[Senate Hearing 114-316]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 114-316

                  30 YEARS OF GOLDWATER	NICHOLS REFORM

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       TUESDAY, NOVEMBER 10, 2015

                               __________

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                      COMMITTEE ON ARMED SERVICES

                     JOHN McCAIN, Arizona, Chairman

JAMES M. INHOFE, Oklahoma            JACK REED, Rhode Island
JEFF SESSIONS, Alabama               BILL NELSON, Florida
ROGER F. WICKER, Mississippi         CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          JOE MANCHIN III, West Virginia
DEB FISCHER, Nebraska                JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas                 KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota            RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa                     JOE DONNELLY, Indiana
THOM TILLIS, North Carolina          MAZIE K. HIRONO, Hawaii
DAN SULLIVAN, Alaska                 TIM KAINE, Virginia
MIKE LEE, Utah                       ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina       MARTIN HEINRICH, New Mexico
TED CRUZ, Texas

                   Christian D. Brose, Staff Director

               Elizabeth L. King, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                               __________

                           november 10, 2015

                                                                   Page

30 Years of Goldwater-Nichols Reform.............................     1

Locher III, James R., Distinguished Senior Fellow, Joint Special 
  Operations University..........................................     5
Hamre, John J., President and Chief Executive Officer, Center for 
  Strategic and International Studies, and Chairman, Defense 
  Policy Board Advisory Committee................................    16
Thomas, Jim, Vice President and Director of Studies, The Center 
  for Strategic and Budgetary Assessments........................    21

                                 (iii)

 
                  30 YEARS OF GOLDWATER-NICHOLS REFORM

                       TUESDAY, NOVEMBER 10, 2015

                                        U.S. Senate
                                Committee on Armed Services
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:04 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain, 
chairman of the committee, presiding.
    Committee Members Present: Senators McCain, Wicker, Ayotte, 
Fischer, Rounds, Ernst, Tillis, Lee, Reed, Nelson, Manchin, 
Gillibrand, Blumenthal, Donnelly, Hirono, and King.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Senator McCain. Good morning. The committee meets today to 
continue our series of hearings focused on defense reform.
    This morning's hearing is critical--is a critical 
inflection point in our efforts. Our prior hearings have sought 
to establish a broad context in which to consider the question 
of defense reform. We have evaluated global trends in threats 
and technology, their implications for national security, and 
what the United States military and the Department of Defense 
must do to succeed against these complex and uncertain 
challenges.
    Today, we begin to look more closely at our defense 
organization, and we do so by revisiting the Goldwater-Nichols 
Defense Reorganization Act of 1986. This landmark legislation, 
which marks its 30th anniversary next year, was the most 
consequential reform of the Department of Defense since its 
creation. And this committee played a critical role at every 
step of the way, from initial study to first draft to final 
passage. Put simply, the Goldwater-Nichols reforms would never 
have happened without the leadership of the Senate Armed 
Services Committee. And yet, to a large degree, the 
organization of the Department still reflects those major 
decisions and changes made back in 1986. On the whole, those 
reforms have served us well, but much has happened in the past 
30 years. We need a defense organization that can meet our 
present and future challenges. That is why we must ask, Has the 
time come to reconsider, and potentially update, Goldwater-
Nichols? And if so, how and in what ways?
    We're fortunate to have a distinguished group of witnesses 
this morning to help us consider these questions. Dr. John 
Hamre, President and CEO of the Center for Strategic and 
International Studies, is one of our Nation's finest defense 
thinkers and leaders. And it all started right here on this 
committee, where he was a young staffer at the time of the 
Goldwater-Nichols reforms. Mr. James Locher, Distinguished 
Senior Fellow at the Joint Special Operations University and 
also an old committee hand, he was the lead staffer who helped 
bring Goldwater-Nichols into being, and it's safe to say that 
no one contributed more to these defense reforms than him. And 
finally, Mr. Jim Thomas, Vice President and Director of Studies 
at the Center for Strategic and Budgetary Assessments, is an 
accomplished defense strategist and practitioner who spent 13 
years recently working inside the defense organization that 
Goldwater-Nichols created, including serving as a principal 
author of the 2006 Quadrennial Defense Review.
    I thank all of our witnesses for their testimony today.
    Goldwater-Nichols came about in response to a series of 
military failures, from the Vietnam War and the failed hostage 
rescue in Iran to difficulties during the invasion of Granada. 
After years of study, this committee concluded that these 
failures were largely due to the inability and resistance of 
the military services to function as a more unified force, 
especially on strategy and policy development, resource 
allocation, acquisition and personnel management, and the 
planning and conduct of military operations.
    In addition, the committee was concerned that the 
Department of Defense had become excessively inefficient and 
wasteful in its management and that civilian and military 
staffs had grown too large. As a result, Goldwater-Nichols 
fundamentally redrew the relationships between the major actors 
in the Department. The Chairman of the Joint Chiefs of Staff 
was strengthen, provided a deputy given responsibility over the 
Joint Staff, and assigned the role of Principal Military 
Advisor to the President. Responsibility for planning 
conducting military operations was vested in empowered 
operational elements, which are now combatant commands 
reporting directly to the Secretary of Defense. The service 
chiefs were focused more narrowly on their roles as force 
providers, not on overseeing day-to-day military operations. 
Major changes were made to strengthen joint duty requirements 
for military officers. And many of the Packard Commission's 
recommendations were adopted to reform the acquisition system, 
with an emphasis on strengthening the Office of the Secretary 
of Defense.
    The record and performance of the U.S. military over the 
past 30 years has largely been of--one of unquestioned and 
unparalleled success, so the inevitable question that many of 
us will ask is, Why change? There are several factors to 
consider.
    First, as our recent hearings have made clear, our 
strategic environment today is radically different. The Cold 
War is over, and we face a complex array of threats, from ISIL 
[Islamic State of Iraq and the Levant] and al-Qaeda to North 
Korea and Iran to Russia and China. What all of these threats 
have in common is that they are not confined to single regions 
of the world. They span multiple regions and domains of 
military activity. We must act whether our--we must ask whether 
our current organization, with its regional and functional 
rigidity, is flexible and agile enough to address these 
crosscutting national security missions.
    A second factor is technology. The clear consensus in our 
recent hearings is that significant technological advancements 
are now transforming the nature and conduct of war. Our 
adversaries are working to harness these new technologies to 
their military benefit. If the United States cannot do the 
same, and do it better, we will lose our qualitative military 
edge, and, with it, much of our security.
    A scarcity of resources for defense is another reason to 
consider change. We must spend more on defense. Reform cannot 
take the place of sufficient funding. But, the fact is, with 
budgets tights--with budgets tight, as they are and seem likely 
to remain, the Department of Defense must make smarter and 
better use of its resources, to include its people.
    That said, the primary goal of reform must be to improve 
effectiveness, not just efficiency. And there are serious 
questions about the performance of the Department of Defense. 
Our defense spending, in constant dollars, is nearly the same 
as it was 30 years ago. But, today we are getting 35 percent 
fewer combat brigades, 53 percent fewer ships, and 63 percent 
fewer combat air squadrons. More and more of our people and 
money are in overhead functions, not operating forces. The 
acquisition system takes too long, costs too much, and produces 
too little. And all too often, we see instances where our 
senior leaders feel compelled to work around the system, not 
through it, in order to be successful, whether it is fielding 
critical and urgently needed new weapons, establishing ad hoc 
joint task forces to fight wars, or formulating a new strategy 
when we were losing the war in Iraq.
    As we consider these questions, Senator Reed and I have 
identified six enduring principles that any defense reform 
effort must sustain and strengthen. We will consider each of 
these principles in the hearings that will follow this one. 
They are: 1) providing for a more efficient defense management; 
2) strengthening the All-Volunteer Joint Force; 3) enhancing 
innovation and accountability in defense acquisition; 4) 
supporting the warfighter of today and tomorrow; 5) improving 
the development of policy, strategy, and plans; and 6) 
increasing the effectiveness of military operations.
    Let me say again, in closing, that this oversight 
initiative is not a set of solutions in search of problems. We 
will neither jump to conclusions nor tilt at the symptoms of 
problems. We will follow Einstein's advice on how to approach 
hard tasks: spend 95 percent of the time defining the problem 
and 5 percent on solutions. We will look deeply for the 
incentives and root causes that drive behavior, and we will 
always, always be guided by that all-important principle: first 
do not harm.
    Finally, this must and will be a bipartisan endeavor. 
Defense reform is not a partisan issue, and we will keep it 
that way. We must seek to build a consensus about how to 
improve the organization and operation of the Department of 
Defense in ways that can and will be advanced by whomever wins 
next year's elections. That is in keeping with the best 
traditions of this committee. That's how Goldwater-Nichols came 
about, three decades ago, and that is how Senator Reed and I 
and all of us here will approach the challenge of defense 
reform today.
    Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. And 
thank you for your very thoughtful and bipartisan approach to a 
significant issue, the review and reformation of the Goldwater-
Nichols.
    But, I'd like to thank you also for bringing together this 
distinguished panel of witnesses. As you have pointed out, Mr. 
Chairman, Dr. Hamre and Mr. Locher were key to the original 
passage of Goldwater-Nichols, and Mr. Thomas is a very, very 
thoughtful, perceptive analyst of these issues. In fact, Jim 
was the committee's lead staffer for DOD [Department of 
Defense] reorganization, and then later served as the Assistant 
Secretary of Defense for Special Operations in Low-Intensity 
Conflict. John Hamre, as you pointed out, is one of the most 
astute observers of the Department of Defense, having served as 
Deputy Secretary of Defense and Comptroller in the '90s. So, 
thank you both. Of course, Mr. Thomas is someone who continues 
to be a expert in analysis of the Department of Defense and 
others, at the Center for Strategic and Budgetary Assessments.
    Thank you, gentlemen.
    Almost three decades after passage of Goldwater-Nichols, I 
join the Chairman in the view that it is appropriate that we 
take stock of what is and what is not working with regard to 
the organization and processes of the DOD, given today's 
dynamic security challenges, particularly.
    The 1986 defense reforms were made necessary by a number of 
identified deficiencies at the time, including operational 
failures, poor interservice coordination, faulty acquisition 
processes, and inadequate strategic guidance. Fortunately, our 
military has not experienced any significant operational 
failures in recent times, and remains the most effective 
fighting force in the world, in no small part because of the 
reform put in place approximately 30 years ago. Unfortunately, 
DOD does continue to suffer from bureaucratic friction, 
acquisition cost and schedule overruns, and difficulties in the 
formulation and communication of strategy. Our task at this 
juncture is to optimize the Department's organization and 
processes and to shape our military to counter the threats and 
other challenges they will face in the future while preserving 
the important principles of jointness and civilian control of 
the military enshrined in the Goldwater-Nichols reforms.
    To do so, we should consider smart reforms to the structure 
and responsibility of the combatant commanders, the alignment 
of roles and missions across the military services, the manner 
in which civilian control of the military is exercised, the 
size and number of defense agencies and field activities, the 
development and acquisition of required capabilities, the 
education and compensation of military personnel, and other 
relevant matters.
    The 1985 staff report of this committee that underpinned 
the Goldwater-Nichols Act and was authored by Mr. Locher and 
Dr. Hamre, highlighted the challenges and risks in seeking to 
reform the Department of Defense. It said, ``The Department of 
Defense is clearly the largest and most complex organization in 
the free world. For this reason, it is critically important 
that if changes are to be made to DOD organizational 
arrangements or decisionmaking procedures, the temptation to 
adopt simplest--simplistic yet attractive options must be 
avoided. Change just for the sake of change would be a critical 
mistake.'' Those words remain true today. And I would note that 
possibly the most important factor in passing the Goldwater-
Nichols Act was the relentless bipartisan effort of its 
sponsors over the course of nearly 5 years to methodically 
study relevant issues and build consensus reform, even in the 
face of strong opposition from the Department.
    The Chairman embodies this determination and bipartisan 
approach, and I thank him for that. And I have no doubt that 
your testimony and assistance will be very valuable.
    Thank you, Mr. Chairman.
    Senator McCain. Thank you.
    I welcome the witnesses. And the statements of the 
witnesses will be included in the record.
    We'll begin with Dr. Hamre.
    Dr. Hamre. Mr. Chairman, thank you. May I just ask you to 
start with Jim Locher? He was the staff director, and----
    Senator McCain. Well, I was----
    Dr. Hamre.--I work for him.
    Senator McCain. I would be more than pleased to begin with 
Mr. Locher.
    Welcome back, Mr. Locher.

STATEMENT OF JAMES R. LOCHER III, DISTINGUISHED SENIOR FELLOW, 
              JOINT SPECIAL OPERATIONS UNIVERSITY

    Mr. Locher. Thank you, Mr. Chairman. I'm delighted----
    Senator McCain. And, by the way, for the record, the two 
first--Hamre and Locher are friends and acquaintances for more 
than 30 years.
    Mr. Locher.
    Mr. Locher. Yes. Thank you, Mr. Chairman.
    Mr. Chairman, I commend you and Senator Reed for initiating 
this important and timely series of hearings. It has been 
nearly 30 years since the Goldwater-Nichols Act mandated the 
last major reorganization of the Pentagon. That legislation, as 
you mentioned, Mr. Chairman, profoundly shaped by this 
committee, has served the Department of Defense and the Nation 
well. But, no organizational blueprint lasts forever.
    To be successful, organizations must be designed and 
redesigned to enable effective interactions with their external 
environment. And the world in which the Pentagon must operate 
has changed dramatically over the last 30 years. Threats and 
opportunities are more numerous, more varied, more complex, and 
more rapidly changing. The changed environment demands Pentagon 
decisionmaking that is faster, more collaborative, and more 
decentralized.
    Mr. Chairman, all public and private organizations are 
facing the challenges of a rapidly changing world. Those that 
continue to thrive have transformed themselves with innovative 
organizational approaches.
    The Department of Defense has delayed organizational change 
longer than advisable. John Kotter, a leading business scholar, 
has observed the price of such delays, and he said, ``The 
typical 20th century organization has not operated well in a 
rapidly changing environment. Structure, systems, practices, 
and culture have often been more of a drag on change than a 
facilitator. If environmental volatility continues to increase, 
as most people now predict, the standard organization of the 
20th century will likely become a dinosaur.''
    Unfortunately, the Pentagon remains a typical 20th century 
organization. It has intelligent and experienced leaders, but 
no organizational strategy for achieving desired outcomes. It 
has deep bodies of functional expertise, but cannot integrate 
them. It has clear authoritative chains of command, but not the 
mechanisms to ensure cross-organizational collaboration. It has 
elaborate, slow processes that generate reams of data, but not 
the ability to resolve conflicting views. It has a large, 
hardworking staff with a mission-oriented ethos, but not a 
culture that values information-sharing, collaboration, and 
team results.
    Mr. Chairman, reforming the Pentagon will require visionary 
leadership--I'm sorry--visionary legislation from this 
committee and its House counterpart. The intellectual and 
political challenges of formulating this legislation will be 
staggering. On the intellectual side, modern organizational 
approaches differ significantly from past practices. They 
require a new mindset and are difficult to implement.
    Before passing the Goldwater-Nichols Act, the two Armed 
Services Committees worked for years to become knowledgeable on 
defense organization and modern organizational practice. A 
similar effort will again be needed.
    With the Pentagon swamped by multiple contingencies, a full 
management agenda, and overhanging budget and staff cuts, 
defense officials are likely to argue that now is not the time 
to pile defense reform on top. Unfortunately, there is never a 
good time to transition an outmoded and overwhelmed bureaucracy 
to better, faster, more integrated approaches. Fixing the 
Pentagon, Mr. Chairman, is much more than a leadership issue. 
Dr. Deming, a systems expert, observed, ``A bad system will 
beat a good person every time.''
    We have repeatedly seen organizational dysfunction stymie 
good leaders. On occasion, good leaders have prevailed. 
Secretary Robert Gates was often able to overcome system 
limitations, such as with the MRAP [Mine-Resistant Ambush 
Protected Vehicles] program. Similarly, General Stanley 
McChrystal created effective high-value terrorist targeting 
teams in Iraq, despite vast institutional obstacles. But, Gates 
and McChrystal did not achieve these results using the system; 
they circumvented it. These outcomes were personality-driven, 
and the processes they used were not institutionalized. The 
system Gates and McCrystal struggled against remained 
unchanged. In any case, defense reform is not a matter of 
choosing between good leaders and good organization. We must 
have both.
    If the committee is to succeed in this historic 
undertaking, it must adopt and execute a rigorous methodology 
for each of reform's two dimensions: intellectual and 
political. Changing organizations is difficult. The failure 
rate of change efforts in business has remained constant, at 70 
percent, over the last 30 years. It is even higher in 
government.
    The intellectual dimension of this methodology requires 
deep study of problems in DOD's performance to enable precise 
identification of required reforms. Three approaches are 
imperative:
    First, identify symptoms, problems, their causes and 
consequences. Goldwater-Nichols' historic success resulted from 
a rigorous methodology focused on getting beyond symptoms to 
identify problems and their root causes.
    Second, examine all elements of organizational 
effectiveness, such as shared values, processes, structure, 
core competencies, staff, culture, and strategy.
    Third, examine the entire system. A holistic examination is 
critical to meaningful reform.
    The methodology's political dimension involves gaining 
solid congressional approval of needed reforms and inspiring 
first-rate implementation by DOD. Foremost among the components 
of a political strategy is creating a sense of urgency.
    To set the context for discussing today's problems, it is 
useful to revisit the intended outcomes of the Goldwater-
Nichols Act. It sought to achieve nine objectives: strengthen 
civilian authority, improve military advice, place clear 
responsibility on combatant commanders, ensure commensurate 
authority for the combatant commanders, increase attention to 
strategy and contingency planning, provide for more efficient 
use of resources, improve joint officer management, enhance the 
effectiveness of military operations, and improve DOD 
management.
    The two Armed Services Committees, Mr. Chairman, gave their 
highest priority to the five objectives dealing with the 
operational chain of command. Not surprisingly, these priority 
objectives have received the highest grades for their degree of 
success. The four objectives addressing administrative 
matters--strategy and contingency planning, use of resources, 
joint officer management, and DOD management--have received 
middling or poor grades. These areas, among others, Mr. 
Chairman, need attention now.
    In addition, some reforms identified at the time of 
Goldwater-Nichols were not enacted, either because of 
opposition or as a result of compromises to gain higher-
priority objectives. Two unachieved reforms were strengthening 
the mission orientation of DOD's Washington headquarters, and, 
two, replacing the service secretariat and military staff at 
the top of each military department with a single integrated 
headquarters staff. Thirty years later, these are pressing 
needs, with the weak mission orientation ranking as the 
Pentagon's greatest organizational shortcoming.
    My written statement, Mr. Chairman, discusses 6 additional 
problems: inadequate strategic direction--a problem that we 
cited at the time of Goldwater-Nichols; inadequate 
decisionmaking capacity; absence of a mechanism for rationally 
allocating resources to missions and capabilities; weak 
civilian leadership at all levels; outdated joint officer 
management system; and sporadic guidance and limited oversight 
of the 17 defense agencies, such as the Defense Logistics 
Agency.
    In conclusion, Mr. Chairman, these hearings represent the 
beginning of a critical initiative by the committee. Many 
voices will counsel against reform, insisting it is impossible 
to do, or at least to do well. In truth, meaningful reform will 
be difficult, and a hasty reform without a deep appreciation 
for the origins of the behaviors that have limited Pentagon 
effectiveness would be a mistake. However, successful reform is 
both necessary and possible.
    For my part, I encourage the committee to stay the course 
and complete the task it has undertaken. It's important to 
recognize there are dangers to inaction as well as misguided 
action. We would not have our world-class military without the 
Goldwater-Nichols Act and the service training revolutions of 
the 1970s and 1980s. If the Senate Armed Services Committee 
puts forth the same level of effort it mounted 30 years ago, it 
will succeed. And the benefits to our servicemen and -women, to 
the Department of Defense, and to the Nation will be historic.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Locher follows:]

