. Nobody wants to reduce that 
contribution.
    We lost, just the civilian furloughs last year, as a 
corporate body 7.8 million man-hours of work. Now, double that 
for the government shutdown impact on our civilian workforce. 
That's also 7.8 million hours of pay that doesn't go into the 
community in which those people live. So you can start to see 
the effects when we have these short-term losses of income. 
Long-term it would be more dramatic, obviously.
    Senator Udall. Thank you, General.
    I see my time has expired, but I want to make a couple of 
very quick comments. I want to thank the members of the 
National Guard units who came to coalition from Kansas, 
Montana, Utah, and of course our Colorado Guard, for the 
incredible work they've done, not only immediately after our 
floods, but now to help rebuild our highways. We're reopening 
these highways months ahead of schedule and it's really a 
testament to the work ethic and the teamwork that those units 
brought to our State.
    Second, I want to again thank you all for coming. I'm sorry 
we're here under these circumstances, but I'm pleased to see 
Senator Inhofe here. He's too tough to let a few blocked 
arteries keep him from doing his work.
    Then finally, I want to associate myself with all the 
remarks about Congressman and Chairman Skelton. He was a 
wonderful man. He was a mentor to me. He had a habit of saying: 
``I'm just an old country lawyer.'' But that was the moment at 
which I would really listen to what Ike Skelton had to say, and 
I know everybody who served with him felt the same way.
    Mr. Chairman, thank you for convening this important 
hearing. We have to get this right.
    Thank you all.
    Chairman Levin. Thank you, Senator Udall.
    Senator Chambliss.
    Senator Chambliss. Thanks, Mr. Chairman.
    Likewise, thanks to you for being here today, gentlemen. In 
my 20 years serving on the House Armed Services Committee and 
the Senate Armed Services Committee, we've never had, in my 
opinion, four finer leaders of our respective branches than the 
four of you. So thanks for what you do every day.
    As we look at what we're going to do relative to defense 
spending, I'm one of those who thinks without question that we 
need to spend more money, that sequestration, as each of you 
have said, is going to become a bigger and bigger problem. But 
I also feel very strongly about the fact that whatever we are 
able to add to DOD spending, that we have to offset it somehow. 
We've simply got to get our fiscal house in order.
    I think if we're going to do that the first place we have 
to look for offsets is at DOD itself. We asked in a hearing 
that Senator Ayotte and Senator Shaheen called on Tuesday of 
this week, we asked of General Dempsey, Senator Manchin did, 
for a list of programs or expenditures that DOD does not want 
to spend money on, that have been mandated by Congress.
    We thought we would have that list by today. I understand 
now we're not going to get it until next week. But I think for 
certain one item that's going to be on that list, General 
Odierno, is the purchase of Abrams tanks that you have been 
somewhat vocal on, that Congress keeps demanding that you buy, 
that you don't need.
    My understanding is that you are requesting a delay or a 
halt in production until 2017 and that the cost of that was 
going to be--the savings was going to be somewhere between $436 
million and $3 billion over 3 years. I don't know what the 
exact number is, but either one of those is pretty significant. 
Is that still the case, that you'd prefer to spend that money 
somewhere else?
    General Odierno. It is. We have the most modernized tank 
fleet we've ever had right now. It is in great shape, and, in 
fact, we're reducing our force structure, so we're going to 
need less tanks. But yet we're purchasing more tanks that we 
don't need. So the savings could be used in many different 
areas of our modernization programs that we need, for example, 
aviation.
    Senator Chambliss. As we go into the authorization bill, 
rest assured that it's issues like that that are going to be 
addressed. As we talk about sequestration, I know that a lot of 
these programs have taken years to develop and produce. So 
these programs that I'm going to mention weren't necessarily 
created or authorized on the watch of the four of you, but they 
are significant.
    General Welsh, I understand there are 12 brand-new C-27J 
Spartans that will roll right off the assembly line and 
immediately mothballed. Since 2007, DOD has spent $567 million 
on 21 of these airplanes, but only 16 of them have been 
delivered, and a majority of those are sitting in storage 
somewhere.
    Also, there were 20 C-27As that cost the taxpayers $596 
million and they sit unused and are sitting in Afghanistan and 
are slated to be destroyed, although there may be some movement 
to try to send those to another agency or entity. But the 
maintenance contract on those airplanes I understand was 
canceled in March of this year and therefore they're unuseable.
    General Odierno, the Army spent $297 million to develop the 
Long Endurance Multi-Intelligence Vehicle, which is a blimp-
like aircraft that would hover over the battlefield, that was 
canceled after one test flight and sold back to the contractor 
for $301,000.
    The Army and the Marine Corps are moving ahead, as I 
understand it, to purchase 55,000 trucks known as the Joint 
Light Tactical Vehicle to replace your current fleet of High 
Mobility Multipurpose Wheeled Vehicles (HMMWV), which is 
probably understandable. But it's also my understanding that 
the committed cost of these per vehicle was $250,000 and now 
it's gone to something like $400,000 per vehicle, not unlike 
what Senator McCain alluded to earlier.
    General Welsh, also a recent audit by the DOD Inspector 
General found that a contractor had overcharged the Defense 
Logistics Agency (DLA) for spare aircraft parts. There was one 
part, an aluminum bearing sleeve, that should have cost $10, 
that DLA paid $2,286 per item, and it resulted in a $10 million 
overcharge.
    Now, again, as I say, those are items that weren't 
necessarily created on your watch, but you're in the process 
right now of looking forward with respect to weapons systems, 
and I just hope you'll keep that in mind.
    There's one area that I just want to mention as we look for 
savings, and that's in the area of medical research. Now, I'm a 
beneficiary of the research that's been done in this country on 
prostate cancer and I'm very thankful for that. They do a great 
job at the National Institutes of Health (NIH) on prostate 
cancer research and every other kind of cancer research.
    But what I don't understand is why the military is spending 
$80 million a year on prostate cancer research, why we're 
spending $25 million a year on ovarian cancer research, and 
$150 million on breast cancer research. We're also doing lung 
cancer research. Now, if there are particular needs that the 
military has regarding military research--and there are some 
because of particularly the casualties that we've suffered 
recently--I can understand it. But these are types of research 
that simply have no place, in my opinion, at DOD. They ought to 
be done at NIH.
    I understand further that there is not real coordination 
between the research done, medical research done at NIH and 
what is done at DOD.
    So, Mr. Chairman, that's not an item that these gentlemen 
have a lot of control over, but it's certainly an item that we 
need to look at, and the money would be better spent as a 
replacement for sequestration. My good friend, a good friend to 
a lot of us, Senator Ted Stevens, was one of the ones who first 
asked for prostate cancer research money to go to DOD. Several 
years later, he announced on the floor of the Senate that he 
had made a mistake, he should never have done that, and that 
that money ought to be spent on research, but it ought to be 
spent at NIH and not at DOD.
    So as we go forward, gentlemen, in the defense 
authorization bill in the next couple of weeks, I look forward 
to seeing that list that General Dempsey gets to us with 
respect to items that come out of each of your budgets, that 
hopefully we can have the spine to stand up and say, 
irrespective of our parochial interests, we have to look after 
our men and women and they need this money to be spent in other 
areas rather than in areas where the military themselves say we 
don't need to spend it.
    Thank you very much.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman and Senator 
Inhofe, for holding this hearing today.
    Thank you, gentlemen, for being here. I would hope, as the 
sentiments expressed by some of our colleagues, that this 
Congress would deal with sequestration in a way that means that 
you don't have to be here year after year after year talking 
about the challenges that our military faces because we haven't 
done our jobs here in Congress.
    Admiral Greenert, I would like to begin with you, because 
we believe that the Portsmouth Naval Shipyard is the premier 
shipyard for modernization and maintenance of our nuclear 
fleet. I have a letter this morning from the president of the 
Metal Trades Council, Paul O'Connor, who talks about the impact 
of sequestration on the workers at the shipyard. I'm going to 
ask you to comment, but I wanted to read just two phrases from 
this letter because I think it epitomizes the challenges that 
they're feeling from sequestration.
    He says: ``With 9\1/2\ more years of sequestration hanging 
over our heads, 9\1/2\ more years of furloughs and layoffs, how 
will we attract the best and brightest young men and women to 
our most technologically sophisticated, complex, precision-
based industry?''
    He goes on to say: ``The insecurity, instability, and 
volatility of sequestration on our shipyard and national 
workforce cannot be understated. The personal impact, mission 
impact, and national security impact are real and contrary to 
the best interests of America.''
    Mr. Chairman, I'd like to ask that this letter be entered 
into the record.
    [The information referred to follows:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Shaheen. Admiral Greenert, I wonder if you could 
talk about what you're seeing with respect to the long-term 
impacts of sequestration? You've mentioned some of those, but 
if you could elaborate further.
    Admiral Greenert. Thank you, Senator. I'm glad we get to 
see that letter because it very clearly states the debilitating 
effects of doing this year after year. It's inefficient and you 
lose productivity, and this fine gentleman described there: You 
can't hire people, so you can't distribute your workforce, and 
you furlough them here and there. So where else are they going 
to--they're going to go elsewhere.
    Somebody has to write the contracts. Somebody has to get 
the logistics done. Those are the people who, regrettably, we 
furloughed. We thought we had workers, but you can stand with a 
wrench in your hand and a welding rod, but you need the 
paperwork. Hey, it's all a team and it's a long chain.
    We think we are saving costs. We're just avoiding costs, 
and we aren't even doing that. We're deferring costs, and then 
it's a one-point fill-in-the-blank factor later on. So that 
right there describes the maintenance conundrum that we have.
    By the way, that's in a nuclear shipyard, which is one of 
our more stable enterprises out there because we hire people 
for the longer term, long planning, and all that. It is a 
premier shipyard and we have lots of use for it, if you will, 
in the future.
    I'm concerned about--and I didn't mention earlier, but the 
shore infrastructure. We have reduced dramatically the shore 
infrastructure in order to keep forces forward. So we went from 
80 percent, if you will, of our motto, which is nothing I'm 
necessarily all excited about, down to 55 percent. We're 
deferring work that's going to come to roost.
    Fortunately, in fiscal year 2013 we were able to meet, 
thanks to Congress, a reprogramming and getting that 6 percent 
requirement done to recapitalize. But in fiscal year 2014 I'm 
very concerned. We have $1 million we need to get to do that 
right. Hopefully we'll get reprogramming or a means or a bill 
to do that. But that infrastructure is very important to us.
    Senator Shaheen. Thank you.
    General Welsh, Senator Chambliss talked about some of the 
areas where there is money being spent that may not be most 
efficient. One of the things that we've looked at on the 
Readiness and Management Support Subcommittee is the Air 
Force's proposal to spend about $260 million for two hardened 
hangers in Guam. Now, my understanding is that hardened hangers 
cost about twice as much as those that are not hardened.
    I wonder if you could prioritize the need for that versus 
the other needs that you and the other members of the panel 
have identified with respect to readiness and training and the 
other challenges that we're facing?
    General Welsh. Thanks, Senator. I don't think it's a matter 
of comparing them in every case. In this particular case, the 
hardened facilities on Guam are a response to a combatant 
commander request to provide more resilient capability on Guam 
because of an increased threat of surface-to-surface missile 
attack. He didn't request that everything be hardened, just 
those things that are key facilities that you couldn't 
improvise for if there was damage on an airfield. That's what 
those facilities are based on. So we are trying to support U.S. 
Pacific Command in that effort to meet his war plan 
requirements.
    The readiness and modernization requirements are much 
bigger than $256 million. So I don't think that's the reason we 
can't be more ready today, although every dollar will help. But 
the readiness problem we face over time is significant. To 
fully restore our normal readiness levels over the FYDP would 
be almost $3 billion.
    So we're looking with sequestration at a long-range problem 
that is significant. It's going to take us 10-plus years to get 
readiness back to the level we want under a fully sequestered 
budget, and we'll only get there by reducing the force enough 
that we can keep a smaller force ready, which means less 
capacity, less capability to respond globally, less options for 
the national decisionmaker.
    Senator Shaheen. I think we certainly all appreciate that. 
But, as Senator Chambliss ticked off a number of projects that 
have significant cost to them, this is one that also has some 
significant cost. When you add up those $250 million projects, 
pretty soon we're talking real money. So I do hope that this is 
one that you will continue to look very carefully at.
    General Welsh. Yes, ma'am.
    Senator Shaheen. Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Shaheen.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman. I want to thank 
all of you for your service and for your leadership during 
these challenging times.
    Let me just echo what my colleague from New Hampshire has 
just said about the Portsmouth Naval Shipyard, Admiral. Where 
are we as we go forward with sequester in terms of fleet size 
and the attack submarine fleet? I know you mentioned in your 
opening testimony that one less Virginia-class submarine would 
be built during the period that we would like to build it. So 
can you give us a picture of what the overall fleet looks like?
    Admiral Greenert. As I mentioned, the undersea domain is 
critically important. We need 45 to 55. Our goal is 55. We'd be 
down to 48 submarines in 2020. I use that as a benchmark year. 
Unfortunately, due to sequestration, we lost the USS Miami, 
which was a project Portsmouth had. But the overruns, the 
furloughs, and the need to have to go to a commercial workforce 
instead of using Federal workforce, it was just too much. We 
couldn't afford that submarine and continue to do the other.
    Senator Ayotte. My understanding is that we aren't meeting 
combatant commanders' needs with respect to the requests they 
make for assistance from the fleet now. What's the rough 
meeting of where we are in terms of combatant commander 
requests?
    Admiral Greenert. Just in submarines, the combatant 
commanders as they look at the world distribution of submarines 
for intelligence, surveillance, and reconnaissance (ISR), they 
need about 19 submarines at any time deployed. We can support 
about 10 to 11 and we distribute them--we broker how that 
works. So we're about 50 percent, and that's pretty reflective 
of the overall fleet request versus what we can provide today.
    Senator Ayotte. Great. Thank you, Admiral.
    General Welsh, when do you expect the F-35A to achieve full 
operational capability?
    General Welsh. We hope that happens in 2021, Senator.
    Senator Ayotte. Okay, thank you.
    General Odierno, let me ask you. You and I talked about it 
when we met. What is your assessment of the A-10 and its close 
air support capability? How important is the A-10 to the Army?
    General Odierno. Thank you, Senator. As I know General 
Welsh would say, the A-10 is the best close air support 
platform that we have today. In Afghanistan when they put the 
Litening targeting pod on it became the most complete close air 
support system, that combined with the Remotely Operated Video 
Enhanced Receiver (ROVER) capability, its gun systems. It's 
performed incredibly well in Iraq and Afghanistan. Our soldiers 
are very confident in the system as it goes forward. It's a 
great close air support aircraft.
    Senator Ayotte. Thank you.
    Can I ask you something? We talk about the savings issue 
and something that I know this whole committee actually signed 
off on, but I fought very hard to not get money appropriated 
for, but I think it highlights the issue that you've heard from 
Senator Chambliss and you've heard as well from Senator Shaheen 
on some examples of, we're all concerned about sequester, but 
also making sure that we use the money that's allocated in the 
best way possible for our men and women in uniform.
    One of them that leaps to mind on my end is the Medium 
Extended Air Defense System program, where we spent $3 billion 
between fiscal years 2004 and 2011. I look at some of the 
choices that you're asked to make today. I just hope that we're 
not going to continue to spend any more money on programs like 
that. Please tell me, General, that we aren't?
    General Odierno. We're very focused now. We have to make 
tough choices. We have to spend money on programs that are best 
for us.
    I would make one comment, and I'll make a general comment. 
You have to remember that as you look at cost per vehicle and 
things like that, the reason some of them are going up is 
because we're purchasing less of them because we have less 
money and we have less force structure, and that drives the 
cost up on some programs.
    But we are looking very carefully. It's only the programs 
we need that we're going to invest in. We're not investing in 
programs we actually do need, and so it's important we don't 
use money for programs that aren't going to directly impact our 
soldiers.
    Senator Ayotte. Before we leave I want to ask about one 
particular topic, General Odierno and General Amos, we've 
talked about it--Afghanistan. How do you assess the situation 
in Afghanistan right now? I'm worried that so many of our 
colleagues, frankly, aren't focusing on the fact that we still 
have men and women who are serving in Afghanistan.
    What is it that we need to do to secure our interests in 
Afghanistan? Can you tell us, where are we on this decision on 
what the follow-on force structure will be? With that decision, 
can we get to a point where whatever that follow-on is, it's 
actually too small to make sure that we need to achieve not 
only the ISR issues that we have to address in Afghanistan, but 
ensuring that our own forces are protected?
    So, General, you and I talked about that. Where are we on 
Afghanistan?
    General Odierno. Thank you, Senator. First, until we get 
the Bilateral Strategic Agreement (BSA) approved, that's when 
we'll start discussing what the end strength is post-2014. 
We're certainly hopeful that we will get that agreement with 
the Afghan Government that allows our soldiers, sailors, 
airmen, and marines to continue to operate in Afghanistan.
    What we have to--what I would say is--and the other thing I 
would say is I believe we're making incredible progress in 
Afghanistan, by the way. We don't talk about that a lot. The 
Afghans have taken over. It's working. They are taking 
responsibility. But we have to stay with them. It's important 
that we stay with them and they continue to have the confidence 
with the multinational force behind them, both the United 
States and others. That's key as we move forward.
    As we make decisions on residual forces, there comes a time 
when if we get too small then our ability to protect our own 
forces is at risk, and then we have to make sure that we 
communicate that to the President. The Joint Chiefs have had 
these discussions and we will communicate that as we move 
forward.
    Senator Ayotte. I understand certainly the feeling that 
people have, given the conflicts we've been involved in, of 
wanting to withdraw. So what are our interests that are at 
stake in Afghanistan in terms of getting the BSA right and 
getting the correct ratio of follow-on forces? I know my time 
is up, but I think this is an important question.
    General Odierno. First off, we need the BSA to protect our 
soldiers. Once we get soldiers, sailors, airmen, and marines 
that are operating there, that allows them to do their job and 
continue to support the Afghans.
    In Afghanistan, it has come so far. It's hard to describe 
to someone who has never been there how far that country has 
come, the progress that has been made, the security that the 
people feel, the fact that the Afghan security forces are 
stepping up in a big way to support their own people.
    But they're not ready to completely do that on their own, 
so it's important. We have to provide new kinds of support, 
training, advising, building their institutions, making sure 
they can continue to move forward, because there are those that 
want to go back and take control and there are extremist 
organizations that will directly threaten the United States. We 
have come too far, we have invested too much, for us to back 
away from that now, because we are close on the cusp, I think, 
of being successful.
    I think it's important that we understand that and that we 
should draw lessons from what we're seeing in Iraq, by the way, 
to that as we move forward.
    Senator Ayotte. Thank you.
    Chairman Levin. Thank you very much, Senator Ayotte.
    Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman. I want to thank 
all of you. It is an honor to have you serving and leading our 
country.
    General Odierno, I was privileged to serve with Ike Skelton 
and he was to me the model of how to serve--dignity, humble, 
hardworking, incredibly smart. As I know you know, his reading 
list was also required reading for the rest of us as well.
    The question I have is--and this ties in, Admiral Greenert, 
to a conversation we once had. You mentioned earlier today 
about at one time pay and benefits was one-third, it looks like 
it's heading for two-thirds. For each of you: What is about the 
proper balance in terms of those kind of costs and everything 
else? Generally, you had mentioned that it's 70 percent now or 
heading there. What is about the right balance for each of your 
forces?
    General Odierno, if you'd like to start.
    General Odierno. Best case for us is we want personnel 
costs to be somewhere between 42 and 45 percent of our total 
budget, and we're past that now. We're over that at this point.
    Senator Donnelly. Admiral?
    Admiral Greenert. I would agree with General Odierno. Right 
now we're at about 50 percent. I think that's okay. That's 
about right. But then we need to look internally and say, okay, 
what's growing the fastest and what does it mean to our 
constituency? Does it really affect them that much in what 
makes them a better sailor, soldier, airman, or marine? So 
there's that piece too of a balance across all those 
entitlements.
    General Amos. Senator, I think somewhere--I'd be thrilled 
if I was in the low 50 percent. I don't know that it's 
realistic that I'll ever get in the 45 to 50 percent mark.
    Senator Donnelly. I think we recognize it's different for 
each force.
    General Amos. It is, it is. It's a shared budget with the 
Navy. It's just a function of being able to get that down, and 
there are ways we can do that and we absolutely have to commit 
ourselves as a DOD and as a Congress to help us do that.
    That's going to just erode my buying power to the point--I 
saw a study, we took a brief probably 3 or 4 weeks ago, that 
said if we stay on the course we're on, somewhere around 2025 
we'll have 98 cents of every dollar going for benefits. You 
just project it out, extrapolate.
    [The following information is provided to supplement the 
hearing record. Specifically, General Amos wrote to Chairman 
Levin requesting to correct the record by clarifying the 
paragraph above in his exchange with Senator Donnelly:]
      


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      
    Senator Donnelly. Right.
    General Welsh. Senator, depending on what you include in 
your accounting of the pay, entitlements, and benefits package, 
we're somewhere between 30 percent and 50 percent right now. 
The problem for us is that range would be fine; it's the growth 
that we're worried about.
    By the way, I think we owe you and the other members of 
this committee and Congress a vote of thanks for the incredible 
job you've done compensating the great men and women who serve 
in all of our Services over the last 20 years. But the growth 
in that category is now the threat to modernization and 
readiness. So we just believe we need to control that growth 
over time.
    Senator Donnelly. As a follow-up--and I know you're all 
doing this--it would be helpful to get your best ideas on how 
to accomplish that on our end, as well as we look forward to 
how we put these budgets together for the future to hit that 
proper and right mix.
    Does flexibility help all of you and how significant would 
that be?
    General Odierno. Senator, it depends on how you define 
``flexibility.'' If you're saying flexibility within each 
budget year, it helps a little bit, but in my mind it helps 
just around the fringes, probably different for every Service. 
What we need is flexibility across the whole sequester action, 
as General Welsh, I think, mentioned earlier. That's what's 
helpful because of the front-loaded nature of it, it throws us 
off skew of how we sustain our balance.
    So if you gave us year-to-year flexibility, there are some 
things we can do, but in my mind that's only around the edges 
and it doesn't really solve the problem.
    Senator Donnelly. This would be to all of you, but in 
particular, General Odierno and General Amos. I was in 
Afghanistan in late April, early May. I was at Helmand Province 
as well. We had metrics that we were looking at and saying, if 
we're able to keep on these metrics by December 2014, we'll be 
in a position to basically turn everything over to the Afghans 
with some presence of residual forces.
    There was some controversy--I shouldn't say controversy, 
but disagreement by some there and others there: Are we able to 
continue to hit these metrics and stay on target? I was just 
wondering if you could fill us in on where we are.
    General Odierno. What I would tell you is we're ahead of 
those metrics. In fact, we've turned over responsibility to the 
Afghans in really over 90 percent of all of Afghanistan. 
There's only a very few places where they have not taken 
complete control of their own security. So, in my mind I think 
they're a bit ahead of the metrics that we originally had 
established back at that time frame, and they continue to move 
forward and do better than we expected, faster than we 
expected.
    General Amos. Senator, we're in exactly the same position. 
Just to give you a sense of what I'm talking about, we've 
transitioned about a year ago to train, advise, and assist 
missions instead of offensive combat operations. So we changed 
the training of our marines going in there. We put more senior 
leaders on the ground so that they could partner with the 
Afghan Kandaks, the battalions.
    So we built that structure, and we put a one-star general 
in charge of it, specifically to focus on that while the other 
stuff was going on. We've just cut that force back by 50 
percent, brought the one-star general home, not because we're 
trying to cut the force structure, but because it's been met 
with such great success.
    By December 2014, will it be just phenomenal? No. But I 
tell you what, I'm confident we will have set the conditions 
for the greatest opportunity for the Afghan people to take 
charge of their lives. I actually feel very good about it.
    Senator Donnelly. Thank you. I see my time is up, Mr. 
Chairman.
    Chairman Levin. Thank you very much, Senator Donnelly.
    Senator Vitter.
    Senator Vitter. Thank you, Mr. Chairman, and thanks to all 
of our witnesses, particularly for all of your service to our 
country. We all appreciate that.
    Number one, I understand that you have clearly articulated 
real problems in readiness; and number two, that lack of 
readiness costs lives and lives are directly at stake. That 
concerns us all.
    I think the last time this possibility of a real hollow 
force and a significant lack of readiness happened was in the 
1990s. General Odierno, I'll start with you. Would you consider 
the challenge today greater or lesser than that challenge then?
    General Odierno. I believe our challenge is much greater 
today than it has been since I've been in the Army in terms of 
readiness. This is the lowest readiness levels I have seen 
within our Army since I've been serving for the last 37 years.
    Senator Vitter. General, I agree, and I think the numbers 
confirm that. For instance, in the 1990s, this general episode 
I'm describing, at that problem the military described 80 
percent of conventional and unconventional forces as acceptable 
with pockets of deficiency. Today, in contrast, at least on the 
Army side, you have said that only 15 percent of Army forces 
are acceptable, with 85 percent being below that; is that 
correct?
    General Odierno. That is correct, Senator.
    Senator Vitter. That certainly puts numbers on exactly what 
you said. But today's situation is much worse. In the 1990s 
there was a response to that. The administration, President 
Clinton's administration, made a specific proposal and worked 
with everyone, including Republicans in Congress, to get $25 
billion allocated for readiness. Will there be a specific 
administration proposal any time soon to this far greater 
challenge?
    General Odierno. I think I can't answer your question, 
Senator. What I would say is, I think it has to do, as the 
chairman said earlier, with the negotiations that are going on 
for the budget deal, and out of that we hope that there will be 
something that comes back to DOD that allows us to deal with 
this 3- to 4-year window we've talked about and readiness 
challenges that we have and get rid of this sequestration, 
which is, as everyone has said here numerous times, a horrible 
way to do business.
    Senator Vitter. I'm familiar with those negotiations. I 
don't think anything is being discussed currently that 
approaches a specific concrete response to this particular 
problem. I know you aren't the ultimate decisionmakers, but I 
would urge the administration to put forward a specific 
proposal, as President Clinton did in the 1990s in a situation 
that I believe you're correct in saying was far less 
challenging, although it was serious.
    General, I also want to ask about some readiness issues 
regarding joint readiness training and the like. I have a 
particular interest in that because some of that happens at 
Fort Polk in Louisiana. Sequestration has forced the 
cancellation of several Combat Training Center rotations. Can 
you describe how important those rotations are and the impact 
on that readiness?
    General Odierno. In fiscal year 2013 we had to cancel seven 
rotations. What that means is you have--usually it's a force of 
about 5,000 to 8,000 men and women who go there, who get a 
chance to train and really get certified in the kind of 
operations that we think they might have to deploy and do. So 
we weren't able to do that.
    Not only that; you lose a significant amount of experience 
that is gained by your leaders. For example, that equates to 
about 250 company commanders, about 50 battalion commanders, 
and 7 brigade commanders who did not get the training that is 
necessary for them to do the operations. That also includes 
their soldiers. So that in effect keeps happening; it just 
continually degrades the readiness.
    So in 2014, what we're going to have to do is, we're going 
to focus all of our dollars to seven brigade elements, so at 
least I can get seven brigades trained, because that's the only 
money I have to do that. Everyone else is going to go 
untrained. They will not be able to do the training necessary.
    Senator Vitter. So if that is accomplished for seven 
brigades only and no more, how would you describe the impact on 
critical core competencies and readiness?
    General Odierno. What that means is we're going to have 
about a little over 20 percent of the force, maybe 25 percent 
of the force, that is trained in its core competency. The rest 
will not be trained in their core competencies.
    Senator Vitter. General, I just want to underscore. The 
specific training we're talking about is the training that's 
most relevant to the sort of operations we face today, is that 
correct?
    General Odierno. That's correct. If we had to deploy in the 
Middle East, if we had to deploy to Korea, if we had to deploy 
anywhere, that's the kind of training they are not receiving. 
So what keeps me up at night is that if something happens and 
we're required to send soldiers, they might not be prepared in 
the way I think the American people expect us to have them 
prepared.
    Senator Vitter. A final question for any or all of you. Has 
the standards in terms of what we are preparing for, in fact, 
been lowered over the last few years, the readiness 
requirements?
    General Odierno. Lowering? I don't know if I'd say 
lowering. So what we've done is--let's take Afghanistan, for 
example. The units that are getting ready to go to Afghanistan 
are training very differently today. As General Amos mentioned, 
they're being trained to do training and advisory missions. 
They're not training to do full spectrum operations, which we 
would normally train them to do, because they are just going to 
do that. They have not been trained in that, in the things that 
we think are important as we develop the readiness levels in 
order to respond to contingencies.
    Senator Vitter. I guess what I'm asking--let me try to be 
clear--overall, in 2010 in the QDR the requirement was to fight 
two wars on multiple fronts and win while engaged in 
significant counterterrorism operations. Hasn't that bar been 
lowered significantly?
    General Odierno. It has.
    Senator Vitter. As that bar has been lowered significantly, 
do you think the world has become a safer place?
    General Odierno. No. As I stated earlier, I believe this is 
the most uncertain I've ever seen the international security 
environment.
    Senator Vitter. Thank you. That's all I have.
    Chairman Levin. Thank you, Senator Vitter.
    Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman.
    Thank you all for your service and for acknowledging the 
contributions and service of Congressman Ike Skelton, with whom 
I had the privilege of serving in the U.S. House of 
Representatives.
    You've all testified with quite a lot of specificity about 
the negative impacts of sequestration. I look at the DSG, and I 
think each of you have acknowledged that this is an 
articulation of future threats, challenges, and opportunities. 
We face enough challenges, i.e., cost overruns, the cost of 
energy to DOD, increasing personnel costs, without--and meeting 
the goals of the DSG--the mindlessness of sequestration.
    There are some who say that we should just give you more 
flexibility. But in my view, giving you flexibility which takes 
sequestration as a starting point is like moving the deck 
chairs on the Titanic. Would you agree with that?
    General Welsh. Senator, flexibility is not the ideal 
solution. It's getting rid of the mechanism of sequestration.
    Senator Hirono. Yes, we need to replace it.
    General Welsh. Flexibility is a help if we can't do that.
    Senator Hirono. So would you agree that what we need to do 
is replace sequestration with a more rational approach to what 
you need to do?
    General Welsh. Absolutely.
    Senator Hirono. All of you agree with that?
    Admiral Greenert. Yes, ma'am.
    Senator Hirono. There were some questions relating to the 
unsustainability of the percentage that personnel costs are 
with regard to all of your budgets. I would like to know, as we 
go forward you must have done some thinking on what kind of 
factors would you apply in making recommendations on changes to 
your personnel costs? What would be your philosophical 
perspective going forward in making your recommendations?
    Admiral Greenert. Senator, I'll take a crack at it if you 
don't mind. One, we'd look at things that would be reversible. 
For example, if we were to slow pay raises or something of that 
regard, something that, when done, look at the impact on the 
constituency and can that be reversed, because we have to 
maintain the All-Volunteer Force. That's very important.
    Two, it has to be transparent. Our folks, we have to speak 
to them, make sure they understand why, what, how, and what is 
the purpose, and where this all fits in, and their families, so 
that they see that.
    Three, I believe there has to be a balance. I alluded to 
this before. Pay, housing, TRICARE, these sorts of things, 
tuition assistance, to be able to go get a degree, is the 
quality of their life. But also, when they go to work what is 
that quality? Do they feel appreciated in that job? Do they 
have what they need, tools, personnel, oversight, leadership, 
and the training, so that they're proud of what they do and 
they can do that?
    I think we need to balance those too as we look at it.
    General Amos. Senator, I think there are from my 
perspective a couple of categories. The first one is internal 
controls on things like bonuses and everything from real estate 
to things we do to recruit and assess marines. We have gone 
back into that in the last 12 months and culled out some 
significant savings. So internally those are the mechanisms 
that we are balancing with regards to retention and 
recruitment.
    But to Admiral Greenert's point, this holistic package of 
the force, I have a piece that we're writing on be careful we 
don't break the All-Volunteer Force. I think there's plenty of 
room to maneuver, by the way, before you get there. I'm not 
advocating there's not. But we just need to be mindful that 
we've had this All-Volunteer Force, we've asked a lot of it, 
and they've actually done remarkably well, and it's probably a 
model for every nation around the world.
    But inside of that there is room to maneuver on health care 
costs. We talked about TRICARE premiums. There is room to 
maneuver, perhaps, on pay raises. There is room to maneuver on 
basic allowance for housing. Right now it's typically on a 2 to 
3 percent rise every year. Do we need to do that while we're in 
this?
    So there are things like that that we're working on.
    Senator Hirono. My time is almost up, but I take it that 
all of you would make these kinds of recommendations with a 
view to make sure that we are really mindful of the need to 
support our troops and to support their families, so that we 
are not going to take away the kinds of benefits and programs 
that they rely upon as you move forward to decrease these 
personnel costs.
    General Odierno. Senator, that's exactly right. We have to 
take into consideration what it takes to maintain the premier 
All-Volunteer Army. We all understand that and that's forefront 
in our minds. But if you get out of balance--I talk about the 
best way to take care of a soldier and their family is make 
sure he's properly trained, has the right readiness levels, and 
when he goes somewhere he comes back to his family. We have to 
balance that part of it with making sure they can live the 
quality of life for the service that they're giving to our 
Nation, and we certainly understand that. So it's finding that 
right balance, and we think we have methods to do that, 
Senator.
    Senator Hirono. Mr. Chairman, my time is almost up, but I 
do have some questions that I will be submitting for the record 
having to do with how sequester is impacting the research and 
development efforts across all of our Services and making sure 
that we maintain an industrial base, as one of you--I think it 
was Admiral Greenert, who mentioned that it is really important 
to maintain our defense industrial base, and the impact of 
sequester on that goal.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Hirono.
    Senator Lee.
    Senator Lee. Thank you, Mr. Chairman.
    Thanks to all of you for your service to our country and 
for joining us today. I deeply appreciate it and, on behalf of 
constituents that I have back in Utah, I express my deepest 
gratitude to you and those who serve under your command.
    For the last 2 years, we've heard a lot from a lot of high-
ranking military officers like yourselves, who have come before 
this committee and others, in front of the men and women that 
they command, in front of the American people, to express the 
grave concerns they have about sequestration and what it could 
do to our military, our military readiness, and everything we 
do through our military.
    I've heard Members of Congress on both sides of the aisle 
and on both ends of the Capitol express grave concerns about 
the impacts of sequestration, about what could happen. I've 
heard my own constituents, people from throughout Utah, many of 
whom are currently serving or have served in the military, 
express similar concerns. It's an interesting conversation. 
It's sad that we have to be having this conversation, 
especially since sequestration was something put into law at a 
time when nobody believed it would ever happen. It was supposed 
to be so bad that we would do anything and everything possible 
in order to avoid it, and yet it has arrived.
    So my first question, which I'll leave open to any of you 
who might want to answer it, I'd like to know a little bit 
about the means by which, the format by which, the regularity 
with which you communicate these kinds of concerns, the sorts 
of concerns we're talking about today, about sequestration's 
impact on readiness and on DOD generally. How and in what way 
do you communicate those concerns to the White House?
    General Odierno. I would say that, first off, as the Joint 
Chiefs we meet twice a week to discuss many key issues, to 
include policy issues, health of the force issues. We clearly 
have discussions, and then the Chairman, as the Chairman, takes 
those to the White House.
    But we also have periodic meetings with the White House. In 
fact, we have one next week, where we'll have the opportunity 
to go over and discuss many of these issues with the President. 
I think he's been very open in meeting with the Joint Chiefs on 
these types of things. So there are forums in place to do that.
    We also obviously meet on a regular basis with the 
Secretary of Defense, where we have the opportunity to talk 
about the issues we have, and he also takes those forward. I 
think there's avenues there that are open to us that we use on 
a quite regular basis.
    Senator Lee. If I understand it, General Odierno, you do 
meet regularly with the White House and you're able to 
communicate these openly, effectively, to people in the White 
House at the highest levels, including the President and the 
Secretary of Defense? Okay, that is good to hear.
    My concern and one of the things that animates that 
question is that I have not sensed quite the same level of 
alarm coming from the White House as I have sensed when I've 
met with each of you. I have not sensed that same level of 
concern. We've seen a lot of action, a lot of energy from the 
White House going into efforts involving everything from gun 
control to defending Obamacare, to fixing the web site, and so 
forth. I have not heard the same level of concern, the level of 
alarm, that I'm hearing from you. That does cause me some 
concern.
    It seems to me that if the administration did, in fact, 
think this situation was this dire, as dire as you are 
explaining it to us, I would expect to see that issue, those 
sets of issues, receive a lot more time and attention and 
energy from our Commander in Chief.
    Going along with that, instructions on preparing for 
sequestration in 2013 were not even initiated until just a few 
months before it went into effect. The President didn't 
consider the possibility of sequestration in his 2014 budget 
request, despite the fact that it is law, despite the fact that 
that law has not been repealed, it has not been modified in a 
way that makes it irrelevant or less relevant.
    So can you, any of you, describe for the committee what 
instructions, if any, you're receiving from the White House and 
from the Office of Management and Budget with regard to how to 
deal with sequestration in 2014 and the budget for fiscal year 
2015?
    Admiral Greenert. We've been directed and we're in the 
process, as we described before, to put together a budget 
that--we call it ``the alternate POM,'' Program Objective 
Memorandum--which assumes sequestration levels, BCA caps. That 
is being prepared and today we are deliberating on that, called 
a program budget review, in DOD.
    There is also a secondary level that is under consideration 
at a higher level, that we also will deliberate over, so that 
there's an option available. But we are focusing on in DOD 
right now the alternative, that is the BCA cap levels, if you 
will. But there are two, there are two options.
    Senator Lee. Okay. Thank you, Admiral, for that. When you 
say, ``so there is an option available,'' meaning so we have 
options on the table, options?
    Admiral Greenert. There are options. So what option will be 
chosen and under what circumstances, I really couldn't tell 
you, Senator. But you wanted to know what are we directed to do 
and that is what we're doing, just again those two levels.
    Senator Lee. So presumably those options will be considered 
by the President and the Secretary of Defense, and at some 
point a decision will be made?
    Admiral Greenert. Presumably, yes, sir.
    Senator Lee. Okay. Thank you, Admiral.
    I see my time has expired. Thank you, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Lee.
    Senator King.
    Senator King. Thank you, Mr. Chairman.
    There's a lot of discussion about flexibility. It seems to 
me in this situation a way to think about it is we're telling 
you that you have to cut a finger off and you get to decide 
which one. That's an unattractive form of having to make 
decisions.
    I want to talk about morale and the effect of this. Senator 
Levin and I were in the Middle East this summer and the biggest 
impression I came back with was an extremely favorable 
impression of the young people that we have working for the 
U.S. Government in the military, in the Intelligence Community, 
in the State Department. These are idealistic, hard-working, 
dedicated people, who we're frankly not treating very well.
    They've been through furloughs, they've been through a 
shutdown. They have the sequester. They don't know what the 
future of their benefit programs are.
    Is this starting to play itself out in terms of retention 
and recruitment and morale in the Services, General Odierno?
    General Odierno. Senator, thank you for the question. I 
would say that there are two pieces to that, the civilian 
workforce and the military workforce. The civilian workforce, 
we are seeing, I'm not saying significant morale issues, but 
there are questions by the civilian workforce because they've 
been through a furlough, they went through shutdown, and a 
reduction along with that. So they are questioning, how stable 
is their work environment, especially since it's still on the 
table.
    In terms of the soldiers, the way I explained it is morale 
is good, but tenuous. Reenlistments are fine, recruiting's 
going okay. Soldiers--there's a lot of angst and the angst is 
kind of what you just said, people talking about benefits, 
people are talking about--obviously, in the Army we're 
significantly reducing the size of the force, so they're 
worried about their future.
    But what makes me feel so damn good about it is what you 
just described, is that their morale is high, they're doing 
exactly what we ask them to do. They're training as hard as 
they can with the money we give them. When they deploy, they 
are there trying to accomplish the mission to the best of their 
ability. That's what's so frustrating to me personally, because 
of their personal dedication to our Nation and to our Army, and 
yet they have a lot of angst both individually and with their 
families because of all this discussion that's going on, the 
fact they might lose their job, they might lose benefits, they 
might--but they continue.
    What's inspiring is they continue to do what we ask them, 
and they do it to the best of their ability. That's the best 
way to describe it to you, Senator.
    General Amos. Senator, I think our civilians--I don't have 
any metrics for this yet because it's too soon to tell. But 
when I talk to our civilian marines, as I mentioned in my 
opening statement, our civilian marines are looking at this 
saying: ``I'm not sure. I love the institution, I love being a 
civilian marine, I like what it stands for; I just don't have 
confidence in it now.''
    They're looking at this, not only what they've just gone 
through, but they're looking at the fact that sequester they 
know is going to require a cut in civilian personnel over the 
next 10 years. It will require a cut in civilian personnel, 
there's no question about it.
    So you look at all the things they've gone through and 
they're saying: ``Boy, maybe I ought to look around.''
    So I don't see people jumping ship, but I do worry about it 
because they're the professionals. That's the civilian side of 
the house and they are the shock absorbers for us, and they're 
the corporate memory.
    Inside my force, the Marine Corps is a young Marine Corps. 
67 percent of all the marines on Active Duty today are on their 
first enlistment. They're somewhere between 18-years-old and 
probably 22-years-old. They didn't come in to sit back at home 
stations and be a garrison marine. They actually like 
deploying. When you go visit them in Afghanistan, in the 
Western Pacific (WESTPAC), you don't get questions like: 
``Well, shoot, what's sequester going to do to me?'' They know 
how to spell it, but that's about it.
    They want to know: ``Hey, Commandant, is this going to be 
the last deployment I'm going to get on, or am I going to 
actually be able to go to combat again or be able to go to 
WESTPAC again?'' So our morale's pretty high right now and I 
think it's going to stay high as long as we give them something 
to look forward to. The reorientation to the Asia-Pacific 
region has just reenergized a lot of marines as they think 
about Afghanistan. My gosh, we're coming out of there in 2014. 
What's left? We talk about Darwin, Australia, we talk about 
Japan, we talk about Guam, and their eyes light up.
    So the morale in my Service is pretty high.
    Admiral Greenert. Senator, an anecdote. I had two of my 
systems commands, major engineering systems, ship and air, they 
have a lot of civilians and they came to me and said: ``You're 
not going to have to worry about headquarters reduction and 
have a reduction in force; we'll do it with attrition. We have 
a lot of people retiring.'' That struck me because that's a lot 
of seniority and talent and experience going out that top and 
we don't have a lot going in the bottom. We'll be out of 
balance, and I spoke about that in my oral statement.
    One other anecdote. General Welsh mentioned kids getting 
bored. In the Navy we're starting to develop a situation where 
when you get ready to deploy you're going to be ready, but, 
boy, you're going to do it fast and you're going to do it hard. 
So our pilots, a lot of our air wings--carrier strike groups 
about the air wing, they're flying a lot and training a lot for 
about 7 months, and they barely have time to get their legal 
will done and get their power of attorney done and then they're 
deploying and they're gone for 6, 7, 8 months.
    Then they come back and they just longingly look out the 
window at their Hornet aircraft and say: ``Gee, I wish I could 
fly again.'' So that have and have-not, when that gets into 
service records you're going to get a have and have-not feeling 
about it. I'd worry about that in morale and in eventually 
retention.
    Senator King. I want to just--I would commend to you, all 
of you gentlemen, an extraordinary speech by Robert Gates that 
was given just in the last couple of weeks. He put it--what 
you've been saying all morning, he put it very bluntly and 
succinctly. He said: ``The greatest threat to American national 
security now lies within the square mile that encompasses 
Capitol Hill and the White House,'' and that we are the 
problem.
    It was very stark. I think that's the point that you've 
been making today. What we're talking about here isn't 
academic, it's not dollars on a balance sheet; it's lives, 
readiness, and the ability to defend this Nation.
    Thank you, gentlemen.
    Chairman Levin. Thank you, Senator King.
    Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    I would add my thanks to you four gentlemen for your 
service to this country, and also my thanks to the men and 
women who serve under you for their commitment to keeping us 
all safe.
    I would like to go on a different track here a little bit. 
At the end of July, Secretary Hagel released a statement on the 
SCMR. It's basically how DOD is going to cope with the 
sequestration over the next 10 years.
    General Odierno, in your testimony before the House Armed 
Services Committee you stated that the SCRM was based on 
assumptions which you described as ``rosy'' and ``somewhat 
dangerous.'' Specifically, you pointed out that it assumes 
conflicts will last just 6 months, little to no casualties will 
be sustained, no follow-up stability operations will be 
necessary, U.S. Forces deployed elsewhere will be able to 
complete, disengage, and redeploy to support a major regional 
contingency, and the use of WMD wasn't even considered.
    Can you elaborate on those assumptions and the danger you 
referred to about building force structure based on those 
assumptions?
    Admiral Greenert. If you reduce the requirement, you reduce 
the amount of forces that are necessary. So what happens is we 
do not have the ability to replace our soldiers that have to 
accomplish the mission. We don't have enough. It's about 
quantity. So for example, the assumption that a war in Korea 
would last less than a year. There's nothing that makes me feel 
that that's a good assumption, that we won't have any 
casualties during a war somewhere around the world.
    The fact that we do full disengagement, we just fought two 
wars, Iraq and Afghanistan. We did not disengage from other 
places around the world. It's just not assumptions that I 
believe are appropriate.
    What I worry about is that in the end the weight of those 
assumptions are not going to be on me. It's going to be on our 
soldiers, our young men and women who are asked to do a mission 
that they simply do not have the capability and quantity of 
capability to accomplish. It results in more casualties, and it 
results--which is the most, in my mind, critical thing. It also 
makes rosy assumptions about our ability to quickly build a 
larger force.
    In the 2000s, while we were fighting two wars, first, it 
took us 4 years to make a decision to say we can grow the Army. 
Then once we did that, it took us about 32 months to do it, 
because you have to recruit them and then you have to train 
them. So you can't do that within a 6- or 8-month period. It's 
impossible to do, and we made assumptions that we would 
magically be able to build this huge Army in a very short 
period of time.
    It doesn't happen that way, unless we go to the national 
mobilization, we go back to a draft, we go back to many other 
things. Even then, it would take longer than 6 months to a 
year--it would probably still take 2 years plus--to build 
another. So it's substances like that that are incredibly risky 
as we go forward.
    Senator Fischer. Do you think this review is helpful in any 
way, to help planning within your different departments and DOD 
as a whole?
    General Odierno. It is. There are some things that are good 
about it. Some things about priorities are good, some things 
about efficiencies. A lot of people have mentioned that there 
are clearly efficiencies that we still have to garner out of 
our own budgets, and we have to do that. I think some of that 
is very good.
    But I do significantly worry about these assumptions that 
we make about our warfighting capabilities, which I think are 
rosy and somewhat dangerous.
    Senator Fischer. Thank you.
    Admiral, do you have anything to add on the SCMR?
    Admiral Greenert. I think we need to keep in mind, it was 
options for a future, which was described. As General Odierno 
said: ``Okay, well, that's nice, but we've never been able to 
predict that future.'' So it's kind of dangerous if you're 
wrong and in the world that I live with, of conducting presence 
if we reduce force structure to a level where we are not out 
and about, our allies wondering of our reliability. Our 
allies--therefore potential adversaries can get out of hand, if 
you will. Then we can pretty much have a mess because we're not 
deterring those by being together with our allies, and that's a 
great deterrent effect.
    But lastly, I would say the ability to produce ready 
forces--you have to look into that very closely. As General 
Odierno said, there were some assumptions made, and we've 
talked about the debilitating effects here on the industrial 
base. That can be quite extraordinary and we need to consider 
that.
    Senator Fischer. I've had some comments made to me that 
President Reagan was able to build up the force fairly quickly 
when he became President. Would you agree with that? Both of 
you have said that it's difficult to build the force up 
quickly. Has it happened in the past? Do you think President 
Reagan did?
    General Odierno. What he did was he didn't increase the 
size; what he did is he increased the investment into the 
force. During the Reagan buildup what we did is we increased 
our readiness, we significantly increased our modernization 
programs, which had an incredible impact on the capability that 
was developed during those time frames in the Army.
    Admiral Greenert. Yes, ma'am. The delivery of, in my world, 
the ships and the aircraft took place quite a bit after the 
investment, if you will. So the same thing occurs when you draw 
down. Boom, they're gone and you say, ``well, I want to stand 
it up again.'' You have to make sure you have shipbuilders and 
aircraftbuilders as well.
    So President Reagan was fortunate in that regard that he 
had a broad enough industrial base to be able to respond.
    Senator Fischer. General Amos and General Welsh, just 
briefly?
    General Amos. Ma'am, I'm with my colleagues on President 
Reagan. We lived with his legacy through the 1990s. We had the 
Reagan buildup, so when we went through the 1990s, the Gulf 
War, we used the equipment that came from the Reagan buildup. 
We sustained that even through the 25, 28 percent reduction-in-
force of the late 1990s and the revolution in military affairs.
    But it takes a long time to build the force, the people. 
But in today's market, programmatically it takes a long time to 
develop ships, airplanes. We're seeing that right now with the 
JSF.
    Senator Fischer. Your opinion of the assumptions in the 
SCMR, General Amos? Did you have an opinion on those?
    General Amos. Ma'am, say that again, please?
    Senator Fischer. On the assumptions that are listed in the 
SCMR, did you have any thoughts you wanted to share on that?
    General Amos. I share my colleagues' apprehensions about 
the assumptions. I think they were too altruistic. I do think 
it was helpful, though, because it gave a range. It gave a 
range of what a Service should look like, and I think that's 
helpful, because it energized the dialogue and got everybody 
moving.
    Senator Fischer. Thank you.
    General Welsh. Ma'am, another assumption that was in there 
that is significant based on where we are today is that SCMR 
was underlined by an assumption that our force was fully ready, 
and that allowed you to execute the strategy. We're clearly not 
there today.
    The other thing I would mention about the Reagan buildup is 
for the Air Force specifically, during that time we purchased 
about 2,600 new aircraft to modernize our force. In the latest 
buildup of our top-line budget between about 2000 and 2008, we 
built 260. So we did not modernize as the top line went up. A 
lot of that is due to the rise in personnel costs that we've 
already discussed. So the force still needs to be modernized in 
some pretty critical areas.
    Senator Fischer. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Fischer.
    Senator Kaine.
    Senator Kaine. Thank you, Mr. Chairman. To the witnesses, 
we appreciate your patience with us.
    The effect of sequester on Virginia is just so palpable in 
all the communities that I visit. I gave my maiden speech on 
the 27th of February as a Senator. I think most maiden speeches 
are ``Here's who I am'' or ``Let me tell you about my State'' 
or ``Let me tell you what I want to do.'' I don't think many 
maiden speeches were like mine: ``Let's not do something 
stupid.'' I had to make my maiden speech about ``Let's not do 
something stupid'' because it was right on the eve of the 
sequester kicking in.
    We cast a vote in the Senate to turn off the sequester and 
there were 53 votes for that. But because of the ability to 
insist upon 60 votes, 53 votes wasn't enough to turn off the 
sequester.
    I just think it's always very important that we say this, 
and you can be more diplomatic than I'll be: It's because of 
Congress. Sequester is because Congress hasn't done a budget. 
Sequester is because we haven't been able to find a deal in 
normal order, we haven't been able to find a deal in 
supercommittees, we haven't been able to do anything other than 
kick the can down the road, CRs.
    Congress could have fixed this. Congress shouldn't have put 
it in place. Congress can fix it, and the one bit of good news 
about this is there's a budget conference finally going on 
right now. One of the things I would certainly ask--everyone 
connected with the military or who loves it, whether you're 
Active Duty, veteran, or just a patriot: Tell the budget 
conferees--and there are some of us around this table; Angus 
and I are both budget conferees. Tell us to get a budget deal 
by the 13th of December, because what you need is certainty and 
a path out of sequester.
    There have been some questions today, Mr. Chairman, along 
the lines of: Have you explained to the President how sequester 
is hurting national security? I found those questions kind of 
odd. The President submits a budget every year to Congress and 
I imagine that you talk to the President about your needs. If 
Congress would just pass the President's budget or pass the DOD 
portion of the President's budget or pass something within the 
general time zone of the DOD portion of the President's budget, 
would our readiness issues be much easier to deal with than 
they are under the sequester?
    Admiral Greenert. Yes, sir, they would. The President's 
budget that we submitted and testified to, I for one found it 
was acceptable.
    Senator Kaine. So there isn't a need for a President to 
come and bring a special request for, we're having readiness 
problems, here's my proposal for how we deal with readiness 
problems. All we have to do is pass a budget and get in the 
general time zone or area of what the President is proposing 
vis-a-vis the DOD and, while it wouldn't eliminate all the 
challenges we have, we wouldn't be here looking at charts like 
this, would we?
    General Amos, I want to ask you a question. I looked 
through your written testimony quickly. You said something 
pretty blunt in your opening comment. I think I heard you use 
the word ``ashamed,'' and I think it was in connection with 
you're ashamed about the way we are treating maybe some of our 
civilians with respect to the furloughs. I didn't write down 
the precise quote and when I went back through your written 
testimony I couldn't find it.
    Could you just refresh me on exactly what you said, because 
I want to ask you what you meant by it?
    General Amos. I just handed my oral statement back, but I 
said I'm ashamed of the way we treated our civilian marines. As 
I look back at how we went through the furlough and how we went 
through the government shutdown, I'm looking at them--and by 
the way, we required them as soon as they came back to help us 
get this budget put in, get all the contracting done, close out 
all the deals at the end of the year.
    These are the professionals that do that, Senator. It's 
typically not military people that are trying to get the 
contracts in, trying to get all the money obligated--the 
professionals that are working on our airplanes, our ships, our 
tanks, our equipment. So to be honest with you, when I look 
them in the eye I'm embarrassed, I'm ashamed. I think they are 
every bit as much patriots as we that wear the uniform are, and 
I think we treated them poorly. That's what I meant by that.
    Senator Kaine. I appreciate your saying that because, 
again, we really are dealing with a problem that Congress 
created and only Congress can fix. Peppering you with more 
questions about whether you're appropriately informing the 
Commander in Chief about these effects is an effort to avoid 
looking in the mirror. We just have to look in the mirror in 
this place.
    Again, Mr. Chairman, we do have a good opportunity right 
now, because the budget conference that should have started in 
March is now under way to try to find some certainty. General 
Dempsey was with a number of us the other day and he said: 
``The problem with sequester is it's money, it's timing, and 
it's flexibility, and all three of those create problems.''
    I worry about your planners. I think you have some superb 
planners in all your branches and with DOD. But instead of 
letting your planners run free to plan how to deal with an 
uncertain world, we're tying up their time making them figure 
out how to deal with an uncertain budgetary situation.
    You don't have a budgetary number yet now. You don't know 
when you'll have a number. You don't know what the rules will 
be about the number that you will eventually get at some 
uncertain time.
    So in an uncertain world, we are making your task almost 
impossible. So I feel ashamed. I feel ashamed to have you come 
back here again and again and again and tell us the same thing 
and not see any action to do anything about it.
    General Amos. Senator, could I comment? We're under a CR. 
You know that. It's a forced diet that prevents us from signing 
multi-year contracts. I have $815 million worth of military 
construction in 2014. Three-quarters of it is for the 
President's strategy, the rebalance to the Pacific. I'm not 
going to be able to commit to that, I'm not going to be able to 
do those kinds of things.
    I was just looking through some numbers in preparation for 
this hearing. As a result of sequester alone and the amount 
of--my share is $10.2 billion or 3 percent over 10 years. Just 
in Marine Aviation alone, it's going to cost me $6.5 billion of 
inefficiency.
    So when we talk about cost overruns and we talk about all 
the other things we're going to try to call the money out, $6.5 
billion, and that's because multi-year contracts were--I either 
can't sign or I have to cancel, so I have to pay penalties now 
and buying airplanes on an individual basis.
    At the end of that, that's four JSF squadrons and two MV-22 
Osprey squadrons, simply because of the inefficient way we're 
going about doing business in this sequester.
    Senator Kaine. Mr. Chairman, I just hope if we have another 
hearing on this, I'm going to suggest something that you're all 
too diplomatic and reasonable to do. But if we have another 
hearing on sequestration, I would suggest that you can bring 
whatever charts you want, but I would suggest you just bring a 
bunch of mirrors and put them up so that we can look at 
ourselves in our faces as we're talking about this. It's the 
only place we're going to solve this. This isn't on you to 
solve, it's not on the President to solve. Only a Congress can 
pass a budget. A congressional budget doesn't even really go to 
the President for signature. It's just fully within this body. 
It's fully within our power to solve this, and I pray that we 
will.
    Thank you, Mr. Chairman.
    Senator King. The public gets this, Mr. Chairman. The 
public understands this. That's why our approval rating is 
below al Qaeda's. It's a sad state.
    Chairman Levin. Two quick requests. One, did each of you 
support the President's budget request?
    General Odierno. Yes.
    Chairman Levin. Admiral?
    Admiral Greenert. Yes, sir, I did.
    General Amos. Yes, Mr. Chairman.
    General Welsh. Yes, sir.
    Chairman Levin. All right. Second, would you give us, 
General Amos, the breakdown for the record of that $6.5 billion 
that you made reference to.
    [The information referred to follows:]

