    [Senate Hearing 114-658, Part 1]
    [From the U.S. Government Publishing Office]

                                                       S. Hrg. 114-658, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   BEFORE THE

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2943

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2017 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 1

                          THE FUTURE OF THE U.S. ARMY

                   U.S. PACIFIC COMMAND AND U.S. FORCES KOREA

                               AIR FORCE POSTURE

               U.S. STRATEGIC COMMAND, U.S. NORTHERN COMMAND, AND
                   U.S. SOUTHERN COMMAND PROGRAMS AND BUDGET

                                  NAVY POSTURE

                      DEPARTMENT OF DEFENSE BUDGET POSTURE

                               U.S. CYBER COMMAND

                                  ARMY POSTURE

                       F-35 JOINT STRIKE FIGHTER PROGRAM

                                   ----------

           FEBRUARY 11, 23; MARCH 3, 10, 15, 17; APRIL 5, 7, 26, 2016

             Printed for the use of the Committee on Armed Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

               Available via the World Wide Web: http://www.fdsys.gov

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                          COMMITTEE ON ARMED SERVICES

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

    Christian D. Brose, Staff Director
    Elizabeth L. King, Minority Staff
                 Director

                                      (ii)

                                C O N T E N T S

                                  ----------

                               February 11, 2016

                                                                       Page

    The Future of the U.S. Army......................................     1

    Ham, General Carter F., USA (RET.), Chairman, National Commission
      on the Future of the Army; Honorable Thomas R. Lamont, Vice
      Chairman, National Commission on the Future of the Army;
      General James D. Thurman, USA (Ret.), Commissioner, National
      Commission on the Future of the Army; and Sergeant Major of the
      Army Raymond F. Chandler III, USA (Ret.), Commissioner,
      National Commission on the Future of the Army..................     4

                               February 23, 2016

    U.S. Pacific Command and U.S. Forces Korea.......................    39

    Harris, Admiral Harry B., Jr., USN, Commander, United States
      Pacific Command................................................    44
    Scaparrotti, General Curtis M., USA, Commander, United Nations
      Command, Combined Forces Command, United States Forces Korea...    61

    Questions for the Record.........................................   106

                                 March 3, 2016

    Posture of the Department of the Air Force.......................   115

    James, Honorable Deborah Lee, Secretary of the Air Force.........   119
    Welsh, General Mark A., III, USAF, Chief of Staff of the Air
      Force..........................................................   138

                                 March 10, 2016

    U.S. Strategic Command, U.S. Northern Command, and U.S. Southern
      Command Programs and Budget....................................   169

    Haney, Admiral Cecil E. D., USN, Commander, U.S. Strategic
      Command........................................................   173
    Gortney, Admiral William E., USN, Commander, U.S. Northern
      Command and Commander, North American Aerospace Defense Command   184
    Tidd, Admiral Kurt W., USN, Commander, U.S. Southern Command.....   196

    Questions for the Record.........................................   247

                                 March 15, 2016

    Posture of the Department of the Navy............................   259

    Mabus, Honorable Raymond E., Jr., Secretary of the Navy..........   263
    Neller, General Robert B. USMC, Commandant of the Marine Corps...   281
    Richardson, Admiral John M., USN, Chief of Naval Operations......   290

    Questions for the Record.........................................   327

                                     (iii)

                                 March 17, 2016

    Department of Defense Budget Posture.............................   343

    Carter, Honorable Ashton B., Secretary of Defense; Accompanied by
      Honorable Michael J. McCord, Under Secretary of Defense
      (Comptroller) and Chief Financial Officer......................   348
    Dunford, General Joseph F., Jr., USMC, Chairman of the Joint
      Chiefs of Staff................................................   377

    Questions for the Record.........................................   425

                                 April 5, 2016

    U.S. Cyber Command...............................................   455

    Rogers, Admiral Michael S., USN, Commander, U.S. Cyber Command;
      Director, National Security Agency; Chief, Central Security
      Services.......................................................   458

    Questions for the Record.........................................   503

                                 April 7, 2016

    Posture of the Department of the Army............................   507

    Murphy, Honorable Patrick J., Acting Secretary of the Army.......   510
    Milley, General Mark A., USA, Chief of Staff of the Army.........   519

                                 April 26, 2016

    F-35 Joint Strike Fighter Program................................   561

    Kendall, Honorable Frank, III, Under Secretary of Defense for
      Acquisition, Technology, and Logistics.........................   565
    Bogdan, Lieutenant General Christopher C., USAF, Program
      Executive Officer for the F-35 Lightning II Joint Program......   567
    Gilmore, Honorable J. Michael, Ph.D., Director of Operational
      Test and Evaluation, Department of Defense.....................   577
    Sullivan, Michael J., Director of Acquisition and Sourcing
      Management, Government Accountability Office...................   592

    Questions for the Record.........................................   623

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                          THURSDAY, FEBRUARY 11, 2016

                                   U.S. Senate,
                           Committee on Armed Services,
                                                        Washington, DC.

                          THE FUTURE OF THE U.S. ARMY

        The committee met, pursuant to notice, at 9:53 a.m. in Room
    SD-G50, Dirksen Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Wicker, Ayotte, Fischer, Cotton, Ernst, Tillis, Lee,
    Reed, McCaskill, Manchin, Shaheen, Gillibrand, Blumenthal,
    Donnelly, Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. The Senate Armed Services Committee meets
    this morning to receive testimony on the findings and
    recommendations of the National Commission on the Future of the
    United States Army.
        I am pleased to welcome General Carter Ham, General James
    D. Thurman, the Honorable Thomas Lamont and Sergeant Major of
    the Army Raymond Chandler.
        Gentlemen, this committee is grateful to you for your many
    years of distinguished service and your leadership during the
    conduct of the National Commission's work. We are thankful for
    the comprehensive and timely report. Today, we hope to benefit
    from your recommendations.
        The focus of this hearing is our Army and our soldiers.
    Their mission is unequivocal. It is to fight and win our
    Nation's wars. As Army Chief of Staff General Mark Milley said
    eloquently, the Army's ``reason for being, our very reason for
    being, at the very core of what it means to have an Army is to
    win, and to win decisively, in ground combat against the
    enemies of our country so that American citizens can enjoy
    life, liberty, and the pursuit of happiness.''
        Through 15 years of war, our Army has been tested. Time and
    time again, our soldiers proved their commitment, courage, and
    determination. It is our duty to do our utmost to provide them
    with the support they need and deserve. That starts by
    recognizing that our Army is still at war.
        At this moment, 187,000 soldiers are deployed in 140
    locations around the globe. They're fighting terrorists and
    training our partners in Afghanistan and supporting the fight
    against ISIL, all the while defending South Korea and
    reassuring our allies in eastern Europe. Yet, as the demands on
    our Army continue to increase, our support for our soldiers has
    not kept pace. In short, our Army is confronting growing
    threats and increasing operational demands with shrinking and
    less-ready forces and aging equipment. By the end of the next
    fiscal year, the Army will be cut down to 450,000 Active Duty
    personnel soldiers, down from a wartime peak of 570,000. These
    budget-driven force reductions were decided before the rise of
    ISIL or Russia's invasion of Ukraine. As the Commission notes,
    a regular Army of 450,000 is the minimum sufficient force
    necessary. We must be clear that when we minimize our Army, we
    maximize the risk to our soldiers. Those risks will only grow
    worse if mindless sequestration cuts are allowed to return and
    the Army shrinks to 420,000 soldiers. On the present course,
    we're running the risk that, in a crisis, we'll have too few
    soldiers who will enter a fight without proper training or
    equipment.
        Given current operational demands, readiness must be the
    first priority of the Army. Yet, as our Army shrinks, readiness
    suffers. Just over one-third of the Army's Brigade Combat Teams
    are ready for deployment and decisive operations. I repeat,
    only just over one-third. The Army has no plan to return to
    full-spectrum readiness until 2021, at the very earliest. As
    the Commission's report makes clear, both the mission and the
    force are at risk.
        Meanwhile, the Army is woefully behind on modernization.
    The Army must modernize for the harsh realities of 21st century
    warfare. Our soldiers must be trained and equipped for an
    increasingly diverse and complex range of threats. They must be
    able to win against peers in highly lethal combined-arms
    maneuver, near-peer in hybrid warfare conditions, and
    determined unconventional insurgents. Yet, our Army is
    essentially organized and equipped as it was in the 1980s. The
    main difference is that it's smaller. In fact, many key
    enabling forces, like artillery, armored calvary, engineers,
    air defense, chemical, biological, radiological, and nuclear
    response, and theater transport have been reduced to levels
    that compromise the Army's ability to field campaign-quality
    forces. Put simply, our ground force is not in balance. We're
    not sized with the adequate capacity or with key capabilities
    to give our soldiers what they need to win decisively. Part of
    that is the legacy of the Army's acquisition record, which
    former Army Secretary McHugh said, quote, ``too often, a tale
    of failure, too many underperforming or canceled programs, too
    few successful fieldings of developmental designs, and far too
    many taxpayer dollars wasted.'' While we have struggled,
    adversaries such as Russia have been investing billions in
    modernizing their armies. The result is that America's
    capability advantage in ground combat weapons is not nearly as
    great as it once was.
        Another challenge to the Army's balance has been its
    failure to operate as a total force composed of the regular
    Army, the Guard, and the Reserve. Yet, while the Army is
    intended to operate as one force, the Commission identified
    major gaps, including a lack of focus on multi-component units,
    the absence of an integrated recruiting force, and the
    inability to manage pay and personnel across the entire Army
    with a single system. The Commission's recommendations for
    developing a total Army as well as those related to the
    critical issue of Army aviation are worthy of the committee's
    consideration.
        Our total Army needs a major change of direction. This will
    not be easy, but it's been done before. Army leaders like
    General Abrams transformed the Army before. They restored the
    discipline and morale of the force in the aftermath of the
    Vietnam War. They transitioned the Army to an All-Volunteer
    Force while revolutionizing training doctrine, and they built
    an Army that won the Cold War and removed Saddam Hussein from
    Kuwait. We need this kind of transformation again today,
    because, as the Commission has made clear, our Army is in
    trouble. The increasing velocity of instability, combined with
    continued reductions in defense spending, will inevitably lead
    to depleted readiness, chronic modernization problems, and
    deteriorating morale. We can and must do better.
        I'm grateful to the Commission for its important
    contribution to helping us find a better way forward.
        Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Well thank you very much Mr. Chairman. Thank
    you for holding this hearing. It's--very important, as you
    pointed out.
        After nearly 15 years of continuous operations, it's
    critical we take a step back and assess the current state of
    the regular Army, the Army National Guard, and the Army
    Reserve. As such, our witnesses this morning each bring a
    unique and valuable perspective on these issues. I look forward
    to their testimony and exploring in greater detail the
    recommendations that the National Commission on the Future of
    the Army has put forth for consideration.
        First, let me begin by thanking the commissioners as well
    as your staff. You've done an extraordinary job. Your hard
    work, your willingness to take on this challenge is deeply
    appreciated. The comprehensive study that you have produced is
    thorough and thoughtful. In particular, I applaud your efforts
    to reach out to all stakeholders, including senior leadership
    in the Department of Defense, leadership within the regular
    Army, the Army National Guard, the Army Reserve, numerous
    elected officials both in Washington and in the states, and,
    most importantly, soldiers currently serving in uniform. I
    think you were guided in those efforts very effectively by the
    Sergeant Major.
        Thank you, Sergeant Major.
        Thank you for the process, and thank you for the great
    effort.
        As the final Commission report illustrates, the Army is
    faced with a number of challenges and tough choices for the
    foreseeable future. The threats facing our Nation are not
    diminishing, and it underscores our need for a well-trained and
    well-resourced, properly equipped military force that can
    deploy at a moment's notice. The Army has made increasing
    readiness levels a top priority; however, in a constrained
    budget environment, augmenting funding for readiness often
    comes at the expense of other Army priorities, including
    investment in modernization and recapitalization. Furthermore,
    the problem is compounded by the fact the Army has had a poor
    track record with the modernization efforts, resulting in
    programs that have been truncated or canceled. I look forward
    to hearing from our witnesses on their thoughts on how the Army
    can continue to improve readiness, as well as your views on how
    the Army can improve its acquisition process.
        Another issue the Commission considered was the Aviation
    Restructure Initiative, or the ARI, and the transfer of all
    Apache helicopters in the Army National Guard to regular Army.
    The Commission's recommended allowing the Active component to
    retain 20 battalions of Apaches, each equipped with 24
    aircraft, while providing the Army National Guard with four
    battalions of Apaches, each equipped with 18 aircraft. In light
    of the vigorous debate the ARI proposal has generated in
    Congress and the importance to the Army, I look forward to
    hearing our witnesses particularly with respect to this issue.
        Finally, the Army continues to draw down its end strength,
    as the Chairman has pointed out. The final goal is 450,000 in
    the Active Army, 335,000 in the Army National Guard, and
    195,000 in the Army Reserve. The Commission noted this level of
    uniformed military personnel, again, as the Chairman pointed
    out, provides the Army a minimally sufficient capability and
    capacity across the range of near-term challenges. In light of
    the evolving security environment and unanticipated global
    challenges, I welcome your comments on whether you believe the
    U.S. Army can continue to meet its commitment with this Army--
    this size Army.
        Again, thank you, Mr. Chairman. Thank you, commissioners.
        Chairman McCain. I thank the witnesses. Whatever order you
    would like to begin, I think would be appropriate.
        General Ham, is that----

    JOINT STATEMENT OF GENERAL CARTER F. HAM, USA (RET.), CHAIRMAN,
    NATIONAL COMMISSION ON THE FUTURE OF THE ARMY; HONORABLE THOMAS
    R. LAMONT, VICE CHAIRMAN, NATIONAL COMMISSION ON THE FUTURE OF
     THE ARMY; GENERAL JAMES D. THURMAN, USA (RET.), COMMISSIONER,
      NATIONAL COMMISSION ON THE FUTURE OF THE ARMY; AND SERGEANT
        MAJOR OF THE ARMY RAYMOND F. CHANDLER III, USA (RET.),
      COMMISSIONER, NATIONAL COMMISSION ON THE FUTURE OF THE ARMY

        General Ham. Thanks, Mr. Chairman. Mr. Chairman and Senator
    Reed, with your indulgence, I think, with the agreement of my
    partners here, we'll just have one opening statement, and then
    go to questions.
        Chairman McCain. Thank you.
        General Ham. Sir, on behalf of all of the fellow
    commissioners and the great staff that support us, thank you
    all for inviting us to testify before the committee on a report
    on the future of the Army. I'd especially thank you, Mr.
    Chairman, for having appointed General J.D. Thurman to the
    Commission, and, Senator Reed, for having appointed Sergeant
    Major of the Army Ray Chandler. It will be no surprise to those
    on this committee that both General Thurman and Sergeant Major
    of the Army Chandler offered characteristically direct and
    forceful insights to the Commission.
        Chairman McCain. Not surprising.
        General Ham. No, sir.
        The committee and staff have already received the
    Commission's report, so I won't spend a lot of time addressing
    specific issues, but I would like to give you a sense of how we
    approached the task that you gave to us in the Fiscal Year 2015
    National Defense Authorization Act. The Commission made every
    effort to be inclusive, accessible, and transparent. We visited
    17 states, interacted with over 320 different Army units of all
    three components. We interacted with all 54 adjutants general
    and 33 governors. About 80 Members of Congress engaged with the
    Commission. We've met with all six geographic combatant
    commanders, many of their service component commands, and many
    of our most important allies and foreign partners. That's
    certainly only a very partial list. We tried to pay strict
    attention to the law that you passed creating the Commission.
    Importantly, our recommendations were required to be consistent
    with acceptable levels of national risk and, importantly,
    anticipated future resources. In other words, this was not an
    unbounded effort.
        The result is a set of 63 specific recommendations that we
    believe are well researched based on realistic assumptions and
    backed by solid data. We found that America's Army is the best
    in the world, and those who have chosen to serve make it so and
    deserve our full and continued support and appreciation. Yet,
    as indicated, our Army faces some significant challenges, many
    of them budget driven.
        From fiscal years 2010 to 2015, for example, overall
    defense spending declined seven percent, but Army funding
    declined 14 percent. On the two main issues before the
    Commission--force size and mix and the Apache transfer--the
    Commission found the following:
        An Army of 980,000 is the minimally sufficient force to
    meet current and anticipated missions at an acceptable level of
    national risk. Within that 980,000, as indicated, the
    Commission finds the regular Army of 450,000, the Army National
    Guard of 335,000, and the Army Reserve of 195,000 present the
    right mix of forces; but, again, the absolute minimum levels to
    meet America's national security objectives. The numbers do not
    tell the full story. The Army of 980,000 must be resourced so
    that it is trained, ready, postured, and modernized to meet the
    Nation's demands.
        It's important to remember the mandate that you gave us.
    You told us to size the force in light of the two previously
    mentioned considerations: risk and resources. Adjust either, or
    both, particularly the level of anticipated resourcing, and you
    would reasonably arrive at very different conclusions. In our
    assessment, an Army of 980,000 is the absolute minimum--a
    floor, not a ceiling.
        On the Apache question, the Commission recommends the Army
    maintain 24 fully manned Apache battalions, 20 in the regular
    Army and four in the Army National Guard. The Commission
    recommendation has advantages over the Aviation Restructure
    Initiative in both wartime capacity and surge capacity, and has
    the added benefit of reducing peacetime deployment stress, and
    we believe it will better promote integration of the regular
    Army and the Army National Guard. It comes at added cost. To
    offset the added costs of having four Apache battalions in the
    Guard, we make some suggestions with regard to potential cost
    offsets, including adding only two Black Hawk battalions to the
    National Guard instead of the four that are currently planned,
    and suggest considering slowing Black Hawk modernization.
        The report also contains several prominent themes based on
    the Commission's factfinding and analysis. We consider
    sustaining the All-Volunteer Force, vital to the future of the
    Nation. A return to a draft or other model of compulsory
    Military Service will not yield the quality Army the Nation
    requires. An All-Volunteer Force is expensive to recruit and
    retain. We believe doing so is the right choice.
        The Commission believes it is critically important to
    develop a true total-force culture. While the regular Army,
    Army National Guard, and Army Reserve are distinct, essential,
    and interdependent, they are meant to operate as one force,
    with their efforts fully integrated. The Commission found gaps
    in seams in the implementation of the total-force policy, and
    our report highlights some of those and offers some remedies.
        The Commission recommends funding at least at the fiscal
    year 2016 President's Budget level, which would provide, in our
    opinion, the Army the minimum resources necessary to meet its
    requirement at acceptable risk. Given the evolving strategic
    environment and the potential for growing instability, even
    this level of funding may prove inadequate in the future.
        Additionally, Army funding must be predictable. Successive
    years of budget uncertainty and continuing resolutions have had
    significant negative consequences for the Army. In the
    Commission's view, even with budgets at the President's Budget
    2016 level, the Army would still have some significant
    shortfalls in aviation, short-range air defense, and other
    capabilities that we address in the report.
        Mr. Chairman, Senator Reed, that's a brief rundown of what
    we found. We recognize that certainly not everyone will agree
    with our recommendations. Indeed, many have already voiced
    their disagreement. What I do hope, though--and I think I speak
    for the Commission--is that our report will contribute to the
    important debate that the Congress and the administration--I
    would argue, indeed, the Nation--must have to determine how
    America's Army should be sized, trained, modernized, and
    postured.
        With that, my fellow commissioners and I are prepared to
    answer your questions.
        [The prepared statement of General Ham follows:]

                    Prepared Statement by General Carter Ham
        Chairman McCain, Ranking Member Reed; on behalf of all my fellow
    commissioners thank you for inviting us to testify before the committee
    on our report on the future of the Army. We appreciate the opportunity
    discuss our findings and recommendations with the committee.
        The Committee and staff have already received the Commission's
    report, so I won't spend a lot of time addressing specific points. I
    would like to give you a sense of how comprehensive we were.
        The Commission made every effort to be inclusive, accessible, and
    transparent.
        We visited 17 states and interacted with:
          over 320 different Army units;
          all 54 adjutants general and 33 governors
          about 80 Members of Congress; and
          all six geographic combatant commands and many of our
    most important allies and foreign partners
        That is just a very partial list.
        I should also point out that we paid strict attention to the law
    you passed creating the Commission; you'll notice every chapter begins
    with a direct quote from the law as a way to frame the subsequent
    material.
        The result is a set of 63 specific recommendations that are
    unbiased, well researched, based on realistic assumptions, and backed
    by solid data. Importantly, our recommendations had to be consistent
    with ``acceptable levels of national risk'' and ``anticipated future
    resources.'' In other words, we were not unbounded in our work.
        What we found is that our Army is the best in the world. Those who
    wear the uniform deserve our gratitude every day.
        The Army faces severe challenges, most of them budget-driven. From
    fiscal years 2010-2015, overall defense funding declined 7 percent.
    Army funding declined 14 percent.
        On the two main issues before the Commission--force size and mix,
    and the Apache transfer--the Commission found the following.
        An Army of 980,000 is the minimally sufficient force to meet
    current and anticipated missions at an acceptable level of national
    risk. Within that 980,000, the Commission finds a Regular Army of
    450,000, an Army National Guard of 335,000, and an Army Reserve of
    195,000 represent the right mix of forces and, again, the absolute
    minimum levels to meet America's national security objectives.
        To fully understand this recommendation it is important to remember
    the mandate you gave us. We weren't asked to come up with an optimal
    force size based on the world situation and our best judgment. That
    would have been nice, but it would not have been realistic.
        Instead, we were asked to size the force in light of the two
    previously mentioned considerations--acceptable risk and anticipated
    resources. Adjust either or both and you can arrive at very different
    conclusions, and I'm sure you and the administration will have your own
    ideas on how to balance those considerations.
        However, in our assessment, an Army of 980,000 is the absolute
    minimum--a floor, not a ceiling.
        On the Apache question, the Commission recommends the Army maintain
    24 manned Apache battalions--20 in the Regular Army and four in the
    Army National Guard. The Commission recommendation has advantages over
    the Aviation Restructure Initiative in both wartime capacity and surge
    capacity, and will reduce peacetime deployment stress. It will also
    promote better integration of the Regular Army and National Guard.
        To offset the added cost of having four Apache battalions in the
    Guard, the Commission suggests the Army could add only two Black Hawk
    battalions to the Guard instead of the four currently planned, and slow
    Black Hawk modernization.
        The report also contains several prominent themes based on the
    Commission's fact-finding and analysis.
        First, the All-Volunteer Force is a national treasure. Since its
    inception, the quality and professionalism of the force has improved
    dramatically--but it is expensive. However, the Commission considers
    sustaining the All-Volunteer Force vital to the future of the nation.
    All budget and force management decisions must be made with this goal
    in mind.
        Second, the Commission believes it is critically important to
    develop a true ``one Army'' Total Force culture. While the Regular
    Army, Army National Guard, and Army Reserve are distinct, essential,
    and interdependent, they are meant to operate as one force--with their
    efforts fully integrated.
        The Commission found that gaps and seams exist in the
    implementation of the Total Force Policy. The report highlights some of
    those and offers remedies.
        For example, we recommend putting all Army marketing under one
    roof, fielding a consolidated pay and personnel system, and making
    changes to the existing 12304b authority that will make it easier for
    the Army to employ the Reserve components.
        Third, the Commission recommends funding at the president's fiscal
    year 2016 level, which would provide the Army with the minimum
    resources necessary to meet its requirements at acceptable risk. Given
    the strategic environment and potential for growing instability, even
    this funding level may prove inadequate.
        Furthermore, it should be understood that even with budgets at the
    PB16 level, the Army would still suffer from significant shortfalls, in
    aviation and short-range air defense as well as other capabilities we
    address in the report.
        That is a very brief rundown on what we found. Certainly, not
    everyone will agree with our recommendations. Indeed, many have already
    voiced their disagreement.
        What I do hope, though, is that our report will contribute to the
    important debate that the Congress and the Administration, indeed the
    Nation, must have to determine how America's Army should be sized,
    trained, modernized and postured.
        With that, we are prepared to answer your questions.

