[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]






 
                        [H.A.S.C. No. 114-6]

                      THE FISCAL YEAR 2016 BUDGET
                      REQUEST: A VIEW FROM OUTSIDE
                      EXPERTS: ALTERNATIVE BUDGETS
                         AND STRATEGIC CHOICES

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                           FEBRUARY 11, 2015

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                      COMMITTEE ON ARMED SERVICES
                    One Hundred Fourteenth Congress

             WILLIAM M. ``MAC'' THORNBERRY, Texas, Chairman

WALTER B. JONES, North Carolina      ADAM SMITH, Washington
J. RANDY FORBES, Virginia            LORETTA SANCHEZ, California
JEFF MILLER, Florida                 ROBERT A. BRADY, Pennsylvania
JOE WILSON, South Carolina           SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey        JAMES R. LANGEVIN, Rhode Island
ROB BISHOP, Utah                     RICK LARSEN, Washington
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN KLINE, Minnesota                MADELEINE Z. BORDALLO, Guam
MIKE ROGERS, Alabama                 JOE COURTNEY, Connecticut
TRENT FRANKS, Arizona                NIKI TSONGAS, Massachusetts
BILL SHUSTER, Pennsylvania           JOHN GARAMENDI, California
K. MICHAEL CONAWAY, Texas            HENRY C. ``HANK'' JOHNSON, Jr., 
DOUG LAMBORN, Colorado                   Georgia
ROBERT J. WITTMAN, Virginia          JACKIE SPEIER, California
DUNCAN HUNTER, California            JOAQUIN CASTRO, Texas
JOHN FLEMING, Louisiana              TAMMY DUCKWORTH, Illinois
MIKE COFFMAN, Colorado               SCOTT H. PETERS, California
CHRISTOPHER P. GIBSON, New York      MARC A. VEASEY, Texas
VICKY HARTZLER, Missouri             TULSI GABBARD, Hawaii
JOSEPH J. HECK, Nevada               TIMOTHY J. WALZ, Minnesota
AUSTIN SCOTT, Georgia                BETO O'ROURKE, Texas
STEVEN M. PALAZZO, Mississippi       DONALD NORCROSS, New Jersey
MO BROOKS, Alabama                   RUBEN GALLEGO, Arizona
RICHARD B. NUGENT, Florida           MARK TAKAI, Hawaii
PAUL COOK, California                GWEN GRAHAM, Florida
JIM BRIDENSTINE, Oklahoma            BRAD ASHFORD, Nebraska
BRAD R. WENSTRUP, Ohio               SETH MOULTON, Massachusetts
JACKIE WALORSKI, Indiana             PETE AGUILAR, California
BRADLEY BYRNE, Alabama
SAM GRAVES, Missouri
RYAN K. ZINKE, Montana
ELISE M. STEFANIK, New York
MARTHA McSALLY, Arizona
STEPHEN KNIGHT, California
THOMAS MacARTHUR, New Jersey

                  Robert L. Simmons II, Staff Director
                 Kari Bingen, Professional Staff Member
                Michael Casey, Professional Staff Member
                           Aaron Falk, Clerk
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                            C O N T E N T S

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                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Smith, Hon. Adam, a Representative from Washington, Ranking 
  Member, Committee on Armed Services............................     2
Thornberry, Hon. William M. ``Mac,'' a Representative from Texas, 
  Chairman, Committee on Armed Services..........................     1

                               WITNESSES

Bensahel, Dr. Nora, Distinguished Scholar in Residence, School of 
  International Service, American University.....................     6
Crotty, Ryan, Fellow and Deputy Director for Defense Budget 
  Analysis, International Security Program, Center for Strategic 
  and International Studies......................................     7
Donnelly, Thomas, Resident Fellow and Co-Director of the Marilyn 
  Ware Center for Security Studies, American Enterprise Institute    10
Harrison, Todd, Senior Fellow, Defense Budget Studies, Center for 
  Strategic and Budgetary Assessments............................     4
Thomas, Jim, Vice President and Director of Studies, Center for 
  Strategic and Budgetary Assessments............................     9

                                APPENDIX

Prepared Statements:

    Bensahel, Dr. Nora...........................................    55
    Crotty, Ryan.................................................    67
    Donnelly, Thomas.............................................    90
    Harrison, Todd...............................................    49
    Thomas, Jim..................................................    79

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    [There were no Questions submitted post hearing.]




   THE FISCAL YEAR 2016 BUDGET REQUEST: A VIEW FROM OUTSIDE EXPERTS: 
               ALTERNATIVE BUDGETS AND STRATEGIC CHOICES

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                      Washington, DC, Wednesday, February 11, 2015.
    The committee met, pursuant to call, at 10:03 a.m., in room 
2118, Rayburn House Office Building, Hon. William M. ``Mac'' 
Thornberry (chairman of the committee) presiding.

  OPENING STATEMENT OF HON. WILLIAM M. ``MAC'' THORNBERRY, A 
    REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. Committee will come to order.
    Our hearing today should help clarify some of the hard 
choices we face for our country's security with the coming 
budget cycle. We live in a time when fiscal problems and 
mounting debt coincide with unprecedented national security 
challenges in a volatile world.
    Since the end of the Second World War, the U.S. has enjoyed 
the freedom to act in our national interest anywhere on earth. 
Few nations in history have been so privileged and few nations 
have thrived so well.
    But all of us should recognize that, depending on the 
choices we make, we may be in the sunset of that era. The 
National Defense Panel cautioned that since World War II, no 
matter which parties control the White House and Congress, 
America's global military capacity and commitment have been the 
strategic foundation undergirding our global leadership. The 
way we resource the Department of Defense [DOD] forms that 
strategic foundation of our global leadership.
    Today, experts from some of the leading think tanks in 
Washington will present their views on the budget choices 
facing us. All of them, I think, provide valuable insight into 
some of the threats and choices and different futures which 
this committee has been looking about.
    All are here to present the difficult options before us, 
and some of those difficult options range from the loss of 
important manpower and equipment to military bases to 
discarding strategic responsibilities.
    Dr. Kissinger said in the Senate testimony earlier this 
month that the United States has not faced a more diverse and 
complex array of crises since the end of the Second World War. 
Our task is to manage a difficult combination of external and 
internal pressures on our defenses and be true to the heritage 
which we have enjoyed.
    I would yield at this point to the distinguished ranking 
member, Mr. Smith, for any comments he would like to make.

STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON, 
          RANKING MEMBER, COMMITTEE ON ARMED SERVICES

    Mr. Smith. Thank you, Mr. Chairman. I think you have 
succinctly described the challenge that we face. We have an 
increasingly dangerous world, with national security threats 
emerging in many different areas, from Russia to the Middle 
East and North Africa, obviously the ongoing struggle against 
ISIL [Islamic State of Iraq and the Levant] in Syria and Iraq.
    It is a dangerous world. It is, you know, not--just because 
we have fewer troops deployed now that we are out of Iraq and 
significantly drawn down in Afghanistan, you know, there is no 
such thing as a peace dividend at this point. We are in the 
exact opposite position, facing an array of complex threats 
that are going to require, you know, both resources and 
considerable creativity to figure out how best to confront.
    At the same time, we are in a budget crisis. And if you 
went back 4 years and looked at the Department of Defense's 
projections, their FYDP [Future Years Defense Program], the 5-
year plan and then their 10-year plan, for what they expected 
they were going to have to spend and what they have now, it is 
substantially less, in large part because of the Budget Control 
Act, but also because of, you know, government shutdowns and 
CRs [continuing resolutions], and basically the significant 
budget dispute here on Capitol Hill.
    So more complex, challenging problems, less resources. That 
is the challenge that we face.
    And we will be very interested to hear from you all about 
how best you think we should confront that, because, you know, 
it is at times like that when you really need to get smart. It 
is the famous quote, I think it was from Winston Churchill--I 
will attribute it to him anyway--it is, ``Gentlemen, we are out 
of money; now we have to think,'' and try to figure out how 
best to use that money.
    I will say just two final things about that. First of all, 
we could help ourselves enormously if we got rid of 
sequestration. I think there is a budget fight still to be had, 
and the deficit is down significantly but it is still 
substantial. The debt is still substantial.
    We need to figure out a solution to that, to get a 10-year 
plan going forward for the budget. But sequestration is just a 
horrible place to do that.
    And it is interesting to note that when sequestration was 
passed, when the Budget Control Act was passed in 2011, the 
goals that it set, it basically said that you had to achieve 
$1.5 trillion in deficit savings over the course of the next 10 
years--you have to come up with a plan for achieving that by 
the end of 2011. We didn't, so sequestration became law.
    We have, however, achieved far more than the amount of 
savings that was called for in the Budget Control Act. But yet, 
we are still stuck with sequestration.
    Our number one is get rid of sequestration. But number two 
is, if we are going to have to live with it, and even if we get 
rid of sequestration, we still are going to have less money 
than they thought we were going to have.
    We are going to have to start making some choices about 
programs, about personnel, about Guard and Reserve, about a 
whole array of things within the defense budget. And 
unfortunately, the default position to most Members of Congress 
is to protect their own. You know, if you are thinking about 
shutting down a weapons system, well, if it is made in my 
district or located in my district then I am going to be 
against it.
    We are running up against the Guard and Reserve problem. 
Nobody wants to reduce anything in terms of personnel costs 
because of the political implications.
    But if we have got the budget we have got, we have to make 
some kind of choice. And I would submit that, for those of us 
who serve on this committee, it is not our primary job to 
protect everything in our own districts. It is our primary job 
to protect the country.
    I will give you a personal example. When I represented 
Joint Base Lewis-McChord, they have a ROTC [Reserve Officers' 
Training Corps] program out there--college students who come 
out, like 3,000 in the summer, and, you know, it is some 
business. And they wanted to move it to Kentucky, they being 
the Department of the Army.
    And, you know, the local people freaked out and everybody 
wanted us to, you know, stop this, and they came to me and 
said, ``This must be stopped.''
    And I was like, ``Yes, if DOD thinks this is the best thing 
to do then we will be okay at Lewis-McChord. There are other 
things to do, and let's not get in the way of everything that 
the, you know, Department of Defense wants to do for parochial 
reasons, because if we do that we paralyze their ability to 
make smart choices and adequately provide for the national 
defense.''
    And I know many past chairmen have been fond of quoting the 
thing that is apparently down there on the front of our 
committee, Article 1, Section 8. Article 1, Section 8 doesn't 
say, ``Make sure that as much defense money as is humanly 
possible comes into your district.'' That is not what it says.
    And in times like this I think we need to be a little bit 
wiser about how we make those choices.
    So, look forward to hearing from you what you think those 
choices ought to be, and if we don't like what the Pentagon is 
offering, what are the alternative suggestions.
    So with that, I yield back. Look forward to testimony.
    The Chairman. I thank the gentleman.
    Let me welcome each of the witnesses.
    We start with Mr. Todd Harrison, with the Center for 
Strategic and Budgetary Assessments [CSBA], who, I understand 
Mr. Harrison is the one who ran the exercise that all of the 
organizations participated in.
    Then Dr. Nora Bensahel, who is currently a distinguished 
scholar at American University, but was with the Center for New 
American Security [CNAS] when this exercise took place.
    Mr. Ryan Crotty, with the Center for Strategic and 
International Studies, CSIS; Mr. Jim Thomas, with Center for 
Strategic and Budgetary Assessments; and finally, Mr. Thomas 
Donnelly, with American Enterprise Institute [AEI], who used to 
be a staff member of this committee and was the last one to get 
his testimony in, I noticed, which may be a connection, I am 
not--I don't know.
    But we really do appreciate each of you not only being 
here, but for putting the time, effort, and resources into 
analyzing these different budget options that are before us.
    And so with that, Mr. Harrison--and without objection, your 
full written statements of all of you will be made part of the 
record.
    And, Mr. Harrison, you may proceed.

   STATEMENT OF TODD HARRISON, SENIOR FELLOW, DEFENSE BUDGET 
    STUDIES, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

    Mr. Harrison. Chairman Thornberry, Ranking Member Smith, 
members of the committee, I want to begin by thanking you for 
the opportunity to testify today.
    Approximately one year ago, CSBA convened a group of 
scholars from four think tanks, represented here today on this 
panel, and asked them to develop alternative approaches to 
rebalance DOD's budget and capabilities in light of projected 
security challenges and fiscal constraints. I should note that 
the views and choices expressed through this exercise represent 
those of the people who participated and should not be 
construed as the institutional positions of their 
organizations.
    The purpose of our exercise was to foster a greater 
appreciation for the difficult strategic choices imposed by the 
Budget Control Act of 2011 [BCA]. The ground rules were that 
each team could vary its defense strategy as it saw fit, using 
the 2012 Defense Strategic Guidance as a starting point. The 
teams used their own expertise to assess the future security 
environment and associated risk, and they were free to modify 
and reprioritize roles and missions for the military 
accordingly.
    The teams then used an online tool created by CSBA to 
implement their strategy and capability choices. CSBA's 
Strategic Choices Tool allows users to quickly add and cut 
items from the current program of record using more than 800 
pre-costed options. The tool allows the users to see the 
resulting budget and force structure impacts in real time.
    The tool, I should note, does not assess risk or make 
judgments as to the sufficiency or wisdom of one's choices. 
Such subjective assessments are better left to the experts 
here.
    We also limited the degree of choices available to the 
teams to impose some political reality. For example, we limited 
how quickly they could cut end strength in each of the 
services. We also did not give the teams the ability to count 
savings from additional efficiencies or compensation reform 
beyond what was already included in the President's budget 
request.
    And we did this for two reasons. First, the purpose of the 
exercise was to focus on the major strategic choices facing 
DOD, and while we all agree the Department should always do 
more to pursue efficiencies, efficiencies do not typically rise 
to the level of a major strategic choice.
    Second, the President's fiscal year 2014 budget request, 
which served as the baseline for all adds and cuts in this 
exercise, already assumed well over $200 billion in efficiency 
savings and compensation reform. Since this was already built 
into the baseline, the teams already had the benefit of these 
savings and it would not be realistic to allow the teams to 
assume even more savings on top of these. And it also made the 
job harder for all of these guys.
    Each of the teams was asked to rebalance the DOD budget 
over 10 years, spanning fiscal year 2015 to 2024, under two 
different sets of budget constraints. The first set of 
constraints used the BCA budget caps currently in effect, and 
the second set used a slightly higher level of funding, roughly 
consistent with the President's fiscal year 2015 request.
    Allowing the teams to vary their strategies and using two 
sets of budget constraints for each team allowed us to discern 
which choices were budget-driven and which were strategy-
driven.
    For example, each of the teams made different choices with 
respect to the Marine Corps force structure, which suggests 
that these choices were dependent on the teams' strategies. In 
other instances, such as the decision to retire Active 
Component A-10s, all of the teams made the same choice, which 
suggests this decision may be independent of strategy.
    We also look for instances when individual teams made 
different choices under the two levels of budget constraints. 
For example, all of the teams made cuts to readiness funding 
under the full BCA budget constraints; but when the budget 
constraints were loosened, they changed their readiness cuts. 
This suggests that cuts to readiness funding were budget-
driven.
    Conversely, we found that each team made roughly the same 
cuts to personnel levels, particularly civilian and support 
contractors, in the two budget scenarios, which suggests that 
these personnel cuts were not budget-driven.
    Despite the budget constraints imposed, all of the teams 
chose to make substantial investments in new capabilities, even 
though these new investments required them to make larger 
offsetting cuts in other areas. All of the teams, for example, 
increased spending on space, cyber, and communications 
capabilities. This suggests that the teams felt DOD's plans did 
not adequately address the challenges the military is likely to 
face in this area.
    Much has changed in the security environment since this 
exercise was conducted a year ago, but the long-term fiscal 
constraints of the Budget Control Act remain the same. What our 
exercise helps illuminate, and what my colleagues will speak to 
in their testimony, are the core capabilities the military must 
protect and, in some cases, increase investments in, regardless 
of the budgetary constraints imposed.
    Thank you.
    [The prepared statement of Mr. Harrison can be found in the 
Appendix on page 49.]
    The Chairman. Thank you.
    Dr. Bensahel.