    The 2011 Budget Control Act (BCA), with 10 years of sequestration, 
will have a $6.5 billion impact on Marine aviation. Across the duration 
of the BCA, sequestration costs to Marine aviation's major defense 
acquisition programs (MDAP) are $5 billion due to program delays, 
inefficiencies (e.g. single-year pricing versus multi-year pricing) and 
reduced acquisition quantities over a longer period of time. 
Additionally, $1.5 billion will have to be reprioritized from 
procurement and modernization accounts to ensure deploying combat-ready 
units maintain required readiness levels (C2 or better).
    Using the President's budget request for fiscal year 2013 as a 
baseline, Marine aviation program cost growth due to procurement 
quantity decreases and schedule extensions associated with 
sequestration are based on the assumption that all MDAPs will be 
decremented 10 percent per year, with no flexibility, for the duration 
of the BCA through fiscal year 2021. Marine aviation program cost 
growth due to procurement quantity decreases and schedule extensions 
associated with sequestration will impact the following programs at a 
total cost of $5 billion:

         Reduction in quantity of 21 F-35B/C during the BCA 
        period at a cost of $250 million.
         MV-22 multi-year procurement contract breach at a cost 
        of $1.6 billion.
         Reduction in quantity of 21 H-1 aircraft during the 
        BCA period, resulting in a significant Nunn-McCurdy breach and 
        a cost of $511 million.
         Two-year delay in the low-rate initial production of 
        CH-53K aircraft with a reduction in procurement of 39 aircraft 
        during the BCA period. This results in the reduction in 
        quantity of 57 aircraft from the original production ramp at a 
        cost of $2.6 billion.
         Reduced procurement quantities of the Ground/Air Task 
        Oriented Radar during the BCA period at a cost of $156 million.

    Sequestration's impact on Marine aviation readiness is calculated 
with the assumption of a 10 percent reduction to yearly flight hours 
for each of the 51 Marine Corps flying squadrons. This equates to a 
yearly cut of approximately 350 flight hours per flying squadron, or 
17,850 total flight hours across all Marine Corps flying squadrons. 
With the average cost per flight hour at $10,500, the yearly decrement 
to Marine Corps flight hours due to sequestration is $187 million. 
Prioritizing readiness by preventing a flight hour reduction requires 
the funding shortfall to be covered by investment accounts (i.e. 
procurement and modernization). The total cost of funding a $187 
million flight hour shortfall over the remaining 8 year duration of the 
BCA will be $1.5 billion.

    Chairman Levin. Now, Senator Blumenthal.
    Senator Blumenthal. Mr. Chairman, I realize we're in a 
vote, so I'm going to be very brief. First, I understand, Mr. 
Chairman, in a glaring omission on the part of our----
    Chairman Levin. I'm going to turn the gavel over to you. Is 
it safe?
    Senator Blumenthal [presiding]. It's an awesome 
responsibility, but I think I'm capable of it.
    Chairman Levin. Thank you all. Senator Blumenthal.
    Senator Blumenthal. We are in the middle of a vote, so I'm 
going to be very brief. First, I understand, Mr. Chairman, in a 
glaring omission on the part of our committee, we have not yet 
wished General Amos a happy birthday, even though it's a little 
bit earlier. Happy birthday, General Amos.
    General Amos. Thank you, Senator.
    Senator Blumenthal. Let me ask, for the record--I don't 
want to take your time with this. But I agree with what Senator 
Kaine has just said the responsibility being on the part of 
Congress. I think part of the way to deal with this crisis--and 
it really is a crisis--is to perhaps modify some of the 
contracts, long-term some of the percent process, which is not 
your doing. You aren't the ones who in effect burden the 
Services with the way we do procurement and how do we do 
procurement. The contracts which in effect, penalized the 
United States when it fails to make certain orders, or when 
there are cost overruns that are not your doing.
    So I would like the panel to look at some of the 
procurement decisions, such as General Amos has just described, 
where we are in effect going to pay a lot more for weapons 
systems, whether it's airplanes or ships, as a consequence of 
sequester, so that we have some examples. They don't have to be 
in charts, but we need to be able to convince the American 
people about what the impact of sequester is, because right now 
it's a word, it's a term that has little or no meaning to 99.9 
percent of the American people.
    One of the other weapons systems--you described one, 
General Amos. But, Admiral Greenert, I understand that the 
Virginia Payload Module which results in a $743 million design 
change to their Virginia-class submarine, has been undermined 
by some potential cuts in the 2014 budget. I support that 
design, the $443 million for the design program. I think it 
will measurably and materially and significantly add to the 
capability of those submarines. To remove the money for 
designing and researching I believe will be really a loss of a 
tremendous opportunity; would you agree?
    Senator Greenert. Yes, sir, I would. As I stated before, 
we're talking about the undersea domain. It's a high priority 
for us. So as I discussed the concept of reprogramming, we'll 
search for that money. We're fortunate it's a long-term program 
in one of the early phases. But obviously the impact if we 
continue this will be dramatic.
    Senator Blumenthal. I also want to raise again, as I've 
done it previously with General Odierno, the Mi-17 helicopter 
issue, where I understand there may be limits to what we can do 
to reprogram money--I just want to state for the record, $1 
billion to buy helicopters from the Russian export agency that 
is also selling arms to Syria, when we don't have Afghan-
trained personnel to maintain those helicopters will strike 
most Americans as a tremendous waste of money, first, because 
we're not buying American helicopters, which we should be doing 
if we have to provide helicopters at all; and second, because 
the Afghans can't use them as we would hope they would.
    I understand that you may have a different position, 
``you'' meaning the U.S. Army or DOD. But if we're going to buy 
those helicopters, we should be buying them from American 
manufacturers and training the Afghans how to use them.
    General Odierno. I would just say, Senator, that I want to 
make it clear we're not buying those helicopters for our 
forces. I want to make that very clear.
    Senator Blumenthal. I understand.
    General Odierno. Second, that's a decision that was made 
in-theater based on their assessment of the ability for the 
Afghans. They think they could, in fact, learn and train on the 
Mi-17s because that's what they've had in the past and that's 
why we're purchasing them. So we're the agent to purchase those 
aircraft for them, but that's a decision that was made by those 
closest to that issue.
    Senator Blumenthal. I understand we're not using--we're not 
buying those helicopters for American forces. They're being 
bought for the Afghans. But we are using American taxpayers' 
dollars, which could be used for the Virginia Payload Module or 
any other of the very important needs that you have and that we 
need to address.
    So I understand that those decisions have been made as a 
result of our recommendations by commanders in the field, and I 
just want to state for the record my reservations about that 
decision.
    Thank you very much. Thank you to each of you for your 
service to our Nation. I think I am in charge of gaveling to a 
close, even though I don't have the gavel.Thank you very much 
for being here and your excellent testimony.
    This hearing is adjourned.
    [Questions for the record with answers supplied follow:]
              Questions Submitted by Senator Kay R. Hagan
                   force structure in north carolina
    1. Senator Hagan. General Amos, currently there are almost 54,000 
Active-Duty marines in North Carolina. Under the Budget Control Act 
(BCA) of 2011, the Marine Corps was reduced in total structure from 
202,000 to 182,100, with 7,000 marines coming from North Carolina. If 
sequestration is allowed to continue, I understand that this could 
result in a further reduction down to 174,000, with 4,000 marines 
coming from North Carolina. How would these further reductions impact 
the Marine Corps' ability to meet current operational demands and 
respond to contingencies in the future?
    General Amos. Assuming that the requirements for marines remained 
the same over the foreseeable future, a force of 175,000 will drive the 
Marine Corps to a 1-to-2 dwell. It will be that way for virtually all 
operational units. Six months deployed, 12 months home recuperating, 
resetting, and training, and 6 months deployed once again. The 175,000 
force accepts greater risk when our Nation commits itself to the next 
major theater war, as there are significant reductions in Marine Corps 
ground combat and aviation units available for the fight.
    Under sequestration, the Marine Corps would effectively lose a 
division's worth of combat power. This is a Marine Corps that would 
deploy to a major contingency, fight, and not return until the war was 
over. The entire bench would be emptied. There would be no rotational 
relief like in Iraq and Afghanistan. Marines who joined the Corps 
during that war would likely go straight from the drill field to the 
battlefield without the benefit of pre-combat training.
    The Marine Corps would have fewer forces arriving less-trained and 
arriving later to the fight. This would delay the buildup of combat 
power, allow the enemy more time to build its defenses, and likely 
prolong combat operations. This is a formula for more American 
casualties. We only need to look to 1950 and the onset of the Korean 
War to see the hazard and the fallacy in this approach.

                   deferred and canceled maintenance
    2. Senator Hagan. Admiral Greenert, in fiscal year 2013, operation 
and maintenance (O&M) accounts were hit particularly hard by 
sequestration and in many cases this resulted in deferred maintenance. 
As an example of this impact, Fleet Readiness Center-East at Cherry 
Point, NC, saw a reduction of 200,000 labor hours and a 12 percent 
reduction in throughput. As you well know, we have to pay for 
maintenance eventually, and the longer we put it off, the more it is 
likely to cost us in the end. How do you think these actions will 
affect the Navy in the short- and the long-term?
    Admiral Greenert. Fiscal year 2013 sequestration resulted in 
airframe/engine inductions and deliveries that were pushed into fiscal 
year 2014. Continued sequestration is projected to drive an additional 
backlog of approximately 190 airframe maintenance actions (of about 700 
planned) in fiscal year 2014. Additionally, fiscal year 2014 
sequestration may result in significant manpower effects including 
reduced overtime, contractor reductions, and civilian reductions. These 
effects would have the greatest impact in the third and fourth quarters 
of fiscal year 2014 which will greatly limit our ability to recover if 
funds become available.

                      basic allowance for housing
    3. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, there is talk of reducing the Basic Allowance for 
Housing (BAH) that servicemembers receive relative to the determined 
cost of living for a given area. Do you feel that we should pass our 
fiscal burdens on to our servicemembers by reducing their BAH?
    General Odierno. I am opposed to any initiative that would simply 
pass fiscal burdens on to soldiers. However, we find ourselves needing 
to review all expenses in order to maintain the appropriate balance as 
a result of the BCA with full sequestration. Even under the Department 
of Defense's (DOD) plan to slow the growth of military compensation, 
military members continue to receive a robust package of pay and 
benefits that compares favorably with private-sector compensation.
    Providing competitive pay and benefits and the best possible 
training and equipment in the current fiscal and political environment 
is a monumental challenge. However, this balance must be found if we 
are to maintain the highest quality, ready, and modern military force 
we have today far into the future.
    Admiral Greenert. Reductions in BAH would likely be a disservice to 
the force. However, I do believe it is important to examine all 
components of military compensation and benefits in order to find 
opportunities to slow growth in some areas. We also must balance 
quality of life components such as basic pay, BAH, health care, and 
tuition benefits with our sailors' quality of work. We must ensure that 
when they go to work, we give them the tools and training they need to 
succeed.
    General Amos. Slowing the growth of BAH is a reasonable measure to 
meet the BCA. The origins of BAH provide to the servicemember no more 
than 80 percent of housing costs. Accordingly, the average 
servicemember had at least 20 percent in out-of-pocket expenses. In 
2000, the Secretary of Defense committed to reducing the average out-
of-pocket expense for the median member to zero by 2005. Given the 
current and future fiscal environment, marginal increases in out-of-
pocket expenses for members is a reasonable consideration.
    General Welsh. Given the current fiscal environment and continued 
projections of increasing compensation growth, we must review the 
current compensation package for potential reforms and to slow the 
growth. We cannot look at programs in isolation, but rather in 
totality, balanced across all beneficiaries, and then assess the impact 
on the total force.

    4. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how do you believe this will affect morale and 
retention of the force?
    General Odierno. No decision has been made on any changes to 
military compensation packages. I am concerned about any piecemeal 
initiative that does not consider second- and third-order effects on 
the All-Volunteer Force (AVF).
    Even under DOD's plan to slow the growth of military compensation, 
military members continue to receive a robust package of pay and 
benefits that compares favorably with private-sector compensation.
    Providing competitive pay and benefits and the best possible 
training and equipment in the current fiscal and political environment 
is a monumental challenge. However, this balance must be found if we 
are to maintain the highest quality, ready, and modern military force 
we have today far into the future.
    Admiral Greenert. I think it is possible to reduce the growth of 
personnel costs and keep total pay and compensation competitive with 
civilian counterparts. It is also important for us to balance quality-
of-life components such as basic pay, BAH, health care, and tuition 
benefits with our sailors' quality of work. We must ensure that when 
they go to work we give them the tools and training they need to 
succeed. It is this balance of quality-of-life and quality-of-work that 
will maintain sailor morale and help us meet our retention and 
recruiting needs.
    General Amos. The current military compensation package enables us 
to achieve recruiting and retention goals. Any adjustments must be made 
carefully to avoid adverse impacts to recruiting and retention. 
However, military compensation cannot continue to grow 
disproportionately as DOD's overall budget shrinks. We believe as we 
plan our budget, reasonable efficiencies, such as reducing BAH, must be 
considered to protect modernization, investments, and infrastructure.
    General Welsh. We must be careful to not look at various 
compensation programs in isolation, but rather in totality, balanced 
across all beneficiaries, and assess the impact on the total force 
before making decisions. A competitive compensation package is crucial 
to maintaining our required force profile, and we must also continue to 
use special and incentive pay programs to recruit and retain critical 
skills.

                           tuition assistance
    5. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, please briefly explain to me what your intent for 
tuition assistance (TA) is in fiscal year 2014.
    General Odierno. TA continues to be a successful program that 
enhances Army readiness, recruiting/retention, and leader development. 
TA provides financial assistance for voluntary off-duty education in 
support of soldiers' professional and personal self-development goals.
    We are in the process of reviewing the TA program for fiscal year 
2014 to maximize use of TA for soldiers across all components, while 
being mindful of a constrained budget.
    TA supports my strategic priorities to develop adaptive Army 
leaders for a complex world, prepare a ready and modern Army, and 
commit soldiers to our Army profession. Finally, TA supports the United 
States' premiere All-Volunteer Army. We remain committed to this 
important program.
    Admiral Greenert. Currently, TA is fully funded in fiscal year 
2014, at the same level as fiscal year 2013. This is a Navy priority 
and we have no plans to change the fiscal year 2014 program execution. 
However, sequestration in fiscal year 2014 may add some risk to the 
program funding.
    General Amos. The Marine Corps continues to support the TA program. 
However, given the uncertainty of both the Continuing Resolution (CR) 
unknown outcomes of the BCA, and discussions regarding the full year 
funding levels, the Marine Corps has taken measures to protect near-
term readiness, which results in reduced funding for some programs, 
including TA. Until these issues are resolved, it is premature to 
determine full funding levels for TA for the remainder of the fiscal 
year.
    The Marine Corps has taken additional actions to ensure that TA is 
being run to meet the appropriate financial management controls of the 
Marine Corps and support personal and professional goals of marines. 
The Marine Corps requires that first time TA applicants have a minimum 
time in service of 24 months, must complete the Marine Corps 
Institution orientation class called ``Personal Financial Management,'' 
and will be approved for only one course unless the first-time students 
have completed an Associate Degree or 60 academic credits with a 
minimum 2.5 grade point average.
    These requirements on first-time students ensure marines focus on 
the objectives of their initial MOS training and their primary Marine 
Corps mission.
    General Welsh. The Air Force recognizes the vital role higher 
education plays in developing the critical thinking skills of airmen at 
all levels. The Air Force is committed to funding the military TA 
program in fiscal year 2014; however, budgetary constraints remain a 
challenge.

                        family services programs
    6. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how will sequestration impact family services like 
the Exceptional Family Member Program (EFMP) and mental health programs 
provided by your Services?
    General Odierno. As a result of sequestration, we continue to 
review all soldier and family programs to determine where we can reduce 
services with the lowest possible risk. Resourcing for the EFMP as well 
as mental/behavioral health programs remain fully funded at this time.
    The U.S. Army Medical Command Behavioral Health Service Line 
includes programs to provide behavioral health services to Army 
children and families. However, sequestration, furloughs, and the 
October 2013 government shutdown, in addition the threat of future 
furloughs, contributed to a loss of behavioral health providers who 
specialize in family behavioral health services, specifically in child 
and adolescent fields. Historically, these providers have been 
difficult to recruit and retain. These complexities are magnified in 
the current fiscal environment. The difficulties in retaining and 
hiring behavioral health providers who mainly work with family members 
has significantly decreased the Army's ability to provide and 
adequately sustain behavioral health support to Army spouses and 
children.
    Admiral Greenert. I am committed to protecting, to the maximum 
extent possible, these important family support services, such as the 
EFMP and mental health programs, from sequestration funding reductions 
in order to minimize possible impacts upon our sailors and families. 
Navy protected all family programs from sequestration impacts in fiscal 
year 2013, in accordance with DOD guidance, and intends to sustain this 
funding priority in fiscal year 2014.
    General Amos. We are not expecting significant impacts to the 
direct care and services of our marine family programs as a result of 
sequestration in fiscal year 2014. In anticipation of sequestration 
cuts, we are planning to absorb these cuts at headquarters level for 
marine and family programs rather than cuts to programs directly. 
Sequestration cuts at the headquarters level will impact staffing, 
training, and other resources used by staff. We are concerned however 
of sequestration in future years which may result in fiscal cuts to 
programs directly.
    Additionally, if we are forced to furlough our civilian marines in 
the future, it is likely our family programs will be impacted through 
loss of direct service hours, resulting in longer wait times, reduction 
in hours of operations, and modifications to programs.
    General Welsh. Sequestration will impact Air Force airman and 
family readiness programs. In addition to morale concerns caused by 
budget uncertainties, constrained operating budgets and hiring 
limitations affect the ability to adequately fill appropriated staff 
positions. Additionally, sequestration may reduce hours of operation 
and program opportunities across the broader umbrella of child and 
youth programs to include child care for working parents, youth sports, 
instructional classes, school support, recreational opportunities, and 
outreach support to Guard/Reserve youth.
    The effect of sequestration can be challenging for any program; 
but, the loss of availability of support services for the EFMP creates 
significant challenges for Air Force families with members with mild, 
moderate, and severe needs. With over 24,000 Air Force exceptional 
family member families and a 30 percent increase in enrollment since 
2010, family support services are necessary to provide comfort, 
stability, and reduce anxiety during times of transition.
    Mental health services remain a top priority and the Air Force is 
committed to sustaining them, especially in support of Wounded Warrior 
programs.

                  impacts on special operations forces
    7. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, what has been the impact on the readiness of your 
Services' Special Operations Forces (SOF) under the recent shutdown and 
fiscal year 2013 implementation of sequestration?
    General Odierno. Although initial indications of a downward trend 
are starting to manifest as a result of the recent shutdown and fiscal 
year 2013 sequestration, Army Special Operations Forces (ARSOF) 
readiness across our tactical/combat units remains relatively high due 
to MFP-11 funding from U.S. Special Operations Command (SOCOM) and 
Army's prioritization of SOF support through personnel fills and 
Service Provided Capabilities (SPC).
    At the strategic level, U.S. Army Special Operations Command 
(USASOC) continues to reprioritize ARSOF personnel and assets to 
support the geographic combatant commanders' and Joint Warfighting 
Headquarters. In doing this, USASOC reduced targeted SOF capacity to 
preserve readiness and the capabilities of their deploying units of 
action. USASOC assumed risk in global areas of operation, outside of 
the Named Operations and Advanced Skills Training, to meet anticipated 
strategic and operational demands. The anticipated reduction in the 
ability of the Services to support future SOF training, exercises, and 
operational enabler requirements, remains a primary concern.
    Admiral Greenert. Sequestration and the recent government shutdown 
have had an impact on near-term readiness by reducing training 
opportunities for nondeployed forces. Navy continues to fully resource 
readiness for deployed forces. SOCOM is responsible for the overall 
readiness of SOF and would be able to provide more detailed information 
on the effects of sequestration on SOF readiness.
    General Amos. Like all SOF, Marine Special Operations Forces 
(MARSOC) operators train rigorously to prepare for deployment. Their 
pre-deployment training cycle is carefully orchestrated to make time 
for all the necessary training events while still giving our marines 
time to reconnect with their families between deployments. The 
uncertainty of the sequestration, shutdown, and the sometimes 
conflicting implementation guidance makes it extremely difficult to 
coordinate all of these events and is demoralizing for our marines and 
their families.
    The sequester and CR cuts in fiscal year 2013 significantly 
impacted MARSOC's training schedule. Courses were cut or consolidated, 
contracted instructors were eliminated, and mission rehearsal exercises 
were scaled back. Courses cancelled in October and November due to the 
shutdown and subsequent travel restrictions will take months to 
reschedule. Without this training, MARSOC operators had significantly 
fewer opportunities to train in varied environments and integrate 
battlefield capabilities into their tactics, techniques, and 
procedures. Deploying MARSOC teams have less redundancy in individual 
operator skills, causing greater risk to mission, and reducing their 
expeditionary advantages.
    General Welsh. The recent government shutdown and fiscal year 2013 
implementation of sequestration impacted the readiness of Air Force 
Special Operations Forces in a variety of functional areas. Major 
exercises were cancelled due to current fiscal uncertainty, resulting 
in a loss of interoperability training and proficiency of our Special 
Operators with their coalition, joint, and general purpose partners. 
Air Force Special Operations Forces are highly dependent upon Air 
Force-provided capabilities as well as those from our sister Services. 
In the operations support arena, we were forced to incrementally fund 
major service contracts, resulting in the deferment of several million 
dollars' worth of sustainment requirements including the repair of 
deteriorated airfields, roadways, and fire suppression systems. 
Important but non-mission critical expenditures were also delayed or 
cancelled, such as morale, welfare, and recreation facilities, further 
challenging force preservation for our already highly-stressed special 
operators and their families. Finally, the long-term consequences of 
the government shutdown and sequestration, considered by many of our 
military and civilian personnel to be a break in faith, are yet to be 
determined.