        Chairman McCain. Well, thank you very much. Thank--to the
    commissioners. We're very appreciative. This comes at a
    excellent time for us as we begin the markup for the 2017
    defense authorization bill.
        I guess I would like to start by saying: Obviously, end
    strength is only part of the answer, but, if you want to
    improve the missions and capabilities, end strength is a place
    to begin. Would--I think you would agree. We're now looking at
    a reduction for 2017 down to 420,000 Active component, as
    opposed to 450,000. What--I guess my first question is, how
    serious is that impact?
        General Ham. Mr. Chairman, in the Commission's work and in
    the analysis that we did, some of it in a classified realm--and
    I would certainly commend the classified annex to the members
    of the committee and to your staffs--it was our assessment that
    the regular Army force of 420,000 would be inadequate to meet
    the Nations' requirements at acceptable levels of risk.
        Chairman McCain. You were looking at the 2016 level of
    funding as a level that you think is barely acceptable, I guess
    is my interpretation. What if it's $17 billion less?
        General Ham. Sir, again, with any--any change to that--and
    we all--as you know, right now the Army is looking at budgets
    below the President's Budget for fiscal year 2016. We think
    that delta in funding just adds to the level of risk, makes it
    more difficult for the Army to sustain the levels of readiness
    that are required to meet the Nation's objectives, and further
    delay any effort to improve modernization.
        Chairman McCain. As you pointed out in your opening
    statement, as we lurch from one year to the next with total
    unpredictability as to the level of funding, no company or
    corporation could survive under that kind of uncertainty from--
    as they lurch from year to year. How harmful is that, not only
    for planning, but--help me out on morale and retention and
    readiness, this OCO idea, which none of us like, but seems to
    be the only way that we're able to fund--but the impact of the
    year-to-year uncertainty of the ability they're going to be
    able to carry out their missions.
        General Ham. Mr. Chairman, let me start, and, if you'll
    allow me, maybe turn to Sergeant Major of the Army Chandler.
        I think, in my view, the biggest impact of the budget
    uncertainty manifests itself particularly in the area of
    modernization, but we also--in our site visits around the Army,
    also heard numerous reports from soldiers, noncommissioned
    officers, and officers of their training and leader development
    plans that were disrupted because of the uncertainty in the
    budget. For example, some leader development courses that were
    canceled or postponed early in the fiscal year because of
    funding challenges. Particularly in the Reserve components, if
    a young noncommissioned officer who is either employed or
    perhaps a college student had made plans to attend a leader
    development course, and then that was suddenly canceled because
    of budget challenges, it may be a couple of years before that
    Reserve-component noncommissioned officer may find another
    opportunity to attend important leader development.
        Sergeant Major?
        Mr. Chandler. Thanks, sir.
        Mr. Chairman, you know, one of my great privileges is to be
    able to talk with soldiers. It's what I did as the Sergeant
    Major of the Army, it's what I was able to do in great part as
    part--a member of the Commission. I will tell you, I think that
    the risk to soldiers in the long-term impact on areas like
    leader development and retention are huge if we're not able to
    sustain a budget over a period of time. I'll give you a quick
    example.
        We had the opportunity to go to the National Training
    Center and speak with the 116th Brigade from a number of
    states, primarily Idaho. One of the commanders that we had an
    opportunity to speak with, he was very concerned about being
    able to retain his mid-grade noncommissioned officers and
    officers. The challenge was, if I'm--got to make a choice
    between going on an annual training event or, as they did, 60
    or 70 days of annual training in order to prepare for a NTC
    [National Training Center] rotation, if they weren't going to
    be utilized after that and deployed someplace, then the issue
    became, ``Why am I doing this? I've deployed several times over
    the past 14 or 15 years, and now being in a place where I'm
    spending 2 or 3 years ramping up for a keystone event, go to
    the National Training Center, and then not be deployed to go do
    something. Why do I need to continue to do this?''
        I think you'll see that, if we're not able to sustain
    adequate funding, leader development programs, and the
    opportunity to go and train and deploy, this will have a huge
    impact on the Army's ability to generate readiness and fight
    and defend our Nation's wars.
        Chairman McCain. General Thurman.
        General Thurman. Mr. Chairman, one of the things that I've
    observed with the lack of predictable funding has been not
    being able to sustain Combat Training Center rotations. The
    crown jewel of the Army to be able to conduct decisive land
    combat is at our training centers. There were cases over the
    past few years where rotations were canceled. That is not a
    good ideal, particularly when we've got formations that have to
    be trained for land combat. I just used my past experience in
    Korea. That situation is very volatile over there, and it
    requires ground forces that are properly trained for decisive
    land combat. This has got to be sustained.
        That was one of the things that I saw a I looked in--over
    the course of funding is--if we don't have predictable funding
    and cannot sustain readiness, particularly on the high end,
    then we've got an Army that's not properly trained.
        What I've learned over my experience, a soldier must have
    confidence in themselves, they must have confidence in their
    leadership, and they must have confidence in their equipment.
    That--and if they don't have that, and have the opportunity to
    train on that, then we're headed for something that is not good
    for the country.
        Thank you.
        Chairman McCain. Sir, did you want to answer?
        Mr. Lamont. Just very quickly. I want to point out, when we
    made reference to and benchmarked FYPB16 [Fiscal Year
    Presidential Budget], that was really informed by the QDR
    [Quarterly Defense Review] of 2014. The strategic environment,
    as we all know, has changed fairly dramatically since then.
    We're quite concerned with those levels, particularly as we go
    into 2017.
        Chairman McCain. Senator Reed.
        Senator Reed. Well, thank you very much, Mr. Chairman.
        Once again, gentlemen, thank you and your colleagues for
    your extraordinary service.
        Let me go back to the issue of the Army Restructuring
    Initiative, the helicopters. I think, General Ham, your
    comments and also the report suggested that one of the reasons
    that you think it--there should be Apaches in the National
    Guard is to help integrate Army aviation across the whole
    spectrum--Active forces, National Guard forces, Reserve forces.
    I--you might comment on that. Also, in terms of the location of
    these residual National Guard units, was there any
    consideration to ensuring they are closely colocated with
    Active forces so they have access to training ranges, to--you
    know, to the things you need to do to stay proficient and
    current? Would that be part of your recommendations, or would
    you consider making further recommendations?
        General Ham and----
        General Ham. Yeah, Senator Reed, thanks. If you'll allow me
    to begin, then I'll turn to General Thurman----
        Senator Reed. Yes, sir.
        General Ham.--who served on the Aviation Subcommittee.
        We looked at four criteria in evaluating a number of
    alternatives for--with regard to the Apache issue. We looked,
    first and foremost, at wartime sufficiency. What was the proper
    structure to meet the stated wartime demands? That's
    articulated in the classified annex. We also looked for what
    alternative offered the best surge capability for unforeseen
    circumstances. Thirdly, we did look at, How do we best support
    the total force policy or the integration of the components?
    Lastly, importantly, looked at cost. In all of those, we came
    to the conclusion that we have stated. Cost, by the way, is
    one--is the reason why we recommend--while the battalions in
    the National Guard----
        Senator Reed. Right.
        General Ham.--be fully manned, they be equipped with only
    18, vice 24, aircraft, purely as a matter of cost. The National
    Guard Bureau and the Director of the Army National Guard told
    us that they are quite familiar and comfortable with cross-
    leveling units when there is a need for operational employment.
        Before I turn to General Thurman, Senator Reed, just--we
    did not look specifically at where those battalions might be
    located. Certainly in the recommendation that addresses multi-
    component units, which we think is important, it does work
    best, in our opinion, when those units are colocated--regular
    Army, Army National Guard, and Army Reserve.
        General Thurman?
        Senator Reed. General Thurman?
        General Thurman. Sir, Senator Reed, just to add to that.
    One of the things that I just would recommend is, we went into
    extensive analysis on wartime capacity that's in that
    classified annex that General Ham referred to. Bottom line,
    there's--if you put all of the AH-64 aircraft in the regular
    Army, you have no strategic depth to reach back to. That was a
    big driver.
        Here's the other fact, is--our aviation units today--Combat
    Aviation Brigades, Apache units--are inside the 1:2--1 year
    deployed to two years back home, the BOG Dwell that's referred
    to. That really drove us to come up with a alternative to the
    Aviation Restructure Initiative. Frankly, that initiative was
    budget-driven, when you really get inside that and look at it.
        The National Guard option, we looked at that, although a
    little more expensive. We used several of the analysis agencies
    to help us with this, with--inside of the Training and Doctrine
    Command. We settled that we--as a minimum, you need 20
    battalions in the regular Army so you can get them out the
    door. We learned a lot of lessons at the start of this war,
    with aircraft and aviation. Twenty-four is the right number in
    a Apache battalion to maintain the amount of combat power that
    you must have when these formations are deployed.
        For the Army National Guard, we see some opportunities also
    for them to work with combined-arms maneuver, particularly with
    the units that are closely located, whether it be Fort Bragg,
    Fort Hood, you name it. That's very important, because an
    aircraft not working with maneuver formations, sir, you know
    that's not very effective.
        In terms of cost, what we didn't want to do as a Commission
    is bring forth an option and not look in detail at this cost,
    and look at how we would offset those costs. Therefore, we
    looked, as an option, at the Black Hawk fleet. Not to say the
    Black Hawk fleet is not an important capability, because it is
    one of the capabilities that's requested all the time, whether
    it be inside the regular Army or for states and governors for
    what they do in the Homeland. The National Guard option said
    they could get by with only two battalions of Black Hawks, so
    we looked at a 3 percent reduction--modest reduction inside the
    Black Hawk multiyear to be able to offset that. The onetime
    cost to go from the AH-64 Delta aircraft to the Echo model,
    which we would recommend, is about $420 million. We thought we
    could offset that inside the aviation portfolio. The annual
    operating costs are about 165 million. Therefore, we brought
    forth a option that is really paid for out of that aviation
    portfolio, and that's what we tried to do.
        The other thing I think that's important inside of Army
    aviation and what the current environment shows is, we are
    rotating--or are going to begin to rotate the Combat Aviation
    Brigade out of Korea. Our professional judgment was to leave
    that permanently stationed in Korea. One, they've got to be
    ready to fight tonight. There's environment issues over there.
    You're in a combined environment over--with the Republic of
    Korea. That is very important, I think.
        The last point I would bring up--or two points--is, we also
    recommended retaining an 11th Combat Aviation Brigade. Now, we
    don't have--we would have to come, obviously, to the Congress
    to get additional funding for that. That's about $1.9 billion,
    because you'd have to buy additional aircraft to maintain 11
    Combat Aviation Brigades. The current environment says we need
    11 Combat Aviation Brigades in the regular Army.
        Then the other thing that I could talk about would be the
    increase in flying hours funding.
        Senator Reed. Thank you.
        Thank you very much, Mr. Chairman.
        Gentlemen, thank you for your service.
        Chairman McCain. Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman.
        General Thurman, on the aviation question, it seems to me--
    and you're recommending a stronger commitment to that, it seems
    like to me--what we learned in Iraq and Afghanistan was just
    how critical that aviation component is. Would you share your
    thoughts about the lessons learned and the shortages we found
    when we were trying to maintain operations in Afghanistan and
    Iraq?
        General Thurman. Yes, sir, Senator.
        As a division commander in Baghdad in 2006, the first call
    I always heard was, ``Troops in contact, requesting attack
    helicopters.'' The reason I bring that up, because this entity
    is one of the capabilities that changes dynamics on the
    battlefield. I would say aviation is going to continue to be a
    high-demand item in Afghanistan and also what--in Iraq or any
    other theater that we are going to get involved in. You see it
    when you review the war plans, and you see it when you review
    the requirements that are coming into the Joint Staff for Army
    aviation.
        Senator Sessions. Well, I think that's true. I was talking
    to a young former helicopter pilot, and flew over a group of
    Sunnis that we were supporting. They were all standing up and
    cheering. They were facing combat, and they'd call for air--
    aviation support, and, when it came, he could see them cheer
    when they flew into the battle. I think it's a big deal.
        With regard--I understand that the President's Budget zeros
    out the Lakota aircraft that's going to be used to replace the
    old TH-67 trainers. Any of you aware of that and have any
    comment on it? Do we--we're well in the process of replacing
    those. I think you--it's odd and concerning to me that it would
    just be stopped.
        General Thurman. Senator, first thing in regard to the
    Aviation Restructure Initiative, we did not look in detail at
    the entire ARI proposal. We looked at--the question the law
    directed us to look at was primarily on AH-64s. I have heard
    that the--there has been an adjustment of funding levels inside
    of Lakota aircraft. I can confirm what you've just said.
        Senator Sessions. Well, we'll need to examine that, I
    think, and make sure.
        With regard to the Aviation Restructure Initiative, it's--
    there was a claim of 12 billion in savings. You believe your
    plan--that sort of strikes a compromise--maybe General Ham--I--
    whoever would like to answer this--your plan tries to offset
    any cost of this area. You think that you've minimized the cost
    by leaving, what, four in the Guard?
        General Ham. Yes, Senator. Certainly the recommendation
    that the Commission made is more costly than the Aviation
    Restructure Initiative. Again, as General Thurman mentioned,
    Senator, we didn't look at the entirety of ARI, we looked
    specifically at Apache. We felt it was important for us, if we
    were going to recommend to you something different than the
    Aviation Restructure Initiative, that we at least offer some
    off--some alternative sources of funding offsets for you and
    for the Army to consider.
        Senator Sessions. Thank you.
        One of the things that's concerning me about this is that,
    as a--in reality, General Ham, maybe Sergeant Major Chandler,
    it's easier to fire, eliminate a Active Duty military uniformed
    soldier than a civilian. As a result, it seems to me we've
    drawn down dramatically our uniformed personnel since the peak
    of the war. A lot of that was natural. I mean, we expected some
    of that to happen. Have we done enough to focus on reduction of
    civilian personnel? It seems to me it would take fewer
    civilians to support 450,000 Active Duty than it does to
    support 570,000 Active Duty. Have you given any thought to
    that?
        General Ham. Senator, we didn't delve into that issue
    particularly, but I would say--and this is, in hindsight,
    probably an area that perhaps we could have dealt with more
    fully--Army civilians are also part of the total force. It's
    regular Army, Army National Guard, Army Reserve, and the Army
    civilians that are so essential to sustaining soldiers in all
    the components. Having said that, I think certainly a
    comprehensive review is warranted. I would say the other
    component of that is certainly the contract force that provides
    many services to the Army, as well. We simply, because of time
    and scope, did not spend a lot of effort in that area.
        Mr. Lamont. I might add something to that, having been the
    former Assistant Secretary of the Army for Manpower, which had
    the civilian component within that organization. We reached a
    peak also in civilians about the same time as we reached in the
    uniformed side, with roughly 570-, the number being anywhere
    from 275,000 civilian upwards almost to 300,000. I'm advised--
    and I can't say this as being totally informed, but I'm advised
    we're roughly at 235,000 Army civilians now, or at least headed
    in that direction. Perhaps some of the staff can confirm that.
        We have to be a little bit careful as we refer to the
    generating force. There's the operational force and the
    generating force within the Army, and the generating force
    takes up roughly one-third. Within that generating force is
    over 60 percent civilian. We have to be a little bit careful.
    It's not always proportional when we cut those down. You--I
    think your point, though, was well taken, that there may be
    some need to see some reductions.
        Senator Sessions. Thank you.
        Chairman McCain. Senator McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman.
        I particularly noticed in the report those areas that were
    cited as an unacceptable risk, because it seems to me that we
    need to really pay attention to where you have determined we
    have an unacceptable risk. Contained in those things were--that
    you characterized as an unacceptable risk was chemical,
    biological, radiological, and nuclear response, and also
    military police. Now, I obviously am aware that Fort Leonard
    Wood is incredibly important to all of the above, so I would
    like--General Ham, if you could, briefly talk about what are
    the potential consequences to our strength and our capabilities
    if we are not really drilling down on this unacceptable risk
    that you all reported on.
        General Ham. Thanks, Senator. I would, first, recommend the
    classified annex, which gets into some of the particulars,
    particularly with regard to the chemical, biological,
    radiological, and nuclear units of the Army. In general, I
    would say that both of those capabilities that the Army
    possesses in its various components reflect a structure that
    was based on a different operating environment than exists
    today, with the necessity that the Army and the likelihood that
    the Army will operate in a chemical, biological, radiological,
    or nuclear environment at home or overseas, I think, drives
    some added emphasis in that area. There is--I would note, we
    believe that there is a particular role for the Army National
    Guard for domestic response in that area.
        With regard to military police, as many parts of the world
    are increasingly urbanized and soldiers will be operating in
    and amongst populations, the military police provide a very
    special capability that facilitates the ability of other Army
    units to operate in that environment. Again, it was our general
    assessment, in both of those capabilities--CBRN [Chemical
    Biological Radiological Nuclear] and military police--that the
    capacity within the Army across the three components has not
    kept pace with the demand.
        Senator McCaskill. I assume, since engineers were not
    cited, that you all are comfortable with our capabilities in
    the--with the Army Corps and the engineering force?
        General Ham. Yeah, Senator. Two different things. We didn't
    spend a lot of time with the Army Corps of Engineers. An
    absolutely vital part of the Army and its contributions to many
    facets of American life and foundational for the economy are
    well known to you and the members of this committee.
        With regard to the operating force of the engineer corps,
    we didn't find significant shortfalls in engineers, themselves.
    We found significant shortfalls in tactical mobility, meaning
    that engineer units across the Army, all components, many of
    them have much of the equipment that they require, but they
    can't move it. In simple terms, I may have my bulldozer, but--
    --
        Senator McCaskill. Don't know how to get it there.
        General Ham.--I have no way to move my bulldozer from where
    it gets off at a port to where it's needed to be. That's a
    needed area to be addressed.
        Senator McCaskill. I also looked at the report as it
    relates for the generating force. I know, Mr. Lamont, you just
    referenced the generating force. Does the Commission believe
    the Army has cut too much from the generating force? How much
    risk has been taken in the Army's ability to expand the
    generating force, if necessary? I mean, obviously, you know, if
    we don't have the folks in place to train up what we need, then
    we are really in trouble. If one of you would address the
    issues around the--what is the appropriate size of the
    generating force? Do we really even know?
        Mr. Lamont. Well, let me take a stab at that.
        One, we are quite concerned with the generating force, as I
    just mentioned, and the--although the Commission did not delve
    deeply into that, I think you hit a key point when you said,
    ``What's our ability if we have to expand?'' Those--the
    generating force are our trainers, our schoolhouses, our
    medical, and things of that nature. As the war progressed in, I
    want to say, 2008, 2009, 2010, the demand for troops grew, and
    we moved any number of troops out of the generating force and
    sent them off to war. They were replaced, often, by civilians.
    I think that that ratio remains much the same.
        We are quite concerned with the size of the generating
    force. I don't know that there is an ideal number, an optimal
    number. We'd better have them when we need them.
        Senator McCaskill. Do you think the ratio of 60 civilian,
    40 military is appropriate for the generating force? That seems
    awfully high civilian, which I understand how it happened and
    why it happened, but shouldn't we try to reverse that?
        Mr. Lamont. Well, speaking as--personally and not as a
    member of the Commission, I agree that that's quite bad. In
    fact, when I left, it was over 62 percent were civilian. That
    seems dramatically small--or large.
        General Ham. Senator, would it be okay if Sergeant Major--
    --
        Mr. Chandler. Senator, just--another item of information.
    The Army uses modeling to develop force structure----
        Senator McCaskill. Right.
        Mr. Chandler.--for operational forces, but we don't
    currently have a model for the generating force.
        Senator McCaskill. For generating?
        Mr. Chandler. There is a great deal of work that's going
    into developing a generating force model. When the Army
    achieves that, I think you'll be able to have better
    granularity on the questions that you're asking.
        One thing I would tell you, is that there is no
    proportional ratio, from my perspective, having been in the
    training and doctrine business for quite a bit of time, that
    says, ``Okay, if you cut this from the operational force, then
    you can see a reduction in--a similar reduction in the
    generating force.'' If you've got to train soldiers at basic
    combat training, it takes a certain amount of people. That
    ratio never changes.
        I applaud the Army's effort for the generating force model.
    I'd ask them to move on that as quickly as possible. Then I
    think you can get to the real--instead of throwing darts at a
    dartboard--to a real level of granularity on where the
    generating force should be. I think most of us are uneasy about
    the fact that we've cut it to--maybe into the bone.
        Senator McCaskill. Thank you, Sergeant Major.
        Thank all of you for your work on this.
        Thank you.
        Chairman McCain. Senator Ayotte.
        Senator Ayotte. I want to thank all of you for your
    distinguished service and work on this Commission.
        I know that the Chairman had asked you about the total
    force size and thinking about, What's the optimal size of the
    Army? That's what I would like to hear from you. Let's--given
    the threats we're facing around the world, given the challenges
    that we face--as I understand, General Ham, you also noted that
    the President's fiscal year 2016 plan does not take into
    account recent changes in strategic environment. Can you tell
    us what is the optimal size for our Army? Because I think it's
    important for us to understand what the optimal size is if we
    really want to protect the American people and not in a budget-
    constrained environment. I understand we're in that, but we
    should understand--With the threats we're facing, what is the
    number, if you could decide that number today?
        General Ham. Yeah, Senator, it is--it's a great question,
    and a tough question--it is important to note that, of course,
    that was not the task that we had in the law. The task that we
    had in the law was constrained by resourcing. That's how we
    approached our work.
        I think I'm on a firm ground that I would speak for the
    Commission that said if you--if the law had not contained that
    constraint, if it didn't say you have to provide
    recommendations----
        Senator Ayotte. See, this is the great thing about
    hearings. We can sort of ask anything, even if we----
        General Ham. Right.
        Senator Ayotte.--said ``in the law.''
        General Ham. Right.
        Senator Ayotte.--I'm asking for your opinions today.
        General Ham. Yeah. The Commission--I think the Commission
    did not address that. I would offer you my personal opinion
    that would say--again, let me backtrack and speak one moment
    for the Commission.
        We were careful in the words that we chose. We chose
    ``minimally sufficient'' at--of an Army of 980,000. Minimally
    sufficient. I think it's a real question to say, Is that the
    Army the Nation wants? Do--does America want a minimally
    sufficient Army? I think that's a discussion for many to have.
        I think if the--if additional funding were available, then
    certainly a larger force--again, let me speak personally--I
    would say, halt any further drawdown now, and make a more--much
    more comprehensive assessment of the operating environment, and
    then see what that cost may be, and then come back to this
    committee and others to say, ``Here's what we think the bill
    is.''
        Senator Ayotte. ``Minimally sufficient,'' to me, doesn't
    sound like protecting our national security interests. That's
    really--I'm not going to ask you to give me an opinion as a
    Commission, but you, given the breadth of experience on this
    panel, based on your experience, General Thurman, where do you
    think we need to be, versus putting aside the budget issue for
    a moment? Because this is an important, I think, understanding
    that we have to have of where we are versus where we should be.
        General Thurman. Yes, ma'am.
        Senator, I will tell you, I'm very concerned, because I
    think we've got major warning signs in front of us right now.
    Not speaking as a commissioner; I'm telling you what I see as I
    watch the resurgence of Russia--they're basically in Syria,
    they're conducting their own NTC rotation. They have gone to
    school on us, and, as I watch that unfold; and then I turn to
    Korea and I watch what's occurring over there in Korea today,
    it's probably more dangerous today than it's been in a long
    time, given we're dealing with a maniac over there, frankly.
    Those forces over there have got to be trained, ready to fight
    tonight, because it's a miscalculation on either side that
    could get us in a war.
        I think, if you look back what happened over the course of
    the last few years when we had the Budget Control Act go into
    effect, the assumptions have changed. One, we're not out of
    Afghanistan, probably putting more back in. We've got ISIS
    [Islamic State of Syria], ISIL [Islamic State of Iraq and the
    Levant], Iraq, Syria. We've got Africa, the--North Africa, that
    whole issue that's going on in there. One of the
    recommendations that we got in the report is to go back and
    review the national security strategy that we currently have in
    the budget, because I believe it's seriously out of balance
    and--as I look at this.
        The number--there needs to be another analysis, in my
    opinion, to go back and look at, What is the right size Army
    that this Nation needs? Frankly, it's going to be expensive,
    and we've got to, I believe, come to grips with that. The--
    frankly, the assumptions that--when we reduce the force,
    they're not true anymore. We have a set of failed assumptions.
    That's my opinion.
        Mr. Chandler. Senator, if you don't mind, I'll add my two
    cents. I think I can be blunt. I don't think it's wise for us
    to consider growing the Army until we totally use the entire
    force and then determine from there what additional
    capabilities we may need. We've used the Active component, the
    regular Army, significantly, and the Guard and Reserve less. We
    need to use and execute the total-force policy to get the Guard
    and Reserve engaged on a predictable rotational basis----
        Senator Ayotte. Well----
        Mr. Chandler.--which will allow us----
        Senator Ayotte. I don't want to interrupt, here, because I
    know we have a vote, but I'm not sure, if I asked my Guard and
    Reserve members if they've been used less, given the nature of
    many of them holding down civilian jobs at the same time, they
    would necessarily agree with that calculation, especially with
    what we've had to do in Iraq and Afghanistan. We couldn't have
    done it without them.
        Mr. Chandler. I would tell you that the vast majority of
    guardsmen and reservists that we talked to want to be utilized
    more frequently, in a predictable manner.
        Mr. Lamont. I would concur with that, by the way, as a
    traditional guardsman for 26 years. We found this every visit
    we went, ``If you're going to train us up and then not use us,
    why are we here?'' It's much different than my years, back in
    the '80s and early 1990s.
        Senator Ayotte. Well, I have great confidence in our Guard
    and Reserve, but I don't think that gets to the fundamental
    question. Because they're asking--we're asking to downsize
    them, too, in terms--I mean, the decisions you're making at
    today are how much training, how much aviation assets they're
    going to get, what are they going to get for their readiness?
    To me, I think it's a total-force question for the Army, and
    it's one that we need to face, of: Where are we, versus the
    threats that we're facing? It seems to me that--as I hear some
    of these threats, that it's time for us to really think about
    not drawing down, but looking at, How do we make sure we can
    protect this Nation? Also that we don't drain our people. You
    know, the dwell-to-deploy ratio and really making sure our most
    precious resource, that they have what they need, and the
    support that they need.
        Senator Reed [presiding]. Well, thank you very much,
    Senator.
        I--the Chairman is voting. Most of my colleagues are
    voting. They shall return. I think someone famous once said
    something like that. I'm going to take the opportunity, and, as
    soon as one of my colleagues arrives, I'll recognize the
    person.
        Sergeant Major, what's the most interesting, insightful
    thing that some of the soldiers told you when you were out with
    your colleagues in the field that we should know?
        Mr. Chandler. Well, I think the one thing that I would ask
    the committee to take away is, the soldiers are extremely proud
    of what they do, regardless of what component they're in, and
    that they want to serve, they're proud to serve, their families
    are proud of what they do. They want to be ready to do what it
    is that the Nation asks us to do, asks them to do. You know,
    whether you're--you're dusty and sweaty and haven't taken a
    shower in 3 days at the National Training Center, you know,
    these kids were motivated. They were going to finish their
    final live-fire objective. They were excited about what they
    were doing. If you went to a drill and saw what some of these
    kids are doing, yeah, they don't want to do a lot of mandatory
    training, they don't want to look at PowerPoint slides, they
    want to get after it, they want to be what they came in the
    Army to be, which is a United States Army soldier of the proud
    tradition that wants to do the Nation's bidding.
        You can't--having been away from the Army for a year and
    coming back and trying to be objective, you can't but be filled
    with pride in the service that these kids--we--I spoke to a
    specialist in--at--and actually came to a hearing in
    Washington. This kid had tried to do many things before he
    entered the Army, but the Army gave him a sense of purpose and
    a desire to do and be a part of something bigger than himself.
    He was almost in tears, moved me to tears, about his sense of
    who he was and what he was about. That's the thing I'd ask you
    to take away. These kids are proud of what they do. They need
    the Nation's support.
        Senator Reed. Thank you very much, Sergeant Major.
        Again, thank you, gentlemen.
        On behalf of the Chairman, I would like to recognize
    Senator Ernst.
        Senator Ernst. Thank you.
        Thank you, gentlemen, so much for being here today and for
    your testimony. I certainly appreciate all the years of service
    that all of you have given.
        I'd like to start with some discussion about the State
    Partnership Program, which has been really important to Iowa
    and many of our other states. Throughout your report, you
    stress the need for the Army to enhance its total-force
    approach to ensure the Army can meet its mission requirements,
    and the importance of the National Guard in achieving that
    goal. I do appreciate the thoughtful analysis of the importance
    of the Guard, especially, since 9/11. In particular, I would
    like to talk about the State Partnership Program. I do think
    that this program is key in allowing our Army and our country
    to better partner with foreign countries and develop these
    nations and enhance our security and the security of our
    allies, and doing so at a low cost to American taxpayers.
        Last week, this committee had a hearing on the Asia
    Pacific, and the witnesses stressed the importance of SPP
    [State Partnership Program] and their belief that it should be
    expanded more into the Asia Pacific, in particular. Is this a
    program that was looked at during this study? If any of you
    could address that, or, General Ham, if you would like to take
    that. National--the impact to our Army with use of the Guard as
    well the State Partnership Program, was that looked at, at all?
        General Ham. Thanks, Senator. We heard, loud and clear,
    from all six geographic combatant commanders, their praise and
    reliance upon the State Partnership Program, and every one of
    them wants that program, not only to be sustained, but to be
    increased. They're looking for more and more opportunities to
    expand State Partnership into other nations, particularly new
    and nontraditional partners in some parts of the world. I would
    agree with you, and it's certainly what we found in our work,
    was the State Partnership is a very low-cost, high-payoff
    program for the Army and for the Nation.
        Senator Ernst. Thank you.
        Any other thoughts, gentlemen, on that? Yes, sir.
        Mr. Lamont. Yes, ma'am. Being from your neighboring State
    of Illinois and a guardsman, and our partner was Poland. In my
    previous life, as the Assistant Secretary of the Army, I
    happened be in Poland at the same time as the Illinois Adjutant
    General. I was absolutely irrelevant to the Polish army,
    because their connection was with the Illinois Guard. That
    partnership is so vital to our country partnerships; it is
    extremely important. They didn't care about me or anybody else,
    but they cared about the people they worked and served with,
    visited with, went to war with. Poland, as you probably know,
    have provided us, and maybe still provide us, with a brigade at
    least once a year when we were in Afghanistan and Iraq. What
    that saved United States taxpayers, for instance, and our
    soldiers, was enormous. It is vitally important, as you know.
        Senator Ernst. Very good. Well, I appreciate that. Iowa has
    a very strong partnership with Kosovo, and, through that, we've
    developed--even outside of our State Partnership Program,
    between our soldiers and Kosovo Security Forces, have developed
    now an economic relationship through our State with the nation
    of Kosovo. Just the last couple of weeks, we opened a brand new
    consulate in Des Moines. That's our State's first consulate. We
    were really excited about that. That started and grew out of
    the State Partnership Program. I appreciate your thoughts on
    that.
        I'd like to turn to a different topic just very briefly.
    One of the recommendations is to reduce mandatory training, as
    prescribed by the Army Training and Leader Development
    Regulation. While I agree with this recommendation, I can't
    tell you how many times I have spoken to Active-component
    commanders as well as Reserve-component commanders, and they
    have said that they are assuming risk rather than mitigating
    the risk due to the mandatory training requirements. The over-
    burdensome requirements mean that commanders aren't able to use
    that time to train on their unit's mettle or their mission-
    essential task list, which ultimately harms the readiness of
    their units and the Army as a whole. You know, we're in a
    politically correct environment. We seem to be very risk-
    averse. Can you talk to that, maybe, a little bit more about--
    and maybe, Sergeant Major, if you would address this--on how we
    get back to being soldiers, but also giving back some of that
    risk?
        Mr. Chandler. Well, thanks for the question, Senator.
        The--I would start off by saying that the Army is making
    inroads to reduce mandatory training, in line with the doctrine
    of mission command. The mitigation of risk is by the higher
    commander. It's--if I was in command of a unit, it would be my
    responsibility to tell my higher commander, ``These are the
    areas of risk that I am assuming, based off of what you told me
    to do.'' The challenge really is even exacerbated for Army
    National Guard and Army Reserve units because of the limited
    amount of time, as you well know, for IDT [Inactive Duty
    Training] weekends or battle assembly weekends. Where do you
    find that balance? I applaud the Army's effort. The Commission
    does, highly recommends that the Army move out a little bit
    quicker on reducing the overhead burden, so to speak, of the
    mandatory training requirements. Look, we ask these commanders
    to make life-and-death decisions on the battlefield. We should
    entrust and empower them to make those same decisions at some
    home station or IDT battle assembly weekend event. Same with
    Active component. We're not going to get to the level of
    readiness that we need to if we continue to add necessary, but
    mandated, requirements with a certain frequency. The commander
    knows the unit. They should be able to make the decisions on
    when and where they need to make the mandatory training occur
    and still maintain an acceptable level of readiness.
        Senator Ernst. Very good. I also agree with that, Sergeant
    Major. Our company commanders and first sergeants, our
    battalion commanders and sergeant majors know their soldiers
    best, and they know what they need to work on. I'm glad to see
    that we have a recommendation that moves us in that direction.
        Thank you much, Senator Reed.
        Senator Reed. On behalf of the Chairman, Senator Donnelly,
    please.
        Senator Donnelly. Thank you, Mr. Chairman. I will pass to
    Mr. King.
        Senator King. Thank you, Mr. Chairman.
        First, an observation. The budget control caps were set in
    2011. I was just making some notes. That's pre-ISIL, pre-Syria,
    pre-Ukraine, pre-South China Sea, pre-North Korea launch. Here
    we are, trying to fit the defense posture of this country,
    subsequent to all those events, within caps that were
    established five years ago. Now, they were adjusted somewhat
    last year, but not all that much. It just--it--I mean, I'm all
    for planning and thinking ahead and having constraints, but
    when the constraints keep you from responding to the threats
    that the country is facing, it's just not a rational or prudent
    policy, it seems to me.
        I wanted to start with a question. General Ham, when you
    made your recommendations, were you consciously or
    unconsciously operating under those caps? In other words, are
    your recommendations based upon those budget realities or were
    they based upon what your best judgment of what the Army needs
    to look like in order to meet the threats that this country
    faces?
        General Ham. Senator, a little bit of both. Certainly, the
    judgment of the eight commissioners--lots of experience in a
    lot of different fields represented there. Again, we were
    instructed in the law that we had to conduct our assessments
    and make our recommendations consistent with an anticipated
    level of future resource. It wasn't further defined. You could
    kind of pick and choose, What do you think the anticipated
    level of future resourcing would be? It was our general
    assessment that it's unlikely, at the time that we were doing
    our work, that there would be a significant increase in
    funding. We--that's why we--we've centered on this notion of
    the level of funding in the President's Budget for fiscal year
    2016 in the--and was kind of the--again, the floor of ceiling.
    Of course, as you know, Senator, we're not at that level yet. I
    think that's at least a start point. It was--I guess to
    summarize, it was a--looking at the anticipated security
    environment, but certainly informed by the level of funding we
    thought might be attained.
        Senator King. You understand the thrust of my concern.
        General Ham. I do, sir. One of our most important
    recommendations, already been referred to, is that, because the
    global security environment has changed so significantly from
    those days of budget and strategic plans, it is time for, we
    believe, new strategic guidance.
        Senator King. I certainly agree with that wholeheartedly.
    To put a point on this, you recommend going down to 30 Active
    BCTs [Brigade Combat Teams], which is actually less than we had
    before September 11th, and then perhaps a reduction to 28.
    Here's my question. How long does it take to recruit, train,
    and equip a BCT if we wanted to increase that number, from a
    standing start?
        General Ham. Senator, let me take a stab at it and maybe
    ask the Sergeant Major of the Army to comment.
        I actually had to do this when I was a division commander.
    A brand new infantry Brigade Combat Team was formed, stood up,
    equipped and deployed. With all of the very, very high
    priority--this was in the mid-2000s--it took about 18 months to
    be able to do that. I would say in a--on a more normal basis,
    it would probably take--and again, that was in a period of
    almost unconstrained resources--typically, I would say two to
    three years would be a more likely timeframe to start from
    scratch and build a Brigade Combat Team.
        Senator King. That reminds me of the old thing I learned in
    Driver's Ed, that your headlights only illuminate a certain
    distance down the road, and, if there's a wall 1 foot beyond
    that distance, you can't stop. We're not going to have the
    ability to respond to a threat if we're talking a minimum of 18
    months to two and a half to three years. I mean, that's the
    risk that we're undertaking as we make--as we're making these
    decisions.
        I--General, your reaction to that kind of----
        Mr. Chandler. Senator, I would say--and I agree with what
    General Ham said--the greatest challenge is the leader
    development in order to fill that brigade.
        Senator King. That's not something you can just turn off
    and on.
        Mr. Chandler. No, those--you know, it takes 20 years to
    make a battalion commander or a brigade commander. I mean, it
    takes 20 years to grow a sergeant major, 15 years to grow a
    first sergeant. Expansion will get the people into the Army,
    will get the equipment to where it needs to be, but to find the
    leadership in order to fill out that organization and make it
    effective takes time. There's just not a lot of them to spare.
        Senator King. Okay. I have the same concern about the end-
    strength numbers, that those were numbers derived from a
    different strategic world, and that we really do need, as you
    say, a strategic reset to take account of the current
    challenges.
        Yes, sir.
        General Thurman. Senator, I was a G3 of the Army for three
    years, and I was there for the grow-the-Army piece, where we
    grew Brigade Combat Teams up to 43 Brigade Combat Teams. I was
    there for Iraq surge, Afghan surge, and watched what goes on
    inside the Army. The biggest issue is manpower because of what
    it takes to get the right people in these jobs. It varied on
    the length of time. Also, as division commander, my experience,
    just--much like General Ham, we deployed a brigade for a
    specific set of missions, and we were able to man, train, and
    equip that in 18 months. That's a stretch. That's a big
    stretch. Again, that's having all the resourcing you need, with
    the right levels of modernization.
        Senator King. Two----
        Mr. Chandler. That's something that's a concern. Yes, sir.
        Senator King. Two days ago in this committee--and I'll end
    my comments; I know I'm over time--two days ago, we had General
    Clapper here, who said that, in his 50 years of service to this
    country, he has never seen a more diverse or serious set of
    threats. At the same we're getting that testimony, we're
    talking about reducing end strength and developing a situation
    where it's going to be very difficult to respond to a crisis.
        Thank you, Mr. Chairman.
        Thank you, Senator Donnelly.
        Mr. Lamont. Senator, I just want to point out one thing. In
    that recommendation for perhaps removing two ICBTs--IBCTs, that
    was conditional. If there were no other alternatives inside the
    Army, the resourcing, or anyplace else, that's what we might
    have to look for. That was a big ``if.''
        Senator Reed. On behalf of the Chairman, Senator Tillis,
    please.
        Senator Tillis. Thank you, Senator Reed.
        Thank you all for being here, and thank you for your
    service.
        I have a question. How do--what are your opinions about the
    current balance between the number of general officers in the
    Army and the current force structure, overall end strength?
        General Ham. Senator, we did not assess that. I would offer
    a personal opinion, and--just from my own personal experience.
    That is a thing that's continually looked at to see if it's
    quite right, not only in terms of number, but in terms of grade
    structure--one, two, three, or four stars. The Army has made
    some adjustments over the past couple of years. It is a
    constant evaluative process.
        Senator Tillis. Any other comments?
        [No response.]
        Senator Tillis. Talk a little bit about acquisition and
    reform. To what extent have you all looked into some of the
    reforms that are detailed in the fiscal year 2016 NDA. Do you
    agree with them? Do you think that they make sense? Are there
    any concerns with them?
        General Ham. Senator, again, it got outside the mandate
    given to the Commission, so we didn't spend a lot of time on
    acquisition reform or, for that matter, for modernization.
    Clearly that's a--an issue--in order for the Army to keep apace
    with the technological advances, for our soldiers to be
    equipped so that they can go into battle, as we say, never into
    a fair fight, I think modernization and the acquisition reform
    that will lead to cost-effective modernization are clearly
    critical items for the Army and for the Nation to address.
        Senator Tillis. Yeah, it seems to me that we really need to
    have that considered in any kind of overall assessments of the
    Army or any branch, because we're--the money and the
    inefficiency that we have there is at the direct expense of
    other things that we need to spend our money. This is one area
    I would like for you all to touch on. In my time--I'm from
    North Carolina, and spend a lot of time down at Camp LeJeune
    and Fort Bragg. One consistent theme that I'm hearing down
    there is a concern that our readiness levels are at a very low
    point. If you take a look at Fort Bragg and you're talking
    about the number of jumps that they want to do now, at--we've
    had this discussion about Pope Air Field and little bit of a
    disagreement with the Air Force on what we should do with those
    assets down there. That stimulated a discussion about just how
    many jumps we should have. It's substantially higher than what
    they've been doing over the past 10, 15 years. My concern is,
    that points to, I think, a readiness deficiency. To what extent
    do you all agree with that?
        Sergeant Major, I see your shaking your head. We'll start
    with you.
        Mr. Chandler. Well, Senator, I think, you know, the Army
    developed a capability called a Rapid Equipping Force, which
    was able to generate and fill requirements much more quickly
    than I think the normal acquisition process takes. My only
    recommendation was, maybe there should be some look at how that
    process worked, and does it apply to the overall acquisition
    program. You know, I think there were some decisions made about
    how many jumps folks would make in airborne units, because of
    the necessity to get them prepared to do the directed mission
    they had in Iraq or Afghanistan. Getting those guys back,
    jumping of planes--guys and gals jumping out of planes is a
    great thing. Personally, I'm all for it. How that fits into the
    overall picture, I'm not aware of right now.
        General Thurman. I would add two points to your question.
    That has to do with acquisition. I think it is right to do
    acquisition reform. It takes too long to field equipment. Why
    does that happen? It happens because we never seem to get the
    requirements right. You have to lock down the requirements in a
    more timely manner. I mean, if you look at the Army, the Army's
    track record is not good. Ground combat vehicle, armed aerial
    Scout, all those were killed because, over time, it takes too
    long to field that equipment. Requirements change, threats
    change. That is right, in my opinion, to really take a good
    look at that.
        I think, in terms of readiness, there's always the question
    about proficiency verses currency. We need to be proficient.
    That comes to light in aviation. Because, right now, I believe
    aviation is on the ragged edge. That's our recommendation on
    increase in flying hours. That's flying hours to support
    combined arms maneuver with maneuver formations. It's one thing
    to go fly a helicopter, it's another thing to integrate it in a
    combined arms formation. That's what's missing.
        The recommendation we had, which is going to cost some
    money, was to increase flying hours, not only for the regular
    Army, but also for the Reserve components--Army National Guard,
    Army Reserve--to get their proficiency levels up. Because
    that's not happening out there, even today. That's what we
    found when we went around and visited units.
        Senator Tillis. Thank you.
        Well, in closing--and I know this is a theme that the Chair
    has struck many times in the year that I've been here--I'm
    trying to figure out how we have an--in any discussion about
    things that we can do to better prepare men and women, and
    better equip men and women, we have to talk about acquisition
    reform, we have to talk about why I've got in my office a 600
    page RFP for the new-generation handgun. It's got 39 pages
    that--and when I go back to the Department, they said, ``But,
    it's only 39 pages of specifications.'' I said, ``Great. Then
    that means we can delete everything else that doesn't speak to
    the complexity of the process and the selection process?'' Of
    course not. The reason that I try to bring these things up,
    even in things where we're talking about capability and
    readiness, that sort of behavior has a direct deleterious
    effect on our ability to provide men and women with training
    and the equipment they need to bring the fight to the enemy. We
    have to make sure that it's integrated and stay on the front
    stage. I know that--I know the Chair agrees.
        Thank you. I've gone over my time.
        Chairman McCain [presiding]. Well, I thank Senator Tillis.
        I know our panelists agree that it harms our credibility
    when we ask for more funding and we have a $2 billion cost
    overrun on an aircraft carrier and we have, starting with the
    FCS [Future Combat Systems], a long line of programs where
    billions of dollars were wasted, with no result. I appreciate
    the emphasis that you have given on this issue. We have to fix
    it.
        Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman.
        I want to thank all the witnesses.
        Indiana doesn't have a large Active Duty presence for many
    of the services, but it's home to our Nation's fourth-largest
    National Guard unit. Many of the 14,000 Hoosiers who serve in
    the Guard also have spent time on Active Duty. In your report,
    you write of how disheartening it was to hear the discord
    within the Army ranks, pitting the Army National Guard against
    the regular Army. I heard that same disheartened sentiment
    among our Hoosier Guard members. From the top down, their focus
    has been on serving our country, our State, and our local
    communities. I appreciate your call for leaders in the DOD and
    in Congress to do our part to keep these conversations
    professional and respectful while keeping in mind that there
    can be different viewpoints on how to best accomplish these
    objectives. As all of you know so well, one of our hopes in
    convening the Commission was to get objective input as to how
    to resolve this difference and others.
        General Ham, how do you believe the findings of the
    Commission will help support the reset in that relationship
    between the regular Army and the Guard?
        General Ham. Senator, I believe many of the recommendations
    that we make with regard to the total force, whether it be a
    legislative change that would allow for the assignment of
    regular Army soldiers into Army National Guard units, multi-
    component units that bring soldiers from all three components
    together in common mission, in my view, also increased
    readiness within the Reserve components on the cyclical basis,
    called the Sustained Readiness Model, that the Army has
    developed, and in the operational employment of the Reserve
    components along with the regular Army. I think all of those
    tend to build this sense of one Army. The same would be true
    for leader development courses for noncommissioned officers and
    officers.
        General Milley, the Chief of Staff, who you all know very
    well, begins many of his addresses to soldiers of all
    components, he said, ``Look at your uniform. Over your breast
    pocket, it says U.S. Army. It doesn't say regular Army, doesn't
    say Army National Guard, doesn't say Army Reserve. It says U.S.
    Army.'' That common start point is--I think is a place to
    begin.
        Senator Donnelly. Just to follow up on that, in the
    recommendations, what do you see as the most vital in helping
    to create that one Army and to resolve that tension?
        General Ham. Senator, I'll offer two that I think are
    vitally important, and others may have some other views.
        The first and foremost, I think, is the overarching
    recommendation to sustain the All-Volunteer Force. I think, if
    we don't do that, the rest of it might not matter. Secondly, I
    think is this element of adequate funding, reliably and
    predictably developed and delivered to the Army in all of its
    components, I think will go a long way to removing some of the
    doubt and uncertainty that exists.
        Senator Donnelly. Well, I'd like to ask the panel a
    different question, which is--we have 63 different
    recommendations for the future of the Army, and we're in a
    resource-constrained environment. Of those 63, what would each
    of you prioritize as your most important recommendation, going
    forward.
        Mr. Lamont?
        Mr. Lamont. Manning and resourcing the total force. We're
    very concerned, as we've mentioned, about keeping our levels of
    manning such that we can respond to acceptable levels of risk.
    It's not just enough to have a larger Army. You'd better have
    them trained, equipped, and ready, or you don't gain a whole
    lot. It's going to be a resourcing--frankly, a resourcing
    picture for that manning and readiness level, as you mentioned.
        Senator Donnelly. Thank you.
        General Ham?
        General Ham. Senator, I think I would fall back to
    recommendation 6, the Congress and the administration should
    return to predictable and responsible budgeting processes that
    meet minimum funding requirements.
        Senator Donnelly. General Thurman?
        General Thurman. Thanks, Senator.
        I would agree with General Ham on that. However, I would
    add that I believe readiness in maintaining the All-Volunteer
    Force is fundamental to this country. Why do I say that? I'm
    very worried about the declining population that is actually
    eligible in this country to serve in the United States
    military. Less than one-third is what can meet standards, in
    terms of the medical fitness, the aptitude, and--and that's
    declining. I think that's something that we've really got to
    pay attention to as we go down the road.
        Senator Donnelly. Thank you.
        Sergeant Major?
        Mr. Chandler. Senator, I think--it's hard for me to
    prioritize, because each one of these are interwoven in some
    aspect of preserving and sustaining the All-Volunteer Force in
    a total-force policy. If you're going to pin me down, budgetary
    stability, budgetary predictability is important.
        I want to give you one area that I think is a resounding
    theme throughout this. This is the Army culture, the culture
    that all three components are interwoven, that rely on one
    another, that we have to do some work in order to break that
    culture down. That are--where many of the recommendations come
    from, especially in multi-component units and leader
    development training. I mean, if people don't want to get
    along, one of the best ways you can solve that is, make them
    stay in the same room until they work it out. I'm sure you
    probably have had some experience with that here.
        Senator Donnelly. Indeed, I have.
        Mr. Chandler. I had the opportunity to serve with the Army
    National Guard unit in Mississippi for three years as a regular
    Army soldier, and that was probably the most important
    assignment for me in my military career culminating as the
    Sergeant Major of the Army, because I was forced to be in an
    environment, post-Desert Shield/Desert Storm, right after the
    brigade that I was assigned to had been declared unfit for
    deployment, to be a regular Army unit stationed in the same
    armory with the same persons. I was forced to change my view of
    what the Army National Guard does for the Nation. I've never
    forgotten it. I still stay in contact with some of those
    individuals that were in that brigade.
        That's the type of thing that, when we talk about the
    total-force policy and the questions that you asked us, that we
    really have to get after. It's not just a policy, but that the
    policy is executed at the grassroots lever. The questions that
    you had about, you know, some--what I think--very
    unprofessional and uncalled for comments in open media and so
    forth--will get resolved over time, but it's not going to get
    changed in one administration. It's going to take, you know, a
    commitment to a long-term vision to make this work for what's
    best for the Army and the Nation.
        Senator Donnelly. Thank you so much.
        Mr. Chairman, thank you.
        Chairman McCain. Senator Lee.
        Senator Lee. Thank you very much, Mr. Chairman.
        Thanks, to all of you, for your testimonies today and for
    devoting a year to this Commission and to the future of the
    Army.
        One of the key issues that Congress asked your Commission
    to report on was the Aviation Restructuring Initiative, or ARI,
    and the future of combat aviation in the Army. In
    recommendation number 57, the Commission recommended retaining
    four Apache battalions in the National Guard, each with 18
    aircraft, and committing to using the National Guard Apache
    battalions regularly. The report states that this would provide
    more wartime capacity than ARI, and would be more cost-
    effective. Can you please discuss for us and explain to the
    committee, if you would, why you determined that the--that
    surge capacity and strategic depth were important factors in
    your recommendation--in developing and making your
    recommendation, and what problems would the Army face if it
    lost strategic depth, you know, provided by the National Guard,
    of Apache battalions.
        General Thurman. Senator, thank you.
        First off, we looked at four areas, after extensive
    analysis. We visited over 31 aviation units across all three
    components. The first thing we looked at was wartime capacity,
    the ability to respond and meet the war plan requirements, and
    then wartime surge capacity, and then to ease the burden on
    peacetime deployments, and then we factored in the cost,
    because we didn't want to come forward with a recommendation
    without some cost offsets. You mentioned strategic depth. There
    is no strategic depth if you move all of the AH-64 aircraft
    inside the regular Army. I would refer you to the classified
    annex. It has a lot of our work--analytical work in there that
    talks about the requirements for AH-64 attack aircraft, which,
    in a lot of cases, was very short as we looked at that.
        One--to get to your point--it takes time to train an Apache
    aviator. That's a very complex system. I am a rated AH-64 Alpha
    pilot, not a Echo or a Delta model. That is a very
    sophisticated aircraft. Not only do you have to master that
    skill of flying the platform, but, one, can you integrate it
    with combined arms maneuver? We felt there needed to be depth
    in the force with--and what the recommendation calls for, it
    would give you about 280 pilots inside the National Guard--Army
    National Guard.
        Now, the other point was, these formations need to be put
    on a rotational cycle, inside the force generation and actually
    utilized so it could offset the stress that's on the current
    peacetime deployments. That's what we tried to do. We offered
    up some cost, modest cost, in terms of reduction of Black Hawk,
    to offset what it would cost to put four battalions inside the
    Army National Guard. That is in the report. Again, a onetime
    cost for the Delta-model-to-Echo conversion, which would be
    required, is roughly a $420 million, and then another 165
    million, in terms of operating and sustainment cost, is what we
    did.
        Senator Lee. Right. Right. No, I'm pleased to hear the
    careful manner in which you've gone about it. I would--my staff
    and I have visited with members of the Utah National Guard's
    1st Battalion, 211th Aviation Regiment, and there's definitely
    a degree and quality of Apache experience in those Guard units
    that I don't think can be replaced or replicated or matched
    anywhere else.
        Last fall, Chief Warrant Officer Kent Jones, one our
    National Guard instructors, reached the milestone of 10,000
    flying hours in the Apache, which is a record. The past two
    years, I've been greatly concerned about using this type of
    experience. How and to what extent did the Commission view
    these issues of pilot and crew experience as you factored in--
    those into this analysis?
        General Thurman. Senator, we looked at that as a--an
    investment, in terms of personnel. Absolutely you would want to
    retain some of that experience, because if you got into a major
    conflict, that's going to be required. If you go back to the
    Iraq War, we called a lot of our aviators to Active Duty that
    were retired, because we needed that experience back. Again,
    you don't build that overnight, and it takes time to do that.
        Senator Lee. Great. Thank you very much.
        Thank you, Mr. Chairman.
        Mr. Lamont. You might want to know that, in fact, one of
    the key members of our staff, on the aviation side, came from
    the Utah National Guard as an aviator instructor pilot.
        Senator Lee. Sounds like you know how to pick them. That's
    great.
        Thank you.
        Chairman McCain. Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Thank you----
        General Ham. Senator, may I--Mr. Chairman, if I may, just
    for a moment, correct the record. General Thurman said that
    he's a rated pilot. I would, for the record, note General
    Thurman ``was'' a rated pilot. I love him dearly, but I would
    not get in an aircraft with him today.
        [Laughter.]
        Chairman McCain. The airways are safe.
        [Laughter.]
        Chairman McCain. Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Thank you all very much for your past service and for your
    willingness to be part of this Commission and work on this
    report.
        A recent RAND report found that current NATO [North
    Atlantic Treaty Organization] force structure in Europe, and I
    quote, ``cannot successfully defend the territory of its most
    exposed members. In the worst-case scenarios for NATO, Russia
    would be able to conquer the capital of Estonia in 36 hours.''
    The Commission recommends that the Army should forward-deploy
    an Armored Brigade Combat Team in Europe and convert the U.S.
    Army-Europe Administrative Aviation Headquarters to a
    warfighting mission. I wonder if you could elaborate. I don't
    know, General Ham, if you would like to do that or if there's
    someone else on the panel who would like to elaborate on these
    recommendations and our need to bolster United States Forces in
    Europe to deter Russian aggression.
        General Ham. Thanks, Senator.
        Let me begin, and I suspect a couple of others may want to
    weigh in.
        With regard to the Armored Brigade Combat Team, there are
    two issues at play here. The regular Army has nine Armored
    Brigade Combat Teams. They're presently all consumed in
    rotational assignments. There's an Armored Brigade Combat Team
    that rotates to Korea. Under the model that basically is
    ``three to make one,'' there are three. Same for the Mideast,
    and the same for Europe. There's no excess capacity in the
    regular Army to meet an unforeseen contingency with Armored
    Brigade Combat Teams. We felt there was needed capacity.
        One way to get additional capacity would be to forward-
    station an Armored Brigade Combat Team in Europe, thereby
    freeing up two other regular Army Armored Brigade Combat Teams
    for unforeseen contingencies, but it also has the significant
    effect--we believe, has a significant effect on both deterrence
    against Russian aggression and assurance of the NATO allies.
    They are sorely lacking in armored brigade--or armored
    capability, and we think a United States brigade would be
    helpful.
        Senator Shaheen. Does the National Guard have any role to
    play as we're looking at how we can cycle forces in and out?
        General Ham. Yes, ma'am, absolutely they do. The--in our
    discussions with the Chief of Staff-Army, Chief National Guard
    Bureau, they're already looking at, How can you, on a
    predictable basis, employ those Armored Brigade Combat Teams--
    six, I believe, in the Army National Guard--how can you employ
    them on that rotational basis? I think, in the not-too-distant
    future, it might not at all be unusual to see an Army National
    Guard Armored Brigade Combat Team rotate for a year to Korea or
    to the Mideast.
        Senator Shaheen. Thank you.
        I think, given the challenges we're--that Europe is facing
    right now, that looking at how we can provide that kind of
    additional support is really important.
        I want to get parochial for a bit, because the New
    Hampshire National Guard has experienced a 32 percent decline
    in force structure since 2007. This percentage is ten times the
    decrease in the National Guard, as a whole, during the same
    period. There are seven states that are smaller than New
    Hampshire but have a larger Guard force structure. Does the
    Commission have any recommendations for how to address the
    right Guard force structure in a State?
        General Ham. We do, Senator. In fact, there's a chapter in
    the report dedicated to that. The law required us to conduct an
    assessment of the process by which Army National Guard forces
    are allocated amongst the States and territories. We made three
    recommendations. They are largely administrative. We found, in
    general, that the process that is used to determine the
    stationing of Army National Guard forces is largely sound, and
    there is an opportunity for all of the stakeholders, both
    Federal and State, to participate in the process. The one
    recommendation that we think was--that--or one part that was a
    shortcoming was that, with the establishment of the Chief of
    the National Guard Bureau as a four-star officer and a full
    member of the Joint Chiefs of Staff, that role had not been
    codified in that process, and particularly with relation to the
    Secretary of the Army and Chief of Staff of Army, who have
    significant responsibilities.
        We thought that the process was pretty sound for all--
    again, for all stakeholders to weigh in when decisions were
    being made with regard to the allocation of Army National Guard
    forces.
        Senator Shaheen. I guess I'm not quite clear. How would
    that affect what's happening in New Hampshire, where you've had
    that decline? How would that helpful--be helpful in reversing
    that?
        General Ham. So--well, I'm not sure that--I'm not sure
    that--reversing might not be in the cards, but when there are--
    when there are force-structure changes that are recommended.
    For example, as we see the Army National Guard go down from a--
    I think, from 353,000, eventually stepping down, perhaps, to
    the 335,000, with the changes in aviation, there is a process
    by which all of the stakeholders--the adjutants general, the
    governors, the State legislators, the Army staff, the National
    Guard Bureau, indeed the--you know, there is a role for the
    Congress, here, in terms of funding--for all of those voices to
    be heard in that allocation process. There are a number of
    factors that are considered: ability to recruit and retain,
    access to training areas, the demographics of the particular
    State or territory that's being addressed. Again, we--while we
    didn't look at individual cases, we looked at the process, and
    it was our assessment that the process was largely found--and I
    think the--with the Chief of the National Guard Bureau, the
    Chief of Staff-Army, Secretary of the Army, and to include
    leadership at the Joint Staff and OSD [Office of the Secretary
    of Defense], I think there is a willingness to have those
    discussions, but albeit at some point there are some very, very
    difficult decisions that have to be made with regard to
    allocation of forces to the States and territories.
        Senator Shaheen. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Blumenthal.
        Senator Blumenthal. Thank you, Mr. Chairman.
        I want to come back to helicopters, specifically Black
    Hawks and the recommendations that have been made. The Army's
    proposed Aviation Restructuring Initiative would move all
    Apaches from the Army National Guard to the regular Army,
    leaving the regular Army with 20 battalions. The National Guard
    Bureau's alternative proposal asks for 24 battalions, six with
    the National Guard, and 18 with the regular Army. Your report
    seems to find a middle ground, recommending that the Army
    maintain 24 AH-64 Apache battalions, 20 battalions in the
    regular Army and four in the National Guard. My feeling is, we
    need a strong Army National Guard, which does not equate for it
    to have Apaches, helicopters that are designed solely for
    combat. The Army National Guard should have combat components,
    and Black Hawks have, again and again over our history, proved
    to be, in combat situations, a critical asset and should be--
    should continue to be used by the National Guard, for all the
    reasons that you have set forth in your report, not the least
    of which is that an Army that trains together will fight
    together more effectively.
        Let me ask you, General Lamont, do you agree that Black
    Hawks are a vital component of the Army National Guard?
        Mr. Lamont. Absolutely. Not only for their ability to--as a
    lift force in a combat asset, but in your domestic responses.
    Particularly, as you know, the Guard makes very great use of
    Black Hawks throughout all the domestic response issues, be it
    floods, be it tornados, be it whatever is the situation.
    They're very, very important to the Guard.
        Senator Blumenthal. As a Senator from a State that has seen
    those Black Hawks used in those domestic situations, and a
    State that has experienced hurricanes, floods, tornados, I
    strongly agree with you.
        Let me ask, General Thurman. Do you see a specific need for
    the Army National Guard to have Apaches, rather than keeping
    them in the Active component under the total-force strategy?
        General Thurman. Yes, sir, Senator, for the purpose of
    having strategic depth for the Nation to meet emerging
    requirements and the--what we found was that we don't have that
    once you eliminate them out of the Army National Guard. Our
    analysis, inside the classified annex, will lead you to that
    conclusion, I believe.
        Senator Blumenthal. Thank you.
        General Thurman, you mentioned one of the elephants in the
    room, in my view, just a few moments ago, the rejection rate of
    Army volunteers for reasons relating to physical fitness and
    perhaps other reasons. That number that I've seen is two-thirds
    to three-quarters are rejected because they can't pass the
    physical test. I wonder how important you feel that issue is
    for our Army and our Marine Corps and other services that have
    to rely on a ready recruit force in an All-Volunteer Army.
        General Thurman. Senator, I feel very strong about that. I
    think fundamental to this country is maintaining the All-
    Volunteer Force. That is something that is easily broken, in my
    view. Having available manpower to--that you can recruit from,
    I think, is very important, and it's something that we ought to
    take notice of in the country as we see this population
    decline.
        Senator Blumenthal. It really is an issue of national
    security. If we can't field the force, we can't send them into
    combat, and we can't protect our Nation. I would suggest, since
    my time is about to expire, that there be a very intense and
    aggressive focus on this issue of the readiness of our young
    men and women seeking to come into our Volunteer Force, and
    what can be done in our schools, our communities, and elsewhere
    to send that message.
        Thank you very much for your service and your excellent
    work on this report.
        Thanks, Mr. Chairman.
        Chairman McCain. Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        Thank you for your service, all of you, and for your work
    on this Commission.
        I'd like to follow up on concern regarding recruiting
    people into our military branches. General Thurman, you
    mentioned once again how important it is. This is not the first
    time that this committee has heard those concerns. Do any of
    you have any specific suggestions on what we can do to change
    these outcomes, where so few people qualify to even join our
    military? I mean, for example, should we be looking to expand
    Junior ROTC [Recruit Office Training Course] or ROTC? I'm
    looking for specific suggestions that you may have.
        General Ham. Senator, I'll start, and perhaps Secretary
    Lamont, who lived in this world for a long time, may have some
    thoughts.
        My thought was the same that you just expressed. That is a
    continued emphasis, or perhaps renewed emphasis, on the Junior
    ROTC program. While that doesn't necessarily lead directly to
    enlistments or to service, I think it does, in terms of
    building character, physical fitness, and leadership amongst
    America's youth, I think is a very wise investment.
        Mr. Lamont. Specifically about JROTC, they are very, very
    important, although I will caution you that I think we are
    legislatively prohibited from actually recruiting from that
    base. The mayors of the cities in which those schools exist
    love them. I have had the opportunity to visit JROTC units in
    Chicago, under Mayor Daley. He said, ``Give me more. Give me
    more.'' We went to Philadelphia, we went to New Orleans. What
    they do to get these kids away from the gangs, away from
    inappropriate family situations--we have found that their
    graduate rates, their grade rates, their ability to go into
    higher education--far greater----
        Senator Hirono. Yes.
        Mr. Lamont.--than in our other schools. We'd love to have
    the ability to recruit from those people, but we're--we really
    can't do that. It--they're vitally important to us, let's put
    it that way.
        Senator Hirono. You would find that, generally, when young
    people are exposed to these programs, then they have an
    understanding--better understanding of the military and what it
    means, and that one would hope that there is a higher of
    enlistment as a result.
        If the other two gentlemen would like to add, but if you
    pretty much agree with ROTC--but, if you have any other
    suggestions.
        Mr. Chandler. Well, I think, first of all, we're limiting
    the conversation to what the military can do. This is not a
    military issue. This is a national issue, which is going to
    take a great deal of courage and commitment and a long-term
    vision to solve. By the time a person is in the JROTC program,
    fundamentally they're cooked. Okay? Their diet, their
    nutrition, the way that they exercise--although it can be
    adapted, their lifestyle, the way that they are brought up by
    their family, is going to determine whether or not they are
    going to be able to meet standards.
        You really have quite--the military has, really, two
    options. They can either extend--reduce the standard and bring
    a person in, accepting more risk and spending more time in the
    training base to get them to an acceptable level, or you're
    going to have to increase recruitment efforts--and that's
    primarily other options and dollars--to get people who are
    qualified at the current standard to come in. I mean, all of
    the services compete against one another. They also compete
    against colleges, universities, and businesses that are looking
    for the same type of person. The challenge will be, Where is
    it, once they come into the Military Service, and specifically
    the Army--what are we willing to accept that risk? You have to
    get ahead of the bang, so to speak. That----
        Senator Hirono. Thank you.
        Mr. Chandler.--starts at the pre-K----
        Senator Hirono. I----
        Mr. Chandler.--you know, and the----
        Senator Hirono.--completely agree.
        Mr. Chandler.--elementary school level of how you help
    adapt lifestyle choices.
        Senator Hirono. Thank you for recognizing that it's a
    continuity. This is one of the reasons that there are generals
    who have come forward to express how important it is for us to
    support quality early education as laying a foundation, the
    very kind of foundation you're talking about.
        Mr. Lamont, I understand that you had the opportunity to
    meet with Governor Ige and General Brooks and General Logan,
    our TAG [The Adjutant General]. You know that we have a huge
    military presence in Hawaii, of course. The rebalance to the
    Asia Pacific is a commitment that I have paid particular
    attention to, representing Hawaii as I do. It includes many
    seapower-related actions, but there is also a strong Army
    presence. Would an Army of 980,000 be able to support our
    rebalance to the Pacific, especially recognizing the
    provocative behavior of China and North Korea and other global
    requirements?
        Mr. Lamont. As General Ham mentioned, that was--wasn't
    within our task, but if you want a personal opinion, I'll be
    happy to address it.
        Senator Hirono. Yes.
        Mr. Lamont. By the way, my visit to Hawaii was--although
    quite short, it was very well informed, having dealt with all
    three components there, and it also helped us inform on how we
    push forward multi-component units, because the Reserves and
    the Army National Guard and PACOM--Pacific Command----
        Senator Hirono. Yeah, all the----
        Mr. Lamont.--work so well----
        Senator Hirono. Yes.
        Mr. Lamont.--together. Now, maybe that's----
        Senator Hirono. I think----
        Mr. Lamont.--brought together----
        Senator Hirono.--that's the perfect model.
        Mr. Lamont.--by geographic requirements, but they truly are
    a model in how they work together.
        To get to your question, if I can't avoid it--answering
    that----
        Senator Hirono. Thank you, Mr. Chairman.
        Mr. Lamont.--the situation, we're quite concerned with that
    level of force, quite frankly, to meet the challenge that we
    have in the Pacific.
        Senator Hirono. Thank you.
        Thank you, Mr. Chairman. My time is----
        Chairman McCain. Senator Kaine.
        Senator Kaine. Thank you, Mr. Chair.
        Thanks, to all of you, for your service on the Commission
    and your testimony today.
        I want to follow up in a way related to the question of
    Senator Hirono and other colleagues about, kind of, the young
    people's ability to meet standards, but sort of coming at it
    from a different direction, which is--Sergeant Major, your--you
    talked about the recruitment challenge. You know, as we're
    dealing with this workforce of tomorrow, the Millennials and
    those younger, they're a very different breed. I learn that all
    the time with my own kids, in terms of what they want to do.
    You're right that, you know, the best and the brightest at that
    period of life--say, high school--colleges are competing for
    them, and the private sector wants to get these folks. We had a
    military commission--Military Compensation Review Commission
    that reported back to us last year, and they looked at all the
    compensation and benefits. A lot of that analysis was about,
    sort of, the fiscal realities of the personnel side of the
    military budget, but it was also looking at it in terms of the
    recruiting and the retention side. Your all's first, kind of,
    pillar of your recommendations is, got to maintain the All-
    Volunteer Force, and that assumes recruitment and retention. I
    would just like each of you, from your own experiences, talk
    about, you know, what is your sense, right now in the Army? Do
    we have the right recruiting and retention strategies with
    respect to the workforce of tomorrow, the talent pool that's
    out there that we want? Either as Commission members or from
    your own personal experiences, what things would you recommend
    to us that we think about to enhance the recruitment and
    retention ability into the Army?
        General Ham. Thanks, Senator. I'll start and then--and turn
    to the others.
        I think two elements I would highlight. In our engagements
    across the force, there's a lot of uncertainty. In the
    retention aspect, whether you're regular Army, Army National
    Guard, or Army Reserve, is my--they watch their numbers, they
    see what's happening--is my unit going to still be here in a
    year or two? Am I still going to be relevant? That uncertainty,
    I think, has certainly an effect on retention.
        From the recruiting and bleeding-into-retention aspect, we
    heard loudly and clearly from soldiers of all components. They
    would like the ability to move between components more
    seamlessly and more easily, depending how their life situation
    changes. You're 18, the regular Army might make all the sense
    in the world. You get married, want to go to college, the Army
    National Guard might make all the sense in the world to do
    that. Then perhaps you find attracted to civil affairs, and so
    the Army Reserve might be a good place for you. Right now, the
    policies are constraining with that kind of movement.
        Senator Kaine. Tom?
        Mr. Lamont. A couple of things, sir.
        Our recruiting cohort's primarily 18 to 25 years of age. As
    you've heard today, we're roughly at the ability to look at
    about 25 percent of the eligible population within that cohort.
    That's--it's narrowing down, particularly as our economy may
    continue to grow and they may have other opportunities outside
    of the military. Our--what we call the DEP [Delayed Entry
    Program], that's Delayed Entry Program--two years ago, we were
    roughly at 32,000 waiting to come in when the opportunity and
    the spaces became available. We're roughly around 10,000 now,
    which is considered very much a floor of where we need to be to
    be able to reach out.
        We've also mentioned today so much about the physical
    concerns of some of that cohort, but the behavioral aspect, as
    well. As we look at States, for instance, in the drug programs,
    where marijuana, for instance, is becoming quite common, the--
    available in other States--well, we still have prohibitions
    against folks coming in, in that regard. We're narrowing, in
    many respects, the eligible cohort that we have to recruit
    from.
        We have 11,000 recruiters throughout the Army. Our
    marketing budget's 280 million a year. We're also making a
    recommendation that we look at how we can integrate the
    recruiting. They're all competitive--all three components are
    competitive here. The Army recruits for itself. The National
    Guard recruits for itself. The Army Reserve recruits for
    itself. How can we--that competition for that same eligible
    person is there, but we've got to bring them together so we can
    all recruit. I--it's not going to be easy, and there is
    cultural issues, and the universal recruiter isn't--this isn't
    a new concept. We have to make an effort and try.
        Senator Kaine. Thank you, Secretary.
        Other comments? If I may, Mr. Chair, just--if I could hear
    from the other two witnesses if they have additional comments?
        Mr. Chandler. Yeah, Senator. I agree with General Ham and
    Secretary Lamont's statements. I think that the Military
    Compensation and Reform Commission that made some
    recommendations--I was a signator of that while I was on Active
    Duty as part of the Department of Defense's recommendation. I
    think it's a very forward-looking approach. A lot of the folks
    that have questions are those that are currently in the current
    retirement system and are not going to be affected by these
    changes. I think it does look at a more future approach to what
    Millennials and others are interested in.
        I would also applaud the Army's efforts with trying to
    think about how we can maybe change some policies that prevent
    us from reaching our--the higher objective. I'll use Cyber
    Command as a--Army Cyber as an example. You know, a big
    struggle with, How do you get this very specialized and unique
    individual--and ``unique'' can mean many different things--how
    do you get them to want to be a part of the Army, which, in
    general terms--and I am generalizing--is a little bit different
    from their experiences either in college or in--working for
    some corporation--and to look at things? Like, maybe the tattoo
    policy needs to be loosened more for them, or that we provide
    an opportunity to move in and out of, not only the Army, but
    back into the--you know, the Microsofts and the Dells of the
    world, and bring them back. I think those are things that we
    should be patient with, we should allow some experimentation
    with, and that we should try and focus on the strategic
    objective. How do we find the best people that want to come in
    and serve the Nation, serve their state, and be productive
    members of the military? I think we're on a path. We've just
    got to be patient with it.
        Senator Kaine. General?
        General Thurman. Senator, I would add two things here to
    what's already been said, but I think there has to be a renewed
    emphasis on service to Nation in this country. That starts in
    the family and in the schoolhouse. We really need to get back
    to some of the basic values of what our principles are in the
    country. That's my personal opinion after watching my whole
    family serve throughout World War I, II, and so forth, into
    Vietnam.
        The second thing that we looked at was having--was
    implementing the one personnel and pay system for the Army.
    Right now, you have separate personnel databases between the
    Army National Guard and the regular Army. You've got to see
    your people enterprise. Right now, you can't. There's a program
    called the Integrated Pay and Personnel System that is out
    there being developed, and I'd highly recommend that that
    funding continue for that, because I think that will help what
    General Ham talked about, of how you can transition between
    components so you don't lose the talent. That would be one of
    my recommendations, sir.
        Senator Kaine. Thank you so much, to the witnesses.
        Thank you, Mr. Chair.
        Chairman McCain. Senator Cotton.
        Senator Cotton. Thank you, gentlemen, for your important
    work on this matter. I apologize that I have been detained at
    the Banking Committee, where we had Federal Reserve Chair
    Yellen in her semiannual testimony.
        I have reviewed the report carefully. I wanted just to get
    on the record a discussion about one particularly interesting
    idea, recommendation 22 from Appendix B on page 112, which I'll
    just read in full rather than asking you all to turn to it.
        ``The Congress should require the Secretary of Defense and
    Joint Staff to oversee the modeling of alternative Army design
    and operational concepts, including: (1) the Reconnaissance
    Strike Group, (2) Hybrid Battalion Task Force, (3) Striker
    Global Response Force, and (4) the Reconnaissance and Security
    Brigade Combat Team--and report on their findings within 1
    year. The report to Congress should explicitly address the
    value of follow-on pilot programs to test further any promising
    any alternate force design-and-concept approaches.''
        This seems to me like a far-reaching, maybe even radical,
    proposal, and I would like to hear more on the record about it
    and what might be necessary to undertake that kind of
    transformation. Maybe if we could start with General Ham and
    then go to General Thurman for your comments.
        General Ham. Good. Thanks, Senator.
        You asked us in the law to be comprehensive in our work,
    and so we did. We reached out to a lot of different agencies,
    to include some who have thought seriously about the size,
    structure, and capabilities that ought be resident in the Army.
    Some of those viewpoints have been controversial within the
    Army and from those outside. We felt, nonetheless, it was
    important to hear from them. We did hear from a number of those
    who have offered these kinds of recommendations.
        I guess I would say that, Senator, we didn't find any of
    those notions were sufficiently mature for us to make a
    recommendation to say we think the Army ought to adopt this
    model or that model, but we found elements of the four
    particular proposals that were mentioned, but several others,
    that we think certainly merit further evaluation by the Army,
    and indeed by the Joint Force, because recognizing that the
    Army is always a part of a Joint Force. Some of these
    implications would have--or some of these recommendations would
    have implications for the other services, so it's important to
    view this in a joint perspective.
        That's--that was the genesis of that recommendation. We
    think there's merit in looking at these things. There are
    systems within Army Training and Doctrine Command and other
    agencies, and we think they should take a serious evaluation of
    these proposals.
        Senator Cotton. General Thurman.
        General Thurman. Yes, sir, Senator.
        What I would say, in addition to that, I think it's
    important to look at these concepts and see what benefits that
    you can gain, in terms of overall capabilities, given the
    threats that we have today. There are emerging threats, as
    you're well aware of, out there that we may have a different
    look at how we may want to provide the capability to the joint
    force commander or the global combatant commander. I think
    these all warrant serious review and a look what can be used
    to--maybe to advance capabilities inside the Army for the
    future, really, is what you're looking at.
        Senator Cotton. Thank you.
        Mr. Lamont, Sergeant Major, anything to add to General Ham
    and General Thurman's comments?
        Mr. Chandler. I'd just concur with what they said. I mean,
    you know, you--the Army that I've been a part of is an evolving
    and learning organization; and another set of eyes on how to
    get after the challenges, I think, is important, and I highly
    recommend that they move forward.
        Senator Cotton. Yes. Well, sometimes evolutions can be
    slow, and lessons learned can be hard. I do think it's a very
    intriguing idea that we should take seriously as a committee
    and explore, going forward in the future.
        Again, thank you all for your service to the country, not
    just now, but in many iterations previously.
        Chairman McCain. I'd like to thank the panel again for
    their great work. I think it's given us some very valuable
    input. I know that Senator Reed and I will look seriously at
    some of your proposals and discuss them with the other members
    of the committee, who obviously, as you can see by the
    participation, are very interested. We appreciate your
    significant contribution.
        Senator Reed?
        Senator Reed. I'd just thank the commissioners, your
    colleagues that are not here, all of you, for--extraordinarily
    well done.
        Thank you, Mr. Chairman.
        Chairman McCain. Thank you.
        This hearing is adjourned.
        [Whereupon, at 11:56 a.m., the hearing was adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                           TUESDAY, FEBRUARY 23, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                   U.S. PACIFIC COMMAND AND U.S. FORCES KOREA