   STATEMENT OF DR. NORA BENSAHEL, DISTINGUISHED SCHOLAR IN 
RESIDENCE, SCHOOL OF INTERNATIONAL SERVICE, AMERICAN UNIVERSITY

    Dr. Bensahel. Chairman Thornberry, Ranking Member Smith, 
and distinguished members of the committee, thank you for 
inviting me to testify in front of you today.
    I participated in this exercise when I was employed at the 
Center for a New American Security as the co-director of the 
Responsible Defense Program. My co-director, retired Lieutenant 
General Dave Barno, and I formed the CNAS team.
    In the interest of time, let me quickly note the three most 
important conclusions we took away from our participation in 
the exercise.
    First, DOD is not investing in the right things for the 
future. As Todd mentioned, this exercise was not a budget-
cutting drill; it truly was about making strategic choices.
    All four teams decided to rebalance the defense budget by 
reducing spending on many current priorities and reinvesting 
the newly freed funds into other parts of the defense budget. 
For example, our team cut the planned defense budget over the 
10-year period covered by the exercise by a total of $716 
billion, far more than was required to meet the spending caps, 
but added back $384 billion in new spending in the full Budget 
Control Act scenario and added $509 billion back in the half 
sequestration scenario.
    This suggests that the planned DOD budget is overinvested 
in some key areas and underinvested in others.
    Second, it was virtually impossible to meet the budget caps 
under the Budget Control Act without cutting civilian and 
military personnel, readiness, or both. Personnel and readiness 
simply consume so much of the defense budget that we were 
unable to stay within the budget caps by cutting procurement, 
force structure, armaments, and logistics alone. People and 
force readiness had to be sacrificed in order to stay within 
those caps.
    We chose first to cut the number of civilians employed by 
the Department of Defense and the military services by one-
third, which was the maximum we were allowed to do under the 
exercise. Between 2001 and 2012, the number of DOD civilians 
grew five times faster than the number of Active Duty military 
personnel. In our view, military combat forces, the sharp end 
of DOD's spear, needed to be preserved even at the cost of 
deeply slashing civilian staff and overhead.
    Yet even so, we were also driven to reduce the Active Duty 
and Reserve end strength of all four military services. We cut 
Active Duty end strength by a total of 127,000 personnel, with 
most of those cuts coming from the Active Army.
    And even yet, we still had to cut readiness in order to 
meet the budgeting cap, even though we strongly resisted doing 
so because readiness is expensive. We believe that the United 
States has a responsibility to prepare its military forces as 
thoroughly as possible for the missions that they are asked to 
conduct, and sending untrained or inadequately prepared forces 
into combat is dangerous and irresponsible. Yet, we had to make 
the same difficult choice that the services have made in recent 
years to cut those readiness funds.
    Third and finally, defense reform is essential to free 
resources for current and future capabilities--again, to invest 
as much money as possible in the pointy end of the spear.
    There are three key elements of a reform agenda that stood 
out to us on our team. First, DOD must shed unneeded overhead, 
civilians, and contractors for the reasons I mentioned above.
    Second, another BRAC [Base Closure and Realignment] round 
is needed. Reducing excess infrastructure would have been one 
of our highest priorities if the tool had allowed us to do so. 
The Army and the Air Force have each estimated that they have 
around 20 percent excess capacity. It is unconscionable to 
require these services to continue spending money on facilities 
that they do not need while the budget caps require them to cut 
end strength, training, and readiness, which puts American 
troops at risk.
    Third and finally, military compensation must be reformed. 
This is a hard but necessary choice, because pay and benefits 
and health care are eating an ever-larger share of the defense 
budget.
    The recent Military Compensation and Retirement Commission 
report offers good recommendations on how to do so while 
grandfathering all currently serving members of the military. 
The commission has estimated that its proposals would save $15 
billion a year.
    That amount is certainly not enough to compensate for the 
cuts required by the Budget Control Act, but if we had been 
able to include around that level of savings in the exercise, 
for example, which did not include an option for compensation 
reform, we would have had to cut far fewer people and maintain 
more readiness.
    Thank you very much.
    [The prepared statement of Dr. Bensahel can be found in the 
Appendix on page 55.]
    The Chairman. Thank you.
    Mr. Crotty.

   STATEMENT OF RYAN CROTTY, FELLOW AND DEPUTY DIRECTOR FOR 
DEFENSE BUDGET ANALYSIS, INTERNATIONAL SECURITY PROGRAM, CENTER 
            FOR STRATEGIC AND INTERNATIONAL STUDIES

    Mr. Crotty. Chairman Thornberry, Ranking Member Smith, and 
distinguished members of the committee, thank you for the 
opportunity to appear before you this morning.
    The strategy and budget exercise that we are referencing 
here today occurred almost exactly a year ago, and yet the 
year--the world really already looks significantly different 
than it did then. The volatile and complex security environment 
already strains many of the choices that we made in this 
exercise, which I think speaks directly to the challenge of 
sequester-level budget, which is a loss of flexibility and a 
limiting of options.
    The U.S. security goals have not been reduced since the 
2012 Defense Strategic Guidance, and yet, $120 billion has been 
cut from that concurrent budget over the 3 years since. The 
impact of these cuts is already in evidence, as the service 
chiefs have already testified. And with the force as currently 
constituted, continued sequester-level funding would shift the 
impacts the force is currently experiencing in readiness, 
trimmed programs, cut training, from just holding patterns to 
entrenched problems.
    So far during these budget cuts we have asked the military 
to do more with less, and they have risen to that challenge. 
But that is not sustainable over the long term.
    In participating in this exercise it was clear that 
sequestration forces you into decisions that you would not make 
otherwise.
    The CSIS team worked to tailor our cuts to the strategic 
priorities that we derived from the 2012 Defense Strategic 
Guidance: prioritizing homeland defense; Asia-Pacific 
engagement, presence, and reassurance; and retaining 
counterterrorism capabilities. We took as a guiding principle 
that a smaller, ready force was preferable to one that 
maintained force structure or added more new programs but is 
less prepared to face the complex challenges we already face 
today.
    There was no way to implement the strategy without risk, 
and we took our primary risks in the size of Active ground 
forces. We hedged this risk with increases to the Guard and 
Reserve, sought to facilitate reconstitution of a larger ground 
force by having additional noncommissioned officers, junior 
grade field officers, retained; better coordination of training 
between Active and Reserve, and shifting of some roles and 
missions into the Reserve Component.
    We also cut the carrier force, but forward-stationed one in 
the Pacific to maximize coverage. And we invested in smaller, 
unconventional capabilities, including cheaper forward 
presence; more intelligence, surveillance, and reconnaissance; 
and special operations forces.
    Under the sequester-level budget, the U.S. military will 
remain the preeminent military in the world. However, we have 
seen a shrinking of the breathing space that we have between 
the capacity that the force has and the daily demand on those 
forces. This limits the Pentagon's ability to react and adapt 
to new challenges and take on the shaping and reassuring 
activities that can help deter a future conflict.
    The Pentagon is being forced to choose between the fights 
today and the fight tomorrow. The reality is that today's 
security challenges require capabilities for the full spectrum 
of operations.
    The 2016 budget process will be a critical one for national 
security. We are reaching a turning point where the temporary 
impacts of sequester-level budgets are going to more 
permanently shape the force that we have going forward.
    So hopefully today's testimonies will help the committee 
better understand what a force looks like under those budget 
constraints and inform the budget tradeoffs that will have to 
be debated over the coming months.
    Thank you for the opportunity, and I look forward to your 
questions.
    [The prepared statement of Mr. Crotty can be found in the 
Appendix on page 67.]
    The Chairman. Thank you.
    Mr. Thomas.

    STATEMENT OF JIM THOMAS, VICE PRESIDENT AND DIRECTOR OF 
    STUDIES, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

    Mr. Thomas. Mr. Chairman, Ranking Member Smith, and members 
of the committee, thank you very much for holding this hearing 
today, and also for inviting all of us to testify. I will 
provide a brief overview of CSBA's approach during last year's 
strategic choices exercise.
    We started, as well, with an assessment of the external 
security environment and its implications for the types of 
forces and capabilities we will need in the future. This 
assessment, in essence, served as our filter or our lens for 
determining our priorities as well as where we would take risk 
regardless of spending levels.
    As challenging as the prospect of continued spending caps 
are for national defense, we face an even more worsening set of 
challenges overseas: revisionist states like Russia, China, and 
Iran; Islamist militant groups like ISIL; new nuclear powers, 
all of whom are exploiting a host of new technologies that 
confer the means to impede America's ability to project power 
and meet its security commitments in the ways it traditionally 
has done so.
    The bottom line for us, as we assessed these challenges, 
was that the future was going to present far tougher challenges 
for our military than the post-Cold War era that we are 
exiting. In particular, future operating environments will be 
far more contested as adversaries exploit anti-access and area 
denial [A2/AD] capabilities to devalue our traditional means of 
power projection and achieving forward presence.
    Thus, we saw an imperative to reshape DOD's portfolio of 
forces and capabilities around three main objectives. First, we 
sought to reshape the U.S. military to put more weight on 
deterrence through the prospect of swift punishment and more 
effective denial of our enemy's objectives in the first 
instance, and at the same time, relatively less weight on 
traditional compellence forces--that is, forces that we need to 
serve eviction notices when our allies or friends abroad might 
be invaded and we have to conduct a counterinvasion.
    Second, consistent with this first objective, we sought to 
maximize combat strike power and prioritize the most viable 
options for projecting power and holding potential adversaries 
at risk anywhere and anytime. We maintained the nuclear triad.
    We placed a premium on conventional global surveillance and 
strike forces, including submarines and low-signature, long-
range land- and sea-based surveillance and strike aircraft, and 
made substantial increases in our stock of precision-guided 
munitions. We sought to develop new ground-based strike 
systems.
    We prioritized unconventional power projection 
capabilities, as well, including special operations forces and 
cyber and electronic warfare capabilities. And we invested in 
potential game-changers, like directed energy, electromagnetic 
railgun, and high-power microwave weapons.
    Second, we sought to judo through the A2/AD problem by 
fielding our own air and sea denial forces and helping 
frontline allies to do the same. So we built up stock of sea 
mines, acquired new torpedoes, and developed new maritime 
sensor arrays to detect enemy intruders in friendly maritime 
space.
    We pursued new air and missile defense systems, like the 
Air-Launched Hit-to-Kill missile. And we made substantial 
investments in decoys, deception measures, aircraft shelters, 
rapid runway repair kits to improve the resilience of our 
forward-based forces.
    And lastly, we expanded our combat logistics fleet to 
maintain robust naval strike power in distant theaters.
    Making these investments would be difficult in any 
circumstances, but the BCA caps made the shift even more 
difficult. We took risks in traditional forces less suited for 
operations in contested environments, including those most 
dependent on close-in bases and those that have to mass in 
order to be effective. This meant significant reductions in 
legacy short-range combat aircraft and ground force capability.
    We also had to make very deep cuts in civilians and 
contractors. And with greatest reluctance, we were also unable 
to avoid making cuts in near-term readiness funding and had the 
most regret over this choice.
    In closing, I urge Congress to develop a serious budget 
proposal that properly funds defense while reshaping the U.S. 
military for tomorrow's challenges.
    Thank you.
    [The prepared statement of Mr. Thomas can be found in the 
Appendix on page 79.]
    The Chairman. Thank you.
    Mr. Donnelly.