             Prepared Statement by Mr. James R. Locher III
    I commend Chairman McCain and Senator Reed for initiating this 
important and timely series of hearings. It has been nearly thirty 
years since the Goldwater-Nichols Act mandated the last major 
reorganization of the Pentagon. That legislation - profoundly shaped by 
this committee - has served the Department of Defense (DOD) and nation 
extremely well. But no organizational blueprint lasts forever.
    To be successful, organizations must be designed and re-designed to 
enable effective interactions with their external environments, and the 
world in which DOD must operate has changed dramatically over the last 
thirty years. Threats and opportunities are more numerous, more varied, 
more complex, and more rapidly changing. Force levels have been 
reduced, and forces that were once stationed overseas are increasingly 
based in the United States. By enabling rapid communications and 
networking, the information age has contributed significantly to the 
environment's complexity and volatility. Among other Pentagon 
organizational needs, the changed environment demands better decision-
making capacity at DOD's uppermost levels. Decision-making must be 
faster, more collaborative, and more decentralized. The Pentagon's 
inadequate capacity represents a major deficiency.
    All public and private organizations are facing the challenges of a 
rapidly changing world. Those that continue to thrive have transformed 
themselves with innovative organizational approaches. Those that merely 
remain viable have at least updated their organizational practices to 
keep pace with the changing environment. And many organizations that 
could not or would not change are no longer with us. Remember E.F. 
Hutton, TWA, General Foods, RCA, and Montgomery Ward? They and hundreds 
of other businesses are gone. The lack of ``market discipline,'' 
exclusive missions, and willingness of the American people to bear huge 
financial burdens during times of war have allowed the government's 
national security institutions to delay organizational change longer 
than advisable. This includes the Department of Defense, which, with a 
few exceptions, has not adapted its organizational approaches to keep 
up with the world it faces. John Kotter, a leading business scholar, 
has observed the price of not undertaking the necessary transformation:

        The typical twentieth-century organization has not operated 
        well in a rapidly changing environment. Structure, systems, 
        practices, and culture have often been more of a drag on change 
        than a facilitator. If environmental volatility continues to 
        increase, as most people now predict, the standard organization 
        of the twentieth century will likely become a dinosaur.

    Unfortunately, the Pentagon remains a typical twentieth-century 
organization. It has intelligent and experienced leaders but no 
organizational strategy for achieving desired outcomes. It has deep 
bodies of functional expertise, but cannot integrate them rapidly and 
well. It has clear, authoritative chains of command, but not the 
mechanisms to ensure cross-organizational collaboration. It has 
elaborate, slow processes that generate reams of data but not the 
ability to resolve conflicting views productively. It has a large, 
hard-working staff with a mission-oriented ethos but not a culture that 
values information-sharing, collaboration, and team results.
    Reforming the Pentagon will require visionary legislation from this 
committee and its House counterpart. The intellectual and political 
challenges of formulating this legislation will be staggering. On the 
intellectual side, modern organizational approaches differ 
significantly from past practices. They require a new mindset and are 
difficult to implement. Part of the committee's challenge will result 
from Washington being a policy and program town with little attention 
to organizational needs. The committee will find a paucity of 
organizational expertise to assist it and few who will understand the 
new directions that are imperative. Before passing the Goldwater-
Nichols Act, the two Armed Services Committees worked for years to 
become knowledgeable on defense organization and modern organizational 
practice. A similar effort will again be needed.
    With the Pentagon swamped by multiple contingencies, a full 
management agenda, and overhanging budget and staff cuts, senior 
defense officials are likely to argue that now is not the time to pile 
defense reform on top. There will be considerable sympathy for this 
position, which will pose a political challenge to the committee's 
efforts. Unfortunately, there is never a good time to transition an 
outmoded and overwhelmed bureaucracy to better, faster, more integrated 
approaches. In some corners of the Pentagon, broader executive branch, 
and Capitol Hill, complacency and fondness for the status quo will 
represent another set of political obstacles. Moreover, active 
opposition will come from those who prefer what they know best or 
benefit from current arrangements and those in Congress who will ally 
themselves with opponents.
                            key observations
    Before going further, I would like to offer a few key observations. 
First, my urging for dramatic changes in Pentagon organization does not 
represent a criticism of defense civilian or military personnel. They 
are working extremely hard and with unyielding commitment. 
Unfortunately, much of their hard work is wasted in an outdated system. 
One indication of the massive frustration generated by the current 
system is that most military officers lament being assigned to the 
Pentagon. Intelligent, disciplined, knowledgeable officers are used to 
taking initiative and managing or solving problems to generate desired 
real-world effects. Seldom is this possible in today's Pentagon, no 
matter how hard one works--which is why measures to enable Pentagon 
staff to work smarter, not harder, need to be put in place.
    Second, for all of its deficiencies, DOD is widely seen as the most 
capable department in the Federal Government. This is in large part due 
to the quality and drive of its workforce, and a military culture that 
values detailed planning processes to cover ``what if'' and ``what 
next'' contingencies. But because the Pentagon confronts the 
government's most dangerous and diverse challenges, being better than 
the rest of the government is not a useful yardstick for measuring 
DOD's performance. More appropriate would be to determine whether the 
department is capable of fulfilling its responsibilities effectively 
and efficiently. The last fifteen years offer considerable evidence 
that it is not.
    Third, beyond the task of fixing the Pentagon, a larger challenge 
looms: transforming the U.S. national security system. This system, 
centered on the National Security Council and its hierarchical 
committee system but encompassing the complex whole of all national 
security institutions, is profoundly broken. All major national 
security missions require an interagency ``whole-of-government'' 
effort, but we have repeatedly witnessed the system's inability to 
integrate the capacities and expertise of departments and agencies. The 
brokenness of the overall national security system will hamper the 
effectiveness of U.S. foreign and security policy no matter how well 
DOD transforms its internal operations or its performance at the 
operational level of war. Significantly, no congressional committee has 
jurisdiction over the heart of the national security system. I would 
urge this committee to understand the liabilities of the national 
security system and what they portend for DOD's performance. It will be 
important to ensure we do not make difficult changes to DOD in the 
false hope of circumventing national security system limitations.
    Fourth, fixing the Pentagon is much more than a leadership issue. 
Speaking of organizations, Dr. W. Edwards Deming, the noted systems 
expert observed: ``A bad system will beat a good person every time.'' 
In the Pentagon and elsewhere, we have repeatedly seen organizational 
dysfunction stymie good leaders. On occasion, good leaders have 
produced remarkable results. Secretary Robert Gates was often able to 
overcome system limitations, such as with the MRAP program. Similarly, 
General Stanley McChrystal created effective high-value terrorist 
targeting teams in Iraq despite vast institutional obstacles. But Gates 
and McChrystal did not achieve these results using the system; they 
circum-vented it at a high risk of failure. These outcomes--and many 
others that resulted in far less propitious results--were personality-
driven, and the processes used were not institutionalized. They were 
exceptions to the rule; the system Gates and McChrystal struggled 
against remained unchanged. In any case and most importantly, defense 
reform is not a matter of choosing between good leaders and good 
organization; we must have both. Too many in Washington pretend 
otherwise and dismiss organizational problems by saying, ``We just need 
good leaders.''
    My last observation concerns the fact that a key Goldwater-Nichols 
provision is not now being implemented. Title 10, section 162 (a), 
requires the secretary of each military department to assign all forces 
(less those for man, train, and equip functions) under his jurisdiction 
to a combatant command. This provision recognized the need for service 
forces to train for missions jointly, either under the direction of a 
geographic combatant command or a U.S.-based combatant command. 
Immediately after passage of the Goldwater-Nichols Act, this 
requirement was met by making the U.S. Army Forces Command, a specified 
combatant command, responsible for joint training and joint exercises. 
In 1993, Chairman of the Joint Chiefs of Staff General Colin Powell, in 
a report on the roles and missions of the armed forces (which 
incidentally was mandated by the Goldwater-Nichols Act) observed that 
with troop strength overseas being reduced, the regionally oriented 
military strategy was becoming more and more dependent on U.S.-based 
forces. He recommended that U.S.-based general purpose forces be 
combined into one joint command, U.S. Atlantic Command, which would be 
responsible for joint training, force packaging, and facilitating 
deployments during crises. Later re-designated as U.S. Joint Forces 
Command, the command served as the joint-force provider until its 
disestablishment in 2011. In apparent disregard for section 162 (a), 
U.S.-based combatant forces are now assigned to their parent services, 
returning to the service separateness that crippled military operations 
prior to the Goldwater-Nichols Act. There is no reason to write more 
law if we are indifferent to implementation of existing law.
                              methodology
    If the committee is to succeed in this historic undertaking, it 
must adopt and execute a rigorous methodology for each of defense 
reform's two dimensions: intellectual and political. Changing 
organizations is exceedingly difficult. The failure rate of change-
efforts in business has remained constant at 70 percent; it is even 
higher in government. The business failure rate has persisted over the 
last thirty years despite the enormous attention change-management has 
received. Amazon lists more than 83,000 books on this topic. I urge the 
committee to give careful attention to the methodology it chooses 
because the nation cannot afford for this committee to fail in its 
efforts to reform the Pentagon.
    The intellectual dimension of a methodology requires deep study of 
problems in DOD's performance to enable precise identification of 
required reforms. Three elements are imperative. First, identify 
symptoms, problems, their causes, and their consequences. Goldwater-
Nichols' historic success resulted from its rigorous methodology 
focused on getting beyond symptoms to identify problems and their root 
causes. Pinpointing problems was the committee's sole focus for 
eighteen months. As part of this thorough process, the committee staff 
produced a 645-page staff study with detailed analyses of each problem 
area. Reorganization efforts too often address symptoms because they 
are most visible. But addressing a symptom will not cure the underlying 
ailment, just as prescribing aspirin could lessen a patient's 
temperature without treating the fundamental illness.
    Work on the Goldwater-Nichols Act provides one example of failing 
to get beyond symptoms. Near the end of the Senate Armed Services 
Committee's deliberations, an amendment was offered to require in law 
that the president submit annually a national security strategy. The 
amendment's sponsor was asked what problem his amendment was designed 
to fix. He responded, ``I don't know what the problem and its causes 
are, but whatever they are, mandating this report in law will fix 
them.'' It did not. All presidents since have submitted a document 
called the National Security Strategy, but the resulting reports have 
fallen far short of satisfying the need for a true strategy document.
    The second fundamental requirement for any effectual methodology is 
examining all elements of organizational effectiveness. It is estimated 
that eighty-five percent of people equate the terms organization and 
structure, but there is much more to making an organization effective 
than simply adjusting its structure. In the late 1970s, McKinsey and 
Company, a management-consulting firm, identified seven elements of 
organizational effectiveness, known as the McKinsey 7-S framework. Each 
element starts with an ``S'' to remind McKinsey's clients of all seven 
elements, but also to remind them ``structure is not organization.'' 
The seven elements are:

    1. Shared values--agreed vision, purpose/missions, and principles
    2. Systems--management processes, procedures, and measurements
    3. Structure--arrangements for dividing and coordinating work
    4. Skills--core competencies; necessary capabilities and attributes 
of the organization
    5. Staff--attributes of personnel; needed qualifications and 
professional development
    6. Style--leadership attitudes and behavior; organization's culture
    7. Strategy--alignment of resources and capabilities for achieving 
objectives

    Three elements of the McKinsey 7-S framework--systems, structure, 
and strategy--are termed ``hard,'' and four--shared values, skills, 
staff, and style--are termed ``soft.'' The hard elements are visible, 
being found in process maps, organizational charts, and strategy 
documents. They are also the easiest to change. By comparison, the four 
soft elements are difficult to describe and even more difficult to 
influence. Despite their below-the-surface nature, the soft elements 
have as much impact on organizational performance as the three hard 
S's. In fact, many believe that the culture of an organization emerging 
from these soft elements more powerfully affects performance than 
formal structures. For this reason, effective organizations pay as much 
attention to the soft elements as they do to the hard ones. The 
committee's defense reform efforts are likely to focus on the soft 
elements, increasing the degree of difficulty.
    The third imperative of an effectual methodology's intellectual 
dimension is to examine the entire system. Whether it is recognized as 
such or not, DOD comprises a large system with many sub-systems. In a 
reform effort, a holistic examination of the entire system is critical. 
As Paul Lawrence and Jay Lorsch's book on organizational design noted: 
``An organization is not a mechanical system in which one part can be 
changed without a concomitant effect on the other parts. Rather, an 
organizational system shares with biological systems the property of 
intense interdependence of parts such that a change in one part has an 
impact on others.'' Moreover, examining the entire system provides an 
important opportunity to address system architecture, division of work 
among components, integration initiatives, and process management and 
improvement.
    Given the difficulty of organizational reform, a great temptation 
exists to approach this task in a piecemeal fashion by breaking the 
work into digestible chunks. That approach poses a danger to meaningful 
reform because reforming one part of an organizational system may not 
work well with subsequent changes to other elements. To be effective, 
an organization must have a high degree of internal alignment among the 
seven elements of organizational effectiveness.
    The methodology's political dimension involves gaining solid 
congressional approval of needed reforms and inspiring first-rate 
implementation by DOD. The change-management techniques that have been 
developed and widely employed by businesses are basically a political 
strategy for formulating and executing reform. This committee must 
adopt an explicit and robust political strategy. George Bernard Shaw 
said, ``Reformers have the idea that change can be achieved by brute 
sanity.'' It cannot. Many brilliant ideas and new directions whose time 
had come gained no traction and are collecting dust on some bookcase.
    Foremost among components of a political strategy is creating a 
sense of urgency. If you cannot convince principal leaders and 
institutions of the pressing need for reform, the committee's effort 
will fail. For six years, I headed the Project on National Security 
Reform (PNSR), which sought to achieve Goldwater-Nichols-like reforms 
of the national security system. Despite overwhelming evidence of 
organizational problems in repeated operational setbacks--such as 9/11, 
Iraq, Afghanistan, and Hurricane Katrina--PNSR was unable to create 
urgency for system reform. In Bosnia and Herzegovina where I served as 
chairman of the Defense Reform Commission, I saw the power of creating 
urgency. Defense reform went from impossible to gaining overwhelming 
approval, following a successful effort to convince the public of the 
need for change.
    A political strategy also needs to build a powerful bipartisan 
guiding coalition to lead the reform effort. This coalition must have 
people from inside and outside of government with power, prestige, 
influence, and knowledge. The good news is that there is already a 
great deal of well-informed interest in defense reform. Over the past 
few years, experts in leading think tanks across the political spectrum 
have joined together to urge Congress to consider defense reform. 
However, most of the recommendations have focused on how to achieve 
budget savings, not on how to improve organizational effectiveness.
    Formulating a vision that articulates a clear sense of purpose and 
direction is another key element of a political strategy. By showing a 
possible and desirable future state, a vision will attract commitment 
and reduce fears that naturally accompany an uncertain future.
                          problems and causes
    To set the context for discussing current organizational problems, 
it is useful to revisit the intended outcomes of the Goldwater-Nichols 
Act. It sought to achieve nine objectives:

    1. Strengthen civilian authority
    2. Improve military advice
    3. Place clear responsibility on combatant commanders
    4. Ensure commensurate authority for the combatant commanders
    5. Increase attention to strategy and contingency planning
    6. Provide for more efficient use of resources
    7. Improve joint officer management
    8. Enhance the effectiveness of military operations
    9. Improve DOD management