        The committee met, pursuant to notice, at 9:33 a.m., in
    Room SD-G50, Dirksen Senate Office Building, Senator John
    McCain (chairman) presiding.
        Committee members present: Senators McCain, Inhofe, Ayotte,
    Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Graham, Reed,
    Nelson, Manchin, Shaheen, Gillibrand, Blumenthal, Donnelly,
    Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good morning. Since a quorum is now
    present, I ask the committee to consider a list of 255 pending
    military nominations. All of these nominations have been before
    the committee the required length of time.
        Is there a motion to favorably report these 255 military
    nominations to the Senate?
        Senator Inhofe. So moved.
        Chairman McCain. Is there a second?
        Senator Reed. Second.
        Chairman McCain. All in favor, say aye.
        The motion carries.
        Good morning. The Senate Armed Services Committee meets
    this morning to receive testimony on U.S. Pacific Command and
    U.S. Forces Korea in review of the defense authorization
    request for fiscal year 2017 and the Future Years Defense
    Program.
        I am pleased to welcome Admiral Harris and General
    Scaparrotti back to this committee. I thank you both for your
    decades of distinguished service and for your leadership in an
    increasingly uncertain time.
        Over the past several years, China has acted less like a
    ``responsible stakeholder'' of the rules-based order of the
    Asia-Pacific region and more like a bully. I note this
    morning's Wall Street Journal headline, ``China Appears to Have
    Built Radar Facilities on Disputed South China Sea Islands.''
        China's increasingly assertive pattern of behavior calls
    into serious question whether China's rise will, in fact, be
    peaceful. Despite United States efforts to rebalance to the
    Asia-Pacific, U.S. policy has failed to adapt to the scale of
    velocity and challenge we face.
        For example, the administration has insisted that China
    must cease its reclamation, construction, and militarization in
    the South China Sea, and that it will fly, sail, and operate
    wherever international law allows. But after more than a year
    of this rhetoric, China's reclamation infrastructure,
    construction, and militarization have all continued.
        The information referred to follows:

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Last week, we saw press reports that China had deployed the
    HQ-9 surface-to-air missile system to Woody Island in the
    Paracel Islands. As I mentioned yesterday, they show a high-
    frequency, possibly over-the-horizon, radar on reclaimed land
    on Cuarteron Reef in the Spratly Islands.
        If true, this deployment would represent a blatant
    violation of Xi Jinping's September 2015 commitment to
    President Obama in the Rose Garden that China ``did not intend
    to pursue militarization.''
        Admiral Harris, I would like to ask today if you can
    confirm the reported militarization of Woody Island, the radar
    at Cuarteron Reef, and if you can reveal to this committee any
    further examples of militarization now occurring in the South
    China Sea that you are aware of.
        As China continues to use force and coercion to
    unilaterally change the status quo and challenge the rules-
    based international order, the credibility of the
    administration's commitments to regional security is
    diminished. Indeed, China's reclamation and militarization in
    the South China Sea, together with China's rapid military
    modernization and expansion, are making it more difficult for
    the United States to defend our allies and our interests from
    military aggression.
        Simply put, the administration's policy has failed.
        Beijing has been willing to accept a high level of risk to
    achieve its strategic goals. Meanwhile, the White House's risk
    aversion has resulted in an indecisive and inadequate policy
    that has confused and alarmed our regional allies and partners.
    The United States must now consider fresh options to raise the
    cost on Beijing's behavior.
        Shaping rather than reacting to Beijing's actions will mean
    adopting policies with a level of risk that we have been
    unwilling to consider up to this point. The administration must
    initiate a robust freedom of the seas campaign, flying and
    sailing wherever international law allows. This should include
    freedom of navigation operations designed to challenge China's
    excessive maritime claims, as well as joint patrols and
    exercises with our allies and partners span the First Island
    Chain.
        We must also maintain our commitment to continued sensitive
    reconnaissance operations, which are critical for gathering
    military intelligence in the Western Pacific. Despite China's
    protests and growing ability to threaten our aircraft, the pace
    and scope of these operations must continue uninterrupted.
        Given the shifting military balance, we also need to take a
    hard look at what the future U.S. military posture in the
    region should look like. While the department has initiated a
    European Reassurance Initiative in Europe, it is clear to me
    that a similar Asian reassurance initiative should be
    considered.
        Building off the recent CSIS [the Center for Strategic and
    International Studies] report, we should consider further steps
    for enhancing posture, improving infrastructure, funding
    additional exercises, pre-positioning additional equipment and
    munitions, and building partner capacity throughout the Asia-
    Pacific region.
        Beyond my concerns about sustaining freedom of the seas, I
    am concerned China may also attempt to expel another country
    from disputed territories, such as Second Thomas Shoal, or
    build new infrastructure at a location like Scarborough Shoal.
    Given this, we should consider clarifying how the United States
    will respond to an attack on the territory or Armed Forces of
    the Philippines under the United States-Philippines mutual
    defense.
        Finally, I believe it is time for the United States
    Government to explore the appropriateness of sanctions against
    Chinese companies involved in the reclamation that has
    destabilized the South China Sea and caused massive
    environmental destruction across this maritime domain.
        While China's assertiveness poses a major long-term
    challenge, North Korea's destabilizing behavior continues to
    present a real and rising risk of conflict.
        Over the past 2 months, it has defied the international
    community by testing a nuclear device and launching a long-
    range missile. These calculated cycles of provocation continue
    to pose a risk of violent escalation on the Korean Peninsula.
    That is why I am thankful for the close cooperation with our
    partners in Seoul between United States Forces Korea [USFK] and
    the ROK [Republic of Korea] Armed Forces.
        I applaud the leadership of President Park for choosing to
    finally close the Kaesong Industrial Region, which has enriched
    the North with hundreds of millions of dollars in the last
    decade. I am also proud to have supported new congressional
    sanctions on North Korea.
        Despite the deficit of leadership from Beijing on this
    issue, these two steps will bring increased pressure on the
    North Korean regime and its supporters.
        I am very encouraged by the joint United States-Republic of
    Korea statement that our two countries will begin the process
    of consultation for deploying the Terminal High-Altitude Area
    Defense, THAAD, system to the Korean Peninsula. The deployment
    of this system by the alliance is a critical step to providing
    a further layer of defenses against North Korea provocations.
        I look forward to hearing General Scaparrotti's perspective
    on the utility of the THAAD system and other ideas to enhance
    the United States-ROK relationship and deterrence on the
    peninsula.
        I would call my colleagues' reminiscence to an occasion
    here the last time Secretary Ash Carter was here, after it had
    been in all of the newspapers and television and radio that the
    United States had finally decided to sail a ship into the areas
    around the disputed islands. The Secretary of Defense, in front
    of this committee, refused to confirm that--refused to confirm
    what was in the media and well-known to everyone, according to
    the New York Times the next day, for fear of upsetting climate
    talks with China. That cannot be made up. Of the 30 years that
    I have been on this committee, I have never seen a performance
    like that.
        Senator Reed?

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman. I want to
    join you in welcoming the witnesses.
        Gentlemen, we appreciate your long and distinguished
    service to the Nation, and also the service of your families
    throughout many, many years.
        General Scaparrotti, this might be your last United States
    Forces Korea posture hearing. We are hearing rumors that you
    are being moved to a different command. But thank you for your
    friendship and your service over many, many years.
        It is clear from the events of the last few months that we
    are facing a challenge of increasing complexity and instability
    in the region. Given North Korea's recent nuclear test and
    China's militarization of land features in the South China Sea,
    the security situation in the region seems more precarious than
    in many recent years. The United States has historically
    underwritten the peaceful development of the Asia-Pacific
    region with strategic alliances and a forward presence that has
    allowed all the countries in the region, including China, to
    make extraordinary economic developments in relative peace.
        One of the pillars of our strategy is to provide stability
    and security in the region by maintaining close partnerships
    and alliances. From the new defense cooperation agreement with
    the Philippines and our rotational Marine presence in
    Australia, to our growing defense relationship with Vietnam,
    there has been great progress on implementing the
    administration's rebalance to Asia, despite competing resource
    demands from other regions. We must continue to build on these
    strategic partnerships and demonstrate our commitment to the
    region by investing sufficiently in our presence and partner
    capacity-building programs.
        Admiral Harris, I am deeply concerned, as we all are, about
    China's violation of its commitment to President Obama in
    November not to militarize the South China Sea.
        Just yesterday, CSIS released an image that appears to show
    that China has placed an advanced radar system on Cuarteron
    Reef, a land feature that China has reclaimed in the Spratly
    Islands. This is in addition to the HQ-9 surface-to-air
    missiles that it added to Woody Island in the Paracels
    recently.
        It seems clear that China does not intend to be a
    responsible stakeholder in the region. I would appreciate your
    views on how China's recent actions affect the stability of the
    region.
        General Scaparrotti, it seems that as Kim Jong-un has
    consolidated his power in North Korea, he is more and more
    willing to tolerate risk, as evidenced by his recent nuclear
    test and rocket launch. I would like to hear about how you
    believe the security situation on the peninsula will evolve
    over the next year.
        Again, we appreciate you joining us this morning, look
    forward to your testimony, and salute your service. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. General Scaparrotti, this is perhaps your
    last appearance before this committee. I want to thank you for
    your outstanding service and your great work, particularly in
    these times of heightened tension. We thank you for your
    service to the country.
        Admiral Harris, do you want to begin?