 STATEMENT OF THOMAS DONNELLY, RESIDENT FELLOW AND CO-DIRECTOR 
   OF THE MARILYN WARE CENTER FOR SECURITY STUDIES, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Donnelly. Thank you, Mr. Chairman.
    Thank you, Mr. Smith.
    It is an honor for a former staff member to return to the 
People's House and to be on this side of the witness table for 
a change, so thank you very much for the invitation. I will try 
to be brief.
    I think it is important, though, to say that we tried--this 
was a second run through this game for us, and we did not want 
to repeat the lugubrious experience we had the first time. To 
be constrained by the BCA budget levels or even the modified 
levels that we used the second time around was, we felt, simply 
to rearrange the deck chairs on the Titanic, that there was no 
space for strategy when the budget choices were so constrained.
    And I think Todd's observation that there was a whole lot 
of commonality--another way to say that is there wasn't a 
dime's worth of difference--between the BCA-constrained 
programs that the four of us came up with is an important 
takeaway from the exercise. At this level of budget, there 
really isn't much chance for a strategy to operate.
    Secondly, we also felt that we had to reject the 
President's 2012 defense guidance because it would not, in our 
judgment, achieve the national security goals that this country 
has always strived to achieve and, most recently, annunciated 
in the National Defense Panel. So we thought it was necessary 
to return to a more traditional military strategy, because what 
we wanted to do was to find out how far we had fallen into the 
hole that we have built for ourselves over the past decade and 
what it would cost to get back out of that hole.
    That is the approach with which we approached this game. 
And so, very kindly, Todd and his crew allowed us to play a 
budget-unconstrained version, which we used to try to put a 
price tag on what we thought it would take to return to a more 
traditional military posture on the part of the United States.
    And again, I won't go through that in detail. I would be 
happy to respond to that in the question and answer session. 
But I would say that we also refuse to sort of rule out 
unpleasant forms of warfare--counterinsurgency and the like--in 
unpopular theaters of war, such as the Middle East.
    So we wanted to stick with a strategy that was consistent 
with the long past and not invent a new America that divested 
itself of traditional security interests. Rather, we wanted to 
put a price tag on attempting to return to a more traditional 
defense posture and to exercise a more traditional strategy--
one consistent with the strategies that have been consistent 
from administration to administration, from changes of party 
really since the end of World War II, but particularly since 
the end of the Cold War.
    As my colleagues have observed, it has been a year since we 
ran the game and the world looks a little bit more dangerous 
today than it did a year ago. We didn't fully understand how 
firm a grip ISIS would have on western Iraq and eastern Syria, 
or how serious the Russians were going to be about holding on 
and expanding their grip on Eastern Europe either.
    So if we were playing the game today, we would take the 
same approach--and that would be not to worry so much about the 
20-year future, but to try now to rebuild--to get to the point 
where the investments that I think some of my colleagues were 
more interested in could have a decisive effect.
    We really felt that the critical time was now and that our 
shortfalls in capacity and readiness were more strategically 
important than shortfalls in capability. So we wanted to try to 
repair what is not broken in order to survive, to live again, 
to fight another day.
    Just to give you a sense of what that meant to us, a couple 
of things: First of all, we didn't just simply throw money at 
everything. First of all, we understand that the rebuilding of 
the force and taking advantage and rebuilding the industry and 
the infrastructure that would sustain that force has to be 
cognizant of the fact that these are institutions that have 
been on a starvation diet for some time now and overworked.
    We have built a plant, for example, that is capable of 
producing maybe 300 F-35s a year, but so far we have only been 
producing about 30 a year. So while the plant is there, the 
workforce isn't there.
    So when we were reinvesting, we tried to be cognizant of 
how much money the Department could intelligently digest over 
the 10-year period that we were talking about. So we didn't 
think that just flipping the money switch was going to be an 
adequate solution.
    Nonetheless, over 10 years we calculated that the 
difference between the BCA levels of spending and what we 
thought might begin to reduce things to a manageable level of 
risk was $780 billion. That is a lot of money.
    By the same token, we were surprised to understand that not 
even that level of further investment would restore the program 
to what it was prior to the BCA. Let me repeat that. In other 
words, we couldn't get back to where we were, in terms of what 
the defense program was in 2011, 10 years from now even if we 
added almost $800 billion to the defense program.
    So that is a measure of how deep the hole is that we have 
dug for ourselves.
    Final metric: That level of spending--the budgets that we 
imagined at the end of this reinvestment period would still be 
less than 4 percent of projected GDP [gross domestic product]. 
And to the degree that the 4 percent of GDP figure means 
anything other than a level of affordability, it means that 
even this kind of reinvestment would still be below what 
reasonable people imagine would be a sustainable level of 
defense burden for the economy and our society.
    So the big takeaway for me was, in order for us to restore 
a traditional form of American leadership it is going to cost a 
lot of money. It would still be affordable, but we can't get 
there from here.
    Thank you.
    [The prepared statement of Mr. Donnelly can be found in the 
Appendix on page 90.]
    The Chairman. That wasn't very cheerful.
    So in essence, four of the leading institutions in town 
formed teams to look at how you would reprioritize the defense 
budget. And as each of you, I think, has acknowledged, a fair 
number of things have happened in the last 12 months--Crimea 
and Ukraine, ISIS, these negotiations with Iran, North Korea 
says it is testing various systems, the Chinese in waters close 
in the Western Pacific are more aggressive.
    My one question I would ask for each of the four teams is, 
hold yourself accountable. Knowing what you know now has 
happened over the last year, where did you mess up? What would 
you do--what would be the one or two areas you would do 
differently now than you did then based on these events that 
have happened over the last year?
    So, Dr. Bensahel, would you like to start?
    Dr. Bensahel. Sure. An easy question.
    The Chairman. Sorry.
    Dr. Bensahel. I think the guiding principles that we used 
during the exercise where the fundamental question is where do 
you assign risk, right, because all of strategy is about 
assigning risk. We made a calculation to assign more risk in 
the short to medium term than in the longer term because of 
some of the challenges, as Jim mentioned, because we saw some 
very significant threats coming out on the horizon.
    And therefore, we prioritized investments in advanced 
military capabilities and research and development because of 
the long lead times those involve.
    I don't think we would have made very many fundamentally 
different choices, given what we know now about what has 
happened over the past year. The one area where I think we 
might have made a different choice is we might not have cut 
Active Duty Army end strength by quite as much as we did.
    In the exercise we cut it down from the planned level of 
490,000 to 420,000. I think we would maybe have made a 
different choice to cut that only as far as about 450,000 to 
hedge against some of those threats.
    But we still would be changing the balance of the force 
between the Active and Reserve, even in the Army, and still 
trying to preserve as much money as we could for those long-
term investments, given our strategic principles that we used 
to guide the exercise.
    The Chairman. Okay. Thank you.
    Mr. Crotty.
    Mr. Crotty. So we actually tried to focus a little more on 
the near term, and that was something that was borne out, and 
yet still, I think we were underinvested in the kinds of 
reassurance and low-end deterrence that actually has been shown 
as something that we desperately need, whether it is in Europe 
or in Asia.
    And I think that that is something that can only be done 
with more capacity. You need more people out there engaging 
with partner and allies, having the flag, being available, 
being close by, because I think that really provides a 
reassurance that is required, especially at the lower end.
    You know, we are very good at deterring at the high end, 
and it is something that we will have to continue to invest in 
to maintain that. But that has changed the level of the 
conflict discourse, and that has not looked very good over the 
past year.
    So for us, so even having focused more on that near term, I 
agree with Nora, it was primarily in some of those personnel 
cuts that we made. We cut the Marines and I think we now 
definitely regret that, particularly with their sort of more 
unique capabilities as well as the requirements that are being 
put on them and sort of the new normal environment. You know, 
there is a lot that we need from them.
    But also, I think--we did not say this specifically, but I 
think that based on the 2012 defense review guidance, we would 
have been pulling some of those Army units that we cut out of 
Europe, and that immediately comes to mind as something that 
might have been a dangerous decision.
    So as you said, I think it immediately tells you that there 
are significant choices that can change in just the course of a 
year, how those will impact your future security.
    The Chairman. Thank you.
    Mr. Thomas.
    Mr. Thomas. One of the things that really strikes me, Mr. 
Chairman, as we look back over the past year has been this 
growing trend in sub-conventional, creeping aggression, whether 
it is little green men in Ukraine, or it is fishermen and the 
use of paramilitary coast guards in the South China Sea or the 
East China Sea, the use of the Quds force in the Middle East. 
This looks like it is a growing trend.
    And I don't think it is a question of, do we deal with 
anti-access and area denial threats or we deal with creeping 
aggression. What I see is really the confluence of the two, is 
that anti-access and area denial capabilities are providing 
umbrellas that make it easier for revisionist states to conduct 
creeping aggression activities in their immediate regions.
    Fundamentally, this is about the weakness of frontline 
states. As we look around the periphery of Eurasia, from East 
Asia to our friends and allies in the Middle East, to Europe 
and countries in the Baltics and elsewhere, how do we 
strengthen their capabilities and ability especially to deter 
sub-conventional threats?
    I think this--we need to place more emphasis on foreign 
security assistance, and in particular, think if there are ways 
that we can further expand or strengthen our unconventional 
warfare capabilities for countering some of these threats. So I 
think special operations have an incredibly important role to 
play, and that would be one of the things I would want to look 
at again.
    ISR [intelligence, surveillance, and reconnaissance] is 
another. I think what we are seeing on the global basis is 
inadequate ISR capacity to deal with multiple crises 
simultaneously.
    And the last is we, as I mentioned earlier, we already have 
regrets about readiness, and that cuts in readiness under BCA 
caps are deleterious to our ability to deal with all of these 
situations.
    Thank you.
    The Chairman. If I could interject for just a second, just 
to remind members that tomorrow we have an informal roundtable 
on exactly this topic. What would you call it? Creeping 
aggression.
    Unconventional, hybrid warfare--lots of names. But we need 
to understand this better and see whether we have a--whether we 
are able to deal with it. And we have outstanding folks to come 
and visit with us about it tomorrow.
    Mr. Donnelly, you kind of answered this, but I don't know 
if you have some additional comments?
    Mr. Donnelly. I have no regrets, Mr. Chairman. I think the 
events of the last year really underscore our fundamental 
approach, that the near-term crisis is so immediate and, taken 
in the aggregate, it is a global crisis. There is no theater, 
there is no domain of warfare, in which American strength isn't 
being seriously called into question.
    So again, it really sort of underscores two things to me: 
that the crisis is now; and that the fundamental strategy that 
was defined in 2012, however wise it may have seemed then, is 
not responsive to current conditions.
    The Chairman. Thank you.
    Mr. Smith.
    Mr. Smith. I guess the big question is where do we save 
money, and a couple of you mentioned a few things, but if we 
could just really emphasize again, you know, there is a laundry 
list of things that the Pentagon has put out there--BRAC, 
personnel cost savings, getting rid of the A-10, laying up 
various Marine and Navy ships. Give me your three best ideas 
for saving money that, you know, fit within the national 
security challenge that we have.
    Mr. Harrison. Sir, I would start by noting some of the 
things that we took off the table are probably the place we 
should actually start--compensation reform. We did allow base 
closures in the exercise, but we made it realistic. Base 
closures cost you a little money up front and then save you 
money in the long run.
    Every single team here chose to do base closures under both 
budget scenarios, so I think that that is an important takeaway 
from this exercise.
    But ultimately, you know, having run two of these exercises 
with this group of think tanks and dozens of exercises with 
other groups, the common trend that I have found is that in 
almost every single case, every team, the largest amount of 
savings dollar-wise comes from personnel--military personnel, 
Active and Reserve Component, and civilian personnel that work 
for the DOD.
    Mr. Smith. And specifically on those personnel savings, 
there are a bunch of different areas. There is health care, 
there is compensation, there is pensions, and then there is a 
variety of different benefits--housing, commissaries. You know, 
what makes the most sense and where do you get to the point 
where you fear that you are risking the All-Volunteer Force, 
the willingness of people to sign up?
    Mr. Harrison. In the exercises it all came from cutting 
head counts. But I will say in my own opinion, having, you 
know, studied and written about this issue, I think what the 
compensation commission came out with in their final report at 
the end of last month--I think that they have got a sound 
approach there.
    It certainly, you know, could use some tweaks and 
improvement by Congress, but their two main recommendations 
that affect the DOD budget are to alter the current retirement 
plan to add a 401(k)-like plan that would benefit, you know, 75 
percent of people who leave without any retirement savings 
while maintaining the defined benefit plan for people who serve 
a full career and retire.
    Mr. Smith. How does that save money?
    Mr. Harrison. Well, so the commission's plan, using their 
own numbers, once fully implemented it would save about $2 
billion a year, which is not a lot from that one change, but it 
basically saves money by DOD not having to set aside as much in 
an accrual payment each year to the Military Retirement Trust 
Fund, and taking some of those savings and reinvesting in a 
defined contribution plan, like a 401(k), but banking the rest 
of the savings.
    The other main recommendation of the commission that saved 
more money was a change to the health care system, and 
allowing, you know, Active Duty dependents, reservists, and 
retirees to do something they were calling TRICARE Choice, 
where you would get a basic allowance for health care for 
Active Duty dependents, for example, and they could buy into 
commercial health insurance plans instead of remaining on the 
military health care system. That change, when fully 
implemented, according to their own estimates, would save a 
little over $6 billion--almost $7 billion a year once it was 
fully implemented.
    Just those two changes alone in the Military Compensation 
Commission report would save about $33 billion in aggregate 
over the next 5 years, and more than that in every 5-year 
period that comes after it. Thirty-three billion dollars is a 
good amount of money. It does not get you all the way where you 
have to be in terms of the Budget Control Act, but it certainly 
would help.
    Mr. Smith. Just one quick question, and anyone can take 
this: weapons systems. Give me a reasonably expensive weapons 
system that you think we don't need, that we could live with 8 
carriers instead of 11, we don't need the new Ohio-class 
submarine, you know, we can buy half as many F-35s, we, you 
know--give me a major--because I think by some estimates, the 
weapons systems that we are planning on building right now we 
can't afford, barring for some unforeseen acquisition reform 
miracle.