    The two Armed Services Committees gave their highest priority to 
the five objectives dealing with the operational chain of command. Not 
surprisingly, these priority objectives have received the highest 
grades for their degree of success. The four objectives addressing 
administrative matters--strategy and contingency planning, use of 
resources, joint officer management, and DOD management--have received 
middling or poor grades. These areas, among others, need attention now.
    In addition, some needed reforms identified at the time of the 
Goldwater-Nichols Act were not enacted, either because of opposition or 
as the result of compromises to gain higher priority objectives. Two of 
these unachieved reforms were strengthening the mission orientation in 
DOD's Washington headquarters and replacing the service secretariat and 
military staff at the top of each military department with a single 
integrated headquarters staff. Thirty years later, these are still 
pressing needs.
    The weak mission orientation in DOD's Washington headquarters must 
be considered the Pentagon's greatest organizational shortcoming. DOD's 
principal organizational goal is the integration of the distinct 
military capabilities of the four services and other components to 
prepare for and conduct effective unified operations in fulfilling 
military missions. The Washington headquarters--the Office of the 
Secretary of Defense (OSD), Joint Staff, and three military 
departments--are organized by and excessively focused on functional 
areas, such as manpower, health affairs, and intelligence. This rigid 
functional orientation inhibits integration of capabilities along 
mission lines. Among many difficulties, this orientation leads to an 
emphasis on material inputs, not mission outputs.
    A second problem is inadequate strategic direction. It has been 
argued before this committee that the Pentagon lacked a strategy for 
Iraq and now lacks a strategy for ISIS, and it is not hard to 
understand why. Senior leaders do not focus on the major issues 
confronting the department. They are pulled down into crisis 
management, where the Pentagon is better at producing policy than 
strategy. Strategy is an explicit choice among alternatives, and DOD is 
unable to rigorously assess risks and benefits among competing courses 
of action and alternative capability sets. Without a guiding strategy, 
it is far more difficult to make reasoned decisions about planning, 
capability, and program priorities.
    The absence of strategy helps explain why the Chairman of the Joint 
Chiefs of Staff finds it difficult to decide between combatant 
commanders when they disagree about near-term priorities or to speak 
for the future joint force commander when establishing priorities for 
future capabilities. Typically, the Joint Staff defaults to the need 
for consensus and is not able to choose between stark alternatives. 
Consequently, service programs predominate, and the budget drives our 
strategy rather than vice versa. Secretary Gates, one of our most 
powerful and competent defense secretaries, fought the service tendency 
to discount new and unconventional threats and sacrifice the near-term 
to the far-term. He prevailed on some important issues, but left no 
enduring impact on the Pentagon and its inability to allocate resources 
to capabilities to missions in a strategy-driven process.
    Closely related to the lack of strategic direction, and third on my 
list of key problems, is inadequate integrated decision-making capacity 
in general. Currently, Pentagon decision-making is more bureaucratic 
than rational, which is to say decision outcomes are more likely to 
reflect compromises between components' organizational interests than a 
conscious choice among alternative, integrated courses of action 
designed to maximize benefits for the department as a whole. The 
Pentagon's ostensibly rational processes are managed in sequence by 
hierarchical, functional structures that represent relatively narrow 
bodies of expertise. For example, the planning, programming, and 
budgeting process typically begins in Policy; then is led by Cost 
Assessment and Program Evaluation; and then, by the Comptroller. 
Frequently the lead office in the process satisfies competing 
objectives with compromises that dilute the integrity of the process; 
compromises that are then compounded as the decision process moves 
forward. All too often the result is consensus products that avoid and 
obscure difficult trade-offs, clear alternatives, and associated risks.
    These sequential, stove-piped, industrial-age processes are slow 
and cumbersome, and, depending on the issue, frequently overly 
centralized. Such decision-making processes are also notably lacking in 
their ability to anticipate and meet future challenges. The Pentagon 
has future threat scenarios, but actually pays close attention to only 
a handful that greatly resemble past wars. In reality, the Pentagon 
does not have a well-developed competency for scanning the horizon for 
coming threats and opportunities. For example, DOD was in denial about 
the need to combat terrorism and other forms of irregular warfare until 
9/11 occurred. Further, the department is not a learning organization. 
Although it has many lessons-learned efforts, the common observation is 
that they are ``lessons encountered'' rather than learned because they 
are not rigorously evaluated and acted upon to correct shortcomings. 
This is true even for well-documented, big lessons. For example, the 
Pentagon made the same mistake in post-conflict operations in Iraq as 
it did in Operation Just Cause in Panama fifteen years earlier.
    All of this explains a fourth problem: The Department of Defense 
lacks a mechanism for rationally allocating resources to missions and 
capabilities. The secretary and deputy secretary of defense need well-
integrated problem assessments and solution options but instead 
discover they are the first real point of functional integration for 
the departmental stovepipes they oversee. Worse, unless they make a 
conscious, sustained effort to pursue issues, they will not have 
sufficient information (on data, methods, threat assumptions, etc.) to 
make a reasoned choice among clear alternatives. It is not surprising 
that they typically do not value this kind of decision support. Former 
secretaries and deputy secretaries often say privately that they would 
favor substantial staff cuts. Uncertain of why they do not receive 
better support or whether and how the system can be improved, they 
conclude incorrectly that smaller staffs might prove more 
collaborative.
    In reality, middle management is working hard but not to good 
effect. An internal Pentagon review I participated in a decade ago 
noted that members of middle management typically come to work early 
and stay late to produce papers and attend innumerable meetings, but 
lack a clear understanding of their roles and responsibilities and are 
uncertain about the outcomes desired by senior leaders. Duplicative 
effort and ``shadow'' organizations sprout up for lack of collaboration 
across office lines. Information flow is poor, and information that is 
shared is used to persuade rather than objectively assess problems and 
potential solutions. In such a system, much valiant effort is wasted 
and of marginal use to the secretary and deputy secretary. Cutting 
staff will save some dollars but it will not get the senior Pentagon 
leaders what they want and need, which is well integrated, 
multifunctional problem assessments and solutions. To date secretaries 
have said they want better decision support, but they have been 
unwilling to adopt 21st century organizational practices and reengineer 
their staffs for better collaboration.
    A fifth problem centers on weak civilian leadership at all levels. 
Like many professional organizations, the Pentagon emphasizes technical 
competence as the yardstick for civilian promotion. Little attention is 
given to developing and mentoring civilian leaders. In fact, I am 
concerned that at least one significant change in the civilian 
personnel system of the OSD Policy office has had unfortunate 
consequences. In the late 1990s, Policy decided to rotate all personnel 
between different functional offices as a matter of course. In addition 
to relatively rapid promotions to the upper end of the civil service, 
this decision has led to a Policy organization where even the most 
experienced may know relatively little about the issues they are 
assigned to manage. Breadth of experience for senior personnel on a 
management track makes sense, particularly when they are backed up by 
subject matter experts with deep functional expertise, but a system 
where everyone is presumed to be on a management track sacrifices deep 
expertise and institutional knowledge that used to complement the fresh 
military experience constantly rolling through the service and joint 
staffs. This development illustrates a point I made earlier about the 
need for a holistic consideration of organizational effectiveness. OSD 
Policy may have solved one relatively narrow personnel problem with 
this initiative, but it did not give sufficient thought to the larger 
impact on the organization's ability to execute its mission.
    The outdated joint officer management system is a sixth problem. 
The Senate Armed Services Committee expected the Pentagon to devise 
improvements to joint officer management within three-to-four years 
after enactment of the Goldwater-Nichols Act. Thirty years later, the 
system's major features remain unchanged. Much has happened in the 
interim. The officer corps is smaller. What it takes for an officer to 
remain tactically and technically proficient has grown more complex, 
and the time demanded by repeated overseas deployments has reduced the 
time for officers to learn the institutional side of their own military 
department and the overall DOD. In addition, there are needs for 
improved collaboration with mission partners, both internationally and 
domestically. Especially in light of these changes, the Pentagon lacks 
a vision of its needs for joint officers and how to prepare and reward 
them.
    A seventh problem is the duplication of effort and inefficiencies 
associated with having two military department headquarters staffs in 
the Departments of the Army and Air Force and three in the Department 
of the Navy. These dual structures are a holdover from World War II 
when the service chief and his staff worked directly for the president 
in running the war, and the service secretary became the department's 
businessman in acquiring and supplying. After the war, the military 
departments with their two separate staffs were perpetuated. It is 
judged that the resulting duplication of effort wastes time and 
manpower.
    The Department of Defense has seventeen defense agencies, such as 
the Defense Logistics Agency and Defense Intelligence Agency, which 
provide department-wide support. In the late 1950's, they were started 
as mom-and-pop businesses, but they have grown into large enterprises 
that consume a significant portion of the DOD budget--nearly as much as 
a military department. While the defense agencies have grown, their 
supervision has remained mom-and-pop, being provided by policy 
officials, such as under and assistant secretaries of defense. Although 
highly proficient on policy matters, these supervisors lack the skills 
and experience of overseeing large enterprises. The result is sporadic 
guidance and limited oversight. This is an eighth problem requiring the 
committee's attention.
    Once the committee has identified problems that need to be 
corrected, it must determine the factors that are causing these 
problems. Understanding the causes is critical because reforms must 
address the causes in order to fix the problem. In this statement, I 
provide only insights into the importance of causes. I have already 
mentioned the fact that DOD is dominated by its functional structure, 
which undermines mission-integration efforts. But the functional 
structure causes other problems. A quotation by Peter F. Drucker 
captures the ills that come from a nearly exclusive reliance on 
functional structure:

        The functional principle [of organizational design] . . . has 
        great clarity and high economy, and it makes it easy to 
        understand one's own task. But even in small business it tends 
        to direct vision away from results and toward efforts, to 
        obscure the organization's goals, and to sub-optimize 
        decisions. It has high stability but little adaptability. It 
        perpetuates and develops technical and functional skills, that 
        is, middle managers, but it resists new ideas and inhibits top-
        management development and vision.

    Functional expertise in the Pentagon is absolutely essential, but 
an exclusively functional structure results in weak collaboration; 
slow, cumbersome decision-making; unduly centralized decision-making; 
diminished focus on essential mission outcomes; lower innovation in 
cross-cutting challenges; powerful resistance to some types of change; 
and an ill-configured organizational structure that is often 
duplicative rather than engineered for cutting-edge challenges.
    A second cause of many organizational problems is DOD's culture. 
Culture--which encompasses vision, values, norms, assumptions, beliefs, 
and habits--is a key determinant of organizational performance. Some 
experts assert: ``Culture is the backbone of every organization.'' The 
Pentagon's culture is misaligned with what is required for effective 
organizational performance in the complex, rapidly changing 21st 
Century. By my assessment, DOD's culture is too predictable, rule-
oriented, bureaucratic, risk adverse, and competitive among components. 
It is not sufficiently team-oriented, outcome-oriented, and innovative.
                                cautions
    This committee will face political pressure to water down its 
problem analyses and articulate them as something less onerous. An 
argument will be made that people will be offended by candid 
assessments and become more determined to oppose your efforts. Although 
this may occur in some cases, reform efforts cannot succeed without 
candid and precise identification of the problems.
    A second caution centers on focusing on efficiency rather than 
effectiveness. It is much more politically acceptable in the Pentagon 
to be inefficient than to be judged ineffective. Thus reform efforts 
typically focus on attacking ``inefficiency'' rather than 
``ineffectiveness,'' and do so in the least controversial manner, 
operating on the simple assumption that we will save money by cutting 
staff and duplicative functions. Obviously, any reduction in staff will 
save a commensurate amount of resources, but it will not--without 
needed reforms--generate greater effectiveness. Just cutting staff 
ignores real problems, like our inability to collaborate across 
organizational lines on multifunctional problems. Not coincidentally, 
one reason why the staffs grow so large is that they attempt to 
preserve autonomy and avoid collaboration by duplicating one another's 
functions. How can we be effective if we don't cooperate on what it 
takes to be truly effective (from strategy to missions to capabilities 
to programs), and if the analysis of courses of action and alternatives 
is not clear, transparent, and collaborative rather than political? 
Once we are clear about what is required for ``effectiveness,'' the 
less important areas naturally become targets for ``efficiencies.'' I 
should note that the Goldwater-Nichols Act focused on effectiveness.
    A third caution concerns the power-back-to-the-services movement. 
In pre-information-age warfare, the battlespace could be divided up, 
and service roles and missions ``deconflicted.'' In the information 
age, more and more--but not all--mission areas are intrinsically joint, 
which means effectiveness depends upon integration and not a sharp 
division of labor between the services. Our concepts and investments 
need to reflect that. It makes sense to give the lead back to the 
services in service-centric mission areas where one service retains the 
bulk of required expertise, such as land control, air superiority, 
anti-submarine warfare, or amphibious operations. But intrinsically 
joint missions, like theater missile and air defense, require more, not 
less, jointness. It would be a grave error--which we would inevitably 
pay for in blood and treasure--to roll back jointness in any mission 
area where success requires a tightly integrated multi-service effort.
    A fourth area to watch out for is layering oversight 
(organizational layers with more people and process) rather than making 
authority and responsibility clearly commensurate with expected 
outputs. Arguably that is what has happened in labeling all military 
mission areas joint, and requiring additional oversight process and 
mechanisms for major acquisition programs by the Acquisition, 
Technology, and Logistics (AT&L) office. As the committee is probably 
aware, statistical evidence indicates that the large AT&L bureau-cracy 
and its many efforts have not improved acquisition outcomes despite the 
best of intentions on the part of those promoting the many previous 
acquisition reforms mandated by Congress and the Pentagon.
                               conclusion
    These hearings represent the beginning of a tremendously important 
initiative by the committee. Many voices will counsel against reform, 
insisting it is impossible to do, or at least to do well. In truth, 
meaningful reform will be difficult; and a hasty reform without a deep 
appreciation for the origins of the behaviors that currently limit 
Pentagon effectiveness would be a mistake. However, successful reform 
is both necessary and possible.
    It is necessary because the men and women in uniform who go in 
harm's way for our collective security deserve the best policy, 
strategy, planning and program decision making possible. And as this 
committee already has heard from much expert testimony, they do not 
currently receive it. It is doable because the reasons why most large 
reorganizations fail are well known. If the committee adopts a rigorous 
methodology for managing change in the Department of Defense that 
avoids the common pitfalls, it can create a more efficient and 
effective defense establishment capable of managing 21st-Century 
challenges well. This will take time, but I am confident it can be done
    Politically, defense reform will be an enormous challenge. The 
committee should expect resistance from well-intentioned practitioners 
and observers but also a great deal of support from defense experts who 
are already on record supporting major change. In addition, many of our 
dedicated civil servants and military officers currently working in the 
Pentagon will support a well-researched and well-reasoned set of 
reforms that make it possible to generate better decision support and 
operational outcomes.
    For my part, I encourage the committee to stay the course and 
complete the task it has undertaken. It is important to recognize there 
are dangers to inaction as well as misguided action. We would not have 
the unparalleled, world class-setting military we have today without 
the service training revolutions of the 1970s and 1980s and Goldwater-
Nichols reforms. If the Senate Armed Services Committee puts forth the 
same level of effort it mounted thirty years ago, it will succeed. And 
the benefits to our service men and women, to the Department of 
Defense, and to our nation, will be historic.

    Senator McCain. Thank you.
    Dr. Hamre.

   STATEMENT OF JOHN J. HAMRE, PRESIDENT AND CHIEF EXECUTIVE 
 OFFICER, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, AND 
       CHAIRMAN, DEFENSE POLICY BOARD ADVISORY COMMITTEE

    Dr. Hamre. Thank you, Mr. Chairman, Senator Reed. And may I 
just have 30 seconds on personal privilege?
    I just have to say what an honor it is to be back to--in 
front of this committee. I spent 10 years working for you, the 
best professional experience of my life. All of us want to live 
a life where we know we're living a bigger life than for our 
own personal well-being. And this committee gave me a chance to 
do that. The grandeur of service is unbelievable. And I want to 
say thank you for letting me be here. And I hope all the young 
people that are sitting behind you that are staffing you now 
appreciate the enormous privilege in being on this committee 
staff.
    Senator McCain. Well, I thank you, Doctor, and I thank Jim, 
also. And I'm sorry we have a level of incompetence that is 
really just deplorable on the committee now.
    [Laughter.]
    Senator McCain. Dr. Hamre.
    Dr. Hamre. I'm smart enough not to follow up that sentence. 
So----
    [Laughter.]
    Dr. Hamre. I would like to, if I could, make just three 
process comments and then maybe three recommendations, if I 
may.
    First, you're--this is going to take a while. You're--this 
is a large issue. It's a complicated problem. It'll take more 
than a year. Right now, we have to get as much moving as 
possible in this year, but I hope you'd also establish a 
process that will carry beyond, because it is--it's going to 
take a lot of work to get the real problems worked through. You 
can do the very big things now, I believe. And I hope that 
you'd think about it as a process.
    Second, if possible, make the Secretary of Defense your 
partner. I think that it will make it so much easier to get 
things implemented if he is wanting to work with you to get 
shared reform moving. I've had a chance to speak with him. I 
think he feels that this is just as important as you do. He may 
have a different, you know, issue alignment than you do, but 
he--if the two of you can work together--or, I should say, the 
two institutions can work together, you'll get a lot done in 
this first year. So, I hope you would think of that.
    And then, the last comment is, please be careful. 
Bureaucracies are adaptive things. They will adapt to good 
incentives, and they will also adapt in bad ways to incentives. 
And you really do need to understand how that's--you know, 
bureaucracy is going to think about this--these new changes. 
And we have a marvelous officer corps. We have a terrific ethic 
in the Department. You're right, it's inefficient, but we need 
to make sure we don't lose something along the way. And I think 
modeling the impact of change would be very important.
    Let me, if I may, just make three observations--or 
recommendations, I should say:
    First, I think there are a few things that we need to fix 
from the original legislation. There were some birth defects, 
frankly. Now, I think you are fixing one of them with the bill. 
And I hope, you know, the [National Defense] Authorization Act 
passes today. When you've made these changes--putting the 
service chiefs back in the chain of command, that's a very big 
thing, and I'm really glad that you've taken that step. I think 
it's going to have enormous impact over the next couple of 
years. It'll take a few years for it to find its true power. 
But, I think that was a very important thing, and I thank you 
for doing that.
    Another--it wasn't a birth defect, but we--when we created 
the Joint Duty Officer Assignment--you know, you can't become a 
flag officer unless you've been in a joint duty billet--well, 
we put that obligation on top of DOPMA [Defense Officer 
Personnel Management Act]. You know, it's a--DOPMA was a very 
complicated, elaborate personnel management structure. Now we 
put another layer on top of it. It's very hard to get through 
the system now. And so, the personnelists have kind of 
engineered pathways through this complexity, and it has created 
an excessively large headquarters structure. They need that 
headquarters structure to get joint duty billets for everybody. 
There just are not enough jobs without it. So, unfortunately, 
we've cut our forces--in my view, too deeply--but, we haven't 
cut the officer corps very deeply, and now we've got too many 
headquarters. Just pure and simple. So, we've got to figure 
out--we've got to go back and look at that interplay of DOPMA 
and joint duty, and find out, How do we take pressure out of 
the system so we're not feeding big headquarters structures 
that are really doing too much micromanagement? So, that would 
be the first thing.
    Second set of issues. And I think they revolve around the 
unified combatant commanders. We used to call them ``unified 
CINCs'' when--on the committee. Back at the time of Goldwater-
Nichols, we thought that we were going to fight wars through 
these unified combatant commands--the Pacific Command, the 
Central Command, the European Command--that we--we thought they 
were going to be warfighting headquarters. But, that's really 
not how we do it anymore. We now fight through combined task 
forces, or joint task forces. We organize a task force purpose-
built for that activity. And, frankly, the regional combatant 
commands are supporting elements now to this activity. They're 
not really fighting that war. It's the commander of that task 
force that's fighting the war. But, if you go out and you look 
at the unified combatant commands, they all have pretty beefy 
structures built around warfighting. They've got a J1, a J2, a 
J3, a J4--I mean, and they're not really doing operational 
warfighting, they're supporting warfighters.
    So, I still think we need those unified commands, very 
much, because they do strategic engagement with our partners. 
The next 30 years, our central grand strategy is to get 
stronger partnerships with friends around the world that share 
our values and interests. Those combatant command offices, 
that's what they do, that's their great contribution to us. 
But, you don't need a J4, a logistician. I mean, he--what does 
he do every day? He calls the guy who is really doing 
logistics, figuring out what he's doing. You know, or a J6 or a 
J2. You know, you--what we need to do is, we really need to 
redefine those commands so that they are streamlined and 
they're doing the strategic role that we need to have them done 
on behalf of the Department. That would be a second thing.
    A third thing, we did--you know, when we were working on 
Goldwater-Nichols, at--running at the same time was the Packard 
Commission. And so, all of the back-office stuff--the 
logistics, support, all that--was being handled in a different 
process, and we really didn't handle it inside Goldwater-
Nichols. We can't afford to keep cutting operating forces and 
not deal with the support structure. The support structure is 
too large, it's too inefficient. And, you know, every 
corporation in America long ago got rid of separate warehousing 
functions and transportation functions. They merged that so it 
could be managed efficiently. We haven't done that in the 
Department. I mean, we need to start taking on those back-
office activities. And that's a very--a couple of simple, very 
direct things could make a huge difference.
    Finally, one last thing--I apologize for going so long--
but, there are some things that we didn't know about when we 
worked on Goldwater-Nichols, primarily cyberwarfare. That was 
not in our consciousness at the time. And we now have to think 
about this in a very different way. We're very fractured as a 
Defense Department when it comes to command and control. The 
services buy the systems, the--they operate in a regional 
command theater when we've got a centralized Cyber Command--you 
know, we're hopefully going to have that here. So, we're very 
fractured. And I think it comes down to a fundamental issue. 
That is that the services still buy their own command and 
control. And it--while I think they should be the ones that buy 
military hardware, I personally am of the view that we now have 
to buy command-and-control equipment on a centralized basis. 
It's the only way we'll get interoperability. It's the only way 
we're going to get our arms around cyber vulnerability in the 
Department. Very complicated problem, but I think we're--it's 
almost inevitable we'll have to do something like that.
    Let me stop here. I'm obviously very flattered to be 
invited. I'll be glad to help in any way.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Hamre follows:]