    STATEMENT OF ADMIRAL HARRY B. HARRIS, JR., USN, COMMANDER, U.S.
                            PACIFIC COMMAND

        Admiral Harris. Thank you, sir. I would.
        Thank you, Chairman McCain, Senator Reed, and distinguished
    members. It is my honor to once again appear before this
    committee.
        Before I begin, on behalf of all the men and women of
    United States Pacific Command [PACOM], I would like to wish
    Senator McCaskill a speedy and full recovery.
        I am pleased to be here with General Scaparrotti to discuss
    how PACOM is advancing America's interests across the vast
    Indo-Asia-Pacific.
        I request, sir, that my written posture statement be
    submitted for the record.
        Chairman McCain. Without objection.
        Admiral Harris. Since taking command of PACOM last May, I
    have had the extraordinary privilege of leading the 400,000
    soldiers, sailors, airmen, marines, guardsmen, and civilians
    serving our Nation. These dedicated men and women and their
    families are doing an amazing job, and I am proud to serve
    alongside them.
        I would like to briefly highlight a few regional issues
    since I last testified before this committee 5 months ago.
        As China continues its pattern of destabilizing
    militarization of the South China Sea, we resumed our freedom
    of navigation operations there, a waterway vital to America's
    prosperity, where $5.3 trillion in trade traverses each year.
        General Scaparrotti and I remain fully aligned in dealing
    with North Korea's recent underground nuclear test followed by
    a ballistic missile launch.
        A revanchist Russia is revitalizing its ability to execute
    long-range strategic patrols in the Pacific, to include the
    basing of its newest strategic ballistic missile submarine and
    last month's bomber flights around Japan.
        Recent terrorist attacks in Bangladesh and Indonesia
    underscore the fact that violent Islamic extremism is a global
    concern that must be crushed.
        We continue to strengthen our alliances and partnerships.
    Japan's peace and security legislation authorizing limited
    collective self-defense will take effect this year. This
    legislation, and the revised guidelines for United States-Japan
    defense cooperation, will significantly increase Japan's
    ability to work with us.
        Thanks to the great leadership of General Scaparrotti,
    South Korea and the United States have taken a strong and
    unified stance to maintain peace and stability on the Korean
    Peninsula. In the face of recent North Korean aggression, PACOM
    hosted a trilateral meeting between the United States Chairman
    of the Joint Chiefs General Dunford, Japanese Chairman Admiral
    Kawano, and South Korean Chairman General Lee. Trilateral
    cooperation between Japan, Korea, and the United States is a
    priority, and I am doing everything I can to enhance it.
        Our alliance with the Philippines took an important step
    forward when the Philippines Supreme Court recently upheld the
    Enhanced Defense Cooperation Agreement, or EDCA, which will
    provide significant partnership and access benefits.
        I am also excited about our burgeoning relationship with
    India, where I will visit next week. As the world's two largest
    democracies, we are uniquely poised to help bring greater
    security and prosperity to the entire region.
        Two visionary policies are now coinciding as the United
    States rebalances west of the Indo-Asia-Pacific and India
    implements its Act East policy.
        Last October's Malabar exercise between India, Japan, and
    the United States shows the security interconnectedness of the
    Indian Ocean, Asia, and the Pacific Ocean. I rely heavily on
    Australia, not only for its advanced military capabilities
    across all domains, but importantly for Australia's warfighting
    experience and leadership in operations around the world.
        These examples clearly demonstrate to me that the United
    States is a security partner of choice in the Indo-Asia-
    Pacific. It is also why I believe that our strategic rebalance
    has taken hold. Given that four of the five strategic problem
    sets identified by Secretary Carter--China, North Korea,
    Russia, and ISIL [the Islamic State of Iraq and the Levant]--
    are in our region, I would say that we cannot rebalance fast
    enough.
        But there is more work to do, and we must not lose the
    momentum, so I ask this committee to support continued
    investment in the future capabilities. I need weapon systems of
    increased lethality that go faster, go further, and are more
    survivable.
        If funding uncertainties continue, the U.S. will experience
    reduced warfighting capabilities, so I urge Congress to repeal
    sequestration.
        Finally, I would like to thank this committee and Congress
    for your enduring support to PACOM, and the men and women in
    uniform, our civilian teammates, and our families. Thank you,
    and I look forward to your questions, sir.
        [The prepared statement of Admiral Harris follows:]
               Prepared Statement by Admiral Harry B. Harris Jr.
        Chairman McCain, Senator Reed, and distinguished members of the
    committee, thank you for the opportunity to appear before you today.
    This is my first posture assessment since taking command of U.S.
    Pacific Command (USPACOM) in May 2015. Over the past 9 months, I've had
    the extraordinary privilege to lead 378,000 Soldiers, Sailors, Airmen,
    Marines, Coast Guardsmen, and civilians selflessly serving our nation.
    These dedicated men and women and their families are doing an amazing
    job, and I'm proud to serve alongside them.
        USPACOM protects and defends, in concert with other U.S. Government
    agencies, the territory of the U.S., its people, and its interests.
    With allies and partners, USPACOM enhances stability in the Indo-Asia-
    Pacific region by promoting security cooperation, encouraging peaceful
    development, responding to contingencies, deterring aggression, and,
    when necessary, fighting to win. This approach is based on military
    preparedness, partnership, and presence.
        The strategic importance of the Indo-Asia-Pacific region cannot be
    overstated. Recognition of clear military, economic, and demographic
    trends inspired President Obama to undertake a ``Rebalance'' strategy
    in 2011. The Rebalance, a strategic whole of government effort, guides
    and reinforces our military efforts, integrating with diplomatic,
    political, and economic initiatives.
        In August of 2015, Secretary of Defense Carter described four
    elements of the military component of the Asia-Pacific Rebalance:
        1)  investing in future capabilities relevant to the challenges in
    the Asia-Pacific;
        2)  fielding the right numbers of existing capabilities to the
    Asia-Pacific;
        3)  adapting our regional force posture; and
        4)  reinforcing alliances and partnerships.
        Despite other pressing challenges around the world, and because of
    the legislative and budgetary support of Congress, we achieved momentum
    in each element above. I believe we must continue, and even increase,
    this momentum, as the strategic imperative behind the Rebalance remains
    valid.
        What follows is my assessment of the Indo-Asia-Pacific and
    USPACOM's part of the Rebalance. I will describe the security
    challenges and highlight regional opportunities with strategic value. I
    will discuss the value of U.S. strategic force posture and forward
    presence to the Rebalance--how it improves our readiness to fight
    tonight, enhances our ability to reassure allies and partners, and
    maintain stability. I will then explain how USPACOM strengthens our
    alliances and builds critical regional partnerships that deliver
    strategic benefit while enhancing U.S. readiness to protect and defend
    U.S. interests. Finally, I will highlight critical needs and seek your
    support for budgetary and legislative actions in the coming weeks and
    months.
                              security environment
        The Indo-Asia-Pacific has been a largely peaceful region for over
    70 years, in large part, because of the system of rules and norms
    established and underpinned by robust U.S. presence and anchored by a
    series of treaty alliances and bilateral relationships with countries
    in the region. Regional nations, including and perhaps especially
    China, have benefited because of the security architecture provided by
    the United States and our allies. The Indo-Asia-Pacific is critically
    important to United States commerce, diplomacy, and security. Estimates
    predict up to 70 percent of the world's population will reside in the
    region by the middle of this century. Within the region are the world's
    two largest economies after the United States (China and Japan), and
    five of the smallest economies. The region contains the world's most
    populous nation (China), largest democracy (India), largest Muslim-
    majority state (Indonesia), and smallest republic (Nauru). It contains
    seven of the ten largest standing militaries in the world, five nuclear
    nations, and five of the U.S.' seven mutual defense treaty alliances.
        The region's environment, history, cultural and political
    diversity, and robust military capabilities present dynamic strategic
    challenges. Self-interested actors challenge the existing international
    rules-based order that helped underwrite peace and prosperity in the
    region for over 70 years. North Korea continues its provocative,
    coercive behavior and weapons development. Chinese coercion, artificial
    island construction, and militarization in the South China Sea threaten
    the most fundamental aspect of global prosperity--freedom of
    navigation. Other challenges include the movement and facilitation of
    violent extremists to and from the Middle East, transnational criminal
    activity (including human trafficking and illicit drugs), and an
    increasingly revanchist and assertive Russia. USPACOM enhances U.S.
    Force posture, presence, and resiliency in the region, modernizing U.S.
    Force capability to ensure forces are ready to fight and win any
    contingency. USPACOM is working with allies and partners on a
    bilateral--and increasingly multilateral--basis to address these
    challenges. Together, we enhance capability and capacity to respond to
    the range of threats endemic to the region. We are stronger together.
                                    overview
        A number of challenges has emerged over the past year that place
    stability and security at risk. In July 2015, China largely completed
    land reclamation at seven sites in the South China Sea and is finishing
    runways, infrastructure, and systems to militarize what are, in effect,
    man-made bases, significantly raising regional tensions. China views
    the South China Sea as a strategic frontline in their quest to dominate
    East Asia out to the Second Island Chain. I view their thinking as
    approaching a new ``Great Game.'' Last month, North Korea conducted its
    fourth nuclear test in ten years and last August, raised tensions with
    a land-mine attack in the Demilitarized Zone (DMZ). Russia continues
    modernizing its military forces, homeporting its newest Dolgurukiy-
    class ballistic missile submarine in Petropavlovsk, and revitalizing
    its ability to execute long range strategic patrols, highlighted by
    last July's deployment of Tu-95 Bear bombers near Alaska and
    California, and last month's bomber flights around Japan. Terrorist
    attacks in Bangladesh and Indonesia underscore the fact that violent
    Islamic extremism is a global problem.
        While these events threaten the region's peace and prosperity,
    there was positive progress as well. Last September, Japan passed its
    Peace and Security Legislation which authorizes collective self-defense
    in limited circumstances. The Philippines remained committed to solving
    its maritime dispute with China peacefully through arbitration under
    the Law of the Sea Convention. The Philippine Supreme Court upheld the
    Philippine's domestic approval of the Enhanced Defense Cooperation
    Agreement (EDCA), which will provide significant partnership and access
    benefits. India underscored its ``Act East'' policy by crafting a Joint
    Strategic Vision of the Asia-Pacific and Indian Ocean Region with the
    United States and is progressing toward signing essential foundational
    agreements that will enable deeper ties, improve interoperability, and
    increase cooperation. Singapore has increased routine access to United
    States military assets such as Littoral Combat Ships and P-3/P-8
    aircraft. Trilateral cooperation among allies is increasing and
    multilateral forums such as the Association of South East Nations
    (ASEAN) are focusing on shared security challenges in the region. These
    events demonstrate that Indo-Asia-Pacific countries are increasingly
    viewing the United States as their security partner of choice. That
    said, significant challenges remain.
                                 key challenges
        North Korea:  Though North Korea is not yet an existential threat
    to the United States, it remains the most dangerous and unpredictable
    actor in the Indo-Asia-Pacific. Kim Jung Un regularly conducts
    provocative and escalatory actions. Just last month, North Korea
    conducted an underground nuclear test, the fourth since 2006, which
    violated its obligations and commitments under international law,
    including several UN Security Council Resolutions. Additionally, this
    month, North Korea conducted a ballistic missile test under the guise
    of launching a satellite. These tests, coupled with the unprovoked mine
    attack on Republic of Korea (ROK) soldiers in the DMZ last August, are
    the latest in a series of actions intended to destabilize the
    Peninsula, challenge ROK President Park's leadership, and raise
    tensions.
        While the international community urges North Korea to live up to
    its international obligations and return to credible negotiations under
    the Six-Party Talks framework, Pyongyang has shown no willingness to
    seriously discuss denuclearization. Kim Jung Un is on a quest for
    nuclear weapons, and the technology to miniaturize them and deliver
    them intercontinentally. Additional nuclear tests are likely to occur.
    North Korea will also likely test and field improved mobile
    intercontinental ballistic missiles and intermediate range ballistic
    missiles (MUSUDAN) capable of reaching Japan, and actively pursue its
    submarine launched ballistic missile development program. On 6
    February, North Korea launched its second space vehicle in direct
    violation of several United Nations Security Council Resolutions,
    firing a complex, multi-stage rocket that also forms the basis of an
    intercontinental ballistic missile. North Korea announced its intent to
    conduct ``annual and regular'' drills to advance this prohibited
    capability. I have no doubt they will do so.
        North Korea refuses to abide by the rules and norms of the
    international community and represents a clear danger to regional
    peace, prosperity, and stability. In the cyber domain, North Korea has
    lesser cyber technical capabilities than other states, but has already
    demonstrated them as a way to impose costly damage to commercial
    entities. This was demonstrated in the high-profile attack on Sony
    Pictures Entertainment. North Korea sells weapons and weapons-related
    technologies in conflict with United Nation Security Council Resolution
    restrictions.
        Chinese Military Modernization and Strategic Intent:  China's
    military modernization program is transforming its forces into a high-
    tech military to achieve its dream of regional dominance, with growing
    aspirations of global reach and influence. Given China's economic rise,
    the goal may be natural; however, the lack of transparency on China's
    overall strategic intent behind its military investments and activities
    creates instability and regional anxiety.
        China's navy and air forces are rapidly fielding advanced warships
    and planes. Over the past decade, the Chinese navy has significantly
    increased in size and is much more capable in every way. Chinese forces
    are operating at a higher tempo, in more places, and with greater
    sophistication than ever before. Chinese shipyards are constructing
    China's first cruiser-sized warship, their first indigenous aircraft
    carrier, and many classes of patrol boats, frigates, and destroyers.
    Newer, more capable submarines continue replacing older ones. New
    fighters (including the ``Gen-5'' J-31), bombers, special mission
    aircraft, and unmanned systems give China greater air capabilities,
    lethality, and flexibility. These advances have been aided and
    accelerated by systemic technology theft, enabling China to skip
    decades of research and development and go straight into production.
    Finally, the People's Liberation Army (PLA) is undergoing dramatic
    reorganization to improve its command and control of joint forces.
        China's strategic capabilities are significant. The Jin-class
    ballistic missile submarine (Type 094) carries the JL-2 submarine
    launched ballistic missile capable of reaching parts of the continental
    United States and represents China's first credible sea-based nuclear
    deterrent. New road-mobile intercontinental ballistic missiles provide
    more strike options and greater survivability.
        In the maritime domain, China's Navy (PLA(N)) is increasing its
    routine operations in the Indian Ocean, expanding the area and duration
    of operations and exercises in the Western and Central Pacific Ocean,
    and is beginning to act as a global navy--venturing into other areas,
    including Europe, North America, South America, Africa, and the Middle
    East.
        While China's actions are causing concern among neighbors in the
    region, there are potential opportunities. Its small but growing number
    of bilateral and multinational exercises suggests Beijing's greater
    willingness to interact with partners. Support for UN Peace Keeping
    missions is an encouraging sign of Chinese willingness to play a more
    active and constructive role in international affairs. My goal is to
    convince China that the best way ahead is through peaceful cooperation,
    participation and conformance in a rules-based order, and by honoring
    agreements made in good faith.
        Territorial Disputes:  The political and military dynamic in the
    East and South China Seas is changing, and tactical miscalculations
    between claimants present threats to stability and security.
        In the East China Sea, tensions between Japan and China over the
    Senkaku Islands continue. China seeks to challenge Japan's
    administrative control over the islands by deploying warships into the
    area, sailing coast guard ships inside the territorial waters
    surrounding the Senkakus, and intercepting Japanese reconnaissance
    flights. In April of 2014, President Obama affirmed that Article V of
    the United States-Japan Security Treaty includes the Senkaku Islands. I
    am bound to protect that promise.
        In the South China Sea, the situation is more complex. There are
    six claimants to disputed features: Brunei, China, Malaysia, the
    Philippines, Taiwan, and Vietnam, and there are three notable disputes
    over territorial sovereignty. The first dispute is between China,
    Taiwan, and Vietnam over the sovereignty of the Paracel Islands, which
    China took by force from Vietnam and has occupied since 1974. The
    second dispute is between China, Taiwan, and the Philippines over
    Scarborough Reef, of which China seized control in 2012. The third
    dispute involves multiple claimants within the Spratly Islands where
    China, Taiwan, Vietnam, Brunei, Malaysia, and the Philippines each
    claim sovereignty over various features.
        The United States takes no position on competing sovereignty claims
    in the South China Sea, but we encourage all countries to uphold
    international law, as reflected in the Law of the Sea Convention, which
    ensures unimpeded lawful commerce, freedom of navigation and
    overflight, and peaceful dispute resolution.
        While China has not clearly defined the scope of its maritime
    claims in the South China Sea, China has unilaterally changed the
    status quo. Chinese leaders seem to believe that, through coercion,
    intimidation, and force, they can bypass accepted methods of dispute
    resolution. They have demonstrated this through aggressive artificial
    island building, and by growing a fleet of ``white hull'' ships and
    fishing vessels whose purpose is to dominate the area without the
    appearance of overt military force. China is now turning its artificial
    island projects into operating bases for forward-staging military
    capabilities--under the rubric of being civilian facilities. For
    example in January 2016, China landed civilian aircraft on its man-made
    airbase at Fiery Cross Reef. The PLA is installing new or improved
    radars, communications systems, and other military capabilities at
    seven separate reclaimed bases. The scale and scope of these projects
    are inconsistent with the China's stated purpose of supporting
    fishermen, commercial shipping, and search and rescue. Although
    Vietnam, Malaysia, the Philippines, and Taiwan have also conducted land
    reclamation in the South China Sea, their total--approximately 115
    acres over 45 years--is dwarfed by the size, scope, speed, and scale of
    China's massive buildup. In a little over two years, China has
    constructed more than 3,000 acres of artificial land--heightening
    environmental concerns by destroying the fragile ecosystem of the South
    China Sea. Professor John McManus of the University of Miami has called
    this the most rapid rate of permanent loss of coral reef area in human
    history. Equally concerning is Beijing's repeated pronouncements that
    it will not accept any decision issued by the arbitral tribunal in the
    case filed by the Philippines under the Law of the Sea Convention..
        China's actions undermine the international rules-based order.
    Furthermore, these actions have driven China's South China Sea
    neighbors to expand their own military capabilities and seek stronger
    relationships with the United States and one another. The result is a
    situation that is ripe for miscalculation that could escalate to
    conflicts that no one wants, in an area vital to global prosperity.
        While preventing conflict in South China Sea requires patience and
    transparency among all parties, time favors the Chinese. For the United
    States to continue to play a constructive role in preventing conflict
    and supporting peaceful dispute resolution requires national resolve
    and a willingness to apply all elements of national power in the right
    measure to influence all claimants to use international dispute
    resolution mechanisms. For example, USPACOM recently conducted freedom
    of navigation operations in the South China Sea--the continuation of a
    longstanding United States practice. These operations are an important
    military tool to demonstrate America's commitment to the rule of law,
    including the fundamental concept of freedom of navigation. The U.S.
    will sail, fly, and operate wherever international law allows.
        Russian Assertiveness:  Though focused on Europe and the Middle
    East, Russia is engaged politically and militarily in the Indo-Asia-
    Pacific. Russian activity is assertive, but not confrontational. Ships
    and submarines of the Russian Pacific Fleet and long range aircraft
    routinely demonstrate Russia's message that it is a Pacific power.
        Russian ballistic missile and attack submarines remain especially
    active in the region. The arrival in late 2015 of Russia's newest class
    of nuclear ballistic missile submarine (DOLGORUKIY SSBN) in the Far
    East is part of a modernization program for the Russian Pacific Fleet
    and signals the seriousness with which Moscow views this region.
        Violent Extremism / Foreign Fighters:  The Indo-Asia-Pacific has
    the largest Muslim population on the planet and extremism is a rising
    challenge. Of the many extremist groups in the Indo-Asia-Pacific, those
    connected to Islamic State of Iraq and the Levant (ISIL) or al Qaeda
    (AQ) are of greatest concern. Foreign fighters from the Indo-Asia-
    Pacific have contributed to violence in Syria and Iraq and pose a
    growing threat to security in their home countries upon their return.
    Attacks in Australia and Bangladesh underscore regional concerns about
    self-radicalized actors. Small but growing numbers of Bangladeshi,
    Indonesian, and Philippine extremists have pledged fealty to ISIL, and
    threats to host nation and Western interests are rising. USPACOM--in
    coordination with USSOCOM--and partner nations are focused on
    disrupting these extremist networks.
        Transnational Crime:  Transnational Criminal Organizations (TCOs),
    many operating sophisticated global enterprises that traffic in human
    beings, weapons, drugs, and other illicit substances, exist throughout
    the Indo-Asia-Pacific. The revenue from criminal endeavors threatens
    stability and undermines human rights. Corruption follows wherever
    these organizations flourish, weakening governments and contributing to
    regional instability.
        Methamphetamine and amphetamine-type stimulants continue to be the
    primary drug threat in the region. Joint Interagency Task Force-West
    (JIATF-W) reports that at least 90 percent of the precursor chemical
    seizures potentially destined for illicit methamphetamine production
    originates in China. Maritime container shipments of China-sourced
    chemicals are diverted for methamphetamine and heroin/opioid production
    in Mexico--a direct threat to the United States Homeland. The Asia-
    Pacific is also a growing, lucrative market for illicit narcotics
    produced in the Western Hemisphere. Just last week, JIATF-W coordinated
    with French authorities in French Polynesia to apprehend a sailing
    vessel located with almost 750 kilograms of cocaine.
        Nearly 36 million victims of human trafficking are estimated
    worldwide and nearly two-thirds are from Asia. Women and children--
    especially those from the lowest socioeconomic sectors--are the most
    vulnerable. Roughly half of those 36 million victims end up in the
    commercial sex trade, while others are forced into difficult and
    dangerous positions in factories, farms, as child soldiers, or as
    domestic servants. While much remains to be done, USPACOM forces,
    including JIATF-W, are building partner capacity and sharing
    intelligence in order to combat these transnational threats.
        Proliferation Issues:  The Indo-Asia-Pacific region has the busiest
    maritime and air ports in the world. Developing technology has outpaced
    many nations' ability to effectively manage export controls. Trade
    includes dual-use technology--commercial items controlled by the
    nuclear, ballistic missile, and chemical/biological weapons control
    regimes, including manufactured or re-exported materials from other
    nations with limited export control enforcement.
        USPACOM's Countering Weapons of Mass Destruction (CWMD) community
    supports counter-proliferation operations throughout the Indo-Asia-
    Pacific region. USPACOM addresses concerns through key leader
    engagements, combined and joint exercises, and international security
    exchanges focused on counter proliferation activities. Recent success
    stories include Vietnam joining 104 nations as an endorsee of the
    Proliferation Security Initiative (PSI). The PSI rotational exercise
    series provides a framework for partner nations to improve legal
    authorities and operational capabilities to interdict WMD, delivery
    systems, and other related materials. Proactive dialogue under PSI is
    vital to reducing WMD proliferation.
        USPACOM works with the Armed Forces of the Philippines to enhance
    military to military interoperability and provide assistance to
    military first responders' capability to respond to a WMD. Under
    section 1204 of the fiscal year 2014 National Defense Authorization Act
    (NDAA), the primary objective of USPACOM's WMD assistance is to train
    and equip first responders. In Aug 2015, USPACOM, Service Components,
    and combat support agencies such as the Defense Threat Reduction Agency
    provided the Armed Forces of the Philippines (AFP) a ``first class''
    Chemical, Biological, Radiation, Nuclear (CBRN) Defense capability.
    Under these section 1204 authorities, USPACOM will begin to work with
    Thailand, Vietnam, and Malaysia to enhance their capacity to respond to
    a WMD event.
        Natural Disasters:  The Indo-Asia-Pacific remains the world's most
    disaster-prone region, experiencing over 2,700 disasters that affected
    nearly 1.6 billion people in the past decade alone. In addition to
    seismic and weather disasters, areas of large populations, dense living
    conditions, and poor sanitation in the region create optimal conditions
    for the rapid spread of diseases. U.S. Forces regularly train with
    allies and partners in disaster relief operations and are called upon
    often to respond to tragic events.
        USPACOM's Center for Excellence for Disaster Management (CFE-DM)
    increases regional governments' readiness to respond to natural
    disasters by developing lessons learned and providing best practices.
    Many of the lessons learned and preparedness measures implemented after
    Typhoon Haiyan (Operation Damayan, November 2013) reduced damage and
    loss of life when Typhoon Hagupit struck the Philippines in 2014. To
    help USPACOM rapidly respond to future natural disasters, Vietnam is
    allowing sets of vehicles, equipment, and supplies to be prepositioned
    within its borders for disaster preparedness purposes. USPACOM will
    continue improving pre-crisis preparedness and working with allies and
    partners to improve responses whenever disasters strike, but it is
    important to note that disaster preparedness cannot overtake
    traditional military readiness as our focus.
                strategic force posture in the indo-asia-pacific
        The tyranny of distance and short indications and warnings
    timelines place a premium on robust, modern, and agile forward-
    stationed forces at high levels of readiness. USPACOM requires a force
    posture that credibly communicates U.S. resolve, strengthens alliances
    and partnerships, prevents conflict, and in the event of crisis,
    responds rapidly across the full range of military operations.
    USPACOM's strategic force posture is also supported by the deployment
    of rotational forces and the fielding of new capabilities and concepts
    that address operational shortfalls and critical gaps.
        Global Force Management (GFM):  In support of the Rebalance, the
    Department has undertaken GFM initiatives that include the deployment
    of Littoral Combat Ships to Singapore, replacing the aircraft carrier
    USS George Washington in Japan with the more capable USS Ronald Reagan,
    the deployment of two additional ballistic missile defense-capable
    surface ships to Japan, and the stationing of additional submarines and
    a submarine tender in Guam. The Air Force deploys a broad range of
    aircraft as part of its Theater Force Package model including B-52s, F-
    22s, F-16s, E-8s, and RC-135s. The Army forward deployed a second
    ballistic missile defense radar in Japan, maintained a THAAD battery in
    Guam, and delivered training and presence across the region through
    Pacific Pathways, enhancing partnership opportunities without permanent
    basing. The Army also continues updating Prepositioned Stocks (APS) and
    advocating for the placement of Disaster Response activity sets across
    Southeast Asia. The Marine Corps continues to execute the Defense
    Policy Review Initiatives (DPRI), which will reduce the Marine Corps
    footprint in Japan and distribute Marine Air Ground Task Force (MAGTF)
    capability across the region. The Marine Corps is also expanding
    rotational presence in Australia through its Marine Rotational Force-
    Darwin initiative. USPACOM plans to improve rotational force presence
    in the Philippines via the Enhanced Defense Cooperation Agreement
    (EDCA) and establishing USAF dispersal capabilities in the Commonwealth
    of the Northern Mariana Islands (CNMI) and in the Northern Territory of
    Australia. Rotational forces west of the International Date Line are
    positioned to deter and defeat potential aggressors in the region.
    Finally, we are beginning consultations with the government of South
    Korea for the placement of a Terminal High Altitude Air Defense
    capability on the Korean Peninsula.
        Posture Initiatives:  The size and scope of forward stationed
    forces and the challenges within the security environment require
    recapitalization and improvement to infrastructure in theater. To that
    end, fiscal year 2016 military construction projects largely reflect
    requirements that support fielding new capabilities in the region, to
    include the F-35 Joint Strike Fighter, CV-22 Osprey, C-130J Hercules,
    and F-22 Raptor. Additional investments support resiliency initiatives
    and infrastructure recapitalization in Australia, Guam, CNMI, Hawaii,
    and Japan; critical munitions throughput recapitalization in California
    (Military Ocean Terminal Concord); and quality of life investments for
    our forces in South Korea and Japan.
        Additionally, USPACOM's force posture strategy seeks to provide the
    correct level of capital investment to support established posture
    initiatives and commitments, including efforts in Korea (Yongsan
    Relocation Plan and Land Partnership Plan) and Japan (Okinawa
    Consolidation and the Defense Policy Review Initiative). In support of
    these initiatives, the Government of Japan committed up to $3.1 billion
    to help realign United States Marines from Okinawa to Guam and other
    locations, and $4.5 billion to expand the airfield and associated
    facilities at Marine Corps Air Station Iwakuni. Korea and Japan
    maintain robust host nation funded construction programs, which play
    vital roles in supporting United States presence and enduring
    capabilities in the region. These vital partner contributions require
    the Services to program Planning and Design funds to ensure our allies
    deliver facilities that meet our requirements.
        Furthermore, USPACOM is expanding its presence in various parts of
    the region to include completing the permanent stationing of THAAD on
    Guam, the addition of a submarine and sub tender in Guam, additional
    Aegis BMD capable ships to Japan, and seeking the assignment of
    additional Intelligence, Surveillance, and Reconnaissance (ISR) assets
    in the region. In support of the Rebalance, USPACOM is in the midst of
    executing four major Force Posture initiatives: (1) United States-Japan
    Defense Policy Review Initiative (DPRI) / USMC Distributed Laydown, (2)
    United States Forces Korea Realignment, (3) Resiliency Efforts, and (4)
    Agile Logistics.
          DPRI:  USPACOM is making progress on DPRI/USMC
    Distributed Laydown initiatives; however, significant Japanese
    political challenges remain. Consolidation of United States Marines in
    Japan is dependent upon completion of Okinawa construction efforts to
    include the Futenma Replacement Facility (FRF). In spite of the
    Government of Japan (GOJ) political resolve and dedication of
    resources, progress on relocating Marines from Futenma to Camp Schwab
    is slow going. GOJ budgeted $258M in fiscal year 2015 for 200 projects,
    but only 9 facilities have been completed with an additional 8 under
    construction. GOJ faces challenges in several areas, including
    overcoming Nago City obstruction impacting construction and controlling
    protester interference. The central government has dispatched police
    officers from the mainland to Okinawa to assist the Okinawa Prefectural
    Police in managing protest activity in and around United States bases
    in Okinawa. However, as of this writing, very little progress has been
    made in improving the situation and protests continue to escalate.
    While the issues in Okinawa continue, USPACOM made progress in laying
    the groundwork for relocating 5,000 Marines to Guam. Tied to the Guam
    effort, DOD is aggressively pursuing the establishment of the CNMI
    Joint Military Training (JMT) Area to mitigate joint training
    deficiencies in the region.
          USFK Realignment:  The consolidation of United States
    forces in Korea via the Land Partnership Program (LPP) and Yongsan
    Relocation Program (YRP) is moving ahead at full-speed. Construction
    will triple the size of Camp Humphreys and increase the base's
    population to 36,000 troops and family members. The ROK is bearing the
    majority of the relocation's cost, committing over $7.5 billion to the
    project. USPACOM appreciates Congress' continued support of DOD's
    largest peace-time relocation project.
          Resiliency Efforts:  USPACOM resiliency efforts include
    investment in a more robust transportation infrastructure in ally and
    partner countries, mitigation of single points of failure via the
    dispersal and optimization of critical enablers, such as communication
    nodes, fuel, medical, and logistic support equipment, and hardening
    facilities. For example, USPACOM is hardening facilities in Guam and
    CNMI as well as enhancing airfields at dispersed sites throughout the
    theater.
          Agile Logistics:  Due to time and distance required to
    move assets within the USPACOM region, it is imperative to invest in
    infrastructure to ensure logistics commodities--munitions, fuel, and
    other war materiel--are properly prepositioned, secured, and available
    to meet requirements. USPACOM continues to build capacity for pre-
    positioned war reserve fuel stocks and invest in munitions, fuel, and
    other war materiel facilities and infrastructure throughout the
    theater. For example, critical munitions throughput recapitalization in
    California (Military Ocean Terminal Concord) is necessary to support
    USPACOM plans and operations.
        Readiness:  USPACOM is a ``fight tonight'' theater with short
    timelines across vast spaces. Threats such as North Korea--which has
    over a hundred thousand rockets aimed at Seoul--require United States
    military forces in the region maintain a high level of readiness to
    respond rapidly to a crisis. USPACOM's readiness is evaluated against
    its ability to execute operational and contingency plans, which place a
    premium on forward-stationed, ready forces that can exercise, train,
    and operate with our partner nations' militaries and follow-on forces
    able to respond to operational contingencies.
        Forward-stationed forces west of the International Date Line
    increase decision space and decrease response time, bolster the
    confidence of allies and partners, and reduce the chance of
    miscalculation by potential adversaries.
        The ability of the U.S. to surge and globally maneuver ready forces
    is an asymmetric advantage that must be maintained. Over the past two
    decades of war, the U.S. has of necessity prioritized the readiness of
    deploying forces at the expense of follow-on-forces and critical
    investments needed to outpace emerging threats. A shortage of ready
    surge forces resulting from high operational demands, delayed
    maintenance periods due to sequestration, and training pipeline
    shortfalls limit responsiveness to emergent contingencies and greatly
    increase risk. These challenges grow each year as our forces downsize
    while continuing to deploy at unprecedented rates.
        Fiscal uncertainty requires the Department to accept risk in long-
    term engagement opportunities with strategic consequences to U.S.
    relations and prestige. Continued budget uncertainty and changes in
    fiscal assumptions in the Future Years Defense Program (FYDP) degrade
    USPACOM's ability to plan and program, leading to sub-optimal
    utilization of resources. Services must be able to develop and execute
    long-term programs for modernization while meeting current readiness
    needs. Much of the supporting infrastructure in the Pacific and on the
    West Coast of the U.S. mainland was established during World War II and
    during the early years of the Cold War. The infrastructure requires
    investment to extend its service life but the Services struggle to
    maintain infrastructure sustainment, restoration, and modernization
    accounts at appropriate levels. If funding uncertainties continue, the
    U.S. will experience reduced warfighting capabilities and increased
    challenges in pacing maturing adversary threats.
                              allies and partners
        USPACOM's forward presence, posture, and readiness reassure allies
    and partners of United States commitment to security in the Indo-Asia-
    Pacific. Strengthening these relationships is critical to meeting the
    challenges and seizing opportunities. Through bi-lateral and multi-
    lateral relationships and activities, USPACOM is building a community
    of like-minded nations that are committed to maintaining of the
    international rules-based order. The United States's five Indo-Asia-
    Pacific treaty allies are Australia, Japan, Republic of Korea,
    Philippines, and Thailand. In addition, the United States continues to
    strengthen partnerships with New Zealand, India, and Singapore, and
    build new relationships that advance common interests with Vietnam,
    Mongolia, Malaysia and Indonesia. This year, USPACOM plans to leverage
    Fiscal Year 2016 National Defense Authorization Act, Public Law 114-92,
    section 1263, ``South China Sea Initiative'' (section 1263) authority,
    to begin implementing the Secretary's Southeast Asia Maritime Security
    Initiative (MSI)--an initiative Secretary Carter announced at the
    Shangri-La Dialogue that will increase the maritime security and
    maritime domain awareness capacity of the Philippines, Vietnam,
    Malaysia, Indonesia, and Thailand. The Secretary has made available $50
    million in fiscal year 2016 funding and announced an additional $375
    million from fiscal year 2017-2020 to conduct MSI activities pursuant
    to this authority. MSI takes a regional approach to help our partners
    better sense activity within their sovereign territorial domain, share
    information with domestic joint and international combined forces, and
    contribute to regional peace and stability operations. I'm also looking
    forward to improving military-to-military relationships with Burma and
    Sri Lanka, once political conditions permit. Strengthening and
    modernizing alliances and partnerships is a top USPACOM priority.
                                     allies
        Japan:  The US-Japan alliance remains strong and operational
    cooperation between USPACOM and the Japan Joint Staff continues to
    increase. Our relationship is a cornerstone of regional stability. On
    September 19th, 2015 Japan's Peace and Security Legislation authorizing
    limited collective self-defense passed into law and will take effect
    this year. Japan's Peace and Security Legislation and the revised
    Guidelines for United States-Japan Defense Cooperation will
    significantly increase Japan's ability to contribute to peace and
    security. Japan's leadership has worked toward lessoning historical
    tensions and improving cooperation and collaboration with the Republic
    of Korea (ROK) in areas such as information sharing and disaster
    response The Government of Japan supports USPACOM activities to
    maintain freedom of navigation in the South China Sea. In another
    growing relationship, a Japanese destroyer participated in the United
    States-India-Japan trilateral exercise MALABAR in October and then
    transited the South China Sea in company with the USS Theodore
    Roosevelt in early November. Japanese P-3s exercised with the
    Philippines and operated in the South China Sea while returning to
    Japan from Southwest Asia.
        Republic of Korea:  The ROK alliance remains strong, and I am
    optimistic that the Japan-ROK relationship will continue to improve,
    which I hold as a top priority. The United States and ROK agreed to
    delay wartime operational control (OPCON) transfer and adopt a
    conditions-based approach, rather than following a calendar-based
    deadline. Secretary of Defense Carter and his counter-part, Minister
    Han, signed the Conditions Based OPCON Transition Plan (COTP) in
    November 2015 at the annual Security Consultative Meeting in Seoul.
    This is part of American and ROK efforts to modernize the alliance to
    better address continued threats and provocations from North Korea such
    as January's nuclear test and February's space launch. Trilateral
    cooperation with Japan is the next logical step to ensure both
    countries' mutual security.
        Australia:  The United States-Australia alliance anchors peace and
    stability in the region. Australia plays a leading role in regional
    security and capacity-building efforts and addressing disaster
    response. Australia is a key contributor to global security,
    contributing to counter-ISIL efforts in Iraq and the Resolute Support
    mission in Afghanistan. With the implementation of force posture
    initiatives, the Marine Rotational Force-Darwin successfully completed
    its third rotation while increasing its presence from 250 to 1,177 U.S.
    Marines. The fourth rotation begins in April 2016. The United States
    and Australia are increasing collaboration in counter-terrorism, space,
    cyber, integrated air missile defense, and regional capacity building.
    Australia is procuring high-tech U.S. platforms that will increase
    interoperability. These include the F-35A Lightning II, P-8 Poseidon,
    C-17 Globemaster III, EA-18G Growler, Global Hawk UAVs, and MH-60R
    helicopters. To enhance synchronization and integration, the Australian
    Government provides a Flag Officer and a Senior Executive (civilian) to
    USPACOM and a General Officer to U.S. Army Pacific staffs on a full-
    time basis.
        Philippines:  The alliance between the Philippines and the United
    States has been important for more than 65 years. The Philippines
    Supreme Court recently upheld the Philippine's domestic approval of the
    Enhanced Defense Cooperation Agreement (EDCA) which will improve United
    States access and build Philippine military capacity by addressing
    capability gaps, long-term modernization, Maritime Security (MARSEC),
    Maritime Domain Awareness (MDA), and disaster response capabilities.
    USPACOM is exploring way to use MSI to realize Philippines MARSEC and
    MDA capability development. The Philippine Navy has made good use of
    two previously awarded Excess Defense Article (EDA) U.S. Coast Guard
    Cutters. During the 2015 Cooperation Readiness Afloat and Training
    (CARAT) exercise, one of the EDA cutters (BRP RAMON A. ALCARAZ PF-16)
    operated with the USS Fort Worth, enhancing our shared security
    concerns. During the 2015 Asia-Pacific Economic Cooperation summit,
    President Obama announced the award of a third former United States
    Coast Guard cutter through the EDA program, which will significantly
    enhance the Philippine Navy's maritime security capabilities, and,
    through MSI, we are exploring ways to ensure that this vessel is
    delivered fully mission capable. U.S. P-3s and P-8s already operate
    from Clark Air Base on a rotational basis, and the EDCA will increase
    United States access in crisis to Philippine facilities that are
    important strategic locations. USPACOM provides information sharing and
    training for the Armed Forces of the Philippines in the areas of MARSEC
    and MDA, Additionally, USPACOM provided $3.5 million in Chemical,
    Biological, Radiological, and Nuclear (CBRN) equipment and two years of
    sustainment training to the Armed Forces Philippines Defense Initiative
    through the CBRN Defense programs. USPACOM appreciates the continued
    support of the Defense Threat Reduction Agency, Joint Program Executive
    Office, and Joint Requirements Office in providing CBRN equipment and
    training to partners in the region.
        Thailand:  The United States and Thailand's long relationship began
    with a Treaty of Amity and Commerce in 1833, now 183 years old; that
    relationship expanded into a defense treaty in 1954, and the U.S.
    continues to value our alliance and friendship. Unfortunately, the Thai
    military's ongoing control of the civilian government since May 2014
    undermines this important relationship. The U.S. encourages a return to
    democracy that will fully restore our bond; until then, military
    engagements and exercises will continue in reduced form. USPACOM will
    continue demonstrating commitment to our oldest ally while also
    reinforcing democratic values and ideals. Moving forward, it would be
    my hope that we use MSI to more fully support Thailand's maritime
    security and maritime domain awareness capability as an important
    member of the region. Moving forward, it would be my hope that we use
    MSI to more fully support Thailand's maritime security and maritime
    domain awareness capability as an important member of the region.
                                    partners
        Singapore:  Singapore is our most important partner in Southeast
    Asia. It has been a major security cooperation partner for over a
    decade and provides invaluable access for U.S. Forces. The rotational
    deployment of Littoral Combat Ships to Changi Naval Base has been
    productive, and P-8s now operate out of Paya Lebar Air Base on a
    regular basis. USPACOM conducts dozens of military exercises each year
    with Singapore's Armed Forces, Singaporean military officers regularly
    attend United States professional military education, and Singaporean
    military personnel participate in advanced military training that is
    conducted throughout the United States. Singapore hosts the annual
    Shangri-La Dialogue, a Secretary of Defense-level event that deepens
    regional ties and tables important issues for discussion. The
    combination of forward deployed forces and deep training relationships
    contribute to readiness, build deeper ties, and allow the U.S. to
    promote maritime security and stability with regional partners.
        India:  The new found momentum in our bilateral relationship with
    India represents USPACOM's most promising strategic opportunity. In
    January 2015, President Obama and Prime Minister Modi signed a Joint
    Strategic Vision of the Asia-Pacific and Indian Ocean Region. This
    landmark document presents shared views and interests for the region.
    The United States / India military-to-military relationship deepens as
    forces increasingly train and operate together. USPACOM intends to add
    momentum to an important relationship. Through this end, I have made
    improving the military-to-military with India a formal Line of Effort
    at USPACOM. In June 2015, during Secretary of Defense Carter's visit to
    India, the United States and India renewed the ten-year Defense
    Framework Agreement. In 2015, United States and India militaries
    participated together in three major exercises and 62 other military
    exchanges covering scenarios ranging from high-end warfare to
    humanitarian assistance and disaster response. The US-India Defense
    Technology and Trade Initiative (DTTI) further expands opportunities.
    Defense sales are at an all-time high and U.S.-sourced airframes, such
    as P-8s, C-130Js, C-17s, AH-64s and CH-47s, increase interoperability.
    USPACOM will advance the partnership with India by expanding the scope
    of military-to-military interactions.
        New Zealand:  Despite differences over nuclear policy, our
    military-to-military relationship with New Zealand, underpinned by the
    Wellington and Washington Declarations, is on solid footing. The New
    Zealand military has fought, flown, and sailed with United States
    forces since the beginning of Operation Enduring Freedom. New Zealand
    continues to be a respected voice in international politics and a
    recognized leader in the South Pacific that shares common security
    concerns with the U.S., including terrorism, transnational crime, and
    maritime security. Military-to-military relations and defense
    engagements with New Zealand remain strong.
        Vietnam:  Vietnam's growing economy and their concerns over Chinese
    coercion presents a strategic opportunity for the United States to add
    another regional partner. USPACOM is moving forward with Vietnam to
    improve Vietnam's capacity and capability in maritime security,
    disaster response. We are also exploring ways to use MSI to support
    Vietnam's maritime security modernization efforts, including in the
    area of search and rescue. In addition, Vietnam has agreed to allow
    U.S. prepositioning humanitarian stocks and supplies for disaster
    preparedness purposes.
        Indonesia:  Indonesia is an important security partner in Southeast
    Asia. President Joko Widodo's initiative to transform Indonesia into a
    global maritime ``Fulcrum'' demonstrates Indonesia's desire to play a
    larger role in international diplomatic, economic, and security issues.
    Again, USPACOM is developing ways to partner with Indonesian security
    forces through MSI and other U.S. security cooperation programs to
    improve Indonesia's maritime security capacity and encouraging a
    collaborative regional maritime security architecture. Indonesia is not
    a claimant to territory in South China Sea maritime dispute, but it is
    reinforcing security on and around its Natuna Islands. Indonesia will
    maintain relationships with other influential nations such as Russia
    and China, but security cooperation with the United States is a top
    priority for Jakarta. As a tangible sign of this, the United States and
    Indonesia signed a ministerial-level Joint Statement on Comprehensive
    Defense Cooperation in October.
        Malaysia:  Malaysia is another important contributor to regional
    peace and security. Through the Comprehensive Partnership with
    Malaysia, the United States and Malaysia promote regional stability.
    Malaysia's regional leadership role, technologically advanced industry,
    stable economy, and capable military make it an important partner in
    securing peace and prosperity in Southeast Asia. USPACOM continues to
    assist Malaysia in building an amphibious force to address non-
    traditional threats in and around Malaysia's territorial waters.
    Malaysia seeks United States support in developing a more capable Coast
    Guard through the Malaysia Maritime Enforcement Agency. These
    capabilities and engagements demonstrate Malaysia's capacity and
    resolve to ensure regional and domestic security, and Malaysia develops
    opportunities for multilateral security cooperation through Cooperation
    Afloat Readiness and Training (CARAT) exercises. Like other section
    1263-designated countries, we are exploring ways that MSI can support
    Malaysia's maritime security requirements in each of these areas.
        Sri Lanka:  President Sirisena, elected in January, is serious
    about addressing Sri Lanka's human rights issues. We have an
    opportunity to expand United States interests with Sri Lanka--Asia's
    oldest democracy--and will proceed deliberately as progress is made.
    Given Sri Lanka's strategic location, it is in America's interest to
    increase military collaboration and cooperation. As conditions permit,
    USPACOM will expand military leadership discussions, increase naval
    engagement, and focus on defense institution building in areas such as
    demobilizing and military professionalism.
                                     others
        In addition to Indo-Asia-Pacific allies and partners, USPACOM has
    many other unique relationships throughout the region with countries,
    jurisdictions, and international governmental organizations. These
    relationships are important parts of our overall strategy.
        Taiwan:  Free and fair democratic elections in January on the
    island of Taiwan reflect shared values with the United States The
    United States maintains its unofficial relations with Taiwan through
    the American Institute in Taiwan and we continue supporting Taiwan's
    security. USPACOM will continue to fulfill United States commitments
    under the Taiwan Relations Act; continued arms sales to Taiwan are an
    important part of that policy and help ensure the preservation of
    democratic government institutions.
        The United Kingdom (UK), Canada, and France:  Staunch NATO allies,
    the UK, Canada, and France are also Indo-Asia-Pacific nations, each
    with significant interests in the Pacific and Indian Oceans, including
    territories, allies, partners, and trade. Each participates in PACFLT's
    RIMPAC and other major exercises, and deploy ships, submarines, and
    other forces to the region for operational, partner capacity, law
    enforcement and disaster response missions. Canada has a General
    Officer serving as a Deputy Director for Operations at USPACOM; the UK
    will assign a similar grade officer to serve as Director of USPACOM's
    Theater Security Cooperation effort. Each nations' leadership expressed
    renewed commitment to the region, and USPACOM welcomes and supports
    their efforts.
        The Association of Southeast Asian Nations (ASEAN):  While not a
    military alliance, ASEAN is among the most important multilateral
    forums in the region. The ten ASEAN member states, under the
    chairmanship of Malaysia last year and Laos this year, seek to improve
    multilateral security engagements and advance stability in the Indo-
    Asia-Pacific. ASEAN-centered political-security fora such as the ASEAN
    Defense Minister's Meeting Plus (ADMM-Plus) and ASEAN Regional Forum
    (ARF) have encouraged ASEAN members and China to conclude a meaningful,
    substantive Code of Conduct for the South China Sea. USPACOM investment
    in the ADMM-Plus, ARF and other U.S. ASEAN defense engagements improve
    multilateral defense cooperation and promote regional norms.
    Facilitating capacity building through incrementally increasing the
    complexity of ASEAN's recurring multilateral exercises is a priority.
    In 2016, USPACOM will participate in the second series of ADMM-Plus'
    three major exercises.
        China:  The United States-China relationship remains complex. While
    Chinese actions and provocations create tension in the region, there
    are also opportunities for cooperation. The United States approach to
    China encourages a dialogue between the armed forces of both countries
    to expand practical cooperation where national interests converge and
    to constructively manage differences through sustained and substantive
    consultations. USPACOM's engagements with China, governed by section
    1201 of the fiscal year 2000 NDAA, improve transparency and reduce risk
    of unintended incidents, enhancing regional stability.
        USPACOM executed over 50 bilateral and numerous multilateral
    engagements last year with China. USPACOM supports our national effort
    to encourage China to support the existing security architecture;
    however, China's base-building and militarization in the South China
    Sea, its lack of transparency regarding military modernization efforts,
    and continued malicious cyber activity raise regional tension and
    greatly hinder United States-China cooperation. Instead of jointly
    working toward reinforcing international rules and law to promote
    regional peace and stability, United States-China engagements are often
    focused on reducing friction and avoiding miscalculation.
        USPACOM hosted a United States-China Military Maritime Consultative
    Agreement plenary and working group focused on operational safety in
    November 2015. USPACOM also provided significant support to the
    development of the Rules of Behavior memorandum of understanding on
    safety in the air and maritime domain. Ongoing dialogues led to
    improved communications and safer encounters at sea and in the air.
        There are areas where United States and Chinese militaries
    cooperate in areas of common interest, such as counter piracy, military
    medicine, and disaster response. The most successful engagements
    focused on military medical cooperation and shared health concerns. For
    example, in January 2015, the PLA hosted the USPACOM Surgeon and
    component surgeons in Beijing, Xi'an and Shanghai focused on Disaster
    Response, Pandemic and Emerging Infectious Diseases, and Soldier Care.
    In September, the USPACOM Surgeon sponsored the third acupuncture
    subject matter expert exchange between United States and PLA
    acupuncturists in Beijing, leading to collaborative research on
    acupuncture treatment for post-traumatic stress disorder. USPACOM
    encourages China's participation in international efforts to address
    shared challenges in a manner consistent with international law and
    standards.
        Bilateral and Multilateral Approaches:  USPACOM is directly
    connected to regional leaders. I am in frequent communication with my
    regional counterparts and appreciate the ability to reach out at any
    time to share perspectives. USPACOM maintains a close link with allies
    and partners through staff exchange and liaison officers, in addition
    to a series of formal bilateral mechanisms. In Australia, key
    engagements stem from the ANZUS treaty obligations, guided by USPACOM's
    principle bilateral event with Australia, the Military Representatives
    Meeting. Similarly, USPACOM's military to military relationship with
    Japan is guided by the annual Japan Senior Leader Seminar. Military
    Committee and Security Consultative Meetings are the preeminent
    bilateral mechanisms that guide the ROK and U.S. alliance. Each year,
    USPACOM co-hosts the Mutual Defense Board and Security Engagement Board
    with the Armed Forces of the Philippines to deal with 21st-century
    challenges. USPACOM conducts annual Senior Staff Talks with Thailand to
    address security concerns and reinforce U.S. commitment to democratic
    principles. Bilateral mechanisms also exist with non-alliance partners
    throughout the region, including India, Indonesia, and Vietnam.
        The future lies in multilateral security mechanisms. USPACOM is
    evolving key bilateral relationships into multilateral ones that will
    more effectively address shared security concerns. For example, US-
    Japan-ROK trilateral coordination in response to North Korean
    provocative behavior is improving. The ROK and Japan each recognize
    that provocative actions by North Korea will not be isolated to the
    peninsula and greater coordination and cooperation are required. The
    December 2014 signing of the US-Japan-ROK Trilateral Information
    Sharing Arrangement is an important step toward greater information
    sharing. This arrangement was first exercised in early January
    following the nuclear test in North Korea.
        To encourage multilateral cooperation, USPACOM hosts the Chief of
    Defense Conference (CHODs) annually. The CHODs conference location
    rotates between Hawaii and a regional partner. In 2015, 31 countries
    attended the CHODs conference in Hawaii. USPACOM also participates in
    Australia-Japan-United States trilateral defense dialogues, including
    the Security and Defense Cooperation Forum (SDCF). The trilateral
    relationship between the United States, Japan, and India is growing, as
    evidenced by the first trilateral ministerial meeting held last year.
    The United States, Japan, and India share democratic values, interests
    in protecting sea lanes of commerce, and promoting adherence to
    international laws and norms. Next, USPACOM aims to build a powerful
    quadrilateral partnership framework of the most powerful democracies in
    the Indo-Asia-Pacific. India, Japan, Australia, and the United States
    working together will be a force for the maintenance of the regional
    rules-based order, counterbalancing and deterring coercion or
    unrestrained national ambitions.
                                   activities
        Security Cooperation and Capacity Building:  USPACOM's Security
    Cooperation approach focuses on building partner readiness, reducing
    partner capability gaps, and building partner capacity. One of the more
    powerful engagement resource tools is Foreign Military Financing (FMF).
    Favorable consideration for continued funding of FMF enables USPACOM to
    meet regional challenges to include border security issues, disaster
    response, counterterrorism, and in particular, maritime security.
        As I mentioned, USPACOM will leverage the fiscal year 2016 NDAA
    section 1263 ``South China Sea Initiative'' authority to execute the
    Secretary's Southeast Asia Maritime Security Initiative to build
    maritime security and maritime domain awareness of partners in the
    South China Sea region, through assistance to, and training of, partner
    nation maritime security forces. USPACOM will continue to rely on FMF
    as a source of providing major end items to eligible countries. MSI
    support notified pursuant to the new section 1263 authority should be
    viewed as complementary and additive in nature to these FMF plans.
    Under MSI, PACOM plans to provide niche capabilities, more multi-
    mission type of equipment, and connective tissue that will help
    partners better deploy and employ these maritime security capabilities,
    both domestically to protect their sovereign territory, but also as a
    means of fostering greater regional interoperability.
        Maritime Domain Awareness:  Southeast Asian partners have expressed
    strong enthusiasm and support for United States security cooperation
    efforts in the area of maritime domain awareness (MDA). USPACOM will
    leverage MSI and the new section 1263 authority to develop multilateral
    approaches to information sharing toward a regional common operating
    picture. This year, the Philippines, Australia and the United States
    are co-hosting a workshop to discuss regional best practices. This
    civilian-military workshop will facilitate whole-of-government
    discussions on maritime challenges that support creation of a regional
    maritime domain awareness network to share information across Southeast
    Asian partners--another multilateral approach to addressing security
    challenges in the region.
        Global Peace Operations Initiative (GPOI):  Indo-Asia-Pacific
    countries provide over 40% of the world's uniformed peacekeepers to
    United Nations (UN) peacekeeping operations worldwide; half of those
    countries that provide UN peacekeepers are GPOI program partners. GPOI
    builds and maintains the capability, capacity, and effectiveness of
    partners to deploy professional forces to meet the UN's needs in peace
    and security operations. Partners are meeting program goals achieving,
    or making progress towards achieving, self-sustaining, indigenous
    training capability. In 2016, USPACOM and Mongolia will cohost a
    multinational peacekeeping exercise called KHAAN QUEST, training
    personnel from 37 nations for deployment to UN peacekeeping missions.
    USPACOM expects 28 regional GPOI partners in KHAAN QUEST. USPACOM will
    continue improving partner military peacekeeping skills and operational
    readiness and provide limited training facility refurbishment.
    Indonesia's plan to provide 4,000 deployable Peacekeeping Forces by
    2020 is another opportunity for USPACOM to engage with Indonesian
    military forces.
        Pacific Pathways:  As an innovative way to overcome the Indo-Asia-
    Pacific's vast time-distance challenges, United States Army Pacific
    (USARPAC) created Pacific Pathways which sequentially deploys small
    units to multiple countries for training. Their forward presence also
    enables rapid response to humanitarian emergencies or regional crises.
    This cost-effective program ensures that our regionally aligned Army
    elements know how to deploy and fight in the Indo-Asia-Pacific
    alongside our allies and partners. I support and encourage this kind of
    innovative thinking, and it pays major dividends in both relationships
    and readiness.
        Joint Exercise Program:  USPACOM's Joint Exercise Program
    intentionally synchronizes frequent, relevant, and meaningful
    engagements across the Indo-Asia-Pacific region. This important
    program, funded through the Combatant Commander Exercise Engagement
    Training Transformation (CE2T2), improves readiness of forward deployed
    assigned forces. Exercises and training strengthen USPACOM's military
    preeminence and enhance relationships. USPACOM appreciates Congress'
    support for continued progress.
        Pacific Partnership:  United States Pacific Fleet's (PACFLT)
    Pacific Partnership is an annual disaster response preparedness mission
    to Southeast Asia and Oceania regions. Pacific Partnership includes
    participation from U.S. allies and partners to improve cooperation and
    understanding between partner and host nations ahead of major natural
    disasters that require a multinational response. Last year, USNS Mercy
    conducted a four-month deployment to Fiji, Papua New Guinea, the
    Philippines, and Vietnam and provided healthcare and surgical
    procedures, community health engagements, and engineering projects
    including nearly 700 surgeries, 3,800 dental exams, and 10 renovation
    and new construction projects.
        Joint Enabling Capabilities Command:  One organization that
    supports USPACOM's ability to respond rapidly and effectively to events
    in theater is TRANSCOM's Joint Enabling Capabilities Command (JECC).
    The JECC is critical to USPACOM's ability to facilitate rapid
    establishment of joint force headquarters, fulfill Global Response
    Force (GRF) execution, and bridge joint operational requirements by
    providing mission-tailored, ready joint capability packages.
        Counter-Narcotics:  The drug trade continues to grow and threaten
    stability across the region. It has become a massive business, with
    sophisticated global networks. USPACOM combats drug trafficking in the
    region through Joint Interagency Task Force-West (JIATF-W). Building
    partner capacity to counter illicit trafficking of narcotics continues
    in areas such as the tri-border area of the Philippines, Malaysia and
    Indonesia, the coastal areas of Vietnam and Cambodia, and the border
    regions of Bangladesh. USPACOM is also fighting illicit trafficking
    across the Northern Thai border in the historic ``Golden Triangle''
    area and beginning new partnerships with France to combat trafficking
    in and through French Polynesia and the Southern Pacific. Counter-
    narcotics programs support law enforcement and security forces, enhance
    relationships with partner nation law enforcement agencies, and impede
    the flow of narcotics and other illicit commodities.
        JIATF-W engagements with China are an essential part of the counter
    narcotics effort. Maritime container shipments of China-sourced
    chemicals are often diverted for methamphetamine and heroin/opioid
    production in Mexico--a direct threat to the United States Homeland. As
    much as 90 percent of the precursor chemicals used in methamphetamine
    production originates in China. Further, the annual volume of
    methamphetamine seizures going into the U.S. exceeded cocaine seizures
    on the southwest border of the U.S. in recent years. Through a
    partnership with the Internal Revenue Service, JIATF-W leveraged
    Department of Defense counternarcotic authorities to open an additional
    avenue of cooperation with Chinese officials by providing anti-money
    laundering training to counterdrug efforts. These efforts show promise
    in improving communication, cooperation, and information sharing on
    significant criminal enterprises operating in the United States and
    China.
        The Daniel K. Inouye Asia-Pacific Center for Security Studies (DKI
    APCSS):  DKI APCSS serves as a truly unique venue to empower regional
    security practitioners to more effectively and collaboratively
    contribute to regional security and stability. This center is one of
    our asymmetric capabilities. No other country has anything quite like
    it. Through its academic exchanges, workshops, and sustained alumni
    engagement activities, DKI APCSS helps build partner nation capacities
    and affirm U.S. interests in the region. DKI APCSS provides added
    support to the USPACOM mission in several uniquely focused areas: as
    one of the few organizations authorized to conduct carefully measured
    engagement with Burma defense officials; as the primary tool of
    security cooperation engagement with the Pacific Island region; and as
    USPACOM's lead in implementing the U.S. National Action Plan mandate to
    increase inclusion of women in the security sector under the Women,
    Peace, and Security program. Recent successes include development and
    implementation of a successful country-wide security plan for 2015
    elections in Burma; building the capacity of government officials in
    preparation for the Lao 2016 chairmanship of ASEAN; enhancing the
    cybercrime investigation capability of the Bangladesh Police;
    developing rules of engagement for the Timor Leste police during
    peacetime; building a data system for collection of counterterrorism
    information in Vietnam; and improving coordination among Philippine
    national agencies, local government units, NGOs, and other stakeholders
    in disaster response.
        Center for Excellence-Disaster Management (CFE-DM):  The CFE-DM is
    USPACOM's executive agent for collecting lessons learned and developing
    and sharing best practices to prepare U.S. and partner governments for
    disaster response. CFE-DM recently completed a Joint After-Action
    Review of USPACOM's disaster response to the April 2015 Nepal
    Earthquake (Operation SAHAYOGI HAAT). The success of the response is a
    testament to Nepali preparation and disaster risk reduction efforts
    that were enhanced by our ongoing training assistance. The civilian
    national disaster management structures functioned, and the initial
    international response coalesced around the Nepal Army's Multinational
    Military Coordination Center (MNMCC). Five years of USPACOM Theater
    Security Cooperation initiatives with regional partners, organizations,
    and international agencies facilitated this collaborative foreign
    disaster response. CFE-DM supports USPACOM's efforts to increase
    resilience and more effective disaster response capabilities.
                             critical capabilities
        The most technical, high-end military challenges in the region are
    growing. While many improvements to posture, forward deployed forces,
    and our relationships help address these challenges, USPACOM requires
    the best, high-end warfighting capabilities available now and in the
    future. As Secretary Carter recently said about deterring our most
    advanced competitors, ``We must have, and be seen to have, the ability
    to impose unacceptable costs on an advanced aggressor that will either
    dissuade them from taking provocative action or make them deeply regret
    it if they do.'' There are a number of mission sets and enablers that
    requires continuous focus and attention. These include undersea
    warfare, munitions, ISR, cyber, space, and Integrated Air and Missile
    Defense (IAMD) systems. We must preserve our asymmetric advantages in
    undersea- and anti-submarine warfare, and we must regain and retain
    fading abilities to counter anti-access / area-denial (A2/AD)
    strategies.
        Today, China is ``out-sticking'' United States air and maritime
    forces in the Indo-Asia-Pacific region in terms of ranges of anti-ship
    weapons. I need increased lethality, specifically ships and aircraft
    equipped with faster, more lethal, and more survivable weapons systems.
    We must have longer range offensive weapons on every platform. Finally,
    we must have a networked force that provides greater options for action
    or response.
        We face a significant A2/AD challenge in this region. Pacing the
    threat is not an option in my playbook. We must outpace the competition
    which requires continued investment in development and deployment of
    the latest technology to USPACOM. Examples include Navy Integrated
    Fires and the AEGIS Flight III destroyer and its Air and Missile
    Defense Radar (AMDR)--essential tools in the complex A2/AD battlespace
    in which our young men and women operate today. The arrival of the USS
    Barry, USS Benfold and USS Chancellorsville in the Western Pacific
    represent forward deploying cutting edge technology where it is needed.
        Undersea Warfare:  Of the world's 300 foreign submarines, roughly
    200 are in the Indo-Asia-Pacific region; of which 150 belong to China,
    North Korea, and Russia. China is improving the lethality and
    survivability of its attack submarines and building quieter high-end,
    diesel- and nuclear-powered submarines. China has four operational Jin-
    class ballistic missile submarines (SSBNs) and at least one more may
    enter service by the end of this decade. When armed, a Jin-class SSBN
    will give China an important strategic capability that must be
    countered. Russia is a Pacific threat, modernizing its existing fleet
    of Oscar-class multi-purpose attack nuclear submarines (SSGNs) and
    producing their next generation Yasen-class SSGNs. Russia has also
    homeported their newest Dolgorukiy-class SSBN in the Pacific,
    significantly enhancing their strategic deterrence posture. USPACOM
    must maintain its asymmetric advantage in undersea warfare capability
    including our attack submarines, their munitions, and other anti-
    submarine warfare systems like the P-8 Poseidon and ship-borne systems.
        Critical Munitions:  Critical munitions shortfalls are a top
    priority and concern. USPACOM advocates for continued investment,
    additional procurement, and improved munitions technologies to better
    deter and defeat aggression. Munitions are a major component of combat
    readiness. USPACOM forces need improvements in munitions technologies,
    production, and pre-positioning, but fiscal pressure places this at
    risk.
        USPACOM weapon improvement priorities include long-range and stand-
    off strike weapons, longer-range anti-ship weapons (ship and aircraft-
    based), advanced air-to-air munitions, theater ballistic/cruise missile
    defense, torpedoes, naval mines, and a cluster munitions replacement.
    Our subsonic ship-to-ship munition, the Harpoon, is essentially the
    same missile we had in 1978, when I was a newly-commissioned Ensign.
    Nearly forty years later, competitors have developed supersonic ship-
    to-ship and land-based weapons that reach much farther, punch harder,
    and fly faster. USPACOM welcomes efforts to turn the tables back in our
    favor--quickly. In the air-to air realm, USPACOM welcomes advancements
    in munitions that will provide an advantage in a complex air-to-air
    environment. Additionally, modernization and improvement to U.S.
    torpedo and naval mine capabilities and inventories are required to
    maintain U.S. undersea advantage. Continued improvements in the
    capability and capacity of ballistic/cruise missile defense
    interceptors will further enhance Homeland defense capabilities and
    protect key regional nodes from aggressive action. In support of Korea,
    USPACOM supports efforts to acquire a replacement for aging cluster
    munitions.
        Intelligence/Surveillance/Reconnaissance:  The challenge of
    gathering credible ISR cannot be overstated, and it is a constantly
    evolving problem. The Indo-Asia-Pacific presents a dynamic security
    environment requiring flexible, reliable, survivable deep-look and
    persistent ISR to provide indications and warning and situational
    awareness across a vast geographic area. As previously noted, USPACOM
    faces a variety of challenges and potential flashpoints to include
    threats from North Korea, a resurgent Russia, an expanding China,
    terrorism, and territorial disputes. Several hundred thousand Americans
    live under a constant threat of attack by North Korea, with over a
    hundred thousand rockets able to range Seoul on little to no notice.
    These challenges require ISR to prevent strategic surprise and
    accurately assess the security environment and, if necessary, defeat
    potential adversaries. The Rebalance to the Asia-Pacific has increased
    USPACOM allocation of ISR resources. USPACOM will continue to require
    additional advanced ISR to avoid long-term risk.
        Cyber and Space:  The cyber domain, coupled with space, is the most
    likely ``first salvo'' in a future conflict. Increased cyber capacity
    and nefarious activity, especially by China, North Korea, and Russia
    underscore the growing requirement to evolve command, control, and
    operational authorities. I support a separate CYBERCOM functional
    combatant command that retains its ``double-hatting'' with the National
    Security Agency. I also believe that in order to fully leverage the
    cyber domain, USPACOM requires an enduring theater cyber capability
    able to provide cyber planning, integration, synchronization, and
    direction of cyber forces.
        USPACOM relies on space based assets for satellite communications
    (SATCOM) and ISR across the range of military operations. The USPACOM
    region spans over half the globe and space based assets are high-
    demand, low-density resources. As the shared domain of space grows
    increasingly congested and contested, our adversaries are developing
    means to attack our space-enabled capabilities. USPACOM requires
    resilient SATCOM capability to support operations. China is pursuing a
    broad and robust array of counterspace capabilities, which includes
    direct-ascent anti-satellite missiles, co-orbital anti-satellite
    systems, computer network operations, ground-based satellite jammers
    and directed energy weapons.
        Integrated Air and Missile Defense (IAMD):  TPY-2 radars in Japan,
    the THAAD system on Guam, and the Sea-Based X-band Radar (SBX) based in
    Hawaii defend the U.S. Homeland and our allies. USPACOM's IAMD priority
    is maintaining a credible, sustainable ballistic missile defense by
    forward deploying the latest in ballistic missile defense technologies
    to the Pacific. For example, the U.S. Seventh Fleet is increasing its
    Ballistic Missile Defense (BMD) capability with the addition of the USS
    Benfold, which arrived in Japan last year, and USS Barry scheduled to
    arrive in early 2016. These ships received a midlife modernization,
    making them the most capable BMD ships in the world. The addition of
    these modernized ships enables the U.S. Seventh Fleet to better support
    the United States-Japan alliance with a credible ballistic missile
    defense capability. USPACOM continues to work with Japan, the Republic
    of Korea, and Australia to improve coordination and information sharing
    with the goal of creating a fully-integrated BMD architecture.
        Innovation:  Innovation is critical to addressing USPACOM's
    capability gaps and maintaining our military advantage. USPACOM
    partners with DOD-wide organizations, national laboratories, and
    industry to provide innovative solutions to fill capability
    requirements. In particular, USPACOM maintains a strong relationship
    with the OSD Strategic Capabilities Office (SCO), which is developing
    game-changing technologies for the Indo-Asia-Pacific. USPACOM strongly
    supports Deputy Secretary Work's Third Offset Strategy and the
    associated effort to strategically advance areas where the U.S. can
    maintain dominance. The ability to quickly and adaptively change joint
    operational concepts and innovatively employ current capabilities in a
    high-end fight is critical.
                                   conclusion
        It has been over four years since the President announced the
    United States Rebalance to the Indo-Asia-Pacific. There is much more to
    the Rebalance than military activity and the success of this strategic
    concept depends as much on our economic and diplomatic efforts as it
    does on our military efforts. From the military perspective, I believe
    the Rebalance is working. This success is due in no small part to the
    support of this committee and the Congress. But we are not done, and we
    must not lose momentum. USPACOM appreciates your continued support. I
    ask this committee to support continued investment in future
    capabilities that meet the challenges in the Indo-Asia-Pacific. I
    appreciate your help in continuing to field the right numbers of
    existing capabilities. I ask for your support to our plans to adapt our
    regional force posture. Finally, I ask your continued support for our
    efforts to reinforce and enhance alliances and partnerships. Thank you
    for your enduring support to USPACOM and our men and women in uniform,
    and their families, who live and work in the vast Indo-Asia-Pacific.

        Chairman McCain. General Scaparrotti?

      STATEMENT OF GENERAL CURTIS M. SCAPARROTTI, USA, COMMANDER,
     UNITED NATIONS COMMAND, COMBINED FORCES COMMAND, U.S. FORCES
                                 KOREA

        General Scaparrotti. Chairman McCain, Ranking Member Reed,
    and distinguished members of the committee, I am honored to
    testify today as the commander of the United Nations Command
    [UNC], Combined Forces Command [CFC], and the United States
    Forces Korea [USFK].
        Sir, I would like to add to Admiral Harris's comment that
    we wish Senator McCaskill a speedy recovery as well.
        On behalf of the American soldiers, sailors, airmen, and
    marines, and our civilians, serving in the Republic of Korea,
    thank you for your support.
        Admiral Harris, thank you for your vision and professional
    support of the entire PACOM team for USFK.
        I have prepared brief opening remarks, and I ask that my
    written posture statement be entered into the record.
        Chairman McCain. Without objection.
        General Scaparrotti. Since my last testimony, our United
    States-ROK alliance has continued to focus on advancing our
    combined capabilities. Some of these advanced capabilities
    include the establishment of the first United States-ROK
    combined division, the rotation of additional U.S. Forces to
    the peninsula, the execution of our annual combined training
    exercises, and steady progress on our $10.7 billion plan to
    relocate United States forces in Korea.
        Furthermore, the Republic of Korea has improved its
    capabilities with the recent establishment of the Korean Air
    and Missile Defense System and center, and the Allied Korea
    Joint Command and Control System. The Republic of Korea has
    also invested in modern equipment with the purchase of the F-35
    Joint Strike Fighter, Global Hawk, Patriot Advanced Capability
    3 missile upgrades, as well as AH-64 Apache helicopters.
        These alliance advances help counter the real and proximate
    North Korean threat. North Korea continues to conduct
    provocations and to resource its large conventional force. Of
    greater significance, North Korea continues to aggressively
    develop nuclear weapons and ballistic missiles in direct
    violation of the U.N. Security Council resolutions, as
    demonstrated with its fourth nuclear test and its fifth TD-2
    launch in January and February.
        In regards to this threat, my top concern remains the
    potential for a North Korean provocation to start a cycle of
    action and counteraction, which could quickly escalate, similar
    to what we experienced this past August.
        While I am proud to report that our alliance stood
    shoulder-to-shoulder and de-escalated the situation, it could
    have spiraled out of control and demonstrates why we must be
    ready to fight tonight on the peninsula.
        To maintain this level of readiness, we will continue to
    focus on sustaining, strengthening, and transforming the
    alliance with an emphasis on our combined readiness in four
    critical areas.
        First, ISR [intelligence, surveillance, and reconnaissance]
    remains my top readiness challenge. CFC/USFK requires
    additional persistent, all-weather ISR capabilities, as well as
    dependable moving target indicator support, to maintain
    situational awareness and provide adequate decision space.
        Second, it is critical for the alliance to establish a
    layered and interoperable ballistic missile defense. To advance
    this goal, we will soon begin bilateral consultations regarding
    the feasibility of deploying the THAAD system to the Republic
    of Korea, which would complement the Patriot system
    capabilities.
        Third, we must maintain an adequate quantity of critical
    munitions to ensure alliance supremacy in the early days of any
    conflict on the peninsula. This requirement is further
    amplified by the approaching loss of cluster munitions due to
    the shelf-life expiration and the impending ban.
        Fourth, we must focus on command and control,
    communications, computers, and intelligence, or what we call
    C4I. Both the United States and the Republic of Korea are
    investing in new tactical equipment that will comprise a
    reliable C4I architecture, but much more is required.
        In closing, I would like to express how proud I am of the
    servicemembers, civilians, and their families serving in the
    Republic of Korea who never lose sight of the fact that we are
    on freedom's frontier. I also would like to recognize
    Ambassador Mark Lippert and Admiral Harry Harris and the United
    States and ROK senior leaders for their enduring commitment to
    our mission on the peninsula. Thank you, and I look forward to
    your questions.
        [The prepared statement of General Scaparrotti follows:]