    8. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, what, in your views, are the likely impacts of 
continued sequestration in fiscal year 2014 and beyond on the readiness 
of SOF?
    General Odierno. ARSOF readiness remains relatively high at the 
beginning of fiscal year 2014. At sequestration spending levels, USASOC 
predicts readiness will degrade, while undergoing force structure 
adjustments, before things improve around fiscal year 2017. The need 
for persistent force capacity in U.S. Central Command (CENTCOM) 
eclipsed ARSOF's ability to fully source theater-setting activities in 
support of other theater campaign plans. Currently, three-fourths of 
deployed forces are directly tied to the fight in Afghanistan and other 
named operations. ARSOF requirements increased 56 percent since 2008; 
despite Operation Iraqi Freedom/Operation New Dawn ending, ARSOF 
remains unable to meet all geographic combatant commander and Theater 
SOCOM requirements. The increase in Global Force Management Allocation 
Plan (GFMAP) requirements consumes nearly all of ARSOF's readiness. 
Moreover, in order to meet urgent and/or critical operational demands, 
USASOC assumed risk in its regional alignment structure, which hinders 
development with partner nations and potential allies.
    USASOC receives the majority of its baseline and O&M funding from 
SOCOM. At this time, USASOC cannot report the final impacts and 
corresponding second and third order effects associated with continued 
sequestration in fiscal year 2014 and beyond until decisions are made 
and guidance is published concerning Army Program Objective Memorandum 
(POM). Nonetheless, USASOC will reduce targeted SOF capacity in order 
to preserve and regenerate a more globally-oriented force.
    Assuming a President's budget for 2014 level of funding across the 
Future Years Defense Program (FYDP) and the additive effects of the 
Services' own reductions, USASOC will reduce combat formations across 
the ARSOF enterprise in an effort to absorb O&M/baseline reductions and 
assume risk in the following areas: Organic Mobility/Strike Capacity, 
Critical Combat Support/Combat Service Support (CS/CSS) Capacity, 
Engagement and Crisis Response Capacity, Joint Combined Exercises for 
Training, Force Modernization, and Language Training and Recruiting. 
USASOC will redistribute forces to protect critical capabilities, such 
as Intelligence, Surveillance, and Reconnaissance (ISR) and regionally-
aligned ground forces, which are critical to fulfilling the tenets of 
the Global SOF Campaign Plan. The Services' reduced ability to provide 
forces for ARSOF pre-deployment training and operational deployments 
remains a primary concern. Bottom line, USASOC remains committed to 
retaining capability by reducing capacity and continues to closely 
monitor and mitigate readiness impacts at the tactical and operational 
levels.
    Admiral Greenert. Similar to other naval forces, sequestration will 
result in reduced training and readiness for nondeployed SOF, reducing 
surge capacity. Navy will continue to maintain the readiness of 
deployed forces. SOCOM is responsible for the overall readiness of SOF 
and would be able to provide more detailed information on the effects 
of sequestration of SOF readiness.
    General Amos. SOCOM predicts that the future demand for SOF will 
increase, that SOF will be more specialized with more advanced training 
to meet regional challenges, and that SOF will still be ready to 
support major combat operations. As the Global SOF Network expands, so 
will the demand on some of the service provided enabling capabilities. 
Reduced Marine Corps end strength will limit my ability to fully 
support MARSOC requirements for combat support and combat service 
support personnel. This shortfall will either be answered through 
additional contractor support which will require additional funding, or 
it will result in a degradation of materiel and operational readiness 
(or both).
    Similar to the larger Marine Corps, I expect that SOCOM will have 
to sacrifice future capabilities in order to preserve readiness. 
Maintenance and recapitalization of equipment, both SOF and service 
provided, will be deferred, despite years of extensive use in 
operations and training. This is a difficult choice that may lead SOCOM 
to lose the comparative advantage if sequestration persists.
    I expect morale within the SOF community, like the rest of the 
Marine Corps, will also be impacted. Career progression, deployment 
cycles, family support services, and the like will be affected creating 
more stress on the force. We take our responsibility to our young men 
and women and their families very seriously, but there is little doubt 
that all of these issues will impact readiness of the SOF community if 
the sequester continues.
    General Welsh. Continued sequestration will cause Air Force SOF to 
consider further force-shaping initiatives and further complicate the 
balance between near-term readiness and long-term capability. The 
impacts would not only be felt by the joint SOF community, but 
throughout every geographic command. Air Force SOF are highly dependent 
upon Air Force-provided capabilities as well as those from our sister 
Services. Examples of difficult decisions include reduced Air Force 
flying hours supporting SOF, incremental funding of service contracts, 
and reduced base operating services and operations support. Continued 
sequestration will negatively affect the ongoing recapitalization of 
our legacy MC-130 and AC-130 fleets, desynchronize global ISR supply 
and demand, and ill-posture our force for future contested environments 
and near-peer challenges.

    9. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how has sequestration impacted the ability of your 
Services to provide critical enabling capabilities to SOF? What if 
sequestration continues in fiscal year 2014 and beyond?
    General Odierno. Army sourcing of SOCOM Service Provided 
Capabilities (SPC) requests to support CAMPLAN 7500 in fiscal year 2014 
is 59 percent of the requested total with a forecasted sourcing of 58 
percent of total SPC requested in fiscal year 2015. However, it remains 
to be seen at what readiness level these SPCs will be maintained given 
the current and projected reductions in Army manning and funding. 
Army's current intent is for contingency forces to train to T1 (highest 
level of readiness) and sustain T2 (next level down) during the 
available year.
    USASOC does not have organic echelon above brigade (EAB) 
maintenance capabilities. Army's Installation Logistic Readiness 
Centers (LRC), formerly Directorate of Logistics (DOL), provide USASOC 
with core maintenance capabilities and support, such as: painting, 
fabrication, corrosion repair, load testing, and maintenance. Providing 
logistics support to ARSOF will always be a top Army priority. Although 
sequestration reductions have negatively impacted Army readiness, the 
Army has a plan to move funds between accounts to ensure continuous 
support to these high priority Special Operations Forces.
    Admiral Greenert. To date, sequestration has not directly impacted 
support to deployed SOF. However, if fiscally constrained to 
sequestration level funding over the long term, one potential scenario 
would result in insufficient capacity to conduct widely distributed 
Counter-Terrorism/Irregular Warfare missions, as defined in the Defense 
Strategic Guidance (DSG). There would be inadequate force structure 
available to allocate to this mission, in the amount defined by the 
Force Structure Assessment and concurred upon by SOCOM.
    General Amos. Reduction of Marine Corps end strength significantly 
degrades my ability to directly support MARSOC, as well as the larger 
SOCOM enterprise. Under a full sequester and a 175,000 strong Marine 
Corps, I will be unable to meet MARSOC's full requirement of 3,112 
Active Duty marines. Per the Defense Secretary's guidance to all 
Service Chiefs, MARSOC will be frozen at fiscal year 2013 end strength 
and thus capped at 2,742 marines--a reduction of nearly 12 percent. 
While MARSOC will still be able to conduct its most critical tasks, 
this unrealized growth eliminates certain key combat service support 
and enabler personnel. MARSOC will rely on service provided 
augmentation, adding additional stress to an already fully tasked 
Marine Corps. In the likely event that the Marine Corps is unable to 
meet the MARSOC request for enablers, they will be forced to use 
contracted personnel for logistics, maintenance, and training. More 
contractors will require additional non-programmed funding and is 
contrary to the guidance to reduce reliance on contracted personnel.
    Sequestration cuts will also increase demand on Marine air-ground 
task force assets that may not be available to support SOF when needed, 
or will reduce our ability to support other global priorities. Other 
service cuts to critical capabilities which support SOF, particularly 
maritime unmanned aerial assets and rotary wing mobility, will drive 
SOF to request additional support from the Marine Corps in the littoral 
zones. This again will compete with the Marine Corps' ability to meet 
other operational demands.
    General Welsh. Air Force Special Operations Forces (SOF) are highly 
dependent upon Air Force-provided capabilities as well as those from 
our sister Services. If sequestration continues in fiscal year 2014, 
the further degradation of supporting conventional forces due to 
diminished resources will increase operational risk and curtail both 
the range of missions and level of operations tempo that Air Force SOF 
can execute in support of SOCOM's Global SOF Campaign Plan and other 
combatant command demands. Examples include decreased or lost training 
and operational capacity in critical command and control, ISR, close 
air support, global mobility, and training range assets, all negatively 
impacting our special operators' ability to train for and execute 
missions worldwide.

    10. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, current plans call for increasing SOF from 66,000 
across DOD to 72,000 by 2017. Is this plan sustainable under full 
sequestration?
    General Odierno. Increasing SOF manpower to 72,000 without the 
adequate resourcing, impacts readiness and SOF's ability to deploy 
properly trained and equipped troops forward. SOF continually assesses 
its force to ensure an optimal mix of Active, Reserve, Guard, and 
civilians required to meet current operational deployments and 
unforeseen emerging threats. Operating under a full sequestration 
condition would significantly hamper SOF's ability to provide a 
flexible force capable of adapting to rapidly changing situations and 
unexpected contingencies.
    Admiral Greenert. Without a substantive change to defense strategy 
that significantly reduces the demands placed on regular Navy forces, 
this plan is not sustainable if we are held to the BCA revised 
discretionary caps in the long term. Trades between manpower, training, 
and costs to equip SOF will be balanced to maintain the readiness of 
regular Navy forces.
    General Amos. No. Under a full sequester and a 175,000 strong 
Marine Corps, I will be unable to meet MARSOC's full requirement of 
3,112 Active Duty marines. Per the Defense Secretary's guidance to all 
Service Chiefs, MARSOC will be frozen at fiscal year 2013 end strength 
and thus capped at 2,742 marines--a reduction of nearly 12 percent. 
While MARSOC will still be able to conduct its most critical tasks, 
this unrealized growth eliminates certain key combat service support 
and enabler personnel. MARSOC will rely on service provided 
augmentation, adding additional stress to an already fully tasked 
Marine Corps. In the likely event that the Marine Corps is unable to 
meet the MARSOC request for enablers, they will be forced to use 
contracted personnel for logistics, maintenance, and training. More 
contractors will require additional non-programmed funding and is 
contrary to the guidance to reduce reliance on contracted personnel. If 
the Marine Corps is forced to downsize below 175,000 marines, 
additional cuts to MARSOC may be required that will reduce operational 
capabilities and availability and directly degrade our ability to 
attain the Nation's military strategic objectives.
    General Welsh. SOF growth is not sustainable while under 
sequestration as it would require the Air Force to offset this growth 
with reductions in non-SOF mission capabilities. Given our tentative 
plans to reduce 500+ aircraft and 25,000 personnel, the Air Force would 
face great difficulty in absorbing additional SOF growth without relief 
from sequestration.

    11. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, what service equipment sustainment or modernization 
cancellations, delays, or restructuring will also affect your SOF 
troops and units?
    General Odierno. The majority of all USASOC equipment comes from 
the Army as Service-provided equipment. This includes everything from 
soldier equipment, such as boots, uniforms, body armor, weapons and 
optics, to organizational equipment, such as vehicles, generators, 
unmanned aerial systems, and other aviation platforms. To date, ARSOF 
has not experienced any significant effects of Army sequestration-
related cuts on either new equipment fielding or on equipment reset. 
However, if funding reductions brought on as a result of sequestration, 
it is likely that ARSOF will be impacted in the future. It would 
require the Army to reduce our modernization accounts by nearly 25 
percent with no program unaffected, including ARSOF. Gauging the 
precise impacts these cuts might have is difficult at this time, as 
final decisions on what to cut or restructure have not been made.
    Admiral Greenert. If fiscally constrained to the revised 
discretionary caps over the long-term, one potential scenario would 
result in the cancellation of one Afloat Forward Staging Base (AFSB) 
procurement, which would have a longer-term impact on the ability to 
support SOF requirements in CENTCOM and U.S. Pacific Command (PACOM) 
currently being mitigated with the Interim AFSB and use of leased 
vessels in PACOM. In addition, reduced force structure would result in 
insufficient capacity to fully support the Counter Terrorism and 
Irregular Warfare missions of the DSG, as defined in the Force 
Structure Assessment and concurred upon by SOCOM.
    General Amos. With the budget-driven reduction of the Marine Corps 
to 175,000, MARSOC will be capped at 2,742 Active Duty marines and will 
not realize planned growth. This has forced MARSOC to reorganize its 
personnel to continue to provide the same amount of operational 
capability with reduced end strength. Along with a reorganization of 
personnel, MARSOC has also done a thorough review of equipment to make 
sure they have the optimal mix to support operations and training. 
Approximately 80 percent of MARSOC equipment is provided by the Marine 
Corps, and I feel confident that MARSOC will continue to be supported 
to the same standards as the rest of the Marine Corps Forces. None of 
the cuts to major Marine Corps programs will have substantial impacts 
to MARSOC.
    I do have concerns that other service cuts will shift the burden of 
SOF support to the Marine Corps. I am particularly concerned about cuts 
to maritime unmanned aerial assets, rotary wing support, and maritime 
platforms that will support SOF afloat. While it is too soon to know 
precisely the impacts of these cuts, we can assume that the capacity 
available will be insufficient to support both SOF and Marine Corps 
needs, particularly in maritime and littoral environments. Reductions 
of these types of high demand, low density capabilities will likely 
force some difficult prioritizations and impact readiness and 
operations.
    General Welsh. The Air Force's fiscal year 2015 budget is still 
working through the DOD's program and budget review process and is pre-
decisional at this time. Given the magnitude of budget reductions the 
Air Force faced to meet BCA guidelines, all avenues to maximize savings 
while minimizing mission impact were considered during the development 
of our fiscal year 2015 budget. The Air Force made tough decisions to 
meet today's challenges while protecting our ability to modernize for 
tomorrow's fight. Recapitalization of aging aircraft fleets, as well as 
critical modifications and upgrades to current fleets, were some of the 
reductions we were forced to make across all commands as a result of 
sequestration.

    12. Senator Hagan. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how do you plan to manage these challenges and 
mitigate their impact on the important role SOF plays in operations 
around the world?
    General Odierno. In fiscal year 2013, the Army coordinated with 
USASOC to ensure equipment reset activities remained uninterrupted in 
spite of sequestration related funding reductions. However, if 
sequestration remains in effect, we may be forced to transition to a 
tiered readiness system to ensure deployed units and those preparing to 
deploy receive priority for personnel, training, equipment, and 
maintenance resources. Hence, USASOC's primary effort remains the 
optimization of limited resources to train and conduct combat 
operations in the future operating environment. This effort hinges on 
the collaborative efforts of SOF-Conventional Force Interdependence.
    Given the continuous deployment cycles across ARSOF to support the 
GFMAP and CAMPLAN 7500 requirements, we expect USASOC to remain high on 
our prioritization list, which reduces the immediate impacts associated 
with tiered readiness across ARSOF. However, as the Army continues to 
refine equipping and sustaining priorities to support significant 
budget and personnel reductions, the Army and USASOC will continue to 
coordinate to ensure ARSOF requirements remain visible within the 
context of ARFORGEN's (Army Force Generation model) resourcing 
priorities. In addition, USASOC will continue to monitor and track base 
operations support and Service Provided Capabilities. Both base 
operations support and Service Provided Capabilities could impact 
ARSOF's readiness to deploy in crisis response, in support of 
persistent engagements, and other named operations around the globe.
    Admiral Greenert. To overcome the challenges and mitigate the 
impacts of sequestration, we are looking at alternative platforms to 
support SOF, such as LCS and MLP (AFSB). We are also enhancing our 
interoperability by integrating SOF into the Amphibious Readiness 
Group/Marine Expeditionary Unit (ARG/MEU) to improve our ability to 
support Theater SOCOM and forward deployed SOF forces.
    General Amos. The Marine Corps and SOCOM share a similar commitment 
to providing agile, expeditionary, and above all, responsive forces to 
meet our Nation's global demands. The Marine Corps provides a 
complimentary capability that can be leveraged to support the Global 
SOF Network. The SOF Liaison Element is the initial mechanism to 
enhance this relationship: a team of six SOF operators, representing 
each of the SOF components, will embark with the Marine Expeditionary 
Units to increase collaboration between the TSOCs and Marine forces 
afloat. Admiral McRaven and I believe that through this relatively 
small investment, we can expand the ways in which the Marine Corps can 
support SOF operations in the maritime and littoral environments. Even 
faced with our current fiscal challenges, enhanced interoperability and 
integration between the Marine Corps and SOCOM remains one of my top 
priorities.
    Although MARSOC will be capped at 2,742 marines due to sequester-
driven reductions, they are looking toward the post-Afghanistan 
environment by regionally aligning each of the Marine Special 
Operations Battalions (MSOB). Forward postured, fully enabled Marine 
Special Operations Companies (MSOC) will now support the Global SOF 
Network in SOCPAC, SOCAFRICA, and SOCCENT. Targeted language programs, 
enhanced logistical networks, and specialized training will enable 
MARSOC forces to build and maintain enduring relationships with our 
critical partners. Seasoned, mature MARSOC marines will bring their 
knowledge and experience of working in expeditionary and often austere 
environments to the benefit of both SOCOM and the Marine Corps.
    General Welsh. The Air Force is striving to mitigate the impact on 
SOF by prioritizing near-term readiness and weapons system 
recapitalization, paired with a focus on full-spectrum training and 
long-term investments. Near-term readiness will ensure our unique 
enabling capabilities are sustained for our SOF supporting the 
combatant commands. Full-spectrum training will be supported through 
the continuation of special operations-focused exercises and an 
increasing emphasis on live-virtual-constructive training. Special 
operations long-term investments favor recapitalization over 
modernization, primarily through the full recapitalization of the MC-
130 and AC-130 fleets.
                                 ______
                                 
             Questions Submitted by Senator Joe Manchin III
            active component and reserve component force mix
    13. Senator Manchin. General Odierno and General Welsh, for 6 years 
as Governor, I sent troops to war at our Nation's request and responded 
to numerous natural disasters. Each time the citizen soldiers performed 
flawlessly and never failed to respond to or accomplish a mission. 
Knowing that the Reserve component is dual-missioned, costs less, and 
has a proven track record, why are we not considering realignment that 
adjusts the Active component/Reserve component mix to maintain 
capability at a reduced cost?
    General Odierno. The BCA imposes significant reductions on the size 
of the Army and creates substantial challenges in meeting the Defense 
Strategy. We may be forced to reduce the total Army an additional 
100,000 soldiers if sequestration continues. The Army is conducting 
deliberate analyses now to determine which capabilities should be 
reduced or adjusted to meet strategic requirements. The Army will 
deliberately and thoroughly review all options that impact Active 
component/Reserve component mix as it downsizes and reorganizes to meet 
the Nation's needs in an era of reduced resources.
    The Army National Guard and Army Reserve play significant roles as 
part of our Total Force. It is imperative not to lose the gains made in 
Reserve component readiness, equipment modernization, and experience by 
continuing to employ Reserve component forces to meet combatant 
commander operational requirements in a fashion that is predictable and 
sustainable, within the resources afforded to us. Prudent use of those 
resources allows the Army to minimize challenges to interoperability 
between the Reserve and Active component during future crises, while 
providing valuable leadership development and experience to members of 
the Reserve component.
    However, we also must be realistic. Reserve component soldiers cost 
less when not on active duty. When activated for mobilization or 
operational support, Reserve component units cost the same as their 
Active component counterparts. Additionally, they can require more 
extensive training periods to meet readiness standards based on the 
mission, which costs both dollars and time.
    The Army National Guard dual-mission requirement must also be 
considered. We should not commit large numbers of title 32 priority 
forces from a state or region, especially during specific times of the 
year, unless the mission is one with significant national defense 
urgency. In the past, we have been able to synchronize deployments 
across the Active component and Reserve component to avoid impacts to 
state missions. Finally, given the drawdown in Afghanistan, Reserve 
component forces will have fewer opportunities for employment, which 
will challenge us all to maintain their current state of training and 
readiness over time.
    General Welsh. The Air Force's fiscal year 2015 budget is working 
through the DOD's program and budget review process and is 
predecisional at this time. Given the magnitude of budget reductions 
the Air Force faced to meet BCA guidelines, all avenues to maximize 
savings while minimizing mission impact were considered during the 
development of our fiscal year 2015 budget, to include the cost-saving 
realignments that you suggest. Finding the appropriate balance, which 
varies by mission, requires extensive analysis to ensure we maintain 
operational capability and responsiveness. We are currently evaluating 
all mission areas to see where we can maintain critical Air Force-
provided capabilities at a reduced cost--and in some cases at reduced 
capacities--by realigning missions into the Reserve component. In 
addition to cost considerations, however, sustainable total military 
force mission contributions by each component are analytically 
evaluated with respect to four other major factors: (1) total strategy-
based warfighting and training demands; (2) required manpower; (3) 
projected equipment inventory; and (4) deployment policy.

    14. Senator Manchin. General Odierno, Time magazine recently ran an 
article titled, ``The War Within the U.S. Army.'' In the article, 
Lawrence Korb, the Pentagon personnel chief during the Reagan 
administration, said the following: ``We should be moving toward a 
small, more agile Active-Duty Army and save the bigger mission for the 
Reserves.'' What are your thoughts on this?
    General Odierno. An undersized Army would lack the capacity to meet 
the land force requirements of combatant commanders. Continuing 2011 
BCA funding levels will adversely affect the Army's ability to rapidly 
provide fully trained and equipped units to combatant commanders over 
the next several years. The Army must maintain an optimal mix of Active 
and Reserve component forces in order to achieve the correct force size 
at the lowest cost. I do not envision significant migration of force 
structure between the Active and Reserve components. Active-Duty Forces 
provide a rotational, worldwide presence to ensure stability and deter 
conflicts, and to rapidly surge capabilities to respond to unexpected 
contingencies. Reserve component forces are best suited for 
predictable, infrequent deployments and for providing operational and 
strategic depth. Due to sequestration impacts to the Army's budget, the 
Army may be forced to implement drastic reductions to end strength, 
unit inventory, and overall readiness, with detrimental impacts to the 
Army's capacity and capability to respond across the range of military 
operations.

                    military child abuse and neglect
    15. Senator Manchin. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, Senator McCain and I recently sent a letter to 
Secretary Hagel about child abuse and neglect in the military, which is 
a growing problem. I received a response, but it is just the start of a 
solution. Even with declining budgets, we need to do right by our kids. 
What are your thoughts on forming a section within the Defense Centers 
of Excellence (DCoE) for Psychological Health and Traumatic Brain 
Injury (PH/TBI) with the issues of child abuse and neglect?
    General Odierno. A Center of Excellence for child abuse and neglect 
already exists within the Army's Family Advocacy Program (FAP). Along 
with the FAP managers, the resources provided by the congressional set-
aside for FAP have been judiciously used to provide adequate staff, 
policy, training, and research into the issues of child abuse and 
domestic violence. The Army, along with our Sister Services, leads the 
Nation in developing risk assessment tools to prevent domestic abuse 
and for the standardizing the definitions for family maltreatment.
    Admiral Greenert. The FAP initiates an effective coordinated 
community response with medical and civilian resources in addressing 
incidents of child abuse and neglect. Children requiring medical 
treatment resulting from psychological and/or traumatic brain injury 
are immediately referred to the appropriate Military Treatment Facility 
(MTF) or civilian hospital for assessment and treatment services. 
Family member children and adolescent victims of abuse or neglect have 
access to the full range of assessment and treatment services for 
psychological problems and traumatic brain injuries regardless of their 
geographic location. Navy MTFs, in conjunction with their network 
partners, provide subspecialty PH/TBI services spanning the entire 
continuum of care, to include outpatient, intensive outpatient, 
inpatient, and rehabilitation services specific to pediatrics. While 
the mission of DCoE for PH/TBI is to provide expertise on DOD policies 
related to PH/TBI care, it is the role of the Services' medical 
departments to actually deliver this care.
    General Amos. Child abuse and neglect within the military is an 
issue that requires a uniformed system of prevention, education, 
research, and service delivery across various programs and at every 
level. Unfortunately, risk factors that make child abuse more likely 
are often present in military families. These factors may include 
increased numbers of young families without social or family support; 
frequent deployment or absences from the home by the military member; 
financial stressors; relationship conflict; and other stressors related 
to deployment. Combating child abuse within the military population 
requires a concentrated, specialized response.
    The Marine Corps continues to work at combating child abuse through 
our various programs including the FAP. FAP is responsible for the 
prevention, intervention, and treatment of family violence. We continue 
to see a decrease in number of child care incidents that meet criteria 
with our programs. The Marine Corps is always supportive of additional 
research support whether it is with other Federal agencies or private/
public partnerships. The Marine Corps has an existing working 
relationship with the DCoE for PH/TBI that has been helpful in our 
research approach at preventing, intervening and treating family 
violence.
    General Welsh. While we are pleased with the intent to ensure the 
issue of child abuse and neglect is addressed even in lean budgetary 
times, the Air Force believes that broadening the scope of the DCoE for 
PH/TBI is not the answer. The issue is really not related to the need 
for more dollars spent on centralized policy and strategy, as would be 
the case in using DCoE. A better use of scarce resources would be to 
expand funding for prevention services within the Air Force's 
successful New Parent Support Program (NPSP), which would allow for 
more robust prevention efforts for high risk families. Expansion of 
NPSP would result in increased outreach and screening of the target 
population as well as increased engagement in services. Providing 
services early in the family life-cycle may prevent maltreatment for 
the most vulnerable children (birth to 3-years-old), as well as setting 
the foundation for positive parenting practices in the future.

    16. Senator Manchin. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, could you comment on child abuse in the 
military, and commit to working on that issue with me?
    General Odierno. Reduction and elimination of child abuse remains a 
top Army priority. We look forward to working with you and other 
Members of Congress to continue addressing all domestic violence issues 
within the ranks of the Army.
    The Army's FAP is dedicated to the prevention, education, 
intervention, reporting, investigation, and treatment of spouse and 
child abuse. The program provides a variety of counseling, relationship 
building, and other services to soldiers and families. Each 
installation FAP manager is responsible for directing the activities of 
the program.
    Preventing domestic violence is a command priority and leader 
responsibility. All commanders receive FAP training. The Army also 
provides soldiers annual FAP awareness training. A basic course is 
conducted for newly assigned personnel, and a series of advanced 
courses are available for clinical health care providers. In addition, 
two specialized courses for military police and criminal investigators 
intervening in Family violence are taught at the U.S. Army Military 
Police School.
    Admiral Greenert. I remain committed to working with you on the 
prevention of military child abuse. Our data indicates a decrease in 
substantiated child abuse incidents between fiscal years 2004 and 2006, 
and the number of incidents remained at steady state through fiscal 
year 2012.
    An increase in substantiated cases this past year is a cause for 
concern; we are monitoring this closely. Our New Parent Support Home 
Visitor Program provides face-to-face contacts to new parents through 
information and referrals, individualized consultation, and educational 
services. Nearly 99 percent of parents who participated in the program 
did not have an incident of abusive parenting within 12 months of 
receiving services.
    General Amos. Multiple efforts are being made to combat the 
occurrence of child abuse in the Marine Corps, through preventative 
efforts, awareness campaigns, parent education, and treatment. The 
Marine Corps continues to work at combating child abuse through our 
various programs including the FAP. Marine Corps FAP's role in 
prevention is to establish clear standards for personal behavior, 
provide early detection of potential problems, and intervene before 
abuse occurs. FAP is responsible for the prevention, education, 
intervention, and treatment of family violence; reviews of alleged 
abuse; clinical treatment for families involved in violence; home 
visits for new parent support efforts; counseling; and 24-hours, 7-
days-a-week, victim advocacy. The FAP investigates allegations of child 
abuse, and makes recommendations for treatment and services for 
affected children and families. Services include clinical treatment, 
New Parent Support Program services, and various other military, and 
community family services.
    Marine Corps Community Services (MCCS), FAP staff, military police, 
legal offices, chaplains, and our civilian counterparts have joined 
forces to reduce child abuse on our bases, stations, and the 
surrounding areas. FAP equips its staff with the right tools for 
success, providing ongoing training and support for adopting new 
practices.
    General Welsh. In the past 3 fiscal years, child abuse has 
increased only slightly in the Air Force. This parallels similar rate 
increases seen across DOD. The increase in rates has been identified as 
primarily driven by child neglect incidents. The rates for emotional, 
physical, and sexual abuse incidents have remained very stable during 
this time period.
    Yes, the Air Force is committed to continuing to address the issue 
of child abuse, and we appreciate Congress' support. The Air Force FAP 
has a number of prevention and treatment programs aimed at reducing 
child abuse and neglect. FAP also has a robust research component and 
partners with highly regarded family violence researchers to continue 
development of effective prevention and treatment programs, as well as 
monitoring clinical and program outcomes.

                    military headquarters staff cuts
    17. Senator Manchin. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, I applauded Secretary Hagel when he ordered a 
20 percent cut to the staff of military headquarters. However, my 
concern is that no one really knows--with any precision--how many 
contractors there are. Therefore, the required cuts might tend to focus 
on uniformed personnel and government civilians, but not contractors. 
Contractors are the first place we should target for cuts. How are you 
implementing the staff reductions to ensure that contractors are part 
of the original baseline and also included in the cuts?
    General Odierno. The Army's first priority is to reduce service 
contracts as much as feasible. We are committed to analyzing all labor 
sources for potential reductions and to preventing the burden of budget 
cuts from falling disproportionately onto our civilian or military 
personnel. This is why the Secretary and I have directed that funding 
for contracted capabilities at all commands will be reduced at levels 
equal to or greater than those for military and civilian reductions.
    The Army tracks Full-Time Equivalents (FTE) not the number of 
individual contractor employees, as service contracts involve the 
performance of a function, rather than the hiring of an individual 
person. The Army has approximately 28,700 contractor FTEs supporting 
Army Management Headquarters Activities at the two-star level or 
higher. These numbers were submitted to Congress in July 2013 as part 
of the fiscal year 2012 Inventory of Contract Services, and reflect the 
items in the Contractor Manpower Reporting Application (CMRA) database 
that support requiring activities with an Army management headquarters 
Unit Identification Code at the two-star level and higher.
    As part of this effort, the Army intends to use the CMRA data to 
measure our headquarters reductions and ensure a balanced approach. 
CMRA data is increasingly being leveraged to build budgets and manage 
the Total Force, in fulfillment of both statutory requirements and 
commitments made to Congress in reports and testimony.
    Admiral Greenert. The 1 July Office of the Secretary of Defense 
(OSD) fiscal guidance directed the Services to reduce spending on 
headquarters 20 percent by fiscal year 2019, relative to the amount 
currently planned for fiscal year 2018. Although the 20 percent cut 
applies to budget dollars, the Secretary of Defense stated his intent 
that we should also strive for a goal of 20 percent reductions in 
government civilians and military personnel.
    In executing this direction, the Navy plans to balance the cuts 
appropriately among contractor, military, and civilian employees within 
individual Navy headquarters organizations. However, not all 
headquarters will be reduced by the same percentage. To support the 
Navy's strategy of rebalancing to the Pacific and continuing to execute 
ongoing Overseas Contingency Operations (OCO), the Navy applied a 
lesser level of reduction to fleet operational headquarters' staffs and 
shifted more burden to non-deployed/non-operational staffs. With fleet 
operational staffs having the preponderance of military manpower among 
headquarters organizations, the military received an overall smaller 
reduction percentage than civilian personnel and the contractor 
workforce. The Navy intends to cut the contractor workforce by at least 
the same percentage as the civilian workforce.
    General Amos. The Marine Corps plans to achieve the 20 percent 
reduction to headquarters by reducing marines in specified headquarters 
as well as eliminating or combining specific headquarters. In addition, 
we plan to reduce funding on associated civilian billets at specific 
headquarters activities, as well as service contract spending at 
headquarters activities which will ultimately result in fewer 
contractors working in our headquarters. Many military billets will be 
transferred to operational units while civilian billets and contractors 
functions/activities will be eliminated. We further anticipate the 
total cost of contracts that support our headquarters will be reduced.
    General Welsh. When we assessed the military headquarters 
workforce, the Air Force explicitly included contractors as part of the 
labor and cost baseline. As we conduct our redesign and workforce 
adjustments, we continue to look at reducing contractors as well as the 
military and government civilian force. The Air Force recognizes the 
need to employ government personnel in certain positions and will 
continue to meet that need.

          eliminating redundant or ineffective weapons systems
    18. Senator Manchin. General Odierno and General Welsh, I have been 
a big supporter of the Bowles-Simpson approach to getting our finances 
in order. It is the only truly bipartisan approach out there. The 
Bowles-Simpson plan outlined some cost-savings measures for defense 
that have not been acted upon. For example, the Bowles-Simpson plan 
recommended that Congress consider developing a commission for trimming 
redundant or ineffective weapons from the DOD inventory. This process 
could help give added flexibility to the Services and let them better 
prioritize weapons systems. What is your opinion on this?
    General Odierno. We do not believe that such a commission is 
necessary. The assessment of whether a system is redundant or 
ineffective currently occurs as part of a process through which the 
military Services, the Joint Staff, and the OSD review requirements, 
programs, and budgets. The Joint Requirements Oversight Council (JROC) 
process assesses whether a program is redundant to those of other 
Services and, along with the acquisition review of programs, determines 
if weapons provide the needed capability or if the requirement can be 
met by other systems. While the system is not perfect, it provides the 
Services flexibility to pursue separate solutions when a common 
solution may be too costly or too complex.
    The Army, like the other Services, also reviews its weapon systems 
internally to identify equipment within the Service that is no longer 
needed, does not meet existing requirements, or is redundant.
    General Welsh. Generally speaking, the Air Force supports 
initiatives aimed at cutting redundant and less capable weapon systems, 
especially in this fiscally constrained environment. In some cases, 
redundancy is an operational requirement, but we cannot afford to fund 
ineffective weapon systems. During the development of our fiscal year 
2015 budget, under the requirements and fiscal guidance of the BCA, we 
were compelled to cut capacity and lower priority platforms, and 
programs that are disproportionately expensive relative to the 
capabilities they provide.

    19. Senator Manchin. General Odierno and General Welsh, please 
provide a list of equipment and/or programs that you recommend 
terminating so that funds can be transferred to higher-priority needs.
    General Odierno. The Army cannot recommend any individual programs 
for termination at this time. All current weapon systems and 
modernization programs serve to fill warfighter-identified and JROC 
approved capability gaps.
    General Welsh. The Air Force's budget recommendations for fiscal 
year 2015 are currently being deliberated in the DOD's Program and 
Budget Review and are pre-decisional at this time. However, in order to 
reduce the size of the Air Force to comply with the magnitude of the 
spending caps established by the BCA and the fiscal guidance we 
received to formulate our budget--while still maintaining a relevant 
force to meet current and future challenges--we employed a guiding 
principle of taking vertical cuts from our programs. That is, as 
opposed to weakening many programs with fair share cuts, we opted to 
terminate complete programs, to include all of the associated support 
elements of the terminated program(s). This includes force structure in 
areas such as single purpose aircraft, lower-end ISR assets, and 
programs that are disproportionately expensive relative to the 
capabilities they provide.

                          all-volunteer force
    20. Senator Manchin. General Odierno and General Amos, the last 
drafted soldier retired in 2011. It is hard to believe that the modern 
All-Volunteer Force (AVF) is only approximately 30-years-old. I grew up 
in an era where the draft was a fact of life. I'm concerned that the 
AVF has isolated those that serve from the rest of the country. There 
are large financial costs associated with maintaining an AVF. I read 
that the Army spends about $20,000 per recruit in advertising costs 
alone. In your judgment, should we be rethinking at least some aspects 
and unintended consequences of the AVF?
    General Odierno. The Army continues to support the AVF as the right 
path to man the Force. The AVF has successfully manned the Army for 
over 40 years, including most recently 12 years of war. The Army, fully 
manned by volunteers, has accomplished all the missions the Nation has 
called upon it to perform. This AVF is of a much higher quality and 
professionalism than what was ever seen during conscription.
    The regular Army cost per accession for fiscal year 2012 was 
$22,386 including recruiting, recruiter support, bonuses, and 
advertising. In past studies, analysts concluded that the AVF would be 
cheaper than a conscripted force, given a constant level of force 
effectiveness. In a 1988 study by the GAO, a volunteer force was 
determined to be less expensive than a draft by more than $2.5 billion 
(over $4 billion today), when taking into account reaching equivalent 
force effectiveness over 24 months.
    That being said, recruiting is expected to be more challenging in 
fiscal year 2014 in part due to the declining eligible recruiting pool. 
The Army and the Nation still face challenges such as rising obesity 
rates and decreasing high school graduation rates as we recruit the 
AVF.
    In the recent past a favorable economic environment allowed us to 
reduce enlistment incentive amounts and the number of Army occupations 
offered bonuses or education incentives. However, we must retain the 
flexibility to continue necessary advertising and to apply incentives 
as necessary to recruit and retain soldiers with critical or 
specialized skills. The continued authorities and funding of these 
programs by Congress remain critical to the sustainment of the Army.
    Last, we should always be concerned about any isolation of our 
soldiers from the rest of society, as well as a society that is 
disconnected from its soldiers. In this respect, it is imperative that 
the Army be reflective of all 50 States and across all demographic 
groups--an Army that represents all of America. We are also mindful 
that it is important to tell the Army story to the American people, 
using all appropriate venues available to us. In addition, we know that 
training and education are critical to a professional force, but that 
broadening experiences away from the Army such as training with 
industry, fellowships, and civilian education may be equally important. 
In the end, I share your interest in ensuring the Army stay 
``connected'' to those whom we serve.
    General Amos. I could not be more proud of today's AVF, and it has 
done superbly for the past 4 decades. The draft has a place, but should 
be reserved for use only when it has been determined that the AVF is 
inadequate to meet the Nation's needs during a national emergency. That 
is where the draft is more cost-effective.
    On the surface it may appear reinstituting some form of the draft 
is an attractive savings over the AVF. However, it is important to view 
what has been achieved by investing in the AVF. For example, within the 
Marine Corps the quality, experience, and professionalism of your 
marines are at the highest levels I've seen in my 43 years. These young 
ethical warriors are the most well-trained and ready to meet the 
demands of a complex strategic environment. More importantly, we are a 
force that is made up of men and women who have made the conscious 
decision to volunteer to serve their country. That is a significant 
difference from a force that is built through the draft.
    It may be true that more citizens are unfamiliar with military 
service due to the lack of a draft. To counter that reality, it is 
essential that awareness and outreach efforts are consistently 
resourced at levels that will maintain connections with the citizens we 
serve.

                                 syria
    21. Senator Manchin. Admiral Greenert, during the recent crisis in 
Syria, we positioned additional destroyers and aircraft carriers in the 
Mediterranean to be able to quickly react as the crisis evolved. I was 
not supportive of using military force in Syria, but I am interested in 
understanding the financial impact of this crisis during a time of 
sequestration. Do you have a general sense of how much it cost to 
deploy these assets to the region?
    Admiral Greenert. Navy assets in the operating area that were 
scheduled to return to homeport were instead extended in the region to 
support this mission. Total fiscal year 2013 costs were $42 million. To 
fund the forward deployed assets in fiscal year 2013, Navy canceled the 
port visits that these assets were scheduled to complete before 
returning to homeport.
    Fiscal year 2014 costs to support the mission total $45 million 
through the end of October 2013. Navy anticipates fiscal year 2014 
costs to total approximately $70 million to $80 million by completion 
of the mission.