                Prepared Statement by Dr. John J. Hamre

    Chairman McCain, Ranking Member Reed, it is a special 
privilege and pleasure to be before the Senate Armed Services 
Committee, especially for the topic of this hearing, ``Do we 
need to reform the Goldwater-Nichols Act?''
    I devoted ten years of my life to serving the United State 
Senate and the Senate Armed Services Committee. Honestly, it 
was the highlight of my professional career and I will always 
be grateful for those opportunities.
    As a relatively junior member of the staff, I was able to 
work on the legislative effort that ultimately became the 
Goldwater-Nichols Act. That too, was arguably one of the 
premier professional experiences of my life. I can still 
remember the debates within the Committee during markup of the 
bill. The debates were strong and the Committee was deeply 
divided. But the debates were highly substantive and conducted 
with deep respect. Every member of the Committee knew the 
gravity of the issues before them, and approached the 
deliberations with honesty and great seriousness. It was the 
model of Congress at its best.
    The issue before us today is the question whether this 
landmark legislation needs to be changed. I think it does, 
honestly. But we have to change it in a way that preserves the 
great accomplishments of the original landmark legislation.
    Prior to passage of Goldwater-Nichols, the military 
services operated as highly autonomous entities. Coordination 
in the field was ad-hoc, with little predictability of effect. 
Back then, coordination meant ``de-confliction.'' Senior 
officers saw the other services as competitors for resources, 
feeling that their requirements were inherently superior to the 
needs of other departments. Command and control was fractured. 
Joint command and control meant carrying multiple redundant 
communication radios that worked only in service-specific 
channels.
    Before Goldwater-Nichols, the Chairman of the Joint Chiefs 
was a figure head, but lacked the power to coordinate a unified 
approach. Regional combatant commanders were largely extensions 
of the dominant military service deployed in the theater.
    The Goldwater-Nichols Act changed all this. Of course there 
are still strong parochial forces within the Defense 
Department. But the senior officer corps today genuinely knows 
more about the other services and respects their capabilities 
and operating procedures. Senior officers genuinely think 
``jointly'' now, something that was quite rare 35 years ago.
    This has produced the finest fighting force it the world. 
So people will rightly ask ``why change it now?''
    In some instances, changes are needed because we didn't 
quite get it right with the original legislation. But in most 
instances, the times have changed. The structure that emerged 
from Goldwater-Nichols doesn't well fit operations in year 
2015. And in a few instances--like cyber war and cyber 
defense--there was no consciousness of these issues when the 
Goldwater-Nichols Act was passed. So permit me to present my 
thoughts along these three lines: (1) things in Goldwater-
Nichols that we need to fix, (2) changes that have occurred in 
modern military operations that need to be reflected in 
revisions to the Act, and (3) things we need to incorporate 
that were never anticipated.

           CORRECTING ORIGINAL PROBLEMS IN GOLDWATER-NICHOLS

    There are two major issues that were ``flaws'' in the 
original design of Goldwater-Nichols. One of them the Committee 
has already addressed, and that is chain of command for 
acquisition.
    The underlying theme of Goldwater-Nichols was to create a 
healthy balance between ``supply'' and ``demand'' within the 
Department. Prior to Goldwater-Nichols, both supply and demand 
resided within each military service. We wanted to increase the 
voice of ``jointness,'' and to do that Goldwater-Nichols 
elevated in prominence the Chairman of the Joint Chiefs of 
Staff. You gave the Chairman a Vice Chairman, and he was given 
protocol status of being #2 and not #6. You elevated the 
stature of the Regional Combatant Commanders (then called the 
Regional Commanders-in-Chief).
    The Service Chiefs--as heads of their respective services--
were stripped of operational command. Command would be 
exercised by the President through the Secretary directly to 
the Unified Combatant Commanders. The Chairman was assigned the 
responsibility of providing military advice directly to the 
President. The Service Chiefs no longer commanded forces in 
combat.
    At nearly the same time, Congress adopted the Packard 
Commission recommendations that stripped acquisition 
responsibilities away from the Service Chiefs. The Committee 
acted to correct this mistake with the National Defense 
Authorization Act you recently passed. This is a very good 
thing.
    From my perspective, DOD often courts trouble when there 
are confused or bifurcated responsibilities for functions and 
activities. It made no sense to have the Service Chiefs 
responsible for training, equipping and housing their 
respective forces, but not accountable for acquisition.
    As I said, I think that you have largely fixed this problem 
with the authorization act you passed this year. It will take 
some years to work through all the details and make the new 
connections in the Pentagon, but I am confident this one act 
will produce the changes that we need.
    The second problem with the original Goldwater-Nichols Act 
is not resolved, and that concerns the way we added joint-duty 
obligations to the normal officer management system. The 
Defense Officer Personnel Management Act, or DOPMA, was enacted 
in 1980. It created a uniform set of requirements for officer 
development. It was a very good and successful act. But it 
created a very elaborate set of requirements. We then added on 
top of that, the joint-duty requirements for promotion to 
general officer/flag officer ranks.
    The idea was simple--you can't become a general or flag 
officer if you have not had experience in a joint-duty 
assignment. In general terms, I agree with this. It created a 
valuable incentive we need to keep.
    But this requirement was layered on top of DOPMA, creating 
a very complex and elaborate system. This complex system is now 
driving force structure, which is upside down in my view.
    Now I will add an additional factor, and I anticipate that 
my words will be controversial. We could manage that elaborate, 
complex personnel management system when we had much larger 
operational forces. But since 1990, we have dramatically 
reduced the size of the operating force--too much in my view. 
But we didn't cut the officer corps as much as we cut the 
operating forces. So we had to find places for officers to 
work, and that has contributed to the significant expansion of 
headquarters staffs. Large headquarters organizations demand 
ever-increasing levels of coordination, and also generate 
considerable micromanagement of people doing real things.
    This is a complex problem that cannot be easily engineered 
away by a small change to Goldwater-Nichols. I believe that the 
size of the officer corps should be reduced. And we need to 
fundamentally review DOPMA and change it to create a more 
dynamic management system.
    There might be a set of changes you should contemplate for 
the fundamental requirement of joint duty experience as a pre-
condition for promotion to general/flag rank. I have not 
studied this adequately, so I offer this as a hypothetical 
idea, not a recommendation. But perhaps we might change the 
requirement for non-combat military operational specialties 
that require joint duty only for promotion to O-8 or O-9 rank. 
I don't know if that is the right answer or not, and I don't 
know how significantly it would change personnel management 
models. But it is an example of ideas we should study.

        UPDATING GOLDWATER-NICHOLS FOR CHANGING PATTERNS OF WAR

    Second, we have new operating patterns today that were not 
anticipated at the time Congress enacted Goldwater-Nichols.
    The largest item in this category concerns the unified 
combatant commands. I was on the staff of this committee at the 
time you deliberated Goldwater-Nichols. At that time, we 
thought that wars would be fought by the regional combatant 
commanders. But that is not how we go to war today. Today, we 
largely conduct operations through joint task forces or 
combined task forces--purpose-built for the operation at hand. 
The regional combatant command headquarters are now overseers 
and supporters of those task force organizations.
    We still need regional commanders, and I think they are 
more important than ever. The primary role of regional 
commanders, in my view, is to develop strategic partnerships 
with friends and allies in their region, to undertake planning 
functions for dealing with crises in their region, and to 
engage local military establishments in a constructive way.
    Our grand strategy for the next thirty years will be to 
build networks of partner relationships around the world with 
countries that share our broad goals. We need to have a very 
senior officer in the region with a strategic vision about what 
we need to manage tension and deter conflict, and to develop 
operational plans to do that. This cannot be done from 
Washington, D.C. Washington is obsessed with politics and 
staffing cabinet secretaries who spar every day over policy 
matters with political impact. The forward regional commanders 
are detached from the daily politics of Washington and can 
nurture enduring relationships.
    So in my view, regional commanders are more important than 
ever. But I don't think they need the kind of war-fighting 
structure and staffs that they have. The logistics chief for a 
regional command, for example, doesn't command anything 
associated with logistics. That general officer is looking over 
the shoulder of real logisticians in task force organizations, 
and providing administrative support from a distance. Much of 
the headquarters structure in regional combatant command 
headquarters is redundant, in my view.
    I believe we should radically restructure most of the 
regional commands and sub-command headquarters to focus them on 
the indispensable role they plan as strategic architects of 
security in their respective regions, and then strip away the 
command structure that is not needed now that we fight through 
task forces.
    A second area where I think we need to update our structure 
reflects the revolution in industry that we have neglected in 
the Defense Department. For example, 50 years ago, American 
corporations had separate warehouse departments and 
transportation departments. Now every successful corporation 
has combined these two functions. Yet we in DOD have stand-
alone organizations that do transportation and depot 
warehousing.
    I hear all the time the tired argument of defenders of our 
current system that our demands are different--that our forces 
are moving and we can't use a Walmart model. I think that is 
absolute nonsense. A friend of mine once said ``candle makers 
will never invent electricity.'' That is what we have here. The 
people working within the existing system will never transform 
their operation to eliminate their job. We need re-organization 
from the top, because we will not get it from the bottom up.
    Goldwater-Nichols really didn't tackle the support side of 
the Defense Department. Understandably, and quite 
appropriately, it focused on warfighting. But now we must focus 
on the support side of the Defense establishment, and bring in 
modern management methods to eliminate outdated organizations 
we inherited from World War II.

                              NEW DEMANDS

    The third broad area I would suggest we need to examine are 
those issues that never existed 35 years ago when Goldwater-
Nichols was adopted. The primary issue here is how we organize 
ourselves for cyber warfare.
    When I was Deputy Secretary of Defense back in 1998, I 
revealed publicly the first cyber-attack on the United States. 
In retrospect, it was laughable and not serious. Now it is 
deadly serious. America has become more dependent on computers, 
and our opponents have become far more skilled in exploiting 
our weaknesses.
    The Defense Department is wrestling with this. I support 
the idea of creating a cyber command. But this papers over a 
larger set of issues that have not been resolved within the 
Department. Who is responsible for the computers when we go to 
war? Is it the service that bought the system? Is it the 
regional commander that is supporting task forces fighting in 
his area of responsibility? Is it a central cyber command in 
the National Capitol Region? Can the head of Cyber Command take 
over operations of networks of a regional commander during 
wartime?
    These are very hard issues. And there are no easy 
solutions. Again, I will make a controversial observation. I am 
a strong advocate for individual services being responsible for 
acquisition for military hardware for their respective 
services. Loyalty to a service matters a great deal. We don't 
want to do what other military establishments have done--which 
is to create a unified ``buying command'' that buys things on 
behalf of the military departments.
    But I make one major exception to this. I have come to the 
painful conclusion that command and control systems should be 
procured centrally by the Defense Department, not by individual 
military departments. We will never solve interoperability 
problems until we get a single, central authority to buy them. 
We will never get our arms around cyber vulnerabilities until 
we have a single focus responsible for stronger protection. In 
this one instance, I would take the Title 10 authority away 
from the military departments and shift it to a central agency 
working for the whole Department.

                               CONCLUSION

    Mr. Chairman, distinguished members of this Committee, I 
admire your foresight and courage to take on this important 
question. Goldwater-Nichols was landmark legislation. It 
produced the finest military establishment in the world. It was 
legislative activity at its best. But after 30 years, it needs 
amending. None of these changes would undermine the great 
contribution it made to build the best military in the world. 
But these changes are needed to make this Department function 
more effectively going forward.
    I am honored to have been invited to appear today. I will 
gladly help the Committee in any way as you move forward with 
this important agenda.

    Senator McCain. thank you.
    Mr. Thomas.

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

    Mr. Thomas. Thank you, Mr. Chairman.
    It's a real personal privilege for me to testify before you 
today and alongside John Hamre and Jim Locher, who, in the 
field of defense, are both enormous figures who have made 
incredible contributions over many decades to our national 
security.
    I also want to commend you for holding these hearings and 
your leadership, foresight, and spirit of bipartisan in 
addressing these very important issues.
    In my testimony today, I'd like to highlight some of the 
problems with our current organization, consider how those 
problems might be--might have emerged over time, and offer some 
ideas for how they might be fixed or addressed.
    As you are all too aware, DOD has trouble producing good 
strategies and plans. Its headquarters staffs have grown too 
large. Its processes are too cumbersome and time-consuming. The 
pace of change on many issues is just simply glacial. Decisions 
often cannot take place until every one has occurred, and this 
frequently results is lowest-common-denominator outcomes that 
everyone can live with.
    How did we get to this place? Many of these problems, I'd 
argue, are the unintended consequences of Goldwater-Nichols. To 
be sure, that legislative watershed solved a very big problem 
for the United States: how to improve the ability of the 
military services to operate together more effectively in 
combat. But, the legislation altered the Pentagon's internal 
balance of power between the Secretary, the Chairman, the 
service chiefs, while also elevating the COCOMs [combatant 
commands] and making them direct-reports to the Secretary. And 
it did so in ways that would leave all of the main actors just 
short of being able to decide anything alone, thus driving the 
need for excessive coordination and concurrence between them. 
By making the Chairman [of the Joint Chiefs of Staff] principal 
military advisor to the President, the legislation intended to 
create a nonparochial ally for the Secretary of Defense. But, 
in fact, it also elevated the status of the Joint Staff to that 
of OSD [Office of the Secretary of Defense], essentially 
creating a second, highly duplicative central headquarters 
staff. And, while the legislation improved considerably the 
quality of officers serving on that Joint Staff, it did not 
result in a cadre of staff offers--officers particularly 
trained as such or shift control over their career advancement 
to the Chairman.
    By taking the Chairman out of the chain of command, it fell 
short of creating an effective central control entity. In our 
current system, combatant commands and service chiefs do not 
work for the Chairman, but for the Secretary of Defense and the 
Service Secretaries, respectively. Thus, the Chairman has to 
rely on his convening powers and ability to control--cajole and 
persuade to get things done, because he lacks directing 
authority. Consequently, no military leader in our current 
system is empowered to prioritize efforts across regions and 
produce something analogous to the very simple, but highly 
effective, strategy General George Marshall articulated for 
dealing with Nazi Germany and imperial Japan, upon United 
States entry into World War II: win in Europe, hold in the 
Pacific.
    Lastly, Goldwater-Nichols strengthened the regional 
combatant commanders and gave them almost exclusive control 
over war planning, but did not foresee, as Dr. Hamre mentioned 
earlier, how, over several decades, they would be consumed by 
their peacetime roles as de facto regional ``super 
Ambassadors,'' at the expense of time and attention needed for 
operational planning in the prosecution of wars. The reality 
now is that combatant commanders often make only cameo 
appearances in actual wars before DOD establishes new ad hoc 
commands and joint task forces devoted to warfighting, as was 
done in Iraq and Afghanistan.
    Mr. Chairman, as you and members of this committee 
deliberate on possible changes in DOD reorganization, I would 
offer several interrelated reform ideas that could help to 
address the problems I've outlined:
    First, I think it's time to rethink the combatant commands. 
The regional combatant command headquarters should be 
considered for consolidation, at the very minimum, and to 
consider replacing the service component commands that are part 
of them with joint task forces focused on planning and fighting 
wars.
    Second, I think the time's come to power up the Chairman by 
placing him in the chain of command and giving him directive 
authority on behalf of the Secretary of Defense. He should have 
greater authority to decide between the competing demands of 
the regional commands and to develop global strategy.
    And third, an idea that was considered too controversial 
and taboo in the 1980s is one that perhaps you would 
reconsider, and that is to create a true general staff composed 
of the very best strategists, planners, and staff officers from 
across the services who would compete to competitively serve on 
this staff and would remain with the general staff for the 
remainder of their military careers, with their promotion 
tracks controlled and determined by the Chairman or the chief 
of the general staff.
    I believe that, to deal with the diverse range of threats 
we face today and are likely to face for the foreseeable 
future, we will need to make major reorganizational changes, 
not modest, ineffective tweaks to the current system. It will 
be difficult, if not impossible, for the executive branch to 
reform itself. If change is going to happen, it will need to 
come from the Congress, just as it did with Goldwater-Nichols 
30 years ago.
    Thank you.
    [The prepared statement of Mr. Thomas follows:]