    So something has got to go. What would you say should go?
    Dr. Bensahel. I think that is exactly the right question to 
ask, and the obvious answer to us when we ran through this 
exercise is the F-35. That is the procurement program that is 
eating the entire defense budget alive--particularly the Air 
Force budget, but its costs are so high that it is crowding out 
everything else in the procurement area, as well.
    Mr. Smith. So it is possible to consider basically eating 
at this point close to 20 years' worth of expenditures on the 
F-35, and then simply relying on--I get my generations mixed up 
here--third or fourth generation fighter planes?
    Dr. Bensahel. No, we didn't recommend canceling the 
program. F-35s are needed by the Air Force in the future. But 
in particular, the Air Force doesn't need as many of them as it 
says it needs.
    The number that the Air Force originally came up with of 
1,746 F-35s was derived by doing a one-for-one replacement with 
the current fighter fleet. And so if the F-35 is supposed to 
have and it does have all these additional capabilities, it is 
not clear to me why the one-to-one number is the right force 
structure for the Air Force, for example.
    Again, because of the constraints of the exercise, on our 
team we did also cut some Navy ships. We cut cruisers, we cut a 
couple of destroyers, and we did cut an aircraft carrier, 
although again, a lot of that was budget-driven more than 
strategy-driven.
    And we ended up cutting a lot of force structure in the 
services, again, particularly in the Army, but because that 
reflected our personnel cuts. It doesn't make any sense to try 
to keep the force structure and the headquarters if you are 
cutting the personnel.
    So we did cut some brigade combat teams, some force 
structure in the Marines; but again, that reflected our primary 
decision because of the budget caps to cut the personnel, to 
then shrink the force structure in proportion to that.
    Mr. Smith. Okay. Thank you.
    Thank you very much, Mr. Chairman.
    Mr. Donnelly. I just think you need to have a larger 
aperture when you start going down this road. Just suppose, for 
example, you know, you are concerned because the F-35 is a huge 
program. What sense does it make to have--if you are going to 
cut the F-35s for the Navy, what sense does it make to have the 
big-deck carriers?
    Who wants a $5 billion, $7 billion carrier with a 30-year-
old airplane that can't go very far or carry very much on it? 
It is not like the F-35 is, you know, a miracle weapon for the 
carrier, but the carrier, without a better airplane on it, 
doesn't make any sense.
    So you have to take the force--likewise, why should the 
Marines buy large-deck America-class amphibs, which was 
designed for the F-35? The whole boat is designed to 
accommodate the F-35.
    Also, the force numbers are not necessarily capability 
numbers; they are force generation numbers. You may have to 
have 1,700 Air Force F-35s in order to generate a certain 
number in a certain number of theaters. I mean, I don't know 
that that RFTA [Reserve Forces Training Area] couldn't be 
revisited, but again, if you are worried about covering all the 
bases that we have to cover, you have to generate a force that 
is there.
    We haven't invented a capability for any platform to be in 
two places at once. So the numbers make a certain bit of sense, 
and if you just start taking them in the abstract, you are 
going to end up doing, you know, exponential damage rather than 
arithmetic damage. And the pieces of the force interact with 
one another.
    So this is what budget drills lead to that have second- and 
third-order consequences that we see reflected in the headlines 
every day but we don't really take into account when we go 
through these sort of budget drills.
    Mr. Smith. Thank you.
    I used up quite a bit of time here. I want to yield back.
    The Chairman. So do budgets. It is not just budget drills 
that have second-order effects; real budgets do too.
    Mr. Jones.
    Mr. Jones. Thank you, Mr. Chairman.
    And I want to thank the panel for all the work you have 
done to help enlighten us to make some very hard and difficult 
decisions forthcoming.
    I wanted to ask you that if we continue to go down this 
road of policing the world, and certain--there is a need with 
these attacks from ISIS and groups like that. And yet, we here 
in Congress are having to make some very difficult budget cuts 
not just as it relates to the military, but to other programs 
for the American citizen.
    I think that is why the--today, with your testimony, is 
very important, because again, we will be making these 
decisions in the next few months.
    I somewhat get perplexed with the fact that--I will use for 
an example Afghanistan. John Sopko, the Inspector General for 
Afghan Reconstruction, has testified before subcommittees and a 
full committee--Oversight--that so much of the money we are 
spending in Afghanistan is a waste. It ends up in the hands of 
the Taliban to buy weapons to kill Americans, or the Taliban 
decides that a road that we built, they want to blow it up.
    I know this wasn't part of your responsibility, but I gotta 
get to a point. If we continue to do this policing work around 
the world, and then we decide that, yes, we fought, our men 
have died and given their life and limbs, but we are going to 
still stay there and help them rebuild their country. The 
Bilateral Security Agreement with Afghanistan is 10 more years 
at an average of anywhere from $25 million to $40 million. I 
mean, it is just on and on and on.
    Then you testify here today that we are not going to have 
the strong military that we need because, again, money is going 
to be part of the issue. Yes, there is waste. You acknowledge 
that, in the Air Force and the Army, I think; 20 percent, you 
said maybe, was excess. There are things we can do and should 
do.
    But I want to get to the point now of the question. In your 
analysis and your personal opinion, is there not going to be a 
time that the Congress pass a war tax to pay for what we have 
and what we need to keep this country militarily strong? 
Because I just don't think we can continue to go down this 
road, quite frankly, without a collapse.
    So my point is why the Congress does not have a debate--and 
maybe we will have a debate--on the fact that maybe we need to 
debate a war tax, or some type of taxation to make sure that we 
are not cheating our defenses from being strong enough to 
protect this country.
    Do you believe sincerely at some point in time--and maybe 
this is a little bit off your responsibility, but I would like 
to know your personal opinion--that if we continue to go down 
this road, we cannot keep doing business as we are doing it now 
because we are not paying for it? It just is ongoing and 
ongoing to a point that we won't have any more money.
    Is it fair to say that Congress should have this kind of 
debate so we can answer some of the--have some solutions for 
some of the areas that you have shared with us today that are 
going to be problem areas in the days to come?
    Mr. Harrison. I would just respond that, you know, I fully 
agree that we as a nation need to have a debate on what it is 
we want our military to be able to do. And that is where we 
began the exercises, by each of these teams having that debate 
amongst themselves on exactly what are the right roles and 
missions for the military now and into the future.
    Once we have that debate then we need to do the hard work 
of figuring out what it is we need in our military, in terms of 
capability, capacity, and readiness, in order to execute those 
roles and missions that have been assigned to the military. And 
once we know what resources would then be required, then as a 
nation we need to be willing to pay for it.
    And if that means additional revenues by, you know, some 
means, then so be it. But that is the debate that we should be 
having.
    Mr. Thomas. Congressman, if I could just add to Harrison's 
remarks, I think in addition to a national debate about what we 
need our military to do, I think we also need a much greater 
dialogue with our allies and partners overseas. I think it is 
not just a question of what do the American people pay, but 
what more can our allies be doing in various places.
    Mr. Donnelly. I will be very brief, if I may. If the 
question is about how to finance military power and the conduct 
of war, historically these are the reasons that countries have 
national banks and borrow money--not to support current 
entitlements, not to pay for current, you know, recurring 
domestic expenditures.
    The British national debt during the Napoleonic Wars was 
something like 250 percent of GDP per year. Yet, because that 
was a public good, the markets of Europe were willing to 
finance that and eventually the British retired that debt.
    We are doing precisely the opposite right now.
    Mr. Jones. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Appreciate the gentleman.
    I realize it is hard with five witnesses to stay within 5 
minutes, but if members can keep their questions briefer then 
we might have a chance.
    Mr. Moulton.
    Mr. Moulton. I have no questions at this time, Mr. 
Chairman.
    But thank you all very much for participating in this 
incredibly important discussion.
    The Chairman. Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    In reading your testimony, I wondered if you thought there 
was any fat in the defense budget.
    Mr. Donnelly. There are things that I wouldn't necessarily 
buy. I am not sure I would call them ``fat''; I don't think 
that is really a useful----
    Ms. Speier. What would they be?
    Mr. Donnelly. There were things I would reinvest in, and 
not invest in at the moment. I think, for example, although the 
littoral combat ship [LCS] is a great littoral combat ship, it 
is not a very good frigate.
    So the problem is not the ship, per se. It doesn't make it 
a ``fat'' ship, although, unfortunately, the Navy made it way--
--
    Ms. Speier. Too heavy.
    Mr. Donnelly. Yes. Yes, okay, so but the problem is a bad 
analysis of the mission and the need or a changing 
international environment. There is nothing wrong with the 
program, per se, or the technologies, per se; it is just too 
small to be a frigate.
    So it is the wrong weapon. It is not a--you know, it is not 
that this was fat or government waste, fraud, and abuse.
    Ms. Speier. Thank you.
    The National Defense Panel, with members appointed by this 
very committee, concluded that, ``A recapitalization of the 
nuclear triad under current budget constraints is, 
`unaffordable.' '' Yet the President's budget is asking us to 
overhaul our arsenal, costing $1 trillion over the next 30 
years--money that could be spent on dozens of other national 
security concerns.
    Before we move forward with this overhaul, do we need to 
reevaluate our assumptions and goals of our nuclear deterrent? 
I would like to know your thoughts on how we juxtapose that 
with the budget.
    Mr. Harrison, why don't you start?
    Mr. Harrison. As a budget analyst, I always cringe at the 
term ``affordability'' because, you know, the things that we 
are talking about here today, some of them are very expensive, 
no doubt, but affordability is a choice, right? It is a matter 
of whether or not we are willing to make the resources 
available.
    I think when I look at the nuclear triad my conclusion is 
that it is not yet ripe for a decision. If you look at the $1 
trillion projection, it is over 30 years, you know, we will 
likely spend $15 trillion to $20 trillion on defense over that 
same time period. So it is a rather small part of our overall 
force and expenditures.
    And many of the platforms included in the nuclear triad 
that we are going to need to recapitalize are dual-use, and 
especially many of the supporting capabilities, in terms of 
communication networks, tankers for the aircraft. Many of these 
things we would fund anyway even if we had new nuclear weapons 
in our arsenal.
    I think you get to a good point, though, of do we need to 
rethink the triad? Do we need to rethink the way that we 
modernize it and the type of capabilities that we have in 
there? I think absolutely we need to be looking at it, and the 
time to look at it is between now and the end of the decade, 
and then we can start making some smart decisions.
    The one thing that concerns me most about the 
recapitalization of the nuclear triad is we have put off some 
of these recapitalization efforts so that now many of these 
programs, the peak in funding are starting to overlap in the 
2020s, in the next decade. And it is not just nuclear forces 
either; if you look at the rest of our acquisition portfolio, 
we have a number of major programs where their peak levels of 
funding are projected to occur at about the same time in the 
2020s.
    If you just look at the Air Force's aircraft procurement 
plan, their long-term plans--and I don't mean to pick on the 
Air Force here, but the F-35A will be in full-rate production; 
the next-generation, LRSB [Long Range Strike Bomber], will be 
ramping up to full-rate production; the KC-46A tanker aircraft 
will be at full-rate production; and they would like to buy a 
new trainer aircraft, ramping up to full-rate production.
    Ms. Speier. Okay. Mr. Harrison, I am going to have to cut 
you off because I am running out of time, want to get one more 
question. But thank you very much.
    And thank you all for your participation. I think this is 
an extraordinary exercise, and I would love to see us as 
members of this committee attempt to do what you have just 
done. It would be quite a challenge.
    I would like to focus one last--30 seconds on the F-35. And 
I am more concerned than anything else on the cost of 
maintenance. And we do not factor that in when we built these 
sophisticated weaponry.
    And I understand it, it is going to be about $19.9 billion 
a year, and $1 trillion over the lifetime of the program just 
for maintenance. And maybe you could all respond to that in 
writing, because my time is expired.
    The Chairman. Thank the gentlelady.
    Mr. Forbes.
    Mr. Forbes. Thank you, Mr. Chairman.
    Not trying to flatter you, but I believe all of you are 
brilliant analysts. But you don't feed your families because 
you think lofty thoughts; you feed them because you are able to 
communicate well.
    And by and large, we are failing. This committee is 
failing; anyone related to national defense is failing in 
communicating the problem we have to our policymakers and to 
the public.
    The real essence, when it comes to national defense 
preparation, has nothing to do with intent, because intent can 
change within 24 hours. We really look at the curve lines for 
strategy, capacity, and capability.
    As I see it, the problem we have is the curve lines for 
those who may want to do us harm today or in the future are 
dramatically going up, and ours are dramatically going down. 
The primary driver of that, in my estimation, is sequestration 
right now.
    And yet, when we talk about sequestration, everybody on 
this committee would be against it but we would all have a 
caveat. Some would say, ``But I didn't vote for it.'' Okay. I 
am in that group. Others would say, ``But we can't deal with it 
unless we raise taxes.'' Some would say unless we remove it 
from everything else, unless we have a BRAC. You know the 
drill.
    Taking all of that aside, using your best communication 
skills not with defense speak--not A2/AD defenses, or 
readiness, or any of those things that you have--what is the 
best message that we can use to communicate with other 
policymakers who might be sitting in Ways and Means [Committee] 
right now, or who may be individuals across the country, to 
tell them the dangers to this country if these curve lines 
continue the way they are and we can't change them? What would 
you say?
    Mr. Thomas. Congressman, I guess I would start by talking 
about not just the security that we have today in this country, 
but what is the security for our kids. That is something that 
affects every Member of Congress and it affects every one of 
us.
    What kind of country are we leaving in the future? And as 
you point to these trend lines, there is a perception of 
American weakness right now in the world and that perception, I 
think, is growing.
    And how we overcome it I think really involves two things. 
One is we have to get our fiscal house in order.
    As Tom was talking earlier, in terms of being able to tap 
financial markets, our ability as a nation to go into financial 
markets and get whatever the heck we need, whether it is in 
World War II or it is in the next World War III, God forbid, 
rests on our fiscal foundation. How secure are we as a 
potential investment?
    And so that is critical. Fiscal rectitude is the foundation 
for everything else.
    And so I think that we would be very open to, whether it is 
entitlement reform, revenue increases----
    Mr. Forbes. But you are covering the solutions. Tell me 
what happens if we continue the curve lines.
    Any of you guys.
    Mr. Donnelly. Sir, I mean, we will lose wars, our people in 
uniform will die, and we as a civilian society will have broken 
faith with the very small number of Americans who go in harm's 
way to defend us. It is really that simple.
    You know, the chiefs talk about readiness statistics and 
all the rest of that stuff, which abstracts it to one level, 
but it--you know, that is what it comes down to.
    Mr. Forbes. Anybody else?
    Mr. Crotty. To me, you know, the strength of American power 