    22. Senator Manchin. Admiral Greenert, what trades-offs did you 
have to make in order to support the President's Syria policy?
    Admiral Greenert. Navy assets in the operating area that were 
scheduled to return to homeport were instead extended in the region to 
support this mission. Total fiscal year 2013 costs were $42 million. To 
fund the forward deployed assets in fiscal year 2013, Navy canceled the 
port visits that these assets were scheduled to complete before 
returning to homeport.
    Fiscal year 2014 costs to support the mission total $45 million 
through the end of October 2013. Navy anticipates fiscal year 2014 
costs to total approximately $70 million to $80 million by completion 
of the mission.
    Some of the specific operational trade-offs included:

         The USS Nimitz's extension to support Syria operations 
        resulted in the loss of an opportunity to conduct dual-Carrier 
        Strike Group (CSG) operations in the South China Sea.
         The Navy extended six ship deployments in length, by 
        an average of 40 days per ship. This extension pushed the 
        deployment length to over 10 months for two ships (USS 
        Stockdale and USS Shoup) and reduced dwell (time in homeport 
        between deployments) for each of the affected ships.
         Due to schedule limitations, the Nimitz CSG escort 
        ships returned to homeport ahead of Nimitz. This required U.S. 
        Pacific Fleet to sortie an unplanned escort ship. USS Spruance 
        lost an opportunity to conduct sustainment training with the 
        George Washington CSG as a result of this escort duty.
         Extended deployments resulted in a delay to the start 
        of critical maintenance periods for five ships (USS Nimitz, USS 
        Princeton, USS Barry, USS Gravely, and USS Monterey). The 
        extension resulted in a slow start due to the loss of time to 
        conduct pre-shipyard preparations and assessments.

 sequestration effects on future procurement and modernization programs
    23. Senator Manchin. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, up to this point, the Services have not had to 
make major changes to their procurement and modernization programs. 
What weapon systems or modernization programs are at risk, if full 
sequestration continues into 2014 and beyond?
    General Odierno. The Army must develop and field versatile and 
tailorable equipment that is affordable, sustainable, cost-effective, 
and enables our soldiers to fight and win across the range of conflict.
    Every program and every portfolio of weapon systems in the Army 
would be directly affected if the cuts from full sequestration occur. 
That said, the Army remains committed to providing the warfighter with 
a superior tactical advantage on any battlefield. Last year, the Army 
was able to mitigate many of the impacts that would otherwise have come 
to fruition against a number of programs by offsetting sequestration 
reductions with prior year unobligated funds.
    As prior year funds become increasingly scarce, the reality is that 
all weapon system programs would be affected in some way by 
sequestration reductions in 2014. We will first look to improve 
existing systems like the Paladin Integrated Management Program, our 
Abrams tank fleet to include procuring sufficient M1A2SEP tanks to 
complete the two-variant fleet strategy, the Bradley Infantry Fighting 
Vehicle, and our soldier systems to include the conversion of M4 
carbines to M4A1 carbines.
    We will invest in developmental modernization programs in select 
cases. For example, the Army will continue to pursue development and 
production of the Joint Light Tactical Vehicle (JLTV), which is needed 
to fill the capability gap between the High Mobility Multipurpose 
Wheeled Vehicle (HMMWV) and the Mine Resistant Ambush Protected (MRAP) 
family of vehicles. Additionally, the Armored Multi-Purpose Vehicle 
(AMPV) is intended to replace the M113 family of vehicles, the primary 
vehicle for many of the Army's important capabilities, such as mortars, 
medical evacuation, and command and control vehicles.
    If full sequestration continues into 2014 and beyond, the Army's 
ability to pursue modernization efforts to replace several aging 
platforms, such as the Armed Aerial Scout and the Ground Combat Vehicle 
for example, would be placed at risk.
    Admiral Greenert. The fiscal year 2013 sequestration reductions 
compelled us to reduce our afloat and ashore operations and created a 
significant shore maintenance backlog. The effects were barely 
manageable because we received authorization to reprogram funds into 
appropriate maintenance accounts, and we were able to use prior-year 
investment balances to mitigate reductions to investment programs.
    If sequestration continues into fiscal year 2014, we will not be 
able to use prior-year funds to mitigate shortfalls in investment 
accounts as we did in fiscal year 2013. Without congressional action or 
mitigating circumstances, the reductions imposed by sequestration and 
the limitations of a Continuing Resolution will compel us to:

         Cancel planned fiscal year 2014 procurement of an SSN, 
        an LCS and an AFSB; also, delay an SSN planned for fiscal year 
        2015 procurement. Each of these would further worsen the 
        reduction in fleet size that the BCA would compel us to make 
        over the long term.
         Delay the planned start of construction on the first 
        SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
        cause us to be unable to meet U.S. Strategic Command presence 
        requirements when the Ohio-class SSBN retires.
         Cancel procurement of 11 tactical aircraft (4 EA-18G 
        Growler, 1 F-35C Lightning II, 1 E-2D Advanced Hawkeye, 2 P-8A 
        Poseidon, 3 MH-60 Seahawk) and about 400 weapons, exacerbating 
        future BCA-driven reductions in our capabilities to project 
        power despite anti-access/area denial (A2/AD) threats.
         Delay delivery of USS Gerald R. Ford (CVN 78) by 2 
        years, extending the period of 10 CVN in service, and lowering 
        surge capacity.
         Delay the mid-life overhaul of USS George Washington 
        (CVN 73) scheduled for fiscal year 2016, disrupting today's 
        ``heel-to-toe'' CVN overhaul schedule and reducing near-term 
        CVN capacity.
         Cancel or defer planning fiscal year 2014 fleet 
        maintenance, including 34 of 55 surface ship maintenance 
        periods totaling about $950 million--all in private shipyards--
        and 191 of about 700 aircraft depot maintenance actions. This 
        missed maintenance will inevitably take time off the expected 
        service life of our ships and aircraft, which in turn will make 
        it harder to sustain even the smaller fleet we will have if the 
        revised discretionary caps remain in place for the long term.
         We will be compelled to keep in place our freeze on 
        hiring for most civilian positions.
         Ashore we will continue to conduct only safety-
        essential renovation and modernization of facilities, further 
        increasing the large backlog in that area.

    General Amos. If sequestration were fully implemented, the Marine 
Corps would have to reassess every program. Sequestration will cause 
interruptions across program acquisitions that increase total program 
costs. As schedules slip and delays are created due to these fiscally 
induced interruptions, we will see longer contracts, losses of 
efficiencies, negative impacts on development and production schedules, 
restructuring of programs, and Nunn-McCurdy breaches. In procurement, 
existing contracts will have to be renegotiated which will prevent the 
Marine Corps from receiving Economic Order Quantity pricing.
    The Marine Corps will have to sustain legacy systems longer than 
planned which will drive up current operation and support costs. We 
will have to shift our attention to developing and replacing 
obsolescent parts for legacy systems, which will lead the workforce to 
focus on reengineering old and inefficient technologies (i.e. 
sustaining 5 legacy radar systems will cost more than employing one new 
Ground/Air Task Oriented Radar (G/ATOR)). Finally, technologies 
designed to improve efficiencies (e.g. fuel, lightweight armor, 
alternative energies) will have to be postponed, preventing the Marine 
Corps from realizing planned, future savings.
    General Welsh. The effects of sequestration disrupt major defense 
acquisition programs throughout the development and fielding phases. 
The single largest impact of sequestration and current budgetary 
unknowns is the very serious impact they have on the meticulous cost 
and schedule planning mandated in numerous public laws and DOD 
acquisition policy. The increasing budgetary inefficiency makes it very 
difficult, if not impossible, for our program managers to adequately do 
their jobs.
    Sequestration cuts deep into Air Force investment accounts, which 
under this law must be applied equally at the program, project, and 
activity level; consequently, it impacts every one of the Air Force's 
acquisition programs. For example, a potential fiscal year 2014 
sequestration impact for the F-35A low rate initial production, 
relative to the request, could be the loss of 4 to 5 aircraft from the 
requested amount of 19. This potential reduction will increase unit 
costs resulting in production funding shortfalls.
    The cuts brought on by sequestration-level funding will force the 
Air Force to make profound reductions to readiness and major defense 
acquisition programs funded out of investment accounts to achieve the 
targeted decreased amounts in the first few years of the FYDP. When 
forced to make tough decisions, we will favor new capabilities over 
upgrades to our legacy forces; our top three acquisition priorities 
remain the KC-46, the F-35, and the Long-Range Strike Bomber (LRS-B).
                                 ______
                                 
              Questions Submitted by Senator Joe Donnelly
                           weather satellites
    24. Senator Donnelly. General Welsh, according to a study by the 
Aerospace Industries Association (AIA), DOD weather satellites are 
critical for use with the Intelligence Community to position spy 
satellites and airborne imaging assets. The AIA also cites that these 
satellites provide critical environmental intelligence to the 
warfighter and the SOF community--ensuring our forces are not 
unnecessarily harmed by rough weather we could have anticipated. There 
have also been reports in the press that if DOD fails to invest in new 
weather satellite capabilities, it could find itself using Chinese 
weather satellite data should a problem occur with National Oceanic and 
Atmospheric Administration (NOAA) weather systems. Weather information 
is critical to mission operations, yet DOD is considering not flying 
its own weather satellites and relying on NOAA and international assets 
which would likely include China because of budget concerns. At the 
same time, the Air Force is paying $70 million a year in storage costs 
for a weather satellite unlikely to fly--shouldn't we take that money 
and go buy a new weather satellite? I am told the cost would be about 
$200 million, which is less than 3 years of storage.
    General Welsh. The Air Force's Defense Meteorological Satellite 
Program (DMSP) will provide seamless operational coverage through at 
least 2021. DMSP is the DOD's current polar-orbiting weather satellite 
system providing the U.S. military and Intelligence Community assured 
access to global environmental information. Its imagery and data is 
used for battlespace awareness, resource protection, and mission 
planning and execution at high latitudes and in data denied and data 
sparse regions. There are two DMSP satellites (F-19 and F-20) that 
remain available for launch, and both satellites completed Service Life 
Extension Program modifications in 2013. Currently, DMSP F-19 is being 
prepared to launch in April 2014; with an expected 7-year service life, 
F-19 will provide operational coverage to 2021.
    DOD currently relies on a combination of DOD, civil, and 
international partner weather satellites for worldwide environmental 
monitoring operations. The combination of these systems provide global 
coverage, continuous data and awareness of environmental conditions and 
are primary sources of data for weather forecast models and 
environmental applications operated by the Air Force, Army, and Navy. 
According to the 2010 National Space Policy, ``The Secretary of 
Commerce, through the NOAA Administrator, the Secretary of Defense, 
through the Secretary of the Air Force, and the NASA Administrator 
shall work together and with their international partners to ensure 
uninterrupted, operational polar-orbiting environmental satellite 
observations.'' Irrespective of future uncertainties in U.S. civil and 
international weather satellite systems' availability, there is no plan 
for the DOD Space-Based Environmental Monitoring baseline to be reliant 
upon Chinese weather data.
    Regarding reference to a new weather satellite, the Air Force 
recently completed an Analysis of Alternatives (AoA) that assessed the 
need for a DOD weather satellite solution within the context of 12 
space-based environmental monitoring collection gaps endorsed by the 
JROC. The Air Force is reviewing the final results of the AoA before 
releasing the results for the JROC review. The results of the JROC 
review will contribute to defining a DOD materiel solution to succeed 
DMSP and the collection gaps such a follow-on system may address.

    25. Senator Donnelly. Admiral Greenert, some of the ideas proposed 
by industry to maintain DOD weather imaging capabilities include 
leveraging innovative partnerships with the Canadians that will bolster 
coverage in the Arctic. This concept was recently touted by the 
Assistant Secretary of Defense, Ms. Madelyn R. Creedon. What kinds of 
concerns do you have within the Arctic region as the ice continues to 
melt and as the Russians and Chinese step up their presence there?
    Admiral Greenert. My greatest concern is that we must continue 
close cooperation with the Nations who share our interest in the 
region. It is unlikely that any one nation will be capable of 
addressing all the information needs of the future Arctic environment. 
Weather imaging for safety and a better understanding of arctic ice 
processes are perfect examples of areas where we need to communicate 
mutual concerns and cooperate toward shared investments, data, and 
knowledge.

    26. Senator Donnelly. Admiral Greenert, what are your needs when it 
comes to weather data and observations within the Arctic?
    Admiral Greenert. We will need enhanced sensing capabilities in the 
following areas:

         Ocean properties
         Atmospheric properties
         Sea ice extent
         Iceberg analysis and enhanced information about 
        iceberg lifecycles
         Seasonal ice zone reconnaissance
         Ice and snow thickness
         Ice/sea/air interaction

    The current Navy capability is sufficient for the extent of our 
operations today, but as our future presence increases, so will our 
needs for increased observations.
                                 ______
                                 
             Questions Submitted by Senator Mazie K. Hirono
                        research and development
    27. Senator Hirono. Admiral Greenert, research and development 
(R&D) funding has been affected by sequestration. With the mandate to 
leave personnel accounts untouched, it has taken an even larger 
proportion of the cut than originally anticipated. R&D is very 
important in order to help advance our technologies and develop systems 
to assist in executing our defense strategy. What effects is 
sequestration having on the Navy's R&D efforts?
    Admiral Greenert. If sequestration continues, automatic percentage 
cuts are required to be applied without regard to strategy, importance, 
or priorities, resulting in adverse impact to almost every program and 
project within the Navy. Sequestration would adversely impact many of 
our R&D programs through contract cancellations, contract terminations, 
and undetermined cost increases caused by inefficient contracting and 
schedule delays. These impacts will reduce and delay our R&D efforts 
and negatively impact key procurement strategies in future years.

    28. Senator Hirono. Admiral Greenert, what are the effects on 
programs such as the Virginia Payload Module (VPM)?
    Admiral Greenert. VPM is a top Navy priority to recapitalize the 
undersea land attack capacity of our guided missile submarines that 
begin retiring in 2026. This solution is the lowest-cost approach to 
satisfy combatant commander undersea strike capability.
    The Navy is committed to fully funding the VPM design to support 
incorporation in the Virginia-class Block V beginning construction in 
fiscal year 2019. Sequestration would increase the risk of design 
maturity to support Block V incorporation. This would further 
exacerbate the reduction in undersea payload volume as our guided 
missile submarines begin retiring in 2026.

    29. Senator Hirono. Admiral Greenert, in your estimation, how 
important is this program in terms of our National Security Strategy?
    Admiral Greenert. VPM is a top Navy priority to recapitalize the 
undersea land attack capacity of our guided missile submarines that 
begin retiring in 2026. This solution is the lowest-cost approach to 
satisfy combatant commander undersea strike capability.

                           rebalance strategy
    30. Senator Hirono. Admiral Greenert and General Amos, while the 
administration plans a significant strategic commitment to the Asia-
Pacific region through its rebalance, the Services face force structure 
adjustments and sequester-related resource constraints. What are the 
potential risks and challenges facing DOD with the new strategy and 
resource constraints resulting from sequestration?
    Admiral Greenert. I remain committed to providing support to our 
allies in the Asia-Pacific region and our fiscal year 2014 President's 
budget submission proposed increasing presence in the Asia-Pacific 
region from about 50 ships today to about 60 ships in 2020, consistent 
with the DSG's direction to rebalance to that region. We are 
considering numerous options, including forward basing more of our 
forces overseas to maximize the presence they provide. With our 
priorities focused on the Asia-Pacific region, we will have to take 
risk elsewhere.
    General Amos. The President has made clear that the rebalance to 
the Asia-Pacific region, including restationing within and off Okinawa, 
is a whole-of-government effort that is the result of our enduring U.S. 
interests in the Asia-Pacific region. Our enduring interests will not 
change however the budget constraints of sequestration may require a 
change to the pace and scope of DOD's activities in the Asia-Pacific 
region.
    We have and will continue to meet the demand for marine presence in 
the Pacific. We are concerned that continued sequestration, when 
applied in the midst of our planned redistribution of forces in the 
Pacific, will impose significant risks to our operational readiness and 
responsiveness. Sequestration will further impact our ability to 
maintain deterrence, project power, respond to crises, and contribute 
to stability, in accordance with combatant commander requirements and 
timelines. Sequestration will also result in delays in facilities and 
force posture restructuring necessary to achieve the distributed 
laydown plan, inducing additional risk for Marine Corps forces in the 
Pacific. The effects of sequestration on Strategic Mobility in the 
Pacific region highlight another area of concern. The Marine Corps' 
ability to project power, participate in Theater Security Cooperation 
events with allies and partners and respond to crises in the Pacific 
could be impacted with reduced U.S. Navy ship availability and the 
higher usage costs of other forms of intra-theater lift.

             challenges facing the defense industrial base
    31. Senator Hirono. General Welsh, our defense industrial base has 
played a major role in the national security of our country for many 
years. It has led the way on many technological advances which also 
served civilian uses as well. The industry also employs many of our 
science, technology, engineering, and mathematics (STEM) graduates who 
are in search of high-tech opportunities to challenge them. The 
professionals in this industry serve our country and play a large role 
in the economic security and national defense of this country. Needless 
to say, the industry is very important to the Nation. What are the 
challenges facing the defense industrial base under current 
sequestration cuts, and what looms in the future if it continues?
    General Welsh. The Air Force, regardless of its future size, will 
continue to rely on the national technology and industrial base to 
develop, produce, and sustain the weapon systems and equipment so that 
airmen can fly, fight, and win in the air, space, and cyber domains. As 
our force structure adjusts to the emerging fiscal realities under the 
BCA, so will the demands the Air Force places on the industrial base.
    With regard to the impacts of the BCA, the cuts imposed had the 
same type of impact on the companies that supply the Air Force with 
goods and services as the cuts had on the Air Force itself. The impacts 
were both across the board and instantaneous with associated increased 
levels of risk and uncertainty. As has been reported in the press, the 
larger companies are reducing and reorganizing to better cope with the 
emerging fiscal realities. Information concerning smaller companies is 
not as well covered by the press. However, the Air Force relies on many 
of those smaller firms for specialized products and services that 
enable our capabilities.
    As I look ahead, I am concerned about ensuring a critical mass of 
engineering and design talent to produce the next generation of unique 
military capabilities. While the Air Force leverages the capabilities 
of the global commercial industrial base where possible, there are 
distinct skills and knowledge needed to provide the technical advantage 
for your airmen to continue to be successful in the tactical 
environment.

    32. Senator Hirono. Admiral Greenert, I'm particularly interested 
in the potential effects on the manufacturing of Virginia-class 
submarines, many of which will be vital to our rebalance strategy. 
Currently, the Navy is scheduled to acquire two Virginia-class 
submarines per year. If budget restraints force the production delays 
or quantity cuts, what is the impact this would have on our ability to 
maintain and grow our high-tech manufacturing workforce and maintain 
our production capabilities?
    Admiral Greenert. Production instability and budget uncertainty 
present two major risks to the submarine industrial base and 
manufacturing workforce and could result in increased acquisition costs 
and reduced procurements. Production delays or quantity cuts due to 
budget restraints translate into reduced retention of skilled labor, 
less material purchasing power, inefficient workforce and financial 
planning, weak learning curve performance, and less willingness for 
industry to invest in facility improvements; all resulting in less 
efficient ship construction and a more expensive shipbuilding program. 
DOD and the Navy have made hard decisions in the last few budget cycles 
to maintain a stable, efficient production rate. Maintaining the 
current production rate ensures workforce and schedule alignment with 
the Ohio-class replacement ballistic missile submarine. Further budget 
restraints or reductions make maintaining this efficient production 
rate more challenging and less likely.
    The greater risk to the submarine industrial base is associated 
with budget uncertainty, particularly the disruption and inefficiency 
caused by sequestration, and delayed authorization and appropriations 
associated with CRs. To a degree, we can work with our industrial 
partners, our shipbuilders and the vendor base to mitigate the impact 
of disruptions that we can foresee. A CR beyond January 15, 2014, 
places at risk the award of two fiscal year 2014 submarines as part of 
the Block IV MYP and causes significant outyear bills and erosion of 
savings due to loss of funding for Advance Procurement and Economic 
Order Quantity material. Sequestration is causing future year cost-to-
complete bills in all shipbuilding programs, not just submarines, 
compounding the challenges of maintaining production with smaller 
budgets.

                       national security strategy
    33. Senator Hirono. General Odierno and General Welsh, you have 
made it very clear that sequestration is affecting readiness and 
modernization efforts. How is sequestration affecting our ability to 
execute our defense strategy?
    General Odierno. If Congress does not act to mitigate the 
magnitude, method, and speed of the reductions under the BCA caps, the 
Army will be forced to make significant reductions-in-force structure 
and end strength. Such reductions will not allow us to execute the 2012 
DSG, and will make it very difficult to conduct even one sustained 
major combat operation. The Army will have a degraded readiness and 
extensive modernization program shortfalls from fiscal year 2014 to 
fiscal year 2017 as we draw down and restructure the Army into a 
smaller force. We will be required to end, restructure, or delay over 
100 acquisition programs, putting at risk programs such as the Ground 
Combat Vehicle and the Armed Aerial Scout. Likewise, it will put the 
production and modernization of our other aviation programs, system 
upgrades, unmanned aerial vehicles, and our air defense command and 
control systems at risk.
    General Welsh. The abrupt and arbitrary nature of sequestration 
drives the Air Force into a ``ready force today'' versus a ``modern 
force tomorrow'' dilemma. This dilemma is dangerous and avoidable. If 
we are given the flexibility to make prudent cuts over time, we can 
achieve the savings required under current law and still maintain our 
ability to provide Global Vigilance, Global Reach, and Global Power for 
the Nation. However, sequestration robs us of that flexibility.
    With sequestration we are unable to maintain mission readiness 
levels, our training programs will be unable to meet current production 
targets, and we are creating a bow wave in critical aircraft 
maintenance. Compensation reform and infrastructure reduction are 
critical. If they are not addressed, then the cuts must come entirely 
from readiness and modernization. This will result in reduced combat 
power from a smaller, less capable, and less ready force, thereby 
increasing national security risk. As a result, if sequestration 
continues, the Air Force will not be able to support the current 
defense strategy.

    34. Senator Hirono. General Odierno and General Welsh, are we doing 
less of what we want to do or are we doing the same things but 
accepting more risk?
    General Odierno. Both. We're doing less of what we need to do to 
support the National Military Strategy (NMS)--especially in the realm 
of shaping military relationships and deterring conflict. 
Simultaneously, the Army is sustaining current operational commitments 
within the context of the reduced fiscal authorities, which is 
jeopardizing our contingency response capabilities. In the totality, 
both of these actions are increasing strategic risk.
    General Welsh. Our operational commitments have remained the same, 
but the fiscal reductions have caused us to forgo needed training and 
exercises. As our current budget constraints force a reduction in our 
readiness and modernization efforts, we are forced to accept greater 
risk as we defend our Nation's interests. As we reduce force structure, 
we are certainly not able to do as much as we have done in the past. 
When I entered the Air Force in 1976, we had 725,000 Total Force 
military airmen, including 585,000 on Active Duty. Today we have 
506,000 Total Force military airmen with only 329,000 on Active Duty. 
There is a limit to how small we can get and still fulfill the DSG 
because our supply of forces is equal to the strategic demand with 
almost no margin in capacity. We will be forced to get smaller, both in 
terms of people and aircraft. If the reduced discretionary caps 
continue, over the next 5 years we may be forced to cut approximately 
25,000 (5 percent) Total Force airmen and approximately 550 (9 percent) 
aircraft.

    35. Senator Hirono. General Odierno and General Welsh, how do you 
reconcile the strategy with the budget reductions?
    General Odierno. The Army is incapable of executing the DSG with 
the resources allocated by the BCA. Further, there are long-term 
consequences for Army readiness. We have mortgaged our future by 
removing money from our readiness account and halting critical 
training. We intended for all Active Army brigades not scheduled to 
deploy to Afghanistan to train on their critical core competencies, but 
we were forced to cancel all Combat Training Center rotations for 
nondeploying units. Canceling rotations for seven brigade combat teams 
(BCT) at either the National Training Center or the Joint Readiness 
Training Center, deprived our future leaders of critical developmental 
experiences. We will inevitably pay a price down the road because we 
simply cannot ever recover that absence of training and readiness back 
for those leaders and their soldiers.
    General Welsh. Budget reductions will not change the Air Force's 
enduring contributions to national security, or the responsibilities 
set forth by the DSG. However, these reductions will require the Air 
Force to make difficult choices and tradeoffs between being ready today 
or preparing for tomorrow's challenges driving increased risk to the 
Air Force's ability to meet current and future national security 
obligations.
                                 ______
                                 
             Questions Submitted by Senator James M. Inhofe
                                  risk
    36. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how far down the path are we on to a force 
that is so degraded and so unready that it will be immoral to use it?
    General Odierno. I have been warning for some time that unless the 
budget situation is changed significantly, we are heading for a 
hollowing of the force and critical degradation of our overall 
readiness. That said, we are taking steps to ensure we retain the 
capability to respond to threats by preserving the readiness of 
deploying units and of a force package able to respond to immediate 
contingency requirements. Absent budgetary relief, this is the only 
logical approach we can take to ensure we send first-deploying units 
into harms' way that are combat ready in terms of manning, equipping, 
and training. However, the longer we must accept risk in readiness by 
deferring training for the rest of the force, the longer it will take 
to regain acceptable level of readiness.
    My other concern is that by reducing the capacity and capability of 
the Army, the United States invites miscalculations by future 
adversaries, making military conflict more, not less, likely. Potential 
adversaries could misjudge the potential costs and consequences of 
their planned actions and behaviors against the perceived ability and 
will of the United States to protect U.S. national interests.
    I will always do everything in my power to ensure that whenever we 
send soldiers into battle, their units are properly manned, trained, 
and equipped. In the end, the national defense strategy and decisions 
to use military force cannot be out of line with the Army the Nation 
has decided it can afford.
    Admiral Greenert. We will continue to deploy only forces that are 
fully trained and ready. The reductions in O&M funding imposed by 
current law allow us to train only those forces that are next up to 
deploy and compel us to reduce training and readiness of other non-
deployed forces. This will result in only one non-deployed CSG and one 
Amphibious Readiness Group (ARG) trained and ready for contingency 
response. Our covenant with the combatant commanders is to have at 
least two CSG and two ARG deployed and another three of each in or 
around the continental United States (CONUS), ready to respond to a 
crisis.
    This reduced capacity for contingency response will occur in fiscal 
year 2014 if we are subject to sequestration and also in the long term 
if we continue to be constrained to the BCA's revised discretionary 
caps. With this reduction, our fully trained presence and surge forces 
would be sufficient to conduct only one large-scale operation, as 
defined today.
    General Amos. During this first year of sequestration, I have 
realigned funds within my authorities to maintain the near-term 
readiness of our forward deployed forces and those units preparing to 
deploy. Marines on the forward edge of our Nation's security remain my 
number one priority. The forces that currently support the Afghanistan 
mission, those engaged in countering terrorism globally, and those 
preparing to deploy forward, will receive the full support they need.
    The cascading effects of the necessary internal budget realignment 
will start to catch up to the Marine Corps no later than 2017. It will 
manifest itself in fewer Active component marines, less investment in 
training and infrastructure, and forgone modernization. If allowed to 
continue along this path slope, we will risk a force that is tiered in 
its capabilities. Forces rotated or deployed forward will leave CONUS 
best dressed, but most of those remaining back at their home base or 
station will be degraded. In aggregate, the force will likely be one 
that is less trained, equipped, and ready for war than what the 
American people have come to expect from their all-volunteer military.
    General Welsh. Air Force readiness is on a 20+ year downward trend 
and sequestration only serves to accelerate this decline. With recent 
sequestration-driven cuts, our forces may not be sufficiently equipped, 
trained, and ready, which increases survivability risk to the force and 
risk in our ability to achieve desired operational and strategic 
outcomes. The degree of risk depends on a number of factors--such as 
the threat environment and our strategic and operational objectives. 
Increased risk alters our--and our adversaries'--decision calculus, 
which can effectively limit strategic options for the President and 
combatant commanders. It is our Title 10 responsibility and sworn duty 
to provide airmen the required training, resources, and equipment so 
that they can successfully accomplish their assigned missions with an 
acceptable level of risk. However, sequestration has forced us to make 
very difficult choices in our efforts to manage this risk so that the 
Air Force can field ready forces for combatant commanders.

    37. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, given the overwhelming impact to readiness 
accounts over the next 2 years, when will we reach the point where the 
force is so degraded it will be immoral to use it?
    General Odierno. We are taking steps to ensure we retain the 
capability to respond to threats, by preserving the readiness of 
deploying units and of a force package able to respond to immediate 
contingency requirements. If sequestration level reductions continue 
into fiscal year 2014, the Army will begin a period of degraded 
readiness, leaving our BCTs unprepared to deploy. In the event of a 
crisis, we will deploy these units at significantly lower readiness 
levels.
    My other concern is that by reducing the capacity and capability of 
the Army, the United States invites miscalculations by future 
adversaries, making military conflict more likely. Potential 
adversaries could misjudge the potential costs and consequences of 
their planned actions and behaviors against the perceived ability and 
will of the United States to protect U.S. national interests.
    Our soldiers are adaptive and agile; over time they will accomplish 
their mission, but their success will come with the greater cost of 
higher casualties.
    Admiral Greenert. We will continue to deploy only forces that are 
fully trained and ready. The reductions in O&M funding imposed by 
current law allow us to train only those forces that are next up to 
deploy and compel us to reduce training and readiness of other 
nondeployed forces. This will result in only one nondeployed CSG and 
one ARG trained and ready for contingency response. Our covenant with 
the combatant commanders is to have at least two CSG and two ARG 
deployed and another three of each in or around the CONUS, ready to 
respond to a crisis.
    This reduced capacity for contingency response will occur in fiscal 
year 2014 if we are subject to sequestration and also in the long term 
if we continue to be constrained to the BCA revised discretionary caps. 
With this reduction, our fully trained presence and surge forces would 
be sufficient to conduct only one large-scale operation, as defined 
today.
    General Amos. During this first year of sequestration, I have 
realigned funds within my authorities to maintain the near-term 
readiness of our forward deployed forces and those units preparing to 
deploy. Marines on the forward edge of our Nation's security remain my 
number one priority. The forces that currently support the Afghanistan 
mission, those engaged in countering terrorism globally, and those 
preparing to deploy forward, will receive the full support they need.
    The cascading effects of the necessary internal budget realignment 
will start to catch up to the Marine Corps no later than 2017. It will 
manifest itself in fewer Active component marines, less investment in 
training and infrastructure, and forgone modernization. If allowed to 
continue along this path slope, we will risk a force that is tiered in 
its capabilities. Forces rotated or deployed forward will leave CONUS 
best dressed, but most of those remaining back at their home base or 
station will be degraded. In aggregate, the force will likely be one 
that is less trained, equipped, and ready for war than what the 
American people have come to expect from their All-Volunteer military.
    General Welsh. It is our title 10 responsibility to provide airmen 
the required training, resources, and equipment so that they can 
successfully accomplish their assigned missions with an acceptable 
level of risk. However, Air Force readiness is on a 20+ year downward 
trend and sequestration only serves to accelerate this decline. With 
recent sequestration-driven cuts, our forces may not be sufficiently 
equipped, trained, and ready, which increases survivability risk to the 
force and risk in our ability to achieve desired operational and 
strategic outcomes. The degree of risk depends on a number of factors--
such as the threat environment and our strategic and operational 
objectives. Increased risk alters our--and our adversaries'--decision 
calculus, which can effectively limit strategic options for the 
President and combatant commanders.

             defense strategy and national security impacts
    38. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, the American people are not hearing your 
warnings and do not believe your message because thus far your warnings 
have been abstract and fail to define the consequences to our safety 
and security. So, in plain terms, what does it mean that you won't be 
able to implement the DSG requirements and will we be less safe as a 
result?
    General Odierno. The DSG outlines the strategy our Nation has 
adopted to ensure the safety of our citizens and reassure our allies 
and partners. The Army's inability to execute this strategy leads to 
increased risk to stability and decreased safety for American citizens.
    The fundamental premise of the DSG is to protect our Nation with 
broad efforts to redirect and reduce international competition, which 
is the primary driver of the types of conflicts most dangerous to 
America's citizens and its interests. Sustaining global leadership is 
key to this strategy, and military superiority as an element of 
national power and is one of our Nation's most critical and unique 
advantages.
    America's military superiority rests on the strength and readiness 
of its Army. As the most verstatile Service, the U.S. Army is the only 
land force that can deploy several thousand troops anywhere in the 
world and sustain them indefinitely. Further, the Army underpins the 
Joint Force by sustaining the Air Force, Marine Corps, and Navy, 
allowing the other Services to conduct operations in the maritime and 
air domains as well.
    This is a unique advantage that allows the Army to prevent the 
outbreak of significant conflicts across the globe, shape the 
environment in ways favorable to the United States, and win wars and 
end conflicts on terms that are favorable to the safety of America's 
citizens, when necessary.
    As a result of the first round of defense cuts, the Army is less 
ready to prevent conflicts, conduct decisive land operations, as well 
as provide support to the other Services. Further reductions under the 
BCA will, over time, result in greater global instability, longer wars, 
increased risk to U.S. citizens, and higher casualties. Our Nation 
cannot predict when or where American soldiers will be needed next, and 
a moderate investment in a properly resourced Army will hedge against 
the significant costs of having an under-resourced Army.
    Admiral Greenert. The BCA revised discretionary caps will preclude 
our ability to execute the 2012 DSG in the near-term and the long-term. 
Applying one fiscal and programmatic scenario, we would end with a 
fleet of about 255 ships in 2020. That is about 30 less than we have 
today, about 40 less than was planned in our fiscal year 2014 
President's budget submission, and 51 less than our force structure 
assessment indicates is required.
    Presence remains the Navy's mandate. We must operate forward where 
it matters and we must be ready when it matters. This posture enables 
us to respond to contingencies. Our forward presence reassures our 
allies and ensures U.S. interests around the world are properly served.
    The 2020 fleet described above would not meet the DSG requirements 
for the mission to Provide a Stabilizing Presence. Navy would be less 
able to reinforce deterrence, build alliances and partnerships, and 
influence events abroad. Navy would not increase our global deployed 
presence, which would remain at about 95 ships in 2020. The lethality 
inherent in this presence, based on ship type deployed, would be less 
than today's 95-ship presence.
    We would also not increase our presence in the Asia-Pacific, which 
would stay at about 50 ships in 2020. This would largely negate the 
ship force structure portion of our plan to rebalance to the Asia-
Pacific region directed by the DSG.
    Under the same planning scenario, the reduction in our O&M would 
result in only one nondeployed CSG and one ARG trained and ready for 
contingency response. We would not fulfill our covenant with the 
combatant commanders to have at least two CSGs and two ARGs deployed 
and to have another three of each in or around the CONUS ready to 
respond to a crisis on short notice.
    In this planning scenario, we would not be able to conduct one 
large-scale operation and also counter aggression by an opportunistic 
aggressor in a second theater as required by the DSG. The Fleet would 
only be sufficient to conduct all missions associated with only one 
large-scale operation, as defined today.
    General Amos. To satisfy the requirements of the DSG, we need a 
Marine Corps of 186,800 Active Duty marines. Under the 2011 BCA, we 
estimated that a force of 182,100 Active component marines could still 
be afforded, albeit with reduced modernization and infrastructure 
support. Under continued sequestration, an Active-Duty Force of 
175,000--far less than is warranted and not accounting for additional 
embassy security marines--is frankly all we can afford even with very 
steep cuts to modernization accounts and infrastructure. This 
significantly reduced force could meet steady state requirements and be 
able to deter or defeat aggression in one region albeit with 
significant strain on the force and increased risk to mission 
accomplishment. When engaged in a major contingency operation, an 
Active component Marine Corps of 175,000 would be incapable of denying 
the objectives of an aggressor in a second region or respond to other 
crises around the globe. This weakened posture makes the Nation, as 
well as many of our security partners, vulnerable to opportunistic 
regional or non-state actors seeking to capitalize on our diminished 
capacity knowing we have no credible response.
    General Welsh. If reductions of the magnitude identified by 
sequestration continue, we will be forced to pursue the following long-
term actions:

    (1)  Force Structure: We will be forced to get smaller, both in 
terms of people and aircraft. Right now we anticipate potential 
reductions of as many as 25,000 people and 550 aircraft. There is a 
limit to how small we can get and still fulfill the DSG because our 
supply of forces is equal to the strategic demand with almost no margin 
in capacity.
    (2)  Readiness: When the Air Force talks about readiness, we're 
talking about our ability to quickly respond to our Nation's demands 
with airpower delivered by airmen who are appropriately trained and 
equipped to accomplish the mission at hand. We will prioritize funding 
for training and readiness. Despite this prioritization, under a full 
sequestration reduction, we will still see significant eroding of our 
readiness in the near-term. The long-term effects of which will be 
detrimental and cannot be fully quantified at this time.
    (3)  Modernization: If the reduced caps under current law continue, 
our modernization forecasts are bleak. This funding level will impact 
every one of our modernization programs. These disruptions will, over 
time, cost more taxpayer dollars to rectify contract breaches, raise 
unit costs, and delay delivery of critical equipment. The public may 
not recognize the effects of these reductions initially. The damage 
will be insidious. However, should we face a high-end threat in the 
future--the impact of not modernizing will be blatant and deadly.

    While failing to achieve national objectives in the next 
counterinsurgency fight would be distressing, losing a major full-
spectrum fight would be catastrophic. If America expects its Air Force 
to dominate the skies in the future battlespace, modernization and 
recapitalization are not optional.

                strategic choices and management review
    39. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do you agree that if allowed to proceed, 
sequester will do unspeakable damage to our national security? Please 
elaborate on the risks resulting from those cuts.
    General Odierno. Emerging threats in today's environment require a 
joint force with a ground component that has the capability and 
capacity to deter and compel adversaries who threaten our national 
security interests. The BCA and sequestration severely threaten our 
ability to do this. The magnitude, method, and speed of reductions will 
not allow us to execute the 2012 DSG, and will make it very difficult 
to conduct even one sustained major combat operation.
    The DSG outlines the strategy our Nation has adopted to ensure the 
safety of our citizens and reassure our allies and partners. The Army's 
inability to execute this strategy leads to increased risk to stability 
and decreased safety for American citizens.
    The fundamental premise of the DSG is to protect our Nation with 
broad efforts to redirect and reduce international competition, which 
is the primary driver of the types of conflicts most dangerous to 
America's citizens and its interests. Sustaining global leadership is 
key to this strategy, and military superiority as an element of 
national power is one of our Nation's most critical and unique 
advantages.
    America's military superiority rests on the strength and readiness 
of its Army. As the most versatile Service, the U.S. Army is the only 
land force that can deploy several thousand troops anywhere in the 
world and sustain them indefinitely. Further, the Army underpins the 
Joint Force by sustaining the Air Force, the Marine Corps, and the 
Navy, allowing the other Services to conduct operations in the maritime 
and air domains as well.
    This is a unique advantage that allows the Army to prevent the 
outbreak of significant conflicts across the globe, shape the 
environment in ways favorable to the United States, and win wars and 
end conflicts on terms that are favorable to the safety of America's 
citizens, when necessary.
    As a result of the first round of defense cuts, the Army is less 
ready to prevent conflicts, conduct decisive land operations, as well 
as provide support to the other Services. Further reductions under the 
BCA will, over time, result in greater global instability, longer wars, 
increased risk to U.S. citizens, and higher casualties. Our Nation 
cannot predict when or where American soldiers will be needed next, and 
a moderate investment in a properly resourced Army will hedge against 
the significant costs of having an under-resourced Army.
    Admiral Greenert. We understand the pressing need for the Nation to 
get its fiscal house in order. DOD should do its part, but it is 
imperative we do so in a coherent and thoughtful manner to ensure 
appropriate readiness, warfighting capability, and forward presence--
the attributes we depend upon from our Navy.
    We will continue to view each of our choices through the lens of 
the three tenets I established when I took office as CNO: Warfighting 
First, Operate Forward, and Be Ready. But with each year of 
sequestration, the loss of force structure, readiness, and future 
investments will cause our options to become increasingly constrained 
and drastic; our ability to contribute to the Nation's security will be 
reduced
    General Amos. The effects of the 2011 BCA and the subsequent 
sequester are already damaging our national security. By forcing the 
Marine Corps and the other Services essentially to mortgage the future 
capability and capacity of the force to fund readiness we are heading 
down a path towards a brittle and hollow force that will be less 
capable of meeting the security needs of the Nation.
    General Welsh. The Air Force offers five enduring contributions to 
our national defense: (1) air and space superiority; (2) ISR; (3) rapid 
global mobility; (4) global strike; and (5) command and control.
    If the reduced discretionary caps with the threat of sequestration 
remain in place for fiscal year 2014, we could be forced to cut flying 
hours by as much as 15 percent. As a result, many of our flying units 
will be unable to fly at the rates required to maintain mission 
readiness for 3 to 4 months at a time, we'll cancel or significantly 
curtail major exercises, and we'll reduce our initial pilot production 
targets.
    Additionally, sequestration-level cuts and/or an extended CR 
severely threatens each of our top priority programs as well as every 
single lower priority program. For example, today the average age of 
our fourth generation fighters, which are critical to both air and 
space superiority and global strike, is over 25 years of age. These 
fighters are simply unable to survive or operate inside the advanced, 
integrated air defenses some countries have today. The B-52 and the KC-
135 fleets providing part of our global mobility and global strike 
capability are over 50 years old. They too, are unable to survive and 
operate in the sophisticated air defense environments we face today, 
and in the future. The F-35, the KC-46, and the LRS-B programs are just 
three of the modernization programs vital to our modernization effort.
    We cannot afford to mortgage the future of our Air Force and the 
defense of our Nation. Modernization is required to execute our core 
missions against a high-end threat in 2023.

    40. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, are the plans you presented for the Strategic 
Choices and Management Review (SCMR) a reflection of the capacity and 
capabilities you can provide for a given level of funding or are they 
informed by the level of resources necessary to meet our strategic 
needs?
    General Odierno. Both. The start point for the SCMR was to first 
consider the resources required to execute the defense strategy and 
meet the needs of the combatant commanders. Afterwards, we were 
directed to look at what we would be able to do at decremented funding 
levels by showing the increased risks associated with lower levels of 
readiness, modernization, and force structure.
    Admiral Greenert. The SCMR options reflect the capacity and 
capability choices necessary if the revised discretionary caps continue 
in the long-term. Our fiscal year 2014 President's budget submission 
reflects the resources necessary to execute the DSG with acceptable 
risk.
    General Amos. The series of choices developed through the SCMR 
process are a reflection of the capacity and capabilities the Marine 
Corps could provide for a range of lower funding levels. However, it is 
important to note that in the course of developing those fiscally 
constrained choices, we ensured the judicious application of resources 
to best meet the strategic needs of the Nation.
    For the Marine Corps, our portion of the SCMR examined several 
possible end strength reductions. The strategy driven force is 
approximately 186,800 Active-Duty marines, and that was not one of the 
options examined in the SCMR process. Instead, the SCMR end strength 
options were a reflection of the capacity and capabilities the Marine 
Corps could provide for an approximate (lower) level of funding; the 
result is a 175,000 Marine Corps, which is a viable, fiscally driven 
end strength. However, we did not simply accept a linear reduction; 
instead, we conducted a detailed analysis to determine the optimal 
designed force based on the strategic needs of the Nation. We 
understand that the Nation requires a smaller, redesigned, and ready 
force that is able to respond quickly to the most likely threats facing 
the Nation, and we optimized the distribution of capacity and 
capability within our 175,000 force to meet that strategic imperative. 
For example, we eliminated a MEF HQ and provided permanent structure 
for two Special Purpose Marine Air Ground Task Forces (MAGTF). We chose 
to take risk in warfighting headquarters rather than smaller, forward 
deployed crisis response units because of the strategic needs of the 
Nation. Ultimately, although 175,000 is a fiscally driven force, the 
strategic needs of the Nation were paramount in each decision.
    General Welsh. The current plans are informed by the levels of 
funding for the capacity and capabilities we can provide for each of 
the funding levels laid out in SCMR. Budget uncertainty required us to 
look at strategic trades across multiple budget scenarios to align 
choices and tradeoffs with strategic priorities to meet sequestration 
cuts if required.