                    Prepared Statement by Jim Thomas
    Mr. Chairman, Ranking Member Reed, and distinguished members of the 
Committee, thank you for the opportunity to testify today. Major 
national security re-organizations often come only after a major 
military disaster when the problems become blindingly apparent. Your 
decision to convene this series of hearings attests to your foresight 
and determination not to wait until a national catastrophe to act, but 
to actively seek out potential reforms now that could improve the 
Department of Defense's (DOD) ability to deal with current and future 
security challenges. It is appropriate for this Committee to undertake 
a fundamental assessment of the DOD's organization and consider 
measures for improving its ability to conduct core functions related to 
strategy formulation; contingency planning; preparing forces and 
developing needed capabilities; and conducting military operations.
    This Committee was the driving force in formulating sweeping 
organizational changes across the DOD three decades ago. The resulting 
Goldwater-Nichols Defense Reorganization Act of 1986 was a watershed 
event in American military history and has had a profound impact on the 
U.S. defense establishment. It addressed the major problem of its day: 
the lack of sufficient inter-Service cooperation or ``jointness,'' 
especially at the operational-theater level.
    While Goldwater-Nichols has had a major positive impact on 
improving operational jointness in the field--to the point that 
America's rivals seek to achieve similar proficiency in inter-operating 
forces from different Services--I think that the scorecard is mixed 
when it comes to organizational arrangements in the Pentagon. Three 
decades on since the historic enactment of Goldwater-Nichols, we should 
consider whether our current command structure and organizational 
arrangements remain appropriate for the world we live in today. There 
are strong grounds for arguing that new legislation is needed to ensure 
the DOD is effectively organized to address current and future security 
challenges. In my testimony today, I will highlight some of the 
problems with DOD's current organizational design and then offer a 
handful of reform ideas that could merit further exploration going 
forward. My testimony today is based on first-hand observations of the 
Department's strategy formulation, as well as operational and force 
planning processes I gained while serving in the Pentagon as a deputy 
assistant secretary of defense for plans and participating in four 
Quadrennial Defense Reviews.
                    problems with our current system
    The United States faces a far more diverse set of threats than it 
did in 1986. Where once we squared off against a single superpower 
adversary, today we confront a far wider array of threats including a 
rising, militarist China; an irredentist Russia; regional hegemonic 
aspirants like Iran; shaky nuclear-armed states like North Korea and 
Pakistan; emboldened terrorist groups like al Qaeda; and barbaric 
quasi-states like ISIL. We face new functional challenges as well, like 
cyber attacks, anti-access and area-denial (A2/AD) challenges, and 
hybrid warfare. Our effectiveness dealing with these modern threats is 
hindered by our Cold War organizational structure. Too often our 
responses to these threats have been too slow, too reactive and 
regionally stove-piped. Our current system is optimized for dealing 
with discrete military problems that can be addressed with temporally 
short, intense conventional operations confined to the area of 
responsibility of a single Regional Combatant Command. It is less 
suited to deal with protracted operations, unconventional warfare, and 
multiple threats that span the boundaries of the Unified Command Plan's 
map. Contingency planning is largely the responsibility of the Regional 
Combatant Commands, which leads to a tendency to look at security 
challenges through a regional rather than global lens. Thus, many see 
China as Pacific Command's issue, Russia as European Command's, ISIS is 
Central Command's, and so forth, when in fact we require globally 
integrated approaches to wage effective long-term strategic 
competitions against these actors.
    While Goldwater-Nichols strengthened the role of the Chairman as 
principal military adviser to the President and Secretary of Defense, 
and improved the quality of officers assigned to the Joint Staff, it 
fell short of creating an effective ``global brain'' at the center of 
the defense establishment--a central control entity that can assess all 
of the military threats and opportunities we face, prioritize resources 
and actions needed to address them, and sequence global operations over 
time, with the needed directing authority to make it all happen. There 
is no central military entity today that has the authority to 
prioritize efforts across regions and produce something analogous to 
the very simple--but highly effective--strategy General George Marshall 
articulated for dealing with Nazi Germany and Imperial Japan upon 
United States entry into World War II: ``win in Europe, hold in the 
Pacific.''
    In the current system, the Combatant Commands and Service Chiefs do 
not ``work'' for the Chairman, but for the Secretary of Defense and 
Service Secretaries. Thus, the Chairman has to rely on his convening 
powers to get things done. The Chairman is unable to play the role of 
``decider'' between the competing demands of the Combatant Commands and 
to hold the Services accountable as force providers. Consequently, he 
must resort to cumbersome processes and coordination mechanisms aimed 
at reconciling the competing demands of the Combatant Commands and 
Services. These processes are laborious and time-consuming. They tend 
to result in lowest common denominator compromises where everyone can 
agree while major issues often going unresolved.
    By making the Chairman principal military adviser to both the 
President and the Secretary of Defense, Goldwater-Nichols inadvertently 
undermined civilian control and blurred the distinctions between the 
Secretary's and Chairman's responsibilities. In theory, the Secretary 
of Defense is the ultimate power and decision authority within the 
Department of Defense on any matter where he chooses to act, as well as 
the President's principal assistant for national defense. Goldwater-
Nichols established the Chairman of the Joint Chiefs of Staff as 
``principal military adviser to the President'' with the intent that he 
would be a non-parochial ``ally'' of the Secretary of Defense. In 
reality, however, this has created a situation where, de facto, the 
Chairman has two bosses, one of whom also serves at the pleasure of the 
other. This matters less in terms of the actual relationships between 
Secretaries and Chairmen, which have generally been cordial, than it 
does in terms of the peculiar organizational relationship between the 
Secretary's staff in the Office of the Secretary of Defense and the 
Joint Staff. Joint Staff officers principally view themselves as 
serving the Chairman in his role as principal military adviser to the 
President. Only secondarily do they tend to see their role as 
supporting the Secretary. And few see the Joint Staff as 
institutionally supporting OSD. While the Secretary has statutory 
responsibilities to oversee the deliberate plans of the Combatant 
Commands, he lacks dedicated military advisers to challenge those plans 
or generate alternatives. The Joint Staff could be a source for such 
alternative plans, but in practice it is reluctant to offer second 
opinions to the Combatant Commands' plans. The Chairman's statutory 
responsibility as principal military adviser to the President has led, 
moreover, to an excessive duplication of staffing functions between the 
OSD and the Joint Staff. Where you have an OSD policy expert, that 
person will almost inevitably have a counterpart on the Joint Staff. In 
Interagency meetings, this means DOD will normally have two seats the 
table with possibly two conflicting viewpoints, which either becomes a 
source of frustration for others or an organizational seam others can 
exploit.
    While Goldwater-Nichols improved the quality of the officers who 
are assigned to the Joint Staff--they tend to be some of the most 
outstanding officers from each of the Services--the vast majority are 
skilled operators (ace pilots, ship captains, and brigade commanders) 
who aspire to higher command assignments when they return to their 
Services. Their promotions are still determined by their Services 
rather than the Chairman, which tempers their non-parochialism while 
serving on the Joint Staff. Too few of these officers, moreover, come 
to the Joint Staff with deep educational backgrounds in military 
history, strategy and war planning experience. Too often Services will 
assign to the Joint Staff an officer with high promotion potential who 
excelled as a tactical commander but has no staff officer experience, 
rather than a highly qualified strategist or planner who is unlikely to 
be promoted to O-7. The kinds of officers who naturally gravitate 
toward staff jobs and might be best qualified to formulate strategy and 
develop imaginative plans also tend to be iconoclastic. Sometimes they 
are promoted as general or flag officers despite their maverick 
streaks, but more often they retire from O-5/6 staff jobs. Finally, 
requiring every general and flag officer to be joint qualified may have 
contributed to the growth of joint headquarters staffs and resulted in 
too many ``ticket punches'' rather than a creating smaller, more elite 
corps of highly qualified joint staff officers.
    Goldwater-Nichols empowered the Unified and Specific Commands as 
the exclusive warfighting institutions of the Department of Defense and 
succeeded in improving jointness at the operational level. Few could 
have imagined, however, how the role of the Regional Combatant Commands 
would evolve over the past several decades. Increasingly, the Regional 
Combatant Commanders' peacetime ``Pro-Consul'' political-military 
functions have diverted their time and attention away from their 
statutory responsibilities planning for or conducting regional combat 
operations. The reality now is that Combatant Commanders often make 
only cameo appearances in actual wars before the Department of Defense 
establishes new ad hoc commands devoted to warfighting as was done in 
Iraq and Afghanistan, thereby freeing the Regional Combatant Commanders 
of their combat duties.
    While they play critical roles in political-military peacetime 
engagement, it is arguable that they have also grown preoccupied with 
so-called ``Phase Zero'' activities relative to preparations for actual 
warfighting and war termination.
    While Goldwater-Nichols was widely seen as shifting power from the 
Services to the Combatant Commands in 1986, over time the system has 
also tended to empower the Regional Combatant Commands relative to the 
Functional Combatant Commands. For example, Special Operations Command 
has played a leading role in the wars in Iraq and Afghanistan, as well 
as in wider global counter-terrorist operations over the past fifteen 
years. But the Regional Combatant Commands have resisted any accretion 
in SOCOM's command responsibilities in global terrorist operations, 
limiting its role to ``synchronizing'' operations across Combatant 
Commands, while stopping well short of directing authority over other 
commands. Similarly, Regional Combatant Commands have resisted moves to 
give SOCOM greater flexibility in moving special operations forces and 
assets between theaters, preferring to ``own'' their forces rather than 
depend on a Functional Command to provide forces to them when they are 
needed. Strategic Command has experienced similar problems in 
integrating global strike and cyber warfare capabilities into the 
contingency plans of Regional Combatant Commands, whose preferences for 
forces and capabilities assigned or apportioned to them may be 
prioritized over those controlled by a Functional Combatant Command.
    This imbalance between Regional and Functional Combatant Commands 
also manifests itself in resource allocation and force planning 
decisions that subordinate global priorities to regional ones. The 
steady proliferation of A2/AD capabilities around the world threatens 
the effectiveness of many traditional elements of our regional forward 
presence, ranging from short-range combat aircraft operating from bases 
close to a potential adversary, to large surface ships, to 
expeditionary ground forces that require access through traditional 
ports and airfields. In the face of growing A2/AD threats, power 
projection capabilities like SOF and global surveillance and strike 
systems that can penetrate and operate in denied areas are among the 
most viable power projection options available to us. They are, 
moreover, globally fungible and can therefore help to deter or defeat 
aggression in multiple areas of the world. Thus, from a global 
perspective they should be highly prioritized. But in reality there is 
a confluence of interests between the Regional Combatant Commanders who 
tend to favor capabilities and forces that will actually reside in 
their theaters and confer political-military benefits through their 
visible presence, and the Services, which continue to acquire 
capabilities and forces that are heavily dependent on relatively 
permissive operating conditions. In this case, the global perspective 
of the Functional Combatant Commanders appears to be receiving 
inadequate weight in the Department's deliberations.
    Finally, headquarters staffs, especially OSD and Joint Staff, have 
simply grown too large over time and the normal processes too 
cumbersome. There are always compelling reasons for adding new staff 
and offices as pressing issues emerge, but once they are added it is 
difficult to divest those functions later on. Although large staffs 
enable leaders to ensure that no issue area goes uncovered, they reduce 
organizational agility and hamper effective decision-making. Large 
staffs, moreover, contribute to excessive coordination and labyrinthine 
processes. And in a system where the coordination process normally 
requires the concurrence of the major players, the process tends to 
favor keeping things just as they are or making only marginal changes 
that are acceptable to everyone. Rarely is someone's ox gored or do 
clear winners and losers emerge, especially when it comes to resource 
allocation. And increasingly in the Department of Defense, when senior 
leaders want to get something done, they must work around the existing 
processes rather than through them. Secretaries of Defense have to find 
innovative ``out of band'' solutions to procure MRAPs, to produce real 
options in a QDR that the normal bureaucratic process would kill, or to 
develop alternate military strategy ideas like the 2006-2007 Surge.
                            recommendations
    Mr. Chairman, as you and members of this Committee deliberate about 
possible changes in the organization of the Department of Defense, I 
would offer a handful of interrelated reform ideas that could help to 
address the problems I have outlined. All of these ideas would require 
detailed analysis to fully understand their strengths and avoid 
outcomes that might inadvertently leave us worse off. It is also 
difficult, if not impossible, to consider these proposals in isolation 
from one another. Enacting one but not another is likely to lead to 
greater problems than either maintaining the current system or adopting 
wholesale changes.
Replace the Joint Staff with a True General Staff
    I believe the time has come to reconsider the merits of creating a 
true General Staff. I think this would have the greatest organizational 
impact addressing many of the problems we currently face. The 
Goldwater-Nichols Joint Staff aimed to establish an independent central 
staff that would be less beholden to the Services, but it fell short of 
a General Staff in three main ways. First, officers assigned to the 
Joint Staff normally return to their Services and their future 
promotions are still controlled by their Services. Second, despite the 
quality of the officers assigned to the Joint Staff, they are not 
trained as an elite strategy and planning staff cadre. Third, the Joint 
Staff and Chairman of the Joint Chiefs of Staff lack directing 
authority one would expect a General Staff to have, resulting in 
cumbersome processes aimed at achieving consensus across the Services 
and Combatant Commands rather than having a decider who can make hard 
choices.
    In the 1980s, broaching the topic of a General Staff was considered 
taboo--too radical, ``un-American,'' and a political non-starter. I 
believe that the strongest arguments AGAINST the establishment of a 
General Staff are that it could lead to: (1) the over-concentration of 
power within the military; or (2) burying alternative courses of action 
or isolating civilian leaders from alternative military viewpoints. 
These risks, however, are not insurmountable and could be addressed 
explicitly in the design of a General Staff. I believe that the 
inability of the current system to formulate effective strategies and 
imaginative plans, the lack of directing authority invested in the 
current Chairman and Joint Staff, and other potential benefits that a 
General Staff offers make an option that has long been seen as 
heretical worth exploring.
    The main purposes of a General Staff would be to assist senior 
leaders to:

      Identify global threats and opportunities;
      Formulate globally integrated, resource-informed 
strategies;
      Develop initial concept plans and offer alternative 
plans;
      Conduct mobilization planning; and
      Determine needed capabilities across the Joint Force.

    The last function would be particularly important to ensure 
adequate investment in interoperable command and control, and 
communications systems that serve as the technical glue binding the 
Joint Force. The General Staff should also be the advocate for globally 
fungible power projection capabilities like SOF, global surveillance 
and strike, space and cyber capabilities, nuclear forces and global 
mobility assets that can swing between theaters to deter, deny or 
punish regional aggressors.
    The General Staff would assume the role of the military's global 
brain to develop cross-regional military strategies and initial concept 
plans for various contingencies. It should have the authority to decide 
between the competing demands of the Combatant Commands and to direct 
them to take preparations or actions consistent with direction or 
orders coming down from the President or Secretary of Defense.
    Unlike the Regional Combatant Commands organized by geographical 
area, a General Staff might be organized around missions or issues. For 
example, the General Staff might assign Flag Officers with 
responsibilities for a particular high-level issue (e.g., a major 
potential adversary or key mission like counter-WMD) to develop both 
the overall strategic approach and initial plans that could cross-cut 
the various Combatant Commands and draw forces and capabilities from 
the various Services as appropriate. The General Staff would also play 
a key role in devising and validating innovative joint concepts of 
operation.
    The General Staff should ideally be reduced in size relative to the 
current Joint Staff. It should be streamlined to focus on inherently 
military tasks while shedding political-military and policy functions 
(e.g., bilateral defense relations, NATO policy, arms control) where it 
currently duplicates functions performed by OSD. It should, however, 
provide technical military advice to support OSD as needed.
    A General Staff would be comprised of elite officers selected at 
the O-4/5/6 level from the various Services on the basis of rigorous 
exams, interviews and their performance in operational-and strategic-
level wargames. Following their highly competitive selection they would 
enter into an intense professional military education course centered 
on strategy formulation and war planning where they would be 
responsible for developing alternative plans and concepts of operation. 
Officers would remain in the General Staff for the remainder of their 
military careers and their advancement would be determined solely by 
the head of the General Staff; thus, they would not be beholden to 
their original Services in formulating strategy, developing plans, and 
determining needed capabilities and forces. Force management and 
manning levels would have to be worked out with the Services in 
advance. General Staff officers should also be eligible to compete for 
General and Flag Officer assignments both within the General Staff and 
across regional and functional joint operational commands and Joint 
Task Forces. Over the course of their careers as General Staff 
officers, they should rotate between the General Staff and assignments 
in the field to maintain operational currency.
    To address some of the historic concerns, the General Staff should 
be required to develop ranges of options and alternative courses of 
action rather than single ``point'' solutions. The Congress should 
ensure adequate channels exist for Service Chiefs and Combatant 
Commanders to surface dissent or alternative courses of action to the 
Secretary and President if they judge it necessary. Similarly, the 
General Staff should foster a culture in which superiors' ideas and 
opinions are routinely challenged.
    In sum, a General Staff would help to improve strategic and 
operational planning competence and would represent a globalist 
perspective to formulate truly integrated, cross-regional and 
competitive strategies. With directing authority on behalf of the 
Secretary of Defense over the Combatant Commands and Services, it would 
be far less encumbered by current coordination processes and the 
penchant of the current system toward concurrence in order to drive 
needed changes. It would also be more likely to identify problems and 
challenge the status quo as it would not be beholden to the Services 
and would be more empowered than the current Joint Staff in making hard 
choices between competing demands.
Replace the Chairman with a Chief of the General Staff
    A Chief of the General Staff would be the highest-ranking military 
officer and report only to the Secretary of Defense. I see merit in the 
Chief of the General Staff being interposed between the Secretary of 
Defense and combatant commanders in the chain of command to assist the 
Secretary in oversight of operational commands in the field. This would 
give him the authority to influence operations and activities around 
the world to a far greater degree than the Chairman can today.
    The Chief of the General Staff would be principally responsible for 
formulating military strategy, developing concept plans, and directing 
global force allocation and application. He would have both decision 
and directive authorities the current Chairman lacks. The Chief would 
play the critical role of global integrator and decider between 
competing military demands consistent with guidance from the President 
and Secretary of Defense. He should have a deputy from a different 
Service who would bring complementary military expertise and help to 
ensure that no single Service is perceived as dominating the General 
Staff. Both the Chief and the Deputy should serve four-year terms that 
are staggered so that they do not normally retire at the same time, 
thereby ensuring continuity.
    To address Congress' historical concerns about the over-
concentration of power invested in this individual, the Chief of the 
General Staff should not be the principal military adviser to the 
President (unlike the current Chairman) but should be under the 
direction and control of the Secretary of Defense and provide military 
advice to the President through the Secretary of Defense. The 
President, however, might be authorized a principal military adviser to 
assist in assessing the strategies and plans produced by the Department 
of Defense. Such an adviser would ideally be a recently retired or 
serving general or flag officer who would, by assuming this position, 
be ineligible for promotion or command and thus not beholden to any 
organization within the Department of Defense. I have in mind the role 
played by Admiral William Leahy during World War II when he came out of 
retirement to serve as the personal Chief of Staff to President 
Franklin Roosevelt.
Retool the Regional Combatant Commands
    Complementing central control organizational changes, Congress 
might also consider consolidating and retooling the Regional Combatant 
Commands. The existing six Regional COMBATANT Commands (Northern 
Command, Southern Command, European Command, Africa Command, Central 
Command and Pacific Command) could be consolidated and reestablished as 
three or four Regional Command Headquarters. One possibility might be 
to keep Pacific and Central Commands but combine Northern and Southern 
Commands, as well as Africa and European Commands. A more radical idea 
might be to organize these consolidated Regional Commands around the 
three major oceans of concern (Atlantic, Indian and Pacific Oceans) 
rather than continental landmasses.
    The major change in the Regional Commands, however, would occur 
below the headquarters level. The existing Service Component Commands 
would be disestablished and replaced with Joint Task Forces focused 
exclusively on warfighting preparation or execution. In many respects, 
this would simply acknowledge what has already become a reality: the 
current Regional Combatant Commands do not normally conduct operations, 
but rather farm them out to subordinate Joint Task Forces or commands.
    Joint Task Forces would serve as the principal joint operational 
command elements worldwide. For example, a Joint Task Force 
Headquarters might be established to plan for operations in a certain 
area of the world. A headquarters planning staff would be formed and 
operational elements from the appropriate Services and SOCOM would 
begin joint training and work-ups in preparation. When ordered to 
deploy, the Joint Task Force would move forward and scale up. While in 
theory the Joint Task Force Commander might report directly to the 
General Staff, as a practical matter for effective span of control it 
probably would make more sense for him to report through a Regional 
Command. The Regional Command would take responsibility for supporting 
the Joint Task Force in the field, especially in terms of logistics, 
handling requests for forces and other support from the Services and 
other commands, thereby freeing up the JTF Commander's time and energy 
to focus on operational planning and warfighting.
Conclusion
    As this Committee deliberates on potential ideas for further 
reorganization it is important to remember that reform cannot 
substitute for adequate funding, nor can it compensate for inadequate 
leaders. Reform cannot ensure a perfect strategy or a brilliant plan 
for every crisis. And reform alone cannot generate ready and combat 
capable forces armed with the best equipment. But organizational reform 
could help to ensure that increases in funding will be more wisely 
allocated, that good leaders can work through a functional system 
rather than around a dysfunctional one, that competent strategists and 
planners can provide senior leaders with better options, and that the 
Services can more effectively develop unrivalled forces and 
capabilities.
    The ideas I have proposed today are unlikely to garner an 
outpouring of support from the Department of Defense institutionally 
(although various officials might personally support them). You will 
hear from many quarters that these ideas are too radical and 
unnecessary, and more marginal changes will be offered as an 
alternative. Indeed, that was the majority reaction to defense reform 
ideas thirty years ago. Nevertheless, I believe that to deal with the 
diverse range of threats we are likely to face for the foreseeable 
future, we need major organizational changes, not modest, inoffensive 
tweaks to the system. It will be difficult if not impossible for the 
Executive Branch to reform itself. If change is going to happen, it 
will need to come from the Congress just as it did with Goldwater-
Nichols.