              Prepared Statement by General Curtis M. Scaparrotti
                                1. introduction
        Mr. Chairman and distinguished members of the Committee, I am
    honored to testify as the Commander of the United Nations Command
    (UNC), the United States-Republic of Korea (United States-ROK) Combined
    Forces Command (CFC), and United States Forces Korea (USFK). Thank you
    for your continued support to our servicemembers, civilians,
    contractors, and their families, whose service each day on ``Freedom's
    Frontier'' advances vital U.S. interests, strengthens the Alliance
    between the United States and the Republic of Korea, and makes a
    critical contribution to the stability of Northeast Asia. In my third
    year as the Commander, I have witnessed the U.S.-ROK Alliance grow
    stronger, as the Alliance has improved its capabilities, planning, and
    cooperation to counter evolving threats from North Korea and to advance
    our four priorities:
          Sustain and Strengthen the Alliance.
          Maintain the Armistice. Be Ready to ``Fight Tonight'' to
    Deter and Defeat Aggression.
          Transform the Alliance.
          Sustain the Force and Enhance the UNC/CFC/USFK Team.
        Through this past August's land mine attack, North Korea's fourth
    nuclear test in January, and the TD-2 missile launch earlier this
    month, the United States and Republic of Korea stood united and
    resolute against North Korea's provocative actions. Our strength and
    combined actions are the product of established ROK-U.S. bilateral
    processes, the Alliance's shared commitment to remain ready to ``Fight
    Tonight,'' and the alignment of American and Korean values and goals.
        While the Command focuses on these core priorities, we are also
    looking to the future. The Alliance took concrete steps over this past
    year to enhance our ability to respond to North Korea's evolving
    asymmetric capabilities, strengthen ROK forces to lead the combined
    defense of the Republic of South Korea, and relocate United States
    forces to two enduring hubs south of Seoul.
     2. america's future in korea--securing vital interests and advancing
                               regional stability
        The UNC/CFC/USFK mission is vital to the broader effort to expand
    security and prosperity in the Asia-Pacific region. As a sub-unified
    Command of U.S. Pacific Command (PACOM), USFK's core responsibility is
    to deter and defeat external aggression against the Republic of Korea,
    which enhances stability in the Asia-Pacific region and affirms our
    commitment to the United States-ROK Mutual Defense Treaty. We cooperate
    closely with PACOM in its mission to promote security cooperation,
    encourage peaceful development, respond to contingencies, deter
    aggression, and, when necessary, fight to win.
        From my perspective, the level of U.S. engagement demonstrated by
    USFK in Korea and PACOM in the broader region is critical in this time
    of opportunity and challenge in Asia. Expanding ties among Asian
    countries and across the Pacific have helped facilitate an era of
    robust economic growth and military advances. While these advances
    promote global expansion and interdependent stability, international
    tensions have risen from the actions of several regional nations'
    military modernization and the use of national power. In this context
    of significant and rapid change, the Republic of Korea's neighbors are
    adjusting their strategies to shape the region's future.
        China's continued pursuit of its military modernization program and
    land reclamation activities have prompted concerns among many nations
    in the region. Even as China's relations with North Korea remain
    strained, Beijing continues to support the North Korean regime, remains
    its largest trading partner, and seeks to prevent spillover of North
    Korean issues.
        Japan's decisions to take a more active role in its defense and to
    advance global security are viewed by many nations around the world as
    a positive development. Yet, some in China, the Republic of Korea, and
    North Korea have been critical, as historical issues continue to
    influence views on Japan's international role. In this complex setting,
    USFK continues to look for opportunities to advance trilateral military
    cooperation among the United States, Japan, and the Republic of Korea.
        Over the past year, Russia has continued to expand its military
    presence, economic investment, and diplomatic engagement to reassert
    its strategic interests in the region. Russia conducted combined
    military drills with China in August, conducted multiple air patrols by
    its bombers throughout the region and into the Korean Air Defense
    Identification Zone, and named 2015 as a ``Year of Friendship'' between
    Russia and North Korea.
        Unfortunately, North Korea has chosen not to embrace this era of
    change and prosperity, and has been omitted from many of the
    opportunities in 21st century Asia. Kim Jong Un, North Korea's singular
    leader and the third generation of the Kim Family, exercises complete
    control over the state and military decision-making process focused on
    preserving the survival of his regime. He maintains an extensive
    internal security apparatus that addresses any challenges to his rule
    and he has openly replaced several top military leaders to solidify his
    authority. Kim also perceives that the regime's survival relies on the
    domestic and international recognition of North Korea as a global and
    nuclear power. This January's fourth nuclear test and February's launch
    of a TD-2 missile configured as a satellite launch vehicle--its fifth
    long-range missile launch since 2006--further demonstrate that North
    Korea will continue to defy UN Security Council resolutions and
    international norms in its attempts to seek the regime's desired
    recognition.
        Similar to his father and grandfather, Kim has likewise
    demonstrated that violent provocations remain central to North Korea's
    strategy. For example, this past August, North Korea carried out a
    heinous landmine attack in the DMZ that grievously wounded two Korean
    Soldiers. Later in the month, tensions rapidly intensified with the
    deployment of additional forces to the DMZ, psychological operations,
    and hostile rhetoric which required a strong, yet measured Alliance
    response. Even though our combined actions enabled national leaders
    from the two Koreas to resolve the situation diplomatically, it
    demonstrated North Korea remains a credible and dangerous threat on the
    Peninsula.
        We continue to assess that North Korea recognizes it cannot reunify
    the Korean Peninsula by force with its large, but aging, conventional
    military. While it continues to train and man its conventional force,
    North Korea remains focused on improving its asymmetric capabilities:
    nuclear weapons, long-range ballistic missiles, and cyber programs. In
    addition to its fourth nuclear test, the regime conducted a multitude
    of multiple rocket launch system tests, as well as no-notice Scud and
    No Dong missile tests from a variety of locations throughout North
    Korea. Upgrades continued on the Taepodong Inter-Continental Ballistic
    Missile (ICBM) launch facility and development of a submarine-launched
    ballistic missile and vessel. Lastly, North Korea continued to improve
    its capabilities in the cyber domain which build on the regime's
    success of past cyberattacks.
        Even as North Korea is investing heavily in asymmetric
    capabilities, its conventional military threats are still formidable.
    The KPA is the fourth-largest military in the world with several
    hundred ballistic missiles, the largest artillery force in the world
    with over 13,000 long-range and other artillery pieces, one of the
    largest chemical weapons stockpiles in the world, a biological weapons
    research program, and the world's largest special operations force.
    About three-quarters of its ground forces and half of its air and naval
    assets are within 60 miles of the Demilitarized Zone (DMZ). In the
    contested waters around the Northwest Islands and beyond the western
    end of the DMZ, North Korea has taken deliberate steps to strengthen
    its awareness and posture with additional navigation buoys, coastal
    observation posts, and naval patrols. These steps even include
    beginning construction of troop and weapon emplacements on Kal Do, an
    island less than three miles from Yeonpyeong Do, site of the 2010 North
    Korean shelling of the Republic of Korean military and civilian
    targets.
        Due to these enduring and proximate threats, our Command must
    continue to deter North Korea's aggression as the risks and costs of a
    Korean conflict would be immense to the Republic of Korea, Northeast
    Asia, and the world. The region accounts for one-fifth of the world's
    economic output, 19% of global trade, four of the 13 largest economies,
    and four of the six largest militaries in the world. If deterrence
    fails, full-scale conflict in Korea would more closely parallel the
    high intensity combat of the Korean War than the recent wars in Iraq
    and Afghanistan. Furthermore, any conflict with North Korea would
    significantly increase the threat of the use of weapons of mass
    destruction.
            3. the command's four priorities--progress and prospects
        In the context of this unique strategic environment, the Command
    advances vital U.S. interests, strengthens the ROK-U.S. Alliance, and
    makes a critical contribution to security in the Asia-Pacific. This
    year, we have made progress on each of our four priorities--first, to
    sustain and strengthen the Alliance; second, to maintain the Armistice,
    while remaining ready to ``Fight Tonight'' to deter and defeat
    aggression; third, to transform the Alliance; and, finally, to sustain
    the force and enhance the UNC/CFC/USFK Team.
        A. Sustain and Strengthen the Alliance.  Three key innovations this
    year have led to substantive improvements in the ability of United
    States and ROK forces to operate together as integrated and capable
    allies.
        1. A new ROK-United States Combined Division improves
    interoperability. For more than 60 years, the Soldiers of the U.S. 2nd
    Infantry Division (2ID) have stood shoulder-to-shoulder with our ROK
    allies. This year, that enduring commitment was taken one step further
    through the transformation of 2ID into a Combined ROK-United States
    Division. This new organization integrates over 40 ROK Army officers
    into the 2ID headquarters, fostering mutual trust, combined decision-
    making, and open communications. In addition, a ROK Army mechanized
    brigade will habitually train with the Combined Division's units to
    develop shared capabilities. If conflict comes to the Peninsula, this
    brigade will be under the operational control of the Combined Division
    to create a seamless capability.
        2. Rotational forces improve readiness. In order to increase the
    effectiveness and readiness of U.S. Forces on the Peninsula, USFK
    rotates specifically selected unit capabilities instead of maintaining
    permanently stationed units with servicemembers on individual one-year
    tours. Fully manned, trained, and mission-ready rotational forces also
    provide the Alliance elevated capabilities over time by introducing a
    greater number of the United States servicemembers to the unique
    aspects of contingency operations in Korea.
        In the summer of 2015, the United States Army began rotating
    Brigade Combat Teams (BCTs) into the Republic of Korea for the first
    time, on nine-month tours as the 2nd Heavy Brigade Combat Team (HBCT)
    of the 1st Cavalry Division arrived from Fort Hood, Texas. Just two
    months after the unit arrived, the BCT was able to integrate with the
    ROK Army to conduct a combined and joint exercise. 2ID's Combat
    Aviation Brigade has also increased its capabilities through the
    rotation of Aerial Reconnaissance Squadrons and the Counter Fire Task
    Force expanded it combat power by adding a rotational Multiple Launch
    Rocket System (MLRS) battalion.
        Rotation of fully-trained and resourced forces to the Korean
    Peninsula is not just an Army commitment. The United States Navy's
    Pacific Fleet ships and aircraft routinely exercise in the waters
    surrounding the Korean Peninsula as part of their regular rotation
    throughout the Pacific. Furthermore, the United States Air Force
    rotates both Active and Reserve Component fighter squadrons to Korea,
    while the United States Marines deploy air-ground teams to exercise and
    practice interoperability with the ROK Marine Corps.
        3. New capabilities improve the Alliance's defense and deterrence.
    The ROK government has continued to invest approximately 2.5% of its
    Gross Domestic Product in its national defense--one of the highest
    rates among U.S. allies. During this past year, the Republic of Korea
    made progress in enhancing future interoperable-warfighting
    capabilities by procuring upgrades such as PAC-3 missiles for the
    Patriot Weapon System, multi-role tanker-transport aircraft, and the
    AEGIS command and control and weapons system. These follow previous
    investments in F-35 Joint Strike Fighters, Global Hawk high-altitude
    unmanned aerial vehicles, and other important assets. Once integrated
    into our Alliance force structure, these systems will further enhance
    our readiness and capability. Additionally, we announced this month
    that we will begin bilateral consultations regarding the viability of
    deploying the Terminal High-Altitude Area Defense (THAAD) system to the
    Republic of Korea to upgrade our combined missile defense posture.
        B. Maintain the Armistice. Be Ready to ``Fight Tonight'' to Deter
    and Defeat Aggression. The Command's focus on readiness proved critical
    to answering North Korean provocations this past year. Our cooperation
    affirmed both countries' pledge to develop Alliance solutions to
    Alliance challenges.
        1. The Command deters and defends against aggression to foster
    stability on the Peninsula. President Obama noted at his October
    meeting with President Park that, from the events of this August,
    ``North Korea was reminded that any provocation or aggression will be
    met by a strong, united response by the Republic of Korea and the
    United States.'' When crisis came, we were prepared. A constant focus
    on readiness and open communication enabled the Alliance to act
    deliberately and prudently. The Alliance's actions deterred broader
    North Korean provocations and set the stage for a peaceful resolution
    of the crisis.
        2. Three successful exercises enhance the Command's readiness. UNC/
    CFC/USFK enhanced its readiness through its three annual multinational,
    combined, and joint exercises--Key Resolve, Foal Eagle, and Ulchi
    Freedom Guardian. Key Resolve and Ulchi Freedom Guardian are annual,
    computer-simulated command post exercises that focus on crisis
    management and the defense of the Republic of Korea. Foal Eagle is an
    annual field training exercise to ensure operational and tactical
    readiness. All three exercises provide realistic scenarios that prepare
    our forces, to include additional participants from the UNC, to deter
    and defeat North Korean aggression and potential instability in the
    region. They are essential in improving ROK-U.S. crisis management,
    combat readiness, and interoperability.
        We also aligned USFK's readiness program on the Korean Peninsula
    with PACOM's regional efforts. In August 2015, USFK and PACOM
    integrated for the first time the Korea-based Ulchi Freedom Guardian
    exercise and PACOM's Pacific Sentry command and control exercise. This
    coordination allowed the Alliance to test effective decision-making and
    mutual support with PACOM.
        3. A revitalizing UNC strengthens the international contribution to
    Korea's defense. Last year, we increased our efforts to further
    strengthen the engagement of the United Nations Command's 17 Sending
    States in our day-to-day operations. When North Korean aggression
    raises tensions, the Sending States provide credible and multinational
    support for the defense of the Republic of Korea.
        To revitalize the UNC, we will continue to engage all of the
    Sending States to leverage their many capabilities for Korea's defense.
    A senior Australian officer on our staff leads a sustained effort to
    enhance Sending State engagement in UNC's work. The representatives of
    the UNC Sending States participate in our exercises, train with us,
    meet monthly with the Command's senior leadership, and assign top-
    quality officers to work in the Command. During the Ulchi Freedom
    Guardian 2015 exercise, the Command greatly appreciated the 89
    participants from seven UNC Sending States (Australia, Great Britain,
    Canada, New Zealand, Colombia, Denmark, and France).
        C. Transform the Alliance. In 2015, the Command and the Alliance
    continued to adapt to face both emerging and evolving challenges.
        1. The MCM and SCM reaffirms ROK and U.S. commitment to defense
    cooperation. Following the October meeting between President Obama and
    President Park, in which our two countries recommitted to a
    comprehensive and global Alliance, our senior defense officials met in
    November at the 40th ROK-U.S. Military Committee Meeting (MCM) and the
    47th ROK-U.S. Security Consultative Meeting (SCM). They approved and
    agreed to implement a new concept to detect, disrupt, destroy, and
    defend (the ``4Ds'') against North Korean missile threats; pledged to
    address global security challenges of mutual interest; strengthened
    cooperation in the space and cyberspace domains; reaffirmed a timely
    completion of the Yongsan Relocation Plan and Land Partnership Plan;
    identified critical military capabilities that the Republic of Korean
    military must develop to meet the conditions of OPCON transition; and
    endorsed the Conditions-based Operational Control (OPCON) Transition
    Plan, or COT-P.
        2. The plan for conditions-based OPCON transition (COT-P) defines
    an effective way forward. COT-P creates a well-designed pathway to
    implement a stable transfer of wartime OPCON of combined forces from
    the United States to the ROK. This Plan provides a road map for the
    Republic of Korea to develop the capabilities that will allow it to
    assume wartime Operational Control (OPCON) when the security
    environment on the Korean Peninsula and in the region is conducive to a
    stable transition.
        3. Effective military planning positions the Alliance to respond to
    a changing threat environment. USFK regularly reviews and updates
    operations plans to ensure our readiness to respond to regional threats
    and crises. The combined ROK-United States operations plan has and will
    continue to evolve to enhance readiness and strengthen the ROK-United
    States Alliance's ability to defend the Republic of Korea and maintain
    stability on the Korean Peninsula.
        D. Sustain the Force & Enhance the UNC/CFC/USFK Team. Our
    Multinational-Combined-Joint Force continues to foster a positive
    Command Climate and focus on the welfare of our team.
        1. The Command fosters a positive Command Climate through trust and
    team-building. The foundations of our organization and a positive
    Command Climate consist of effective communication, trust, and
    teamwork. Regular training on prevention of sexual harassment, sexual
    assault, and suicides continues to be a priority. The result is a
    strong record of servicemember discipline in the Republic of Korea.
    Over 99.4 percent of our servicemembers demonstrate their discipline
    and desire to be law-abiding, good neighbors in Korea.
        2. Cohesive communities and new facilities promote Korea as an
    ``Assignment of Choice.'' This attention to the welfare of our entire
    team has been an important driver in making Korea an ``Assignment of
    Choice.'' Our realistic training against a real North Korean threat,
    cohesive community, the safety of our host country, and the brand-new
    facilities at Camp Humphreys welcome members of our military to serve
    on ``Freedom's Frontier.''
                   4. critical near-term alliance transitions
        Northeast Asia is one of the world's most dynamic regions. As a
    result, the Command's success is not only contingent on our ability to
    meet our immediate requirements, but also on our flexibility to adapt
    in the strategic environment to new opportunities and challenges. While
    we focus our efforts on our four Command priorities, we are also making
    decisions and taking actions now that shape the future of our Command
    and Alliance. Longer-term success requires both steadfast advancement
    of the Command's priority to maintain readiness to ``Fight Tonight''
    and the agility to transform in the future.
        A. Enhance the Alliance's capabilities. As the North Korean threat
    evolves, its extensive asymmetric arsenal could be used at a time and
    location of its choosing. This creates indications and warning
    challenges for the Alliance which require the United States and the
    Republic of Korea to develop new capabilities to detect and defend
    against this threat.
        1. Advance ISR, BMD, and critical munitions to sharpen our tools of
    deterrence. Together, both countries must constantly improve their
    intelligence, surveillance, and reconnaissance capacity; develop a
    robust, tiered ballistic missile defense; field appropriate command and
    control assets; acquire necessary inventories of critical munitions;
    and enhance the tools to prevent, deter, and respond to cyber-attacks.
        2. The Tailored deterrence strategy underscores the U.S. commitment
    to the Peninsula. We have developed and refined a Tailored Deterrence
    Strategy, which serves as a strategic framework for tailoring
    deterrence against North Korean nuclear and ballistic missile threat
    scenarios. By providing a full range of ready military capabilities,
    including the U.S. nuclear umbrella, conventional strike, and missile
    defense capabilities, this strategy supports deterrence and represents
    the U.S. commitment to provide and strengthen extended deterrence.
        3. The Combined Counter-Provocation Plan manages the risks of
    miscalculation. We also have confidence in our Combined Counter-
    Provocation Plan. This plan improves our ability to respond to North
    Korean provocations as an Alliance, while managing the risks of
    miscalculation and escalation. The events of this August underscore how
    strong, yet measured responses set the conditions for diplomatic
    efforts to work.
        B. Relocate the United States force in Korea. The Command made
    progress towards relocating the majority of United States forces in
    Korea to two enduring hubs south of Seoul--a Central Hub around the
    cities of Osan and Pyeongtaek, and a Southern Hub around the city of
    Daegu. The $10.7 billion program is the largest single construction
    program in the Department of Defense and is well on its way to
    realizing its goal of modernizing the warfighting Command in Korea,
    improving the Command's effectiveness in deterring North Korea, and
    defending the Republic of Korea.
        1. Construction peaks as workers build facilities to triple the
    size of Camp Humphreys. At the end of 2015, approximately 65% of the
    program was completed. Currently, at the peak of production, workers
    are constructing 655 new buildings, and remodeling or demolishing 340
    existing buildings to accommodate the increase in population from
    approximately 12,000 to more than 36,000 servicemembers, families,
    civilians, and other members of our community. The majority of new
    facility construction at Humphreys will be completed in 2016, and the
    majority of unit relocations will occur through 2018. During these
    transitions, we are committed to making relocation decisions with the
    effective defense of the Republic of Korea as our most important
    priority.
        2. United States Naval Forces Korea moves its headquarters to
    Busan, collocated with the ROK Navy. The project at Camp Humphreys is
    not the Command's only move. This year, United States Naval Forces in
    Korea relocated the majority of headquarters staff from Yongsan
    Garrison in Seoul to the ROK Navy base in Busan, to enable the two navy
    staffs to work closer on a daily basis. This is the first United States
    headquarters located on a ROK base.
                            5. usfk's critical needs
        My top concern remains that we could have very little warning of a
    North Korean asymmetric provocation, which could start a cycle of
    action and counter-action, leading to unintended escalation. To remain
    effective as the threat evolves, we seek four critical capabilities:
        First, Intelligence, Surveillance, and Reconnaissance, or ISR. ISR
    remains my top readiness challenge and resourcing priority as CFC/USFK
    requires increased, multi-discipline, persistent ISR capabilities to
    maintain situational awareness and provide adequate decision space for
    USFK, PACOM, and National senior leaders. Therefore, among various
    spectrum, deep look, and full-motion video (FMV) capabilities, I also
    request dependable Moving Target Indicator (MTI) support combined with
    an airborne command and control and battle management capability. The
    ability to correlate MTI with other airborne sensor data in near-real-
    time, with a robust on-board communications ability, contributes to a
    deeper understanding of the North Korean threat and intent.
        Second, Command, Control, Communications, Computers, and
    Intelligence, or C4I. Both the United States and the Republic of Korea
    are investing in new tactical equipment that will comprise a reliable
    C4I architecture. We must maintain this momentum in improving C4I
    capabilities and interoperability, so we can communicate from tactical
    to strategic levels and between units in the field.
        Third, Ballistic Missile Defense, or BMD. North Korea's missile
    program continues to develop, so it is critical for the Alliance to
    continue to build a layered and interoperable BMD capability. The U.S.
    PATRIOT system provides important defensive capabilities, and I have
    previously recommended to both governments that they consider a high-
    altitude missile defense capability. Meanwhile, the Republic of Korea
    is moving forward in the development of its Korea Air and Missile
    Defense (KAMD) and ``Kill Chain.'' We have also made progress in
    advancing the interoperability of Alliance BMD capabilities, but there
    remains work to do in this area, particularly to further refine
    interoperability between systems.
        Fourth, Critical Munitions. The Command has identified specific
    munitions that it must have on hand in the early days of any conflict
    on the Peninsula. In this phase, the Alliance relies on the United
    States and ROK Air Forces air superiority to provide time for ready
    forces to flow into the Republic of Korea. In order to ensure this
    supremacy through immediate Alliance capability and interoperability,
    we must have sufficient critical munitions on hand. Therefore, we will
    continue to work closely with the Republic of Korea to ensure it
    procures the appropriate types and numbers of critical munitions for
    the early phases of hostilities. Of note, the potential ban on cluster
    munitions could have a significant impact on our ability to defend the
    Republic of Korea.
        With these capabilities, our Alliance will greatly improve its
    posture in Korea. If we continue to act together, with the consistent
    support we have experienced in both Washington and Seoul, I believe the
    Command and the Alliance will strengthen and ensure our capability to
    deter North Korea and defend the Republic of Korea and United States
    interests.
                                 6. conclusion
        Over the past two-and-a-half years, I have seen steady progress in
    the United States-ROK Alliance. Last year, we were tested, and we found
    ourselves ready. Through annual exercises that rehearse United States-
    ROK cooperation, the commitment to readiness of United States and ROK
    armed forces, and our peoples' shared values and goals, UNC/CFC/USFK
    and the ROK-United States Alliance have successfully advanced our
    priorities and realization of our combined vision.
        We are deeply thankful for the support of our Korean partners and
    the UNC Sending States. We appreciate and value the continued support
    of Congress and the American people, as it is your support that allows
    us to undertake this critical mission.
        It is my honor to serve with the American Soldiers, Sailors,
    Airmen, and Marines and our government civilians who serve in the
    Republic of Korea. Their presence and actions ensure freedom and the
    success of our objectives. Finally, we would like to recognize the
    leadership and support of senior United States and ROK civilian and
    military leaders, Ambassador Mark Lippert, and Admiral Harry Harris, as
    we support vital United States interests, strengthen the Alliance
    between the United States and the Republic of Korea, and make a
    critical contribution to security and prosperity in the Asia-Pacific.
        Thank you, and I look forward to our discussion.

        Chairman McCain. Thank you.
        I thank the witnesses for the kind words about Senator
    McCaskill. You reflect the views of all of us in wishing her
    well and a speedy recovery.
        General Scaparrotti, you have the benefit of now 4 years of
    service as commander of forces in Korea. Have you ever seen
    tensions this high?
        General Scaparrotti. No, sir, I have not, particularly in
    August. I think the tensions then with North Korea to ``semi-
    war'' status was the highest tension that we have seen,
    probably since 1994.
        Chairman McCain. In your testimony, you said the situation
    ``could spiral out of control.''
        General Scaparrotti. Yes, sir. My concern is that, in a
    provocation, much like we had in August, both sides at a very
    high alert status, there could be a miscalculation. Then with
    the response, it would be hard to control that situation.
        Chairman McCain. You do support THAAD deployment?
        General Scaparrotti. I do, sir.
        Chairman McCain. Admiral Harris, do you think it should be
    seriously considered, an option of a second carrier based in
    Japan?
        Admiral Harris. Senator, I believe that, as a COCOM
    [Combatant Command], I want as much capability as close to the
    fight as I can. I think with regard to the second carrier
    strike group in Japan, there are some problems with that, with
    the political piece with Japan, the costs, and all that. I will
    defer to the Navy to sort that out.
        But, again, as a COCOM, I would welcome as much forces
    forward as possible.
        Chairman McCain. You have been in your job for how long
    now?
        Admiral Harris. Just a little over 7 months. I took over
    last May.
        Chairman McCain. You have had extensive experience with the
    Chinese issue, with the issue of China?
        Admiral Harris. Yes, sir, I have. Before this job, I was
    the Pacific Fleet Commander.
        Chairman McCain. Has any of this escalation, the latest,
    this HQ-9 surface-to-air missile system, surprised you?
        Admiral Harris. No, sir. It does not surprise me. In my
    opinion, China is clearly militarizing the South China Sea, and
    you have to believe in the flat earth to think otherwise.
        Chairman McCain. One of the responses is to regularly sail
    into and fly over international waters?
        Admiral Harris. Yes, sir. As I testified last September----
        Chairman McCain. Not as a one-off, but as just a regular,
    routine use of international airspace and waters?
        Admiral Harris. Yes, sir. I agree with you.
        Chairman McCain. The situation vis-a-vis China continues to
    escalate, in your view?
        Admiral Harris. Yes, sir. It does. I think China's SSM,
    surface-to-surface missiles, surface-to-air missiles, on Woody
    Island; its new radars on Cuarteron Reef over here; the 10,000-
    foot runway on Subi Reef over here and on Fire Cross Reef and
    other places; these are actions that are changing, in my
    opinion, the operational landscape in the South China Sea.
        Chairman McCain. The weapons they have developed could pose
    a direct threat to our carrier capabilities?
        Admiral Harris. Yes, Senator. They could. The DF-21, which
    they have developed, and the DF-26, which they are developing,
    could pose a threat to our carriers. I think, though, that our
    carriers are resilient, and we have the capability to do what
    has to be done, if it comes to that.
        Chairman McCain. I note you mentioned in your remarks that
    the United States-Philippines alliance is important. Do you
    think it is important for us to lift restrictions on the sale
    of weapons to Vietnam?
        Admiral Harris. Yes, Senator. I believe that we should
    improve our relationship with Vietnam. I think it is a great
    strategic opportunity for us, and I think the Vietnamese people
    would welcome an opportunity to work closer with us, as their
    security partner of choice.
        Chairman McCain. That also means port visits?
        Admiral Harris. Yes, sir. We do port visits in Vietnam. I
    advocate for more, and I believe that we will be able to do
    more this year.
        Chairman McCain. If you were asked for your top two or
    three priorities of what we should do, in light of this
    compelling information concerning the militarization by China,
    what would you recommend?
        Admiral Harris. Sir, I believe that we should maintain our
    credible combat power. We should maintain a network of like-
    minded allies and partners. We should continue to exercise our
    rights on the high seas and in the airspace above it. We should
    encourage our friends, partners, and allies to do the same.
        Chairman McCain. Thank you.
        Senator Reed?
        Senator Reed. Thank you very much, Mr. Chairman.
        Thank you, gentlemen, for your testimony.
        Admiral Harris, you pointed out that there is a growing
    alliance in the Pacific, including India, the Philippines,
    Vietnam, potentially. Some of this, ironically, might be a
    result of some of these contested actions of the Chinese. Is
    that accurate?
        Admiral Harris. Yes, Senator. It is accurate. I believe
    that China's actions are provocative, increases tensions, and
    it causes the nations in the region to look to the United
    States as their security partner of choice and away from China.
        Senator Reed. Do you feel that we are fulfilling that role
    adequately, that we are engaging, and that we are cooperating
    and leading as we should in the Pacific?
        Admiral Harris. I believe we are. Across the Indo-Asia-
    Pacific, from India through Southeast Asia and East Asia and
    Japan and Korea, we are improving our treaty alliances, our
    bilateral partnerships.
        In turn, we are getting increased access throughout the
    region. Singapore comes to mind. The EDCA that I spoke about in
    the Philippines comes to mind.
        This is an exciting time, in terms of access and agreements
    and relationships with countries throughout the Indo-Asia-
    Pacific region.
        Senator Reed. One of the consequences of their buildout
    into the islands is that they have very accurate surface-to-
    surface missiles, they have accurate radars, which would seem
    to put an even higher premium on underwater operations by U.S.
    submarines or autonomous vehicles. Is that your view? Are they
    becoming more important, submarines?
        Admiral Harris. It is, though I would not say it is
    becoming more important, because submarine and undersea warfare
    has always been important to the joint force. I view the
    submarine as the original stealth platform, and the
    capabilities that we have is a true asymmetric advantage over
    any other adversary or potential adversary on the planet. That
    is our capability in the undersea realm.
        Senator Reed. Thank you.
        Let me pose a question to both of you. China and North
    Korea is a very complicated relationship. The Chinese I think
    are nervous, not perhaps as much as the South Koreans and the
    United States, but, certainly, a little bit nervous. Yet they
    are the major funder in terms of the banking system, all of the
    infiltrating and exfiltrating monies in and out of North Korea,
    equipment, et cetera.
        Why, in your view, have we not been able to convince the
    Chinese of the danger that they face, and that their efforts
    and our efforts together could be effective in preventing
    potential catastrophes? Admiral Harris?
        Admiral Harris. Sir, I wish I knew the answer to that
    question. But I will say, adding on to what General Scaparrotti
    mentioned about THAAD, I find it preposterous that China would
    try to wedge itself between South Korea and the United States
    for a missile defense system designed to defend Americans and
    Koreans on the peninsula. If they were truly concerned, if they
    were truly interested, I believe China would and should
    intervene with North Korea and convince them to quit their
    cycle the provocations.
        Senator Reed. General Scaparrotti?
        General Scaparrotti. Sir, first, I agree with Admiral
    Harris. I think that they state that they are concerned about
    stability on the border, and I believe that they place that
    value above the risk that they believe they are taking with Kim
    Jong-un. We, certainly, hope that they will reconsider that
    calculus, because they, certainly, could have a greater
    influence in North Korea, given that 80 percent of their trade
    and a good deal of North Korea's banking is with China.
        Senator Reed. Thank you.
        Admiral Harris, you urged us all to repeal sequestration,
    which is, I think, the logical and obvious thing that must be
    done. Looking at your budget for this year, do you think you
    have adequate resources for the challenges, and they are
    significant, that you face?
        Admiral Harris. Senator, thanks to the Congress, I am in
    good shape in Pacific Command in fiscal year 2016, and the
    budget for 2017 looks good for me. I am grateful for that.
        There is always more, of course, and I will just mention a
    couple areas: munitions; submarines--my submarine requirement,
    as a combatant commander in the Pacific, is not being met, and
    that is solely because of numbers--ISR, intelligence,
    surveillance, and reconnaissance, that General Scaparrotti
    mentioned; and long-range antisurface missiles, weapons, which,
    I am pleased to note, is in the fiscal year 2017 budget.
        Senator Reed. I presume you would agree, General
    Scaparrotti?
        General Scaparrotti. Yes, Senator. I agree. I enjoy a
    priority within PACOM and DOD [the Department of Defense] as
    well to ensure that my forces can fight tonight. The four needs
    that I noted are the primary ones.
        Senator Reed. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Inhofe?
        Senator Inhofe. Thank you, Mr. Chairman.
        First of all, last week, we appreciate very much, Admiral
    Harris, your giving us the time that you gave us. I led a
    delegation of House and Senate members, and you were very nice
    to spend time with us when we visited you there.
        Since that time, we had a personal visit with the
    Australian Minister of Defense; with our Marines in Darwin, in
    the northern part of Australia; the Singapore Minister of
    Defense; and the commander of COMLOG WESTPAC [Commander
    Logistics Group, Western Pacific]; as well as Diego Garcia. We
    went a long ways around.
        But going back to our visit with you, we thank you very
    much for that.
        Just a minute ago, when we were also there visiting with
    you--and this would have been the 13th, last Saturday--we asked
    you a question about the budget. You were not forecasting any
    shortfalls at that time in the fiscal year 2017 projected PACOM
    budget, in the current threats in the Pacific. Is that what you
    just restated a minute ago?
        Admiral Harris. Yes, sir. It is.
        Senator Inhofe. Generally speaking, the forward forces are
    in pretty good shape when you get a hostile environment like we
    have right now. We talked about that when we were in your shop
    there. But it is usually at the expense of somebody else, in
    this case, the follow-on forces. Do you feel confident that
    they are being treated in a way that, should they be called
    upon, they have had adequate training that they would need to
    make this happen?
        Admiral Harris. Yes, Senator. I am confident that the
    follow-on forces are in good position today.
        Senator Inhofe. We do not hear that very often. I am glad
    to hear that.
        General Scaparrotti, there are currently nine ongoing
    operations and exercises within PACOM, all vital to our
    international interests. I will not list those. You know what
    those nine are.
        According to the Army budget overview, PACOM's combined
    operations consist of over 75,000 U.S. soldiers. How many of
    these strategic enablers are sustainable under the proposed
    Army budget now? Have you looked at that?
        General Scaparrotti. Yes, Senator. I think that we can
    actually sustain the pace and operations that we have today for
    2016 and 2017, in PACOM. Pacific Pathways has been very helpful
    throughout the Pacific. I think that is probably the one where
    we would adjust tempo, or perhaps pace, if there was budget
    pressure on that. But I am pretty confident we can maintain the
    exercises, and, in particular, those that we do on the
    peninsula.
        Senator Inhofe. Yes, Pacific Pathways is the number two
    here. If something happened there, does that have an effect on
    any of the others?
        General Scaparrotti. Well, sir, I think it would affect
    others in the sense that Pacific Pathways is very important to
    partner development. It brings a lot of capability within the
    Pacific, not only to the peninsula itself.
        Senator Inhofe. All right. The international standoff
    deepened earlier this month when North Korea, of course,
    ignored repeated warnings by the regional powers.
        Do they pay any attention to the regional powers? We have
    been talking about this for a long time.
        Admiral Harris, do you think, when they have all these
    warnings by us and by others that are out there, does that mean
    anything to them, North Korea?
        Admiral Harris. I am not sure what means anything to North
    Korea, Senator. But I have to think that the pressure brought
    on by our alliance with South Korea and other nations in the
    region, they do take note of that. If they did not take note of
    it, I am not sure where we would be.
        I believe that they also listen to China, though I think
    the Chinese influence on the North is waning compared to what
    it has been in the past.
        Senator Inhofe. On the 9th of February, we had a hearing
    with James Clapper, and he expressed very much of a concern
    with the acceleration that is taking place.
        A minute ago, you said that we are probably in pretty good
    shape in PACOM. That is what you said when we were there last
    Saturday. Since that time, you have all these--and I will
    submit these three for the record, Mr. Chairman. You actually
    talked about the Wall Street Journal but also the Washington
    Post; and, just yesterday, Japan's Foreign Minister canceling a
    visit to China; and then the tensions that came out in an AP
    [Associated Press] story just a few hours ago.
        I would like to submit those for the record.
        Chairman McCain. Without objection, they will be included.
        [The information referred to follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Then I would like to have you, for the
    record, maybe, Admiral Harris, kind of explain that if it
    seemed at the time of our visit on Saturday that things were
    under a level of control in terms of the budget concern and the
    resources that would be allocated to you, why there would not
    be an insufficiency now since these things happened since our
    last Saturday visit. Just looking at it very honestly with
    acceleration as to what those resources are, are they really
    adequate, for the record?
        Admiral Harris. Thanks, Senator. I believe, for the record,
    that PACOM is adequately resourced in fiscal year 2016 and in
    the 2017 budget.
        Senator Inhofe. Okay, that is fine. I just wanted you to
    elaborate on that for the record, after this meeting is over.
        The information referred to follows:

        I support the President's fiscal year 2017 budget and feel it
    addresses many of the Indo-Asia-Pacific Theater priority programs and
    requirements. I believe the budget allows me to meet the strategy in
    the USPACOM area of responsibility. USPACOM worked closely with the
    Office of the Secretary of Defense (OSD) and the Services to ensure the
    final President's Budget was adjusted to fund key weapon systems and
    modernization efforts which address adversary high-end capabilities and
    provides adequate force structure needed in the Pacific Theater.
    Critical investments include: Upgrading fourth generation fighters and
    procuring sufficient fifth generation aircraft; investing in precision
    munitions (i.e. AIM-9X, AIM-120D, SM-6, MK-48); sustaining Long Range
    Anti-Ship Missile (LRASM) procurement; procuring Virginia-class
    submarines, enhancing other undersea capabilities, and resourcing
    advanced Intelligence, Surveillance, and Reconnaissance (ISR) and
    Command and Control (C2) systems (i.e. E-2D Advanced Hawkeye and P-8
    Poseidon).
        If additional resources were to become available, I would
    prioritize additional investments in the following areas: accelerate
    Virginia-class submarine procurement, procure additional F-35 Joint
    Strike Fighters, and procure additional critical munitions (AIM-9X,
    AIM-120D, SM-6, MK-48).
        However, as I testified during my confirmation hearing and have
    discussed publically elsewhere, I believe that sequestration, if it
    continues in force after 2017, will significantly harm USPACOM forces
    and my ability to meet my strategic objectives.