    41. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how were the SCMR funding levels for each 
Service determined?
    General Odierno. Three budget options were discussed during the 
SCMR: (1) a President's budget to ``sustain'' the DSG; (2) an In-
Between Budget to ``bend'' the DSG, and (3) the BCA which would 
``break'' the DSG. The OSD did not present the methodology on how 
Service shares were generated for these three options.
    Admiral Greenert. The SCMR was directed by the Office of Secretary 
of Defense (OSD) to produce options and identify choices that would 
prepare the way for DOD to comply with the revised discretionary caps 
of the BCA of 2011. Secretary Hagel directed the SCMR to generate a 
menu of options built around the following budget scenarios:

         First, the President's fiscal year 2014 budget, which 
        incorporates the carefully calibrated and largely backloaded 
        $150 billion reduction in defense spending over the next 10 
        years.
         Second, the BCA sequester level caps, which would cut 
        another $52 billion from defense spending in fiscal year 2014, 
        with $500 billion in reductions for the DOD over the next 10 
        years.
         Third, an in-between scenario that would reduce 
        defense spending by about $250 billion over the next 10 years, 
        but would be largely back-loaded.

    In July 2013, OSD provided fiscal guidance to the Services 
directing the development of two fiscal years 2015-2019 budget 
submissions: one at the President's budget 2014 level and the other at 
the BCA level. The OSD fiscal guidance included base budget toplines 
for each Service at each level.
    General Amos. The budget scenarios considered in the SCMR process 
ranged from the President's budget proposal for fiscal year 2014 and 
beyond (cuts of about $150 billion applied heavily to later years) to 
full compliance with the BCA caps (cuts every year of about $50 
billion). This range of planning scenarios is consistent with OMB 
guidance. The SCMR examined large blocks of capabilities across DOD (we 
called them Force Elements), and assessed incremental reductions in 
capability and capacity. Some of these Force Elements were unique to a 
single Service, some of them crossed Service lines. We studied 
reductions in all Force Elements, across all Services--nothing was off 
the table--but no single Service was assigned a specific targeted 
funding level that they had to meet.
    General Welsh. Per OSD's guidance, the budget scenarios considered 
in the SCMR ranged from the President's budget proposal for fiscal year 
2014 and beyond (cuts of about $150 billion applied heavily to later 
years) to full compliance with the BCA caps (cuts every year of about 
$50 billion). This range of planning scenarios is consistent with OMB 
guidance. OSD's fiscal guidance is structured around those two budget 
scenarios and is intended to enable execution of the strategic 
rebalancing effort.

    42. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, Secretary Hagel has stated that a basic 
tradeoff in funding will be between capacity and capability. How do you 
intend to address this tradeoff?
    General Odierno. Given the necessity to prepare for the reduced 
discretionary caps and threat of sequestration in fiscal year 2014, the 
Army's execution of the fiscal year 2014 budget will proceed along five 
avenues. First, Secretary McHugh and I have directed that we accelerate 
the deliberate downsizing of the Army's Active end strength from its 
current level of 532,530 to 490,000 by fiscal year 2015 instead of 
fiscal year 2017. Second, we are implementing force structure changes--
including the reorganization of our BCTs--to reduce brigade level 
headquarters while sustaining combat power. Third, we will be forced to 
concentrate readiness funding into few units, resulting in readiness 
shortfalls during fiscal year 2014-fiscal year 2017. Fourth, we will 
reprioritize our modernization programs and determine which ones are 
most critical to filling capability gaps and which ones will be delayed 
or cancelled. Fifth, we will make every effort to recruit and retain a 
high quality, professional, and disciplined AVF while we support our 
veterans transitioning back to civilian life.
    Admiral Greenert. There are numerous ways to adjust Navy's 
portfolio of programs to meet the BCA of 2011 revised discretionary 
caps. These are currently under deliberation within DOD.
    Any scenario to address the fiscal constraints under current law 
must include sufficient readiness, capability, and manpower to 
complement the force structure capacity of ships and aircraft. This 
balance would need to be maintained to ensure each unit will be 
effective, even if the overall fleet is not able to execute the DSG. 
There are, however, many ways to balance between force structure, 
readiness, capability, and manpower.
    To provide perspective on the level and type of adjustments that 
will need to be made, one potential fiscal and programmatic scenario 
would result in a 2020 Fleet of about 255 to 260 ships, about 30 less 
than today, and about 40 less than Navy's fiscal year 2014 President's 
budget submission. It would include 1 to 2 fewer CSG, and 1 to 2 fewer 
ARG than today. This 2020 fleet would not meet the DSG requirements.
    General Amos. Within the Marine Corps, we see it as a triad--
capability, capacity, and readiness, but on a fundamental level, yes, 
we will need to make tradeoffs across those areas. However, it's not an 
either/or proposition; it's about striking the right balance given the 
current and future security and fiscal environments. Under 
sequestration, the Marine Corps will take risk in capacity and 
capability in order to preserve near term readiness--it's happening 
already. Our end strength is coming down to 175,000 by the end of 
fiscal year 2017; that's the maximum glideslope possible that will 
allow us to keep faith with marines and their families that have been 
strained for the last decade. Additionally, we have made large 
reductions to our modernization accounts--delaying key programs and 
completely eliminating others. We have made those hard choices in order 
to preserve near-term readiness, because that's what we bring the Joint 
Force and that's what the Nation expects of her marines. We will be 
smaller, we will be leaner, but we will remain ready to respond to 
today's crisis, with today's force, today.
    General Welsh. The blunt and indiscriminate mechanism of 
sequestration is forcing the Air Force to choose between a ready and 
right-sized force today or a modern force tomorrow. One of the 
foundations of our fiscal year 2015 POM was to protect our future 
warfighting capabilities; to achieve this--while maintaining a 
credible, ready force capable of fighting today's fight--we will be 
required to divest some force structure in order to avoid a hollow 
force. The Air Force carefully designed our fiscal year 2015 budget 
recommendations to provide a right-sized force that is able to meet 
today's challenges while protecting our ability to modernize for 
tomorrow's fight. However, despite our best efforts, the reality is 
that this fiscally constrained environment also means accepting the 
tradeoffs of an Air Force that has less capacity and capability, will 
take longer to prosecute the Nation's call to national security 
exigencies, and may suffer higher casualties and attrition against 
adversaries in doing so.

    43. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, have any of you developed a plan for 
addressing or implementing this SCMR tradeoff in fiscal year 2014, and 
if so, when do plan to inform Congress of the changes needed in your 
fiscal year 2014 budget plans?
    General Odierno. The impact of sequestration in fiscal year 2013 
coupled with the threat of fiscal year 2014 sequestration levels of 
funding are forcing the Army to implement significant reductions to 
endstrength, readiness, and modernization in order to generate short-
term cost savings. However, this will leave Congress, future 
administrations, and the Nation with severely reduced options for 
action. The next administration will have less capability to deter 
conflict and would be increasingly reliant upon allies in any future 
conflict, with no guarantee that our allies would be willing or able to 
provide the assistance needed to meet U.S. national security goals. In 
the event of a strategic surprise or upon the completion of 
hostilities, an undersized Army would be unable to conduct long-term 
stability and transition operations.
    The Army remains fully committed to the enactment of President's 
budget for fiscal year 2014. The Army's portion of that base budget, 
$129.7 billion, is necessary in its entirety to ensure that the Army 
meets the requirements of the 2012 DSG. The fiscal year 2014 budget, 
however, does not provide the funds necessary to address decaying 
readiness that is the result of earlier agreements with DOD. As a 
result, I submitted a $3.2 billion Unfunded Request Memo on 6 June 
2013. In addition to the fiscal year 2014 base budget, the Army has 
submitted a separate request of $47.6 billion in fiscal year 2014 OCO 
funding for operations in Afghanistan; it is critical that this request 
be fully funded to support our soldiers currently deployed and those 
soon to deploy into theater.
    The SCMR was a valuable forum to discuss the projected impacts of 
sequestration and to formulate the choices facing us in the areas of 
end strength, force structure, readiness, and modernization. The Army 
is working closely with the DOD to provide detailed plans to operate 
during fiscal year 2014 at the base budget funding level consistent 
with the fiscal year 2014 funding caps in the BCA of 2011, as amended. 
DOD is currently consolidating all Services input and will provide 
Congress a potential BCA level implementation plan in mid-December.
    Admiral Greenert. The mechanical implementation of sequestration 
does not allow us to plan for a tradeoff between capacity and 
capability. However, if Congress authorizes reprogramming, Navy can 
work to restore balance between readiness, force structure, 
modernization, and manpower. Just to meet minimum readiness needs, we 
need to transfer or reprogram about $1 billion into the O&M account and 
about $1 billion into our procurement accounts, mostly for 
shipbuilding, by January 2014.
    For fiscal year 2014, Navy will prioritize meeting our global 
presence requirements, but with reduced capacity to surge additional 
forces to respond to crises. Maintaining current readiness and forward 
presence to the extent possible under sequestration comes at expense to 
our investment in future readiness. My written statement for this 
hearing details the programs at risk if sequestration continues in 
fiscal year 2014.
    General Amos. Upon finalization of the fiscal year 2015 President's 
budget, we will review those programs most impacted by the SCMR 
decisions to determine the best approach to pursue in fiscal year 2014. 
When possible, savings will be reallocated to the higher priority U.S. 
Marine Corps programs that enhance near-term readiness. The 
incorporation of SCMR decisions into the fiscal year 2015 budget limits 
the Marine Corps' ability to make substantial changes to our execution 
of the fiscal year 2014 budget.
    General Welsh. SCMR findings were used to inform the fiscal year 
2015 POM submission. Those results will be submitted with the budget in 
February 2014.

    44. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, what tradeoffs will be necessary to ensure 
there is a balance between organic and commercial depot work?
    General Odierno. The Army's Organic Industrial Base Strategic Plan 
establishes the framework needed to properly balance organic and 
commercial depot workload. The organic facilities will focus on the 
workload necessary to support core capabilities. The Army will also 
continue to pursue public-private partnerships, performance based 
logistics agreements and outsourcing for workload that is not required 
to support our core capabilities. This helps to balance the depot level 
workload between organic and commercial sources and to meet our 50/50 
statutory requirements.
    Admiral Greenert. Regardless of force structure decisions that 
would occur as a result of continued sequestration, Navy will continue 
to balance depot work between the public and private sector in 
accordance with Title 10 U.S.C. section 2464 and section 2466 to 
maximize the readiness of the Fleet. Our aircraft carrier and submarine 
depot-level maintenance is nuclear-related and is conducted primarily 
in the four public sector naval shipyards, while most of the surface 
ship depot-level maintenance is conducted in the private sector. Each 
of these capabilities requires a highly skilled workforce that is 
trained and equipped for that specific type of work. Neither skill set 
is easily reconstituted if lost.
    General Amos. Federal law (10 U.S.C. section 2466) states that not 
more than 50 percent of the funds made available in a fiscal year for 
depot-level maintenance may be used for commercial depot work, and the 
Marine Corps continuously seeks to make optimal use of depot 
maintenance resources by using all available sources of repair within 
the limitations of the law. Between fiscal year 2005 and fiscal year 
2012, the Marine Corps' public-sector depot expenses averaged 87.78 
percent, and private-sector expenses averaged 12.22 percent. During 
those years, the low percentage of total workload executed in the 
private sector was attributed to the Marine Corps' need to leverage 
core organic depot capability to rapidly meet emerging requirements in 
Iraq and Afghanistan. This included application of significant 
survivability upgrades/modifications and design/build of systems to 
meet immediate acquisition demands. Examples include the HMMWV and 7-
ton armor application/upgrade, Logistics Vehicle System and MRAP 
survivability upgrades, and design/build of mine rollers, egress 
trainers, and the Mobile Trauma Bay. As the Marine Corps transitions to 
a post-OCO environment and depot maintenance resources become 
increasingly constrained, we will continue to make optimal use of 
resources by selecting those sources of repair that meet our 
requirements and timelines, comply with depot source of repair 
decisions, and provide the best value for the government.
    General Welsh. The Air Force will continue to manage public-private 
depot workload through its standing processes (i.e., the Depot Source 
of Repair Process (DSOR) for depot maintenance workload). The use of 
the DSOR process ensures a ready and controlled source of repair for 
workloads that sustain a core capability for the Air Force. In addition 
the DSOR process is used to ensure compliance with the 50/50 law. In 
the last 50/50 report to Congress the Air Force reported for fiscal 
year 2012 51.8 percent organic and 48.2 percent contract and projected 
compliance in fiscal year 2013 and fiscal year 2014.

    45. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do you assume that you will have to move away 
from installations given the severe reduction in funding, and if so, 
which ones did you plan for?
    General Odierno. The Army has not planned to move away from any 
specific installations. The Army will make closure or realignment 
recommendations upon approval from Congress as part of a Base 
Realignment and Closure (BRAC) round.
    As the Army's end strength and force structure decline alongside 
its funding, millions of dollars will be wasted maintaining 
underutilized buildings and infrastructure. In a very short period, 
trying to spread a smaller budget over the same number of installations 
and facilities will result in rapid decline in the overall condition of 
Army facilities. Without a future round of BRAC, the Army will be 
constrained in closing or realigning any installations to reduce 
overhead. This empty space tax on our warfighters will simply result in 
cuts to capabilities elsewhere in the budget.
    A future BRAC is essential to identify and divest excess Army 
infrastructure as the Army reduces its force structure. BRAC also 
allows for a systematic review of existing DOD installations to ensure 
effective joint and multi-service component utilization. A BRAC round 
is necessary to identify inefficiencies and eliminate unused 
facilities, so that we do not divert scarce resources away from 
training, readiness, and family programs.
    Admiral Greenert. We do not plan to move away from installations. 
Our Navy functions best when our shore infrastructure is aligned with 
our force structure and laydown. If Congress authorizes a new BRAC 
round, the Navy will evaluate our activities objectively by measuring 
military value, alignment with force structure, cost, and impact to the 
surrounding communities.
    General Amos. Our installations are the deployment platforms from 
which Marine expeditionary forces prepare to fight and win the Nation's 
battles. They provide MAGTFs ground and aerial training areas, ranges, 
airfields and logistics support to hone battle readiness. In addition, 
installations support our marines' families, to include security and 
quality of life programs.
    Due to diminishing resources, our Installation Commanders make 
difficult choices on a daily basis in order to fulfill operational 
requirements; often at the expense of near-term facilities maintenance 
requirements. There is no plan to reduce the number of installations 
within the Marine Corps. Rather, our focus is to balance our limited 
resources across our 24 installations without jeopardizing operating 
force readiness, safety, or the well-being of our marines and their 
families. To date, we have been successful and intend to manage our 
resources based on a directed review of each installation's 
requirements.
    General Welsh. The sequester will necessitate reductions that will 
make it difficult to keep force structure at all bases and maintain 
required readiness levels. However, estimating the exact number of base 
closures across the Air Force is premature without BRAC authority. We 
require BRAC legislation to allow the Air Force to complete a thorough 
analysis of infrastructure and excess capacity. Only with enactment of 
BRAC authority can the Air Force conduct a definitive BRAC analysis, 
authoritatively measure and compare force structure and infrastructure 
requirements, and determine excess capacity.

    46. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, can each of you describe what capabilities 
your Service is offering as choices that will no longer be able to be 
provided for national defense as a result of sequestration?
    General Odierno. Sequestration directly threatens the Army's 
capability to conduct a multi-phase, combined arms, joint campaign in a 
complex environment that includes a conventional opponent, irregular 
warfare, and counterinsurgency.
    Right now the Army is well-trained in counterinsurgency operations. 
We want to continue to maintain that expertise, while also increasing 
proficiency for combined arms, joint capabilities for a multi-phase 
campaign for a major contingency operation. We were scheduled to begin 
this training in fiscal year 2013. Instead, the Army was forced to 
cancel most of this training in fiscal year 2013 because of the 
sequestration-related cuts to readiness. As a result, the Army now has 
a limited number of brigades that are capable of doing full spectrum 
operations.
    Admiral Greenert. Currently, the reductions in fleet training we 
are compelled to make result in only one non-deployed CSG and one non-
deployed ARG trained and ready for surge operations, while some 
combatant commander plans notionally require three of each ready to 
deploy within about 2 weeks of a crisis occurring. Sequestration in 
fiscal year 2014, particularly if combined with restrictions of a CR, 
will continue to reduce our readiness in the near-term.
    General Amos. Sequestration is impacting U.S. Marine Corps 
modernization capabilities that are necessary to deal with future 
threats. These modernization reductions include Major Defense 
Acquisition Programs like the Amphibious Combat Vehicle (Initial 
Operating Capability (IOC) delayed by 3 years), the JLTV (IOC delayed 
by 1 year), the G/ATOR Block II (Ground Weapon Locating Radar--GWLR) 
(IOC delayed by 2 years), and the Marine Personnel Carrier 
(terminated). These reductions also include 95 of 112 smaller 
procurement programs, reducing critical maneuver capabilities, net-
centric and interoperable capabilities, persistent ground surveillance 
capabilities, and command and control capabilities. All Marine Corps 
reductions in equipment modernization could have a significant negative 
impact on the defense industrial base, and will also negatively affect 
long-term readiness.
    We are also planning and implementing reductions in end strength 
that will require the remaining marines to deploy more frequently and 
with less time on home station between deployments. We are reducing our 
already lean civilian labor by 10 percent, and we are reducing our 
Reserve Forces by over 1,000 Marine reservists. At the same time, we 
have been asked to provide additional marines security guards to 
reinforce embassies around the world, and we continue to support the 
rebalance to the Pacific. We meet these increasing steady state demands 
by accepting risk in major combat operations, eliminating one of our 
three Marine Expeditionary Force headquarters, reducing the number of 
tank companies and artillery batteries, and eliminating six infantry 
battalions.
    General Welsh. The Air Force is not removing capabilities. To meet 
OSD fiscal guidance for the fiscal year 2015 POM, the Air Force is 
considering reducing force structure in areas such as single-mission 
platforms as well as retiring entire fleets of aging and costly 
platforms that are less capable and less survivable in highly contested 
airspace. While the Air Force works to maintain its capabilities, it 
will decrease in size. This size reduction will increase risk due to 
reduced capacity.

                           readiness concerns
    47. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, given the current trends in the readiness of 
your combat units, are you concerned about the emergence of a hollow 
force?
    General Odierno. Yes, I am very concerned that the BCA's spending 
caps create the long-term conditions of a hollow force. I view a hollow 
force as one in which there is prolonged and disproportionate 
investment across manpower, O&M, modernization, and procurement without 
corresponding adjustments to strategy. Some examples of the potential 
impacts are as follows:

         Available personnel would be continually shifted from 
        non-deployed to deploying forces in order to meet operational 
        demands. This would exacerbate personnel shortfalls and place 
        combatant commander operational plans at higher risk.
         Shortage of repair parts would drive cannibalization 
        and reduced training events would significantly impact our 
        ability to build readiness. This would have a compounding 
        effect on the capability of our equipment and the effectiveness 
        of Army units.
         Perhaps no other example is as important as soldier 
        training. We would not be able to fully train our soldiers, 
        whether through individual professional military education or 
        collective unit training, in a way that would enable them to 
        operate successfully in a joint, interagency environment across 
        the range of military operations (from stability operations to 
        decisive action). After the current fiscal year, the deficit in 
        trained forces will place us in jeopardy of being unable to 
        meet the requirements of our higher end war plans.

    Admiral Greenert. We will continue to deploy only forces that are 
fully trained and ready. The reductions in O&M funding imposed by 
current law allow us to train only those forces that are next up to 
deploy and compel us to reduce training and readiness of other non-
deployed forces. This will result in only one non-deployed CSG and one 
ARG trained and ready for contingency response. Our covenant with the 
combatant commanders is to have at least two CSG and two ARG deployed 
and another three of each in or around the CONUS, ready to respond to a 
crisis.
    This reduced capacity for contingency response will occur in fiscal 
year 2014 if we are subject to sequestration and also in the long term 
if we continue to be constrained to the BCA revised discretionary caps. 
With this reduction, our fully trained presence and surge forces would 
be sufficient to conduct only one large-scale operation, as defined 
today.
    General Amos. Yes. My concerns against a hollow force are not new. 
Earlier this year, under the precept that additional budgetary 
constraints were imminent, I directed my staff to conduct an internal 
study to identify the future Marine Corps force structure. Under my 
guidance, the redesigned force must meet the National Security Strategy 
requirements, at a high rate of readiness, within the confines of 
future budgetary constraints. Our study concluded that a Marine Corps 
of 175,000 would provide the operational requirements of steady state 
deployments, crisis response activities, and potential major combat 
operations while preserving institutional health and readiness. At 
175,000 the Corps leverages its crisis response capability, which is 
crucial for the current and future threat environments through lighter, 
agile, forward-deployed forces. The force provides a balanced force of 
MAGTFs that range from the Special Purpose MAGTF to the Marine 
Expeditionary Force (MEF) levels. The 175,000 strong force supports and 
prioritizes the rebalance to the Pacific, includes the 1,000 Marine 
Corps Embassy Security Group, and supports Marine Corps Forces SOCOM 
and Marine Corps Forces Cyberspace Command.
    Under sequestration, the Marine Corps will take risk in capacity 
and capability in order to preserve near term readiness--it's happening 
already. Our reduction to 175,000 by the end of fiscal year 2017 will 
allow the Marine Corps to maintain a high state of readiness while 
maintaining an end strength reduction glideslope that will allow us to 
keep faith with marines and their families that have been strained for 
the last decade. My priority will remain to provide a ready force. That 
is what the Nation expects of its Marine Corps. Continued sequestration 
budgetary cuts will cause us to adjust further in capacity and 
capability to maintain a ready force and ensure that we can respond 
when the Nation calls.
    General Welsh. Hollowness is best described in terms of risk--risk 
to the survivability of the force and risk in our ability to 
effectively carry out the DSG. Under sequester, it has become 
exceedingly difficult for the Air Force to manage these risks. For the 
Air Force, a hollow force is one that appears good on paper, but has 
more units, equipment, and installations that it can effectively 
support; lacks the resources to adequately man, train, and maintain 
them; lacks sufficient logistical support to employ its forces 
effectively; and is not provided with enough capable equipment and 
weapons to perform assigned missions.
    To avoid the emergence of a hollow force, one of the Air Force's 
main focuses for fiscal year 2014 will be on units that were stood down 
in 2013 and returning them at least to the same, albeit, previously low 
levels of readiness to prevent further erosion in their capabilities. 
However, if we do not receive sufficient funding in fiscal year 2014, 
the Air Force will again be forced to stand down units or fly them at a 
reduced training rate, similar to the actions we took in fiscal year 
2013 while under sequester. If sequester remains in place for the 
entire fiscal year 2014, the Air Force will be forced to cut flying 
hours to the extent that most flying units will not be ready. 
Recovering Air Force readiness levels required to meet DSG requirements 
will take a combination of time, additional resources, and reductions 
in operational tempo.

    48. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how will sequestration affect your ability to 
train your forces for the full range of assigned missions?
    General Odierno. Until we can adjust to sequestration funding 
levels, the Army will not be able to train all units for the full range 
of assigned missions. With the limited resources available for training 
after sequestration, only units with high-priority missions, such as 
the Global Response Force or Korea, are able to build readiness for 
decisive action across a broad range of military operations. Deploying 
units will continue to receive all resources required to train for 
their assigned missions. Other units will only receive sufficient 
resources to train at the lowest unit proficiency levels, generally 
squad or platoon. While our doctrine guides us to train for decisive 
action in support of unified land operations, most of our units are not 
receiving sufficient resources to support training to the battalion or 
brigade level of proficiency. This means that in order to deploy at the 
highest level of unit proficiency, those units would require additional 
time and resources for training before they would be ready for the full 
range of missions.
    Admiral Greenert. We will continue to deploy only forces that are 
fully trained and ready. The reductions in O&M funding imposed by 
current law allow us to train only those forces that are next up to 
deploy and compel us to reduce training and readiness of other non-
deployed forces. This will result in only one non-deployed CSG and one 
ARG trained and ready for contingency response. Our covenant with the 
combatant commanders is to have at least two CSG and two ARG deployed 
and another three of each in or around the CONUS, ready to respond to a 
crisis.
    This reduced capacity for contingency response will occur in fiscal 
year 2014 if we are subject to sequestration and also in the long term 
if we continue to be constrained to the BCA revised discretionary caps. 
With this reduction, our fully trained presence and surge forces would 
be sufficient to conduct only one large-scale operation, as defined 
today.
    General Amos. Pre-deployment training of OEF-bound units remains a 
top priority; this capability is resourced primarily through OCO 
funding. Post-OEF training priorities reflect where risk will and will 
not be accepted from reduced funding. Those priorities are:

         Transform civilians into marines
         Provide initial MOS, functional, and skill progression 
        training
         Provide education to develop marines who are capable 
        of commanding/leading at appropriate levels
         Develop, execute, and maintain a Service-level 
        exercise program
         Provide the operating forces with unit training 
        enablers
         Establish and maintain ranges
         Establish and maintain live, virtual, and constructive 
        training capability
         Provide civilian training
         Provide other directed training and education

    Anticipating funding challenges in fiscal year 2014, we identified 
trade-offs in training development and delivery. Those tradeoffs accept 
risk primarily in the area of home station training enablers. Ranges 
will be maintained to current standards, but modernization and 
investment will be limited, circumscribing the ability to meet emerging 
operational training requirements. Reductions in simulations and 
training devices support are also anticipated, limiting access to 
relevant simulations, thereby impacting our units' ability to maintain 
proficiency. Reductions in flight hours and aviation depot throughput 
would adversely impact Marine Corps' aviation training and surge 
capability. An anticipated reduced availability of amphibious and 
maritime prepositioning shipping, for training and deployment, would 
also impact readiness.
    General Welsh. One of the Air Force's main focuses for fiscal year 
2014 will be on units that were stood down in 2013 and returning them 
back to operational levels of readiness to prevent further erosion in 
their capabilities. However, if we do not receive sufficient funding in 
fiscal year 2014, the Air Force will again be forced to stand down 
units or fly them at a reduced training rate, similar to the actions we 
took in fiscal year 2013 while under sequester. If sequester remains in 
place for the entire fiscal year 2014, the Air Force will be forced to 
cut flying hours to the extent that within 3 to 4 months, many flying 
units will not be able even to maintain already low levels of mission 
readiness. The Air Force will also be forced to cancel or significantly 
curtail major joint and combined training exercises yet again.
    This sequester-induced readiness posture will degrade our ability 
to carry out OPLAN and Secretary of Defense-ordered missions, continue 
to degrade our depot maintenance and modernization programs, and will 
significantly erode our training and force development efforts, 
creating long-term readiness shortfalls. Overall, this readiness 
posture prevents us from attaining required mission ready status in 
fiscal year 2014, creates heightened risk, and will not meet the 
operational demands of the DSG. Recovering Air Force readiness levels 
required to meet the DSG will take a combination of time, additional 
resources, and reductions in operational tempo.

    49. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, with the increases in threats around the 
world, how would a hollow force affect the risks to the lives of our 
military men and women?
    General Odierno. We have not provided the collective training 
necessary to operate in the complex environments we face. We should 
never waiver from ensuring our men and women have the resources to 
train to the highest levels of readiness. In the end, this saves lives 
and guarantees success.
    Admiral Greenert. We will continue to deploy only forces that are 
fully trained and ready. The reductions in O&M funding imposed by 
current law allow us to train only those forces that are next up to 
deploy and compel us to reduce training and readiness of other 
nondeployed forces. This will result in only one nondeployed CSG and 
one ARG trained and ready for contingency response. Our covenant with 
the combatant commanders is to have at least two CSG and two ARG 
deployed and another three of each in or around the CONUS, ready to 
respond to a crisis.
    This reduced capacity for contingency response will occur in fiscal 
year 2014 if we are subject to sequestration and also in the long-term 
if we continue to be constrained to the BCA revised discretionary caps. 
With this reduction, our fully trained presence and surge forces would 
be sufficient to conduct only one large-scale operation, as defined 
today
    General Amos. The Marine Corps provides the Nation an ability to 
respond to today's crisis, with today's force, today. In order to 
provide that capability, I must ensure that our brave men and women 
wearing our uniform are trained and equipped to answer the call 
whenever it may come. A hollow force limits those marines forward 
deployed and those forces trained and ready to respond when 
contingencies arise.
    Under sustained sequestration for forces not deploying to 
Afghanistan, the fuel, ammunition, and other support necessary for 
training will be reduced precluding our ability to provide fully-
trained individuals and ready units to meet emerging crises--ultimately 
impacting even Amphibious Ready Groups and Marine Expeditionary Units. 
Within a year, we will see real impact to all home station units and 
the beginning of impacts to our next-to-deploy and some deployed 
forces, the beginnings of a hollow force we have fought so hard to 
avoid.
    Sacrificing training and readiness is not the right answer to our 
budgetary shortfalls. History shows us that we will be challenged 
again. When that happens, we cannot change the status of our forces at 
that time. We have what we have. And the Marine Corps will respond as 
it always has. The reality is that we would have fewer forces arriving 
less-trained and arriving later to the fight. This would delay the 
buildup of combat power, allow the enemy more time to build its 
defenses, and likely prolong combat operations. This is a formula for 
more American casualties. We only need to look to 1950 and the onset of 
the Korean War to see the hazard and the fallacy in this approach.
    General Welsh. As we are forced to cut back on modernization and 
readiness, risk to our military men and women, as well as the risk to 
our Nation, will only increase. Since the Korean War, we have provided 
unprecedented control over the skies above our soldiers, sailors, 
marines, and airmen, enabling them to accomplish their missions free 
from enemy air attack. One only has to look at recent conflicts in Iraq 
and Afghanistan to understand the extraordinary advantages airpower 
brings to our joint force. However, as our readiness and modernization 
budgets decrease, not only will the risk to our airmen increase as they 
conduct their missions, but the risk to every soldier, sailor, and 
marine we protect will also increase. In addition, our ability to 
strike the required targets, maintain battlespace awareness, rapidly 
move our Nation's resources where needed, and exercise precise command 
and control over all these missions, will be degraded.

    50. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, can your Service execute all of the combatant 
commanders' operation plans, given current and projected readiness 
levels of your forces--personnel, equipment, and training?
    General Odierno. The magnitude and speed of the budget, combined 
with ongoing war operations, restrict the ability of the Army to manage 
the transition and risks creating a hollow force. Therefore, over the 
next 3 to 4 years, there will be significant impacts on manning, 
equipping, sustaining, training, and installations. We will be forced 
to implement a severely tiered readiness strategy in which only 20 
percent of the operational force will be trained to the highest level. 
This will continue until we can reduce the size of the force to bring 
into balance readiness, modernization, and endstrength. But, the size 
of the Army could be too small to appropriately respond to a sustained 
major contingency.
    Admiral Greenert. The BCA reduced discretionary caps over the long 
term will preclude our ability to execute all the missions required by 
the 2012 DSG. We will maintain a credible and modern sea-based 
strategic deterrent, maximize forward presence to the extent possible 
using ready deployed forces, and continue investing in asymmetric 
capabilities while doing our best to sustain a relevant industrial 
base.
    There are several missions and needed capabilities specified in the 
DSG that we cannot perform or keep pace with potential adversaries. 
These will preclude us from meeting the operational plan requirements 
as currently written and defined by our combatant commanders with 
acceptable risk. The reductions in force structure will limit our 
ability to meet the presence requirements of the DSG, resulting in a 
Navy less able to reinforce deterrence, build alliances and 
partnerships, and influence events abroad.
    General Amos. Combatant commanders report shortfalls in many of 
their major contingency plans that may require modification of 
objectives and/or timelines should we actually have to execute those 
plans. Sequestration exacerbates these shortfalls.
    General Welsh. While under the BCA, Air Force readiness is now--and 
is projected to remain--below what is required to provide ready forces 
to meet the DSG. The Air Force can currently execute any individual 
combatant commanders' operational plan; however, we face some 
capability gaps and challenges in certain plans. If we do not receive 
sufficient funding in fiscal year 2014, we may have to rotationally 
stand down units or fly them at a reduced rate, similar to the actions 
taken in fiscal year 2013. This sequester-induced readiness posture 
will impact our ability to fill OPLAN and Secretary of Defense-ordered 
missions, continue to degrade our depot maintenance and modernization 
programs, and will significantly erode our training and force 
development efforts. Our force structure does not have excess capacity 
to facilitate rotational readiness and our OPLAN requirements do not 
provide the time for the Air Force to recover from this readiness 
posture. In the short-term, we will continue to make resource-informed 
evaluations of our plans and modify them as necessary in order to meet 
the objectives.

    51. Senator Inhofe. General Odierno and General Amos, the Army and 
the Marine Corps were forced to forgo critical OCO funding for fiscal 
year 2013 reset. This, coupled with reductions related to fiscal year 
2013 sequestration, has seriously eroded readiness. Given that nothing 
has been done to address sequestration, what do you see as the long-
term impact of sequestration on readiness?
    General Odierno. The short-term fiscal impacts of sequestration 
combined with the lingering funding shortfalls to OCO are forcing the 
Army to reduce funding, across all areas: readiness, personnel, 
modernization, and training. The Army, in the near- to mid-term, would 
then be challenged to provide the full spectrum of associated 
capabilities of strategic land power to combatant commanders as part of 
a crisis contingency force.
    These short-term decisions will over the long-term impact Army 
capabilities that are necessary and enduring components of strategic 
land power within the Joint Team. For example, as Army rotary wing 
aircraft--which provide critical tactical and operational maneuver and 
humanitarian relief--continue to age without programmed modernization 
or replacements (50 percent of aviation fleets have exceeded the 20-
year programmed life), future combatant commanders will be left with 
limited military options.
    Additionally, leader development is negatively impacted and affects 
the long-term health of a professional force. For example, from 2004 to 
2011, nearly 5,500 company commanders and over 3,500 field grade 
officers missed the professional and leader developmental opportunities 
associated with combined arms maneuver training, focusing instead on 
stability and support operations in a counterinsurgency environment. 
The cancellation of combat training center (CTC) rotations in fiscal 
years 2013 to 2014 will widen this professional knowledge and 
experience gap and take years to overcome.
    General Amos. Sustained sequestration would mean an extended period 
of severely reduced funding bound by rules that provide little 
flexibility to efficiently apply mandated reductions. The Marine Corps 
would realign funds from long-term investment activities to protect the 
short-term readiness of deployed and next-to-deploy units. Maintaining 
near-term readiness and operational commitments would be achieved at 
the expense of investment in modernization, infrastructure, and 
quality-of-life accounts. These reduced investments would accelerate 
the rate of infrastructure degradation and increase the long-term costs 
to return facilities to acceptable levels. Decreased funding for 
equipment modernization would put at risk the ability to effectively 
respond to tomorrow's threats.

                      major contingency operations
    52. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, in your opinion, does the sad reality that the 
U.S. military may no longer be able to support even one major 
contingency operation diminish our ability to deter war?
    General Odierno. Military superiority rests on the strength and 
readiness of its ground, air, and sea components. When we become out of 
balance, it impacts our ability to deter and compel our adversaries.
    They will weigh the potential costs and consequences of their 
planned actions and behaviors against the perceived ability and will of 
the United States to protect U.S. national interests. My concern is 
that by reducing the capacity and capability of the Army, the United 
States invites miscalculations by future adversaries, making military 
conflict more likely.
    Admiral Greenert. Under sustained reduced BCA-level funding, one 
potential scenario would result in a 2020 Fleet that would not be able 
to conduct one large-scale operation and also counter aggression by an 
opportunistic aggressor in a second theater, as required by the 2012 
DSG. Our presence and surge forces would be sufficient to conduct all 
missions associated with only one large-scale operation, as defined 
today. Our inability to meet this mission requirement will diminish our 
ability to deter aggression.
    General Amos. The Marine Corps is currently capable of supporting a 
single major contingency operation. To satisfy the requirements of the 
DSG, we need a Marine Corps of 186,800 Active Duty marines to 
participate in steady state operations, fight a major war, and deter 
regional aggression. Under sequestration, an Active-Duty Force of 
174,000 is all we can afford in 2017. This force would remain capable 
of meeting steady state requirements and would be able to participate 
in one major contingency operation, albeit with significant strain on 
the force and increased risk to mission accomplishment. The Marine 
Corps will always stand ready to answer the call of the Nation; 
however, an Active-Duty Force of less than 174,000 marines would 
greatly diminish our ability to deter and defeat aggression in the 
future.
    General Welsh. A reduction in our overall warfighting capability 
diminishes our ability to deter war, and any reduction in our ability 
to deter war increases the risk not only for our Homeland, but our 
national security interests abroad. We are at increased risk in 
numerous regions around the globe today, but are capable of sustaining 
our deterrence force for the foreseeable future. However, we cannot 
simultaneously and fully execute all 10 DSG missions. If sequestration 
were to continue, the Air Force's ability to execute multiple missions 
listed in the DSG will continue to erode.

    53. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, would you agree that that means the military's 
ability to protect U.S. national interests and citizens abroad are 
significantly degraded?
    General Odierno. I agree that budget shortfalls, budget 
uncertainty, and sequestration directly threaten the Army's capability 
to conduct multi-phase, combined arms, joint campaign in a complex 
environment that includes a conventional opponent, irregular warfare, 
and counterinsurgency.
    Right now the Army is well-trained in counterinsurgency operations. 
We want to continue to maintain that expertise, while also increasing 
proficiency for combined arms, joint capabilities for a multi-phase 
campaign for a major contingency operation. We were scheduled to begin 
training for that in fiscal year 2013. Instead, the Army was forced to 
cancel most of this training in fiscal year 2013 because of the 
sequestration-related cuts to readiness. As a result, the Army now has 
a limited number of brigades that are capable of doing full spectrum 
operations, since we are reducing the capability and capacity of the 
Army and depending on the contingency that would impact our ability to 
protect and interests.
    Admiral Greenert. The BCA reduced discretionary caps over the long-
term will preclude our ability to execute all the missions required by 
the 2012 DSG. We will maintain a credible and modern sea-based 
strategic deterrent, maximize forward presence to the extent possible 
using ready deployed forces, and continue investing in asymmetric 
capabilities while doing our best to sustain a relevant industrial 
base.
    There are several missions and needed capabilities specified in the 
DSG that we cannot perform or keep pace with potential adversaries. 
These will preclude us from meeting the operational plan requirements 
as currently written and defined by our combatant commanders with 
acceptable risk. The reductions in force structure will limit our 
ability to meet the presence requirements of the DSG, resulting in a 
Navy less able to reinforce deterrence, build alliances and 
partnerships, and influence events abroad.
    General Amos. The priority for the Marine Corps remains forward 
presence and the ability to respond rapidly to any crisis threatening 
U.S. national interests and citizens abroad. An Active component Marine 
Corps of 186,800 is required to achieve the objectives of the 2010 
National Security Strategy and the 2012 DSG. Any decrease in the Active 
component of the Marine Corps therefor will result in a commensurate 
increase in risk to both U.S. national interests and citizens abroad.
    General Welsh. The U.S. Air Force is the best in the world and is a 
vital piece of the best military in the world. This will not change 
even if sequester persists. When we are called, we will answer, and we 
will win. But the likelihood of conflict may increase as potential 
adversaries sense weakness and vulnerability. Any reduction in our 
ability to conduct contingency operations and deter wars reduces our 
ability to protect our citizens abroad and defend our national 
interests. A smaller, less capable and less ready force will certainly 
increase the risk to our national security interests at home and 
abroad.

                  modernization program funding levels
    54. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, to what extent does the lack of prior-year 
funding impact your ability to address the impacts of sequester on your 
procurement programs in fiscal year 2014?
    General Odierno. Despite the potential increase in sequestration 
impacts to procurement programs, the Army has $3.1 billion less in 
prior year funding to leverage in fiscal year 2014. In fiscal year 
2013, there was $11.5 billion of prior year funding available to 
address the fiscal year 2013 sequestration reductions to procurement 
programs. In fiscal year 2014, there is only $8.4 billion of prior year 
funding to address the potential fiscal year 2014 sequestration 
reductions to procurement programs. The Army will leverage the reduced 
amount of prior year funding with fiscal year 2014 procurement funding. 
This lower amount reduces the Army's buying power for critical weapon 
systems and reduces the Army's flexibility to address sequestration 
impacts. In fiscal year 2013, the Army used prior year funds to 
mitigate many of the impacts that would otherwise have come to fruition 
by offsetting sequestration reductions with unobligated funds. As prior 
year funds become increasingly scarce, the grim reality is that no 
weapon system or modernization program will go untouched by 
sequestration reductions in 2014. For some programs that have already 
seen reductions, continued sequestration could terminate key 
warfighting capabilities.
    Admiral Greenert. The effects of the fiscal year 2013 sequester 
were barely manageable because we received authorization to reprogram 
funds into appropriate maintenance accounts, and we were able to use 
prior-year investment balances to mitigate reductions to investment 
programs.
    If sequestration continues into fiscal year 2014, we will not be 
able to use prior-year funds to mitigate shortfalls in procurement 
accounts as we did in fiscal year 2013. Without congressional action or 
mitigating circumstances, the reductions imposed by sequestration and 
the limitations of a CR will compel us to:

         Cancel planned fiscal year 2014 procurement of an SSN, 
        an LCS, and an AFSB; also, delay an SSN planned for fiscal year 
        2015 procurement. Each of these would further worsen the 
        reduction in fleet size that the BCA would compel us to make 
        over the long term.
         Delay the planned start of construction on the first 
        SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
        cause us to be unable to meet U.S. Strategic Command presence 
        requirements when the Ohio-class SSBN retires.
         Cancel procurement of 11 tactical aircraft (4 EA-18G 
        Growler, 1 F-35C Lightning II, 1 E-2D Advanced Hawkeye, 2 P-8A 
        Poseidon, and 3 MH-60 Seahawk) and about 400 weapons, 
        exacerbating future BCA-driven reductions in our capabilities 
        to project power despite A2/AD threats.
         Delay delivery of USS Gerald R. Ford (CVN-78) by 2 
        years, extending the period of 10 CVN in service, and lowering 
        surge capacity.
         Delay the mid-life overhaul of USS George Washington 
        (CVN 73) scheduled for fiscal year 2016, disrupting today's 
        heel-to-toe CVN overhaul schedule and reducing near-term CVN 
        capacity.