is on our economic prosperity, and that prosperity is based on 
a rules-based international order that is undergirded by our 
involvement in the global security. And I think that that is 
the biggest argument, to me, about why we need what we have.
    Mr. Forbes. Anybody else?
    Dr. Bensahel. I would add to that that, particularly for 
the American public, we need to emphasize that the future of 
wars do not necessarily look like Afghanistan and Iraq. I think 
that for most people who don't follow these issues closely, 
that is what war looks like and that is what the future looks 
like, and they don't want a part of that.
    And so I think distinguishing what the future environment 
is like, future threats, and making clear that they do not 
always require large-scale deployments of combat forces in 
irregular environments is very important. I think the American 
public responds to the need for American leadership in the 
world. I think that resonates quite well.
    And I also think--I hate to come back to this, but 
reforming the defense budget resonates. You know, my mother 
used to ask me, ``Why can't the United States defend itself on 
$500 billion a year?''
    It is an excellent question. If we started the budget from 
zero we would probably allocate things very differently.
    But making a public case about how we spend that money and 
why those dollars are needed to protect U.S. interests around 
the world, to continue playing a leadership role, and to say 
that not everything looks like the wars of the past 13 years is 
an important step.
    The Chairman. Thank the gentleman.
    Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman.
    I want to thank the witnesses for their testimony today.
    You know, I have been sort of in and out. We are dealing 
with the education markup, and sequestration is haunting that 
process, which is, again, I think some of the more thoughtful 
people who care about our ability to advance technological 
capability in defense understand that education is also a 
priority that really plays into national defense, as well.
    And that sort of, I think, goes right back to the question 
of, you know, when sometimes sequestration is talked about it 
is sort of, like, viewed as this, you know, the Ten 
Commandments that we are all sort of trapped under. And, you 
know, I was around when the 2011 Budget Control Act was passed, 
and when that was incorporated into the Budget Control Act, 
number one, you know debt-to-GDP was closer to 10 percent--or 
deficit spending-to-GDP was closer to 10 percent; today we are 
under 3 percent.
    And secondly, the history--the forensics of sequestration 
really go back to the 1980s. I mean, this language was almost 
done verbatim from the Gramm-Rudman sequestration.
    And Phil Gramm, the grandfather, you know, the inventor of 
sequestration, he gave a speech in 2011 where, you know, he 
reminded Congress that it was never the objective of Gramm-
Rudman to trigger sequester; the objective of Gramm-Rudman was 
to have the threat of sequester force compromise and action.
    So in other words, I mean, the fact is we are not helpless 
here. I mean, we can turn off those cuts by an act of Congress, 
which the Budget Control Act, by the way, was, as well.
    So, you know, this is--you know, I just think it is 
important sometimes for people to remember we are not sort of 
trapped here, that, you know, we can do this. And Mr. Thomas 
alluded to, you know, some of the ways that we need to take a 
global approach.
    And the good news is that, again, because the deficit has 
moved in the right direction far faster than CBO [Congressional 
Budget Office] projected in 2011 when we passed the Budget 
Control--I mean, if you said that we would have the deficit 
down to less than 3 percent of GDP back in 2011 you would have 
been dismissed as a stark raving lunatic, and yet that is where 
we are today. So this is not mission impossible.
    And again, I just think that that is something that we all 
have to kind of keep sort of drumming into is this is not 
something that we have to accept.
    One quick question, again, looking at some of the 
priorities that, again, you guys still went through this 
process, you know, sharpening your pencils. You know, I sit on 
Seapower and, you know, the Navy changes that you sort of 
suggested--certainly the undersea, you know, sort of bolstering 
of forces is something that some of us are--you know, feel 
pretty validated about.
    But there was also, again, the LCS program and the cruiser 
program seem to be sort of a target, in terms of some of your 
suggestions. And I was wondering if whoever wants to step up 
and sort of talk about that, you know the floor is yours.
    Mr. Donnelly. If you don't push the button you don't get to 
talk.
    The sea services back in the 1990s made a fundamental 
misjudgment about the nature of warfare in their domain, which 
we have been paying for. They thought they were going to be 
able to eternally operate close to shore, so the Zumwalt 
cruiser was basically like a giant battleship.
    It had a gun that shot 100 miles, which is a pretty amazing 
bit of engineering. But, you know, if you can't sail close 
enough to use the gun then it is a little bit of a problem.
    Likewise, the littoral combat ship, as the name indicates, 
was meant to fight in littoral waters, and it was designed to 
go fast originally. It was called the ``Streetfighter'' at one 
point.
    Well, so now we find that the environment in which it may 
be asked to operate is a lot more lethal. And thus, it was a 
fundamental misjudgment by the Navy about what its operational 
environment was going to be that has affected a whole host of 
programs, and it is going to, I don't know, take a long time 
for the Navy to recover from having made that profound mistake.
    It has been a problem for the Marine Corps, as well. And 
you could probably make similar judgments about the other 
services.
    Dr. Bensahel. I would like to just add briefly, your 
comment about education and how that affects this. One of the 
things we prioritized on our team was preserving as much of the 
defense budget as possible for research and development, and 
particularly within that basic science, things that don't have 
yet a direct link to defense programs, because of our concerns 
that the funding for that in other parts of the Federal budget 
will be coming down and that ultimately, basic research and 
basic technological research is absolutely essential to stay on 
the forefront of defense capabilities in the future. So we 
prioritized that even within the defense budget.
    The Chairman. Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    I want to go back to the topic that Mr. Forbes was 
pursuing--that is how we communicate this problem. Anybody on 
this committee knows that the spending caps that were put on 
defense through the BCA are moronic and need to be gone.
    The problem we have is many people in the Congress think it 
is working out just fine. Deficit is going down, they are not 
hearing the Defense Department squeal too much, and we are not 
dead.
    So we have the challenge, as members of this committee, to 
communicate not only to the public but, more importantly, to 
our fellow colleagues and our leadership the problem in a way 
that makes them want to act. You know, Mr. Courtney is right--
we can fix this, but we have got to have consensus that it 
needs to be fixed. That is not there.
    So I would ask each of you--and, Mr. Donnelly, Mr. Forbes 
asked you to, in plain language, describe why it needs to be 
fixed, and you talked about we have broken faith, and all that 
was fine. That is not going to persuade Members to change their 
mind. What I think we have to do is offer that, but then follow 
it up with some specific examples of why this is a threat to 
our country's security.
    So I would ask you to use this threshold: Assume you are 
talking to my 75-year-old mother who never finished high 
school, in that kind of language, and explain to her, who 
happens to be another Member of Congress, why this has got to 
be fixed and it has got to be fixed with this budget.
    Start with Mr. Donnelly and go down. And you have got 30 
seconds at most, because they are not paying attention after 
that. We are talking to them on the floor; they are wanting to 
get on to something else.
    Mr. Donnelly. I can't believe that a woman like that would 
be content to send American soldiers into harm's way without 
preparing them for victory. I would not want to give up on that 
idea. I think that is something that touches Americans who 
don't serve very deeply.
    Mr. Rogers. My colleagues are going to say, ``Listen, the 
Defense Department is not squealing. I think it is working out 
just fine. Tell me why it is a threat.''
    Mr. Donnelly. Because----
    Mr. Rogers [continuing]. Example.
    Mr. Donnelly. Part of the job of this committee is to put 
a--is to make that case.
    Mr. Rogers. That is what I am asking----
    Mr. Donnelly. You know, go out to a rifle range, go to a 
unit, go to a hangar and see pilots who aren't flying.
    Mr. Rogers. You are missing my point. I am on the floor 
talking to a colleague from Wisconsin. He is giving me 15 or 20 
seconds of attention before he is moving on. I am asking you to 
help me have some examples I can provide.
    Mr. Thomas, you are shaking your head. You know what you 
are doing.
    Mr. Thomas. I will try to redeem myself after Mr. Forbes' 
comment.
    What I would say is that, are we better off now as a nation 
than we were in July of 2011, before the----
    Mr. Rogers. And he said, ``Yes, well, our deficit is 
down.''
    Mr. Thomas. Our deficit is down, but the world is going to 
hell in a handbasket. And what I would say is the reason we 
have to make--we have to fully fund defense today is because an 
ounce of prevention is worth a pound of cure, and we either pay 
now or we are going to pay much more later as we look at a 
deteriorating global security environment.
    Mr. Rogers. Y'all are making a wonderful case to people on 
this committee who get it. You are too abstract. Give me some 
examples of why we should scare the crap out of somebody that 
if we don't turn this around we are going to be in trouble.
    Mr. Crotty. So the last time we sort of ignored things and 
went down farther than most planners would have wanted us to go 
was the time we ended up back in--or we ended up in Afghanistan 
because we had not been paying attention and didn't have the 
capacity to--and will to respond. Or maybe more currently, if 
you are speaking to someone today, you know, ``You see the 
beheadings from ISIS on the news. Do you want us to be able to 
do something about that?''
    I think that that is the fundamental question. I mean, 
there are deeper questions buried in that, but I think that is 
the fundamental question we are sort of trying to face.
    Dr. Bensahel. The world is a dangerous place and we are 
dealing with more difficult threats than we have in a long 
time. And we have to be able to deal with the full range of 
threats, from a group like ISIL that beheads innocent people, 
to an aggressive Russia that is invading, taking over territory 
from other states.
    The United States has a leadership role to play in ensuring 
those things don't happen.
    Mr. Harrison. Sir, can I try a completely different 
approach? Because I don't think the defense arguments are 
necessary going to convince a person that hasn't already been 
convinced by them, because I think they have heard all of this.
    What I would say is the BCA budget caps were set without 
regard for need. They were set to reach a predetermined deficit 
reduction target.
    The BCA was intended as a forcing function, not as a means 
of governing. So I would say, with all due respect, Congress 
should do its job and govern, and reconsider those caps, and 
spend what is necessary for defense, not an arbitrary level.
    Mr. Rogers. Well, you know, all of you make very good 
cases, but I am just telling you, our colleagues don't get it. 
They really think they are working and they don't see the harm, 
and this is dangerous.
    But thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Johnson.
    Mr. Johnson. Thank you.
    I have listened carefully, and, Mr. Donnelly, you mentioned 
about entitlement funding and inferred that that is one of the 
reasons why we cannot fund our defense needs.
    And so my question is this: Defense spending, particularly 
sequester, are hollowing out our defense infrastructure and 
will leave us with a hollowed-out military unable to meet the 
current and future threats to our national security. And my 
question to you is this: What is worse, a hollowed-out military 
and inability to respond to the current challenges to our 
national security and those that will arise in the future most 
certainly, or is it a hollowed-out social safety net with 
millions of poor, hungry, and homeless children, elderly, and 
mentally and physically ill Americans all clamoring and solely 
dependent upon private charity for their basic sustenance?
    Which is worse?
    Mr. Donnelly. Both those things are bad. The worst case of 
all is paying for my entitlements. I am not yet poor. I don't 
intend to become poor, and----
    Mr. Johnson. You do realize that there are many poor people 
out there----
    Mr. Donnelly. I do, but the entitlement----
    Mr. Johnson. You realize that----
    Mr. Donnelly. But you are not talking about entitlements 
when you are talking about poverty. You are talking about the 
middle class. You are----
    Mr. Johnson. You also recognize that----
    Mr. Donnelly. You are going to be--Social Security and 
other entitlements are going to be paying for baby boomer 
retirement. I would sacrifice some slice of that to protect the 
poor and to give people who need in this society a decent 
quality of life, and to protect us all as Americans.
    Mr. Johnson. Well----
    Mr. Donnelly. Take my slice.
    Mr. Johnson. I think most of us would agree with you. Most 
of us would have some affinity for the idea of perhaps removing 
caps on social--income subject to Social Security taxes, those 
kinds of things that would strengthen our so-called 
entitlements.
    But you did not answer my question, though. What is worse, 
a hollowed-out military or a hollowed-out social safety net, 
which affects millions of poor children, elderly, sick, both 
mentally and physically--what is worse----
    Mr. Donnelly. That is a false choice that I won't make. We 
are a wealthy society. We can afford to defend ourselves and we 
can afford to take care of the people who need help in our 
society.
    Mr. Johnson. Well, I think your comments were indicative of 
wanting to just totally cut and obliterate the entitlement 
spending.
    Mr. Donnelly. I said we are spending too much on 
entitlements; I didn't say that we should obliterate or 
eliminate the entitlement program.
    Mr. Johnson. Current levels of spending on entitlement 
programs is too much, and current spending on defense is too 
little.
    Mr. Donnelly. In bottom-line terms, I would agree with 
that.
    Mr. Johnson. All right. I just wanted to get you on record 
on that.
    Unless any of the other members of the panel wanted to 
respond, I would have no other questions.
    I yield back, Mr. Chairman.
    The Chairman. Gentleman yields back.
    Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    I would like to thank our panelists today for joining us.
    Dr. Bensahel, I would like to go to one of the comments 
that you made specifically about base capacity. Your comment in 
your analysis is, ``It is unconscionable to require these 
services to continue to spend money on facilities they don't 
need while the budget caps require them to cut end strength, 
training, readiness, which puts American troops at unneeded 
risk.''
    And looking at that, give me your perspective on how the 
analysis was done on current base capacity. What are some of 
the assumptions there? Was it different than the analysis that 
was done in 2005?
    And one of the issues that comes up is, you know, not only 
are we looking at capitalization, but, you know, how does this 
square with the national security strategies that we have and 
making sure that there is, indeed, alignment there?
    And another one of the most important questions is there is 
a cost to these base realignment and closure. If you can't 
capture those savings within the FYDP, then all of that is 
speculative about what impact truly realigning capacity has.
    So give me your assumptions about that analysis and about 
where we really need to be addressing this particular question.
    Dr. Bensahel. First of all, that is exactly right about 
needing to be able to harvest the savings within a certain 
period of time, the 5-year FYDP period. And in fact, that was 
the one defense reform-type option that was available to us in 
this exercise was what Todd dubbed, and others have dubbed, the 
clean-kill BRAC, which is that all the savings as part of that 
would have to be generated within 5 years.
    I think that there are a lot of lessons to be learned from 
the 2005 BRAC experience. I don't think anybody is happy with 
how that occurred.
    I would say that that process was much more about alignment 
than closure. There was a tremendous amount of new 
construction. The new construction costs reduced the planned 
savings for that by over 70 percent.
    So the 2005 BRAC model is not what I think that Congress 
should endorse. The previous BRAC rounds did a far, far better 
job of reducing costs and actually harvesting savings, even 
though some of it was beyond the 5-year period. That is what 