        Admiral Harris. Yes, sir. I am happy to do that.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman McCain. Senator Gillibrand?
        Senator Gillibrand. Thank you, Mr. Chairman. Thank you both
    for your service and this hearing.
        I am concerned about cyber threats from this region, in
    particular. How do you assess these threats? How are forward-
    deployed forces vulnerable to them? What can we do to address
    them better?
        Admiral Harris. Thank you, Senator. I will start.
        Cyber is the new frontier. It is the new threat vector. We
    are expending enormous resources across the department in
    getting after cyber. In the Pacific, we have stood up an
    organization called CYBERPAC, Cyber Forces Pacific, within
    Pacific Command. They look at DOD information systems defense
    or defensive cyber operations and offensive cyber operations.
        I have assigned to me at PACOM cyber mission teams and we
    are learning how to use those teams. Again, this is new, but it
    is a very real threat not only to U.S. military forces, but to
    America in general, in my opinion.
        General Scaparrotti. Senator, I thank you for the question.
        As Admiral Harris said, this is a domain that we are
    learning that is very challenging and in particular in the
    peninsula, because North Korea also has a very deliberate goal
    of increasing their cyber capability. As you know, they have
    demonstrated that both here with the Sony attack in the United
    States and also in Korea against their banking and media
    industry in 2013.
        It is a great concern to me. We have increased our joint
    cyber center capabilities over the past year. We continuously
    work at that. I also now have been deployed a cyber mission
    team, and I work also with the teams and am supported by the
    teams in PACOM.
        I would just make one other comment. It is important within
    the alliance that I and the Republic of Korea's cyber teams
    develop a much closer relationship, because we do have a unique
    vulnerability in that we have systems that are ROK-United
    States that support the alliance specifically centric.
        We are working hard as an alliance as well to ensure that
    we have a proper defense and a capability that we require
    within the domain.
        Senator Gillibrand. I also have concerns specifically about
    China. I think China is making significant progress in its
    military modernization initiatives. In fact, it is currently
    testing the J-20, its fifth-generation competitor to the F-35.
    How effective is our current defense posture and network of
    regional partners in deterring Chinese expansion? In which
    areas are we lacking depth of strategic operations or tactical
    levels? What do you think are the most effective ways to ensure
    China's rise is peaceful? Last, are there any particular United
    States military capabilities with which you see China closing
    the gap?
        Admiral Harris. I will start, Senator.
        I think that, in the capability realm, I asked for
    increased surface-to-surface weapons. When I started flying P-
    3s back in the late 1970s, we had the Harpoon missile. That is
    the same missile we have today.
        We need to have an increased lethality and reach and speed
    that I talked about before. I am grateful that the Services
    responded to that request, and in fiscal year 2017 budget,
    there is increased funding for programs to increase that
    lethality of surface-to-surface missiles.
        I think Deputy Secretary of Defense Work just recently
    spoke of the SM-6 missile and its capability in the surface-to-
    surface mode or against surface targets.
        The LRASM, the Long-Range Anti-Ship Missile, which is air-
    launched now, is another great capability that we need to bring
    online fast, and I am grateful for that.
        I wrote also about the need for increasing the buy, and
    rate of buy, of F-35s, the Joint Strike Fighters. I am pleased
    that in the fiscal year 2017 budget, that is in there. I am
    glad about all of that.
        As I mentioned before, we have a shortage in submarines. My
    submarine requirement is not met in PACOM, and I am just one of
    many COCOMs that will tell you that. That is our principal
    asymmetric advantage over China and any other adversary, and I
    think we have to keep after it. I think it is important in the
    long run to modernize our force for the future.
        To get at your last question about what we can do, I think
    diplomacy is probably the key. We have to have a strong defense
    backed up by active diplomacy. I think we need to use diplomacy
    to influence China toward an acceptable behavior in the
    international space.
        General Scaparrotti. Senator, I would just add, and
    emphasize the last point.
        On the peninsula, one of my concerns is that, if there is
    conflict, what are China's actions? We plan for those
    possibilities. I am sure they do as well. I think diplomacy and
    engagement, which PACOM engages with them regularly to have
    these conversations, is very important, so that they understand
    our intent, and we have those communications, if we should have
    a conflict on the peninsula.
        Chairman McCain. Senator Ayotte?
        Senator Ayotte. I want to thank both of you for your
    service to the country.
        Admiral Harris, I want to thank you for also visiting the
    Portsmouth Naval Shipyard. We are really appreciative of that
    visit.
        To follow up on what I have heard you say today, in terms
    of the gap of our attack submarine fleet and the needs that you
    have in PACOM, what role, first of all, does the Virginia-class
    submarine play in the importance of our supremacy undersea? How
    big is this gap? We actually asked the Navy this morning about
    all of the combatant commands, and the Navy told us that only
    62 percent of the requests for attack submarine support are
    being met right now. What is the gap like in PACOM as well?
        Admiral Harris. The gap is about 62 percent. The exact
    numbers are classified. I would be happy to have that
    discussion with you. But we experience an attack submarine
    shortfall in the Pacific, and I would maintain that the Pacific
    is the principal space where submarines are the most important
    warfighting capability we have.
        As far as Virginia-class submarines, it is the best thing
    we have. It is the best thing we have. I cannot get enough of
    them, and I cannot get enough of them fast enough.
        Senator Ayotte. Great. Thank you. I think this is the issue
    that you raised as we think about sequestration, the long-term
    impact on our investment in our attack submarine fleet, which
    is so critical to the defense of the Nation and, obviously, an
    area where we have very important supremacy undersea with the
    challenges that we are facing in the region.
        But if we do not have presence, then we obviously cannot
    address our security needs. Our presence in the region is
    probably as important as anything else. Would you agree with
    that?
        Admiral Harris. I do. If you do not have presence, then you
    better have reach. That reach comes from submarines and
    aircraft and the like. We need the new SSBN [ballistic missile
    submarine], SSBN-X [Ohio-class replacement submarine], in the
    2020s, and we need the new long-range bomber as well.
        Senator Ayotte. I also wanted to ask you about unmanned
    underwater vehicle R&D [research and development] and what you
    think we should be doing in terms of conducting research,
    development, and fielding advanced unmanned underwater
    vehicles. Is that something we need to invest in and focus on
    going forward?
        Admiral Harris. I think we must invest, Senator, in
    advanced underwater vehicles and go forward with it, not only
    in antisubmarine warfare and all of the things that UAVs can
    provide us in that regard, but also in mine warfare to get
    after the mine threat that we will face.
        Senator Ayotte. How are we doing on that, compared to, for
    example, China or other countries?
        Admiral Harris. I think we are doing okay in it, but we
    need to do a lot more.
        Senator Ayotte. Okay, thank you.
        I wanted to also ask, General Scaparrotti, as we look at
    the actions of North Korea that have been discussed today--
    recently, obviously, the underground nuclear tests, the
    ballistic missile launching--how do you assess what they are
    doing right now? I know there is always a pattern of escalation
    and looking for an international response, but it strikes me
    that Kim Jong-un is even less reliable, obviously, than his
    father.
        Where do you assess this situation, and what more should we
    be doing to respond?
        Secondly, what is your prediction in terms of what we might
    see next from the North Koreans? Or is it just so unpredictable
    from your perspective?
        General Scaparrotti. Thank you, Senator.
        First of all, I think Kim Jong-un has been clear that he
    intends to establish himself and wants to be accepted as a
    nuclear nation with a valid missile capability to deliver those
    assets. Of course, he claims he can do that today. He wants to
    be recognized as such.
        He said, despite international sanctions, that he will
    continue to develop his nuclear and his missile capabilities.
    Despite our deterrence, as you have seen, he has continued to
    do so.
        I think his calculus is, at this point, that those tests
    that he just conducted in January and February, that they were
    within his risk tolerance; that he could conduct those; and at
    some point in the future, in the next 3 or 4 months, move
    beyond it, just as he has done in cycle of provocation and
    relaxation over time, which has been their norm.
        I do worry about his calculation being wrong, at some
    point. I state that is what I worry most about.
        His view of the world is a very isolated one. Given the way
    that he leads, in terms of the brutal nature of his leadership,
    I am not sure that he gets a lot of good advice or at least
    critical advice from those around him.
        Senator Ayotte. I think you are pretty hesitant when you
    are around him to give any contrary advice also. That is the
    problem.
        General Scaparrotti. I think we will see increasing tension
    as we go into this training period coming up here in February
    and March. I think what we should do, to ensure that our
    alliance is strong, is that we maintain our deterrence
    activities that we have there, particularly our large exercises
    here. There is no doubt in my mind that he knows of our
    capability and believes that he cannot defeat it.
        I think stronger sanctions are very important for the
    international community.
        Senator Ayotte. Excellent. We recently passed very strong
    legislation.
        General Scaparrotti. I appreciate that.
        Senator Ayotte. I think that sets the stage for the
    sanctions piece. Thank you.
        General Scaparrotti. Yes, ma'am.
        Chairman McCain. Senator King?
        Senator King. Thank you, Mr. Chairman.
        General Scaparrotti, I think your analysis is exactly
    right. Almost all wars in history are started from a
    miscalculation. I think, for that reason, it seems to me that
    part of our strategy should be very clear about what our
    capabilities are, what our red lines are, and when we will act,
    so that there is not a miscalculation or misunderstanding or an
    underestimation of our capacity. Would you agree?
        General Scaparrotti. Yes, sir, I would agree.
        Senator King. Admiral Harris, what are the strategic
    implications for the United States strategy in the Pacific of
    the Chinese Anti-Access/Area Denial, so-called A2/AD, strategy?
        It seems to me that forces us to question the strategy of
    the carrier as the primary instrument, the development of the
    standoff cruise missiles by the Chinese. This, it seems to me,
    is a moment of inflection, in terms of what our strategy is in
    that region.
        Admiral Harris. Thanks, Senator.
        We have predicted the demise of the carrier since I have
    been in the Navy. We had the Soviets with their submarines,
    carriers, and all their capability, and we questioned the
    survivability of the carrier then, and then the Soviets went
    out and tried to build their own. Then they sold it to China,
    and China is using it, and they are building their own now.
        If the carrier were really irrelevant, then I question why
    these competitors and peer competitors are trying to build
    their own at the rate they are building them.
        I think the A2/AD strategies that China imposes are
    serious, and we have to seriously consider them and work around
    them.
        Senator King. It seems to me that we need to think about
    the range of our weapons.
        Admiral Harris. We do. Yes, sir. That is one of the issues
    that I spoke about earlier.
        In our regular ship surface-to-surface weapons, we are out-
    stuck by the Chinese today. But because of this committee and
    Congress, we are going to be in good shape in 2017, as we put
    money into those systems.
        I think, again, the original stealth platform is the
    submarine, and we will be able to win in any conflict at sea
    when we apply the joint force to that.
        I am comfortable with the carrier operating in those
    waters, but we have to consider it. We have to consider the
    threat.
        But the Chinese A2/AD threat is not 10-feet tall. It is not
    even 6-feet tall, in my opinion.
        Senator King. You mentioned the importance of diplomacy as
    part of the overall strategy. Would part of that be the
    advisability of the U.S. acceding to the U.N. Law of the Sea
    Treaty?
        Admiral Harris. In my opinion, Senator, yes.
        Senator King. That would help us in dealing with some of
    these fuzzy claims in the South China Sea?
        Admiral Harris. I believe that U.S. accession to UNCLOS is
    a positive.
        Senator King. I have looked at the map. We ought to call
    the South Atlantic the South American Sea or something, because
    just the name, it is nowhere near China.
        Admiral Harris. Yes, sir. We do call the Gulf of Mexico the
    Gulf of Mexico.
        Senator King. Not the Gulf of Florida, interestingly.
        Admiral Harris. That is right.
        Senator King. Just yesterday, there was a report of the
    fastest sea level rise in 28 centuries, and a projection that,
    by the end of this century, sea level could rise 3 to 4 feet.
    Are you looking at the strategic implications of that, both in
    terms of our infrastructure that is on the coast, but also the
    stability of areas within your command, Bangladesh, low-lying
    coastal cities throughout the region?
        Admiral Harris. I look at it in a capability way, because
    it will be PACOM forces or U.S. military forces that respond to
    disasters caused by flooding or tornadoes or typhoons or
    whatever, so I look at it in that way. But, frankly, I am not
    looking at rise in sea levels and its effect globally toward
    the end of century. That is just too far out for me.
        I worry about what is happening in the near term and what I
    can do about it, and how I can be helpful.
        Senator King. Would it not be prudent though to analyze our
    infrastructure, just to do a tabletop on what would happen if
    sea level went up a couple feet in San Diego or Guam or Hawaii?
        Admiral Harris. Certainly. Yes, sir. It clearly would.
        Senator King. Finally, what is China's goal? What are their
    strategic goals? Is it purely defensive? Is it offensive? Do
    they want to take territory? What is behind this buildup that
    they are engaged in?
        Admiral Harris. Senator, this is my opinion. I believe
    China seeks hegemony in East Asia.
        Senator King. Simple as that?
        Admiral Harris. Simple as that.
        Senator King. Regional control?
        Admiral Harris. Yes, sir.
        Senator King. Thank you, Admiral.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ernst?
        Senator Ernst. Thank you, gentlemen, for being here today.
    We, certainly, appreciate your service.
        Admiral Harris, in 2014, the Marine Corps announced its
    Expeditionary Force 21 doctrine, which stated that, after over
    a decade of land-based combat operations, the Marines were
    going to start returning to their amphibious roots. I believe
    the success of this effort is vital in order to respond to a
    rising China and to assist our allies in that region.
        Are you comfortable with the Navy and Marine Corps forces
    that are postured to provide expeditionary capabilities to meet
    your PACOM requirements?
        Admiral Harris. Senator, I am, but I will be the first to
    say that 14 years of fighting in Iraq and Afghanistan land
    wars, there are majors in the Marine Corps, O-4s, that have
    never served at sea in the Fleet Marine Force.
        Senator Ernst. Correct.
        Admiral Harris. I welcome their return to amphibiosity. But
    it is not just the Marines. The Marines are involved in
    training our allies and partners, as they see the benefits of
    having an amphibious capability for their areas, for example,
    Indonesia and all of the archaeological islands that comprise
    that country, Japan and their interest in amphibious warfare,
    and on and on.
        I am pleased with the work that we are doing and especially
    pleased with the work that the Marines and the Army are doing
    to increase the amphibious capability of our friends, allies,
    and partners in the region.
        Senator Ernst. Very good. You have a strategy for closing
    that gap, like you said, the O4s mostly have land-based combat
    operations?
        Admiral Harris. Right. I had a strategy when I was the
    Pacific Fleet commander, and now I get to task the Pacific
    Fleet and the Marine Forces specific to come up with that
    strategy and work it.
        Senator Ernst. Very good. I am very excited about that. We
    are getting back to the basics, I think, for all of our forces
    out there.
        Do you agree with the Navy-Marine Corps Joint Forcible
    Entry capability with a validated ship requirement of 38?
        Admiral Harris. I do. The forcible entry requirement is
    critical not just for the Marines but for the Army as well.
        Senator Ernst. Do you think that that will be able to be
    maintained, then, moving into the future?
        Admiral Harris. I do not know. I hope so. I hope that we
    will be able to get our amphibious ship levels to that
    standard.
        Senator Ernst. Okay, thank you, Admiral.
        Over the past several weeks, just a slightly different
    topic, but over the past couple weeks, we have had a number of
    very distinguished witnesses, such as Lieutenant General Thomas
    Conant, a former PACOM deputy commander, and General Carter
    Ham, the former commander of AFRICOM [United States Africa
    Command] and United States Army Europe. They have spoken very
    highly of our National Guard State Partnership Program.
        I do believe that this program is key in working with our
    allies, and developing our allies and their capabilities. But I
    am concerned because in the PACOM or in the Asia-Pacific area,
    there are very few State Partnership Programs out of 70
    different unique programs that we have worldwide. I think it is
    important that we exercise these types of programs and develop
    those relationships with those countries.
        Could you speak to that a little bit, sir?
        Admiral Harris. I can. I am a huge fan of the State
    Partnership Program. I have seen it work in the Pacific.
    General Grass and I have talked about it, and I have asked for
    an increase in state partner relationships out there.
        But for the countries in the region, their state partners,
    our Guard forces, are often their principal training
    relationship. It is critical for all the reasons you mentioned.
    General Grass and I are in lockstep on the way forward in the
    Pacific.
        Senator Ernst. Are there certain countries that we should
    be working more with, with a state partnership relationship?
        Admiral Harris. Sure. Mongolia comes to mind in, and we
    have asked for that.
        Mongolia is a perfect case in point of a country that would
    benefit greatly from our State Partnership Program.
        Senator Ernst. That is very good. We have many States that
    already have developed relationships, and sometimes look for
    second partnerships as well, so thank you.
        General Scaparrotti, do you have any thoughts on the State
    Partnership Program?
        General Scaparrotti. I, too, am a big fan of that. The
    relationships that are built over time, the trust that is
    built, are very important. That is really the glue that helps
    us improve not only that relationship, but, importantly, to
    develop capacity within our partners.
        Senator Ernst. Fantastic. Thank you.
        Thank you very much.
        Chairman McCain. Some of that depends on the attractiveness
    of the State. Don't you think that has a lot to do with it?
        Senator Nelson?
        Senator Nelson. Thank you, Mr. Chairman.
        General, when does China yank North Korea's chain? What is
    the point at which they really get serious that North Korea is
    getting out of control with the nuclear weapons capability?
        General Scaparrotti. Sir, I wish I knew the answer, because
    we have been trying to find that spot, frankly. I think they
    have underestimated the danger of KJU [Kim Jong-un], at this
    point. He is clearly confident in his ability to provocate and
    control a situation, so I would encourage them to reconsider
    that at this time.
        But, obviously, they still, despite these recent events,
    appear to be reluctant to take some serious steps, which they
    certainly could.
        Senator Nelson. Do they seem to be, certainly, the one
    applying economic pressure, and so forth. I mean, do they fear
    a united Korean Peninsula so much, and/or do they fear too many
    refugees coming in, that this nuclear threat is not enough for
    them to pull that chain?
        General Scaparrotti. Well, I think first they fear
    instability on their border, if that were to occur, the refugee
    problem it would create for them along the border, and then
    also the security of the WMD [weapons of mass destruction].
    North Korea not only has nuclear but they have probably one of
    largest chemical and bio stockpiles--chemical, in particular,
    but bio capability--around the world.
        That is their first concern, getting control of that, if it
    were to be an unstable country.
        Secondly, I believe, too, that it provides them a buffer,
    and they would fear a unified Korea, particularly with a United
    States ally. They would be concerned where our forces would be
    stationed.
        Senator Nelson. As you all wargame this, what is China's
    position, if the young gentleman goes off his rocker and
    launches an attack against us, an attempted attack, because
    presumably we would have the capability of knocking it down? In
    a wargame like that, what do you expect for China's reaction?
        General Scaparrotti. Sir, we actually have that as a part
    of our wargaming and planning. I think our first thing, as I
    mentioned earlier, is that we count on engagement with them. We
    work on engagement, particularly with PACOM, on a regular basis
    in order to give us that relationship. If and when there is
    any, even a provocation on the peninsula today, we make contact
    to make sure they understand our intent.
        This is my personal opinion. I think that China is also
    looking at those possibilities in their calculation, and
    probably are more inclined lately to intervene potentially, at
    least in the border areas and to the extent that they would be
    concerned about control of those WMDs as well.
        I think intervention is more of a likelihood, in my mind,
    in the few years that I have been in command now, than it was,
    say, 2 years or 3 years ago.
        Senator Nelson. It may be one of the areas that China would
    suddenly see that it has its interests aligned with the
    interests of the United States.
        Admiral, it is great to see you.
        Mr. Chairman, he is a great product of Pensacola, Florida.
    As a native Floridian, you can hear it in the lilting tone of
    his voice.
        Admiral, share with us your thought of the importance, from
    a national military perspective, of the Trans-Pacific
    Partnership [TPP].
        Admiral Harris. Sir, I am just going to bask a little bit
    in that lilting-ness just for second here.
        The Trans-Pacific Partnership, I believe, is an important
    component of the economic part of the rebalance. I have spoken
    of the rebalance being comprised of the military, diplomatic,
    political, and economic parts. In the economic sphere, which I
    have said is the most important component of the rebalance--the
    most visible piece is the military piece, because you can see
    an aircraft carrier or Joint Strike Fighter or Stryker vehicle
    and all that.
        But the most important part of the rebalance, to America,
    is really the economic component. In that economic component,
    you have energy and you have TPP. I think that TPP binds us to
    the 11 other nations that are part of TPP.
        The standards that it takes for a country to enter TPP is
    helpful. It is helpful to the global trade piece, and it is
    helpful to those things that we view as important as conditions
    of entry.
        I think the fact that there are countries waiting in line
    to figure out how to get in, I think that is important as well,
    and indicative of how TPP is viewed now in the Pacific.
        Senator Nelson. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman.
        Thank you, gentlemen, for your testimony. I appreciate the
    opportunity to get caught up yesterday.
        Admiral, I appreciate you talking about the TPP, not only
    in terms of economics, but energy. As we discussed yesterday,
    the United States has an enormous opportunity now, in terms of
    our competitive advantages in energy, LNG, oil exports to our
    allies and even other countries in the region. I think it is
    something we need to be taking advantage of.
        I want to follow up on the chairman's questions on the
    South China Sea. Secretary Carter was testifying here a few
    months back when we had done the first FONOPs [Freedom of
    Navigation Operations]. I am a big supporter of Secretary
    Carter, but I think there was some concern here on the
    committee that an opportunity to actually announce in a robust,
    articulate way what we were doing was missed, because we
    literally had to press it out of him just to get any details on
    what the heck was going on.
        From your perspective, what exactly is our policy with
    regard to the South China Sea, our freedom of navigation
    operations? What is the purpose? What is the goal? Should we be
    doing this on a regular basis, as the chairman said, also with
    our allies?
        Admiral Harris. Thanks, Senator.
        I believe the purpose of freedom of navigation operations,
    and the other operations we do in the South China Sea, is to
    exercise our rights on the high seas and in the airspace above
    it on a regular basis.
        Senator Sullivan. To what end? What is the goal?
        Admiral Harris. The goal is international rules and norms.
    This is international water and international airspace. If we
    do not exercise our rights, or if those rights are not
    routinely exercised by someone, then we stand a chance of
    abdicating those rights to someone else.
        The regular exercise of freedom of navigation, in my
    opinion, is critical. It is important, and it is something that
    we must continue to do.
        Senator Sullivan. Do we have allies who are interested in
    doing that with us for the same reasons? Are we looking to
    coordinate with them in terms of future FONOP operations?
        Admiral Harris. We have allies, friends, and partners,
    Senator, that are very supportive of our freedom of navigation
    operations. There are some of those who are willing to consider
    doing them with us, but there are others that are unable to,
    either because of their own military capability or lack
    thereof, or of their internal politics, I guess, and of their
    relationship with China.
        Senator Sullivan. Do you think that it would be helpful to
    have additional allies, whether they are from the region or
    maybe some of our NATO [North Atlantic Treaty Organization]
    partners?
        Admiral Harris. It would be helpful. I have encouraged
    other countries to conduct operations in the South China Sea,
    because, at the end of the day, South China Sea is
    international waters, in my view.
        Senator Sullivan. We talked about Okinawa yesterday. Can
    you just give us an update on what more we should be looking at
    doing? We are helping our allies, particularly with regard to
    Japan, in terms of the Marine redeployment there.
        Admiral Harris. We have this relationship with Japan in
    Okinawa. We have an obligation to defend Japan, and they have
    an obligation to provide us a place from which to defend them.
    Okinawa is one of those critical places where we must be in
    order to meet our treaty obligations to defend Japan.
        A few years ago, through a lot of increasing tensions over
    the years, Japan asked us to move our forces out of Futenma to
    someplace else. Our response to that is, sure, you build a new
    place and we will move our forces there. That is a simplistic
    view, but that is how we agreed to move from Futenma to the
    Futenma Replacement Facility, Camp Schwab, Henoko.
        In that process, we agreed also to relocate 8,000 to 10,000
    Marines out of Okinawa. For that, you have the Guam piece, the
    Hawaii piece, and part of the Marine rotation forces in Darwin.
    You have all of that, which is a follow-on to once we start
    moving Marines from Futenma to the Futenma Replacement
    Facility.
        The challenge we have is to get the build done on the
    Futenma Replacement Facility, which is Japan's responsibility.
    That is their obligation to us.
        Right now, it is slowed. It is a little over 2 years late.
    It was going to be done by 2023, and now we are looking at 2025
    before that is done. That is when the big movement of Marines
    from Okinawa to Guam and Hawaii would take place, in the 2020s.
        I believe we have to continue to fly and operate out of
    Futenma and continue to work with the Japanese, as they start
    to build the replacement facility at Henoko, Camp Schwab.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        I would like to thank both Admiral Harris and General
    Scaparrotti for the time you spent with me yesterday. I
    appreciate that very much, and for your service.
        General Scaparrotti, our very best wishes to you, as you go
    forward.
        Admiral Harris, I am happy to see in your written testimony
    that you raise the Daniel K. Inouye Asia-Pacific Center for
    Strategic Studies, DKI APCSS, and the Center for Excellence in
    Disaster Management.
        Can you talk briefly about the importance and the benefits
    that these two organizations provide to you as the commander of
    PACOM?
        Admiral Harris. Yes, Senator. I believe the Daniel K.
    Inouye Asia-Pacific Center for Strategic Studies, DKI APCSS, is
    a true force multiplier for my operations in the Pacific. DKI
    APCSS is able to bring countries to Hawaii that I cannot go to.
    They enjoy special ability to link together students from all
    over the region in very positive ways.
        In building those relationships, it helps me in the region,
    and it also helps those countries to realize the benefits of a
    relationship with the United States.
        I cannot say enough about DKI APCSS and retired Lieutenant
    General Dan Leaf, who directs that. I am pleased to be able to
    work closely with him and the center. I am pleased that the
    center is a direct report to PACOM.
        So, too, CFEDM, the Center for Excellence in Disaster
    Management, I think that that center has the capability and the
    potential to be a true storehouse of knowledge and lessons
    learned on how we do disaster management, not only in the
    region, but that can be shared globally for people who would
    seek that information.
        Senator Hirono. I think particularly as we natural
    disasters occurring more and more, that the center is very
    important. I have been visited the center a number of times. I
    totally agree with you that that is a really important
    resource. It is a resource for you as well as our country.
        I want to turn to the relationship, the trilateral
    relationship, among Japan, United States, South Korean. This is
    for General Scaparrotti.
        The tensions, as you say, are higher than ever, and there
    are some historical issues between Japan and South Korea that
    make the relationship between these two countries particularly
    challenging. From your perspective, how do you see this
    relationship currently and moving forward? Perhaps with the
    tensions between South and North Korea now, perhaps South Korea
    will be moving more closely to Japan. How do you see this
    developing?
        General Scaparrotti. Senator, thank you. It is an important
    question and an important relationship for us.
        I see it positive, and I see it moving in a positive
    direction. A year ago, we were having difficulty with
    trilateral relationships, encouraging mil-to-mil relationships,
    et cetera. Over this past year, there has been, I think, a
    concerted effort with both parties, with the U.S. as a partner
    to both, to improve that relationship.
        As you know, Japan and Korea recently had high-level
    discussions, as well as a meeting between the Prime Minister
    and the President Park that resolved the comfort women issue. I
    think that was significant, as well as the pressures from North
    Korea. I think both have encouraged them to increase the
    trilateral relationship.
        Admiral Harris just hosted a conference with the two
    chairmen from each of those countries, as well as General
    Dunford. I think we have the foundation now to move forward in
    the future with greater mil-to-mil exercises, as well as
    probably an encouraging environment for increasing information
    flow between the three countries.
        Senator Hirono. Thank you.
        This is for Admiral Harris. The actions of North Korea have
    been particularly troubling, especially with their so-called
    hydrogen bomb test and their rocket launch into space. Do you
    see North Korea as a nuclear state? If so, what does this mean
    for the United States and the U.N. [United Nations]?
        Admiral Harris. They clearly have some nuclear
    capabilities. I am not convinced that the bomb that went off
    was a hydrogen bomb, but they clearly have some degree of
    nuclear capability.
        I think they pose a very distinct and real threat, not only
    to peace and stability on the Korean Peninsula, but globally.
    As they develop their nuclear capability--and as I said before,
    they are on a quest for nuclear weapons, the means to
    miniaturize them, and the means to deliver them
    intercontinentally. They pose a real threat to Hawaii and to
    the West Coast, to the mainland of the United States, and soon
    to the entire U.S.
        They pose a threat today, with their hundreds of thousands
    of rockets within rocket range of Seoul, to the 28,500 American
    troops that are posted there, their families, the hundreds of
    thousands of Americans who work in Korea, and our Korean ally
    and Japan.
        They are a real threat today, and I encourage China, for
    example, to be helpful and to try to bring North Korea to the
    negotiating table and to do the right thing.
        Senator Hirono. Well, our best wishes on your continuing
    efforts on that score, because I know it is quite the challenge
    to have China step up and deal with North Korea in a way that
    would be helpful to stabilizing that region. Thank you very
    much.
        Chairman McCain. Senator Rounds?
        Senator Rounds. Thank you, Mr. Chairman.
        Admiral, first of all, let me say how much I appreciated
    the opportunity to visit with you at PACOM headquarters this
    last week on the Inhofe codel. Your message was striking. At
    the same time, I came away a little bit puzzled with one part.
        We have been working on the issues surrounding rebalance or
    a rebalance strategy since 2011. The rebalance, a strategic
    whole-of-government effort, guides and reinforces our military
    efforts, integrating with diplomatic, political, and economic
    initiatives. In August 2015, Secretary of Defense Carter
    described four elements of the military component of the Asia-
    Pacific rebalance.
        Have you seen a doctrine that you put your strategy around,
    which is the rebalance? Or is it a series of concepts that are
    still being developed?
        Admiral Harris. I believe that we have a strategy now, and
    it is the East Asia military strategy that was put out by OSD
    [the Office of the Secretary of Defense] last December,
    November or December. I think it captures it well. There are
    probably other things that will come out on that, but I am
    satisfied, in reading the East Asia military strategy piece--
    the Asia-Pacific strategy piece, rather, that it is captured in
    there.
        But I think all the elements that I spoke about earlier on
    the rebalance are in play in the Indo-Asia-Pacific region. Just
    in the diplomatic and political spheres, for example, we now
    have the EDCA, the Enhanced Defense Cooperation Agreement, with
    the Philippines, which gives us access to their bases. We have
    the new defense guidelines with Japan, which is the follow-on
    to their peace and security legislation, which allows them some
    limited collective self-defense, which moves that relationship
    forward. We have access agreements with Singapore, which allows
    us to put our LCS, littoral combat ships, there, and P-8, P-3
    aircraft there on a routine basis.
        Of course, all the agreements we have with Australia, which
    is the cornerstone of our MRF-D deployment, the Marine
    Rotational Force Darwin deployment.
        I am very pleased with those initiatives, which are in that
    diplomatic, political sphere part of the rebalance.
        The military piece is, as I said, the most visible piece.
    You can see that. Then we have the economic piece, which is the
    most important part to the United States, in my opinion.
        Senator Rounds. With regard to A2/AD, there seems to be
    considerable movement, a very quick movement, on the part of
    China in this area. Do you have the appropriate intelligence-
    gathering information? Do you need more tools than what you
    have right now?
        Admiral Harris. I can always use more tools, Senator. I
    would like to know more about China's intent. But in that
    regard, what I need more than anything else is persistent ISR
    to keep that never-blinking eye on Korea.
        Senator Rounds. Specific platforms that are not available
    to you now that you need?
        Admiral Harris. There are platforms that are not available
    now that I have asked for.
        Senator Rounds. Okay. They are coming?
        Admiral Harris. It is being considered. It is part of the
    global allocation of forces. I compete with platforms along
    with Central Command, EUCOM, European Command, and the like.
        Senator Rounds. In the current posture, the Chinese have
    clearly put us in a position where they are moving us, in terms
    of our safety zones, farther out, farther away. The LRS-B
    [Long-Range Strike Bombers] is being proposed right now.
        Is the LRS-B an asset that you would consider critical,
    with regard to our future capabilities in the South China area?
    Seeing how they could be deployed out of North America, they
    basically would be in a position to make the strikes necessary
    at that time that perhaps some of our other carrier-based units
    might not be able to maintain, just based upon size and
    capabilities.
        Admiral Harris. Senator, I am sorry. I do not know the
    acronym.
        Senator Rounds. Long-range strike bomber.
        Admiral Harris. Yes. It would be helpful. As I mentioned
    before, in talking about the next-generation bomber, all of
    that capability is important, not only the next-generation
    bomber, but the next-generation SSBN.
        We need those to maintain a position of strength into the
    2020s.
        Senator Rounds. Mr. Chairman, thank you.
        Senator Reed. [Presiding.] On behalf of Chairman McCain,
    Senator Shaheen?
        Senator Shaheen. Thank you, Mr. Chairman.
        Admiral Harris, I am so glad to hear someone in your
    position who does not know one of the acronyms that is being
    used. It makes me feel so much better.
        [Laughter.]
        Admiral Harris. Acronyms kill, ma'am.
        Senator Shaheen. Yes, they do. That was a very good pun.
        I want to thank you both for your service. I want to start,
    I assume it should be with you, Admiral Harris.
        There was a report that was just given to Congress this
    week that suggests that Chinese investments in the national
    security sector in the United States are growing. Is there any
    reason why we should be concerned about that?
        Admiral Harris. Sure. I think that, depending on the area
    that they invest in, there is every reason to be concerned. We
    need to look at each one of these investments carefully. We
    have a process called CFIUS [Committee on Foreign Investment in
    the United States], another acronym. I could not begin to tell
    you what it stands for.
        Senator Shaheen. That one I know.
        Admiral Harris. All right. But that allows us a mechanism,
    a legal mechanism, to perhaps prevent China from buying or
    investing in certain areas. I have used it before, when I was
    at Pacific Fleet, to prevent the purchase of some facilities,
    which were near our key military facilities.
        Senator Shaheen. Does the economic reliance on China by
    some of our American allies create complications for our
    security strategy, as we are thinking about Chinese investments
    in our national security sector and what is happening with some
    of our allies with respect to their reliance on what is
    happening in the Chinese economy?
        Admiral Harris. Clearly, Senator, it does.
        China is the principal trading partner of many of our
    friends, allies, and partners, not only in the Indo-Asia-
    Pacific, but globally. That is a factor that each country has
    to make, and it is a factor in how we regard their reliability
    in certain cases.
        I am often asked, well, we have this size of the Chinese
    military and we have this size of the United States military
    west of the dateline, but surely, if you added to that all of
    our capability resident in our friends, allies, and partners,
    they would match the Chinese, in terms of numbers. You cannot
    always count on that in every case, because each country will
    make their independent, sovereign decision on whether to
    participate in a given operation or whatever.
        China's investment in those countries, in those countries'
    trade relationships with China, is important. It matters, just
    as it matters to us.
        Senator Shaheen. Thank you.
        General Scaparrotti, in your testimony, you mentioned North
    Korea's recent actions that suggest that it will do whatever it
    wants to defy U.N. Security Council resolutions and other
    norms.
        A couple weeks ago, we passed additional sanctions on North
    Korea here. To what extent do those help or hurt, as we are
    trying to influence North Korea's actions?
        General Scaparrotti. Senator, thank you. I appreciate the
    action that Congress took here in terms of sanctions, because I
    do believe they have an impact. We know that we have slowed his
    capability to develop his munitions, missiles, et cetera. He is
    somewhat cash-strapped. I think additional sanctions, which
    there are steps we have not taken yet, I think the more that we
    do, the more pressure we then put on Kim Jong-un.
        He has a fairly shaky economy, not a good hand. These
    sanctions, I think, could create a big problem for him,
    certainly to someone who puts 30 percent of his economy into
    his military.
        Senator Shaheen. Thank you. I am, certainly, a big
    proponent of our having passed those sanctions.
        I would like to say for the record, Mr. Chairman, that one
    of the things that I am very concerned about, with respect to
    the sanctions and their enforcement, is the fact that we have
    still have sitting in the Banking Committee the nomination of
    Adam Szubin to be the person at the Department of the Treasury
    who is charged with enforcing those sanctions. He has not yet
    been officially approved.
        I would hope that we could enter that into the record, and
    I would urge that we see some action on his nomination.
        I am out of time, Mr. Chairman, but can I ask one more
    question?
        Senator Reed. Yes.
        Senator Shaheen. Given the recent action by North Korea,
    have we seen that affect that Chinese thinking or support for
    North Korea and their willingness to try and encourage them to
    pull back on their nuclear efforts? For either of you, both of
    you.
        General Scaparrotti. As you know, they denounced the
    actions as well. They stated their concern with them. I think
    they are in active conversations with us now.
        But to this point, we have not seen the steps we would like
    them to take, in my opinion, and that they could take.
        Senator Shaheen. Thank you. Thank you both very much. Thank
    you for your service.
        Senator Reed. On behalf of Chairman McCain, Senator Graham?
        Senator Graham. Thank you, Senator Reed.
        General, let's pick up with what you just said.
        Are we overly relying on China to discipline and regulate
    North Korea? Every time somebody mentions North Korea, the
    first thing out of their mouth is, ``Well, we have to have the
    Chinese help us.''
        General Scaparrotti. Sir, in my opinion, I do not know that
    we are overly reliant. But, certainly, there are actions--for
    instance, unilateral actions that this body just took--that we
    could, certainly, apply as well.
        Senator Graham. Could you give me a list of things that we
    could do that we have not done regarding North Korea? Not right
    now, but later.
        General Scaparrotti. Yes, I could.
        Senator Graham. Okay. Have you ever found a situation in
    military history, modern military history, where sanctions
    stopped a dictator from acquiring weapons?
        General Scaparrotti. I am not aware. I would have to look
    at that, Senator, to be honest with you.
        Senator Graham. Do you think he cares how his people live?
        General Scaparrotti. No, he does not.
        Senator Graham. Do you think if he had a missile that could
    reach the United States, he would actually use it against us?
        General Scaparrotti. I think that his stated purpose is to
    protect his regime. If he thought his regime was challenged, he
    states that he would use WMD.
        Senator Graham. Is it in our national security interests to
    allow the North Koreans to develop missile technology that
    could hit the Homeland?
        General Scaparrotti. No, sir.
        Senator Graham. Would you suggest we use military force, if
    necessary, to stop that?
        General Scaparrotti. If military force was necessary, yes,
    sir. But I think there should be----
        Senator Graham. But that should be on the table? But that
    should be one of the options?
        General Scaparrotti. Yes, sir.
        Senator Graham. Do you agree with that, Admiral?
        Admiral Harris. I do.
        Senator Graham. I just want the committee to understand
    that we are about to have to cross a road here eventually.
        Don't you think that, in the coming few years, we are going
    to have to make a decision about this?
        Does that make sense to you, admiral?
        Admiral Harris. It does, Senator, in my opinion.
        Senator Graham. Say in the next 5 years--I am just picking
    a date out of thin air here--the United States is going to have
    to make a tough decision regarding North Korea, whether or not
    to let them know that if you continue down the missile
    development road, we will attack that program?
        Admiral Harris. At some point, it may come to that.
        Senator Graham. Do you think it would be good for North
    Korea to understand that is the consequence of what they are
    doing?
        Admiral Harris. I think they do understand it, Senator.
        Senator Graham. Do you think they really believe we would
    use military force to stop their missile program?
        Admiral Harris. I do not know what they believe.
        Senator Graham. Okay.
        What about you, General?
        General Scaparrotti. Sir, I would say the same. Our
    difficulty is really understanding their----
        Senator Graham. Could we make it more clear to them? Is it
    possible to make it more clear to them?
        General Scaparrotti. I think it is possible to make it more
    clear to them.
        The second thing I would add, Senator, is that, as you look
    to the future, I am concerned as well not only about his
    nuclear missile capabilities, developing cyber capability. He
    is developing a strategic-launch ballistic missile, and he is
    developing his air defense capabilities.
        All of those things, in about 5 or 6 years, are going to be
    a more formidable problem.
        Senator Graham. In light of the threat that could emerge
    over the next 5 years from North Korea, if sequestration goes
    back into effect, does that affect the Army's ability to
    participate in South Korea effectively?
        General Scaparrotti. Yes, sir, it does.
        Senator Graham. If sequestration goes into full effect,
    Admiral, what does that do to your ability in your theater?
        Admiral Harris. I think it hurts me greatly, not only for
    forces that are forward-deployed, but also follow-on forces. I
    worry most about those follow-on forces.
        Senator Graham. We have a 5 year window here of where North
    Korea is advancing missile technology and cyber capability.
    They are becoming more of a threat in the next 5 years, unless
    something changes. Is that correct? Is that what you are
    telling the committee? In the next 5 years?
        Admiral Harris. You said 5 years. I did not.
        Senator Graham. Okay. I am just picking 5 years.
        Admiral Harris. Right.
        Senator Graham. Let's just say in the next 5 years, if
    nothing changes, they are going to be a bigger threat to the
    United States?
        Admiral Harris. Clearly. Clearly.
        Senator Graham. Is that true of you, General?
        General Scaparrotti. Yes, I agree.
        Senator Graham. We have that dynamic. The Congress'
    response is to reduce your capabilities in the next 5 years.
        Is that what Congress is doing to you?
        Admiral Harris. If sequestration remains the law of the
    land, as I testified during my confirmation hearing, I think it
    will hurt us significantly in the 2021, 2022 time frame.
        Senator Graham. From a policymaker point of view, your
    military advice to us would be to change that construct?
        Admiral Harris. My military request of you, Senator, would
    be to end sequestration.
        Senator Graham. Yes, because what we are doing is we are
    having the enemy increasing capability, and we are decreasing
    your ability to confront the enemy. That is a bad combination.
        Admiral Harris. It is not just North Korea.
        Senator Graham. In your theater.
        Admiral Harris. In my theater. It is globally.
        Senator Graham. What does North Korea want, General? Just
    survivability?
        General Scaparrotti. Sir, he wants to protect his regime,
    the Kim family regime. He wants to establish himself as a
    recognized nuclear state.
        Senator Graham. Okay.
        Admiral, would the TPP be helpful, if passed, in your
    region?
        Admiral Harris. It would be helpful to pass.
        Senator Graham. What if we failed to pass it?
        Admiral Harris. Then the countries in the region will
    question the seriousness of our commitment to the rebalance,
    one. Two, they will turn somewhere else.
        Senator Graham. Will that likely be China?
        Admiral Harris. It will be China.
        Senator Graham. Thank you, both, for your extraordinary
    careers. Thank you, both.
        Chairman McCain. [Presiding.] Senator Kaine?
        Senator Kaine. Thank you, Mr. Chair.
        Thanks to the witnesses. I appreciate this testimony much.
    Some of us are running back and forth to a Foreign Relations
    Committee hearing with Secretary Kerry, where many of the same
    issues are being discussed. We apologize for that.
        Admiral Harris, I enjoyed our visit in Halifax at the
    security conference there in November. One of the issues we
    talked about I know was raised by Senator King in a question
    when I was gone, but I think it was raised pretty briefly. He
    asked you whether you thought the United States should ratify
    the U.N. Convention on Law of the Sea [UNCLOS], and you said
    yes. I want to dig into that a little bit more.
        A lot of the testimony and discussion this morning has been
    about the Chinese island-building and other activities in the
    South China Sea. A lot of the testimony that is going on
    upstairs with Secretary Kerry is about the same thing.
        Admiral, you said a few minutes ago, and I quote, you were
    asked about China and what our posture is vis-a-vis China's
    activities. ``The goal is international rules and norms.'' I
    think that ought to be the goal.
        We should be an enforcer of international rules and norms,
    but I just find it fascinating that as much as we talk about
    the Chinese activities in the South China Sea that we are
    against, because they violate international rules and norms, we
    are the only major power in the world that has not ratified the
    U.N. Convention on Law of the Sea.
        Now, as a practical matter, in terms of our own activities,
    we act as if that is law. We act in accord with it. But our
    refusal--and it is a refusal, and it is a refusal by this body,
    the Senate, to ratify--means that we really lack standing to
    hold it up against the actions of anybody else and complain
    about their failure to follow the requirements of that
    convention.
        This is not only a matter with respect to China in the
    South China Sea. It is also increasingly becoming an issue with
    Russia in the Arctic.
        If you could, Admiral Harris, instead of just saying, ``I
    support it,'' talk to me a little bit about, from the security
    standpoint, the safety of the United States and the mission
    that we have in the Indo-Asia-Pacific, what would ratification
    of that U.N. convention do for the United States?
        Admiral Harris. Thanks, Senator, for the opportunity.
        Let me begin in response by saying that I have talked to
    quite a few folks who are opposed to UNCLOS, the United Nations
    Commission on Law of the Sea, and I have been informed by them,
    and I appreciate their position, and I understand the position.
    I do not agree with it, but I want to acknowledge that there
    are good reasons--there are reasons to oppose UNCLOS.
        My personal opinion is, first and foremost, UNCLOS gives us
    credibility. It gives us credibility in the international space
    that we lack today simply because we are not a signatory to
    UNCLOS.
        In a purely military sense, in a projection of power,
    whether we sign on to UNCLOS or not is not going to affect
    that. But I think, by not signing onto it, we lose the
    credibility for the very same thing that we are arguing for,
    which is following accepted rules and norms in the
    international arena.
        The United States is a beacon, and we are a beacon on a
    hill. But I think that light is brighter if we sign onto
    UNCLOS.
        We are going to find ourselves in this odd situation here
    in a few months if--if--the International Tribunal for the Law
    of the Sea agrees with the Philippines' position with regard to
    their claim against China's nine-dash line.
        We are going to find ourselves supporting that outcome and
    yet not be a signatory to it. That puts us in an awkward
    position vis-a-vis the other countries in the region.
        You raise Russia. Russia is going to reap the benefits of
    almost half of the Arctic Circle, because of this theory of
    extended continental shelf, which is afforded by UNCLOS. On the
    other hand, we are not going to reap those great benefits,
    because we are not a signatory to UNCLOS.
        I think it affects us in our commerce, in our trade, which
    is part of that rebalance. It is part of those four big spheres
    in the rebalance.
        Senator Kaine. The absence of ratification does not only
    deprive us of an argument against activities of others that we
    would argue are not lawful, but it also deprives us of some
    positive, upside benefits, for example, with respect to the
    extended continental shelf argument.
        Admiral Harris. Right. In my opinion, that is true.
        Senator Kaine. I have no further questions. Thank you, Mr.
    Chair.
        Senator Reed. [Presiding.] Thank you.
        On behalf of Chairman McCain, Senator Cotton, please?
        Senator Cotton. Thank you. I apologize for my absence. I
    have had presiding officer duty on the Senate floor.
        General Scaparrotti, that is the equivalent of staff duty
    for a junior officer at the regiment, if you are not aware.
        I want to address something specifically that you stated in
    your testimony on page 12. ``We will continue to work closely
    with the Republic of Korea to ensure it procures the
    appropriate types and numbers of critical munitions for the
    early phases of hostilities. Of note, the potential ban on
    cluster munitions could have a significant impact on our
    ability to defend the Republic of Korea.''
        Could you say a little bit more about that significant
    impact, General Scaparrotti?
        General Scaparrotti. Yes, sir. Thank you.
        There is presently a policy that in 2019 will go into
    effect that states, basically, the use of cluster munitions
    that have a dud rate of greater than 1 percent can no longer be
    a part of our inventory or be employed. I rely on cluster
    munitions in a very large way to affect operations, if we go to
    crisis on the peninsula.
        My concern is that we will not be able to replace those
    cluster munitions with proper munitions, or we will use unitary
    rounds, which, to have the same effect, I have to fire three to
    five rounds for each one of those cluster munitions.
        My point is that we need to work now to both develop
    munitions that are acceptable with less than 1 percent dud
    rate, so that we can replace them in due time. Until we do, I
    need to be able to use those cluster munitions that I have in
    storage now in the peninsula in the interim.
        Senator Cotton. Is the rationale for this policy a
    humanitarian concern, based on the nature of cluster munitions?
        General Scaparrotti. Yes, sir.
        Senator Cotton. Do you think it is more humanitarian to
    preserve these munitions in our arsenal and, hopefully, deter
    them or any other munitions from ever having to be used, or to
    remove them from the arsenal and perhaps increase the
    likelihood of a conflict in which thousands could die?
        General Scaparrotti. No, I think, particularly in this
    case, if we were not to use cluster munitions in a crisis on
    the peninsula, it will result in greater both military and
    civilian casualties in the long run, because extension of the
    campaign and also the effect it would have tactically on our
    forces.
        We have done some modeling on this. We have done some
    testing on it. I am quite confident of that opinion.
        Senator Cotton. Have your predecessors relied on these
    types of munitions going back to the 1950s?
        General Scaparrotti. We have used cluster munitions in the
    past. They are being used today. For instance, the Russians
    have used them in a devastating way in Ukraine.
        Senator Cotton. I have noticed.
        Admiral Harris, I would like to turn to your testimony on a
    related topic. Page 20, under the heading ``Critical
    Munitions,'' you state, ``Critical munitions shortfalls are a
    top priority and concern.''
        Do you mean to say there that you actually are facing
    actual shortfalls now in critical munitions?
        Admiral Harris. That is true, Senator. I have called for
    increased munitions. There is a shortfall in General
    Scaparrotti's arena. Part of that shortfall should be paid for
    by the Korean ally. That is a subject of discussions that we
    have with Korea.
        Senator Cotton. Not just in Korea, though, but theater-
    wide, do you face this kind of shortfall?
        Admiral Harris. I do, but the focus of that part of my
    written testimony centered on Korea.
        Senator Cotton. Okay. In this kind of unclassified setting,
    is it something that you get into in more detail, about the
    kind of shortfalls you are facing?
        Admiral Harris. I prefer not to in this setting, but I
    would be happy to come back to you in a closed session to talk
    about it, or come to your office.
        Senator Cotton. I understand. We might submit questions for
    the record. I think it would be the height of irresponsibility
    for civilian and military leaders in this country not to, at a
    minimum, have sufficient munitions to fight and, hopefully,
    deter the wars that we might face. Whatever we might disagree
    about on longer term, large-ticket budget items, I think we
    need to have the rounds for our soldiers, sailors, airmen, and
    marines.
        Admiral Harris, I would like to turn to the United States-
    Philippines alliance, something to which Senator McCain alluded
    about our Mutual Defense Treaty.
        CSIS has recommended that we should consider offering an
    explicit guarantee to the Philippines that the U.S. will
    respond under the Mutual Defense Treaty to an attack on the
    Philippines military in disputed water or territory. Do think
    this option should be considered?
        Admiral Harris. I think we should consider it, and we
    should have a discussion of it in the policy arena. Our
    obligations under the treaty with the Philippines is pretty
    clear. Whether we extend that to Second Thomas Shoal, which we
    do not hold as Philippines' sovereign territory, because we do
    not take a position on sovereignty, we should have that
    discussion, I believe.
        Senator Cotton. Thank you. I think we should have that
    discussion as well. I think deterrence works best when
    deterrence is clear, as with relationships that we have with
    NATO, Taiwan, and so forth.
        My time has expired.
        Senator Reed. Senator, if you would like to take additional
    time, because we have until Senator Blumenthal and Senator
    Sullivan return.
        Your timing is exquisite. Thank you, Senator Cotton.
        On behalf of Chairman McCain, let me recognize Senator
    Blumenthal, as he is seated. Thank you.
        Senator Blumenthal. Thank you, Mr. Chairman. I appreciate
    your great work on behalf of our country and the work that you
    have done, particularly in the theaters that you have covered.
        General Scaparrotti, I want to come back to one of the
    points that was raised by my colleague, Senator Gillibrand,
    about soft targets, in terms of cyber. How vulnerable do you
    think those targets are in the area under your command?
        General Scaparrotti. I think, first of all, I am confident
    in our military systems, my command and control systems. We red
    team that. We exercise it. I think we have a good defense. But
    with promise cyber is, it is very dynamic. It changes every
    day, so it is something we have to stay focused on.
        I am concerned about, obviously, the civilian cyber network
    that we are all connected to and has an influence on us
    militarily as well in the peninsula. That requires ROK-United
    States work, and it requires ROK work with their civilian
    counterparts, as well.
        Senator Blumenthal. Is there, in your view, any action we
    could take with respect to North Korea that would deter their
    invasive action, such as we saw with Sony, such as we have seen
    and you see in your theater?
        General Scaparrotti. Yes, I believe there are some actions
    we could take. I would prefer to provide that to you in either
    a closed session or a classified document.
        Senator Blumenthal. I understand that point. Without
    speaking to them specifically, have you made recommendations
    about them? Do you think there is the prospect of imminent
    action that will widen and increase the effectiveness of what
    we are doing?
        General Scaparrotti. Well, in terms of the recommendations,
    we are actively discussing some operations, in terms of their
    effectiveness, et cetera. But that is presently just a part of
    planning.
        Senator Blumenthal. Admiral Harris, in terms of the
    submarine capability of this country, we face no shortage of
    challenges in the Asia-Pacific. Also, I think many of us have
    no doubt about the importance of submarines.
        I know that my colleague, Senator Ayotte, asked you about
    the sufficiency of the funding that we have in prospect.
        If you were to talk to the American public, how would you
    put it so that they could understand the importance of our
    submarine capability in the Asia-Pacific?
        General Scaparrotti. Senator, I would say that the
    submarine force has been our principal asymmetric advantage
    over all the adversaries we faced in the 100 years of the
    submarine service. It is such an asymmetric advantage that
    every country who can builds their own submarine force.
        Those countries that are building those submarine forces
    are building some very capable vessels. The Russians, the
    Chinese lead that effort. The Japanese make a great submarine.
        But I am concerned about the Russian and Chinese
    submarines, as they increase in their capability. The Russian
    submarine force, in my opinion, did not take a hiatus when the
    Cold War ended. Now we have the Dolgorukiy-class SSBN. Their
    newest ballistic missile submarine is now in their Far East
    fleet in the Pacific.
        The Chinese are building Jin-class SSBNs, which has the
    capability, if mated with the right missile, to threaten the
    entire United States.
        These are submarines that we have to, we must keep them at
    risk whenever they are underway and on patrol.
        I face a submarine shortage in the Pacific. My requirements
    are not being met, and that is a function of numbers and global
    demand. I get all that. But I am also worried about that delta,
    that shortfall between requirement and presence.
        Senator Blumenthal. Thank you.
        Thank you both. My time has expired.
        Thank you, Mr. Chairman.
        Senator Reed. Thank you very much.
        On behalf of Chairman McCain, Senator Tillis, please?
        Senator Tillis. Thank you, Mr. Chair.
        Gentlemen, I am sorry I was not here for a lot of the
    committee meeting. I have Judiciary and Veterans' Affairs going
    on at the same time. But thank you for coming before the
    committee, and thank you and your family for your service, and
    all the folks that back you up.
        I have a question that I hope it has not been asked, but it
    has to do with the buildup that we see in China.
        Admiral, when you and I had a briefing, you made the
    comment that we have a qualitative advantage, but quantity has
    a quality of its own. As China continues to expand either its
    geographic footprint or it continues to build ships and other
    assets, has there been any modeling or any focus on what it is
    going to take to continue to operate these things, in terms of
    fiscal sustainability? Is there anything in your analysis to
    say, at some point, you have to maintain them, you have to
    operate them, and with their financial woes? Is there is any
    thought on that or analysis being done?
        Admiral Harris. It is a great point, Senator. I have not
    done that analysis, nor have I seen analysis of China's fiscal
    sustainability of their military out beyond--pick a date, 2020,
    2025 or whatever.
        But what I have seen is an increased number of frontline-
    capable ships, submarines, and aircraft well into the 2020s. I
    am worried about that.
        But I have not looked at their ability to fiscally sustain
    that force.
        Senator Tillis. Another point that you made that really
    struck me was the difference when you talk about our
    qualitative advantage. It is not only our technological and our
    power projection capability, but it also has to do with
    important things like survivability.
        We are clearly going to have to spend more and sometimes
    take longer to increase the assets that we have in the area,
    because of the premium that we place on force protection and
    survivability.
        I just think that is important for people to understand. We
    would never feel like, given China's priorities today, that we
    need to match them ship for ship. But we need to figure out
    when those ratios--I think your concern is that, even with our
    advantage, the ratios are getting to a point where you
    expressed some concern. Is that correct?
        Admiral Harris. It is correct. But I am less concerned
    about managing the Chinese ship for ship than I am matching
    them missile for missile. Their missile ranges far exceed ours
    ship to ship.
        Senator Tillis. That is a very good point.
        Admiral Harris. But I am pleased that in the 2017 budget,
    we are going to put some funding against improving our surface-
    to-surface missile capability.
        Senator Tillis. Now, if I can flip it for a minute, we are
    viewing China as a kind of emerging threat or growing that in
    that area of the world. What sort of work can we do to identify
    instances, particularly as it relates to North Korea, to find
    partnerships and common interests? What kinds of things, either
    General Scaparrotti or Admiral Harris, are we working on that
    you think could potentially bear fruit?
        Admiral Harris. I have talked in public before about--there
    are more things that bind and link China with the United States
    than separate us. The things that separate us are not
    insignificant. But let me talk now about those things that we
    can do together in shared security spaces.
        We have a military consultative working group with China
    where we meet with them on a regular basis to discuss incidents
    at sea and in the air. We have our rules of behavior working
    group. We have all of these positive fora where we can engage
    in discussions with our Chinese counterparts.
        They are active globally in positive areas, and we should
    talk about those and commend them for it. They were involved in
    the removal of chemical weapons from Syria. They were involved
    in an evacuation of noncombatants from Yemen. They have been
    involved in counterpiracy operations off the Horn of Africa now
    for years. They are on the 22nd iteration of that. They had the
    largest number of ships off the west coast of Australia in the
    search for the missing Malaysian airliner.
        These are all positive things, and they are doing good
    things in that international space.
        It is just those provocative things that they are doing in
    Southeast Asia and the South China Sea, which raises tensions
    and provocations, which causes problems in that area that we
    have to work with them on.
        Senator Tillis. Thank you.
        In closing, two things. I suspect that my colleague here is
    going to bring up the 425. I would associate myself with any
    concerns that he may have with that. I will be sticking around
    for his questions. But I think it is also to continue to
    communicate back to us how the current budget request helps
    you, what the priorities should be, communicating those back to
    our office, and continue, I think, to pound the table to say,
    at all costs, avoid sequestration.
        I look forward to working with you, and thank you for your
    service.
        Senator Reed. On behalf of the chairman, Senator Sullivan,
    please?
        Senator Sullivan. Thank you, Mr. Chairman. My colleague,
    Senator Tillis, is wise in terms of his ability to anticipate
    questions. I did want talk a little bit about some of the force
    posture.
        Admiral Harris, in your testimony, you talked about the
    tyranny of distance and the importance of forward station
    forces at high levels of readiness that can rapidly respond to
    a crisis in terms of a full range of military options. The
    President, when he announced the rebalance, which I think has
    broad support here on this committee, bipartisan support, he
    talked about no force reduction in the Asia-Pacific theater.
        Despite that, as you may be aware, and we talked about a
    little bit yesterday, the Army has decided to essentially get
    rid of the only airborne brigade combat team in the Asia-
    Pacific, the 425, also the only Arctic trained and mountain
    trained. They are, certainly, a brigade combat team that brings
    a lot of onlies to the fight. Although it is an Army decision,
    it certainly impacts the two of you.
        I know, General Scaparrotti, you view the 425 as an
    important strategic reserve that can get to Korea within 7
    hours. We have a huge strategic lift capability coupled with
    the 425.
        Admiral Harris, you actually own those forces, in terms of
    operational command.
        General Milley, to his credit, has said he is going to take
    a look at this decision. He has actually put the decision on
    hold. I was up in Alaska with him. He was on a fact-finding
    mission just a couple days ago.
        If he were to reverse that decision, would you support his
    decision to do that, if he were? Both of you?
        General Scaparrotti. Yes, sir. I would. It brings a very
    specific set of capabilities to the theater, as you just
    stated. I would just say that General Milley, as you know, with
    the downsizing of our force, has to make a decision to take
    that someplace.
        With that comment, I would just say my personal opinion is
    that we need to reconsider the downsizing of the Army at this
    point, given the challenges that we have around the globe. We
    have a mismatch between the requirements and our strategy and
    the force that we have today.
        Senator Sullivan. I could not agree more with you on that,
    General.
        General Milley, again, to his credit, is looking hard at
    the tooth-to-tail ratio. If he has to cut anybody, the
    infantry, armor, tooth element of our forces--but I think your
    broader point on not drawing down the 425 is a really good one.
        Admiral Harris, do you have any thoughts on the?
        Admiral Harris. Sure, Senator. I will be the first to say
    it is much more fun to be an insatiable COCOM than it is to be
    a Service Chief, so I do not envy the position that General
    Milley or Admiral Richardson or any other Service Chiefs are
    in, as they have to make these difficult decisions.
        But I would say that our Nation has an insatiable desire
    for security, and rightfully so. I welcome General Milley's
    decision to reconsider the reduction of the 425 and that great
    capacity that is resident in Alaska. Now, these are follow-on
    surge forces that, without them, I do not know where we would
    be, if we had a major fight on the Korean Peninsula.
        Senator Sullivan. Thank you for that. I was just out at
    Fort Polk at the JRTC [Joint Readiness Training Center]. The
    425 is actually doing their month-long training out there. To
    watch close to 1,000 airborne soldiers drop out of the sky in
    the middle of the night on a forcible entry military exercise
    shows you what an awesome instrument of American power this
    unit is. I certainly think it is a strategic mistake for the
    country to be getting rid of them.
        Let me ask one final question, just switching gears here.
    CSIS, in their report--I know both of you have reviewed it--
    recommended that we should consider offering an explicit
    guarantee to the Philippines that the United States will
    respond under the United States-Philippines Mutual Defense
    Treaty to an attack on the Philippines military in the disputed
    waters or territory.
        I think, to the President's credit, he did this with regard
    to one of the islands, with regard to our treaty obligations to
    Japan recently.
        Should this option be considered? What do you think the
    effect of such a declaration would be? What do you think the
    effect of the President's previous statement vis-a-vis Japan
    and our treaty obligations to Japan on one of the islands, what
    do you think the impact of that was?
        Admiral Harris. I am trying to decide which question to
    answer first. I will start backwards.
        I think the Secretary of Defense and the President's
    unequivocal declaration that the Senkaku Islands fall under the
    protections afforded by the mutual security treaty with Japan
    had a positive effect on the situation in the East China Sea.
        I responded to a question earlier about CSIS's
    recommendation about the Philippines.
        Senator Sullivan. I am sorry. I was----
        Admiral Harris. No, no.
        I believe that our obligations to the Philippines under
    that treaty, which every treaty is different, is clear, and I
    understand my obligations. I think we should consider it, for
    sure.
        We should consider clarifying our position on the
    Philippines marines that are on the Second Thomas Shoal. We
    have maintained as a Nation that Second Thomas Shoal, that
    territorial maritime dispute there, we do not take a position
    on that. We are going to have to study this and get into it.
    But I think it clearly should be considered.
        Senator Sullivan. Your first statement about the
    President's statement, you said you thought it was positive.
    Why? Why do you think so? What did it do?
        Admiral Harris. It sent a clear signal to China that we
    would defend the Senkakus just as we would defend Tokyo.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Senator Reed. Thank you, Senator Sullivan.
        Admiral Harris, General Scaparrotti, on behalf of Chairman
    McCain, thank you for your testimony and your continued
    service.
        Again, on behalf of the chairman, let me adjourn the
    hearing. Thank you.
        [Whereupon, at 11:35 a.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Kelly Ayotte
                             nuclear proliferation
        Admiral Harris and General Scaparrotti: According to a recent
    report in the New York Times, some politicians in South Korea are
    calling for an indigenous nuclear weapons program due to the recent
    North Korean nuclear test.
        1. Senator Ayotte. What are your assessments of these reports?
        Admiral Harris. The United States is completely committed to the
    defense of South Korea and the ROK government is committed to the Non-
    Proliferation Treaty. While some politicians may have personal views on
    the matter, these views do not represent the official position of the
    ROK government, and I have not received any indications during my
    engagements with ROK leadership that nuclearization is a consideration.
        General Scaparrotti. I do not believe these reports represent the
    senior leaders of the Republic of Korea (ROK) Government. I have not
    received any indications that nuclearization is under consideration by
    any of the ROK officials I am in contact with. The United States is
    completely committed to the defense of South Korea, and the ROK remains
    committed to the Treaty on Non-Proliferation of Nuclear Weapons (NPT).
    President Park has rejected the need for nuclear weapons as recently as
    13 January 2016. Additionally, Minister of Defense Han Min-koo rejected
    the call for developing nuclear weapons, instead calling for a THAAD
    deployment. This was in response to the remarks by the ROK's Ruling
    Party Floor Leader regarding nuclear weapons.

        2. Senator Ayotte. Do you believe South Korea or any other ally in
    the region may decide to pursue a nuclear weapons capability in the
    near future?
        Admiral Harris. Our allies benefit from the conventional and
    nuclear deterrence provided by our significant military capabilities,
    and I have received no indications that our regional allies are
    dissatisfied with the U.S. commitment to extended deterrence.
        General Scaparrotti. [Deleted.]

        3. Senator Ayotte. Why do you believe the United States nuclear
    umbrella is not deemed sufficient by those calling for an indigenous
    nuclear weapons program in South Korea?
        Admiral Harris. The United States and our alliance with the ROK
    have effectively deterred major hostilities on the Korean peninsula for
    over 60 years. Although the U.S. nuclear umbrella is designed to help
    deter and prevent major hostilities it cannot, nor was it meant to,
    deter all possible provocations. The calls for an indigenous ROK
    nuclear weapons program are not unique to recent events. It is
    understandable that some South Koreans would become increasingly
    concerned as the DPRK continues to advance its nuclear weapons program,
    and as a result want to bolster their own sense of national security as
    a result of the ongoing posture of the DPRK.
        General Scaparrotti. [Deleted.]
                                     pacom
        4. Senator Ayotte. Do you have the right number of U.S. Army troops
    stationed in or rotating through the PACOM area of responsibility?
        Admiral Harris. USPACOM has adequacy in some areas but faces
    shortfalls in others, specifically in those capabilities considered
    ``High Demand/Low Density (HD/LD)'' throughout the Army. The physical
    number of U.S. Army troops stationed in, or rotating through, the
    USPACOM AOR is sufficient for steady state (Phase 0) operations;
    however, if a contingency occurs we will need to rely on the
    availability of trained and ready CONUS-based Army forces that can
    respond quickly to a short- to no-notice crisis and supplement what we
    have postured in theater. This remains the area of operational risk
    that is most significant when considered against OPLAN requirements.
    For certain specific capabilities (see question #5 for examples), our
    planning has determined that additional presence on the Korean
    peninsula is required, either via permanent stationing or rotational
    (deployed) forces. Increased forward presence (permanent basing) in the
    PACOM AOR would reduce the Army's deployment to dwell ratios and
    significantly alleviate stress on the force. Additional prepositioning
    of Army-specific equipment and supplies will also serve as a combat
    multiplier in both contingency and crisis.

        5. Senator Ayotte. Admiral Harris: If not, what more do you need?
        Admiral Harris. [Deleted.]
                                patriot missiles
        6. Senator Ayotte. General Scaparrotti: Do all the Patriot
    batteries in South Korea feature the ``Configuration 3+'' upgrade?
        General Scaparrotti. No. There are eight (8) United States Patriot
    batteries stationed in South Korea and all eight are scheduled to
    receive the Configuration 3+ upgrades in fiscal year 2017. U.S. Patriot
    batteries in the PACOM region are the priority for fielding
    Configuration 3+ upgrades.