    General Amos. If there is a mechanical sequester on fiscal year 
2014 funding, the impact will be greater if the Department is not 
provided the flexibility to distribute or to utilize prior-year 
unobligated funding. A mechanical distribution at the line item level 
does not allow for informed decisions of targeting budgetary 
reductions.
    If sequestration continues into fiscal year 2014, the Marine Corps 
would have to continue to assess every program. Sequestration will 
cause interruptions during program acquisition that increases the total 
program cost, as schedules slip and delays result in longer contracts, 
loss of efficiencies, negative impacts on development and production 
schedules, program restructures, and could potentially cause Nunn-
McCurdy breaches. In procurement, existing contracts may have to be 
renegotiated which will prevent the Marine Corps from receiving 
Economic Order Quantity pricing.
    The Marine Corps will also have to sustain legacy systems longer 
than planned, which will ultimately drive up current operation and 
support costs. We will have to shift our attention to developing and 
replacing obsolescent parts for legacy systems that are no longer 
available in the market place, which will shift the workforce to a 
focus of reengineering old and inefficient technology (e.g. sustaining 
five legacy radar systems will cost more than employing one new G/
ATOR). Finally, technologies designed to improve efficiencies (fuel, 
lightweight armor, etc.) will have to be postponed, preventing the 
Marine Corps from reaping planned savings while simultaneously driving 
up costs due to the use of older, more expensive technologies.
    General Welsh. In fiscal year 2013, the Air Force used $1.5 billion 
in unobligated prior year funds that were not available in fiscal year 
2014. Sequestration cuts deeply into fiscal year 2014 Air Force 
investment accounts, which under the law must be applied equally at the 
program, project, and activity level; consequently, it impacts every 
one of the Air Force's acquisition programs. For example, a potential 
fiscal year 2014 sequestration impact for the F-35A low rate initial 
production, relative to the request, could be the loss of 4 to 5 
aircraft from the requested amount of 19. This potential reduction will 
increase unit costs resulting in production funding shortfalls.
    The deep cuts brought on by sequestration-level funding will force 
the Air Force to make profound cuts to readiness and major defense 
acquisition programs funded out of investment accounts to achieve the 
targeted reduction amounts in the first few years of the fiscal year 
defense plan. When forced to make tough decisions, we will favor new 
capabilities over upgrades to our legacy forces and our top three 
acquisition priorities remain the KC-46, the F-35, and the LRS-B.
    The Air Force would like to be granted the ability to move funds to 
mitigate, to the maximum extent possible, devastation to the highest 
priority programs. However, even with flexibility, the Air Force may 
not eliminate all risks associated with meeting the combatant commander 
requirements.

    55. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, will the lack of prior-year funds force you to 
cancel or renegotiate procurement programs?
    General Odierno. The lack of prior year funding significantly 
reduces the Army's flexibility and increases risk. In fiscal year 2013, 
the Army was able to mitigate many of the impacts on a number of 
programs by offsetting sequestration reductions with prior year 
unobligated funds. As prior year funds become increasingly scarce, all 
weapon system programs will be affected in some way by sequestration 
reductions in 2014. This confluence of factors will cause more severe 
impacts in fiscal year 2014 than in the prior year and will necessitate 
many modifications to contracts across the Army.
    Admiral Greenert. If sequestration continues into fiscal year 2014, 
the lack of prior-year funds will create more significant impacts to 
our procurement programs than in fiscal year 2013. Without 
congressional action or mitigating circumstances, the reductions 
imposed by sequestration and the limitations of a CR will compel us to:

         Cancel planned fiscal year 2014 procurement of an SSN, 
        an LCS, and an AFSB; also, delay an SSN planned for fiscal year 
        2015 procurement. Each of these would further worsen the 
        reduction in fleet size that the BCA would compel us to make 
        over the long-term.
         Delay the planned start of construction on the first 
        SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
        cause us to be unable to meet U.S. Strategic Command presence 
        requirements when the Ohio-class SSBN retires.
         Cancel procurement of 11 tactical aircraft (4 EA-18G 
        Growler, 1 F-35C Lightning II, 1 E-2D Advanced Hawkeye, 2 P-8A 
        Poseidon, and 3 MH-60 Seahawk) and about 400 weapons, 
        exacerbating future BCA-driven reductions in our capabilities 
        to project power despite A2/AD threats.
         Delay delivery of USS Gerald R. Ford (CVN-78) by 2 
        years, extending the period of 10 CVN in service, and lowering 
        surge capacity.
         Delay the mid-life overhaul of USS George Washington 
        (CVN 73) scheduled for fiscal year 2016, disrupting today's 
        heel-to-toe CVN overhaul schedule and reducing near-term CVN 
        capacity.

    In order to avoid or remedy some of the fiscal year 2014 impacts 
described above, we need Congress to approve authorization and 
appropriations bills. This would enable the Navy to transfer funds, 
pursue innovative acquisition approaches, start new projects, increase 
production quantities, and complete ships.
    General Amos. There is no direct negative impact on current 
procurement programs resulting from less funding being available in 
prior-years. The Marine Corps was able to mitigate impacts from 
sequestration in fiscal year 2013. Unobligated balances were available 
due to a reduction in requirements resulting from the Operation 
Enduring Freedom drawdown, contracting efficiencies, and acquisition 
strategy changes to promote competition.
    General Welsh. The lacks of prior-year funds to reduce fiscal year 
2014 sequester bills may require the Air Force to negotiate a reduction 
in the required number of items, or level of service that affects the 
current year acquisition. Multi-year (MY) procurements generally assume 
some constant level of production or service; if fiscal year 2014 
sequestration causes a reduction of product or service requirements, it 
will likely result in the following: increased unit prices, a 
requirement to pay for subcontracted items delivered early to need per 
the MY agreement, and could even result in a breach of contract 
entirely if the requirements fall below a minimum commitment in the MY 
agreement.

                              hollow plans
    56. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do we have hollow plans today, even before we 
have felt the full effects of sequestration?
    General Odierno. Previously, there were some risks with the 
execution of Army plans. However, sequestration has exponentially 
increased those risks. Recent reviews and assessments of the Army's 
most resource intensive plans have aided in current posture decisions 
and positioning in the Asia-Pacific region. The Center for Army 
Analysis' ``Hollow Army'' study found that the increased interval for 
achieving readiness and the possibility of employing forces at 
readiness levels below optimum will yield dramatic increases in 
attrition and casualties for U.S. forces placing U.S. lives and mission 
accomplishment at risk. Under sequestration, the required force 
structure of Army operational plans would lose critical training 
resources that would otherwise prevent these lags, exacerbating the 
hollow plan phenomena.
    Admiral Greenert. As a force provider, Navy's responsibility is to 
provide properly manned, trained, and equipped forces to execute the 
combatant commanders' plans. We are challenged to do so within current 
planning timelines under a sequestered budget. With continuation of the 
fiscal constraints under current law, Navy will not be able to execute 
the full requirements of the DSG in 2020 and our presence and surge 
forces would be sufficient to conduct one large-scale operation, as 
defined today. However, any future budget scenario must include 
sufficient readiness, capability, and manpower to complement the force 
structure of ships and aircraft. Failure to do so increases risk to 
current operations and future contingencies.
    General Amos. Combatant commanders report shortfalls in many of 
their major contingency plans that may require modification of 
objectives and/or timelines should we actually have to execute those 
plans. Sequestration exacerbates these shortfalls.
    General Welsh. Our current plans are not hollow, but executable 
based on achieving DOD defined end states. As we look forward to future 
fiscal year budgets and constraints, we will have to make smart, 
resource-informed modifications to these plans in order to keep them 
viable.
    The Air Force has been able to meet all Secretary of Defense 
ordered missions remaining in fiscal year 2013 by maintaining combat 
ready status for only select units. However, sequester jeopardizes our 
ability to surge additional forces to meet contingency and emergent 
combatant commander requirements. Based on our Global Vigilance, the 
sequester-induced rotational readiness we are currently experiencing 
has placed us beyond the red-line, or tipping point, in terms of risk. 
This risk will, however, only be evident outside of DOD in the event of 
a crisis requiring rapid and robust response.

    57. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, in your opinion, are our potential adversaries 
getting weaker or stronger?
    General Odierno. We expect to encounter a wide spectrum of possible 
threats under conditions of uncertainty and chaos and thus cannot make 
blanket statements about all potential adversaries. What worries us is 
that over the last year a number of dangerous trends have deteriorated 
to the point that they are now threatening stability across entire 
regions. Throughout the Middle East and Africa, the Arab Spring 
transition has lead to instability and violence, providing arms and 
increasing the operating space for terrorists. Political instability in 
Syria degenerated into a civil and sectarian war. Iranian meddling in 
Syria has torn open a Sunni-Shia fissure across the Middle East drawing 
regional and distant countries into the conflict. China escalated its 
pressure on neighboring states over territorial issues and hardened its 
diplomatic position resulting in increased anxiety among United States 
friends and allies in the region and an emerging Asian arms race. The 
security environment in Syria, Iran, Pakistan, and North Korea has 
become increasingly uncertain and highlights concerns over the use, 
proliferation, and controls on weapons of mass destruction. While these 
crises have worsened, the defense budgets of our NATO allies are 
declining, which will likely affect their contribution and capabilities 
in future coalition operations.
    Admiral Greenert. The United States will continue to face a wide 
range of conventional and asymmetric threats from state and non-state 
actors. These threats are becoming more diverse and wide-spread through 
the proliferation of military and dual use technologies by legitimate 
and illicit means. In particular, our primary strategic competitors are 
improving their military capabilities through military modernization 
programs geared towards their individual strategic goals.
    General Amos. In general, our key adversaries are growing stronger.

         China is growing stronger both militarily and 
        technologically and continues to expand its ability to project 
        power and influence regionally across multiple domains. China 
        is increasingly assertive in the South China Sea and continue 
        to expand their influence in the greater Pacific region.
         Iran is gaining more freedom of movement and enhancing 
        its lethality and capability to threaten our interests but is 
        still hampered by a weak economy, exacerbated by sanctions. 
        Iran stands to gain influence in Afghanistan as the coalition 
        presence is reduced.
         Russia is working hard to re-establish and grow its 
        military capability and is becoming more assertive despite 
        economic and demographic challenges that will impede its 
        ability to do so.
         Radical Islamic Militants are stronger globally and 
        are morphing and expanding. Individual groups are not 
        necessarily stronger but their interconnectivity and ability to 
        adapt to meet conventional force capabilities makes them 
        increasingly lethal. Al Qaeda is gaining strength in Syria, and 
        holding its own in Iraq, Yemen, and Africa despite increased 
        security force capabilities and efforts.
         Transnational criminal groups are increasingly active 
        and linked to cyber criminals and extremist groups, affording 
        both access to capabilities they wouldn't otherwise have.

    General Welsh. Our potential adversaries are getting stronger. 
China's surge in defense spending is reflected in a military 
modernization program that places a strong emphasis on regional power 
projection by way of ballistic missiles, air power, and a growing navy. 
A resurgent Russia has laid out ambitious plans to trim its military to 
a lean fighting force armed with the latest technologies from a 
reinvigorated defense sector. Despite its ongoing civil war, Syria has 
continued to receive and integrate advanced Russian weapons to 
complement its vast inventory of legacy systems. Iran has also acquired 
new military equipment from Russia, and is putting significant 
resources towards developing its domestic defense industries, including 
ballistic missiles and a potential nuclear capability. Even a 
relatively stagnant country such as North Korea has shown signs of 
modernization, showcasing new, never-before-seen systems at military 
parades and testing advanced missile systems and nuclear weapons. 
Meanwhile, the rest of the world is finding advanced military and dual-
use technology more accessible than ever, and cyber warfare offers 
countries, non-state groups and even individuals the ability to strike 
at our information infrastructure with little risk of retaliation. As a 
result, even those future adversaries we have not yet identified will 
be better equipped and better prepared to challenge us in the years to 
come.

    58. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, if plans are being revised to account for 
decreased funding, as opposed to the estimates of an adversary's 
capabilities, are we increasing the risk of lives and missions?
    General Odierno. There are numerous global crises with potential 
challenges and adversaries. The Army expects to face a broad spectrum 
of challenges from Humanitarian Assistance and Disaster Response to 
irregular combatants to full conventional operations. The Army remains 
committed to our endstates and strategy. Revised operational plans 
incorporating reduced funding will increase the interval for achieving 
readiness for follow-on forces creating expanded timelines for mission 
accomplishment. The Center for Army Analysis' ``Hollow Army'' study 
found that an increased interval for achieving readiness and the 
possibility of employing forces at below-optimum readiness levels will 
result in more casualties and potentially put the mission at risk. 
Finally, decreasing force structure to include substituting long-range 
fires capabilities for maneuver units will leave critical 
vulnerabilities in the operational plans' execution, particularly with 
respect to counterproliferation of weapons of mass destruction, which 
could lead to increased threats to the United States in the long-term.
    Admiral Greenert. As a force provider, Navy's responsibility is to 
provide properly manned, trained, and equipped forces to execute the 
combatant commanders' plans. We are challenged to do so within current 
planning timelines under a sequestered budget. With continuation of the 
fiscal constraints under current law, Navy will not be able to execute 
the full requirements of the DSG in 2020. However, any future budget 
scenario must include sufficient readiness, capability, and manpower to 
complement the force structure of ships and aircraft. Failure to do so 
increases risk to current operations and future contingencies.
    General Amos. Ideally, war planning should be predicated against 
our enemies' capabilities. There is almost always tension between what 
a commander assesses is needed to accomplish the mission and what is 
available. I have stated that DOD must do its part in helping reduce 
the Nation's budget woes, and I have pledged to give you the best 
Marine Corps the Nation can afford. But sequestration is a damaging way 
to do this.
    Combatant commanders report shortfalls in many of their major 
contingency plans that may require modification of objectives and/or 
timelines should we actually have to execute those plans. Sequestration 
exacerbates these shortfalls, thereby increasing risk to mission and 
American lives.
    General Welsh. Plans must always be adjusted to account for both 
available resources and the adversary's capabilities. The revised plans 
will balance the risk to life and mission. With reduced resources 
available, conflicts may take longer and result in larger losses, than 
if more resources were available.

    59. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, are you comfortable with defense strategy 
based on budgets, as opposed to providing the means for adequate levels 
of national security?
    General Odierno. I am concerned with some of the assumptions that 
were made in the SCMR when determining the resources needed to meet the 
defense strategy. I have offered my best military advice, cautioning 
against best case and somewhat dangerous assumptions. I am not 
comfortable assuming that we can quickly rebuild a larger force, that a 
conflict will last just 6 months, that little to no casualties will be 
sustained, or that no follow-up stability operations will be necessary. 
Similarly we should not assume that U.S. forces deployed elsewhere will 
be able to complete their task at hand, disengage and redeploy to 
support a major regional contingency. Further, an adversary's use of 
weapons of mass destruction was not considered during the SCMR process. 
In the end, the weight of those assumptions will be on our soldiers, 
our young men and women asked to do a mission that they simply will not 
have the capability and capacity to accomplish.
    Admiral Greenert. We understand the pressing need for the Nation to 
get its fiscal house in order. DOD should do its part, but it is 
imperative we do so in a coherent and thoughtful manner to ensure 
appropriate readiness, warfighting capability, and forward presence--
the attributes we depend upon from our Navy. Specifically, we need to 
be able to establish and pursue a deliberate plan for future force 
development. Regardless of the level of funding we receive, having a 
predictable budget and associated authorities will enable us to develop 
and execute an achievable strategy. This strategy would guide our 
efforts to sustain the appropriate readiness in today's Navy while 
building a future fleet that is able to deliver the most important 
presence and capabilities and address the most important warfighting 
scenarios
    General Amos. The President's DSG is the defense strategy for the 
Nation; it identifies our strategic interests and guides defense 
priorities over the coming decade. As a Service Chief and member of the 
Joint Chiefs of Staff, it is part of my responsibility to realign funds 
within my authority to maintain the near-term readiness of our forward-
deployed forces while continuing to invest in infrastructure 
sustainment and modernization requirements necessary to succeed in 
future conflicts. Under the 2011 BCA and the subsequent commencement of 
sequestration, I am not able to do all these adequately. The available 
resources cannot meet all of our defense requirements, and we face an 
increased level of risk to American forces if they are called upon to 
fight in a major combat operation.
    General Welsh. If we accept that our defense strategy is devised 
and implemented within the bounds of constrained resources, in the 
budgetary environment we find ourselves in now, the strategy represents 
the ``ends'' for national security. It follows then that the Total 
Obligation Authority provided to the Air Force represents the 
``means.'' How we specifically spend those ``means'' represents the 
``ways'' in which we seek to maintain the capability and capacity to 
provide ready forces to win today and tomorrow's fight, as called upon 
by our Nation. As such, an effective strategy must be informed by 
predictable levels of resourcing to connect ``means'' to ``ways,'' and 
ultimately to the national security ``ends.''

                          morale and resources
    60. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how worried are you about the morale of your 
personnel as a result of 4 years of budget cuts?
    General Odierno. I am personally concerned with anything that may 
affect our Army's ability to fight and win on the battlefield. And 
continued budget cuts certainly have the potential to cripple morale if 
soldiers believe they are not be supported in a manner that allows them 
to do training to do what they came in the Army to do. However, despite 
budget reductions, and reductions in training readiness and equipment 
readiness, overall soldier morale has remained relatively stable for 
over a decade. We realize that this constrained budget is creating a 
lot of angst, especially when we begin talking about changes and 
reductions in benefits. Nevertheless, soldiers understand that the Army 
must be manned, trained, and equipped. Despite the uncertain future, 
soldiers are doing exactly what we ask them to do. They are training as 
hard as they can with the money we give them. When they deploy, they 
accomplish the mission to the best of their ability.
    Admiral Greenert. The morale of the force is something that I take 
seriously. I am concerned about how budget cuts will affect both the 
Quality of Life of Sailors and their Quality of Work. We have thus far 
protected our Quality of Life programs to the extent possible (pay and 
allowances continue to be exempted). However, Quality of Work has been 
impacted. The material conditions in warehouses, barracks, hangar bays, 
piers, etc. have had to be mortgaged to pay these bills. Supply part 
availability and depth of repairable inventories are suffering under 
sequestration. All of these things impact quality of work--our sailors 
understand why we have to make these choices, but they do lead to 
frustration on the part of our personnel, which will ultimately impact 
morale.
    General Amos. The Marine Corps is extremely concerned about the 
impact of the budget on the morale of not only marines, but their 
families and our civilian personnel. It is vital to keeping faith with 
our marines, their families, and our civilian marines. However, marines 
and their families are resilient and morale remains high.
    The Marine Corps is currently prioritizing support services for 
marines returning from Afghanistan and transitioning out of the Marine 
Corps and limit direct services impacts to marines and their families. 
However, continual cuts will start to impact these direct services, 
which will result in an impact on morale. Marines and their families 
are no different than their fellow citizens. With prolonged budgetary 
uncertainty and cuts, employee stress will increase, morale will 
decline, and at some point productivity will begin to suffer.
    We will need to be fiscally responsible during this challenging 
budget environment and continue to critically assess the needs of our 
marines and family members and prioritize available resources. While 
the Marine Corps has always been frugal money managers, going forward 
we are seeing greater innovation and more creative partnerships and 
leverage of supporting organizations at the State and Federal level. 
The Marine Corps continues assess our programs and make fiscal 
adjustments as necessary. If reductions ensue, the results can be 
reduction in hours of operation, longer wait time for services, and 
modifications to programs such as in family care, family readiness, and 
behavioral health programs, all of which can result in an impact in 
morale.
    General Welsh. I remain worried about the impact of budget cuts 
upon morale across the Air Force. No personnel program or Airman and 
Family Support program has gone untouched. Furlough, pay, and hiring 
freezes have created pay concerns for our civilian airmen. 
Sequestration's combined effects have impacted military personnel 
readiness training, airmen support programs, and increased airmen's 
workload, all of which negatively impact morale.

    61. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, is there a point where the demands on our 
military will overwhelm the resources provided to them, resulting in a 
broken force?
    General Odierno. The answer depends on exactly what the Army is 
asked to do. Based on our current projected fiscal year 2015 end 
strength of 490,000, the Army could successfully implement the 2012 
DSG. However, the end result of sequestration-related cuts to readiness 
is that the Army will arrive later to the fight with fewer and less-
trained trained forces. Additionally, the Army will lack the capacity 
to replace units that face combat attrition or rotate units out of 
longer duration conflicts. This will delay the buildup of combat power, 
allow the enemy more time to build its defenses, and, likely, prolong 
combat operations altogether. This is a formula for more American 
casualties.
    Admiral Greenert. There is, of course, a point at which that would 
be true of any military force. As a force provider, Navy's 
responsibility is to provide properly manned, trained, and equipped 
forces to execute the combatant commanders' plans. We are challenged to 
do so within current planning timelines under a sequestered budget. 
With continuation of the fiscal constraints under current law, Navy 
will not be able to execute the full requirements of the DSG in 2020. 
Specifically, our presence and surge forces would be sufficient to 
conduct only one large-scale operation, as defined today.
    Any scenario to address the fiscal constraints under current law 
must include sufficient readiness, capability, and manpower to 
complement the force structure capacity of ships and aircraft. This 
balance would need to be maintained to ensure each unit will be 
effective, even if the overall fleet is not able to execute the DSG. 
There are, however, many ways to balance between force structure, 
readiness, capability, and manpower. Additionally, any future budget 
scenario must include sufficient funding to balance readiness, 
capability, and manpower with our force structure of ships and 
aircraft. Failure to do so increases risk to current operations and our 
ability to sustainably support future operations.
    General Amos. The Marine Corps is continually prioritizing support 
services for marines returning from Afghanistan and transitioning out 
of the Marine Corps. We will continue to look for opportunities that 
will allow us to leverage our resources, as well as resources from 
supporting organizations at the State, Federal, and local levels, to 
minimize any direct impact to services for our marines and families.
    The Marine Corps has diligently looked to the future and 
anticipated sequestration cuts in programs, such as the Marine and 
Family Programs. In order to absorb these cuts in the immediate future 
we have decided to focus reductions at headquarter levels rather than 
cuts to the programs directly. However, continual cuts and furloughs 
will impact these direct services, which will result in an impact on 
morale. Marines and their families are no different than their fellow 
citizens. With prolonged budgetary uncertainty and cuts, stress will 
increase on our marines and civilian marines, morale will decline, and 
productivity will suffer. To mitigate any impact on morale, the Marine 
Corps is being frugal money managers, going forward we are seeing 
greater innovation and more creative partnerships and leverage of 
supporting organizations at the State and Federal level. The Marine 
Corps will continue to assess our programs and make fiscal adjustments 
when it is called upon us to find more savings.
    General Welsh. Current demands on the Air Force are overwhelming 
our resources, which drives a continual downward trend in readiness. 
Continued sequestration-level funding will force difficult choices 
between readiness and modernization.

    62. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, in your opinion, are we breaking the sacred 
vow we have with a volunteer force to provide them with the adequate 
resources and training needed to safely prevail on the battlefield?
    General Odierno. The Army trains to ensure that deploying soldiers 
and units are combat-ready to prevail on the battlefield. Reduced 
funding limits training and delays our ability to deploy forces. The 
Army is prioritizing resources to ensure that the forces with the 
highest priority missions have adequate resources and training. Until 
the Army can adjust to lower total obligation authority and transition 
to a fully-supportable force structure, we can only ensure a portion of 
the force is adequately trained to respond on time to support planned 
contingency operations. Other forces will prepare as best they can with 
available resources. In order to deploy at the highest level of unit 
proficiency, those units will require additional time and resources for 
training before they are ready for the full range of missions.
    Admiral Greenert. No, we have not broken our vow with our sailors. 
We have purposely targeted our reductions to areas that do not have 
direct impact on our sailors or their ability to prevail in any 
conflict. Cuts to our programs have been in our shore establishment, 
management, and business operations in our systems commands/procurement 
processes, non-deployed force training and sustainment--we have ensured 
combat readiness of our forward deployed forces were protected as our 
first priority. While this has been an effective approach so far, we 
are accumulating risk in the material condition of our base 
infrastructure and are seeing increasing backlogs in ship and aircraft 
maintenance. We cannot continue to take these risks indefinitely; at 
some point, we will begin to see operational impacts from the non-
operational choices we are making today. The tipping point will be a 
function of the breadth, depth, and timing of continued sequestration.
    General Amos. The Marine Corps is extremely concerned about 
ensuring our marines are properly resourced and trained to accomplish 
their mission. As I stated in my testimony, I am concerned that with 
continual fiscal uncertainty we may be breaking faith, but our marines 
and families continue to be resilient.
    The Marine Corps has been faced with challenges in light of 
sequestration and drawdown in end strength. In response, the Marine 
Corps is prioritizing support services for marines returning from 
Afghanistan and transitioning out of the Marine Corps and limiting 
direct services impacts to marines and their families. We are being 
frugal money managers looking for greater innovation and more creative 
partnerships, leveraging support organizations at the State and Federal 
level, and currently absorbing fiscal cuts at the headquarters level to 
minimize any impact on direct services to marines and families.
    General Welsh. It is our title 10 responsibility and solemn duty to 
provide airmen the required training, resources, and equipment so that 
they can successfully accomplish their assigned missions. Recruiting 
and developing high-quality, innovative airmen will remain a 
fundamental tenet of the Air Force. Our airmen have delivered 
incredible airpower for the Nation, 24 hours a day, 7 days a week, 365 
days a year. However, sequestration has forced us to make very 
difficult choices in our efforts to manage risk to the force. The Air 
Force will do everything in its power to maintain faith with the 
Nation's airmen, but the lack of resources provided the Air Force under 
sequester will impede our ability to meet our title 10 
responsibilities.

      weapons systems modernization and technological superiority
    63. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how will sequester impact our ability to 
provide our men and women in uniform with the modern 21st century tools 
and technologies they need to defeat 21st century adversaries, like 
China?
    General Odierno. The indiscriminate nature of sequestration has 
forced inefficient program changes and delays in equipment 
modernization that affects our ability to sustain current systems 
effectively and obtain the capabilities needed for future operations. 
Not only is there a reduction in available dollars, but the buying 
power of those dollars has been severely restricted because of 
reoccuring CRs to fund the military rather than timely budgets. We know 
that over the long-term, the effects of reduced funding under the BCA 
will significantly increase the costs of vital soldier weapon systems 
and reduce investment in future Army capabilities, while our potential 
adversaries continue to develop destructive technologies and weapons. 
For example, we cannot afford to procure a new Armed Aerial Scout 
helicopter and there will be a delay for the modernization of Air 
Defense Command and Control systems. From fiscal year 2014 to fiscal 
year 2017, the Army will have extensive modernization program 
shortfalls. Only in fiscal year 2018 to fiscal year 2023, will we begin 
to rebalance readiness and modernization to a level that is appropriate 
to fully execute the DSG.
    Admiral Greenert. If Navy is fiscally constrained to the 
sequestration-level funding at the revised discretionary caps over the 
long-term (fiscal year 2015 to fiscal year 2023), one potential 
scenario would result in the development of our capabilities to project 
power not staying ahead of potential adversaries' anti-access/area 
denial capabilities. We will not meet the projected capability 
requirements to assure Joint access in a plausible operational scenario 
in 2020 due to shortfalls, specifically:

         Some undersea capabilities will be slowed:

                 Attainment of the required P-8A inventory 
                (117) would be delayed from 2019 to 2020, and 
                transition from the P-3C to the P-8A would be delayed 
                from 2019 to 2020.
                 The LCS ASW Mission Package would be delayed 
                from 2016 to 2017.
                 Upgraded sonobuoys and advanced torpedo 
                procurement would still equip all of our helicopters, 
                SSN, and P-8A in the Western Pacific by 2018.
                 VPM would still be fielded in 2027 to enable 
                Virginia-class SSN to replace SSGN that begin retiring 
                in 2026.
                 The LCS mine warfare mission package would 
                still field its first increment in 2015 and the second 
                in 2019.

         Air and missile defense improvements would be slowed:

                 SEWIP upgraded electromagnetic sensing and 
                upgraded jamming and deception capabilities would both 
                be delayed 1 year (to 2015 and 2018, respectively). 
                Both of these upgrades are required to counter advances 
                in adversary anti-ship cruise missiles.
                 The new Air and Missile Defense Radar (AMDR) 
                would be delivered on only four ships, as compared to 
                seven under our President's budget for 2014 submission, 
                between 2021 and 2024.
                 The Evolved Sea Sparrow Missile Block II would 
                still be fielded in 2020, with 80 missiles being 
                delivered to deployed ships.
                 The F-35C Lightning II, the carrier-based 
                variant of the Joint Strike Fighter, would still field 
                in 2019 and join our CVW forward homeported in the 
                Western Pacific in 2020. Overall, the number of F-35 
                procured would decrease by about 30 aircraft in 2020.
                 All components of the improved air-to-air IR 
                kill chain that circumvents adversary radar jamming 
                would be delayed by 2 years. The Infrared Search and 
                Track (IRST) sensor system would field in 2018 and the 
                improved longer-range IRST would not deliver until 
                2021. The new longer-range AIM-9X Block III missile 
                would not be fielded until 2023.
                 Improvements to the air-to-air RF kill chain 
                would be slowed down as F/A-18E/F Block II Super Hornet 
                anti-jamming upgrades would be delayed to 2020. The 
                longer-range AIM-120D missile would still field in 2014 
                but equipping of all Pacific carrier air wings would be 
                delayed by 2 years to 2022.
                 The Navy Integrated Fire Control--Counter Air 
                network would still initially field with the E-2D 
                Advanced Hawkeye in 2015, but only four CVW (compared 
                to six in our President's budget submission for 2014) 
                would have it by 2020. Transition to the E-2D would be 
                delayed 3 years to 2025.

    General Amos. Although we are seeing an increase in the type and 
complexity of Chinese systems and capabilities that are challenging and 
of concern to all the Service Chiefs, I am confident that we will 
continue to make the right investments to outpace these threats. My 
focus has been and will continue to be on ensuring the readiness of the 
Marine Corps--to provide the Nation's forward deployed crisis response 
capability. These capabilities will not be aimed at countering one 
specific threat but must be able to respond to crises that have yet to 
be identified.
    We have consciously shifted some of our funding to maintaining a 
current level of readiness, and sacrificed some modernization efforts. 
However, we continue to invest in reducing the weight of our tactical 
vehicles while providing the requisite protection for our marines. This 
will make greater use of autonomy, and to expand our command and 
control, ISR, and expeditionary logistics capabilities to the tactical 
edge. These capabilities when paired with fifth generation aircraft 
such as the F-35B, the Amphibious Combat Vehicle, and forward deployed 
amphibious warships will enable future MAGTFs to continue to serve as 
an insurance policy against future threats. However, continued 
sequestration will further restrict the adjustments and choices I will 
be able to make to long-term modernization efforts while maintaining 
near-term readiness.
    General Welsh. Sequestration-level cuts will impact every one of 
our investment programs. Modernization/recapitalization is required in 
order to execute our core missions against the spectrum of threats, 
including a high-end adversary. Failing to achieve national objectives 
in a major full-spectrum fight against a near-peer adversary, due to a 
lack of modernization or recapitalization, is unacceptable. If the 
budget reduction under current law continues, erosion of our efforts to 
modernize the force will impact our ability to meet the future 
technological challenges presented by a near-peer adversary, while also 
impacting required readiness necessary for contributing to the joint 
force. Given adequate resources our airmen will innovate and find new 
and better ways of approaching future military challenges.

    64. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do you agree that under sequester we risk 
ceding our technological advantage over the Chinese?
    General Odierno. I agree that the indiscriminate nature of the 
sequestration reductions to Army science and technology (S&T) efforts 
risks ceding our technological advantage over the long-term. 
Investments in S&T are a critical hedge in developing technological 
superiority through enabling and revolutionary technologies.
    Sequestration has already had a significant impact on the Army's 
S&T programs, with the most serious effects felt by the civilian 
workforce at our labs and research, development, and engineering 
centers. Due to sequestration impacts (including furloughs, associated 
impacts such as travel and conference restrictions, and hiring and pay 
freezes), the Army is losing personnel with specialized critical 
expertise. For example, the Night Vision and Electronic Sensors 
Directorate lost 8 personnel in June and July 2013 alone, compared to 
an average annual loss of around 19 personnel. These pressures also 
make it more difficult to attract top talent, especially in areas of 
new technical emphasis within the DOD such as cyber research and 
systems biology. The loss of key personnel and the inability to attract 
new talent will have long-term effects that will be difficult to 
recover from, even after sequestration has ended.
    Sequestration also forced a large (nearly 50 percent) reduction in 
new basic research grants in fiscal year. Army basic research advances 
the frontiers of fundamental S&T and drives long-term, leap-ahead 
capabilities for the Army through a multi-disciplinary portfolio 
teaming our in-house researchers with researchers and graduate students 
at 120 universities in 38 States.
    Sequestration has caused cancelations and delays in applied 
research and technology development areas as well. For example, we have 
delayed the Extended Area Protection and Survivability program by 6 
months. This program supports DOD's strategic shift to the Asia-Pacific 
region through the development of new technologies for counter unmanned 
aerial systems and counter cruise missile missions. Continued 
sequestration in fiscal year 2014 and beyond will greatly exacerbate 
these challenges.
    Admiral Greenert. If fiscally constrained to the revised 
discretionary caps over the long-term, one potential scenario would 
result in the development of Navy's capabilities to project power not 
staying ahead of potential adversaries' A2/AD capabilities, effectively 
ceding our technological advantage.
    General Amos. Although we are seeing an increase in the type and 
complexity of Chinese systems and capabilities that are challenging and 
of concern to all the Service Chiefs, I am confident that we will 
continue to make the right investments to outpace these threats. My 
focus has been and will continue to be on ensuring the readiness of the 
Marine Corps--to provide the Nation's forward deployed crisis response 
capability.
    Marine Corps S&T efforts are fully integrated into the Office of 
Naval Research. Our relatively modest U.S. Marine Corps investment in 
S&T is not focused on China per se. We are focusing on our traditional 
expeditionary capabilities in the pivot to the expansive Asia-Pacific 
theater. We are investing in programs that will support lightening the 
MAGTF for rapid employment while retaining sufficient combat power to 
prevail against threats in the littorals.
    The A2/AD challenges of concern to the Navy are of equal concern to 
the Marine Corps, and will impact the ability of the Marine Corps to 
provide effective crisis response throughout the littorals of the Asia-
Pacific theater. The emphasis/priorities that naval S&T has placed on 
future disruptive/game changing technologies in directed energy, 
lasers, electronic warfare, cyber, autonomy, and mine counter measures, 
will enable our continued technological advantage in this environment. 
These critical technologies in concert with others that support Navy 
specific requirements ensure the Nation's naval team has the ability to 
assure access, project power, and provide for an integrated defense of 
our amphibious forces, carrier battle groups, and other Joint Forces.
    General Welsh. The impact of sequester has introduced uncertainty 
into rebuilding unit readiness, investment to restore infrastructure, 
and modernization/recapitalization efforts. The uncertainty introduced 
into our force structure planning efforts will impact the operational 
availability of some of our most technologically advanced capabilities 
and could impact the Air Force's ability to execute its mission. In the 
face of this increased uncertainty, the Air Force continues to strive 
to present a modern and technologically advanced force to combatant 
commanders. The fiscally informed decisions we make now will transform 
today's Air Force into a ready, smaller, highly-trained, and modern 
force prepared to provide global vigilance, reach, and power against 
technologically-advancing near-peers.

    65. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how will sequester impact the defense 
industrial base and its ability to increase production of critical 
capabilities in response to a contingency?
    General Odierno. The Army expects that sequestration will impact 
the defense industrial base and its ability to increase production of 
critical capabilities in response to a contingency in the following 
ways:

         Shrinking demand and production rates will lead to 
        higher proportional unit and overhead costs.
         Lower production rates will lead to shrinkage in the 
        labor force. The loss of trained and experienced workers may 
        reduce industry's ability to quickly respond to future 
        requirements.
         Long-term reductions in funding will threaten the 
        Army's future modernization efforts and place major acquisition 
        programs at risk, thereby providing fewer opportunities to 
        maintain design and manufacturing skills in the industrial 
        base.