Congress should use as a model and not be scared off by the 
2005 experience.
    I don't know the details of where those numbers came from 
within the services, but I do know that there have been 
efforts, for financial reasons, to shrink footprints, to 
consolidate, and some of it also reflects force structure cuts. 
When you cut force structure and end strength you don't need as 
many facilities as you have in the past, and I know that was 
one of the drivers of their cost estimates.
    Mr. Wittman. Looking at the national defense strategies, I 
think one of the concerns is that in haste to be able to save 
money we look at the short term. But understanding, too, just 
as you all have pointed out, that things change in the long 
term.
    And we know in the United States, as it is configured 
today, if you get rid of base structure you will never get it 
back in that configuration. And if you do need to regenerate 
that it will be much, much more expensive, and it will be 
sometimes impossible to regenerate it because people don't want 
those things in their backyard anymore once they disappear.
    So the balance is how do we save money in an effective way 
to meet today's needs, but how do we make sure that we don't 
rid ourselves of capacity that may be needed in the future?
    And a great example is let's say theoretically you want to 
close an Air Force base, but we are planning to put in place a 
new long-range strategic bomber. And all of a sudden later down 
the road, as these aircrafts start to come online in 2020 and 
beyond, you look at it and you go, ``Wow, you know, we closed 
this base, but that is really a place where we need to be 
placing these long-range strategic bombers, for a variety of 
reasons: we don't want them flying over neighborhoods, the 
sound, all those kinds of things.''
    So my concern is aligning strategically long-term needs 
with where we are trying to go in the short term. So just give 
me your perspective on how to--how those elements balanced in 
this decisionmaking.
    Dr. Bensahel. I would just say that I believe the chiefs of 
staffs of all of the services are well aware of that. They do 
think long-term. They are not concerned--when they make 
recommendations like that and estimates of that kind of 
capacity they are not talking about what they need for today or 
even tomorrow; they are thinking much longer term.
    And, you know, if those are the conclusions that they have 
reached, that they have asked Congress for--they are asking 
Congress to close 20 percent of their capacity--that will 
already have figured into their calculations, particularly 
because they are also, you know, involved--the Secretary of the 
Air Force, the Chief of staff of the Air Force are thinking 
about the long-range bomber, for example, when they make those 
decisions.
    Mr. Wittman. Sure. I think that is why the questions about 
the assumptions that they make about needed capacity and 
whether that aligns with the strategies is such a critical 
question. I think those questions need to be asked if we are to 
make the proper decisions.
    I don't know if any of the other panelists have a view on 
that and how we need to keep those things in mind.
    Mr. Thomas. Congressman, one thing I might add is we 
certainly have to be concerned about regret factors for closing 
domestic bases, but I think that danger is greatly compounded 
when it comes to thinking about our overseas bases. And there I 
think the regret factors could be far greater.
    Mr. Wittman. Yes. Very good.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman.
    I had a question, you know, just about--particularly 
because the American public obviously has a lot of concerns 
about costs in general and defense budgets and what have you. 
But help me understand like how do you--with all the aggression 
that we see popping up in different parts of the world, 
particularly in the Middle East, but also in the Ukraine and 
other places, paying for all of the needs to address all of 
those different issues and be prepared? Because I think that a 
big part of preparedness is that even if we never have to use 
force, like let's say like in the Ukraine, for instance, we 
obviously want to have the appearance or the perception that we 
are prepared to deal with it if need be.
    And so how do you deal with all of these--with having to 
keep up that perception and that capability at the same time 
and dealing with the money that is needed to do that, in 
particular when we start talking about personnel costs, which 
is a big part of the budget?
    Mr. Thomas. Congressman, one thing I would offer is that, 
as I mentioned in my testimony, we have to think about new ways 
of deterring conflict abroad. And in the past we have 
maintained very large, sizeable forces in an expeditionary 
fashion that we can dispatch overseas to come to the aid of an 
ally very reactively after something has occurred.
    And we have an opportunity, I think, to make a shift. We 
can put greater emphasis on preventive capabilities and the 
ability to deny adversaries the ability to commit acts of 
aggression or coercion in the first instance.
    But we also can place greater emphasis on global 
surveillance and strike capabilities that can cover down on 
multiple areas of the world simultaneously and hold out the 
potential for very devastating reprisals, should aggression or 
coercion be conducted.
    Dr. Bensahel. I would add to that that the United States 
has a tremendous deterrence capability today, especially if you 
are talking about things like Russian aggression in Ukraine. 
The U.S. Army, in both the Active Component and Reserve 
Component, has a tremendous number of tanks, for example.
    The question about whether they are forward-based and 
whether they are, you know, reassuring to our allies is an 
important one, but that is not a question of the equipment. The 
equipment is there; the people are there. It's a, you know, a 
basing issue and a force posture issue.
    The types of current threats that we are facing don't 
require large-scale conventional forces in order to address. 
They are more likely to be addressed by special operations 
forces, light footprint types of approaches that cost much less 
money in terms of equipment; they are expensive on the 
personnel side.
    But at least in the current threat environment, that is not 
a tradeoff that you have to make within the defense budget. 
Now, as I said, our principles when we went through this 
exercise were not convinced that that is the same logic over 
the long term, so our long-term investments shifted a bit in 
order to ensure that the United States maintains a credible 
deterrent force across all of its military services.
    But the capabilities to deal with the threats that we are 
facing today, in our view, largely do reside within the 
services.
    Mr. Donnelly. If I may, I would say we have a problem more 
with dissuasion than deterrence. We have an incredible ability 
to punish anybody that we wish to punish, whether we are based 
forward or based in the continental United States. I mean, that 
destructive power of the American military is, you know, 
literally awesome.
    The problem is to dissuade the Russians or whoever from 
crossing the line in the first place, and that is very much a 
matter of where we are and in what kinds of numbers. This is 
the problem, you know, both in Europe and in East Asia.
    But it--the problem in the Middle East goes even beyond 
that, I would say. I have always been attracted to Jim's idea 
that we have been issuing eviction notices in the Middle East 
rather regularly over the past 20 years.
    What is our strategy for ISIS if not to evict them from 
their current statelet, or whatever you want to call it. 
Anything less than that would be a strategic failure of huge 
magnitude.
    So, you know, if our real goal is to not simply deter but 
to dissuade a whole host of bad guys from even thinking about 
it, they have to think not only of the severity of the 
punishment but of the certainty of the punishment and our 
ability to roll back, as it were, if they do cross various red 
lines.
    And that is where I think the immediate problem is. Nobody 
doubts the United States' ability to exact--or to wreak havoc 
on our adversaries. What they question is our sort of 
willingness to do so, and our willingness to do so in a way 
that will be tolerable to our allies.
    Mr. Veasey. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Nugent.
    Mr. Nugent. Thank you, Mr. Chairman.
    And thank you for being here today, to the panel.
    You know, I agree with some of what you say and I disagree 
with some of what you say, which is a good thing, right? You 
know, we had a retreat yesterday, which was the first for this 
committee, ever, and we heard from some, you know, pretty 
insightful folks. Some was, you know, classified and some was 
unclassified.
    But at the end of the day, I think most of us walked away 
saying, you know, we have--the multiple threats are so 
different, and we have state actors and we have resurgence of 
some state actors--Russia in one and China now emerging.
    And our response obviously is worldwide while theirs is 
more regionally allocated, so they can have, you know, less 
money spent, but we have to spend a whole lot more to reach out 
and do the things we need to do, plus the counterterrorism 
issues that we have through non-state actors that are proxies 
for some states. So we have a whole host of issues to deal 
with.
    But your review--and, Mr. Crotty, I think you--Crotty--you 
touched on an area as it related to the National Guard and 
Reserve Component. I think you were the only one that actually 
increased National Guard and Reserve, and I was just trying to 
figure out why did you do that and what was your basis behind 
that?
    Mr. Crotty. Sure. I think that when you start talking about 
getting down to these big budget cuts, one of the first things 
that you need to think about is the roles and missions 
question. What should everybody be doing?
    And I think that as we talk about the changing and diverse 
nature of threats, and some of us have talked about the move 
away from how important conventional response is--perhaps the 
Guard and Reserve can start to be a place where we start to 
develop these other capabilities.
    Maybe these are not people who are going to be out there in 
the front line in tanks, but they may be--maybe the cyber 
mission needs to move out of the Active Component and into 
Guard and Reserve because that is how we can better access 
people that, you know, don't--they want to serve their country; 
they don't necessarily want to be in uniform on the front 
lines, but they have skills that they can bring. And I think 
that that is something that we--if you are going to have to 
start thinking about big cuts you have to start thinking about 
big moves, so that was one area.
    I think another area where we were thinking about the Guard 
and Reserve is as a better rotation base for doing some of the 
engagement overseas or, you know, sort of short-term things, 
being involved in exercises and building relationships and 
having some of those language and cultural skills that might be 
harder to keep in the Active services.
    And finally, one of the things that we did was we brought 
down the size of the Army significantly, and while conventional 
threats are less than they have been at times--or our 
conventional responses are maybe not as effective as they have 
been in the past, the ability to mobilize a large ground force 
is an important capability to maintain. And so while you lose 
some time and capability by moving it from Active to Reserve, 
it is still important to be able to do that if you have to.
    And so making sure that the Guard and Reserve are sized and 
also organized to work better with the Active----
    Mr. Nugent. And the Guard and Reserve----
    Mr. Crotty. Yes.
    Mr. Nugent [continuing]. They do it at a reduced cost.
    Mr. Crotty. Yes. Yes. I mean, part of the reason we moved 
out of Active into the Reserve is it was cheaper.
    Mr. Nugent. But they have been utilized to a greater extent 
than ever, you know, the last 10, 13 years. They were never 
really, I don't think, envisioned to be that--you know, that 
operational, but they are today. And I think we have relied 
upon them to a greater extent.
    Here is what I worry about, and, you know, we focus on what 
is in front of us. Right now the shiny object is ISIS. But, you 
know, it is much greater than that, you know, across the globe. 
You know, when you start trying to identify what the threat is 
and it is, you know, it is radical Islam, it is those types of 
things that are not just in, you know, in Syria and in Iraq, 
but they are in, you know, Africa.
    They are all over the world, and so we are focused on that, 
but at the same time, we have state actors that are increasing 
their capabilities to an extent that we have never seen before. 
You know, China has never been a real threat to us, and I don't 
think they are necessarily a threat to the homeland, but they 
are a threat to our way of life, particularly in regards to 
what is going on, you know, in the Pacific, and what they can 
do and what their modernization is designed to do.
    And we have to be able to project force to that because I 
think one of the things that was mentioned, you know, that 
ounce of prevention is worth a pound of cure. And I just want 
to leave it at that.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman, for an excellent 
hearing. I wish all of our colleagues were able to attend.
    I also want to thank CSBA, because it sounds like that 
budget exercise you went through was extraordinarily useful not 
only for the expert panelists, but it made me wonder, Mr. 
Chairman, if we should get all the members of this committee to 
go through that exercise, because life is about tradeoffs; 
legislation is about tradeoffs.
    And I thought Mr. Donnelly was particularly useful in his 
exercise in a traditional U.S. defense posture costing us $780 
billion. Like, is anybody on the Hill talking about numbers of 
that size?
    You know, and that is very useful because your benchmark is 
kind of like traditional HASC [House Armed Services Committee] 
speech material. So I would suggest that no member continue 
making that speech unless he or she is willing to find $780 
billion so we are more than a paper tiger here.
    Mr. Donnelly.
    Mr. Donnelly. I just want to clarify what the--that is the 
difference between what we thought would begin to be adequate 
and what the 10-year baseline is. So it is about a--almost a 20 
percent increase, you know, so it is $800 billion out of $2 
trillion, something like that.
    Mr. Cooper. Yes. So it is 4 percent of GDP, which is a 
reasonable figure to spend on defense, but yet we, even on 
HASC, who are more familiar with these issues, are nowhere near 
in the reality ballpark to get this done.
    Now, we perhaps don't need the traditional defense posture. 
The other panelists provide a useful service by getting even 
more realistic.
    But just in that ballpark, when Mr. Harrison said, well, 
for certain personnel measures, reforms that we probably won't 
have the courage to do on this committee, that would save us 
$33 billion over 5 years.
    Well guess what? This week this House of Representatives, 
in legislation so minor it won't even be reported in the 
newspaper, we will increase the deficit by $77 billion just by 
routine stuff that we will do this week.
    Seventy-seven billion dollars. Now that is a 10-year 
figure, as opposed to Mr. Harrison's 5-year figure, but these 
are approximate numbers. Just this week we will blow through 
savings like that that this committee will not have the courage 
to come up with.
    So I thought the single most powerful word in the testimony 
was Ms. Bensahel's word ``unconscionable.'' That is a strong 
word.
    And what was she referring to? The fact that this committee 
will not even allow the Pentagon to consider a BRAC reduction 
when the Army and the Air Force testified there is 20 percent 
surplus capacity. That is outrageous.
    When our own military is begging them to--begging us to get 
the flexibility to do the right thing and we refuse to give it 
to them. We look incompetent. We look selfish. We look weak.
    And America should not look like that. So this is this 
committee's chance, under new leadership, to come forward with 
a realistic and funded defense strategy.
    On another note, Mr. Thomas, I wanted to ask--you mentioned 
a new strategy regarding sea mines and things like that. I 
would like to understand more about that. Aren't mining the 
seas considered an act of war? But that's a useful way to do 
A2/area denial?
    Mr. Thomas. Thank you, Congressman.
    What we have seen our adversaries doing over the last 
decade or more has been developing capabilities that can impede 
our ability to project power. Sea mines, as they sound 
offensive, are actually extremely useful defensive weapons.
    So you could imagine in places like the East China Sea, the 
ability for the United States and its local allies to be able 
to implant mines in their own territorial waters that could 
impede intruding submarines and other forces could be valuable 
for helping to better defend their maritime areas of control.
    Mr. Cooper. You have written about this, and so just go to 
your think tank and CSBA and get the materials on this?
    Mr. Thomas. Yes, sir. We would be happy to send you 
something.
    Mr. Cooper. That would be great.
    Thank you, Mr. Chairman. Again, an excellent hearing.
    The Chairman. Thank you.