        7. Senator Ayotte. General Scaparrotti: What are the implications
    of not having this upgrade?
        General Scaparrotti. The operational implications of not fielding
    configuration 3+ upgrades to the U.S. PATRIOT force would be additional
    risk in our ability to defend the ROK. The 3+ upgrades would improve
    the lethality of the PATRIOT in defending against the NK BMD threats.
    Not upgrading current U.S. PATRIOT with configuration 3+ leaves our
    systems less capable against the advancing capabilities of the NK
    missile force.
        Significant improvements that Configuration 3+ provides the force
    include:
        1) Missile Segment Enhanced (MSE) interceptors. These provide
    extended range and increased lethality.
        2) Radar Digital Processor (RDP) upgrades. This upgrade to the
    Patriot system radar will replace obsolete components, increase radar
    reliability, increase long range TBM detection, optimizes the MSE
    interceptors.
        3) PDB 8 software and Modem Man-stations in the command control
    van. The software updates improve system reliability and maximize the
    MSE interceptor capability and RDP improvements.

        8. Senator Ayotte. General Scaparrotti: Do you recommend that
    Patriots in South Korea receive the ``Configuration 3+'' upgrade?
        General Scaparrotti. Yes. I recommend that United States Patriots
    in Korea remain the priority for 2017 fielding of the Configuration 3+
    upgrades due to the imminent threat we face.
        Patriot is currently the only capability on peninsula that defends
    against the North Korean ballistic missile threat. In order to maximize
    the viability of this BMD capability, I recommend that the U.S. Patriot
    systems assigned to the KTO remain a priority for upgrades with
    Configuration 3+.
                                   __________
                   Questions Submitted by Senator Mike Rounds
                           pacom platform allocation
        9. Senator Rounds. Admiral Harris and General Scaparrotti, you
    stated during testimony that there were specific Intelligence,
    Surveillance and Reconnaissance (ISR) platforms that would aid PACOM's
    mission that have not been provided to you during the Department of
    Defense global force allocation process. Please provide detail on the
    types and numbers of these platforms. We are prepared to receive a
    classified response if necessary.
        Admiral Harris. [Deleted.]
        General Scaparrotti. [Deleted.]
                                   __________
                    Questions Submitted by Senator Ted Cruz
                                  port visits
        10. Senator Cruz. I am concerned about the apparent unwillingness
    of the Administration to open United States ports to Taiwanese ships
    during the ROC Navy's transit across the Pacific for their Fleet of
    Friendship goodwill visit to destinations in Central America. Given
    that Taiwan and the United States have built a close partnership in
    maritime security cooperation, is there an alternative procedure DOD
    can suggest for solving the problem of resupplying their fleet during
    the transit? Looking beyond this issue, what do you see as next steps
    that the United States and Taiwan can take to strengthen maritime
    cooperation?
        Admiral Harris. [Deleted.]
                              thaad in south korea
        11. Senator Cruz. I am pleased to see progress on discussions with
    South Korea regarding THAAD. This is a crucial step to securing our
    ally and protecting U.S. troops deployed in the region. As you aware,
    China wasted no time in waging a propaganda war against this action,
    going so far as to blackmail South Korea with economic retaliation if
    THAAD were deployed. I am concerned that this Administration and the
    Department of Defense have not been vocal enough in countering China's
    deceptive claims on THAAD's capabilities, nor condemning their harsh
    treatment of South Korea. Moving forward, what concrete steps will DOD
    take to address China's behavior regarding THAAD?
        Admiral Harris. I will continue to engage the American public on
    this issue, and I will continue to clearly represent United States
    policy to the international community. While no decisions have yet been
    made on a deployment of THAAD to the Korean Peninsula, the United
    States will take the steps necessary to protect our Homeland and our
    treaty ally. In recent bilateral engagements with China's military, the
    United States has made clear that American defensive capabilities on
    the Peninsula are intended solely to defend the Republic of Korea and
    United States troops and citizens there, against the evolving North
    Korean threat. This capability includes defense against North Korean
    ballistic missiles. We have also made clear that THAAD in South Korea
    is not directed at China and is not intended to affect strategic
    stability with China.
        General Scaparrotti. USFK remains focused on bilateral engagement
    with the ROK regarding the deployment of THAAD to the Korean Peninsula
    to enhance our theater ballistic missile defense. Interactions with
    China are beyond USFK's authorities, and I respectfully defer your
    question to PACOM.
                                south china sea
        12. Senator Cruz. China began aggressively expanding their
    territorial claims and building illegitimate islands almost two and a
    half years ago. You indicated during the Armed Services hearing that
    you believe the United States should carry out freedom of navigation
    operations in the South China Sea. When did you first provide this
    professional military advice to the Administration?
        Admiral Harris. Prior to assuming command of USPACOM, I served as
    the Commander of U.S. Pacific Fleet from November 2013 to May 2015.
    During that time, I provided multiple maritime options for the USPACOM
    Commander including proposed freedom of navigation operations. The
    USPACOM Commander considered those options in conjunction with other
    options leveraging all elements of national power. I assumed command of
    USPACOM in May 2015. Since assuming command, I have provided my
    professional military advice to the Secretary of Defense concerning all
    matters relevant to U.S. strategic objectives in the Pacific Command
    area of operations. This advice included proposed freedom of navigation
    operations in the South China Sea as well as other operations,
    activities, and actions designed to convey our strategic message and
    influence the behavior of Chinese leaders.

        13. Senator Cruz. Why did PACOM fail to exert its right to
    navigational maneuver in the waters surrounding these man-made islands
    from 2012 until October 2015? In your professional military opinion,
    has the delayed response made it more difficult to roll back and
    counter China's narrative that the South China Sea ``belongs to
    China,'' as a Chinese Vice Admiral declared last September?
        Admiral Harris. Although USPACOM did not conduct Freedom of
    Navigation Operations (FONOPS) inside 12NM of disputed South China Sea
    features in 2013 or 2014, USPACOM continued to conduct a broad range of
    military operations in the South China Sea, which China claims in its
    entirety. These operations include numerous monthly FONOPS since 2011
    in the South China Sea outside 12NM of disputed features challenging
    excessive restrictions in Exclusive Economic Zones and airspace, a
    significant number of reconnaissance flights each month, frequent
    single and multiple ship patrols as part of our Pacific Presence
    Operations, and eight FONOPS inside 12NM of disputed South China Sea
    features in 2011, 2012, 2015, and 2016.
        I have always been a proponent of the United States flying,
    sailing, and operating wherever international law allows and have
    always supported a robust FONOPS program. The United States has not
    relinquished the South China Sea to China. We have maintained a
    consistent, open, and prominent presence that has successfully
    demonstrated our commitment to our allies and partners, as well as a
    commitment to security and stability in the region.
                                   submarines
        14. Senator Cruz. Admiral Harris, you expressed concern during the
    Armed Services hearing that our capacity to deploy submarines is
    falling well below the requirements of our combatant commanders,
    specifically noting that submarines provide you with your ``principal
    asymmetric advantage.'' Please explain the impact of that deficit on
    future operations in an environment where China continues to increase
    their A2/AD capabilities and Russia continues their investment in
    undersea warfare. Given the current size of our submarine fleet and
    existing shipbuilding projections, are you concerned that the United
    States could be denied access anywhere in your PACOM area of
    responsibility in the next decade? If you were not resource or asset
    constrained, how many attack submarines would you desire in PACOM?
        Admiral Harris. [Deleted.]
                                   __________
                Questions Submitted by Senator Claire McCaskill
                         us strategy and regional order
        15. Senator McCaskill. Admiral Harris, recently, we have been
    working with the Chinese to increase dialogue and confidence building
    measures, particularly as they relate to operations on the high seas
    and in the air. In 2014, the US, China and 25 other maritime nations
    implemented the Code for Unplanned Encounters at Sea which would
    monitor maritime behavior. However, despite some progress, China
    continues its coercive behavior in maritime disputes through island
    building in the South China Sea and provocations around the Senkaku
    Islands in the East China Sea. Are the Chinese deliberately ignoring
    these confidence building efforts or are they interpreting differently
    than the US?
        Admiral Harris. China does not want a war or military conflict with
    the United States, and they likely view confidence building measures as
    moderately useful in preventing the inadvertent escalation of maritime
    encounters. As do we. That said, China's national policy holds that the
    rocks, shoals, and reefs in the South China Sea are China's. This
    drives their behavior which includes ignoring international law as it
    applies to maritime law. Regarding confidence building measures
    themselves, China does not view confidence building measures as
    directly relevant to disputes in the East and South China Seas. In
    these disputes, China's interest is in portraying other countries'
    operations in Chinese-claimed waters as an infringement on China's
    rights, which justify a stern response, rather than an encounter
    between ships exercising equal rights. As a result, I believe China
    will employ confidence building measures only selectively in the East
    and South China Seas, and not in situations in which it believes these
    confidence building measures constrain it from pursuing its sovereignty
    objectives.
        All this said, the Chinese are actively implementing standards and
    rules of behavior agreed to in the Code for Unplanned Encounters at Sea
    and the Rules of Behavior for the Safety of Air and Maritime Encounters
    that were recently signed as bilateral confidence building measures.
    The United States and China meet three times a year; twice during
    Military Maritime Consultative Agreement working groups, and once at a
    plenary session that addresses operational safety concerns,
    effectiveness of confidence building measures, as well as identifying
    additional areas for improvement. I believe these confidence building
    agreements and meetings have been helpful in improving safe maritime
    encounters.
                  chemical biological stockpile in north korea
        16. Senator McCaskill. General Scaparrotti, in your testimony you
    commented that North Korea has one of the largest chemical weapons
    stockpiles and biological weapons research programs in the world. The
    recent National Commission on the Future of the Army found that the
    Army is incurring ``unacceptable risk'' in our response capabilities as
    they relate to, among other areas, chemical, biological, radiological
    and nuclear (CBRN) response. Do you agree with the Commission's
    findings?
        General Scaparrotti. Yes. I concur with the Commission's findings.
    The Army's force structure and response capabilities for CBRN response
    have been in steady decline over the past decade or longer. The vast
    majority of our force flow to support our OPLAN, in the area of CBRN
    response, is heavily dependent on the Reserve component and is
    projected to arrive in theater much later in the fight than we have
    requested or require. In dealing with the massive WMD programs within
    North Korea, we simply lack the capacity to adequately address the
    scale of this problem set.

        17. Senator McCaskill. General Scaparrotti, do you have sufficient
    CBRN response capability to meet the requirements on the Korean
    Peninsula?
        General Scaparrotti. No. We do not have sufficient CBRN response
    capability to meet potential contingencies in the Korean Theater of
    Operations, due to a lack of sufficient passive and active CBRN Defense
    capabilities and personnel. We have shortages in the area of collective
    protection and insufficient capabilities in both aerial and ground
    based persistent biological sensors/surveillance; The Chemical and
    Biological Defense Program (CBDP) and the Joint Program Executive
    Officer--Chemical and Biological Defense (JPEO-CBD) are currently
    working with us to address these issues. Additionally, we lack CBRN
    Specialists to manage/respond to a CBRN incident and execute the
    required post-incident decontamination.
                                   __________
                  Questions Submitted by Senator Joe Donnelly
                                  hypersonics
        18. Senator Donnelly. Admiral Harris, do you see investment in
    hypersonic systems, including conventional prompt strike, as a priority
    for the future of our ability to deter aggression and defend our
    interests in the Pacific?
        Admiral Harris, Yes--investments in hypersonic weapons must be a
    priority to ensure our ability to deter aggression and defend our
    interests in the Pacific remain unchallenged. Hypersonic systems are a
    significant deterrent because they provide a non-nuclear option to
    provocation and the ability to rapidly project power to decisively
    defeat aggressors. Furthermore, hypersonic systems increase platform
    survivability and decrease operational employment risk in Anti-Access/
    Area Denial environments.
                        anti-access/area denial (a2/ad)
        19. Senator Donnelly. Admiral Harris, General Scaparrotti, what
    advantages would flying 5th generation aircraft provide in the
    contested airspace over the Korean Peninsula?
        Admiral Harris. Fifth generation aircraft provide significant
    advantages in the contested airspace over the Korean Peninsula. Our
    fifth generation aircraft provide increased survivability and lethality
    in the A2/AD environment through enhanced systems and increased
    situational awareness. This said, due to the relative small number of
    fifth generation fighters that will be brought online by the Air Force,
    Navy, and Marine Corps in the next five years, I believe it is prudent
    to migrate some fifth generation capability and weapons to our existing
    large fourth generation fighter force.
        General Scaparrotti. [Deleted.]

        20. Senator Donnelly. Admiral Harris, General Scaparrotti, can you
    speak to the expected survivability of older and less protected
    airframes, such as Korean F-5s and US A-10s in the initial phases of a
    war in Korea?
        Admiral Harris. [Deleted.]
        General Scaparrotti. [Deleted.]

        21. Senator Donnelly. Admiral Harris, General Scaparrotti, what is
    your choice to go against threats such as MiG-29s and the plethora of
    short/long, stationery, transportable, radar and IR threats?
        Admiral Harris. Fifth generation fighters and hypersonics. The
    Pacific theater requires fifth generation fighters equipped with the
    payload and range that provides the air superiority necessary to win
    decisively against threats such as the MiG-29s. Fifth generation
    fighters are multi-role tactical aircraft with electronic warfare
    capabilities that can operate, and endure, in an Anti-Access / Area-
    Denial (A2/AD) environment. Furthermore, it is essential that Pacific
    theater fighters are able to communicate with our regional allies such
    as: Australia, Japan, and South Korea who are procuring F-35 aircraft.
    Additionally, hypersonics are game changing technologies that enhance
    our ability to overcome the tyranny of distance, while providing the
    element of surprise. Hypersonics provide range at sea, and the air
    launch necessary for the freedom of maneuver of fleet operations.
    Hypersonics also give us the speed, survivability and time critical
    strike capability that allows our forces to strike at will.
        General Scaparrotti. [Deleted.]

        22. Senator Donnelly. Admiral Harris, General Scaparrotti, would we
    be able to gain air superiority over Korea faster or slower with F-35/
    22s versus A-10s and even F-16s?
        Admiral Harris. We enjoy air superiority today against the North
    Korean Air Force with our F-22s, F-16s, F-15s and F/A-18s. We would
    gain air superiority faster with F-35/22s versus A-10s and F-16s. The
    superior technology of our fifth generation aircraft to provide
    situational awareness and counter-air capability, combined with our
    high level of pilot proficiency provide significant advantages against
    even the most advanced aircraft in North Korea, the MiG-29.
        General Scaparrotti. [Deleted.]

        23. Senator Donnelly. Admiral Harris, what do you see as the top
    A2/AD challenges we face in the Asia-Pacific region?
        Admiral Harris. The top three challenges are: (1) gaining and
    maintaining air and sea superiority, which requires ample submarines,
    fifth generation aircraft, and critical munitions; (2) defending space
    assets, to include communications, position, navigation and timing
    assets, and intelligence, surveillance and reconnaissance (ISR) assets;
    and, (3) defending our assets through integrated ballistic and cruise
    missile defense and dispersal operations.

        24. Senator Donnelly. Admiral Harris, what particular programs do
    you see as vital to maintaining our ability to project power in the
    Asia-Pacific?
        Admiral Harris. In order to project power in the Asia-Pacific
    Theater, PACOM forces require capabilities that can operate and survive
    in an Anti-Access / Area-Denial (A2/AD) environment against China and
    Russia. Some specific programs required in the PACOM theater are:
    regional submarines, Fourth Generation Fighters with upgraded Fifth
    Generation capabilities and Fifth Generation aircraft; precision
    munitions (i.e. AIM-9X, AIM-120D, SM-6); Long Range Anti-ship Missile
    (LRASM); advanced Intelligence, Surveillance, and Recognizance (ISR)
    communications systems (i.e. Advanced Hawkeye E2D and P-8 Poseidon).
    Our forces require systems that diminish gaps in surface, air and
    subsurface areas.

        25. Senator Donnelly. Admiral Harris, General Scaparrotti, a key
    component of Chinese military strategy would be attacks on regional
    United States land bases, of which five are currently within range of
    China's land-attack cruise missiles. Given limited resources, what
    priority should be given to investments in base dispersion, base
    hardening, enhancing the ability to operate from further away, and
    enhancing CONUS-based global strike capabilities?
        Admiral Harris. Regional missile forces continue to evolve in both
    capability and capacity, resulting in growing levels of risk to forward
    U.S. Forces. High priority must be given to reducing risk via
    investments in both active (ballistic and cruise missile defense) and
    passive defense (distributed operations, hardening and seaport/airport
    repair) at our existing, planned, and possible expeditionary operating
    locations. Additionally, high priority must be assigned to the
    development of the robust distributed logistics support capability that
    is essential to enabling sustained combat operations from numerous ``at
    risk'' U.S. operating locations in the Western Pacific.
        General Scaparrotti. As USFK does not focus on Chinese deterrence
    and defense per the scope of your question, I respectfully defer this
    request to the key leaders of both Pacific Command and U.S. Strategic
    Commands. However, USFK is focused on maintaining a level of security
    for our installations based on current threat assessments. Every
    installation conducts regular training and vulnerability exercises
    designed to harden our force protection. Additionally, USFK planners
    have developed and regularly refine contingency plans to disperse key
    systems when threatened.
                                   __________
                 Questions Submitted by Senator Mazie K. Hirono
                          asia-pacific rebalance 2025
        26. Senator Hirono. Admiral Harris and General Scaparrotti, Last
    month, the Center for Strategic and International Studies (CSIS)
    released the Asia-Pacific Rebalance 2025 Report. The SASC heard
    testimony on its findings earlier this month. An excerpt from the
    abridged report is as follows: ``Although the Obama administration
    issued a series of speeches and documents on the rebalance, the authors
    found that there remains no central U.S. Government document that
    describes the rebalance strategy and its associated elements. In
    interviews with leaders throughout the Department of Defense, in
    various U.S. agencies, on Capitol Hill, and across the Asia-Pacific,
    the study team heard consistent confusion about the rebalance strategy
    and concern about its implementation.'' Can you both please provide
    your thoughts on this? Do you agree that the United States does not
    have a clear strategy in the Pacific? What can you do in your capacity
    to support a clear and consistent strategy?
        Admiral Harris. [Deleted.]
        General Scaparrotti. I have a clear understanding behind the intent
    and objectives of the U.S. Rebalance, and am in regular dialogue with
    leaders throughout the Department of Defense and elsewhere in the U.S.
    Government to remain synchronized. Throughout my time in Command, I
    have regularly offered my best military advice to support the
    development and implementation of a clear and consistent strategy. The
    rebalance has played a role in the high priority allocation of
    resources to United States Forces Korea, as well as increased senior
    leader attention and time spent in Korea. This has been a key component
    to our success in Korea.
                                     pacom
        27. Senator Hirono. Admiral Harris, this past week it was announced
    that the contract award for the Joint Surveillance and Target Attack
    Radar System (JSTARS) program has been delayed by at least six months.
    How important is having the JSTARS capability in the Asia-Pacific
    region and are you concerned about the delays associated with the
    JSTARS recapitalization program? How does this impact your capabilities
    in Asia-Pacific?
        Admiral Harris. It is very important to maintain JSTARS capability
    in the Indo-Asia-Pacific region, and potential delays in the JSTARS
    recapitalization concern me. The primary impact is a potential gap in
    the Battle Management Command and Control (BMC2)-Intelligence
    Surveillance and Reconnaissance (ISR) capability to meet key strategic
    objectives. The current Air Force E-8C retirement plan would further
    reduce deployable capacity, impacting USPACOM access to forces.
    Advocacy is essential in retaining sufficient JSTARS capability to meet
    command requirements in the 2017-2028 timeframe, as there is no other
    alternative joint capability that provides an integrated BMC2-ISR
    capability of the E-8C.
                                  eagle vision
        28. Senator Hirono. Admiral Harris, in your testimony you make
    mention of the fact that The Indo-Asia-Pacific is the world's most
    disaster-prone region. The United States plays a significant role in
    providing humanitarian assistance to countries that experience these
    hardships, and PACOM is a critical component of that aid. As the
    Commander of PACOM, can you please comment on the capabilities that the
    Eagle Vision system in providing assistance to those countries in need?
    As you know, the Hawaii Air National Guard is one of the few Air Guard
    units which hosts the system.
        Admiral Harris. Eagle Vision provides me with rapid access to broad
    area and multispectral imagery. It supports aircraft mission planning,
    mission target area visualization, intelligent assessment, map
    preparation, and other topographic applications in support of both
    warfighting or disaster response. Eagle Vision's most notable aspect is
    its ability to provide near real time imagery aiding command and
    control.
        These capabilities can enhance the ability of responders to focus
    limited assets on critical areas of need. Eagle Vision can be deployed
    to any location within the USPACOM AOR by C-130 or C-17. In the USPACOM
    AOR, Eagle Vision is currently used by the 293rd Combat Communications
    Squadron, Hawaii Air National Guard, Hickam Air Force Base, Hawaii.
                                   pacom aor
        29. Senator Hirono. Admiral Harris, given the downward pressures on
    budgets and other resource restrictions, we obviously can't have
    everything we need in terms of providing national security
    capabilities. As far as PACOM is concerned, if additional resources
    were made available what items would you recommend having in the PACOM
    AOR?
        Admiral Harris. I recommend additional investment in the
    advancement of critical munitions, additional submarines, fourth
    generation fighters with upgraded fifth generation capabilities and
    fifth generation fighters, and persistent Intelligence Surveillance
    Reconnaissance (ISR). Critical munition (i.e. AIM-9X, AIM-120, SM-6)
    shortages impact USPACOM's ability to conduct high end warfare in an
    Anti-Access/Area Denial (A2/AD) environment. The restricted ranges of
    our aging surface-to-surface and air-to-surface munitions now serve as
    the limiting factor in the effectiveness of advanced U.S. assets. Until
    munition ranges and effectiveness catch up to the capability of our
    advanced fighters, ships, and submarines the benefit of having such
    capable assets will be stymied. Additional submarines would assist in
    maintaining an asymmetric advantage against the current adversary
    submarine threats in the region and fifth generation aircraft have the
    capability that can operate and survive in an A2/AD. Persistent ISR is
    necessary to bolster Ballistic Missile Defense (BMD). Persistent ISR is
    necessary to find, fix, and target concealed and mobile missiles in the
    AOR.
                                     thaad
        30. Senator Hirono. General Scaparrotti, I understand that a
    Terminal High Altitude Area Defense (THAAD) system is being considered
    for use against potential North Korean missile threats. Can you talk
    more about this weapon system and the capabilities that it would bring?
        General Scaparrotti. [Deleted.]
                            japan - korea relations
        31. Senator Hirono. General Scaparrotti, how would you currently
    assess the state of Japan-Korea defense cooperation including in the
    missile defense arena?
        General Scaparrotti. Although there are still lingering historical
    issues, the prospects for improved defense cooperation between Japan
    and Korea have increased. The North Korean threat has galvanized our
    partners on both sides and they have recognized that cooperation in the
    missile defense arena is paramount to national and regional security.
    Recent achievements like the 2014 Trilateral Information Sharing
    Arrangement and the U.S. ROK Japan Defense Trilateral Talks will
    continue to underpin trilateral relationships into the future. As
    evidence of these improving relations, there have been several Defense
    Trilateral Talks that have occurred in the wake of this year's DPRK
    nuclear and missile tests. I am cautiously optimistic both nations will
    continue to work together and strengthen our unified position against
    North Korea.
                            regional energy security
        32. Senator Hirono. Admiral Harris and General Scaparrotti, as you
    know, the Asia-Pacific region is home to some of the fastest growing--
    and industrializing--economies in the world. As these economies grow
    and industrialize, they need to generate the energy needed to power
    their more modern economies. However, the Asia-Pacific region does not
    have substantial fossil fuel resources, and is already facing the
    challenges presented by air and water pollution, as well as the myriad
    other consequences of a rapidly changing climate. Furthermore, the
    distances within the PACOM AOR make energy transport and cost a
    vulnerability for our forces. The United States military's experiences
    in Iraq and Afghanistan are well documented examples of these
    difficulties. In your view, despite the currently record low price of
    oil, how much of a long-term vulnerability does competition for energy
    resources present in the region both for the relations between nations
    there as well as U.S. Forces in the AOR? What sort of pressures does
    this place on U.S. national security in the region, and what types of
    initiatives are you undertaking to help alleviate some of these
    concerns? What have been some of the outcomes of those efforts to date?
        Admiral Harris. Experts state that growth in trade of energy
    sources will be particularly large in the Indo-Asia-Pacific region and
    almost all these energy sources will require movement through
    international waters. To ensure global growth and to meet our nation's
    security priorities, international sea lines of communication must
    remain secure. Security of international sea lanes is a cornerstone of
    Pacific Command's mission. We employ two broad efforts: enduring
    presence and working with allies and partners. Enduring presence of
    Pacific Command's forces enhances international maritime domain
    awareness and supports the free flow of international trade, to include
    energy supplies. Pacific Command works with allies and partners to
    improve and/or develop their domestic maritime security capabilities.
    In its first year of execution, the Department of Defense Maritime
    Security Initiative addresses improving partner nation capability and
    capacity to conduct maritime security and enforce their resource rights
    within their Exclusive Economic Zone. Additionally, Pacific Command
    works closely with partners across the Indo-Asia-Pacific region in our
    strategic approach to ensure energy requirements will never be an
    operational constraint. Part of Pacific Command's energy security
    program includes building resiliency in energy systems; increase allied
    and partner interoperability; and integrating energy security
    principles into operations, activities, and actions. Outcomes of these
    efforts include energy security dialogues with allies and partners;
    inclusion in steady state campaign plan, contingency plans, and
    exercise scenarios; and informing innovation requirements for basing
    and operational energy security innovation in order to improve mission
    assurance and extend operational reach.
        General Scaparrotti. The Republic of Korea (ROK) is a small nation
    without a significant endowment of natural resources. Thus, significant
    shifts in energy prices or supplies have a potentially significant
    impact on the ROK economy. However, energy competition does not play a
    large role in ROK national security decision-making, nor does the ROK
    appear to feel significant pressure. A robust nuclear energy
    capability, combined with the security provided by the United States-
    ROK Alliance, helps to alleviate energy concerns. The United States can
    further contribute to ROK energy security as a source of oil,
    particularly with the recent lifting of the United States crude oil
    export ban.
        The ROK does not have international oil or gas pipelines; they rely
    exclusively on tanker shipments. The ROK is one of the world's top
    importers of liquefied natural gas (LNG), coal, and crude oil. They are
    the second largest importer of LNG mostly from the Middle East and
    Southeast Asia. They are the fourth largest importer of coal which
    comes from Australia and Southeast Asia. The ROK is the fifth largest
    importer of crude oil, mostly from the Middle East. The ROK imports
    about 97% of its total primary energy consumption, and much of it from
    the Middle East and through Southeast Asia. The security of key sea
    shipping lanes, especially in the South China Sea (SCS), is paramount.
    The ROK has a vested interest in maintaining freedom of navigation
    operations (FONOPS) in the SCS to ensure its energy security.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            THURSDAY, MARCH 3, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                   POSTURE OF THE DEPARTMENT OF THE AIR FORCE

        The committee met, pursuant to notice, at 9:32 a.m. in Room
    SD-G50, Dirksen Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Wicker, Ayotte, Cotton, Rounds, Tillis, Sullivan,
    Lee, Reed, Nelson, Manchin, Shaheen, Gillibrand, Blumenthal,
    Donnelly, Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good morning.
        The committee meets today to consider the posture of the
    Air Force in the context of our review and oversight of the
    fiscal year 2017 budget request. I welcome our witnesses,
    Secretary of the Air Force Deborah James and Chief of Staff of
    the Air Force General Mark Welsh.
        General Welsh, I understand this may be your last time you
    will appear before this committee. Thank you for not cheering.
    I just want to take this opportunity to express our gratitude
    to you and your family for 40 years of service and sacrifice in
    defense of our Nation and wish you every success in your future
    endeavors.
        Twenty-five years of continuous deployments, troubled
    acquisition programs, and frequent aircraft divestments have
    left us with the oldest and smallest Air Force in history. The
    combination of relentless operational tempo and misguided
    reductions in defense spending in recent years has depleted
    readiness. Today less than half of the Air Force fighter
    squadrons are fully combat mission ready, and the Air Force
    does not anticipate a return to full spectrum readiness for
    another decade.
        Meanwhile, potential adversaries are developing and
    fielding fifth generation fighters, advanced air defense
    systems, and sophisticated space, cyber, and electronic warfare
    capabilities that are rapidly shrinking America's military
    technological advantage and holding our aircraft at greater
    risk over greater distances.
        Despite temporary relief from the arbitrary spending caps
    imposed by the Budget Control Act, including through last
    year's Bipartisan Budget Act, we are still placing an
    unnecessary and dangerous burden on the backs of our airmen.
        Given the obvious needs of our Air Force to restore
    readiness, recapitalize our combat aircraft fleet, and invest
    in modernization, the President should have requested a defense
    budget that reflects the scale and scope of the national
    security threats we face and the growing demands they impose on
    our airmen.
        Instead, he chose to request the lowest level of defense
    spending authorized by last year's budget agreement and submit
    a defense budget that is actually less in real dollars than
    last year, despite the fact that operational requirements have
    grown.
        That leaves the Air Force $3.4 billion short of what the
    Air Force said last year it would need for fiscal year 2017.
    Given this budgetary shortfall, I am concerned the Air Force
    will not be able to meet the requirements outlined in the 2014
    QDR [Quadriennial Defense Review]: to simultaneously defeat an
    adversary while denying the objectives of another.
        The shortfall in this year's budget has forced the Air
    Force to make a number of painful and undesirable decisions.
    The most significant was to slow procurement of the F-35A by 45
    aircraft over the next five years. This budget-driven decision
    will likely increase the cost of this already costly aircraft,
    while exacerbating what defense experts call the modernization
    bow wave for other critical Air Force programs over the next 10
    years, which the Air Force admits it cannot afford at current
    funding levels. It also means it will take even longer for the
    Air Force to address the tactical fighter shortfall looming in
    the next decade.
        While we recognize the need for additional resources, this
    committee will continue to exercise rigorous oversight on Air
    Force acquisition programs, including the KC-46A tanker
    program, the presidential aircraft replacement, and the GPS
    Operational Control System, recently labeled the Air Force's
    ``number one troubled program.'' If the Air Force, and the
    Department of Defense more broadly, wish to convince the
    American people that they need more taxpayer dollars, they must
    show they are efficiently and wisely using the resources they
    already have.
        In particular, questions persist about the validity of the
    F-35 program of record quantity. Just consider that 815 F-35A's
    have been deferred from delivery to the Air Force since 2002,
    and the Service's latest procurement profile now projects the
    last F-35A to be delivered in the year 2040. At a certain
    point, a 38-year acquisition program runs the risk of producing
    obsolescence, especially when our adversaries are accelerating
    technological developments to counter the F-35. I look forward
    to reviewing the Secretary of Defense's decisions on
    revalidation of the total F-35 program of record quantity,
    which is due to this committee by May 25th, 2016.
        The decision to further delay the F-35 procurement also
    underscores the folly of the Air Force's plan to retire the A-
    10 fleet before a proven close air support replacement is
    fielded. Much fanfare has been made about the Air Force's
    decision not to divest A-10 aircraft in fiscal year 2018, but
    beginning in fiscal year 2018, the Air Force again plans to
    retire the entire A-10 fleet by 2021 with no replacement.
        As the Air Force proceeds with needed modernization, I
    recognize the need for a new bomber to replace our aging fleet
    of B-52, B-1, and B-2 aircraft. A long-range, penetrating
    strike capability is vital to deterring our enemies and
    reassuring our allies in increasingly contested environments in
    Europe and the Asia-Pacific.
        However, I remain seriously concerned about the acquisition
    strategy for the B-21 Long Range Strike Bomber, especially the
    use of a cost-plus contract for the development of this
    aircraft. I am still not convinced that this program will not
    repeat the failures of past acquisition programs such as the F-
    35. I will carefully examine every legislative option to ensure
    that our Congress can fulfill our dual obligations to the
    American people, providing our warfighters with the necessary
    capability to defend this country and to do so at the lowest
    possible cost and shortest period of time.
        Similarly, ending the use of Russian rocket engines remains
    a top priority for this committee. Department leaders have
    correctly drawn attention to Russia's growing development of
    military capabilities to threaten U.S. national security in
    space. The greatest risk in this regard is that Vladimir Putin
    continues to hold our national security space launch capability
    in the palm of his hand through the Department's continued
    dependence on Russian rocket engines. This is a national
    security threat in addition to a moral outrage at a time when
    Russian forces continued to destabilize Ukraine, including
    nearly 500 attacks in the past week, as General Breedlove, the
    Commander of European Command, testified on Tuesday.
        The Treasury Department remains unwilling to sanction
    Roscosmos, the Russian parent company of the manufacturer of
    the RD-180, which is controlled by two sanctioned cronies of
    Vladimir Putin. This suggests a level of hypocrisy in U.S.
    sanctions policy that will only make it harder to convince our
    European allies to renew their own sanctions on Russia this
    summer.
        This committee wants to find a constructive solution to
    eliminate our dependence on Russian rocket engines immediately
    without compromising future competition, a goal that Secretary
    James said was possible in testimony in January.
        Finally, I want to express my continuing concern with the
    Air Force's mismanagement of its remotely piloted aircraft, or
    RPA [Remotely Piloted Aircraft], enterprise. The Air Force's
    MQ-1 and MQ-9 community remains undermanned and overworked.
    Yet, despite the Air Force's stated need for an additional
    3,000 RPA manpower authorizations, the Air Force's end strength
    remains the same as last year.
        While the Congress authorized greater retention bonuses for
    RPA pilots, the Air Force did not provide them out of a sense
    of ``fairness.'' After years of warnings that RPA pilots and
    maintainers are leaving in droves, this was a missed
    opportunity and a damaging mistake. I look forward to your
    explanation for this action.
        Senator Reed?

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Well, thank you very much, Mr. Chairman. Let
    me join you in welcoming Secretary James and General Welsh to
    the committee this morning to testify on the plans and programs
    of the Department of the Air Force for the fiscal year 2017
    annual authorization.
        We are grateful to both of you for your service to the
    Nation. Particularly, General Welsh, let me join the chairman
    in commending you for your outstanding service to the Nation
    and to the Air Force. You have led with vision and integrity.
    Thank you very much, sir.
        Over the past 15 years, the Air Force personnel and
    equipment have played a key role in support of our national
    security goals in Iraq, Afghanistan, and across the globe. Over
    this time, we have relied heavily on Air Force strike aircraft
    to take on important ground targets, Air Force manned aircraft
    and unmanned aerial vehicles to provide intelligence,
    surveillance, and reconnaissance support, and Air Force tankers
    and cargo aircraft to support coalition air operations.
        Our witnesses this morning face huge challenges as they
    strive to balance the need to support ongoing operations and
    sustain readiness with the need to modernize and keep the
    technological edge in the three domains of air, space, and
    cyberspace that are so critical to military success. The Air
    Force has produced a budget that, like all the Services, made
    tough decisions in a time of constrained resources.
        The Air Force is proposing significant force structure
    changes to ensure that it will have the right size and mix of
    assets and capabilities to meet strategic needs in a manner
    consistent with a constrained budget environment. The Air Force
    proposal includes major shifts in both strategic and tactical
    aircraft programs, with reductions shared among the Active Duty
    force, the Air National Guard, and the Air Force Reserve. Here
    are some examples.
        The Air Force is planning to retire the entire A-10 fighter
    force over the future years defense program as new F-35A Joint
    Strike Fighter aircraft replace them on a one-for-one basis.
    While there is a one-for-one replacement for aircraft and
    squadrons under the Air Force plan, it is not clear that the
    close air support capability of the modernized force will equal
    or exceed the close air support capability of the current
    force, and we would appreciate your thoughts, as the chairman
    has indicated. The disjunction between the deployment of F-35's
    and the proposed retirement of the A-10 raises that question,
    and it is a critical question.
        The Air Force continues its plan to eventually retire the
    entire U-2 fleet and keep the Global Hawk Block 30 remotely
    piloted aircraft fleet. In the meantime, the Air Force plans to
    develop and field capabilities for the Global Hawk that are
    intended to equal or exceed the capability of the U-2, as
    required by law. Again, I would appreciate an update on this
    particular issue.
        DOD [Department of Defense] has directed the Air Force to
    reduce the number of Predator and Reaper RPA, remotely piloted
    aircraft, Combat Air Patrols, CAPs. The previous goal was 65
    CAPs. The new goal will be 60 CAPs. This is to allow time for
    the Air Force personnel and logistics systems to catch up to
    the demand for RPA forces. Again, your views on how this is
    going to be accomplished would be actually critical.
        Finally, the Air Force wants to make significant reductions
    in certain high-demand/low-density forces, such as the AWACS
    [Airborn Warning and Control System], JSTARS [Joint
    Surveillance and Target Attack Radar System], and Compass Call
    fleets before they would be replaced by new systems and
    capabilities. We need to understand the risks involved and the
    gaps that would be produced in phasing one system out as other
    systems come aboard.
        Four years ago, Congress created a National Commission on
    the Structure of the Air Force to make recommendations on
    policy issues that are directly relevant to these force
    structure decisions. We look forward to receiving testimony
    from the Air Force on the progress being made to implement
    those recommendations.
        As the Air Force contemplates major force structure
    changes, we need to understand what if any effects these
    changes may have on the Air Force's ability to play a key role
    in implementing defense strategic guidance calling for a shift
    to refocus emphasis to the Asia-Pacific region, for one
    example. Again, I hope our witnesses today can give us this
    advice.
        You have, as the chairman has indicated, significant
    challenges in maintaining the acquisition programs with the new
    strike fighter. It is an expensive program, and again, I think
    it will be a focus not only of our questions but of your
    efforts over the next several months.
        I look forward to your testimony.
        Thank you, Mr. Chairman.
        Chairman McCain. Thank you.
        Welcome, Secretary James.

    STATEMENT OF HONORABLE DEBORAH LEE JAMES, SECRETARY OF THE AIR
                                 FORCE

        Ms. James. Thank you, Mr. Chairman and Ranking Member Reed,
    and good morning to all the members of the committee.
        We have got a lot to talk about this morning, and General
    Welsh and I are very proud to be here to represent the Air
    Force.
        When we testified before you last year at our posture
    hearing, we outlined three priorities. Those are taking care of
    people, balancing readiness of today with the needs of
    modernization for tomorrow, and making every dollar count. I am
    here to tell you that those are the same priorities. They have
    not changed.
        But what has changed--and both the chairman and the ranking
    member have already touched upon this, that what has changed
    over the last few years are the threats and the challenges that
    are faced by our Nation around the world. Your Air Force is
    fully engaged in every region of the world, every mission area
    across the full spectrum of military operations. Put simply, we
    have never been busier on such a sustained global basis, at
    least not in the 35 years that I have been an observer on the
    scene.
        Now, General Welsh, is going to talk to you more about
    these areas, as well as many others under our priorities
    representing our budget in just a few minutes. But what I would
    like to do is use my precious time here before the committee to
    update on two key areas of interest, and both the ranking and
    the chairman touched upon these. Those two areas are the B-21
    bomber and space launch.
        Our nuclear enterprise is our number one mission priority,
    and the B-21 will be an essential piece of our Nation's nuclear
    backbone and, indeed, ditto for the conventional area as well.
    The B-21 will be a vital global precision attack platform that
    will give our country a deep, penetrating capability, enabling
    us to hold targets at risk anywhere on the globe and provide
    the President with flexible options in addressing future
    threats. Now that we are beyond the GAO [Government
    Accountability Office] protest period, we are moving forward
    with execution.
        Now, in terms of the B-21 acquisition, cost control is
    paramount. We have taken a careful look at lessons learned from
    previous acquisition programs. We have looked at those that
    have worked well, and we have looked at those that have not
    worked well. Experience tells us that there is no one-size-
    fits-all when it comes to acquisition contracts and strategies
    because you see we have certainly examples of cost-plus
    failures, but there also have been cost-plus successes.
    Likewise, we have had some successes in fixed-price work, but
    there have also been some noteworthy failures in the fixed-
    price development world to include the A-12, the Tri-Service
    standoff attack missile, the C-5, the future combat system, and
    the C-17.
        Now, some of these programs were canceled without delivery
    of any warfighting capabilities. Some had to sacrifice
    capability to stay within funding constraints. Some were
    restructured and significant additional funding was added to
    complete. Many of them, in addition, resulted in years of
    litigation.
        To help ensure that we now deliver the best value to the
    American taxpayer with the right quantities, the B-21 approach
    uses a mix of contract types to support the overall acquisition
    strategy, and this mix was specifically chosen to capitalize on
    the advantages of the different contract types while limiting
    the potential risks for cost growth and/or performance issues.
    Although the B-21 design incorporates mature and existing
    technology, we will be integrating those technologies on a
    never-before-built low-observable bomber. It is these two
    factors, the never-before-built bomber and the integration
    aspect that introduces risk into this development program,
    particularly when we get to integration and test phases.
        While some can draw comparisons between the B-21 and the
    KC-46, there are actually some very important differences.
    Unlike the KC-46, the B-21 is neither a commercial derivative
    aircraft, nor is it a commercial derivative design. Unlike the
    KC-46, the B-21 has no anticipated commercial or foreign sales
    market to offset any unexpected development costs.
        Now, after carefully considering these and other factors,
    the milestone decision authority determined a cost-plus
    incentive contract type was best for the development phase of
    the program.
        Now, of course, there have also been cost-plus failures.
    There is no question about that. F-22, B-2, F-35. They went way
    over cost and did not produce the performance on time. We are
    mindful about all of these examples, and we are also very
    mindful of the potential for cost growth. We believe that we
    have taken steps to address this.
        First, we had two independent cost estimates completed and
    we have funded to the higher estimate.
        Second, we have and will continue to ensure the
    requirements remain stable. By the way, the chief requirements
    control officer is sitting right next to me right now this
    morning.
        Third, we crafted an incentive structure that will reward
    cost and schedule performance during this cost-plus phase of
    the contract. We structured the majority of these incentives
    toward the back end of the cost-plus phase of the program,
    which means that the contractor will be incentivized to get to
    production as quickly as possible and as feasible and not drag
    it out in the cost-plus phase.
        Fourth, we are using those mature technologies I referenced
    to meet requirements and avoid developing key subsystems while
    also developing the aircraft. By the way, that combination was
    one of the things--one thing that went wrong in the B-2
    program.
        Now, all of these factors make us believe that we have a
    good approach and that we will control costs on this program.
    Technology maturation and risk reduction was fixed-price. The
    first five low-rate initial production options are fixed-price,
    and the remainder of the production will be fixed-price. The
    majority of this program will be fixed-price, but a portion, of
    course, is in the cost plus incentive arena.
        Let me now take a few moments just to update the committee
    on some elements with respect to space launch since we were
    last together in January.
        Now, during the January hearing on space launch, I
    testified that I too was disappointed that ULA [United Launch
    Alliance] had not been on the GPS-3 [Global Positioning System]
    competitive launch. I asked my team to go look at options for
    what could be done about this because, after all, the ELC is
    taxpayer dollars involved. My general counsel performed that
    review and coordinated the results with the OSD [Office of the
    Secretary of Defense] general counsel.
        The general counsel found that while certainly it is
    possible to terminate the contract, it is not probably the most
    cost-effective approach for the taxpayer. Given that ELC
    provides infrastructure, which is essential to the launches
    that are specific to the block buy, we would still have to pay
    for that service somehow, and we would end up probably paying a
    lot more than we are paying today. Breaking that contract and
    allocating those costs to each individual launch in the block
    buy would likely cost the taxpayer between $700 million and
    $800 million more.
        Now, that was the finding of my general counsel, together
    with the OSD [Office of the Secretary of Defense] general
    counsel. But I want to take one more step. I would like to get
    an independent legal review to see if there is some angle there
    that we are missing.
        Additionally, since the space hearing, the DOD engaged the
    Department of the Treasury regarding the status of sanctions as
    they pertain to the recent reorganization of Roscosmos and as
    the chairman noted the findings there.
        Meanwhile, we have continued our plan to transition away
    from the RD-180 rocket engine reliance, and in addition to the
    first 2 OTA [Other Transaction Authority] contracts that went
    to SpaceX and Orbital ATK, on February 29th we awarded two
    more. These two were to Aerojet Rocketdyne and to ULA. With
    these actions, we will have obligated all of the fiscal year
    2015 funding for rocket propulsion system work in a full and
    open competitive way per the law.
        Finally, we are still concluding and conducting an analysis
    on various allocation strategies, should allocation become
    necessary in the future. Preliminary analysis suggests that a
    transition to a combination of an allocation between the Delta
    and the Falcon launch service, on the other hand, would add
    anywhere from $1.5 billion to $5 billion in additional cost,
    depending on your assumptions and depending on when you would
    begin such a transition. The basic rule of thumb here is that
    the sooner a full RD-180 ban might start, the more disruptive
    it would be to the launch manifest and to the production
    timeline and the higher the cost would be.
        Now, none of this additional cost, whatever that cost ends
    up being, is currently contained within the Air Force program.
    As I just said, everything I just said is preliminary in
    nature. We are still trying to refine the details.
        As I wrap up, Mr. Chairman, I want to thank you and this
    committee for your leadership and support of the Bipartisan
    Budget Act. As you noted, it does not provide all of the
    resources that we felt we needed, but it is extremely important
    because it is much needed stability and predictability.
        While we are appreciative of this, we worry about the
    return of sequestration in fiscal year 2018 and beyond. You all
    remember in 2013, sequestration compelled us to park jets and
    delay upgrades and halt training, and that further exacerbated
    our readiness situation. If we return to it in fiscal year
    2018, we will be even worse off. It will touch our people, our
    modernization efforts, and our readiness. All of the programs
    that both the ranking and the chairman talked about in the
    beginning--all of these relate to money. We agree with these
    points. All of these points relate to money, and getting
    sequestration lifted permanently would be a fantastic start to
    helping the entirety of DOD in this arena.
        Thank you very much for your support of our Air Force and
    for our airmen, and we look forward to your questions.
        [The prepared statement of Ms. James and General Welsh
    follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman McCain. General Welsh?