About the Center for Strategic and Budgetary Assessments
The Center for Strategic and Budgetary Assessments (CSBA) is an 
independent, nonpartisan policy research institute established to 
promote innovative thinking and debate about national security strategy 
and investment options. CSBA's analysis focuses on key questions 
related to existing and emerging threats to U.S. national security, and 
its goal is to enable policymakers to make in for med decisionson 
matters of strategy, security policy, and resources.

    Senator McCain. Well, I thank the witnesses. And we have, 
obviously, a lot of issues to discuss.
    I guess one of my first questions is--and I'd--I'll ask two 
at the same time. One is the results that would entail if we 
did nothing, if we just leave the status quo. And I guess my 
second question is, I don't think there's any doubt about the 
proliferation of COCOMs. Seems to me that every time there's 
some issue or area, we create a command, whether it be African 
Command or AFRICOM or what--now we have Cyber Command, and all 
is--and all of those, of course, includes large staffs and 
support activities that continue to contribute to the reduction 
in actual warfighting when we look at the reduction of brigade 
combat teams and the commensurate increases in size and numbers 
of COCOMs and staffs.
    So, maybe we could begin with you, Jim, and maybe discuss 
those two issues.
    Mr. Locher. Absolutely. Mr. Chairman, there would be a high 
price for doing nothing. The organizational arrangements in the 
Pentagon are not well matched to the external environment. 
We're going to have increased ineffectiveness and increased 
inefficiency. This is not a modern organization at the 
Department of Defense. It's filled with lots of talented people 
who are incredibly dedicated to what they are doing, but they 
have an outmoded approach. There are also some cultural 
obstacles. So, I would encourage the committee to take action 
in this area. The--as Mr. Thomas mentioned, the Pentagon is not 
going to reform itself. It's going to need external help to do 
so.
    The--on the second question, on the proliferation of 
combatant commands, this is an age of specialization in which 
we need people who can get focused either on a region or a 
particular topic, like cyber. And if we have a problem with 
these commands being too large, I think some of the ideas that 
Dr. Hamre mentioned, in terms of making them much smaller, not 
having large headquarters--but, if we consolidate them, as Mr. 
Thomas had mentioned, we dilute that specialization, but we 
also begin to layer. And layering is not good in a world that 
moves so fast. So, I would look for other ways to reduce the 
burden of combatant commands to figure out how we can 
centralize some functions for the combatant commands to reduce 
their cost. But, I think that they serve a very useful purpose, 
and I would not consolidate them. And I'd be very careful on 
eliminating some of them.
    Dr. Hamre. Mr. Chairman, when I came on this committee, 
working for you, I remember it so distinctly. This was--you 
said in your statement that the purchasing power of the budget 
we have today was roughly the same as we had 30 years ago. But, 
30 years ago--and I remember this--we bought over 950 combat 
aircraft, we bought 21 surface combatants, we bought 50 ICBMs 
[intercontinental ballistic missiles], 1,200 M1 tanks, 1,800 
Bradley fighting vehicles. We had 300,000 troops in Europe. We 
had 2.2 million people in uniform. We have a fraction of that 
today, and we're spending the same amount of money. And you 
look to see the size of the overhead structure and interference 
that comes from too many headquarters and too much 
micromanagement, it is choking this Department.
    So, I think this is crucial. Doing nothing would be very 
damaging, so I really hope that you take this with full energy. 
We have to do it.
    Senator McCain. And the second question.
    Dr. Hamre. Sir, I think the--in general, we have--we've had 
a pattern--during the Vietnam War, the average person that 
testified in front of the Congress was a colonel. By the end of 
the war, they were generals. And now you hardly ever have 
anybody but a four-star general coming up here. I mean, we've 
got too much top-heavy focus. The people that run this 
Department really are the O6s [colonels]. We should be giving 
them much more of that responsibility back.
    And I think we have too many commands. We've got commands--
every command looks the same way Julius Caesar would have 
created it, you know, personnel, operations, intelligence, 
logistics. I mean, this--we have got to be smarter than just 
simply cookie-cutter--doing a cookie-cutter model for every 
command headquarters that we set up. It just--this--we're too 
smart. I mean, we don't have to be as rigid and structured as 
we are. So, I think going back and forcing a massive 
streamlining of this command structure would be very important.
    Senator McCain. Mr. Thomas?
    Mr. Thomas. Well, I agree with the points. I think Mr. 
Locher is--a good issue, in terms of--we want to avoid adding 
duplicative layers. But, I also think Dr. Hamre made a good 
point earlier, which was, the role that's played by the 
regional combatant commands is an important one, in terms of 
engagement and partnership and all of that, but I think we have 
to divide them out. I mean, the reality today is that we are 
warfighting with joint task forces. We're not warfighting with 
those combatant commands. So, I think the real choices are 
between: Do you want to just eliminate that layer of what we 
call combatant commands today and have joint task forces that 
report directly to the center, which I think is the solution to 
that problem, or is perhaps, for span of control and also to 
conduct some of these political, military, international 
activities, do you want that command layer there? And I think 
that's a question that we need to address.
    Overall, I think our fundamental problem is that we are 
losing the command-and-control competitions against all of our 
adversaries today. All of our adversaries, from great powers, 
like Russia and China, to nonstate actors, like al-Qaeda and 
quasi-states like ISIL, are inside our OODA [observe, orient, 
decide, and act] Loop, they are moving faster and making 
decisions faster than we can possibly keep up with our outdated 
processes and organizations. So, I absolutely agree, part of 
the answer has to be reducing headquarter staffs. In part, you 
do it maybe to save money, but I think the bigger reason is, 
you do it to gain back your agility as an organization.
    Senator Reed. Thank you very much, gentlemen. It's very, 
very thoughtful testimony.
    And just let me follow up on a point that Mr. Locher made, 
and ask the whole panel to--you urged us to take a holistic 
look, which would, I think, also include the connections 
between the Department of Defense and every other agency it 
works with. I don't want to make our task more difficult, but 
that world needs some attention, too. But, could you give us a 
sense of the relative importance of reform of not just the DOD 
system, but the interagency system? And I'd ask everyone to 
comment.
    Mr. Locher.
    Mr. Locher. If it were possible, I would urge this 
committee to take on the interagency issues first, because they 
are much more troubling. But, that's not within the committee's 
jurisdiction. But, I think it's important to note that, no 
matter how well you transform the Department of Defense, it is 
still going to be troubled by an interagency system that is 
quite broken. And the problems that confront this Nation and 
national security require an interagency response. The days of 
the Department of Defense being able to execute a national 
security mission by itself are long gone. And we do not have 
the ability to integrate the expertise and capacities of all of 
the government agencies that are necessary.
    As you know, Senator Reed, I headed the project on national 
security reform for 6 years, trying to bring a Goldwater-
Nichols to the interagency. We did not succeed. But, that is a 
major, major problem.
    Senator Reed. Thank you.
    Dr. Hamre, your comments, and then Mr. Thomas.
    Dr. Hamre. Well, I agree it's a major problem. The problem 
is, it's a faultline in American constitutional government. 
There's no question that Congress has the right to oversee and 
fund the executive branch departments, and you have a right to 
demand that they come and talk to you about what they're doing. 
There's also no question that the President has a right of 
confidentiality in how he runs the executive branch. And that 
nexus is at that interagency process. We have not been able to 
solve this constitutional dilemma. So, what we do is, we try to 
improve everybody's functioning and then hector everybody to do 
a better job of getting together on it.
    It really comes together with the President. The President 
has to have the kind of vision for what the interagency process 
should look like. And the person who did it best was Dwight 
Eisenhower. Dwight Eisenhower had a J5 and he had a J3 in his 
NSC [National Security Council]--I mean, the equivalent of 
that. And that's when it worked best. That's when they did 
strategic planning. Right now, everything is what's on fire in 
the inbox.
    Senator Reed. Thank you very much.
    Mr. Thomas, please.
    Mr. Thomas. I agree with Dr. Hamre in his formulation. The 
one concrete thing that the committee might consider is, there 
is a legislative requirement for the President to prepare a 
National Security Strategy every several years. And this is an 
ad hoc--this is a unclassified document that, over the years, 
has really generated pablum. We rarely have anything that 
would--truly looks like a strategy when you look at this. It 
looks like a marketing brochure for the executive branch in a 
lot of ways.
    What we need is a hardhitting classified National Security 
Strategy. And that Strategy should be coordinated with the 
fiscal guidance that the President sends to each of the 
executive departments. This, I think, would help to improve the 
national security coordination and achieve greater unity of 
effort across the government.
    Senator Reed. Mr. Locher, you mentioned weak mission 
orientation, and--can you give us an example on what--the 
panel, an example. Because sometimes it helps us to sort of put 
a specific anecdote or a specific example to a concept.
    Mr. Locher. Certainly. You know, as--when you're at the 
level of the Secretary and the Deputy Secretary, you have that 
ability to focus on missions. But, the moment you go below the 
Secretary and the Deputy Secretary, you're going into 
functional areas: manpower, health affairs, intelligence, 
acquisition. But, what we really need, to move quickly, is to 
be able to focus on missions, missions such as counterterrorism 
or countering weapons of mass destruction or some of our 
activities in the Middle East. There is no place in the 
headquarters of the Department of Defense where the Secretary 
and the Deputy Secretary could go and have all of that 
functional expertise integrated into what I would call a 
``mission team.'' In the business world, beginning in the mid- 
to late-1980s, businesses went to what they called ``cross-
functional teams,'' where they could get all of the expertise 
of a corporation together on one team to solve a problem 
quickly. We need to be able to do that in the Department of 
Defense.
    When Toyota started the cross-functional teams, they ended 
up being able to design an automobile with 30 percent of the 
effort. The Department of Defense could do the same thing. 
You've heard both Dr. Hamre and Mr. Thomas talk about the slow, 
ponderous process in the Pentagon. In part, that's because we 
are dominated by those functional structures, the boundaries 
between them are very rigid, and what we need to do is to adopt 
more modern organizational practices, mirror what's been done 
in business to create teams that are focused on mission areas.
    Senator Reed. Thank you very much.
    Thank you, gentlemen.
    Dr. Hamre. Could I just react to say one thing, though? So 
much of the rigidity in our system is really driven because of 
the way we get money from the Congress. I mean, it comes in in 
these buckets. We have to stay inside those buckets. People 
have to be advocates for those buckets. That is the--that's the 
structure that's, frankly, locking us in. You know, we do two 
things very well: win wars and get money from Congress. And to 
get money from Congress, we are very dutiful about taking your 
direction. We're going to have to tackle that problem.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Senator McCain. Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    I understand that the Goldwater-Nichols Act--it was the 
product of years of deliberation, and today we're hearing you 
talk about a holistic approach, we're hearing about the dangers 
of hasty reform or misguided actions. Is there anything that 
you think Congress can do immediately? Are there small changes 
that we can make? Or do you propose that more holistic, big 
approach? And are we able to do that? You know, there's a sense 
of urgency out there. We just heard that there's a slow, 
ponderous process in the Pentagon. How do we get by that? Can 
we do it by taking some incremental steps there? And, if so, 
what would you all suggest?
    Dr. Locher.
    Mr. Locher. Well, I don't think there's--if you really want 
to see a seed--if this committee wants to transform the 
Department of Defense from a 20th century organization to a 
21st century organization, it's going to take--have to take 
that holistic approach and work very carefully through the 
issues. That does not mean that, as part of this process, you 
won't identify ideas in the beginning that are clearly needed. 
And actually, during Goldwater-Nichols, there were four or five 
provisions that were passed early on, at the insistence of the 
House, focused on the Joint Chiefs of Staff organization, where 
enough study had been done by the two committees to see that 
those ideas really made sense. But, the larger reforms are 
going to be quite difficult.
    My view is that the work that this committee will have to 
do will be more difficult than the work that was done as part 
of Goldwater-Nichols, because lots of the things, such as the 
cultural impediments in the Department of Defense, take a long 
time to really understand and figure out how to get over them. 
But, there could be a number of things that could be acted upon 
quickly because they become so obvious that they would be 
useful.
    Dr. Hamre. Ma'am, I would--two things. I think the--one of 
the greatest things that needs to be done is to rationalize 
DOPMA, the Defense Officer Personnel Management Act, and 
reconcile it with joint duty. But, I don't think that could be 
done by a committee. I think you should create a task force 
that supports this, gives you some recommendations. It's very 
elaborate how personnel management is conducted and what it 
does to patterns of officer recruiting and retention and all 
that. So, I think you should have a--create a commission that 
helps you with that.
    The one thing I would ask you to focus this next year on is 
the relationship of the Joint Staff and the unified combatant 
commands. Overwhelmingly, that's going to be the--where you'll 
get the biggest bang for the buck. It's the biggest force--
biggest factor that's going to make big structural changes in 
the Department. And that's something that you could easily get 
your arms around in one year.
    Senator Fischer. Thank you.
    Mr. Thomas.
    Mr. Thomas. I would just second that and that I think it is 
really about the role of the Chairman and the Joint Staff that 
might be the most discrete, but all of these issues really are 
intertwined. But, there are several things. One is improving 
the training of officers who are going to serve on the Joint 
Staff, in terms of their ability to do strategic and 
operational planning. The other is really the role of the 
Chairman, and considering perhaps placing him into the chain of 
command and, at the same time, rethinking his role as principal 
military advisor to the President, and how that could evolve in 
the future.
    Senator Fischer. Okay, thank you.
    You also spoke of strategy and planning and a--the weak 
civilian leadership, yet--how successful can the Department be, 
when much of the strategic direction comes from active 
participation by that civilian leadership?
    Mr. Locher. Well, let me talk about that. I think that's a 
little bit of a challenge in the Department. Many professional 
organizations, whether they're medical, law, accounting, have a 
tendency to promote people based upon their technical 
competence. And for a long period of time, we've done that on 
the civilian side of the Department of Defense, that we have 
our greatest policy specialists who rise to the top of the 
organization. And for a long time, that was fine, but, as the 
world accelerated and the demands of leadership became greater, 
we ended up with a vulnerability. We're not, in the Department 
of Defense, preparing people well enough--civilians--for the 
leadership responsibilities they have. And that leads to lots 
of inefficiency, inability to produce quality products on time, 
inability to recruit, to mentor the next generation of leaders. 
And so, it's a topic that needs some attention, but would have 
to be a long-term process with all of the right incentives.
    Senator Fischer. Thank you very much.
    Thank you, Mr. Chairman.
    Senator McCain. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    And thank you all. I appreciate very much your giving us 
all this insight.
    As I look at the organization of the Department of Defense, 
I have a hard time figuring out who's in charge. And I would 
ask you all--I know the Department of Defense, Secretary at the 
top. I always--and you're right about all the generals that 
come--four-stars generals. We see very few below that level. 
But, I've always felt the Joint Chiefs of Staff, in my mind, 
before I knew the--what the chart looked like--the Joint Chiefs 
of Staff would have been representing, but working together to 
defend our country and make sure that we were--the homeland was 
safe, and then they would have answered directly to the 
Secretary of Defense for the responsibilities of each branch, 
seeing that they were coordinating. When you look at the chart, 
it's not that at all. The chart basically--the Joint Chiefs of 
Staff have no more input than the Department of Army, 
Department of Navy, Department of Air Force. It doesn't make 
any sense. I mean--so, I don't know how you get a decision 
being made, or how the Secretary is getting the information, 
when they're supposed to be thinking as all-in-one versus just 
individually. Is that the problem you all have been 
identifying? Or----
    Dr. Hamre. Well, yes, sir. Mr. Thomas had brought this up. 
You know, the hottest debates we had 30 years ago on the 
committee when they were deciding Goldwater-Nichols was this 
question about creating a general staff. And there was great 
fear----
    Senator Manchin. Joint--you're talking about the Joints.
    Dr. Hamre. The Joint Staff evolving into a general staff 
like----
    Senator Manchin. I gotcha.
    Dr. Hamre.--the Bundeswehr used to have, you know, where 
there was a dedicated cadre of staff officers that ran----
    Senator Manchin. Okay.
    Dr. Hamre.--you know, the Ministry. And there was great 
fear that we would do that. And the reason you see the 
structure of Goldwater-Nichols today was, in no small part, 
because of that fear of the general staff. And part of it was 
parochial, to be honest. I think there was a fear on the part 
of the Navy and the Marine Corps that the Army would dominate 
the--a general staff, as it did in Germany. And so, it was kind 
of a backdrop argument why we shouldn't have a general staff. 
But, we have always been deeply ambivalent about having a very 
strong uniformed body in Washington, because--look, the average 
Secretary of Defense serves 26 months; the Deputy Secretary, 
about 22 months.
    Senator Manchin. Who's the most powerful after the 
Secretary of Defense? What--which layer does it go to?
    Dr. Hamre. Well, I mean, it's--when--if it's a matter of 
resource allocation, it's the service secretaries and the 
service chiefs. Service chiefs are, by far, the most important 
people in the building when it comes to physical things, real 
things----
    Senator Manchin. Okay.
    Dr. Hamre.--people, equipment, training, et cetera. Service 
chiefs are all-powerful. When it comes to operations in the 
field, they're not in the game. That's--it's the Secretary to 
the unified commander, actually, even though the unified 
commander isn't doing much anymore, to a task force. So, we've 
got two different channels where power is exercised, but it 
only comes together at the Secretary. And, honestly, you know, 
every one of us that's served in public life were accountable 
to the people--the American public through the chain of command 
through the President. So, I don't think that part is bad. But, 
what's--where we get clogged up is when we have ambiguous 
command and ambiguous----
    Senator Manchin. I've got one final question. Time is 
precious here. I want to ask all three of you this. And, Mr. 
Locher, you can start, and then Mr. Thomas, and, Mr. Hamre, you 
finish up.
    Do you all believe there's enough money in the defense 
budget to defend our country to continue to be the superpower 
of the world? Do you believe there's enough money right now--I 
heard a little bit--I need an--your thoughts on that.
    Mr. Locher. You know, I--this is not an area of my 
expertise currently. I've not been involved in the defense 
budget. I do think that there are lots of improvements in 
effectiveness that'll lead to considerable efficiency, which 
would free up more money----
    Senator Manchin. Well, you know our budget, in the 600 
range, versus the rest of the emerging world, if you will----
    Mr. Locher. I think my--the--my two colleagues here are 
better----
    Senator Manchin. Okay.
    Mr. Locher.--able to answer this question for you, Senator.
    Senator Manchin. Thank you.
    Mr. Thomas, real quick, and then Mr. Hamre.
    Mr. Thomas. Senator, if I could just comment on your first 
question and just maybe add--very quickly--and then add--and 
address the funding question.
    I think----
    Senator McCain. If we need additional time, please go 
ahead. This is an important line of questioning. Go ahead.
    Senator Manchin. Thank you.
    Mr. Thomas. Thank you very much, Chairman.
    The way we do command and control in the American military 
is exceptional. It is unlike the command and control for any 
other country in the world. And we have had a tension, since 
the founding of the Republic, between a Jeffersonian aversion 
to a--the concentration of power in any military officer versus 
the Hamiltonian impulse toward centralization and 
effectiveness. And I think that's really what we're struggling 
with today, is that, if anything, we understand that either 
extreme is going too far, but where we are on that pendulum 
swing maybe is too far in the Jeffersonian direction today. And 
I think if we're frustrated with how much--the Byzantine 
coordination process, and everyone has to concur, and you can't 
figure out, on the process, who's responsible for what--those 
are all symptoms of that. And so, I think that that's something 
we would consider. And I think that really gets to this 
fundamental point of thinking about the role of the Chairman. 
Is he or is he not in the chain of command? And should we have 
a general staff? And it's a part of the issue.
    With respect to funding, I think that our funding today is 
inadequate, given our level of strategic appetite, that, for 
all the things we want to do in the world and that we perhaps 
are required to do in the world, we simply don't have the 
resources to do it all. And I think the other part of this 
problem, again, is that there's a lack of global 
prioritization, there's a lack of an ability to determine where 
we're going to take risks--below the level of the Secretary.
    Senator Manchin. Mr. Hamre.
    Senator McCain. Does that respond, Mr. Thomas, to Senator 
Manchin's question about sufficient funding?
    Mr. Thomas. I'm sorry, Mr. Chairman?
    Senator McCain. One of Senator Manchin's questions was, Do 
you believe there is sufficient funding for defense?
    Mr. Thomas. No, sir, I do not. I think that--I think we are 
underfunded, given our strategic appetite and what we want to 
accomplish. I think improvements in organization could help us 
more efficiently allocate resources across the Department, but 
reorganization is no substitute for adequate funding for 
defense.
    Senator Manchin. Gotcha.
    Mr. Hamre.
    Dr. Hamre. Sir, we have too small a fighting force, and 
we've got too big a supporting force, and we have inefficient 
supporting--I personally think we can live with the budget that 
you've outlined if we were to do fundamental changes in how we 
support this force.
    I'll give you just a little example. You go to the 
headquarters that are operating and supporting satellites for 
the United States Government. I won't say--I'll just say the 
Air Force.
    Senator Manchin. Yes.
    Dr. Hamre. They'll have 5- and 6- and 700 people in that 
office. If you go to a commercial satellite operating company, 
they're going to have 10. I mean, the scale is so off. So, I 
mean, we have so much we could do by becoming more efficient. I 
think that there are--I think it's the case. There are more 
people in the Army with their fingers on the keyboard every day 
than on a trigger. This is what has to change. We can live with 
the money you've given us if we can make real changes.
    Senator Manchin. Thank you, Mr. Chairman.
    Senator McCain. Senator Rounds.
    Senator Rounds. Thank you, Mr. Chairman.
    In listening to the testimony of all three of you, there 
seems to be a common thread. And that is, number one--and I 
would ask your comment--Goldwater-Nichols did not design the 
Pentagon to fix itself, but, rather, expected an outside entity 
to provide that. At the same time, I think the suggestion by 
Mr. Thomas that the Senate having the opportunity to fix and 
then laying out the challenges you find within the Pentagon, it 
is slow to adapt, it is slow to respond. It has an archaic 
system, which, basically, feeds upon itself. It sounds a lot 
like the United States Senate, in many ways. Would you care to 
comment, in terms of: Should we be looking at--in terms of how 
we fix, or if we fix--how do we put together a system that may 
very well have the ability to make changes within itself to 
keep up with an ever-changing environment?
    Mr. Locher. Senator, if I might start on that topic.
    At the time of Goldwater-Nichols, there was a great 
interest in having the Department of Defense renew itself. You 
know, the Defense Business Board was created, and it generated 
some ideas for changes that need to occur. But, all large 
organizations, even in the business world, have a great 
difficulty in reforming themselves. Often, a leader in a 
business sees that things are not working well, but his 
institution is very interested in maintaining the status quo, 
and so they often go to an outside consulting firm, where they 
can get a fresh perspective. And the Department of Defense is a 
large organization. It's overwhelmed with its day-to-day 
responsibilities. It's hard for the senior leadership to find 
time to take--to look at these issues in the depth that are 
required. And so, I think the Congress, the two Armed Services 
Committees are always going to have play a role, in terms of 
thinking the--about the changes that will have to occur in the 
Defense Department next.
    You know, in addition to doing Goldwater-Nichols, the 
Congress also passed the Cohen-Nunn Amendment that created the 
U.S. Special Operations Command, another piece of legislation 
that's been highly successful, and it was done over the 
opposition of the Department of Defense.
    Dr. Hamre. A friend of mine once said, ``A Candlemaker will 
never invent electricity.'' And so, you're going to have to 
create a reform impetus from outside of the system. This is 
what corporations do. I mean, it--reform comes from cuts. Cuts 
don't lead to reform. I mean, you--or cuts lead to reform. You 
don't get savings by starting with a reform agenda. You have to 
just impose some changes. And I--this is where I think you have 
to do it, if possible, in partnership with the Secretary. I 
mean, the two of you have the same goal right now. And trying 
to find a way where you can--in this--you're ahead. You've got 
1 year where you can make some very large changes. I think 
there's real opportunities here.
    Mr. Thomas. I would agree with that point, that one of the 
things, thinking back to the history of Goldwater-Nichols, was 
the staunch opposition, not only of the services, but the 
Secretary of Defense at the time, Casper Weinberger. And I 
think you have an opportunity to establish that dialogue today, 
and perhaps a partnership to address some of these problems. 
But, it is absolutely right that the organization simply cannot 
reform itself, that there are too many conflicting interests 
and priorities and parochial interests that just can't be 
overcome from within. They're going to have to be addressed 
from an external source.
    I think, as much as the Department resisted Goldwater-
Nichols 30 years ago, that now has become the status quo in a 
lot of ways. And I think, actually, there would be strong 
defense for maintaining many of the edifices and processes that 
it created. And so, we'll have a--the same sort of tension that 
existed then, today. But, one way I think that could be 
ameliorated is by early dialogue with the Secretary.
    Senator Rounds. The cyber threat seems to be all-
encompassing, in terms of where it hits. How do you begin the 
process of looking at a system that includes cyber? And where 
do you put in at? Where in the system does cyber fit when we 
talk about redoing or revamping the Pentagon operations?
    Dr. Hamre. Well, I have--sir, I have my own personal view, 
here, which is not--is rather different. In my view, you've got 
two separate, parallel staffs that work for the Secretary of 
Defense. We've got the Joint Staff--I mean, they report through 
the Chairman, but the Joint Staff works for the Secretary, as 
does OSD. OSD's C-cubed part is weak. I think the--that the J6, 
you know, ought to become the direct guy watching over cyber 
and all C-cubed stuff for the Secretary. And personally, I 
believe that we stood--should migrate towards Title--take Title 
10 authority away when it comes to command-and-control systems, 
from the services. We're going to have to do that on a 
centralized basis. It'll take a long time to get there, but 
we're never going to get interoperability and we're never going 
to get an efficient system to protect cyber--cyber defenses 
with this very, very fractured landscape that we have. It's the 
only area that I would change Title 10.
    Senator Rounds. Thank you, Mr. Chairman.
    Senator McCain. Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman.
    I'd just like to briefly say I was with the sailors of the 
USS Kentucky this weekend. They passed on their best wishes to 
the Chairman and Ranking Member. And you would be very proud of 
the extraordinary job they're doing.
    Senator McCain. The sailors, to Senator Reed?
    Senator Donnelly. He's from Rhode Island. He's seen a 
sailboat every now and then.
    Senator Reed. Submarines.
    [Laughter.]
    Senator Donnelly. Dr. Hamre, you gave us an example of 
where you thought you could see significant change. Do you have 
another example or two that you can give us? And then the rest 
of the panel, as well.
    Dr. Hamre. Yeah, this is a real pet rock of mine, but our--
the way we--we spend over a billion dollars a year on security 
clearances. Now, let me just tell you, this is the only system 
in the world where the spy fills out his own form, and then we 
give it to a GS7 to try to figure out if he lied or not. This 
is the dumbest system in the world that we have. We spend a 
billion dollars on it. You could easily ask somebody to fill 