    Mr. Harrison, you are as knowledgeable an expert on defense 
budget as I know of in town following it closely. Are you aware 
of any study or basis for this figure that some folks from the 
Pentagon throw around that we have 20 percent extra 
infrastructure?
    Mr. Harrison. My understanding of that figure is, well, 
first of all, I believe DOD is prohibited from doing a detailed 
analysis of this issue, so they aren't able to produce new 
analysis to substantiate the number. The figure is an estimate 
that is derived from the detailed analysis they did of the 
inventory of facilities in the United States prior to the last 
round of base closures, and then subtracting the amount of 
infrastructure that was reduced during the fifth round of base 
closures. You end up with somewhere in the neighborhood of 20 
percent excess capacity.
    The Chairman. As I understand what you are saying, sometime 
before 2005 they believe they had--and I don't know if these 
numbers are exactly right--23 percent extra infrastructure. The 
2005 BRAC round reduced 3 percent, so they are saying, okay, we 
still have 20 percent extra.
    Mr. Harrison. That is my understanding, sir.
    The Chairman. That is where that number is basis----
    Mr. Harrison. Yes, sir.
    The Chairman. Okay. Thank you.
    Mr. MacArthur.
    Mr. MacArthur. Thank you, Mr. Chairman.
    I have lived through budgets for about 30 years in a very 
different context--in a business context--and I am still trying 
to decide and discern to what degree that helps me and to what 
degree that hurts me in trying to assess our role and how we 
make progress in this. And I have presented budgets where I 
argued for my priorities; I have sat on boards of directors 
where I evaluated those and made cuts.
    It seems to me that our role is probably more like the 
board. I don't see us cutting individual programs, getting into 
the weeds. I think we lose something there.
    So I have been focused on the broader sense, and I would be 
interested when I am done in whether you think that is the 
right approach for us.
    It also seems to me the difficulty for us in assessing what 
level of military investment is adequate, there are a couple 
things I have jotted down here. One, the scope of the DOD is 
vast and arcane. It is so complex that only initiates like the 
DOD, perhaps you, and others really get it.
    It is difficult to compare dollar levels to your mother. 
What is the difference between $500 billion and $550 billion? 
You know, what is the difference, really? It is hard for us to 
assess that.
    There is a myriad of different opinions is a third problem 
about the risks, the priorities, the relative effectiveness of 
options.
    And then there is a whole set of--a fourth issue is 
differences in values. I heard a question earlier about, you 
know, is this more important than social programs. And you can 
argue whether that is a false choice, but it is a choice that 
is in many people's minds.
    So I have tried to stay focused on a little bit of a 
broader approach to this, and that is, what is military 
spending over time as a percentage of GDP in peacetime, in 
wartime, and where are we? Are we in wartime, peacetime as you 
look--you know, it is not a World War II environment, but we 
are certainly a nation at war.
    And I would like you to talk about it, but I would actually 
like it if one of you could send analysis, if you have it, I 
assume you do--what have we spent throughout the course of 
modern history in military spending as a percentage of GDP? And 
then what level of DOD spending is implied by the current BCA 
as a percentage of GDP?
    So I would be happy to have you grasp any of those points 
that I just mentioned and comment on them.
    Mr. Harrison. If you don't mind, if I can go first? I have 
a report, I will send it to you, that tracks it, at least since 
the end of World War II, of defense spending as a percent of 
GDP. I do not remember the exact numbers off the top of my 
head, but I believe the peacetime average, if you cut out the 
periods of the Korean War and Vietnam War, et cetera, that we 
have typically averaged around 6 percent of GDP.
    But also, if you look at the trend in the graph, it has 
been steadily declining, and that is over decades.
    I caution people against using percent of GDP as a good 
metric for defense spending. I think what that leads us to is 
setting things like an arbitrary floor for defense spending.
    People floated things like 4 percent of GDP, ``Four Percent 
for Freedom.'' It is great alliteration. I don't know that it 
is good strategy, though.
    I still fundamentally believe--the reason I am against the 
BCA budget caps is the same reason I am against setting a 
percent of GDP for defense, is because I think our spending 
level should be driven by our security needs and not set at 
some arbitrary level, regardless of where that ends up. Let's 
have the debate about what we need to spend and then let's 
fully fund that.
    Mr. MacArthur. If we could get some agreement around that I 
would agree with you. But I am not sure we can, and so in the 
interest of persuading colleagues who are part of this 
decision, it seems to me there needs to be something else, some 
handle for people to grab hold of and say, ``Okay, we do have 
deficit issues, but if we spent 6 percent traditionally then 
maybe I can live with, you know, 3.5 percent today.'' That is 
why I gravitate a little bit to that.
    Mr. Harrison. I have failed to answer the last part of your 
question. We are on track now to fall below 3 percent of GDP on 
defense spending. That is where we are headed at this moment.
    Mr. Donnelly. I will try to put this in 15 seconds. Since 
the end of World War II we have guaranteed a remarkably 
historically secure and stable international environment. It 
has been the framework for our prosperity, been the framework 
for the expansion of human liberty across the planet, and for a 
really--if you are talking about great power stability, 
unprecedented in history.
    The cost of that has declined as we have become richer and 
the system has become more entrenched, which is reflected in 
that downward GDP slice. GDP is nothing more than a measure of 
the opportunity cost. Can we afford to sustain what we have 
built?
    And at 5 percent, a nickel on the dollar, it seems like a 
pretty good value and a cost that we could sustain, you know, 
indefinitely.
    Mr. MacArthur. Thank you.
    I yield back.
    The Chairman. Mrs. Davis.
    Mrs. Davis. I will try, Mr. Chairman, really quickly. I 
have been called back to another meeting.
    Thank you so much. Your presentations were good. I read 
most of those before and have heard the questions.
    Mr. Harrison, if I could turn to you, because I know you 
have been very involved in personnel issues, and I believe the 
chairman asked about that earlier and, you know, the cost 
factors involved.
    We have 1 percent of our population that engage in the 
military, and so part of the pushback as we move forward and 
try and deal with these issues is that very fact of people 
feeling like, you know, we are looking at the budget but, you 
know, we are going to this area--and I greatly appreciate the 
commission, but I am just--you know, we were talking about how 
do we sell some of this.
    And what would you say, I guess, to that 1 percent? And 
what is it that we should be coupling particularly with those 
changes, that modernization, that we demonstrate that we are 
actually, you know, being very true to the young men and women 
and the families who serve this country?
    Mr. Harrison. I would say that when it comes to the defense 
budget, it's about balance. And when it comes to keeping faith 
with the troops, it is not just about pay and benefits; it is 
about ensuring that the force that we have and the funding we 
provide provides an adequate number of people, it provides the 
best equipment in the world that is properly maintained, and 
the best training in the world.
    And we are breaking faith with the troops when we 
shortchange any of those things. So it is about keeping the 
right level of balance.
    And for me, when I look at the compensation reform issue, I 
served in uniform in the past and, you know, I can tell you--
and anyone who serves I think would agree--that it is not the 
only reason people join the military or choose to make a career 
of the military. It is not just about compensation; it's about 
serving one's country. So let's not forget that.
    But also, what is important to me is thinking about the 
future. I am not in the military anymore, but what if one day 
my two little daughters--this is still a long way off--what if 
one of them wants to join the military. What will I care about 
as a parent at that point?
    I will tell you, I will not care one bit about their 
retirement plan. I will care about making sure they have got 
the best training, the best equipment in the world, and they 
have got enough people going into battle with them that they 
will be protected and they will be able to come back home to 
me. That is what I care about.
    And so I think when we are looking at, you know, what we 
can do in the future, yes, we absolutely have to keep faith 
with the troops. And we absolutely need to maintain an All-
Volunteer Force with a compensation system that can recruit and 
retain the best and the brightest, but it is about balance, so 
I think we have got to look beyond just trying to maintain the 
status quo.
    Mrs. Davis. Just too, I think a few of the other issues 
that you raised--one is focusing on cyber, and that is 
understandable. I know that in the last budget we actually did 
improve those budgets considerably, and on some levels they--
technological piece and the intel piece is really dependent on 
the best minds, you know, so it is personnel, it is human 
capital that in many ways is required here.
    Why did everybody want to raise those cyber budgets 
significantly and what should we know about that? Is it in 
competition, necessarily, with adversaries and the idea that, 
you know, we are--we can't stand still while they are, you 
know, racing ahead, or is it something else?
    Dr. Bensahel. I think there is a tremendous amount of 
concern about proliferating cyber capabilities, particularly in 
the hands of some U.S. potential state adversaries and their 
capabilities. So I do think that there is a reason to be 
investing in that.
    I would caution, though--and I don't think the American 
people are aware of this--that most of the money that DOD 
spends on cyber goes to protecting and dealing with DOD 
networks and dealing with offensive capabilities against state 
adversaries. They don't go about protecting, you know, the 
networks that we depend on for our, you know, banking, for, you 
know, the fact that we all have iPhones in our pockets, you 
know, the basic networks that undergird our society.
    I think there is an important role here for Reserve forces 
to play not just because they offer the chance to bring in 
people who wouldn't necessarily serve otherwise, but because 
you want the people who work at Apple, and Microsoft, at 
whatever, you know, startup tech company, you want the military 
to be able to address their skills. And particularly if--to be 
able to utilize their skills. And particularly if you are 
talking about the Army and the Air Force, you want them in the 
National Guard so that they can also deal with state 
preparedness for cyber emergencies and events that may occur, 
as well.
    Mrs. Davis. If I may say, because I think you were pointing 
out the fact that those Reserve forces and civilian have 
increased greatly, but that is part of the argument, that being 
specific about the talents that people bring in that area, we 
actually--maybe we should be increasing that a lot more.
    Dr. Bensahel. I think it is important to bring in people 
who already have those skills. It is much harder to grow 
someone within the military force structure to do that than to 
bring in people with the outside expertise.
    The Chairman. Thank you.
    Mr. Brooks.
    Mr. Brooks. Thank you, Mr. Chairman.
    The Budget Control Act passed in 2011. It held the 
sequestration provisions in it that have done such damage to 
national defense. For emphasis, I am one of those that heeded 
the warnings and voted against the Budget Control Act.
    We were advised--the House Armed Services Committee in 
2011--that if sequestration played out through the full 10-year 
period, after everything was said and done our military would 
have the smallest number of men and women in uniform since 
before World War II, Great Depression era numbers; the smallest 
number of operational naval vessels since roughly World War I; 
and the smallest number of operational aircraft in the history 
of the United States Air Force. That's 3\1/2\ years ago.
    Today, do you have a judgment as to whether those 
projections are holding up, or they were exaggerations, or 
underestimates?
    Mr. Crotty. My first reaction is, actually, I think we are 
getting there even faster than some would have guessed at that 
time. You know, we already had a Navy and an Air Force that 
were shrinking as budgets were growing.
    I believe the Air Force is now trying to rebound from 
hitting their lowest point since their creation after World War 
II this year. The Navy force structure that we have projected 
even in the President's budget level, not even the BCA level, 
is bringing us far below where we have traditionally been as a 
Navy.
    And it is both the size and efficacy of those forces. We 
have shrunk them, but they also have the oldest equipment that 
they have had, especially in the Air Force, as sort of an 
average age of inventory, and they are getting less time to 
fly, steam, drive, and train and exercise.
    So I think we have already seen a lot of those impacts 
probably faster than we would have expected.
    Mr. Harrison. And I could add one thing. Fully agree, we 
are rapidly shrinking the force, I think faster than many of us 
even expected. I think even when we were running this exercise 
I think we thought that our cuts might have been too rapid, and 
yet it seems to be the track that we are on.
    A caution I would offer is while, you know, for many types 
of threats and many types of contingencies the size and the 
capacity of the force matters and the number of platforms 
matters, in other contingencies, other situations, it is the 
capabilities that those platforms have that actually may be 
more important. So while we do see that our ship count in the 
Navy, just if you take an example, is far below where it was in 
the 1980s, it is a different mix of ships with different 
capabilities.
    The same is true of the Air Force. Much smaller number of 
platforms, but I would argue that the platforms are a lot more 
capable.
    So it is a very complicated question when you are looking 
at the size and capacity of the force. You have to also take 
into account, what are the capabilities of that force? What can 
it actually do?
    And that--I think that is a key role of this committee is 
providing oversight to make sure that we have got the right set 
and the right mix of capabilities and capacity in the future.
    Mr. Brooks. Is it fair to say at the same time that our 
potential geopolitical foes' platforms or weapons systems are 
also being upgraded?
    Mr. Donnelly. Or just changed.
    The other thing that I would say about our forces is they 
are really remarkably less ready. So it is not just a question 
of how capable they are, how many of them there are, but how 
many of them are prepared to go into harm's way on short 
notice.
    The chiefs recently testified that, because of the little 
squirt of money they got in the Ryan-Murray deal, the Air Force 
got up to 50 percent of its combat fleet being ready. The Chief 
of Staff of the Army reported a third of its brigade combat 
teams were ready. That was the high watermark of recent years.
    So if you ask, ``How many units can we send to respond to a 
crisis who have all their gear, well-trained, all their people, 
and are ready to go,'' that is a small slice of a shrinking 
pie, an aging, you know, pie with aging equipment, et cetera, 
et cetera. So if you are looking at outputs rather than inputs, 
I think that is the sort of metrics that really frighten me 
much more either than capacity or capability.
    Mr. Thomas. China has had double-digit increases in its 
defense spending for 24 of the last 25 years. That is a 
situation that we can't imagine, sitting in this room, for 
ourselves. And over time, those--just looking at those 
trajectories, this just presents a far greater problem for us 
as we look out a decade or more.
    Mr. Brooks. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Ms. Stefanik.
    Ms. Stefanik. Thank you, Mr. Chairman.
    And thank you, to all the witnesses, for the excellent 
testimony today.
    My question--and I hope in this question I bring 
generational perspective--I was a senior in high school when 9/
11 happened, and in our world today, at no point in my lifetime 
did we have more hotspots and chaos than we do when we open the 
newspapers. I find that much of our discussion in Congress, 
unfortunately, focuses on the impact of the sequester with a 
snapshot of the present time.
    My challenge to you is, what is the snapshot of the future 
for my generation that is going to inherit the negative 
implications of the sequester if we do not change the 
trajectory? I would like to hear what that snapshot is 10, 20 
years in the future, how it affects the free flow of goods and 
services around the world, the tough choices our military is 