    The Army is conducting assessments of the industrial base, both on 
its own and in conjunction with broader DOD initiatives assessing the 
defense sector. The AT Kearney Combat Vehicle Industrial Base 
assessment, and the DOD's sector-by-sector, tier-by-tier analysis are 
focused on identifying potential weak points in the industrial base and 
guiding efforts that support critical elements found to be at risk.
    Admiral Greenert. The fiscal year 2014 President's budget request 
requires the BCA of 2011's discretionary budget caps be replaced in 
fiscal year 2014 and beyond. If the discretionary caps are not revised, 
our fiscal year 2014 obligation authority could be reduced $10 to $14 
billion. This would compel Navy to again reduce operations, 
maintenance, and procurement in fiscal year 2014, negatively impacting 
the industrial base.
    Delayed weapon system production and cancelled or deferred 
maintenance and repair will impact ship, aircraft, missile, and land 
system manufacturers and our industrial supplier base. The projected 
loss of planned work in fiscal year 2014 due to sequestration will 
further stress smaller businesses that provide supplies and services to 
major manufacturers, which have already been impacted due to the 
general downward trend in defense spending.
    General Amos. Sequestration has had, and will continue to have, a 
deleterious impact on our Marine Corps industrial base. Under Secretary 
Hale testified in March 2013 that sequestration disrupted as many as 
2,500 investment programs--driving up unit costs at the very time DOD 
is trying to hold them down. The persistence of sequestration will 
cause additional cost increases, schedule delays, and adverse effects 
on our piece of the larger defense industrial base.
    The Marine Corps relies on the non-DOD base for much of the 
research, development, testing and evaluation (RDT&E) that nets us our 
advanced technology and systems. Sequestration is placing pressure on 
commercial industry's ability to maintain expertise in critical 
technologies and core competencies, as well as its ability to avoid 
contraction, which could lead to less cost-effective solutions in 
support of our warfighting capability. The small businesses the Marine 
Corps relies on, either as prime or sub-prime partners, are hard-
pressed to absorb delays in receipt of contract awards. In order to 
stay in business, they will need timely and predictable contract award 
actions.
    At Marine Corps Logistics Command (LOGCOM), our artisans perform 
repairs on the full spectrum of Marine Corps equipment. The LOGCOM 
workforce consists of skilled and seasoned artisans not found in 
commercial industry near our production plants. Many of these artisans 
require highly specialized, technical skill sets and certifications 
that are low-density in commercial industry and take years to develop. 
Examples include specialized metals and coatings workers, electro-optic 
workers, and engineers capable of design and fabrication of parts for 
our legacy systems that are no longer manufactured. If the Marine Corps 
is forced to make precipitous cuts to the LOGCOM workforce, it would 
take time to regrow the workforce and requisite skill sets, putting at 
risk our capability and capacity to surge in response to unforeseen 
contingencies.
    General Welsh. The impacts of sequestration on the Air Force flowed 
across the broad network of companies, large and small, that provide 
the goods and services that enable the Global Reach, Global Vision, and 
Global Power of Air Force capabilities. Companies have already 
responded to the new fiscal reality. Some companies have made cuts in 
personnel, consolidated their operations, and stopped selling to the 
military. The net result is a smaller defense industrial base.
    This smaller industrial base, in general, will be less capable of 
responding to a sudden increase in demand or a production surge. There 
will be reduced workers at fewer locations with less raw materials 
readily available. At the same time, the demands from the Air Force and 
other Services are no longer for simple industrial age products but for 
precision weapons and systems with highly advanced technical 
capabilities. The combination of starting from a reduced position and 
producing systems that are both complicated and complex, presents the 
industrial base with a significant challenge when attempting to surge. 
My hope is that the Nation will have the time needed for the industrial 
base to respond. The airmen who will be called upon to fly, fight, and 
win will need those capabilities.

    66. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, what are your priorities for critical 
capabilities that need to be protected at all costs?
    General Odierno. The Army will protect its critical capabilities by 
continuing to engage in activities that ensure the commercial and 
organic portions of the Army industrial base meet the needs of the 
warfighter.
    The Army is conducting assessments of the industrial base, both on 
its own and with AT Kearney. The AT Kearney Combat Vehicle Industrial 
Base assessment, and the DOD's Sector-by-Sector, Tier-by-Tier program 
are focused on identifying potential weak points in the industrial base 
and then guiding efforts that support critical elements and 
capabilities found to be at risk.
    Through implementation of its Army Organic Industrial Base 
Strategic Plan, the Army continually assesses the organic industrial 
base to identify core depot and critical manufacturing capabilities, 
areas of risk, and present and future organic industrial base 
requirements. This will ensure that depot and arsenal workforces and 
infrastructures are sized and adjusted accordingly over time to sustain 
core depot and critical manufacturing capabilities to support the needs 
of the warfighter during current and future contingency operations.
    Admiral Greenert. There are several missions and needed 
capabilities specified in the 2012 DSG that we cannot perform or keep 
pace with potential adversaries if constrained to the BCA reduced 
discretionary caps in the long-term. However, our highest priority 
missions are to maintain a credible and modern sea-based strategic 
deterrent, maximize foreign presence to the extent possible using ready 
deployed forces, and continue investing in asymmetric capabilities 
while doing our best to sustain a relevant industrial base.
    General Amos.

         Amphibious Combat Vehicle
         F-35B, Joint Strike Fighter
         Amphibious Warships

    General Welsh. As we plan for various budget scenarios, we will 
remain strategy driven by focusing on the unique capabilities we 
provide the joint force and our ability to execute those capabilities 
against a high-end threat. We seek to be ready in 2014 for a full range 
of combat operations, while also building an Air Force capable of 
executing our five core missions. However, with a sequestered budget, 
we will not be able to protect our critical capabilities, and will not 
be able to train or equip our forces or for the full range of 
operations against a determined, well-armed, and well-trained 
adversary. The U.S. Air Force provides Global Vigilance, Global Reach, 
and Global Power to defend our great Nation. At all costs, we must 
preserve our enduring contributions in air and space superiority; ISR; 
rapid global mobility; global strike; and command and control. Each of 
these effects is only provided through the synergy of the right airmen, 
with the right training, possessing the right equipment. We must make 
prudent choices to ensure the Air Force is able to unleash the full 
potential of airpower today, tomorrow, and in the future.
    To strengthen our unique and enduring contributions, the Air Force 
will: deter and defeat adversaries with a credible first-look, first-
shot, and first-kill capability; hold our adversaries and what they 
value at risk while operating on a global scale with unmatched joint 
integration; exploit and defend air, space, and cyberspace, especially 
in contested environments, while denying our adversaries unrestricted 
use of the same. In addition, we believe excess infrastructure is an 
issue we must address and believe there are precious dollars to be 
saved in infrastructure reductions and interoperability improvements. 
We must integrate and organize our Active, Reserve, and Guard forces to 
leverage the unique strengths and perspectives of each to seamlessly 
execute Air Force missions; enhance relationships and interoperability 
with our sister Services, other government agencies, allies, and 
partners. The money saved from these efforts must be redirected towards 
readiness and training. We must better train airmen to bring their 
unique specialties together in more realistic, intense, and diverse 
environments to advance integrated airpower operations. Then we must 
take the highly trained force and do everything in our power to keep 
the force ready. An emphasis on readiness to ensure the highest quality 
force, regardless of size; and modernize our capabilities to reduce 
operating costs while attaining desired effects with greater 
persistence, survivability, longer range, and more versatile payloads 
is absolutely essential.

                         nuclear modernization
    67. Senator Inhofe. Admiral Greenert, because of budget reductions, 
the replacement for our aging nuclear ballistic missile submarines has 
been delayed by 2 years. As a result, U.S. Strategic Command (STRATCOM) 
and the Navy believe this will impose moderate operational risk in 
approximately the 2030 timeframe. Will the sequester cause an even 
greater delay in this program?
    Admiral Greenert. Due to its national importance, the Navy will 
maintain a credible and modernized sea-based strategic deterrent even 
if it results in taking risks in other missions of the Navy. However, 
without congressional action or mitigating circumstances, sequestration 
in fiscal year 2014 will delay the planned start of construction of the 
first SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
cause us to be unable to meet STRATCOM presence requirements when the 
Ohio-class SSBN retires.

    68. Senator Inhofe. General Welsh, the replacement for the nuclear 
air-launched cruise missile (carried by strategic bombers) is the long-
range standoff (LRSO) missile, which has been delayed by 2 years. Can 
we expect further delays due to sequestration?
    General Welsh. The LRSO program is a high priority nuclear 
deterrence operations capability, and the Air Force has had to make 
difficult strategic trades affecting other modernization programs in 
order to minimize the impact of sequestration to LRSO. The program is 
currently on track to achieve Milestone A in fiscal year 2014 and a 
Technology Demonstration contract award in fiscal year 2015. However, 
it is highly likely LRSO could be further delayed if sequestration 
continues based on impacts to the National Nuclear Security 
Administration's (NNSA) ability to produce a warhead synchronized with 
the DOD timeline requirement. NNSA planned to start the LRSO warhead 
Life Extension Program (LEP) in fourth quarter of fiscal year 2014 
based on their fiscal year 2014 budget submission. NNSA is reviewing 
their budget priorities to include impacts of sequestration, and will 
resolve prior to the submission of their fiscal year 2015 budget.

    69. Senator Inhofe. General Welsh, how could sequestration and 
further budget reductions impact the current Intercontinental Ballistic 
Missile (ICBM) force and the development of a follow-on system?
    General Welsh. Sequestration will slow our fuze modernization 
program, upgrades to cryptographic and code handling media, and 
replacement of aging missile transport support, and reentry vehicle 
test equipment for the Minuteman III ICBM. Technology maturation, 
system analysis, and acquisition planning for a follow-on system will 
continue as planned with the Ground Based Strategic Deterrent (GBSD) 
AoA completing in June 2014. However, should sequestration continue 
into fiscal year 2015 and beyond, GBSD could be placed at risk along 
with other critical nuclear modernization programs.

    70. Senator Inhofe. General Welsh, would DOD consider eliminating a 
squadron or wing of ICBMs due to budget cuts?
    General Welsh. DOD is currently reviewing force structure options 
to comply with the New Strategic Arms Reduction Treaty (START). 
Speaking for the Air Force, any near-term ICBM reductions will be tied 
to treaty compliance, rather than to meet a specific budget level. As 
we look to the future, there are a number of major modernization 
challenges facing the triad. This will require an honest debate as a 
Nation on what we can afford, and what is required to support our 
national strategy.

    71. Senator Inhofe. Admiral Greenert and General Welsh, why are any 
reductions in the nuclear forces necessary, when the Deputy Secretary 
of Defense, Ash Carter, told the House Armed Services Committee (HASC) 
in August, that nuclear forces are not a big swinger of the defense 
budget?
    Admiral Greenert. Strategic nuclear force structure will comply 
with the agreed upon limits under the New START treaty. The 2010 
Nuclear Posture Review (NPR) concluded that stable deterrence can be 
maintained while reducing accountable strategic delivery vehicles and 
warheads below the 2002 Moscow Treaty levels.
    General Welsh. DOD must reduce strategic nuclear forces to comply 
with the central limits agreed to in the New START treaty by February 
5, 2018. The Treaty allows the United States to maintain and modernize 
our strategic nuclear forces in a way that best protects our national 
security interests, within the overall central limits of the Treaty.

    72. Senator Inhofe. Admiral Greenert and General Welsh, wouldn't 
the United States have to increase reliance on its nuclear forces if 
budget cuts continue to hollow-out our conventional forces?
    Admiral Greenert. No. As stated in the 2010 NPR, the United States 
would only consider the use of nuclear weapons in extreme circumstances 
to defend the vital interests of the United States or its allies and 
partners. In many cases, it would be inappropriate and counter-
productive to assign nuclear forces to the type of missions that are 
carried out by conventional forces.
    General Welsh. As stated in the 2010 NPR, the fundamental role of 
U.S. nuclear weapons is to deter nuclear attack on the United States, 
our allies, and partners. Although sequestration will have an impact on 
future Air Force conventional capabilities and readiness, the Air Force 
is not aware of any administration or DOD changes to policy that direct 
an increase in reliance on strategic forces to compensate for potential 
gaps in conventional capabilities that may result from reductions in 
defense spending.

                   fiscal year 2015 budget decisions
    73. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, what are some of the issues that are currently 
being discussed for the fiscal year 2015 budget?
    General Odierno. The SCMR review concluded that the Total Army must 
reduce its endstrength, combat formations, readiness, and modernization 
programs dramatically to keep pace with each of the proposed budget 
options. We must strike the right balance between end-strength, 
readiness, and modernization across the active Army, the Army National 
Guard, and the U.S. Army Reserve as we reduce the size of the force.
    If the magnitude and speed of the discretionary cap reductions 
remain, causing Army end strength to drop below 450,000, the Army will 
not be able to fully execute the 2012 DSG requirements. From fiscal 
year 2014 to fiscal year 2017, as we continue to draw down and 
restructure the Army into a smaller force, the Army will have 
significantly degraded readiness and extensive modernization program 
shortfalls. Only in fiscal year 2018 to fiscal year 2023 will we begin 
to rebalance readiness and modernization. This rebalance will come at 
the expense of significant reductions in force structure and end 
strength, which may not allow us to execute the DSG and, in my opinion, 
will add significant risk for the Army to conduct even one sustained 
major combat operation.
    The Army is continuing to examine future year readiness and 
investment impacts as a result of fiscal uncertainty.
    Admiral Greenert. We have been directed by the OSD to build a 
budget, called the alternate POM, which assumes funding levels at the 
revised discretionary caps over the long-term. This is being prepared 
and we are currently deliberating on the alternate POM in program 
budget reviews within DOD. There is also a secondary funding level that 
is under consideration at a higher level to provide additional options, 
but we are focusing on the alternate POM right now.
    General Amos. The Marine Corps is focused on how to maintain a 
ready force postured for crisis response and forward presence in an 
uncertain and declining fiscal environment. Readiness remains our 
primary concern, but adverse impacts upon training and longer term 
investment and modernization become more critical each year 
sequestration continues.
    General Welsh. Given the magnitude of the cuts the Air Force and 
the rest of DOD face, all options were considered during the 
development of our fiscal year 2015 budget. As a result, the Air Force 
divested less capable aircraft that are optimized for a single mission 
and, instead, prioritized multi-role survivable aircraft; reduced 
modernization while protecting critical initiatives including our top 
acquisition priorities (F-35A, KC-46A, LRS-B, space strategic warning, 
secure communications, and space situational awareness); protected 
readiness to the maximum extent possible; and reduced headquarters 
staff.

    74. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, help me understand the significance of the 
trades that sequestration is forcing you to make as you look to 
finalize the fiscal year 2015 budget.
    General Odierno. The choices we must make to meet reduced funding 
levels caused by sequestration could force us to reduce our Army in 
size and capability to levels that I am not comfortable with as the 
Chief of Staff of the Army. We must develop a leaner, smaller Army that 
remains the most highly-trained and professional All-Volunteer land 
force in the world; one that is uniquely organized with the capability 
and capacity to provide expeditionary, decisive landpower to the Joint 
Force, and is ready to perform the range of military operations in 
support of combatant commanders to defend the Nation and its interests 
at home and abroad, both today and against emerging threats. For those 
who present the choice as one between capacity and capability, I would 
remind them that for the Army, soldiers are our capability. The Army 
must train and equip soldiers to achieve decisive strategic results on 
the ground. If the funding dictates a smaller Army, then we must be 
prepared for both reduced capacity and reduced capability.
    Ultimately, the size of our Army will be determined by the guidance 
and amount of funding provided by Congress. Under the proposed SCMR 
funding levels, the Army was sized-to-budget, meaning that in order to 
build and sustain a ready force, the Army would be reduced to no more 
than 420,000 in the Active Army, 315,000 in the Army National Guard, 
and 185,000 in the U.S. Army Reserve. This results in significantly 
less than the 52 BCTs I believe we need. Additionally, it would require 
us to reduce our modernization accounts by nearly 25 percent; leaving 
no program unaffected. While we have not made our final decisions at 
this point, major weapon programs will inevitably be delayed. The 
impact on the industrial base is likely to be severe.
    The Army is continuing to assess the impacts and potential trades 
as a direct result of sequestration in fiscal year 2014. The results of 
current deliberations will be presented during the fiscal year 2015 
budget briefings to Congress.
    Admiral Greenert. Consistent with what the Deputy Secretary of 
Defense told this committee in August, if fiscally constrained to the 
BCA revised discretionary caps over the long-term (2013 to 2023), the 
Navy of 2020 would not be able to execute the missions described in the 
2012 DSG. There are numerous ways to adjust the Navy's portfolio of 
programs to meet the revised discretionary caps. These are currently 
under deliberation within DOD.
    Any scenario to address the fiscal constraints under current law 
must include sufficient readiness, capability, and manpower to 
complement the force structure capacity of ships and aircraft. This 
balance would need to be maintained to ensure each unit will be 
effective, even if the overall fleet is not able to execute the DSG. 
There are, however, many ways to balance between force structure, 
readiness, capability, and manpower.
    General Amos. The Marine Corps will protect near-term readiness at 
the expense of significantly increased risk in equipment modernization 
and infrastructure sustainment which creates imbalances across the 
Corps. The Marine Corps will rebalance to the Pacific and prioritize 
crisis response and support of deployed and next to deploy units. 
However, if sequestration remains in effect, the Marine Corps would be 
forced to reduce its permanent Active Duty end strength to 175,000 
which accepts risk in Major Combat Operations (MCO) as operating forces 
will be engaged in one theater thus reducing forces available for MEUs, 
SPMAGTFs, TSC operations, and other operational commitments. This risk 
cannot be continued indefinitely as less funding for equipment 
maintenance, training, ranges, and facilities ultimately impacts 
readiness for next-to-deploy and home station crisis response forces.
    Additionally, the conditions of our facilities--across the board--
will reduce from fair to poor within the FYDP in conjunction with 
minimum funding for base operating support functions (utilities, life/
safety/heath, et cetera) and significant reductions to MILCON/facility 
sustainment, restoration, and modernization. Finally, reductions to 
equipment modernization result in deferred Initial Operating Capability 
(IOC) and reductions to critical capabilities such as maneuver, net-
centric, interoperable, persistent ground surveillance, and command and 
control.
    General Welsh. The significance of the trades we were required to 
make in our fiscal year 2015 budget are clear: the caps established by 
the BCA and sequestration will result in an Air Force that has less 
capability and less capacity. Additionally, the front-loading of the 
BCA cuts also forced us to consider tradeoffs in current readiness 
versus future preparedness. Collectively, in formulating an Air Force 
budget that complied with the BCA and the fiscal guidance, we had to 
accept that we could not fund an Air Force that would be fully capable, 
retain capacity, appropriately ready for near-term contingencies, and 
recapitalized for the future. Instead, you will see an Air Force 
lacking the capacity and capability needed to implement the DSG, 
quickly compel adversaries, and avoid unprecedented levels of risk to 
the lives of servicemen and women called into conflict.

         impact of sequestration on military medical readiness
    75. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, how are effects of sequestration expected to 
impact the health of our men and women in uniform?
    General Odierno. The health of our soldiers directly impacts the 
security of our Nation. The soldier is the primary weapon system of the 
U.S. Army. Accordingly, soldiers' health equates to readiness. Military 
medical health and readiness are directly tied to the Military Health 
System's (MHS) ability to provide the right care at the right time. We 
must maintain a stable fiscal platform that allows us to focus on our 
priorities of Combat Casualty Care, Readiness and Health of the Force, 
a Ready and Deployable Medical Force, and Health of Our Families and 
Retirees.
    Sequestration has placed tremendous pressure on Army medicine to 
provide adequate care to soldiers and other beneficiaries. Fiscal 
uncertainty has led to a decrease in patient encounters, enrollment, 
and overall patient satisfaction. We expect the trend to continue if 
sequestration remains in place.
    Over one third of our civilian medical workforce was furloughed as 
a result of the most recent government shut down. Previously, 83 
percent were furloughed due to sequestration. The uncertainty caused by 
such furloughs is taking a toll on our personnel and creating hardship. 
The Army Medical Command has lost over 4,000 medical workforce members, 
representing nearly 10 percent of the civilian workforce. Continued 
turbulence for our civilian workforce adversely impacts the Total Army 
medical team morale, which will negatively impact retention of both 
military and civilian staff. In the long-term, continued uncertainty 
will likely cause civilian personnel to migrate to the civilian health 
care sector and prevent us from maintaining the right talent we need 
for the future.
    Sequestration also negatively impacts the long-term R&D of new 
medical treatments and solutions for the battlefield. The funding 
requirements for military medical R&D are not tied to the size of the 
force, but to the diversity of medical challenges imposed by 
operational and environmental health threats that will increase with a 
change in operational focus to the Pacific.
    More than a decade of war has led to tremendous advances in 
knowledge and care of combat-related wounds, both physical and mental. 
Our decisions today must preserve the Army's core medical research 
competencies and, through continued medical research investments, 
sustain a productive capability to ensure strategic flexibility and 
respond to current and future threats. If forced sequestration cuts 
continue to reduce the Army budget in fiscal year 2014 and beyond, we 
will risk losing our core medical research competencies and 
compromising our ability to prevent technological surprise and deliver 
medical solutions necessary to address the gaps discovered during 12 
years of combat operations.
    Admiral Greenert. Our sailors must be medically ready to meet their 
demanding responsibilities. Just as importantly, they need to be 
confident when they are deployed that their families have access to 
quality health care. The Navy is committed to maintaining access to 
health care for all our beneficiaries; however, I remain concerned 
about the impact of sequestration at our medical centers, hospitals, 
and clinics. With planned reductions, Navy MTFs will have fewer 
resources to address the needs of our beneficiaries at a time when we 
are seeing an increase in the number of patients in our facilities and 
an increase in demand for health care services. In order to address the 
anticipated increased demand for access to care at MTFs, fiscal year 
2014 sequestration cuts will continue to be channeled to decreasing 
facilities sustainment (restoration and modernization), equipment 
purchases, and travel, and descoping healthcare support and service 
contracts.
    General Amos. Our sailors supporting the Marine Corps are committed 
to providing the highest level of quality patient care and access for 
wounded warriors and beneficiaries. However, sequestration will 
adversely impact medical research targeted for wounded warriors and 
impact long-term cost saving initiatives, such as the Marine-Centered 
Medical Home. Sequestration will also undermine restoration, 
modernization efforts, and facility repair, thereby decreasing access 
to quality care and the patient experience.
    General Welsh. To date, the Air Force has not experienced any 
visible impact from sequestration on the health of our airmen; we have 
worked very hard to ensure our airmen and their families continue to 
receive quality and timely health care. In the short-term, 
sequestration impacts to staffing could result in delays in some 
services, and the need to send some patients to the civilian network 
for care. Long-term impacts of continued sequestration on readiness are 
of great concern. Continued cuts to R&D programs could delay critical 
advancements in military medicine that allow us to provide cutting-edge 
care on the battlefield and prepare us for the next war. Prolonged 
delays in acquisition of medical equipment or funding of medical 
military construction and facility sustainment projects, traditional 
bill payers during constrained budget periods, will also result in the 
Air Force no longer providing state-of-the-art care to our members and 
families. When this occurs, we will eventually see an impact on the 
recruiting and retention of highly qualified medical providers as they 
become dissatisfied with their working environment and the ability to 
maintain their wartime skills at proficiency level. Ultimately, all of 
these factors would reflect on the care we are able to provide to 
ensure our force is healthy and fit. We are committed to supporting our 
airmen and their families and, if sequestration continues, will make 
adjustments in an effort to focus our resources where they are most 
needed.

    76. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, what impact does a medically unfit fighting 
force have on our national security?
    General Odierno. A medically unfit fighting force negatively 
affects the Army's ability to support the NMS because of a decreased 
number of combat-deployable soldiers. Currently, the number of 
medically non-available soldiers has remained consistent at 65,000 
across the Active and Reserve components. Because all these soldiers 
count against the Army components' end strength numbers, it will 
exacerbate the Army's personnel readiness posture as we also work 
through a deliberate drawdown. The greater the percentage of medically 
unavailable soldiers becomes against the Army's decreasing end 
strength, the fewer soldiers are available to deploy to achieve NMS 
objectives.
    Admiral Greenert. Our sailors must be physically and mentally 
capable to fulfill their demanding operational responsibilities. The 
medical readiness of sailors is directly linked to Fleet readiness; 
when they are medically unfit, it impacts their ability to contribute 
to the mission of their ship or command. This in turn harms our ability 
to deliver the appropriate readiness, warfighting capability, and 
forward presence the Nation depends upon from our Navy.
    General Amos. The Marine Corps is America's premier crisis response 
force. As such our readiness is directly tied to confronting emerging 
threats whenever and whenever they may next strike. Medically unfit 
marines reduce strategic and operational options available to combatant 
commanders, reduce the size of the force and decrease readiness. 
Service men and women of the Marine Corps will continually be called 
upon to fight the Nation's wars and to protect American's freedoms. 
Marines must be in top physical condition, which translates into being 
healthy and fit to perform their mission. A medically unfit fighting 
force presents a difficult challenge to military preparedness and to 
force health protection, and may lead to significant implications for 
national security.
    General Welsh. Each component of a mission-critical system, to 
include the airmen operating the system, must be properly maintained 
(or fit) to ensure optimal function. A medically unfit airman threatens 
system success and endangers the Air Force's ability to prosecute our 
national strategic objectives. This has the potential to put our 
national security interests at risk.

            research and development, science and technology
    77. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, R&D and S&T budgets are typically the first to 
be cut when budgets are constrained. What roles do R&D and S&T play in 
the ability of your Services to provide for the security of this Nation 
and its people?
    General Odierno. The Army's S&T vision is to foster innovation, 
maturation, and demonstration of technology enabled capabilities that 
empower, unburden, and protect the warfighter of the future while 
exploiting opportunities to transition increased capability to the 
current force. S&T, an early component of R&D, enables soldiers to 
dominate the battlefield today and tomorrow. Investments in R&D and S&T 
are critical to our efforts to maintain technological superiority. The 
Army depends on its S&T programs to research, develop, and demonstrate 
high-pay-off technological solutions to threats faced by soldiers in 
complex environments across the full spectrum of conflict. In order to 
prevent, shape, and win future conflicts in an uncertain and complex 
world, Army S&T must deliver timely technology solutions that address 
the Army's top priority capability gaps.
    The R&D mission leverages advancements developed through the S&T 
programs and brings those ideas/technologies to bear, fulfilling the 
cornerstone of our NMS to always have the technological advantage.
    Both S&T and R&D provide a wealth of knowledge, invention, and 
discovery. In addition, investment in S&T and R&D provides the Army 
with the foundation necessary to support the development of a spectrum 
of capabilities from revolutionary and disruptive capability 
development via new programs of record (POR) to evolutionary 
advancements in capability through existing PORs. However, constant 
fluctuation and uncertainty due to the current fiscal environment 
inhibits our ability to develop and mature key technologies that ensure 
our warfighters maintain a technological edge over our adversaries.
    Admiral Greenert. Naval R&D and S&T deliver new affordable 
capabilities to the Navy that ensure continued superiority of the U.S. 
naval forces of today and the warfighters of the future. Naval S&T 
supports a Navy that is capable of prevailing in any environment by 
focusing on S&T areas with big payoffs, encouraging innovative thinking 
and business processes, and striving to improve the transition of S&T 
into acquisition programs in the most cost-effective means possible--
striking the right balance between responsive near-term technology 
insertion and long-term basic research. S&T investments enable the 
technical superiority of our naval forces by producing knowledge and 
transitions, and growing a healthy science and engineering workforce.
    If sequestration continues, there would be adverse impacts to many 
of our R&D programs due to contract cancellations, contract 
terminations, and undetermined cost increases caused by inefficient 
contracting and schedule delays. These impacts will reduce and delay 
our R&D efforts and negatively impact key procurement strategies in 
future years.
    General Amos. Marine Corps Naval R&D and S&T investments enable new 
affordable capabilities that ensure the continued technical superiority 
of our warfighters today and into the future. Without an adequate 
investment in S&T, we are in jeopardy of employing obsolete legacy 
technology. Many programs such as the Amphibious Combat Vehicle rely on 
these investments to make affordable and effective material solutions 
feasible.
    The Marine Corps S&T program is fully integrated into the Office of 
Naval Research. Naval S&T investments support a Navy and Marine Corps 
that is capable of prevailing in any environment by focusing on areas 
with sizeable payoffs, encouraging innovative thinking and business 
processes, and striving to improve the transition of S&T into 
acquisition programs in the most cost-effective means possible--
striking the right balance between responsive near-term technology 
insertion and long-term basic research. Our U.S. Marine Corps S&T 
investments enable technical superiority by producing knowledge 
products, enhancing current programs of record, and transitioning new 
capabilities into emerging programs of record. Our R&D and S&T funding 
also supports an essential science and engineering workforce, keeping 
it technically relevant and capable of developing and evaluating 
technology enhancements for warfighter applications. Maintaining an 
appropriate investment in our technology base is critical to ensure the 
ability to keep pace with future threats and opportunities. The Marine 
Corps S&T Strategic Plan establishes priorities and provides the combat 
developer's guidance and direction for investments in areas that will 
enable future operational concepts.
    General Welsh. Since its inception, the U.S. Air Force has 
protected the Nation through technical innovation. The Air Force S&T 
program prepares and equips the warfighter to face threats in an 
uncertain future. The Air Force S&T program investigates game-changing 
technologies to affordably transition the art-of-the-possible into 
military capabilities. We invest in research that addresses urgent, 
near-term warfighter needs as well as research that will provide 
revolutionary capabilities in the future. The Air Force S&T program is 
multifaceted and flexible; it maintains a strong core of in-house 
expertise, pursues technologies in coordination with industry and 
academia, and leverages global S&T developments and emerging 
capabilities.
    Even in these tenuous fiscal times, maintaining investment in S&T 
is crucial to the future safety of the Nation. The rapid-fire rate of 
technological development across the globe necessitates that America 
remains a technologically superior Nation--and the Air Force S&T 
program leads the charge in creating a secure, technologically-advanced 
future for our warfighters.

           impact of sequestration on the war in afghanistan
    78. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do you agree that funds used to pay for 
ongoing efforts in Afghanistan do not soften or lessen the impact of 
sequestration?
    General Odierno. Yes. The Army fenced the OCO funds directly 
supporting ongoing operations in Afghanistan and did not use them to 
lessen the impact of sequestration.
    Admiral Greenert. Funds provided by Congress to Navy for OCO do not 
lessen the impacts of sequestration. OCO funds provide for incremental 
operating costs associated with efforts in Afghanistan and cannot be 
realigned to other Navy efforts impacted by sequestration if they do 
not support the OCO mission.
    General Amos. Yes. Funds allocated towards our Afghanistan forces 
do not soften the impact of sequestration.
    My number one priority remains those forces in Afghanistan and 
forward deployed and we will ensure they are supported and ready. The 
funding provided by Congress in support of Operation Enduring Freedom 
funds the additional temporary end strength, the pre- and post-
deployment training, the deployed units, and the retrograde and reset 
of equipment. As a result, this funding does not lessen the impact of 
sequestration on installation support and equipment maintenance.
    General Welsh. Any additional OCO funding required in the year of 
execution, not covered by the OCO appropriation, adds complexity to the 
challenge of covering sequester as the additional funds needed are 
supported from our baseline appropriated dollars.

    79. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, isn't it true that last year you were forced 
to take money out of your base budgets to pay for shortfalls in the 
Afghanistan warfighting effort because the White House chose not to 
request additional supplemental funding?
    General Odierno. The Army used $4.54 billion in base funding and 
$2.16 billion from other DOD funding sources to pay for the $6.7 
billion shortfall in OCO funds in support of Operation Enduring 
Freedom.
    Admiral Greenert. Navy provided $0.2 billion in baseline military 
personnel and R&D amounts to fund fiscal year 2013 OCO requirements in 
second destination transportation for equipment movements and 
retrograde operations. The second destination transportation 
requirement is funded through Army.
    General Amos. In fiscal year 2013, the Marine Corps OCO request was 
fully supported by the administration and Congress.
    General Welsh. OCO costs exceeded original estimates in fiscal year 
2013. These emerging expenses were met through scrubbing OCO 
requirements, deferring contracts in order to mitigate costs, and 
funding transfers ($.854 billion) between investment and O&M 
appropriations.

                       looming retention problems
    80. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, due to sequestration, we have: cancelled a 
deployment of a carrier battle group; cancelled training and exercises 
at every level; grounded aircraft; cancelled or postponed weapons and 
advanced training schools and courses; reduced the amount of ammunition 
our service men and women can use during training; required our 
military to train without the proper equipment--equipment they will use 
in Afghanistan and around the world; postponed required maintenance on 
all our military equipment; and delayed or cancelled replacement of 
that equipment. Our men and women in uniform are unable to do what they 
signed up to do. Do you see any indicators of a looming retention 
problem? Please provide examples of these indicators.
    General Odierno. Despite budget reductions, the morale of our 
Active component soldiers remains high, though tenuous. There are 
currently no indications of a looming retention problem within the 
Active component. In fact, the Active Army continues to reenlist 
soldiers at rates that are consistent with historical trends (fiscal 
year 2013--113 percent). Retention has remained high throughout the 
war; despite the hardships, soldiers have reenlisted to remain a part 
of the team, and continue to do so. We expect the trend to continue and 
currently see nothing that indicates an inability to meet our retention 
goals. However, as the Army reduces end strength and addresses the 
impact of reduced budgets, we will continue to monitor reenlistment 
rates and trends to determine any shift in program accomplishments.
    During the government shutdown, unit battle assemblies were 
canceled, and career counselors were not able to travel. This may have 
impacted reenlistment opportunities for certain reenlistment eligible 
soldiers. Soldiers who exited during this period may have erroneously 
believed that they did not have any option to extend due to the 
government shutdown. Army Reserve Careers Division is currently 
tracking and contacting all affected soldiers who subsequently exited 
during this period. Any additional shutdowns could impact hundreds of 
soldiers in the reenlistment eligibility window, thus reducing the 
year-to-date reenlistment mission and impacting U.S. Army Reserve end 
strength, and the readiness of under strength units. Once a soldier 
separates from the Army, it is a lengthy process to bring them back.
    The number of Army National Guard reenlistments has steadily 
increased over the last 3 fiscal years in line with the increasing 
number of reenlistment eligible soldiers. The fiscal year 2013 
retention mission set a very aggressive goal to maximize Army National 
Guard reenlistments. The Army National Guard leadership continues to 
maintain significant emphasis on the retention of qualified, 
experienced soldiers and anticipates no issues with meeting future 
retention goals.
    Admiral Greenert. Fiscal year 2014 retention is currently exceeding 
expected levels in all enlisted categories. We do not anticipate any 
significant aggregate or community-specific officer retention problems.
    General Amos. There is some evidence of a potential future 
retention problem. As a part of our drawdown efforts, the Marine Corps 
is currently accessing the right balance of officers and enlisted 
personnel numbers needed to meet our requirements. In the future, we 
believe that in order to meet end strength requirements, the Marine 
Corps will require a higher percentage of reenlistments and lower 
attrition rates. In general, higher retention requirements/lower 
attrition requires greater incentives, and often a larger Selective 
Reenlistment Bonus budget, to be able to achieve retention goals.
    General Welsh. Overall officer and enlisted retention remains 
strong; our airmen love what they do for the Air Force and our Nation. 
Given the many personal factors affecting an airmen's decision to stay 
or depart the force, it is too difficult to ascertain how sequestration 
will affect retention. However; it would not be surprising to find that 
airmen might waiver in their commitment to future service under the 
conditions adversely impacted by sequestration.

                      rephasing sequestration cuts
    81. Senator Inhofe. General Odierno, Admiral Greenert, General 
Amos, and General Welsh, do you agree that a rephasing of the sequester 
cuts--like the table below proposes--in a way that won't devastate 
readiness or undermine our security here at home, would be beneficial 
and would allow each of you to make smarter decisions that reduce some 
near-term risk?

  REDISTRIBUTION OF SEQUESTER CUTS UNDER SENATOR JAMES M. INHOFE'S BILL
                        [In billions of dollars]
------------------------------------------------------------------------
           Fiscal Year                  DOD Cut             Add/Sub
------------------------------------------------------------------------
2014............................  10.0..............  -44.7
2015............................  30.0..............  -24.7
2016............................  61.7..............  +07.0
2017............................  63.7..............  +09.0
2018............................  63.7..............  +09.0
2019............................  66.7..............  +12.0
2020............................  69.7..............  +15.0
2021............................  72.1..............  +17.4
------------------------------------------------------------------------

    General Odierno. Yes. Currently, the severity and immediacy of 
sequestration is having devastating impacts to the Army. Under current 
constraints, readiness, and modernization are the only sources 
available to offset the reduced funding in the early years until force 
structure and end strength reductions produce savings in the future 
(typically 3 to 5 years). This causes the Army to be out of balance 
across force structure, readiness and modernization for 5 to 8 years. 
Re-phasing the reductions to the future would enable the Army to better 
manage the impacts and maintain better balance as we drawdown and adapt 
to fiscal realities.
    Admiral Greenert. The challenge of sequestration as a mechanism for 
deficit resolution comes from both the size of the cuts and the 
indiscriminate mechanical nature of the cuts as required by law. If 
sequestration levels of funding are sustained for 10 years, the Navy of 
2020 would not be able to execute the missions described in the DSG.
    Navy will do our part to get the Nation's fiscal house in order, 
but it is imperative we do so in a coherent and thoughtful manner to 
ensure appropriate readiness, warfighting capability, and forward 
presence. The SCMR demonstrated that making cuts strategically is only 
possible if they are back-loaded. While no agency welcomes additional 
budget cuts, a scenario where we have additional time to implement 
reductions, such as in the President's budget, would be far preferable 
to the deep cuts of sequestration. If these abrupt cuts remain, we risk 
fielding a force that over the next few years is unprepared due to a 
lack of training, maintenance, and the latest equipment.
    There is some benefit to rephasing the sequester cuts. However, the 
proposed plan resulting in deeper out-year reductions also poses 
challenges, particularly for our investment accounts. To responsibly 
manage the fiscal year 2013 sequester impact, Navy deferred costs to 
future years for many of our investment programs. The funds necessary 
to ensure these programs remain whole may not be available in the above 
plan with cuts greater than current sequestration levels in the out-
years.
    General Amos. Yes. The rephasing of sequester cuts would alleviate 
some of the near-term risks to readiness, installations, and equipment 
modernization. However, with continued or increased reductions in the 
out-years, the Marine Corps will still have to make difficult decisions 
regarding manpower (our most expensive resource) which continues to 
result in risk to our operating forces, specifically our MCO 
capabilities.
    General Welsh. Sequestration is very harmful to Air Force readiness 
and our airmen. The Nation will be more secure and will achieve more 
sustainable savings if reductions in defense spending are made in a 
more reasoned way than the abrupt, arbitrary mechanism of 
sequestration. With Congress' support for the tough decisions that will 
be necessary to align our future force to the needs of the strategy and 
a sensible alternative to the indiscriminate sequestration cuts, we can 
be both ready today and modern in the future. We need Congress to pass 
funding bills that provide stability both in the near-term and the 
long-term.
                                 ______
                                 
                questions submitted by senator mike lee
                            readiness issues
    82. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, you all have testified about the readiness crisis we 
will be facing in the coming years if sequestration continues. The 
problem is that savings from changes in force structure and 
efficiencies can only be realized in later years, so in the earlier 
years of sequestration, more of the annual cuts will have to come out 
of readiness. Can you specifically speak to what changes in force 
structure will be necessary to regain readiness at the funding levels 
under sequestration?
    General Odierno. If further budget cuts are directed in conjunction 
with the BCA of 2011, and end strength goes below 490,000 in the Active 
component, the Army would need to reduce up to an additional 100,000 
soldiers from the Active component, the Army National Guard, and U.S. 
Army Reserve. These reductions would result in an Army that is 
undersized and subject to prolonged and disproportionate investment 
across manpower, O&M, modernization, and procurement without 
corresponding adjustments to strategy. In the face of fiscal year 2014 
budget uncertainty, the Army will ensure units with high-priority 
missions have the resources they need to be fully prepared, and must 
accept risk in lower non-priority units. Lowest priority forces may not 
be able to fully execute broader-focused training strategies since they 
would have to constrain training activity to the squad/crew/team level. 
Restoring adequate readiness across the force will take years to 
complete and require significantly more resources to maintain the 
necessary readiness in a stable fashion.
    Admiral Greenert. If sequestration continues in fiscal year 2014, 
we will need to request to transfer or reprogram funds from other 
accounts into O&M to make up for the sequestered amount and regain 
readiness. Just to meet minimum readiness needs, we need to transfer or 
reprogram about $1 billion into the O&M account. Procurement programs 
would have to be reduced to achieve near-term savings from changes in 
force structure. For example, cancelling procurement of 11 tactical 
aircraft (4 EA-18G Growler, 1 F-35C Lightning II, 1 E-2D Advanced 
Hawkeye, 2 P-8A Poseidon, and 3 MH-60 Seahawk) and about 400 weapons, 
exacerbating future BCA-driven reductions in our capabilities to 
project power despite A2/AD threats.
    General Amos. Concerned with the likelihood of future sequestration 
budgets beyond 2013, the Marine Corps initiated a study to identify the 
Marine Corps force structure that would best meet the National Security 
Strategy requirements, at a high rate of readiness, within the confines 
of future budgetary constraints. A redesigned 175,000 force emerged as 
the best force the Corps could provide in addressing the operational 
requirements of steady state deployments, crisis response activities, 
and potential major combat operations while preserving institutional 
health and readiness. At 175,000, the Corps leverages its crisis 
response capability, which is crucial for the current and future threat 
environments through lighter, agile, forward-deployed forces. The force 
provides a balanced force of MAGTFs that range from the Special Purpose 
MAGTF to the Marine Expeditionary Force (MEF) levels. Marine 
Expeditionary Units (MEU) with parent Marine Expeditionary Brigades 
(MEB) would optimize amphibious training opportunities within each MEF. 
Standing MEBs would be capable of high-entry operations from the 
seabase and employment as a Global Response Force to provide the 
combatant commanders with a middleweight force for a broad range of 
mission sets. The 175,000 force supports the rebalance to the Pacific, 
includes the 1,000 Marine Corps Embassy Security Group, and supports 
Marine Corps Forces SOCOM and Marine Corps Forces Cyberspace Command. 
It accepts risk, however, in the ability to carry out major combat 
operations at the high end of the range of military operations. Some of 
the force structure changes will be:

         Headquarters above the MEF will be reduced by 20 
        percent
         II MEF and MARFORCOM commands will be combined
         Marine Logistics Groups will be reorganized into 
        functional battalions
         The quantities of artillery batteries and tactical 
        aviation squadrons will be reduced

    General Welsh. The readiness problem the Air Force faces over time 
is significant. Recovering Air Force readiness levels required to meet 
DSG requirements will take a combination of time, additional resources, 
and reductions in operational tempo. The Air Force can only achieve 
these readiness levels by reducing force structure enough so that we 
can keep a smaller force ready, which in turn means less capacity, less 
capability to respond globally, and less options for national strategic 
decisionmaking. If reduced sequestration-level funding caps continue, 
over the next 5 years, the Air Force could be forced to cut up to 
25,000 total force airmen (about 5 percent) and up to 550 aircraft 
(about 9 percent of the inventory). While fiscal constraints make it 
necessary to reduce force structure, a smaller force will not 
automatically be more ready. To achieve desired readiness levels, we 
must also manage the operational taskings so that our forces have the 
time to conduct necessary training to achieve readiness.