out a 1040EZ security form, where you put down your name, your 
Social Security number, and your mother's maiden name, and I 
can generate a dossier on you for $25 that's better than 
anything an investigator's going to come up with. I could save 
you $700 million tomorrow, and give you a better security 
system.
    Senator Donnelly. And do you have a second one?
    Dr. Hamre. Yeah, I--we have to consolidate DLA [Defense 
Logistics Agency] and the--and TRANSCOM [Transportation 
Command]. I mean, we--it doesn't make any sense to have 
separate transportation function and warehousing function for 
the Defense Department. I mean, that has to change. There--I'd 
be glad to come up to your office----
    Senator Donnelly. That would----
    Dr. Hamre.--and bore you----
    Senator Donnelly.--be terrific.
    Dr. Hamre.--to death.
    Senator Donnelly. I'd enjoy that.
    Mr. Locher?
    Mr. Locher. What I'd like to talk about is the bureaucratic 
bloat that has occurred in the headquarters--in the Washington 
headquarters of the Department of Defense. As you may know, the 
workload in the Pentagon is crushing. People are working as 
hard as they possibly can, with incredible dedication. When I 
was the ASD SO/LIC [Assistant Secretary of Defense for Special 
Operations on Low-Intensity Conflicts], some of my people were 
working so hard that I actually had to limit the amount of time 
that they could come to work, because they were burning 
themselves out completely.
    Now, we've added more manpower to try to make this system 
work. But, if we went to sort of modern practices, things that 
have been proven in business, these horizontal process teams, 
we could be incredibly more efficient. We could serve the 
Secretary and the Deputy Secretary. We could have integrated 
decision packages sent up to them. And we could do it with a 
lot fewer people that we're--than we're currently using.
    One of the things I had mentioned is, we have two 
headquarters staffs, at the top of the Department of the Army 
and in the Air Force, and three in the Navy. That's a holdover 
from World War II. They ought to be integrated. The Secretary 
and the Chief ought to have----
    Senator Donnelly. Great. Thank you.
    Mr. Thomas?
    Mr. Thomas. The Department of Defense is a lot better at 
adding new functions and organizations over time than it has 
been in abolishing old ones that may not be as relevant in the 
world we're living in. That's for sure.
    I think headquarters reductions across the board, starting 
at the very top, with the Office of the Secretary of Defense 
and the Joint Staff, as well as in the service staffs and the 
combatant commands, would not just be, again, a cost savings, 
but could increase the effectiveness of those organizations and 
their agility. Large staffs lead to overcoordination of a lot 
of issues.
    Senator Donnelly. If--I'll let you finish, but I'm running 
out of time, so I wanted to ask you one other thing. One of the 
things we do at Crane Naval Warfare Center in Indiana is try to 
figure out how to do some commonality for the Navy, the Air 
Force, the Army so that, instead of three different stovepipes 
going up, that they work together on one project, one type of 
weapon, one type of process. Does this seem to be a path that 
makes sense to all of you?
    Mr. Locher?
    Mr. Locher. I would agree. You know, this--the 21st century 
is the century of collaboration, that we need to be able to 
work across organizational boundaries. And the work that you're 
talking about being done across the three services is exactly 
what we need to do. The problems we face are so complex that we 
need lots of expertise that comes from different functional 
areas. And so, they need to figure out how they are going to 
collaborate in highly effective ways.
    Senator Donnelly. Thank you.
    Mr. Thomas, I had cut you off when you were finishing your 
answer.
    Mr. Thomas. Just on that last point, I think we need to 
empower the services more to make some of those decisions. I 
think sometimes we impose joint solutions across the services 
in areas where it may not make sense, because the issues are 
very complicated. I think when services come together and 
decide they're going to design a common weapon system or a 
common airframe, that has led to some good results. I think 
when we try to impose it and say we will have a one-size-fits-
all solution for our next combat aircraft or for a weapon, 
sometimes the results have been disastrous, because they just 
layer more and more requirements on a system that's 
overburdened and ends up being behind on schedule, over on 
cost, and doesn't perform as well as we'd like for any of the 
services.
    Senator Donnelly. Thank you, Mr. Chairman.
    Senator McCain. Senator Tillis.
    Senator Tillis. Thank you, Mr. Chairman.
    Gentlemen, thank you for being here.
    Mr. Locher, I want to start with you. You've made 
references a couple of times to examples in the private sector 
that have worked. And I think you talked about Toyota. If you 
take a look at a lot of those private-sector transformations, 
they--the successful ones--and there have been many failures--
had a lot in common. They did have CEO commitment, they had the 
commitment of what would be the CEO, the board, and the senior 
management team saying, ``We're going to change this 
organization.'' Given what we've said about the separation 
issues that we have here, how do we actually apply that model? 
Unless there's a different operating construct and you have all 
the partners at the table, how are we going to be any different 
35 years from now than the recommendations that were made about 
35 years ago between the Packard Commission and the resulting 
legislation in Goldwater-Nichols?
    Mr. Locher. Well, you're correct. You--in successful 
reforms, you have to have a guiding coalition, a powerful 
guiding coalition. And, you know, at the time of Goldwater-
Nichols, most of the people in the Pentagon in senior positions 
were dead-set against it, and that's why it took the two Armed 
Services Committees so long to work their way through it to 
mandate these reforms.
    The suggestions of trying to work with the Department--and 
Senator Goldwater and Senator Nunn never gave up in trying to 
work with the Department of Defense--I think those are 
important ideas. But, this committee can form that powerful 
coalition. You can get people from outside of government, some 
business experts to join your efforts and provide a convincing 
case, even to people in the Department of Defense, that these 
ideas are things that do need to occur, would be beneficial for 
the Department. You know, as the committee develops a vision of 
what a future Department would look like, that could be useful, 
as well.
    Senator Tillis. Well, thank you. You know, we remember the 
stories of the $435 hammer and the $600 toilet seat, and the 
$7,000 coffeepot. And now we've got more generals in Europe 
than we have rifle commanders. We've got a lot of problems out 
there. And it's a big--going back to the private-sector models, 
it costs a lot of money to transform an organization. We're in 
a resource-constrained environment, where there almost 
invariably--if you look at Toyota, you look at GE, look at any 
of the major companies that truly transform and produce 
transformative results, they had to spend money to actually 
save money. And one of the ways they did that is, they 
identified so-called low-hanging fruit or quick hits to do 
that.
    Mr. Hamre, you talked about security clearances. Where do 
we look for opportunities to try and create the resources that 
we need if we're going to continue to be in a resource-
constrained environment to really accelerate the 
transformation? And, Mr. Hamre, I'll start with you, since 
you've already offered to do security clearances for $25 each.
    [Laughter.]
    Dr. Hamre. I offered to do the background investigation for 
$25 each.
    Senator Tillis. Okay. Fair enough.
    Dr. Hamre. That's--that would save three-quarters of a 
billion.
    We are very poor at real property maintenance. You know, we 
don't have a purple property book. You know, every bit of real 
property is owned by a military service. It's not a well--
they're not well managed, they're not well run. We could easily 
consolidate that and bring that under some broad-scale 
professional management. Property disposal--we've got a 450-
person property disposal operation, and they've got eBay. I 
mean, you know, we have 450 people who are going to work every 
day doing what eBay does. I mean, so we could easily be--there 
are changes all over we could do stuff like that. So--and that 
would save money almost right away.
    Senator Tillis. And how do you--and I was Speaker of the 
House down in North Carolina, and we ended up having a fiscal 
crisis. We had to find a way to save about $2 and a half 
billion or fix a deficit, by no means scale here. But, one of 
the things that we found is that we need to incentivize good 
behaviors for a lot of good people that are working in DOD. And 
we created this concept of ``finders, keepers.'' And the way it 
worked is that, if we found it, we kept it. If they found it, 
brought it to us, in terms of savings, things that could be 
reinvested, then we would reward them. I think one of the 
dangers that we'll have in this transformation is that we'll 
find waste, we'll say you can no--or inefficiencies, or we'll 
identify some productivity improvements. We sweep all that back 
for spending based on our priorities rather than looking at 
ways to incent good behavior and strategic investment to foster 
an ongoing process of transformation versus--let's say we get 
this right. And I believe Senator McCain is best suited to lead 
us in this job. But, if it's once and done, we'll be back here, 
in 10 years or 15 years or 20 years, lamenting the fact that it 
was a great--it was a great meeting, great recommendations, a 
few things got done, and we're no better off 25 years from now 
than we are today than we were 35 years from now. So, how do 
you--in terms of looking at the good things going on in the 
Department, how do you create a construct that actually has a 
lot of the best ideas, like came out of Toyota, like came out 
of GE, are rooted in the minds of people down in the trenches 
trying to do the jobs, knowing that there's a more efficient, 
better way to do it?
    And, Mr. Thomas, I'll start with you since I haven't asked 
you a question, and then we'll go to Mr. Locher if the Chair 
allows.
    Mr. Thomas. Thank you, Senator.
    I think you raise a good issue, in terms of looking across 
the Department for ways where we can find efficiencies. And 
this certainly is something that both, I think, the Secretary 
and the services are probably looking at on a constant basis. I 
mean, they've booked--both Secretary Gates and his successors 
made finding efficiencies a big part of their remit, in terms 
of trying to find some economies within the Department of 
Defense. But, I think we have to ask ourself, How effective or 
how well have we done, in terms of finding these efficiencies?
    Senator Tillis. Not well.
    Mr. Thomas. And I worry that, without really thinking 
through a reorganization, I'm skeptical that we're going to 
find that much, that I think you're going to have to actually 
take some bolder steps, in terms of reorganization. And those 
reorganizational steps, in turn, I really think should be 
driven by considerations of strategic and operational 
effectiveness first, not for efficiencies. I think, in the 
process, that they could generate some.
    Mr. Locher. Sir, your discussion of incentives is hugely 
important, because we need to build some new behavior, some new 
approaches, and so you need to be thinking, you know, What are 
the incentives we have now that are not serving us well? And 
what incentives do we need to create both for individuals and 
for organizations?
    And to give you an example, at the time of Goldwater-
Nichols, nobody--no military officer wanted to serve in a joint 
duty assignments. And--but, our most important staffs were the 
Joint Staff and the combatant command headquarters staffs. So, 
the Congress saw that as an intolerable situation, so they 
created incentives in the Joint Officer Personnel System for 
people to want to go to serve in joint assignments and to do so 
serving the joint need, not beholden to their service. And out 
of that, they built a joint culture which served as--very, very 
well.
    So, as we're--as the committee is thinking about how it's 
going to reform the Department of Defense, one of the things it 
needs to figure out are, What are the incentives that are 
producing dysfunctional behavior, and what incentives does the 
committee need to put in place that'll move us in the right 
direction?
    Senator Tillis. Thank you.
    Senator McCain. Senator Hirono.
    Senator Hirono. Thank you very much.
    And thank you, to the panel.
    Goldwater-Nichols, I understand, was a big change to how 
the Department of Defense operated. Correct? And you are the--
all of the--you panel members are looking to Congress to make 
the--a big change to how DOD operates, because you have said 
that the Pentagon cannot reform itself.
    Now, Goldwater-Nichols, you've said--testified that it was 
passed, over the objections of the defense--people from the 
Department of Defense and others. So, I'm wondering whether, in 
the time of Goldwater-Nichols passing and where we are now with 
this committee, are there some significant limitations on the 
ability of this committee to push through the kinds of 
significant changes that Goldwater-Nichols represented?
    Mr. Locher. My honest answer is, I don't see any 
limitations upon this committee. It--the Congress has the 
authority to provide for the rules and regulations of the 
military. And I think, at this point in time, this committee 
and its counterpart in the House are best prepared to take on 
the intellectual and political challenges of setting some new 
directions for the Department of Defense.
    Senator Hirono. I wonder about that, because, for example, 
on the issue of things such as base closures, it is really hard 
for us. Most of us have very significant military 
constituencies. And so, we are part of the environment of the--
I would say, the difficulties in moving us forward to modernize 
our military. So, BRAC [Base Realignment and Closure] is one 
example. You know, I have Pacific Command, which is a huge area 
of responsibility. So, we all have these constituencies that I 
think make it pretty challenging for us to remove ourselves 
from the priorities and the input from our military 
constituencies to move us forward. So, I think that--I don't 
know if that--that this situation is more pronounced now 
because of the complexities.
    So, I'm world wondering, from a realistic standpoint--yes, 
we can get to some of the low-hanging fruit, but the kind of 
wholesale, large changes that you all are recommending, I--if 
there are any suggestions on how we can move forward--do we 
create a commission, do we--you know, how do we move forward, 
knowing I--as I said, that we have our own huge military 
constituencies in Congress--as Members of Congress?
    Mr. Locher. Well, at the time of Goldwater-Nichols, you had 
very strong ties between members of the committee and the 
services. Almost everybody on the committee at that time had 
served in the military, many of them during World War II. And 
so, when the committee began the work, you had that pool of 
those service loyalties, and eventually that was overcome as 
the committee worked its way through the issues and came--
became convinced that there were fundamental changes that 
needed to be made. As it turns out, this is a good-government 
effort. And the committee was able to free itself up from its 
ties to the various services and look at this from a whole--
Department of Defense--a whole-of-Department-of-Defense 
perspective.
    Senator Hirono. Do the other two panel members want to 
chime in?
    Dr. Hamre. Well, just--I'd just say, there's no low-hanging 
fruit. I mean, everything's hard now. I mean----
    Senator Hirono. Yes
    Dr. Hamre.--we've had 15 years of picking low-hanging 
fruit. I mean, there is no low-hanging fruit. So, we now have 
to make hard choices.
    I just would argue, your best chance of finding meaningful 
changes is in the support side, not on the combat side. We've 
cut the combat force too deeply.
    Mr. Thomas. I would just add, in an era that sometimes is 
seen by American taxpayers and voters is overcharged 
politically, I can't think of a better bipartisan issue that 
Congress could be taking up right now. This is not one that 
divides cleanly along partisan lines. It's an issue where 
there's going to be acrimony, and there will be huge debates on 
lots of issues, and we would have disagreements amongst 
ourselves in terms of thinking through these organizational 
issues, but they're not going to break down along partisan 
lines. And I think that's a--both an opportunity for this 
committee and for the Congress as a whole, and I think it's 
something that would just do tremendous good.
    Senator Hirono. Usually an organization can move forward if 
there is a guiding overriding goal. So, for example, for our 
committee to move forward, what do you think should be a 
organizing goal? Would it be something as broad as the need to 
modernize our military, modernize DOD? Would that be a unifying 
goal for us to proceed under?
    Mr. Locher. Well, in his opening statement, the Chairman 
mentioned six guiding principles for this work. And I think 
that those provide, really, goals for the work of the 
committee. Some of that is, as you've mentioned, to modernize 
the management of the Department, but he listed some others, as 
well.
    Senator Hirono. Thank you. My time is up.
    Senator McCain. Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    In light of the increasing reliance and importance of the 
Reserve components and the National Guard, do you have any 
suggestions as to whether there ought to be additional 
reorganization changes that take account of their increasing 
significance in our force?
    Dr. Hamre. Well, it--I think we have to separate the 
National Guard from the Reserves. I mean, the National Guard, 
it's very hard because, of course, it's a federated--it's a 
Federal structure. I mean, they work for Governors, and then 
they're mobilized at a national level. So, there's no real way 
around that central dilemma. I mean, we've--what we've done is, 
we've create the National Guard Bureau, the--we have a four-
star Guard officer who now sits on the Joint Chiefs. I mean, I 
think that--I think we've captured about everything we can on 
the National Guard side.
    I think, on the Reserves--I think there's a deeper 
question, frankly, on the Reserves. And that is, for the last 
10 years, 12 years, we've fought wars where we wanted to 
minimize the number of soldiers' boots on the ground, and so we 
used contractors to provide support. Historically, the Reserve 
component was very heavy in doing that combat service support 
in theater. And we didn't use them, because we were afraid of 
having to make a military headcount.
    I think we have to sit down and so some fundamental 
thinking. If we're going to continue to fight wars like that, 
where we use contractors, you know, to augment and support the 
force in the field, we need to rethink what we're going to do 
with the Reserve component, with the Army and Air Force 
Reserves. The--you know, the Navy has a Reserve, but it isn't--
it's very different, you know.
    So, I mean, I think there is a--I think that's worthy of a 
real deep dive, actually, but I don't have a recommendation for 
you, though.
    Mr. Thomas. Senator, I might just add. I think there are 
some new opportunities for how we think about leveraging both 
the Guard and the Reserve components across the services. One 
issue we've talked about already this morning is cyber warfare. 
And this may be one where it may be very well suited for 
Reserve components, both in terms of how we tap expertise that 
comes from the private sector and where, in fact, they may be 
some of the key drivers in the areas of how we think about 
networks in the future.
    Another may be in terms of unmanned systems and unmanned 
system operation, where this can be done in a distributed 
fashion that you don't actually necessarily have to be at the 
point of attack.
    And lastly, I'd say we're now well over 40 years on from 
the Abrams Doctrine and coming out of our experience in Vietnam 
and how we thought employing the Guard and the Reserve, and 
this idea that--we wanted to actually make it very difficult to 
mobilize the Guard and Reserve to go to war. And we may want to 
go back and rethink some of that, in terms of making it easier 
to tap the resources of the Guard and the Reserve in the future 
for various military operations and activities.
    Senator Blumenthal. I couldn't agree more that the role of 
the Guard and Reserve--and I recognize that the National Guard, 
in peacetime, unless it's mobilized, is under the jurisdiction 
of State officials, but both the National Guard and Reserve 
reflect resources that are used increasingly without, 
necessarily, the kind of rethinking or deep dive that you've 
suggested be given to that role. And so, I'm hopeful that this 
conversation may lead, not necessarily to drastic changes, but 
at least to an appreciation for the tremendous resource that 
our National Guard and Reserve represent.
    And talking about outside contractors, just a last 
question. We haven't talked much about the acquisition process. 
And we probably don't have time, in this setting this morning, 
to reach any thorough recommendations, but I would just suggest 
that the size of contracting, the time that is taken for 
delivery of weapon systems--taking the Ohio replacement 
program, for example, a submarine that's going to be delivered 
well into the remainder of this century, and we're contracting 
for it now, using a process that many of us have found 
frustrating and disappointing, in some ways. I think there is a 
need to think about the Department of Defense as a major 
contractor and buyer and purchaser of both services and 
hardware in capital investments.
    So, thank you for your testimony this morning.
    Senator McCain. Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Senator McCain. I'd just like to announce to the committee, 
after Senator King, we will be adjourning, because we have a 
vote at 11:00.
    Senator Gillibrand.
    Senator Gillibrand. Mr. Thomas, in the open letter on 
defense reform, you and your colleagues wrote, quote, ``It's 
time for a comprehensive modernization of the military 
compensation system. America's highly mobile youth have 
different expectations about compensation and attach different 
values to its various forms than did earlier generations.'' 
What types of compensation do you think will attract modern, 
tech-savvy youth to the military? And what lessons can we learn 
from the private sector about employing a modern workforce? And 
how does this affect National Guard and Reserve?
    Mr. Thomas. Thank you, Senator.
    I think one of the concerns--and maybe sometimes it's not 
so appreciated--is that it's only really a small minority of 
servicemen and women across the U.S. military that actually 
will end up collecting any sort of retirement pension for their 
service. It's really an all-or-nothing system today. And--
whereas most folks who serve in the U.S. military are not going 
to serve for 20-year careers, or longer, they're going to serve 
only for probably a handful of years. And so, just as we've 
done in the private sector, where we've moved away from defined 
pension schemes towards 401k's and contributory plans, perhaps 
this is something we should be thinking more about for the 
Department of Defense: more flexible compensation and benefits 
that people can take with them as they move, not only from the 
military out into the private sector, but increasingly as we 
think more creatively about how we can also at various points 
in--over the course of a career bring people from the private 
sector and from the civilian world into the military for 
various stints of time. This is something that's so foreign to 
our concept of how we think about the military. And I think 
this really impresses on the importance of the Guard and the 
Reserve and how people can move, over the course of a career, 
from serving on Active Duty to moving back into the Reserve 
Force, making taking a few years off while raising a child or 
pursuing educational opportunities, and then being able to 
return again at a later point.
    Senator Gillibrand. I thought your comment about cyber was 
really important, because we've been trying to have that 
discussion in this committee about using the Guard and Reserve 
to create cyber warriors, since they have expertise. They might 
work at Google during the day, but they have great abilities 
that could be used by the Department of Defense. And so, I 
think your testimony there is very interesting.
    Mr. Locher, one of the fears of opponents of Goldwater-
Nichols was that it would decrease civilian control of the 
military. What's your assessment on how the reforms have 
impacted civilian control of the military? And do you think we 
have achieved a good balance? And do you believe there is 
sufficient civilian oversight of the combatant commanders?
    Mr. Locher. Well, I don't--I--the fears of loss of civilian 
control were misstated. I think the--Goldwater-Nichols made it 
absolutely clear that the Secretary of Defense was in control 
of the Department of Defense. In the past, you know, the 
Congress had weakened the Secretary, in part for its own 
interest in the Department, but now I think the Secretary's 
role is absolute in the Department, and we do have effective 
civilian control.
    At the time of Goldwater-Nichols, the attention of the 
Congress, in terms of confirming officers, was focused on the 
service chiefs. And we ended up putting much more emphasis on 
the combatant commanders, because those are the people on the 
front line who are--who could actually get the United States 
involved in some action in their various regions. And so, I 
think that having the combatant commanders work for the 
Secretary of Defense and having those efforts to review their 
contingency plans by civilian officials, all of those have 
helped to provide for effective civilian control of those 
operational commands.
    Senator Gillibrand. You also said that the Pentagon's 
change-resistant culture represents its greatest organizational 
weakness. Do you think that's still true today?
    Mr. Locher. Absolutely. You know, we've gone 30 years 
without major changes in the Department of Defense at a time in 
which the world has changed tremendously. Organizational 
practice has changed in lots of private organizations. We've 
not seen that mirrored in the Department of Defense. And all 
sorts of inefficiencies have come from that.
    Senator Gillibrand. Where do you see the greatest overlap 
and redundancy now in our current system?
    Mr. Locher. Well, I think the greatest overlap and 
redundancy is in the headquarters of the military departments, 
where we have a service secretariat and a military headquarters 
staff. They have one common mission. And I think we--lots of 
manpower is wasted there.
    There has also been some concern about--between the Office 
of the Secretary of Defense and the Joint Staff, whether there 
are functions there that are being performed by both 
organizations that could either be eliminated in one of those 
two offices, or reduced. And so, I think that's another 
question for examination.
    Senator Gillibrand. Thank you.
    Thank you, Mr. Chairman.
    Senator McCain. Senator King.
    Senator King. Dr. Hamre--if you fellows also want to chime 
in on this--a lot of people talking about national security 
today are talking about whole-of-government approaches to 
dealing with some of these issues. Do we need to rethink or 
think about how better to coordinate the activities and work of 
the Department of Defense, Department of State, intelligence 
agencies? Is there duplication, overlap, inefficiency in trying 
to do a whole-of-government approach with the combatant-
commander structure?
    Mr. Locher. Sir, we--this is--we--this is a very tough 
problem, because it's a constitutional problem. The Congress 
oversees the branches--the Departments of the executive branch. 
But, it has no responsibility to oversee the coordination of 
them. That's the President's responsibility.
    Senator King. Right. That's the Commander-in-Chief.
    Dr. Hamre. Commander-in-Chief. And so, you're dealing with 
the central ambiguity of the Constitution. The President 
chooses how he wants to organize and coordinate them. Now, I 
think there are things that could be done, especially as we 
think about transitions of government. For example, I think we 
should be--when you come to a seam in the government like this, 
we should be strengthening the executive secretariats. That's a 
case where the Defense Department could make a contribution--
the executive secretariat's like the lymphatic system that 
parallels the blood system, you know, in the body. And we put 
military officers with senior elected officials--or appointed 
officials. And it gets the--the government functions, even when 
the new people that are coming in don't know how it works and 
the people who are leaving have lost interest. You know, and so 
you can at least have--you can do some things like that. But, 
it's a very hard problem to solve.
    Senator King. Mr. Locher, do you have comments?
    Mr. Locher. I do. This is an area that I spent 6 years 
working on, trying to produce a whole-of-government effort. 
Today, national security missions require the expertise and 
capacities of many, many departments. And right now, the only 
person who can integrate all of that is the President. And it--
that's not possible for him to do. He has a small National 
Security Council staff, and it's been drawn into management of 
day-to-day issues, and it's completely overwhelmed. So, we need 
to figure out a different system for integrating all of this 
capacity across the government.
    Now, the--inside the Executive Office of the President, 
there's no oversight by the Congress of that, but there are 
other things that could be done. The Office of Management and 
Budget is inside the Executive Office of the President, but it 
is overseen by the Congress, and three of its officials are 
confirmed by the Senate.
    Senator King. But, the--there's a contrary problem, where 
if you concentrate all power in the White House, you end up 
neutering the State Department and the Secretary of Defense, 
and everything gets--the calls all come from the National 
Security Council. So, I take it there's a tension there.
    Mr. Locher. Well, you want the Departments of State and 
Defense to provide their expertise. You don't want that 
duplicated up at the National Security Council level. But, all 
of that has to be integrated some way, and it's, you know, sort 
of the integration we did in the Department of Defense at the 
time of Goldwater-Nichols. We don't have mechanisms for doing 
that. It would require some new legislation. But, right now, 
our ability to pull together our government to tackle these 
tasks is very, very poor, and something will have to be done 
about it.
    Senator King. That question is, Is it legislative or is it 
presidential management and leadership?
    Mr. Locher. Well, there's a lot that the President could do 
within his own authority. You know, we have no executive order 
for the national security system. The National Security 
Advisor, there's no presidential directive for that. You don't 
have any guidance from the President to the departments and 
agencies as they put together their budgets. There are lots of 
things that could be done, but there's not much capacity for 
doing that. But, there are also some things that will require 
legislation to enable the President to delegate his authority 
to lesser officials.
    Senator King. I'm running out of time, but I'm very 
interested in this issue. And, to the extent you could supply 
written comments for the record, giving us some suggestions as 
to how we can tackle this issue.
    [The information referred to follows:]