going to have to make, and whether we will be able to support 
our allies.
    Mr. Crotty. I will just take a quick comment to that. You 
know, I think that the worst case scenario is a continuation of 
actually some of what we have seen this year, which is the 
freedom of regional actors to start to take things into their 
own hands without fear of repercussion, which I think is sort 
of the harbinger of a breakdown of sort of the international 
order.
    When we reach a point where, you know, we see all of these 
hotspots, the concept of regional actors being able to 
physically take territory--I mean, the last time there was an 
annexation of land was Kuwait, and before that it was back in 
the 1960s. I mean, this is sort of relatively unprecedented in 
the current time.
    And so if that is what the worst case scenario looks like, 
I think the hotspots only sort of exponentially grow.
    Mr. Thomas. Really since World War II we have taken for 
granted the international set of rules that everyone plays by, 
which are really underpinned by American defense capabilities. 
And as we look out over the next couple decades, I think it is 
likely that we are not only going to have challenges to that 
global set of rules, but in fact, there are a number of 
revisionist states, whether it is Russia and Europe in the 
Caucasus or Iran in the Middle East, particularly if it 
acquires a nuclear weapon, or China in East Asia, that are 
going to impose new rule sets, at least regionally, and over 
time globally.
    Mr. Donnelly. Suppose a couple years from now you are 
voting on an authorization of force requested by the President 
in whatever scenario you can imagine, and you thought as a 
member of the committee that you were going to send people into 
harm's way who might not win, and that more of them would die 
than you felt comfortable with. That is not something that 
anybody since 9/11 or since the end of the Cold War has had to 
take into account. When we have gone to war we have gone to war 
with the expectation of victory and at a particularly low cost.
    So as you look forward to your long and no doubt 
distinguished career, that is the kind of proposition that you 
may have to wrap your head around.
    Ms. Stefanik. Mr. Donnelly, I want to follow up on that.
    My second question, I have the distinct honor of 
representing Fort Drum, which is home of the historic 10th 
Mountain Division, the most deployed unit in the U.S. Army 
since 9/11. And my basic question--and I want you all on 
record--as we focus on the negative consequences of these 
devastating defense cuts, are our soldiers' lives at risk today 
and tomorrow?
    Mr. Donnelly. Yes. I mean, and again, more so. War is a 
dangerous business. All kinds of--you know, training is a 
dangerous business.
    You know, we ask people in uniform to take these kinds of 
risks, but we also think that our responsibility is to send 
them out there with the prospect of victory, and a prospect of 
coming home in one piece and living a decent life when they are 
not deployed.
    Mr. Thomas. Yes. I mean, a force that is not adequately 
trained and adequately equipped is going to be at far greater 
risk, and this is a real danger with the Budget Control Act and 
the imposition of the caps.
    Mr. Crotty. Yes. And I would add that we have talked a lot 
about the impact of sequester-level budgets, which is, as 
distinct from sequestration, the mechanism itself--you know, we 
talk about how bad sequester-level, BCA-level budgets are. I 
actually think the impact of sequester, particularly on those 
readiness questions and training, is even worse. So I would 
just highlight that in the future as we see where this budget 
goes this year.
    Dr. Bensahel. Yes. The cuts to readiness undoubtedly 
increase the risks that our military personnel will face.
    Mr. Harrison. The one thing I would just add is not only is 
it the amount of budget reductions that play--increases this 
risk. That would only be compounded by a failure to make 
strategic choices, because I think the way we spend our defense 
dollars is just as important as how many dollars we have to 
spend.
    Ms. Stefanik. Absolutely. And as we seek to educate our 
colleagues of the importance of replacing this sequester and 
not gutting our Nation's military, it is more than dollar 
signs. This is about our soldiers' lives at risk and brave 
young men and women who serve in our military.
    I yield back.
    The Chairman. Thank the gentlelady.
    Mr. Knight.
    Mr. Knight. Thank you, Mr. Chair.
    And I would like to say that I appreciate these briefings. 
They are very helpful, especially to the freshmen that are 
learning quite a bit, and we are getting into this process. 
Maybe we have come from somewhere where we have got a little 
bit of knowledge about this, but the whole budget process is 
quite a bit.
    I want to talk about two things real quickly. One is in a 
time where we are deploying one-to-one in many of our cases--I 
know the Marines as a whole are about one-to-five-to-one right 
now. It is very difficult, and it is very difficult to maintain 
a force.
    Some of the force wants to be deployed, but when you start 
getting into one-to-one or 1.5-to-one, you start diminishing 
your force and diminishing what--well, what they are capable 
of, quite honestly.
    How much should we worry about that? How much should we 
worry about many of these divisions going out at such a high 
rate?
    And then secondly--and you can take these as a bunch; this 
is a totally different subject, but let me talk about the F-35 
program. The F-16 has been out IOCs [initial operational 
capability] for about 36 years; the F-15 for about 43 years. We 
are going to have those two aircraft, those two fourth-
generation fighters, for probably another 20 to 25 years in 
some capacity in the U.S. Air Force.
    At what point to we say the F-35 program is a leap ahead in 
technology that we just can't skip? You can't take two bites of 
the apple, in other words. You have to do that technology jump 
right now.
    In other words, if you don't do it in 10 or 15 years, if 
you try and take the next step it is going to be hugely costly 
and we won't be able to afford it at that point, so the Joint 
Strike Fighter [JSF] makes sense. And maybe we can run down the 
road on that.
    Mr. Harrison. I would just start by saying in this 
exercise, no one actually cancelled the JSF program. Three of 
the four teams did reduce the quantity that we are buying, but 
I will let them explain their rationales.
    Dr. Bensahel. On both your questions, first, the rotation 
demand, the one-to-one and one-to-two and one-to-three that we 
have seen should no longer be the rotation requirements of the 
future now that we are not sourcing two large-scale ground wars 
in Iraq and Afghanistan, so those numbers are naturally going 
to come down. So the way that we have looked at rotation 
policies in the past, the way even that the services have 
thought about staffing themselves and modeling what units are 
ready to go is all going to be changing because we will no 
longer have that kind of rotation demand on our largest forces.
    The caveat to that is special operations forces and other 
specialized capabilities will continue to deploy at those rapid 
rates because that is where the demand is, and so there does 
need to be some caution there. But those larger problems I 
think will naturally reduce themselves because of--we are going 
to be having fewer people deployed overseas.
    Second, on the F-35, exactly as was just said, I think the 
question is not whether we should have the F-35, but how many. 
I would make an argument that the leap ahead is not to the F-
35. The F-35 is important, but it is a linear continuation of 
the succession of fighters that we have had.
    The real leap-ahead technology is into unmanned, and there 
are very, very good reasons that the Air Force in particular 
should be exploring that. And I would argue for not investing 
additional funds in the F-35 as the leap ahead, but taking any 
harvested savings and investing that in the future of unmanned 
technology, which will be a truly bad capability.
    Mr. Crotty. On the first question, I would say that one of 
the things we do have to keep in mind is that while we are 
coming, you know, sort of having a changing of our structure of 
rotating, I think that there is also greater demand on forward 
deployment worldwide, and that is something we will have to 
keep in mind and keep an eye on, especially with any changes to 
capacity. I think that is one of the big issues. You know, we 
need to be places to reassure, to have presence, to engage with 
allies, which I think is critical today.
    As far as the F-35, I think one of the undersold advantages 
that it provides is as the sort of network node that actually 
makes everything around it better. And then, in fact, that is 
sort of the multiplication, to me, that it brings to the table 
is actually taking the fighters that we are going to have for 
another 20 years, and when you start working them together it 
actually vastly increases their capability, their 
survivability. And I think that is something that we can't sort 
of wait on.
    Mr. Thomas. To your first question, undoubtedly if we are 
going to have a smaller force we have to change what we are 
doing. We can't have unsustainable OPTEMPO [operations tempo], 
PERSTEMPO [personnel tempo], where you have one-to-one 
rotations.
    But that is going to drive you in one of two directions. 
Either you are just not going to be overseas because you are 
just not--you don't have the rotation base if you continue 
business as usual.
    The other alternative as a smaller force means we are going 
to have to be more forward stationed, and I think that probably 
is the right answer. And it is the right answer not only 
because we are a smaller force, but it is the right answer 
because the environments in which we are going to operate are 
going to be far more contested, and our ability in a crisis or 
in a conflict to simply flow C-17s and commercial aircraft into 
a theater or drop off ships in that theater with troops is just 
not going to be realistic.
    On the F-35 point, I would just echo Ryan's comments on how 
we think about the F-35. It is more than just a fifth-
generation fighter aircraft; it is a node and a network.
    And in particular, I would highlight the incredible 
capabilities of the advanced electronically scanned array, the 
AESA radar, which not only is a sensor, but it also is a 
potential weapon in the future. So I think we have to kind of 
change how we think about this capability.
    That said, we are going to have to look at what the 
capacity of that force is going to be.
    Mr. Donnelly. I will be quick because there is not much 
time left.
    Anybody who tells you we will never get another large-scale 
land campaign in the Middle East, you should go have a little 
lie-down and, you know, wait till it passes. Nobody ever wanted 
to do these things in the first place, but there is a logic 
there that is pretty compelling. If you do care about the 
balance of power in the Middle East, this is going to keep 
coming back up.
    The points that people have made about the F-35 being 
something fundamentally different than a fancier version of the 
F-16 are right on point. I would offer that it is not really a 
fighter; it is more like an armed scout. It can go and protect 
itself and find targets for other things to kill.
    Mr. Knight. Thank you, Mr. Chair.
    The Chairman. Time of the gentleman is expired.
    Let me see if you all are comfortable in answering how much 
we should spend this year on defense. Given everything you know 
about the work that your organizations have done, the exercise 
we have been talking about--and just for reference, using the 
050 numbers, we are at $521 billion this year; under the BCA 
caps it is $523 billion; the President's budget request is $561 
billion.
    I am not trying to influence you, but yesterday General 
Dempsey told us that $561 was the lower ragged edge of how much 
spending it would take to defend the country.
    So, based on everything that you have done and everything 
you know, let me just see if--and if you don't feel comfortable 
I understand, but do you have a number for fiscal year 2016 
that you think would be an appropriate amount to spend for 
defense?
    Mr. Harrison.
    Mr. Harrison. Well, being from a think tank, I will start 
with my caveats. If you--what do you want the military to do is 
the strategy that is laid out in the 2012 Defense Strategic 
Guidance and updated in the 2014 QDR [Quadrennial Defense 
Review], if that is what you want our military to do then I 
think--and the other caveat, if you are willing to accept many 
of the cost savings proposals that DOD has included with their 
budget, which do include some compensation reform proposals--if 
you are willing to accept that and cross your finger that some 
efficiency initiatives actually come true, then I think their 
number of $561 billion for the total national defense budget is 
probably about right.
    Dr. Bensahel. His caveats were my caveats. I think that the 
key question is what savings do you harvest in other parts of 
the defense budget and the assumptions that go into that.
    But if you make those assumptions, I think that that is a 
reasonable number to be considering. But I don't have a lot of 
optimism that a lot of those caveats will hold.
    The Chairman. And your reason for saying that is if we gain 
efficiencies or savings in parts of the budget, those savings 
and efficiencies need to stay within the defense budget, right?
    Dr. Bensahel. Yes, that is part of it. It is also--and you 
will know this far better than we do--it is very, very 
difficult to achieve current-year savings by looking at 
efficiencies on the kind of reforms we are talking about; you 
do need to have a much longer perspective.
    The Chairman. Yes. Okay.
    Mr. Crotty. I agree. I do think, obviously, Chairman 
Dempsey going with the ragged edge at $561, it is hard to 
refute that. And the--sort of the rumor has always been that, 
you know, that they tried to come in significantly higher.
    You know, I think that having some pressure on making sure 
that internal reforms do happen and there is some rationalizing 
of say civilian and contractor forces, as the force changes, 
you know, there needs to be some downward pressure. But I am 
concerned about some of the risk is all in the other direction. 
The risk is in the money we are trying to bring back in from 
OCO [Overseas Contingency Operations] that--in the war funding, 
that really is now just about how we live day-to-day. It is 
part of what the military is doing.
    So between that, the past efficiencies, and assumed future 
efficiencies, the $561 starts to jump to $580, $590 really 
quickly when you start thinking about exactly what it is we 
think we are paying for and need to pay for.
    Mr. Thomas. Just to underscore, we really need reform, 
because the reforms are not just about treating the President's 
request as a floor for this year and saying, ``If we don't get 
the reforms you potentially need more,'' but it is the long-
term savings. And if we don't start placing--putting these 
reforms in place, we have this problem year after year. And at 
the same time, if we do put the reforms in place, we get those 
accumulated savings sooner rather than later.
    Mr. Donnelly. I would fall back on the report of the 
National Defense Panel, for which I worked as a scribe and so I 
got to see the members wrestling with this question. And their 
answer was to say we needed to go back to the 2011 budget--the 
last Gates budget, as it is commonly referred to, which was the 
last time prior to the BCA that the Department was allowed to 
do anything like budget building that was based on a strategy.
    And I think their observation was that the BCA has 
fundamentally changed everything since then, including the 
National Military Strategy, as reflected in the Defense 
Guidance.
    So the question is how reasonably fast can we get back to 
that Gates ramp? So based on where we are and what that Gates 
number is, something in the $560 to $570 range is probably as 
much money as the Department can reasonably digest, even if you 
wanted to get back to Gates, say, by 2018 or something like 
that.
    The Chairman. I don't remember the exact number for this 
year for Gates, but it is in the--I think $580s or something 
like that would be what it would be, so-- I'm sorry?
    Staff. 638----
    The Chairman. $638 billion. Sorry. It is always good to 
have a budget person on your right shoulder to remind you what 
the real numbers are.
    Last comment I would make: I appreciate what a number of 
you, including Mr. Thomas at the end, said about reform. My 
only point to you is it is not just about saving money; reform 
is necessary for the agility we have to have in a very 
volatile, uncertain world. And so there are two goals of this 
reform, and we need to keep them both in mind.
    But you all have done a terrific job of fielding our 
questions and also some of our frustrations today. I appreciate 
it very much. And as I said at the beginning, I really 
appreciate all of the work that your organizations do to 
contribute to our national dialogue and decisionmaking on 
defense.
    So thanks for being here, and please keep up the good work. 
I know I and other members of the committee depend on the work 
y'all do to help inform and educate us.
    And with that, the hearing stands adjourned.
    [Whereupon, at 12:20 p.m., the committee was adjourned.]


      
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