    83. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, will it require a BRAC round? If so, how extensive 
will the BRAC need to be and how extensive would downsizing need to be 
for each of the Services?
    General Odierno. Yes. The Army's end strength and force structure 
is declining as funding decreases creating additional excess capacity. 
We simply cannot afford spending millions of dollars maintaining 
underutilized buildings and infrastructure. In a very short period, 
trying to spread a smaller budget over the same number of installations 
and facilities will inevitably result in rapid decline in the condition 
of Army facilities. Without a future round of BRAC, the Army will be 
constrained in closing or realigning installations to reduce overhead. 
This empty space tax on our warfighters will simply result in cuts to 
capabilities elsewhere in the budget.
    BRAC 2005 was a restructuring effort that is currently saving the 
Army a net of $1 billion a year, even though the Army's force structure 
and end strength increased during the implementation period. During the 
late 1980s and 1990s, the Army's force structure and end strength 
declined significantly, which initiated efficiency rounds of BRAC that 
are saving the Army an additional $1 billion a year. The Army would use 
a future round of BRAC to seek efficiencies similar to the rounds of 
BRAC from this period.
    The Army is unsure exactly how much excess capacity will be created 
when the Army's Active component force structure declines to 490,000 
soldiers. A June 2013 Government Accountability Office (GAO) report 
concluded that use of 2004 and 1998 capacity data for ``calculating 
pre-BRAC estimates of excess capacity ha[s] limitations.'' These 
capacity analyses identified upwards of 20 percent excess capacity in 
Army installations.
    A BRAC round is necessary to identify inefficiencies and eliminate 
unused facilities, so that we do not divert scarce resources away from 
training, readiness, and family programs.
    Admiral Greenert. Our Navy functions best when our shore 
infrastructure is aligned with our force structure and laydown. If 
Congress authorizes a new BRAC round, the Navy will evaluate our 
activities objectively by measuring military value, alignment with 
force structure, cost, and impact to the surrounding communities.
    General Amos. Our bases and stations provide the training areas, 
ranges, and facilities necessary to prepare and sustain forward 
deployed marines. The Marine Corps views its installations as an 
indispensable element to operating force readiness and we continue to 
seek efficiencies in every facet of installation management. Since 
installation readiness and operational readiness are intertwined, 
installations and operating forces must be viewed through one 
supporting prism and we continue to aggressively seek efficiencies and 
will find our trade space in the selective divesture of aging 
infrastructure. We recognize the necessity of BRAC deliberations across 
the Services. However, we don't believe we have excess infrastructure. 
In fact, our assessment is that we are currently right-sized and will 
need to maintain the current number of bases to support the future 
force.
    General Welsh. Yes, we require BRAC legislation to allow the Air 
Force to complete a thorough analysis of infrastructure and excess 
capacity. Only with enactment of BRAC authority can the Air Force 
conduct a definitive BRAC analysis, authoritatively measure and compare 
force structure and infrastructure requirements, and determine excess 
capacity.

    84. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, what will happen to military readiness if the 
continued growth in personnel costs--such as pay, benefits, healthcare, 
and retirement--are not changed?
    General Odierno. Military manpower costs remain at historic highs 
and consume roughly 44 percent of the Army budget today. If we do not 
slow the rate of growth of soldier compensation, it will consume a 
higher, disproportionate percentage of the Army's budget. As a result, 
we will be forced to reduce the Army's size below sequestration levels 
of end strength and further reduce investments in training and 
modernization which will inevitably adversely affect readiness. We must 
balance compensation with capacity, readiness, and modernization. It is 
imperative that we develop compensation and benefits packages that 
reduce the rate of growth, while honoring our commitment to soldiers 
and their families and maintaining the quality of the AVF.
    Admiral Greenert. Military compensation is roughly half of the DOD 
budget. If left unchecked, the growth of pay and benefits will impact 
our readiness and modernization efforts, resulting in a far less 
capable force that is well-compensated, but poorly trained and poorly 
equipped.
    General Amos. Controlling the growth of personnel costs is 
essential to maintaining a balanced, high state of readiness force as 
we tighten our spending to meet the requirements in the BCA. The 
proposals to reduce pay and health care costs--in the President's 2014 
budget submission--will allow us to continue to recruit and retain 
high-quality marines. If action is not taken to slow compensation 
growth, personnel costs will continue to increase; thereby, putting 
greater pressure on readiness and modernization.
    General Welsh. Readiness is at a critical point in our history. We 
have to take a deliberate and comprehensive look at compensation and 
benefits to be sure we have the right balance between people, programs, 
readiness, weapons systems sustainment, and modernization.

    85. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, do you believe these changes to personnel costs 
would need to be made even if sequestration were not a factor?
    General Odierno. Yes. The cost of a soldier has doubled since 2001 
and unless DOD, with congressional support, can bend the cost curve of 
military compensation, it will grow to a disproportionate share of the 
budget. This especially impacts the Army, which has the largest end 
strength of all the Services. As we go forward, we must develop 
compensation packages that control future costs, but at the same time 
continue to recognize and reward our soldiers and their families for 
their commitment and sacrifice.
    Admiral Greenert. Yes. I support our fiscal year 2014 President's 
budget submission, which included modest compensation-related reforms. 
People are our most important asset, and we must sustain compensation 
packages that recruit and retain the finest military in the world. 
Overall, personnel costs in DOD have risen approximately 40 percent 
above inflation since 2001, we cannot afford to sustain this growth 
under the current fiscal realities.
    General Amos. Yes. The Marine Corps currently spends 62 cents on 
the dollar to cover manpower and personnel costs. If action is not 
taken, that number will approach 70 cents by the end of the FYDP. 
Limiting the growth of military compensation is still a necessary 
aspect of force modernization. Measured and competent adjustments to 
areas, such as basic pay and BAH, are responsible ways to adapt to the 
current fiscal environment without hollowing out the AVF.
    General Welsh. The Air Force must employ a fair and competitive 
compensation package to recruit and retain quality airmen to maintain 
the experience in our technology-based force. This will require 
thoughtful and strategic compensation modernization and reform under 
most any budget environment.

               strategic shift to the asia-pacific region
    86. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how will the President's strategic shift to the 
Asia-Pacific region be effected by an ongoing sequester?
    General Odierno. The Army continues to prioritize and implement 
requirements that support the rebalance to the Asia-Pacific region, but 
ongoing budget reductions may raise doubts in the region about 
America's commitment. In the short-term, sequestration primarily 
degrades the readiness of Army forces to participate in shaping 
activities and to respond to contingencies in the region. In the 
medium- to long-term, sequestration limits our ability to most 
effectively modernize or restructure forces to meet future regional 
security challenges. The Army maintains a robust, forward presence in 
the region including 8 Active component BCTs, 12 Patriot batteries, and 
numerous theater enabling units. Yet the nature of the sequestration 
cuts has led to a sharp reduction in training budgets, leaving most 
units assigned to the theater at reduced readiness levels. Without 
ready forces, we will find it increasingly difficult to sustain the 
quality and quantity of activities that demonstrate American leadership 
and commitment. As the Army continues to balance global obligations, we 
have prioritized key assets and capabilities and aligned a Corps 
Headquarters and additional enabler units to the region. We presently 
consider these commitments and capabilities sustainable, but a 
prolonged sequester may require cuts in both force structure and 
modernization that significantly decrease the Army's ability to meet 
future security challenges. At a time when many Asia-Pacific nations 
are using their recent prosperity to modernize or expand their 
militaries, the Army cannot continue to play a stabilizing role in the 
region if investments in force structure and future capabilities do not 
at least keep pace.
    Admiral Greenert. I remain committed to providing support to our 
allies in the Asia-Pacific region and our fiscal year 2014 President's 
budget submission proposed increasing presence in the Asia-Pacific 
region from about 50 ships today to about 60 ships in 2020, consistent 
with the DSG's direction to rebalance to that region. We are 
considering numerous options, including forward basing more of our 
forces overseas to maximize the presence they provide. With our 
priorities focused on the Asia-Pacific region, we will have to take 
risk elsewhere.
    General Amos. The President has made clear that the rebalance to 
the Asia-Pacific region, including restationing within and off Okinawa, 
is a whole-of-government effort that is the result of our enduring U.S. 
interests in the Asia-Pacific region. While our interests will endure, 
the budget constraints of sequestration may require a change in the 
pace and scope of some of DOD's activities in the Asia-Pacific region, 
but not the priority of the region to the United States.
    In the long-term, sequestration will delay and potentially lengthen 
the timeframe for completion of the U.S. Government/Government of Japan 
Distributed Laydown. Additionally, sequestration reduces strategic 
mobility, or Intra-theater lift requirements and the ability of those 
Pacific-based forces, such as the 31st Marine Expeditionary Unit and 
Marine Air Group-12 which use Guam and the Commonwealth of the Northern 
Mariana Islands training ranges for sustainment of unit-level and MAGTF 
training.
    General Welsh. Sequestration will pose many challenges for the Air 
Force in the rebalance to the Asia-Pacific region. Despite these 
challenges, sequestration is providing an opportunity to relook at how 
we do business while we continue to prepare for high intensity 
conflict. Ensuring we provide deterrence in Asia, in close 
collaboration with the other Services and our allies, is critical to 
our success.
    One of the ways the United States demonstrates its commitment to 
the region is by stationing the majority of the Air Force's permanent 
overseas forces in the Asia-Pacific region. This airpower regional 
presence, combined with CONUS-based forces, provides critical 
operational capabilities to the PACOM Commander. We must work to 
protect and preserve our forward presence in the Asia-Pacific region.
    Under sequestration-level funding, we are unable to maintain 
mission readiness levels, our training programs will be unable to meet 
current production targets, and we are creating a bow wave in critical 
aircraft maintenance and modernization. This will result in reduced 
combat power from a smaller, less capable, and less ready force, 
thereby increasing national security risk.
    Additionally, major components of the Air Force's Asia-Pacific 
rebalance strategy include Theater Security Cooperation, Joint 
Cooperation/Operational Concept Development (Air-Sea Battle), Force 
Posture, Base Resiliency, and Investment/Modernization. Specifically, 
we have programmed substantial funding to enhance our capability for 
expedient repair of our major Pacific bases. While less visible than 
aircraft on the ramp, this represents a major commitment to the region. 
The Air Force continues to work on Pacific Airpower Resiliency studies 
to inform our future priorities. The United States has done virtually 
no hardening for some 30 years.
    Regardless of the budget levels, the Air Force remains committed to 
the key tenets of the DSG. Sequestration may slow our efforts, but we 
cannot let it stop them. Between force presence and infrastructure 
improvements, our warfighting credibility and our operational 
resiliency commitment will be demonstrated to our partners and allies 
and messaged to our potential adversaries.

    87. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, will we be able to shift to the Pacific and still 
maintain our ability to fight terrorism and deter the Iranian threat in 
the Middle East?
    General Odierno. Unless something is done to mitigate the 
magnitude, method, and speed of the reductions under the BCA, the Army 
will be forced to make significant reductions in force structure and 
end strength. Such reductions will not allow us to fully execute the 
2012 DSG and will make it very difficult to conduct even one sustained 
major combat operation.
    Admiral Greenert. Our fiscal year 2014 President's budget 
submission planned to increase presence in the Asia-Pacific region from 
about 50 ships today to about 60 ships in 2020, consistent with the 
DSG's direction to rebalance to that region. If fiscally constrained to 
the revised discretionary caps over the long-term, the Navy of 2020 
would not be able to execute the missions described in the DSG. In one 
potential scenario, Navy would not increase presence in the Asia-
Pacific region, which would stay at about 50 ships in 2020. This would 
largely negate the ship force structure portion of our plan to 
rebalance to the Asia-Pacific region directed by the DSG.
    The Navy's fiscal year 2014 President's budget submission would 
``place a premium on U.S. military presence in-and in support of-
partner nations'' in the Middle East. Since presence would decrease 
and, assuming we use the same ship deployment scheme in the future, 
there would be gaps in CSG presence totaling 2 to 3 months each year.
    Under the fiscal year 2014 President's budget, we would have the 
capacity to conduct widely distributed counterterrorism and irregular 
warfare missions. According to our FSA, this requires one AFSB in the 
Arabian Gulf and one AFSB in the Gulf of Aden, four LCS, with two 
deployed in various locations worldwide and six MQ-8B/C Fire Scout 
unmanned air vehicles operating from these platforms. Under long-term 
revised discretionary caps, we would not have the capacity to conduct 
widely distributed counterterrorism and irregular warfare missions, as 
defined in the DSG.
    General Amos. We must maintain a force that can balance a focus on 
the Asia-Pacific region with a sustainable emphasis on the Middle East, 
combined with a continuous effort to counter violent extremists 
operating across multiple domains.
    Based on the detailed planning the Marine Corps has done, a force 
design of 175,000 is the lowest temporary level that can retain 
America's crisis response force within sequestration level budgets. 
This provides a minimum acceptable level of readiness, while 
maintaining forward presence as a part of the Navy-Marine Corps team. 
Further reductions will incur heightened, and in some cases prohibitive 
risk to the National Security Strategy.
    General Welsh. The Air Force's ability to provide the joint force 
with Global Vigilance, Global Reach, and Global Power make it 
particularly well-suited for the rebalance to the Asia-Pacific region, 
while still maintaining our ability to deter aggression in the Middle 
East. The arbitrary nature of sequestration, however, puts that ability 
in jeopardy due to reduced flying hours, curtailed major exercises, and 
overall reductions in force structure, readiness, and modernization. We 
will become a smaller force, but there is a limit to how small we can 
get and still fulfill our DSG obligations due to an increasingly slim 
margin in capacity.

            sequestration and the quadrennial defense review
    88. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, how is sequestration factoring into the writing of 
the Quadrennial Defense Review (QDR) for next year?
    General Odierno. The QDR is evaluating the demands of the emerging 
security environment and examining a wide range of options for sizing 
and shaping U.S. forces accordingly. The review has been undertaken in 
the context of generally tightening resource constraints on DOD and 
includes consideration of the potential implications of sequestration 
on the Nation's ability to execute an appropriate defense strategy. I 
anticipate that the QDR report will address those implications when 
published.
    Admiral Greenert. As stated in the QDR Terms of Reference, ``The 
QDR will update the defense strategy as appropriate, aiming to provide 
a strategy that is executable at low-to-medium risk, while accounting 
for the prevailing financial outlook of potential deep cuts to the 
Department's budgetary top line, in both level and backloaded 
profiles.''
    General Amos. In contrast to the SCMR process, which was fiscally 
constrained, the QDR is fiscally informed. In other words, the QDR 
focus is different--it is focused on developing the right strategy and 
force planning construct for the future security environment, not on 
meeting targeted budget reductions. Our staff involved in the QDR 
process fully understands that we must account for today's fiscal 
pressures as we develop the right strategy and force planning 
construct. We must ensure that we are developing an affordable 
strategy, but we also need to be clear on what capabilities DOD needs 
to protect or even enhance, despite fiscal pressures. Striking that 
balance is the challenge of the QDR, and I believe that we are on the 
correct path to achieve that balance.
    General Welsh. The QDR is a comprehensive examination of national 
defense strategy, force structure, force modernization plans, 
infrastructure, budget plan amongst other elements of the defense 
program, and policies as required by title 10 U.S.C. section 118. Along 
this line, sequestration constraints will be considered when developing 
near-term and long-term defense strategy, force structure, and 
capabilities to ensure a realistic and implementable national defense 
strategy. However, as OSD has previously stated, considerations of 
national objectives, threats, strategy, and military capabilities 
should be wide-ranging enough to provide decisionmakers with insights 
about consequences and associated levels of risk for different levels 
of resources.

    89. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, will we see changes in our strategic objectives and 
priorities because of budget restraints?
    General Odierno. While the Secretary of Defense or the Chairman of 
the Joint Chiefs of Staff are better positioned to answer this 
question, I think it is clear that we can expect to see some refinement 
of our strategic objectives and priorities as DOD fully implements the 
2011 BCA.
    The President's January 2012 DSG provides a starting point for 
refining objectives and priorities. As you will recall, the guidance 
directs that the Armed Forces not size for large-scale, long-term 
stability operations. To the Army, that means reducing or taking risk 
in the forces providing depth and endurance for post-conflict 
operations designed to transform battlefield success into enduring 
political and security stability. We have regularly mobilized and 
deployed many of these forces over the past 12 years, but the January 
2012 guidance reduces that priority.
    Clearly articulating to the President and Congress what our Armed 
Forces can and cannot do at reduced funding levels, and the associated 
risk, is a critically important step in this process. We owe it to our 
political leaders, as well as our soldiers and their families, not to 
create political expectations that our military cannot achieve.
    As we look to the future, we will need to see the world as it is, 
not as we might like it to be. A host of factors including weapons 
proliferation, climate change, cultural and religious differences, 
wealth disparity, and access to global information, will likely 
increase challenges faced by many governments, some of whom are 
important to the security the United States and our allies. Security 
challenges related to failing states and ungoverned territories will 
likely remain for the foreseeable future. Addressing these challenges, 
alongside key allies and interested partners, will remain a 
fundamentally human endeavor, requiring U.S. ground forces that are 
well-led, well-equipped, and well-trained. These past 12 years of war 
have taught us, as a Nation, that there is no substitute for an 
adequately sized, ready, and responsive Army that helps to shape the 
world in which we live, prevent miscalculation and conflict, and 
decisively defeat aggression directed against American citizens, 
territory, and interests.
    Admiral Greenert. The standard that guides our current planning, 
programming, and budgeting is the 2012 DSG and its objectives for the 
Joint Force. Our 2014 President's budget submission was designed to 
execute the DSG with acceptable risk. The DSG incorporated the first 
set of BCA-mandated budget reductions and directed the military to 
address ``the projected security environment'' and to ``recalibrate its 
capabilities and make selective additional investments to succeed in 
the missions'' of the Armed Forces. If fiscally constrained to the 
revised discretionary caps, over the long-term (2013 to 2023) the Navy 
of 2020 would not be able to execute the missions described in the DSG, 
requiring a reassessment of our strategic objectives and priorities.
    General Amos. Without modification to either the defense strategy 
or the budget, the mid- and far-term effects of sequestration will 
force DOD to re-evaluate its objectives and priorities.
    General Welsh. The overall strategic objectives and priorities for 
DOD will not change, however the fiscal realities of sequestration will 
require hard choices and tradeoffs. These choices will be informed by 
the strategic priorities laid out in the QDR.

      biggest threats facing the united states in the next decade
    90. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, what do you think are the biggest threats the United 
States will have to face in the next decade?
    General Odierno. Al Qaeda core and its regional allies and 
franchises will remain capable of threatening U.S. regional allies and 
interests, and are continuing to seek opportunities to conduct 
international attacks. Additionally, new terrorist groups aided by 
infusions of al Qaeda personnel have emerged in the wake of the Arab 
Spring.
    Political turbulence and the ensuing instability initiated with the 
Arab Awakening in early 2011 will continue to generate challenges for 
domestic and regional security in the Middle East. Nascent Governments 
in Libya, Tunisia, Egypt, Yemen and Iraq will struggle to satisfy 
national demands while confronting extremists attempting to shape 
government policy through violence. The United States will be the 
object of dissident frustrations and terrorist attacks ranging from 
isolated incidents against local western interests to military and 
diplomatic missions. The U.S. Army will be called upon to assist 
regional partners in strengthening security service capabilities and 
responding to emergency stability operations that likely will include 
protecting U.S. citizens and interests in the region.
    Even with the interim agreement on Iran's nuclear program, the 
Persian Gulf will continue to experience regional tensions and 
continued Iranian initiated subversive activities that include attacks 
on U.S. regional interests.
    Although China and the United States share many interests, China 
continues to modernize and expand its armed forces while claiming 
sovereignty over territories in the East and South China Seas that are 
also claimed by U.S. friends and allies. China's uncompromising and 
assertive behavior is heightening tensions and increasing the danger of 
accidental escalation. Prospects for a near-term Taiwan crisis appear 
low, but the balance of regional military forces continues to shift in 
China's favor.
    The Democratic People's Republic of Korea remains a critical 
security challenge. North Korea has repeatedly demonstrated its 
willingness to undertake provocative and destabilizing behavior, 
including attacks on the Republic of Korea (ROK). Its pursuit of 
nuclear weapons and long-range ballistic missiles and willingness to 
proliferate weapons in contravention of its international agreements 
and United Nations Security Council Resolutions further highlights its 
threat to the region.
    North Korea fields a large, forward-deployed military that retains 
the capability to inflict serious damage on the ROK, despite 
significant resource shortfalls and aging hardware. The North Korean 
military is also well-postured to conduct limited attacks with little 
or no warning, such as the 2010 sinking of a South Korean warship and 
the artillery bombardment of a South Korean island along the Northern 
Limit Line.
    Russia still views the United States/North Atlantic Treaty 
Organization (NATO) as its primary threat and is increasing its 
military budget in order to modernize and reform its armed forces. It 
is using its military capabilities, energy resources, and growing 
economic power to intimidate countries in its ``near abroad'' into 
joining Russian-dominated military and economic organizations. Russia 
continues to support the Syrian regime and is attempting to reduce 
United States influence globally, especially in the Middle East and 
Africa through increased arms sales. Russia is aggressively asserting 
greater territorial claims in the Arctic.
    In Latin America, transnational criminal organizations (TCO) are an 
expanding problem. Particularly in Central America, TCOs have grown so 
large and well-financed that they are threatening the authority of the 
governments and the political and economic stability of the countries. 
Approximately half the forces of the militaries of Guatemala, Honduras, 
and El Salvador are tasked with fighting and assisting police against 
the TCOs. The regional militaries are asking for additional help 
combating TCOs.
    The terror threat from al Qaeda linked groups in Africa has been 
growing steadily. Africa's Islamists are able to take advantage of the 
continent's porous borders; weak and corrupt central governments; 
undertrained and underequipped militaries; flourishing drug trades that 
provide a steady source of income; and, vast lawless spaces.
    NATO and our European allies make critical contributions to our 
global operations, but they face significant defense cuts that will 
reduce the size and capability of their ground forces with possible 
adverse effects on future coalition operations.
    Admiral Greenert. It is hard to predict future threats and our 
historical record in this is poor. However, we believe we will face a 
broad array of diverse threats and challenges to the Nation's security 
over the next 10 years. Among the most concerning are cyber, threats to 
access, proliferation of weapons of mass destruction, and militant 
extremism.
    General Amos. The DSG describes future threats, challenges, and 
opportunities--I continue to support its full implementation. Future 
threats to the United States will emanate from a security environment 
defined by violent extremism, battles for influence, disruptive 
societal transitions, natural disasters, extremist messages, and 
manipulative politics. We must be prepared to confront them 
successfully. Over the next decade, the world will see criminal 
enterprises wield combat power formerly only associated with nation 
states and experience separatism, extremism, and intolerance that will 
lead to terrorism, protests, and violence. In this context, new 
technologies will place modern weapons into the hands of developing 
states and non-state actors while the development and proliferation of 
advanced conventional weapons challenges our ability to project power 
or gain access.
    General Welsh. From an Air Force perspective, we will see 
adversaries possess the capability to degrade our ability to operate in 
air, space, and cyberspace. A growing number of adversaries will be 
able to sustain effective interference in multiple domains, creating 
highly-contested environments. High-end threats from integrated 
advanced technologies, systems, and training will increase. In the mid-
term, a near-peer competitor will emerge capable of producing, 
acquiring, and integrating high-end air, space, and cyberspace 
capabilities that rival or equal our own. The growth of highly-
contested environments will overmatch the Air Force's current 
capabilities.

    91. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, will we have the readiness in coming years to 
execute operational plans to neutralize these threats?
    General Odierno. Under the funding levels of the President's budget 
proposal, which defer the largest funding reductions until 2018, we can 
maintain a ready force, albeit a smaller one, that can meet the 
requirements of the 2012 DSG.
    Under the funding levels of the current law, in contrast, the Army 
will be ``sized-to-budget.'' In my professional military judgment, 
these projected end strength and force structure levels would not 
enable the Army to fully execute the 2012 DSG requirements to defeat an 
adversary in one major combat operation while simultaneously denying 
the objectives of an adversary in a second theater. Additionally, it is 
unlikely that the Army would be able to defeat an adversary quickly and 
decisively should they be called upon to engage in a single, sustained 
major combat operation.
    Admiral Greenert. Currently, the reductions in fleet training we 
are compelled to make result in only one nondeployed CSG and one non-
deployed ARG trained and ready for surge operations, while some 
combatant commander plans notionally require three of each ready to 
deploy within about 2 weeks of a crisis occurring. Sequestration in 
fiscal year 2014, particularly if combined with restrictions of a CR, 
will continue to reduce our readiness in the near-term.
    General Amos. The impacts we face in terms of readiness have 
primary and secondary effects. While the primary effects on short-term 
readiness will begin to be observable in fiscal year 2014, the longer-
term effects will be even more devastating. We are realigning funds 
from longer-term activities to protect the short-term readiness of our 
combat deployed marines. While these adaptations are necessary, the 
continued maintenance of the short-term readiness of our current force 
comes at the expense of those who will follow in their footsteps. We 
are consuming tomorrow's seed corn to feed today's requirements, 
leaving ever less to plant for the future.
    The abruptness and inflexibility of sequestration will force us to 
mortgage the condition of our equipment and could erode our readiness 
to dangerous levels. The indiscriminate nature of sequestration is 
creating its very own national security problem. Within a year, we will 
see real impact to all home station units and the beginning of impacts 
to our next-to-deploy and some deployed forces . . . the beginnings of 
a hollow force we have fought so hard to avoid.
    General Welsh. The Air Force was below its readiness requirements 
to meet the DSG before sequester as a result of 20+ years of continuous 
combat operations. The 2014 President's budget request represented a 
deliberate attempt to regain and restore Air Force full-spectrum 
readiness. Unfortunately, fiscal year 2013 sequester impacts, coupled 
with the government shutdown and continued budgetary uncertainties, 
have caused readiness to continue to decline. Although today, the Air 
Force maintains the capability to prevail in a single conflict, it 
comes at a cost to the full-spectrum training and readiness for any 
additional operational plan or contingency execution. If budgetary 
constraints continue, it is highly unlikely the Air Force will have the 
required ready units to meet its wartime requirements with ready forces 
for the foreseeable future.

    92. Senator Lee. General Odierno, Admiral Greenert, General Amos, 
and General Welsh, if we have to engage in military action against 
these threats, what further effect will it have on our readiness gap?
    General Odierno. To meet the military needs of the Nation, the Army 
must have a capability to do a multi-phase, combined arms, joint 
campaign in a very complex environment that includes a conventional 
opponent, irregular warfare, and counterinsurgency. A single major 
conflict will exhaust this capability, depleting any ready forces for 
another contingency.
    Admiral Greenert. If constrained to the BCA revised discretionary 
caps in the long-term, we would not be able to conduct one large-scale 
operation and also counter aggression by an opportunistic aggressor in 
a second theater. Under one fiscal and programmatic scenario, the fleet 
in 2020 would have 9 to 10 CVN/CSG and 9 to 10 LHA/D and ARG. We would 
be able to sustain about one non-deployed CSG and one non-deployed ARG 
fully certified and able to surge on required timelines. Together, our 
presence and surge forces would be sufficient to conduct all missions 
associated with only one large-scale operation, as defined today.
    General Amos. As a result of the BCA and sequestration, the Marine 
Corps' readiness model is already out of balance. To maintain 
readiness, I have been forced to realign funds from longer-term 
activities to protect the near-term readiness of our currently deployed 
forces. If we have to send our forces into combat before the force is 
fully reset, it will only widen the current readiness gap.
    Sustained combat operations in the Middle East have placed enormous 
demands on our equipment. The Marine Corps does not anticipate a post-
OEF operational pause whereby the Service will have the luxury of 
focusing exclusively on reset and reconstitution. The Marine Corps must 
remain ready to respond to unforeseen crises. This means reset will 
occur in stride with current operations and the larger reconstitution 
effort to ensure operating forces go to combat fully equipped, with 
mission capable equipment.
    A current Marine Corps operating assumption is that we will be 
funded to our identified reset liability level. Appropriations short of 
this amount already jeopardize our required readiness levels for post 
Operation Enduring Freedom reset.
    General Welsh. Engaging in military action against a threat will 
have a negative impact to our readiness levels. While engaged with a 
threat, airmen do not retain proficiency in other core skills required 
to maintain readiness. The Air Force is already on a 20+ year downward 
trend in readiness due to continued operational demand, coupled with a 
shrinking force. Add to this trend the recent sequestration driven cuts 
and our forces may not be sufficiently trained and ready to meet a 
future threat. These factors increase risk to personnel and equipment 
and could put desired outcomes in jeopardy. Unfortunately, it takes 
even more sorties and money to retrain a squadron whose readiness has 
atrophied than it takes to keep it trained and ready. These factors 
will only widen the readiness gap until we can change our current 
course.

                  depot and modernization work delays
    93. Senator Lee. General Welsh, I appreciate the time we have spent 
discussing issues important to the Air Force. In the House Armed 
Services Committee sequestration hearing in September, you outlined the 
F-35, the KC-46, and the new LRB as the Service's top priorities, but 
stated that the sequester could threaten those programs, as well as 
programs of lower priority. Can you describe your concerns about what 
specifically could happen to new acquisitions and to legacy platforms 
that require depot work and modernization?
    General Welsh. The effects of sequestration disrupt major defense 
acquisition programs throughout the development, fielding, and 
sustainment phases. The effects may not be immediately apparent to the 
American public, but the damage could be disastrous. Should we face a 
high-end threat in the future, the impact of not investing in new 
technologies and modernization will be deadly. Program disruptions and 
acquisition delays will, over time, cost more taxpayer dollars to 
rectify contract breaches, will raise unit costs, and will ultimately 
delay delivery of critical equipment to combatant commanders.
    We must continue to maintain and modernize legacy platforms 
essential to a full range of combat operations. Under continued 
sequester, we face delays to depot maintenance through both organic and 
contract sources on critical aircraft, engines, and space systems. Over 
time, delays will add to a bow wave of maintenance that will eventually 
ground aircraft and disrupt capabilities to critical combat support 
systems in air, space, and cyberspace domains. Delays in depot 
maintenance and upgrades to missile warning and space surveillance 
tracking will significantly impact national missile defense and space 
situational awareness, ultimately hurting our intelligence community. 
Relief from sequester and investment in these weapon systems is 
essential to prevent the looming impact to combat readiness.
    Sequestration cuts deeply into Air Force investment accounts, which 
under the law must be applied equally at the program, project, and 
activity level; consequently, it impacts every one of the Air Force's 
acquisition programs. For example, a potential fiscal year 2014 
sequestration impact for the F-35A low rate initial production, 
relative to the request, could be the loss of 4 to 5 aircraft from the 
requested amount of 19. This potential reduction will increase unit 
costs resulting in production funding shortfalls.

    94. Senator Lee. General Welsh, will it be more expensive to delay 
depot and modernization work that will have to be made up in the 
future?
    General Welsh. Delays to depot maintenance create a bow wave of 
requirements. As the bow wave builds, stress on depot capacity 
increases. Eventually, aircraft will be grounded awaiting depot 
maintenance, which will decrease aircraft availability to the 
warfighter. It is essential that we fund and execute depot maintenance 
and modernization to preclude these costs. Further, planned maintenance 
in the current fiscal year that is delayed to future fiscal years can 
drive idle production shops and degrade workforce proficiency and 
productivity. Ultimately, a loss of efficiency can drive future 
volatility to labor rates and operational costs. These impacts may also 
carry forward to our industry partners driving unanticipated bills to 
the Air Force as we try to best utilize our limited funds to meet our 
highest priority requirements. All of these sequestration impacts will 
affect the Air Force's ability to maintain full-spectrum readiness.

                             nuclear forces
    95. Senator Lee. Admiral Greenert and General Welsh, can you 
outline what effect the prolonged sequestration will have on our 
current ICBM, ballistic missile submarine, and strategic bomber forces?
    Admiral Greenert. Due to its national importance, the Navy will 
maintain a credible and modernized sea-based strategic deterrent even 
if it results in taking risks in other missions of the Navy. However, 
without congressional action or mitigating circumstances, sequestration 
in fiscal year 2014 will delay the planned start of construction of the 
first SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
cause us to be unable to meet STRATCOM presence requirements when the 
Ohio-class SSBN retires.
    General Welsh. The Air Force will ensure continued focus on 
maintaining a strong nuclear deterrent, but prolonged sequestration 
will force difficult choices concerning nuclear modernization and 
sustainment programs. Prolonged sequestration would drive changes to 
modernization and sustainment schedules, including badly needed 
sustainment of maintenance and storage facilities. These schedule 
changes would delay our ability to field the capabilities necessary to 
meet critical weapon system requirements, and might also result in the 
need for costly, currently unplanned, life extension programs.

    96. Senator Lee. Admiral Greenert and General Welsh, what effect do 
you believe it will have on our overall strategic deterrent?
    Admiral Greenert. Due to its national importance, the Navy will 
maintain a credible and modernized sea-based strategic deterrent even 
if it results in taking risks in other missions of the Navy. However, 
without congressional action or mitigating circumstances, sequestration 
in fiscal year 2014 will delay the planned start of construction of the 
first SSBN(X) from fiscal year 2021 to fiscal year 2022. This would 
cause us to be unable to meet STRATCOM presence requirements when the 
Ohio-class SSBN retires.
    General Welsh. Our nuclear triad continues to play an essential 
role in deterring potential adversaries, providing extended deterrence, 
and reassuring our allies and partners of our commitment to their 
security. As reflected in the 2010 NPR, maintaining and modernizing the 
air and land-based legs of the triad is critical to our national 
security and remains a top Air Force priority.
    In the near-term, the Air Force has successfully managed the impact 
of sequestration on nuclear deterrence operations--ensuring that our 
strategic forces remain safe, secure, and effective day-to-day. 
However, beyond the current fiscal year, the impacts of prolonged 
sequestration are largely unknown and are cause for concern. Continued 
sequestration would create significant risks to sustainment and 
modernization programs for our nuclear-capable bomber, dual-capable 
aircraft, and ICBM forces, resulting in negative mission impacts and 
potentially undermining core readiness of our nuclear deterrent.

                            missile defense
    97. Senator Lee. Admiral Greenert, what effect will a continued 
sequester have on our missile defense plans in Europe and the 
deployment of naval assets with the Aegis System?
    Admiral Greenert. Even if the sequester continues in fiscal year 
2014 and beyond, Navy would still evolve our posture in Europe by 
meeting our ballistic missile defense (BMD) European Phased Adaptive 
Approach requirements with four BMD-capable DDGs homeported in Rota, 
Spain, and two land-based sites in Romania and Poland.

    98. Senator Lee. Admiral Greenert, what will be the cumulative 
effect on our ability to guard against missile threats from the Middle 
East or North Korea?
    Admiral Greenert. Prolonged sequestration, with BCA-level top 
lines, would hamper Navy's ability to guard against missile threats and 
pace the advancements of potential adversary A2/AD capabilities by 
decreasing our forward presence and requiring us to slow the fielding 
of the AMDR aboard DDG-51 Flight III warships.

                 mix of foreign- and home-based troops
    99. Senator Lee. General Odierno and General Amos, at a speech at 
the Center for Strategic and International Studies on Tuesday, 
Secretary of Defense Chuck Hagel stated that DOD would reconsider its 
mix of Active-Duty and Reserve Forces, as well as the mix of foreign-
based and home-stationed troops. Do you have any further information on 
these plans?
    General Odierno. The Army must maintain a balance between end 
strength, readiness, and modernization as we consider future strategic 
implications. As for force mix, I do not envision significant migration 
of force structure between the Active and Reserve components. As we 
drawdown and rebalance, I would continue to see the Active component as 
that portion of the force best suited for unpredictable and frequent 
employments, for dealing with complex operational environments, and for 
dealing with unexpected contingencies. I would see the Reserve 
components best suited for predictable and infrequent deployments, for 
providing title 32 support to State and local authorities, and for 
providing operational and strategic depth. The first two brigades the 
Army reduced were two of the four stationed in Europe. The decision to 
reduce these two brigades first was based on a joint Army DOD 
reassessment of the U.S. global strategy and posture in the European 
Command area of responsibility in light of the emerging defense 
strategy. There are no plans to reduce additional overseas units.
    General Amos. The Marine Corps has done a considerable amount of 
analysis of the mix of Active Duty and Reserve component forces. In our 
analysis we have determined that a Reserve Force of 39,600 is robust 
enough to provide us the strategic depth to augment the Active 
component in the event of multiple major contingency operations while 
being manageable enough for us to man, train, and equip. This size 
Reserve Force also affords the Marine Corps enough capacity to provide 
operational tempo relief critical for those types of forces that are in 
high demand during steady state operations.
    With respect to foreign-based and home-stationed troops, we have 
taken a very close look at the distribution of our force as we look to 
re-posture to the Pacific. We feel that our current disposition affords 
the Nation a great deal of responsiveness as demonstrated most recently 
by the timely response by the Navy/Marine Corps team to the 
humanitarian operations in the Philippines. Our posture in the Pacific 
also provides the Nation a significant strategic capability by having 
forces in a position to rapidly respond to a major contingency 
operation in the Pacific.

    100. Senator Lee. General Odierno and General Amos, are you 
considering reducing the number of Active-Duty Forces and increasing 
Reserve and Guard Forces, and downsizing our overseas presence?
    General Odierno. The Army must maintain a balance between end 
strength, readiness, and modernization as we consider future strategic 
implications. As for force mix, I do not envision significant migration 
of force structure between the Active and Reserve components. As for 
overseas basing, the first two brigades the Army reduced were two of 
the four stationed in Europe. The decision to reduce these two brigades 
first was based on a joint Army DOD re-assessment of the U.S. global 
strategy and posture in the European Command area of responsibility in 
light of the emerging defense strategy. There are no plans to reduce 
additional overseas units.
    General Amos. No. In 2010, the Service conducted a Force Structure 
Review, which reduced the Active component force from 202,000 in fiscal 
year 2011 to 186,800 by fiscal year 2016. As part of this reduction 
there was some capability that was transferred from the Active to the 
Reserve component such as an additional tank company, a bridge company, 
combat engineer company, and amphibious assault company. However, the 
overall end strength of the Reserve component (39,600) was not changed.
    In subsequent service structure reviews, the Active end strength 
was reduced from 186,800 to 182,100 and finally to 175,000 by fiscal 
year 2017. During this last Active component reduction there was a loss 
of capacity but not capability, and the Reserve component was also 
reduced to 38,500 by fiscal year 2017. This reduction was based on the 
future mission requirements of the Marine Corps Total Force and what 
Reserve component support was required.
    Future end strength reductions for either the Active component or 
Reserve component will be considered based on future mission 
requirements as well as budgetary limitations. Additionally, while 
overall Active component billet requirements reduced, the overseas 
billet requirements actually increased at the same time. A summary is 
below:

          Fiscal Year 2011 (202k): 18,204;
          Fiscal Year 2016 (182k): 19,708; and
          Fiscal Year 2017 (175k): 19,358.

    [Whereupon, at 12:04 p.m., the committee adjourned.]

                                 [all]
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