    Dr. Hamre. We do need to rethink how to better coordinate the work 
of the various departments of the Executive Branch. I personally think 
there is not much duplication, but there are major gaps and lost 
opportunities because we fail to coordinate appropriately.
    But there is a larger issue here that merits our reflection. The 
interagency process in foreign policy sits right on top of a fault line 
in American constitutional governance. There is no question that the 
Congress has a right to oversee the work of cabinet departments. The 
senior leadership requires Senate confirmation. The Congress 
appropriates annual funding for the department. There is no question of 
Congress's right here.
    At the same time, the President has a constitutional right to 
privacy of his deliberations in his own office. Congress has to 
subpoena records. The President decides what and how he wants to 
cooperate. The Supreme Court has largely stated that these are 
``political questions'' and not subject to their jurisdiction.
    The question is this: is the interagency process within the 
National Security Council something that is privileged for the 
President and not subject to review, or does the Legislative Branch 
have inherent rights to change the interagency process as an extension 
of their right to oversee the work of cabinet departments?
    This is an unresolved question. I am personally skeptical that 
there are legislative solutions to this problem.
    There is no question that many of the problems the country has in 
foreign policy are more the caused by weak coordination of the 
Executive Branch departments. I should also note that the Congress is a 
major factor here because the committee jurisdiction reinforces the 
stove-piped approach of the executive branch departments.

    Senator King. Because I think this is going to be a major 
issue, going forward. We're not--we're no longer going to be 
engaged in strictly military conflicts, they're going to have 
other dimensions. So, I look forward----
    Yes, sir, you wanted to--thank you.
    Very quickly--and perhaps this is for the record--Packard 
Commission identified accountability as an essential element. 
The Chairman has really focused very diligently on acquisition. 
Are there other areas of the Defense Department that are 
lacking in accountability or that we should raise the 
accountability analysis level?
    Dr. Hamre. Well, I think the action of your committee to 
put the service chiefs back in the chain of command probably 
fixes the biggest one. I think that was really important.
    I think that probably looking at how we manage defense 
agencies--defense agencies are very large enterprises now, and 
I--there's not a great oversight system for the defense 
agencies, how they perform, accountability to the Secretary----
    Senator King. When you say ``defense agencies''----
    Dr. Hamre. This would be the Defense Logistics Agency, 
Defense Commissary Agency, the----
    Senator King. Okay.
    Dr. Hamre.--the Defense Finance and Accounting Service.
    Senator King. Principally civilian.
    Dr. Hamre. Yes, sir. They have a thin veneer of military, 
but they're largely civilian enterprises and big business. I 
mean, this is probably $85 to $90 billion every year. I mean, 
these are big operations. And there's not a great system of 
oversight for their activity.
    Senator King. Thank you.
    Thank you, Mr. Chairman.
    Senator McCain. Well, I thank the witnesses. It's been very 
helpful and certainly is, I think, an important basis for us 
moving forward. We will be making sure as many people as 
possible are able to see your written testimony. I think 
they're very comprehensive and very important. And we will be 
calling on you as we move forward.
    And I do take your advice seriously about working with the 
Secretary of Defense. We do have a bipartisan approach to these 
issues, as we have in--as the bill we are about to vote on. 
But, this has been, I think, very helpful to the committee. And 
it is our mission to try to get as much done, this coming year, 
as possible, recognizing that we aren't going to get everything 
done.
    But, I also might make what seem to be self-serving, but 
some of the things that we have in this legislation, such as 
retirement reform, such as many others, they're not necessarily 
low-hanging fruit, but they certainly are issues that we could 
address in a bipartisan fashion. For example, the retirement 
system. The predicate for that was laid by a committee--a 
commission that was appointed, that testified before this 
committee, that I don't think we would have acted if it hadn't 
been for that. So, it's also helpful to have your advice and 
counsel.
    Senator Reed, did you want----
    Senator Reed. No, Mr. Chairman. I just wanted to second 
your comments and thank the witnesses' extraordinary insights, 
and look forward to working with them.
    Senator McCain. This hearing is adjourned. Thank you.
    [Whereupon, at 10:53 a.m., the hearing was adjourned.]

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