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

        General Welsh. Thank you, Mr. Chairman and Ranking Member
    Reed, and distinguished members of the committee. It is always
    a privilege to testify before you and to join Secretary James
    in representing America's airmen.
        As you heard from the Secretary, our top priorities remain
    taking care of people, balancing readiness and modernization,
    and making every dollar count. While we keep one eye on those
    priorities, we keep the other on our very interesting world.
    Along with you, we have been watching China flex its muscles in
    the South China Sea. We have watched as they dramatically
    increased the level of technical capability in their air force
    and expanded the scope and complexity of their operations in
    both space and cyberspace.
        After wreaking havoc in Georgia, Crimea, and the Ukraine,
    we see a resurgent Russia now aggressively supporting the Assad
    regime in the skies over Syria and promise to modernize its
    legacy nuclear forces.
        We noticed Iran's broad overt and covert influence on
    unrest in the Middle East and its general malign influence
    inside and outside the region.
        We watched with interest as North Korea conducted an
    illegal nuclear test and subsequent rocket launch, perhaps
    signal events for a ballistic missile program yet to come.
        We continue to watch ISIS [Islamic State of Iraq and Syria]
    walk a trail of terror that now stretches well beyond Iraq and
    Syria.
        To confront these challenges and to ensure a fighting force
    that is able to overcome them all, our fiscal year 2017 budget
    request attempts to balance the size of our force with the
    required readiness and necessary modernization of that force.
        In terms of people, our fiscal year 2017 budget request
    modestly grows the total force and adds airmen in a number of
    critical career fields like ISR [Intelligence, Surveillance and
    Reconnaissance], cyber, maintenance, and battlefield airmen. We
    are asking to increase Active Duty end strength from roughly
    311,000 to 317,000 by the end of fiscal year 2017. Given our
    current operational tempo, it is imperative that we at least
    get to this number this year.
        If mission demands require additional growth in 2017,
    Secretary James is prepared to use her existing authorities to
    grow modestly beyond 317,000 provided we are able to attract
    the right talent for the positions we need. That would, of
    course, require congressional support of a reprogramming action
    to fund the additional manpower.
        In the Air Force, total force integration is alive and
    well. We continue to shift mission sets from the Active to
    Reserve components where appropriate and to integrate
    organizations when and where it makes sense. We have three
    Active Duty officers today commanding Reserve component wings,
    and this summer an Air Force Reserve officer will take over--
    will take command--excuse me--of an Active Duty fighter wing
    and an Air National Guard officer will take command of an
    Active Duty mobility wing. We will also test a fully integrated
    air refueling wing beginning in fiscal year 2017.
        For fiscal year 2017, we have requested a 1.6 percent pay
    raise for both military and civilian airmen and targeted pay
    and retention bonuses for a variety of career fields, including
    RPA crews. Chairman, thanks to your help and the help of this
    committee, RPA and manned pilot incentives are finally at the
    same level, but we cannot stop there. This year, we chose to
    give our RPA pilots a $25,000 per year retention bonus and not
    the full $35,000 you authorized. We did that to make sure that
    the bonus for RPA pilots was commensurate with that of other
    critically manned pilot categories. We have some that are even
    in more crisis than RPAs at this point in time. We will intend
    to seek legislation this year to increase all of our aviator
    retention pay for manned and unmanned platforms to $35,000 per
    year. We will ensure you have all the details you need to
    assess that proposal.
        Finally, this year's budget expands the Sexual Assault
    Prevention and Response program, fully funds child care
    facilities, boosts educational benefits, and supports important
    infrastructure programs that benefit both airmen and their
    families.
        Readiness remains both an imperative and a struggle for us.
    Less than half of our combat units are fully prepared, as you
    heard, for a high-tech fight against a capable and well-
    equipped force. This budget funds flying hours to the maximum
    executable level, invests fully in the corresponding
    sustainment accounts, and ensures our top end combat exercises
    like Red Flag and Green Flag remain vibrant.
        In consultation with our combatant commanders, we made some
    adjustments to address the global threats that I mentioned
    previously. We did rephase the A-10 and EC-130 divestitures.
    Both fleets are fully funded in fiscal year 2017. Keeping them
    beyond that is simply a manpower issue. We do not have enough
    people in the Air Force to continue to operate all the
    equipment we have today and to stand up a new fleet of F-35's.
    With additional manpower and funding to cover the activity, we
    could certainly do that, and I would be a very happy Air Chief
    if we got that increase. But today we do not have the manpower
    to do both.
        Our budget request also adds 24 MQ-9 Reapers and increases
    our munitions buy to meet operational demands.
        Our aircraft inventory is the oldest it has ever been, as
    the chairman started off mentioning, and our adversaries are
    closing the technology gap. We simply must modernize. This
    budget request includes ongoing investments in nuclear
    deterrence, space, and cyberspace. We are pressing ahead with
    legacy platform replacements, the F-35, KC-46, B-21, Combat
    Rescue Helicopter, and the JSTARS. Due to limited trade space,
    we had to defer five F-35's from our fiscal year 2017 program,
    delayed some upgrades to legacy weapon systems, and will
    continue to live with a dramatically reduced infrastructure
    improvement program.
        To maximize our buying power, we will streamline energy
    usage, we will employ airmen's cost-saving ideas by the
    hundreds, and we will march toward audit readiness by the end
    of this fiscal year.
        In closing, I would like to offer my thanks to each one of
    you for dedicating your time and your attention to our Military
    Services, not just our Air Force, and the remarkable men and
    women who give them all life.
        We look forward to your questions.
        Chairman McCain. Well, thank you very much.
        You know, the only problem, General, with your statement
    about the A-10 is you have no replacement for it, and it is in
    combat and in operation in Iraq and Syria as we speak. You want
    to retire it, but you have no plans, according to what has been
    submitted to this committee, as to the F-35's that will replace
    it. In fact, you have reduced the number of F-35's that we are
    requesting. It does not match up, General.
        General James. Chairman, the mission capability of the A-10
    will not be replaced by the F-35.
        Chairman McCain. We have a conflict going on in Iraq and
    Syria now, which the A-10 is in combat, most notable when they
    destroyed the fuel trucks, and you have nothing to replace it
    with.
        General James. Sir, we would do the work that the A-10 is
    doing today with the F-16 and the F-15E predominantly.
        Chairman McCain. Then why are you not doing it now?
        General James. We are, sir. They are flying many air
    sorties.
        Chairman McCain. You know, that again flies in the face of
    reality. The A-10's are flying the most effective and least
    costly missions in Iraq and Syria.
        General James. Chairman, we would love to keep it all. The
    fact is that the Budget Control Act----
        Chairman McCain. But you have nothing to replace it with,
    General. You have nothing to replace it with. Otherwise, you
    would be using the F-15's and the F-16's, which you have plenty
    of. But you are using the A-10 because it is the most effective
    weapon system. This is really unfortunately disingenuous. I
    mean, you have the options of using the F-15 and the F-16 right
    now. You are not. You are using the A-10.
        General James. Sir, we are using them both heavily. We are
    using the B-1 heavily.
        Chairman McCain. Every Air Force pilot that I know will
    tell you the most effective close air support system is the A-
    10.
        General James. Senator, we have X amount of people and X
    amount of dollars.
        Chairman McCain. You have X amount of missions, and the A-
    10 is carrying out those missions, General.
        General James. No, sir.
        Chairman McCain. That is amazing.
        General James. Senator, those are not the facts.
        Chairman McCain. Yes, they are the facts, General.
        General James. We can give you the numbers.
        Chairman McCain. They are the facts. The facts are on the
    ground in the destruction of the enemy by the A-10 aircraft. If
    you were not using the A-10, as you said, if you think the F-15
    and the F-16 can do the job, then you would be using them
    instead of the A-10.
        You know, General, I have had a little military experience
    myself, including in close air support. For you to sit there
    and tell me that we could be using the F-16 and the F-15 when
    we are not and your plans are to use the F-35 at 10 times the
    cost eventually, it flies in the face of not just my experience
    but the experienced pilots that I know, the U.S. Air Force
    pilots that I am in constant communication with.
        General James. Senator, my last comment. I do not want to
    argue this with you.
        Chairman McCain. You are arguing. You are arguing facts.
        General James. Senator, I will give you the facts of how
    many targets have been struck by which kind of platforms in
    Iraq and Syria over the last year.
        Chairman McCain. Yes, and a significant number of them have
    been done by the A-10. Is that true or false?
        General James. No. It is true.
        Chairman McCain. It is true? Then why would you want to
    retire the least expensive, most accurate close air support
    system?
        General James. I do not want to retire it, Senator. But the
    Air Force has to get bigger to do all this.
        Chairman McCain. But you have not got a replacement for it,
    General. For you to sit here and say that you do absolutely
    flies in the face of the facts. Enough said, General. Okay?
        General James. Okay, Chairman.
        Chairman McCain. You know, it is really embarrassing to
    hear you say something like that. When I talk to the people who
    are doing the flying, who are doing the combat, who say that
    the A-10 is by far the best close air support system we have--
    it is embarrassing.
        General James. We all talk to them, Chairman. Thank you.
        Chairman McCain. Secretary James, on the rocket engine,
    which you chose to highlight, are you aware that there are
    members of--two members at least of Roscosmos who are on our
    sanctions list? You are aware of that.
        Ms. James. Yes.
        Chairman McCain. We have now two sanctioned cronies of
    Vladimir Putin who are getting X millions of dollars of
    taxpayers' money. Right?
        Ms. James. I do not know that to be true or false.
        Chairman McCain. Well, they are being paid. Are they being
    paid?
        Ms. James. I do not know.
        Chairman McCain. Is Roscosmos being paid? Do you know that?
        Ms. James. I got the decision from the Treasury Department
    vis-a-vis the sanctions----
        Chairman McCain. Do you know that Roscosmos is the Russian
    parent company of the manufacturer of the RD-180? Do you know
    that?
        Ms. James. I do not have access to who makes that money.
        Chairman McCain. It is public knowledge, Secretary James.
    It is public knowledge that the company is Roscosmos that is
    the company that is selling the--is a parent company of the
    manufacturer of the RD-180. You did not know that?
        Ms. James. Chairman, I would be happy to get the Treasury
    Department to come brief you.
        Chairman McCain. I am not asking for the Treasury
    Department. I am asking you if you know what is public
    knowledge. Do you know that it is public knowledge that
    Roscosmos is the parent company of the manufacturer of the RD-
    180? Do you know that or not?
        Ms. James. I have not studied it in detail, but if you say
    so, I believe you.
        Chairman McCain. I am asking you if you know it not. This
    is really--you know, I have been to a lot of hearings in my
    time, but I have not quite seen one like this. I am asking you
    a question. Do you know that the Russian parent company of the
    manufacturer of the RD-180 is Roscosmos, of which two
    sanctioned cronies of Vladimir Putin control it? Do you or do
    you not know that?
        Ms. James. I accept your word. I know it.
        Chairman McCain. Thank you. I am astonished that you did
    not know it. I mean, after all, this is a pretty big deal that
    we have been talking about, and you chose to bring that up in
    this hearing, and you do not know that Roscosmos is the Russian
    parent company of the manufacturer of this rocket engine, which
    is controlled by two sanctioned cronies of Vladimir Putin. You
    did not know that?
        Ms. James. I brought up that the Treasury Department did
    not put the Roscosmos on the sanctions list, and you brought
    that up too, Chairman.
        Chairman McCain. That was not my question. My question was
    whether you knew that or not.
        Ms. James. Prior to you telling me this today, that
    individual aspect, no. But I accept your word and I know it
    now.
        Chairman McCain. I am not asking you to take my word. I am
    astonished that you did not know it.
        Senator Reed?
        Senator Reed. Thank you very much, Mr. Chairman.
        One of the points that you both made and I made in my
    statement was the decision by Secretary Carter to lower the
    number of combat air patrols for the remotely piloted aircraft
    from 60 to 65. My sense is that is a reflection of the stress
    on the whole enterprise, the number of pilots, et cetera. This
    is an asset that every commander needs more not less, as we
    hear every time we go overseas. Two questions follow from that.
        One is that in order to aid the enterprise, the training of
    the pilots, selection of pilots, who will fly these aircraft so
    we can get back up to the CAP levels of 65 or beyond, is there
    any legislative initiative that you need going forward, General
    Welsh and Secretary James? Do you want to start, General?
        General James. Senator, I do not believe there are. We are
    in the process now of doubling our production and our training
    pipeline between now and the end of fiscal year 2017. That is
    biggest and most significant first step. We have never trained
    more than 180 a year. We will train 334 this year and 384
    beginning next year. That is the beginning of the recovery in
    that enterprise and normalizing a battle written for the entire
    community. But I think we are on track to get that done.
        Senator Reed. Secretary James?
        Ms. James. I would concur. Not this year, but as we go
    forward, as you heard, we do want to modestly build up our end
    strength. There may be things coming down the pike next year.
        Senator Reed. General Welsh, we had a lively discussion in
    my office about--first, let me commend you on opening up the
    senior enlisted ranks to access to operators for Global Hawk,
    which you have done, which I think makes sense, and you can tap
    into some great expertise. The question, what about the
    Predator and Reaper communities? Those are still restricted to
    trained pilots and non-commissioned officers. Is there any plan
    to go look at the enlisted ranks to fill those slots?
        General James. Initially we want to get that community well
    first, complete our ``get well'' plan, get it healthy. It was
    not a problem moving--availability of officers who are enlisted
    to move through the pipeline. The problem was the training
    pipeline itself. We need to get that healthy first. We chose
    the Global Hawk community to initiate the enlisted RPA operator
    program because it is a smaller community. It can be more
    controlled initially. We can learn the lessons we need to learn
    as we do that, and then we will decide where we go from there.
        Senator Reed. Let me switch to another issue that I
    mentioned in my opening statement, and that is that we have
    some high-demand/low-density aircraft you are well aware of,
    JSTARS, AWACS, Compass Call. The plan again, because of
    pressure, is to retire these aircraft, and we are sort of in a
    similar dilemma as the A-10. We do not have an obvious
    replacement. Can you comment on that, General?
        General James. The strategy for those aircraft, JSTARS, EC-
    130H, Compass Call, et cetera, is to try and modernize within
    our top line because we do not think there is more money
    coming. To do that, we have to take money out of our top line
    some way, and the way we have approached this is to look at
    downsizing to certain numbers of aircraft in those fleets to
    pay for the recapitalization program and just replace it on the
    fly. It means that short-term you have less capability in that
    mission area to support the combatant commanders with, but if
    we do not do this, long term we will have no capability in that
    mission area to support the combatant commanders.
        Senator Reed. You are going to use the internal budget
    issues to generate more improvements on existing aircraft or
    even build new aircraft.
        General James. That is our intent, sir. We can do that with
    any capability. It is not the ideal way to do it because you
    have to give up capability to get future capability. But we
    just do not think there is more money coming to support a
    development program.
        Senator Reed. Secretary James, one of the issues that is
    always attendant upon development of a new aircraft is not just
    the acquisition costs but the life cycle costs. Have you been
    looking at the B-21 in terms of life cycle costs? If you have,
    can you give an indication of how you are prepared to minimize
    those costs, since we are starting on this process right now
    with design and initial sort of production?
        Ms. James. I would like to, if I may, come back for the
    record or come back in a briefing format to give you some
    information on that, Senator Reed.
        Senator Reed. Thank you very much.
        Senator Reed. Thank you, Mr. Chairman.
        Chairman McCain. Senator Inhofe?
        Senator Inhofe. Thank you, Mr. Chairman.
        First of all, let me just say to the two of you I have been
    on this committee for 20 years, and I was on the House Armed
    Services Committee before that. I have found that the two of
    you are the most accessible of any Secretary and Chief that we
    have had in the past. I really do appreciate it. You have come
    out when we have called. I remember on very short notice,
    General Welsh calling you and asking if you would meet me in
    Fort Smith, Arkansas to look at a problem with the 188th wing
    there, and you were there. It was a little intimidating for me
    because I had to park my little Harmon Rocket next to your C-
    20. But, nonetheless, we enjoyed that visit, all on short
    notice. I really do appreciate it.
        I want to use my time differently than the rest of them
    because it is very disturbing to me, when I watch the
    presidential debates and I hear people talking, nobody knows
    the level of threat that we are facing in this Nation right
    now. You know. Both of you know. But the people do not know
    that. That is what we should be talking about in terms of the
    resources that we have.
        When I read the statement that was made by our former
    Secretary of Defense, Chuck Hagel, when he said, quote,
    American dominance on the seas, in the skies, and in space can
    no longer be taken for granted, you know people back in
    Oklahoma, when we say that, maybe it is not believable. But it
    is true. I think in your statement that you submitted, you said
    in different words the same thing. The era in which the United
    States could project military power without challenge has
    ended. I agree with that.
        The thing that that translates into is the other statement
    that you made the deteriorating military strength is an
    invitation for conflict. We all remember when we were looking
    at the big bomb and the threats that we were facing. Our
    feeling was at that time you have to have it, but you never
    want to use it. The best way not to use it is to have it. You
    have got to have that force.
        One of the things that was stated in your message when you
    said, quote, your Air Force will support the most urgent
    combatant commander request. When I read that, that means to me
    that we cannot meet all of the combatant commander requests,
    but just the most urgent ones. Do you want to define what an
    urgent one is, either one of you?
        General James. Senator, the decision on which combatant
    commander's request we actually prioritize is actually made
    through a joint process. The ultimate decision belongs to the
    Secretary of Defense. There is a debate that goes on or a
    requirement that is presented from a combatant commander to the
    Joint Staff. The services engage in the discussion. The Joint
    Chiefs engage, and the Secretary of Defense makes a decision
    based on what he sees to be the greatest priority.
        Senator Inhofe. Yes, but if we had the resources, would you
    not say that you would be meeting--attempting to meet most all
    of the requests that they have, not just the urgent ones.
        General James. Senator, all the services would like to meet
    all----
        Senator Inhofe. You were at Hill, I think, were you not,
    when you were flying during Desert Storm I think it was,
    probably F-16's I would guess.
        At that time, was the threat to the United States as great
    as it is today?
        General James. Sir, I think the greatest existential
    threat, the nuclear threat that Russia holds, was the same, but
    other than that, no.
        Senator Inhofe. Well, James Clapper and every witness we
    have had before this committee has said that we are facing the
    greatest threats today that we have ever faced. Some of them
    say not just in the last 40 years but in the history of this
    country. I believe that is true. That is what we need to be
    talking about.
        You mentioned a minute ago that we are trying to go up from
    310,000 to 317,000 Active Air Force. Is that correct?
        Ms. James. Yes. The Chief did mention that, Senator, and it
    is--actually I think it is 311,000 to 317,000 for the Active.
    You will recall about a year or so ago, we also increased our
    Guard and Reserve to about 3,000 additional. We are modestly
    now upsizing Active, Guard, and Reserve. As the Chief was
    saying, we think, given world demands and our reading of the
    situation, that there may be cause for even more provided that
    we can get the right talent.
        Senator Inhofe. Yes. That is really, Madam Secretary, the
    point I am trying to make here. At that time, if we had 300,000
    or so Guard--or currently Guard, we would be talking about a
    total force, including the Reserve component, of around
    600,000. I mean, round figures. At the time that you were
    flying those F-16's, at that time we actually had 134 combat-
    coded fighter squadrons. Today we have 55.
        This is the point I am trying to get across because we know
    it in this room, but the Americans do not know it, that we have
    a greater threat and we have less than half of the capability
    in terms of numbers that we had at that time.
        Ms. James. We are approximately 200,000 people smaller than
    we were at the time of Desert Storm.
        Senator Inhofe. Yes, and that is the point I want to make,
    and I do not have time for that.
        But for the record, I would like to ask you if we had three
    top priorities, what would they be if we had the funding levels
    to support where we are deficient today. For the record. All
    right? Thank you.
        Ms. James. Thank you.
        Senator Inhofe. Oh, I meant to mention also I really
    appreciate your greatest asset being here too, Betty.
        Chairman McCain. Senator King?
        Senator King. First, I want to associate myself with the
    comments of Senator Inhofe. I think we are facing--all the
    testimony that has been in all the hearings, whether for me in
    Armed Services or in Intelligence, that we are facing a more
    diverse and serious threat environment than we have faced in
    any of our adult lives.
        I think the important point--and people often talk about
    defense budgets and do we need to modernize the nuclear fleet--
    is that the most successful foreign policy initiative in terms
    of peacekeeping has been our deterrent. The fact that nuclear
    weapons have not been used since 1945 is a function of the
    reality of the fact that have a deterrent force. It is a
    paradox that in order to prevent war, you have to prepare for
    war. There is a danger, particularly I am concerned, as is
    Senator Kaine, that we have ceded our congressional power over
    war-making to the executive. I think that is something that we
    really need to discuss and focus upon. But the larger question
    is how do we maintain the peace, and the best way to do that
    paradoxically is to prepare for war. That is what we are
    talking about today.
        Let me ask some specific questions about the B-21. Is the
    fixed-price part of the contract fixed today? In other words,
    is there a price or is that to be set after the design phase?
    Madam Secretary?
        Ms. James. The price is related to what is called the APUC
    [Average Per Unit Cost]. If you think back, Secretary Gates in
    the year 2010 set a price point for what we now call the B-21.
    The fixed-price is fixed. It is fixed today.
        Senator King. It is a dollar amount?
        Ms. James. Yes.
        Senator King. It is so many millions of dollars per
    airplane.
        Ms. James. Yes.
        Senator King. As I understand it, 70 percent of the
    contract, roughly, is in this fixed-price component.
        Ms. James. Correct.
        Senator King. 30 percent is in the cost-plus component,
    which is engineering and design. The fixed-price part is fixed.
        Ms. James. We will make that price point--beat it actually,
    we hope, vis-a-vis what Secretary Gates set.
        Senator King. Could you explain as briefly as possible the
    incentive structure in the cost-plus part of the contract that
    is designed to mitigate the very real and I think legitimate
    concerns the chairman has articulated about cost-plus contracts
    generally?
        Ms. James. The basic approach involves having very specific
    performance milestones, having gates along the way during that
    cost-plus phase of the contract. Then there are incentives,
    meaning a fee that the contractor will earn, provided that they
    hit those milestones and do it correctly.
        Senator King. If they do not hit the milestones, if they do
    not hit the price milestones, if the cost-plus is too much on
    the plus side, they lose incentive fees.
        Ms. James. They lose the fee. They lose partly the fee or
    they can lose all of the fee under certain circumstances.
        Senator King. What we are really talking about here in
    contractual terms is risk. They are not willing to bear all the
    risk of new R&D, but we are not bearing all of it either
    because of the way the fee is structured.
        Ms. James. That is right. It is a shared risk situation,
    and the bulk of the incentives are geared toward the tail end
    of the EMD [Engineering Manufacturing and Development], which
    gives the contractor the incentive to go as quickly as possible
    and not drag out the cost-plus EMD portion, to get to
    production as quickly as is feasible.
        Senator King. Well, that gets to my next question. Senator
    Inhofe has a very powerful chart that talks about the length of
    time it takes to bring a new airplane to flight, and it was
    something like 23 years as opposed to a new automobile or a new
    commercial plane. Those three things, automobile, commercial
    plane, and military plane, used to be the same, roughly, time
    frame 30 years ago, and today there is this dramatic
    difference.
        Are we focused on time as well as price?
        Ms. James. We are focused on both, and we project the mid-
    2020's would be the IOC [Initial Operating Capability] of this
    aircraft.
        Senator King. Well, I hope that there are structures in the
    contract too that strictly relate to this issue because, you
    know, the F-35 time was a real problem. I think Senator
    Inhofe's chart was 23 years now is the time to bring a new----
        Ms. James. There are, Senator.
        Senator King. One final quick point in terms of design.
    Because we are designing a structure, a platform, if you will,
    that will have a significant life, 20-30 years, I hope that the
    design concept includes--``easy'' is not the right word, but
    facilitates modularization and modernization without having to
    redesign the whole structure. I think that is very important.
    Otherwise, it is obsolete the day it takes to the air.
        Ms. James. You are right and it does.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Sessions?
        Senator Sessions. Thank you, Mr. Chairman.
        General Welsh, with regard to nuclear issues, as Senator
    King and Senator Donnelly, our ranking member on the Strategic
    Subcommittee, we have been dealing with these issues for many
    years. I think we have good bipartisan understanding of these
    issues. Deterrence is the key fundamentally to peace. It is
    important.
        Is it not true, however, that the Russians are aggressively
    pursuing nuclear advancement in making a number of--taking a
    number of steps to achieve that?
        General James. They are, Senator.
        Senator Sessions. Tell me about how you feel about it.
    Particularly within NATO [North Atlantic Treaty Organization],
    we have a dual aircraft that is capable of nuclear and
    conventional weapons. I understand that it is at least a week
    before that aircraft could be loaded and deployed to deliver a
    nuclear weapon. It seems to me that is the kind of signal that
    Russia might misread as not being alert and determined to use
    our nuclear capability if we have to. Do you think that is
    acceptable, and should we improve that delay time?
        General James. Senator, there are various levels of
    response time required by the NATO system. It depends on the
    qualification level of the crew, the current alert status of
    the crew, the NATO threat level that has been set at the time.
    Actually I think you can do it faster than a week. But this is
    something you have to pay attention to all the time.
        Senator Sessions. Well, I just think it is important for
    us, do you not, that we start our modernization program, get it
    moving to send a message to the entire world that we are not so
    shaken by the concept of nuclear weapons that we are not going
    to be prepared to defend ourselves if it happened. Do you think
    we need to be sure we are moving forward at a steady pace to
    maintain the nuclear arsenal, modernize it, make it more safe,
    but yet more effective if delivered?
        General James. Senator, I think one of the reasons we are
    facing this bow wave and recapitalizing the nuclear
    infrastructure is because we have not stayed on a steady pace
    with our investment in it over time. Now we are going to have
    to pay the price and prioritize our investment over the next 10
    to 15 years.
        Senator Sessions. Well, I think that is the conclusion of
    our subcommittee, absolutely. Over the last 20-30 years, we are
    the slowest nuclear power in the world to modernize and
    recapitalize our nuclear weapons system.
        With regard to this RD-180, Russian launch system, that
    goes into space, you have said this before, but I would like
    you to repeat it. Are you committed to transitioning off the
    Russian engine and to an American-made replacement as soon as
    feasible? Both of you can answer.
        Ms. James. Yes, absolutely.
        Senator Sessions. Well, Secretary James, how we do that
    could impact significantly cost. Is that right?
        Ms. James. Yes.
        Senator Sessions. Well, one figure you gave us, Madam
    Secretary, was $1.5 billion to $5 billion in cost. What was
    that?
        Ms. James. We agreed to do an analysis--and that analysis
    is still ongoing--of different possibilities of allocation
    strategies, one of which involves Delta on the one hand--so
    some of the launches going under Delta----
        Senator Sessions. That would be the Delta medium that is
    more expensive right now?
        Ms. James. That would be the Delta--I am looking around. I
    think is that the heavy? That would be the Delta heavy. Then
    there would be--the other side of the allocation would be the
    SpaceX variant. SpaceX would do the launches that it is
    certified to do, and the others would be done by the Delta.
        That approach would cost additional dollars to the Air
    Force budget, to the taxpayer, anywhere on the order of $1.5
    billion more to maybe as high as $5 billion more depending on
    when you would cut of the RD-180 and start this approach. There
    are various assumptions at play here, and we are still doing
    the analysis. Those figures are preliminary.
        Senator Sessions. Well, it is a bitter pill it is taking as
    long as it apparently is taking to replace the engine.
        However, I am concerned about cost, and I think that you
    have to be concerned. A billion dollars or $5 billion would
    impact your ability to do the things you have already been
    asked about, would they not, General Welsh? It would have to
    come out of your hide.
        General James. Senator, that is the problem right now. It
    is balancing this.
        Senator Sessions. Senator McCain and this committee is
    going to give vigorous oversight to that. But I think you
    cannot make foolish decisions and incur more cost than is
    reasonably necessary in this project. I really care about that.
        With regard to the long-range strike bomber, now named the
    B-21, we are talking about $550 million a copy I understand.
    That is half a billion dollars per plane. Just for a layperson,
    that seems like a lot. Are we missing something here in our
    entire process of procurement both in terms of how many years
    it takes to accomplish this and ending up with a cost this
    high? Or is there anyway to achieve the same quality and
    capability in a shorter time at less cost?
        Ms. James. Well, that figure that you quoted, the $550
    million, in fiscal year 2010 dollars is actually the price
    point that former Secretary Gates wrote into the acquisition
    strategy. Frequently in Defense, we do not pick a price point
    and then try to do the development and the procurement around
    that price point. The private sector does that all the time.
    Defense usually does not. This was a rather unusual program,
    and it was all about cost control. I know it is a lot of money,
    but it is a lot of capability for a lot of money.
        Senator Sessions. Well, thank you. My time has expired.
    Thank you very much for your service, both of you, and we will
    continue to work on these tough issues.
        Ms. James. Thank you.
        Senator Reed [presiding]. On behalf of Chairman McCain,
    Senator Heinrich.
        Senator Heinrich. Thank you very much.
        Secretary James, you mentioned at the beginning the focus
    on taking care of people. I still have very serious concerns
    that we are not adequately taking care of our RPA community,
    particularly our RPA pilots. I would certainly ask that the
    issue that Chairman McCain mentioned at the very beginning
    regarding bonuses be looked at again. You know, General Welsh,
    I know when we talked about this last year, the community was
    practically at the breaking point. As somebody who represents
    the Nation's premier RPA training mission in New Mexico, I am
    very pleased at the focus that has been put on this. I think
    that you, General Welsh and Secretary James, General Carlisle
    as well--we all very much appreciate the focus, but we have to
    do more because this is a very, very serious stressor and we
    are not seeing the relief that we need yet.
        You have heard from some of my colleagues concerns about
    this as well. I want to put a little different focus on it in
    regards to my question and focus specifically on the training
    element of the RPA [Remotely Piloted Aircraft] mission versus
    the operational challenges that we face right now.
        I want to ask what plans the Air Force has to invest in
    additional training facilities and infrastructure specifically
    at Holloman Air Force Base or at other locations to handle the
    increased workload that we see coming down the pipeline as a
    result of trying to fix some of these stresses.
        General James. Senator, this year in fiscal year 2017, the
    budget request asks for a little over $3 million to finish a
    GCS facility at Holloman so we can put the new Block 50
    cockpits in there when they arrive, also to house the current
    GCS so we get people out of trailers into a little more livable
    day-to-day environment.
        Next year we asked for more money because one of the things
    that has changed in our plan as a result of the ``get well''
    plan is that the 6th reconnaissance squadron, which has been
    doing the training for the Predator crews, was scheduled to be
    divested. We are now going to keep that, transition it to MQ-
    9's, build new facilities, equipment, and the infrastructure
    required to be able to train students in that squadron now.
    That will also be done at Holloman. I believe that is $43
    million here in the next couple years.
        Senator Heinrich. Fantastic. I think this focus is going to
    pay a lot of dividends down the road. I appreciate everything
    you are doing on this front.
        Secretary James, last year one of the things that I
    expressed concern about is the lack of modernization for our
    Air Force research laboratories. As you know, these labs play a
    critical role in developing and deploying next generation
    systems, improving acquisition program outcomes--we have spent
    a lot of time talking about that today--and in making sure that
    operational technical problems are solved in a reasonable time
    period.
        I am still highly concerned about this. I look at this
    budget and it invests heavily in modernization programs like
    the F-35, the B-21, but it seems to be continuing to
    shortchange the underlying infrastructure that develops the
    technologies that really set us apart from our adversaries in
    the world.
        What is the Air Force's plan to modernize its research
    laboratory infrastructure, specifically focused on things like
    MILCON [Military Construction] and increased flexibility for
    minor construction projects so that we have that infrastructure
    in place to support the kind of capabilities that we all know
    we need?
        Ms. James. Just a few points, if I may make, Senator. There
    are two Air Force-owned lab projects that are in the fiscal
    year 2017 budget, $13 million for a facility at Kirtland, which
    would be focusing on space vehicle research, and then there is
    a $75 million project for Eglin, and that would be focusing on
    advanced munitions and technology. Those are the two that are
    Air Force-owned labs that are in the budget.
        We also have dollars in the budget that will do the MIT-
    Lincoln Lab approach. That is a different form of a lab. We are
    advancing the ball on that.
        But let me come back to your overall point, and that is the
    infrastructure spending across the Air Force. This was one of
    the reductions that we had to make, one of the tough choices,
    along with some of the modernization choices and the other
    things that we talked about earlier. Neither one of us--I think
    I speak for the Chief too. We are not satisfied with the level
    of funding there. We are essentially shortchanging a lot of
    different areas and a lot of different facilities, but that is,
    again, a budget situation. A BRAC [Base Realignment and
    Closure] would certainly help for us to be able to shed excess
    infrastructure and that way we could spend the dollars on those
    facilities that we really need for the future.
        Senator Heinrich. I wanted to raise this for my colleagues
    because I think we need to understand that there are some very
    difficult tradeoffs being made here. We are certainly not
    meeting the needs of basic infrastructure, and it is one of the
    things we need to focus on with regard to research and
    development and also with regard to things like our ranges,
    which just simply do not also get the MILCON investment that
    they need to support all of our services, not just the Air
    Force.
        Thank you all.
        Senator Reed. On behalf of Chairman McCain, Senator Cotton,
    please.
        Senator Cotton. Thank you.
        Earlier this week, I chaired a classified hearing of the
    Airland Subcommittee about the B-21. It was a very worthwhile
    hearing. One thing I noted in that hearing is no member asked
    about the need for the next generation bomber. They understood
    the strategic threats we face and the capability it delivers.
    Obviously, there are many issues that we cannot entertain here
    in this hearing.
        But one thing I would like to hear from both of our
    witnesses on the question we asked in that classified setting
    is why will the B-21 be different. We have ongoing issues with
    the F-35. We were supposed to have 620 F-22's. We got 187. We
    were supposed to have 80-something B-2's. We got 20. Many of
    those decisions go back decades. There is not much we can do
    about that now. But what is it about the way the contract for
    the B-21 has been structured and about this aircraft that gives
    us the confidence, given the vital need for the aircraft, that
    we will, at the end of the program, in fact, have 100 aircraft?
    General Welsh, if you would like to start.
        General James. Senator, for it to be different, we have to
    make it different, which is going to require attention from
    this minute forward under this program at every level of our
    Air Force and the right kind of oversight provided by everyone
    from the Congress to the Department of Defense to our folks in
    Air Force Materiel Command and our acquisition chain.
        The difference to date has been the collaborative effort
    with industry before we even sent a request for proposal out to
    industry was, at least in our experience, incredibly good. We
    identified needs and the cost curve before we wrote the
    requirements for the RFP [Request for Proposals]. We set a
    requirements baseline for this airplane 4-plus years ago and it
    has not changed at all. We have held very firm to that. As a
    result, the industry teams who were competing were able to get
    way ahead of the game in terms of looking at integration of
    sensors onto the platform, final design work, et cetera because
    they were not worried about us changing a requirement that
    would cause them to reshuffle all that work again at some point
    in their development process. I think that is why we saw the
    fact that the actual price that they came in within their bids
    was lower than what we had put on as a requirement of the
    system.
        We have to keep that same kind of communication, that same
    kind of dialogue going from now forward. We cannot take our eye
    off this ball or it will drift like everything else has. We
    just cannot let it.
        Senator Cotton. Secretary James, do you have anything to
    add?
        Ms. James. First of all, I certainly concur with everything
    that the Chief said.
        Back to the actual strategy, we tried to learn from both
    successes and failures of the past acquisition strategies. We
    are approaching this differently. He mentioned the importance
    of having stable requirements, and in order to change a
    requirement, it requires the Chief of Staff of the Air Force
    himself to sign off on such a thing. There have not been
    changes.
        We went and we got two independent cost estimates because
    the other thing that we learned from the past is having proper
    estimates that are realistic is really important. We budgeted
    to a higher independent cost estimate to provide enough margin
    in the program. Then we structured the contract in a hybrid
    fashion, some of which is cost plus incentive for a portion of
    the contract, and a lot of it is in the firm fixed-price world.
    The period of development, which is cost plus incentive, the
    incentives are specifically structured so that the contractor
    will be incentivized to meet milestones on time. If they do,
    they make their maximum fee. It is also backloaded such that
    the contractor is incentivized to get through the cost-plus
    portion into production and into the firm fixed-price as soon
    as feasible and not drag it out in the cost-plus arena.
        Then if I could ask the Chief to just say a few words
    because the other part of the question had to do with the need,
    the Nation's need for the bomber, and how it will be different,
    given the threats that we----
        Senator Cotton. My time is running short. As I said, there
    was uncommon consensus in the subcommittee hearing about the
    need for this next generation bomber.
        General Welsh, I want to turn my attention to a more
    immediate practical matter. I hear from Arkansans who are
    flying missions in the Middle East right now over Iraq and
    Syria that our aircraft are in some ways facing a maintenance
    crisis, that we have F-15E's that are either not able to take
    off or having to return early because of their age and because
    of maintenance issues. Could you say a little bit more about
    this situation?
        General James. Sir, our fleets of airplanes are getting
    old. All of them are, except the ones just coming off the line
    now. We have now six fleets of airplanes that are older than 50
    years old, and we have 23 I believe that are older than 25
    years. Supplies are getting tougher to find. Manufacturers are
    diminishing. Cost of maintenance is increasing. Our aircraft
    availability is going down in virtually every system we have.
    It is just a fact of life right now in the Air Force. It is why
    we have to modernize. The cost of day-to-day operations in our
    Air Force is going up because the fleets are old.
        Senator Cotton. Well, you can imagine what it is like to
    hear from Arkansans who are either flying these aircraft or
    whose children are flying these aircraft. On the one hand, they
    see cost overruns on the F-35. They see brand new F-15A's
    destined for Saudi Arabia sitting on the flight line at St.
    Louis, and then they see what happens to pilots when their
    aircraft goes down over territory controlled by the Islamic
    State. Are we putting the kind of resources we need to into
    this immediate problem of the maintenance and flight readiness
    of these aircraft that are being flown every day by America's
    sons and daughters over a brutal terrorist army?
        General James. Senator, we pay an awful lot of attention to
    maintenance of our airplanes before we put people in them to go
    fly. I think that is reflected in the actual maintenance rates
    and the lack of emergencies over enemy territory for the last
    25 years. Our maintenance teams are remarkable. They are
    stressed because they are undermanned. We have built up a
    35,000 person ISR enterprise over the last 10 years or so while
    we cut the Air Force 50,000 people overall, which is an 85,000
    person cut to the rest of the 330,000 mission area in the Air
    Force. We are thinned out everywhere. That is the manpower
    problem. There is no place we can go to grab people because we
    are undermanned everywhere. Our people are working their tails
    off. They are doing great work. I feel comfortable about the
    safety of our crews who are flying these airplanes, but keeping
    them safe is getting harder and harder and more and more
    expensive.
        Senator Cotton. Well, thank you. My time has expired. But I
    think it is incumbent upon us as a committee to do everything
    we can to make sure that we are getting you the resources and
    tools that you need on the front lines, even as we are looking
    to the next generation of capabilities as well. Thank you.
        Chairman McCain [presiding]. Senator Nelson?
        Senator Nelson. Mr. Chairman, welcome.
        General Welsh, thank you so much for your long and very
    distinguished record.
        I just want to raise two questions that, while I am doing a
    markup, I am sure the chairman raised. One is the Russian
    engine, the RD-180. Madam Secretary and General, is it your
    opinion that we would buy the RD-180 as little as possible in
    order to protect us against a gap that we would not have
    sufficient engines to have access to space?
        Ms. James. I certainly want to buy it as little as
    possible. You said the magic word, sir, and that is assured
    access to space, which is the top job that we all have.
        The other element was we were trying to get to a
    competitive environment so that two companies could actually
    have a reasonable competition and that would be a good thing
    for the taxpayer, the industrial base, and so on. We did feel
    that a little bit more flexibility in the number of engines
    would help get us through that competitive environment to the
    transition and to such point that we have a fully capable
    rocket, plus an engine manufactured in America that is
    integrated and certified. We think that is a little bit more
    time and a little bit more flexibility would be helpful.
        Senator Nelson. I will just conclude this by saying that we
    are concerned about a gap of potentially three or four years
    where the only way to get to space is we could not go on the
    Falcon 9 because it does not have the lift capability of
    getting some of those payloads to orbit and would have to go on
    the Delta IV. But there you are talking about a much more
    expensive launch than the Atlas V, which could put those
    payloads to orbit. Is that correct?
        Ms. James. That is correct. Essentially it boils down to
    money. If you were to cut off the use of the RD-180's,
    depending on assumptions, the manifest would have to be changed
    and things would perhaps get delayed to a degree. But this is
    where I referenced that our analysis is still ongoing.
        Senator Nelson. Okay. I think we all want to get to the
    same place, and the bottom line is assured access to space.
        Ms. James. Right.
        Senator Nelson. Let me go over to the B-21. In this
    contract, we have got production at the end, and we have got
    development now. Because of the good work by the chairman on
    previous contracts, namely the tanker, and his concerns about
    the overruns, the chairman is quite concerned about is this a
    cost-plus on the development side. But you all, obviously,
    having been very sensitized to the fact of overruns in the
    past, indeed, as the chairman has pointed out, on the F-35, you
    wanted to make this as tight as you could going out on an RFP.
    In that development stage, you actually have about five units
    that are going to be basically at fixed-price. Is that correct?
        Ms. James. The contract that was let some months ago is for
    engineering, manufacturing, and development, and then it is
    also for the production phase, the LRIP [Low Rate Initial
    Production], what is called LRIP, the low rate initial
    production phase, and that will deliver to us a certain number
    of aircraft, 21, if memory serves me correctly.
        Senator Nelson. General, do you want to add anything to
    that?
        General James. No, Senator. Those aircraft are at a fixed
    cost after that, the first five production lines.
        Senator Nelson. I must admit in the classified briefings
    that we have had and that this Senator has had personally, I,
    knowing the sensitivity of the chairman, have hammered on this
    over and over with regard to watching the cost. I have been
    impressed with the Air Force doing everything that you can
    possibly do on a contract of this magnitude to make sure that
    you rein in those costs. It is our job to have the oversight
    and to make sure that you are doing the job. I want to commend
    you for what you have done thus far.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ayotte?
        Senator Ayotte. I want to thank the chairman.
        I want to thank both of you for your service to the country
    and your families as well. Appreciate it.
        I would like to ask you, Secretary James, about the Haven
    Well situation in Portsmouth that you and I have talked about,
    the PFC [Perfluorinated compound] contamination of the
    groundwater in Portsmouth, New Hampshire. This is something
    that I just have a couple of questions on.
        The Air Force submitted a report last September and found
    that as of September 15th, there were thousands of
    servicemembers, both Active Duty and Guard, as well as
    civilians, that may have been exposed to the PFCs there. I just
    wanted to get the update on what the plan is to contact those
    individuals.
        Then as a follow-up on this, the City of Portsmouth also
    just submitted recently a proposal to the Air Force on how to
    clean up the contamination at Pease. I understand that was
    submitted three weeks ago. I would like just to get a sense of
    when you expect the Air Force to respond to the City of
    Portsmouth. Obviously, I hope you will be transparent and
    responsive.
        Ms. James. On the second point, Senator, I am going to have
    to go back and check with our Assistant Secretary for I&E just
    to see where that proposal stands. I have not seen that
    proposal myself.
        Senator Ayotte. If you can submit just when you expect to
    respond for the record, that would be helpful. Thank you.
        Ms. James. I will do that.
        You are right. You and I have talked about this. Sometimes
    as we as a country and as a military, in our efforts to protect
    people, sometimes communities get contaminated to a certain
    degree. We regret it and we stand by it, and we are prepared to
    take the right action and clean it up.
        We have notified airmen, including former airmen, of what
    has happened so that they are aware of it, and that occurred,
    if I recall correctly, by mid-December. That happened some time
    ago. We are going to clean the water.
        We are also working with the CDC [Centers for Disease
    Control] on the matter of developing a plan for health
    monitoring. They have the lead, but we are working with them.
        Senator Ayotte. Excellent. I would just urge you with
    Portsmouth submitting the proposal, that you work very closely
    with the city and in a transparent manner so that we can really
    get this cleaned up and also get treatment or support for
    anyone who has been affected. I appreciate that. Thank you.
        General Welsh, I would like to ask you when do you expect
    the SDB-2 to achieve a demonstrated full mission capability for
    the F-35A.
        General James. Senator, I will have to get the date. I do
    not know that off the top of my head.
        Senator Ayotte. I think we have, in some documents, heard
    from your staff that it is not going to be before 2022, but if
    you can get me the exact date, I would appreciate it. Thank
    you.
        Senator Ayotte. I would also like to ask you--I know that
    Senator McCain had asked you some questions about the A-10. How
    many A-10's will be grounded in fiscal year 2018 due to
    unserviceable wings and also how many in 2019?
        General James. Senator, our intent would be for none of
    them to be grounded for unserviceable wings. A-10's that are in
    the fleet we need to keep flying.
        Senator Ayotte. Excellent. I am glad to hear that.
        As I understand it, there needs to be some work done on the
    A-10 wings. Does the Air Force plan to submit a reprogramming
    request to ensure that that support is there? Because I
    understand there is going to need to be some work done or some
    enhanced wing assemblies.
        General James. Senator, my understanding of this is that we
    have the funding and the wings necessary for fiscal year 2017,
    and we have a decision point during this year that we will
    reach where we have to make a decision on acquiring them in
    2018 and beyond. If that is not accurate, I will get you the
    right answer shortly after this hearing.
        Senator Ayotte. Well, one thing I understand is that there
    are 110 more wings that are needed. Am I hearing you say today
    that you are committed to ensuring that these wings are
    repaired and that they remain, obviously, operational so that
    we can continue to use the A-10 as it is doing, as I understand
    Ash Carter, the Secretary, has recently said, a great job in
    the fight against ISIS [Islamic State of Iraq and Syria]?
        General James. Senator, they are doing a great job in the
    fight against ISIS and everywhere else we use them. Anything
    that we have in our inventory that needs modifications to stay
    safe and effective, our intent is to continue to do that.
        Senator Ayotte. Okay. I appreciate that.
        I also want to ask about what is happening in the boneyard
    right now with the A-10. As I understand it from information my
    office has gotten, in 2014 the Air Force scrapped or destroyed
    about 44 A-10's, and even beyond that, as I understand it, in
    2015 as well, there were a number of A-10's scrapped, to a
    total of 82 A-10's scrapped in the boneyard. The cost to
    destroy one of these A-10's is, as I understand it, $15,500 per
    A-10. One thing I am concerned about, as we have the A-10's out
    fighting the battle against ISIS, we have the Air Force
    spending about $1.3 million in the last 2 and a half years
    destroying A-10's. Are there no parts on those aircraft that
    were destroyed that could have been used to support the A-10's
    that are being deployed now? Is that not why we keep--one of
    the reasons we keep them in the boneyard?
        General James. Senator, the word ``destroy''--I have to
    define that. I do not know what that means. I do not know if
    that means they disassembled them and took parts of the
    airplane to use as spare parts, which would be normal. I do not
    know the facts on this case, Senator. I will find out for you.
        Senator Ayotte. Well, I hope you would because, as I
    understand it, we have been told that there are plans to
    destroy a total of 79 A-10's this and next fiscal year. What I
    would like to understand is if we are destroying these A-10's,
    is this being done prematurely, number one, given obviously the
    concerns we have about the close air support capacity and also
    the concerns that we ensure that we are getting the right parts
    to keep our flying A-10 fleet in really full maintenance
    operational capacity? Can we make sure that we get an answer to
    that?
        General James. Yes, ma'am. We will get you an answer for
    that. There is certainly no intent to not have flying airplanes
    fully serviced with spare parts. I doubt very seriously if
    anything is going on that is causing that to happen. But I will
    get you the facts. I just do not know.
        Senator Ayotte. Well, I appreciate it. I appreciate the
    follow-up on both the wing issue, which is critical to make
    sure that our A-10's keep flying and also on the boneyard
    issue. Thank you, General.
        Chairman McCain [presiding]. Senator Kaine?
        Senator Kaine. Thank you, Mr. Chair.
        Thanks to both of you, Secretary James, General Welsh. It
    is always good to have you here.
        I want to ask about two things: budget and Air Force sort
    of strategic thinking about unmanned platforms. On the budget
    first.
        In your testimony, you talked a bit and offered I think
    appropriate thanks to our chair and ranking member on the two
    year budget deal that we struck in October and the
    appropriations bill that we followed up with in December.
        We have now done two two year budgets in a row. Painful
    getting to both of them. But to me the two year budget deals
    sort of have three strong pluses.
        One, two years gives you more certainty than one year. I
    think certainty is good.
        Second, in the two year budget deals, we have treated the
    BCA caps as a discipline but not as straitjacket. It is sort of
    a starting point, but in each of the two year budget deals,
    Murray-Ryan in December 2013 and then the deal in October, we
    used the caps as a starting point, but we adjusted off them to
    take account of current realities.
        The third positive about this deal in my view was that it
    expressed a preference for base funding over OCO [Overseas
    Contingency Operations] funding, and it was something I think
    everybody on this committee wanted to get to. There is a role
    for OCO, but we should not use OCO generally just as a way to
    end run the caps. We should try to, again, provide more
    predictability by putting funds in the base when we can.
        There is a little bit of discussion going on up here now. I
    am on the Budget Committee too. More of it is on the House side
    than the Senate side about whether we should undo the second
    year of the two year budget deal and just revisit it and maybe
    do something different. I strongly opposed that on the theory
    that two year budget deals are providing certainty and why
    would we want to now kind of throw that up in the air and
    inject more uncertainty in the situation.
        Would you agree that a two year deal provides a certainty
    that is helpful to you and, if at all possible, we should kind
    of try to stick with it?
        Ms. James. I certainly agree that having certainty is an
    excellent thing and the two year budget deal does give us that
    certainty. Not so much from my military work but from my
    professional staff member work when I was on the House Armed
    Services Committee, I would tend to agree. If you do that to
    the deal, if you open the deal, it might open up a hornets'
    nest. But again, I say that from my past experience.
        As you heard both General Welsh and I note, and many of the
    members have noted, there are all these programs that people
    are concerned about. We are concerned about them too. We
    certainly could use more money. But I as an American citizen
    would not want to see the deal reopened and then everything go
    poorly as a result and lurch toward a government shutdown and
    things of that nature. Stability is pretty key.
        Senator Kaine. General Welsh, additional comments?
        General James. Senator, all the concerns about the makeup
    of the budget plan we share, but stability is a wonderful thing
    actually, especially in the environment within the last few
    years.
        Senator Kaine. It seems to me maybe we have kind of
    blundered into--I am not sure we have gotten there completely
    intentionally, but we have blundered into a positive where you
    do a two year budget deal, then a 1-year appropriations deal.
    The two year budget provides some general certainty, and when
    you get the first year appropriations bill done, that gives you
    some predictability, but it also gives you the ability in year
    two to alter the appropriations line items to take account of
    some reality. You get some in-the-ballpark certainty with the
    ability to kind of true things up in the second year. It is my
    hope that we stick with the two year deal and do not do another
    one.
        I want to ask you about unmanned platforms and really
    bigger picture kind of strategically how you approach it. I was
    reading last month a series of articles about the CBARS of the
    Navy. It is carrier-based aerial refueling system tanker that
    they are working on that I think the committee has supported.
    It kind of made me wonder within the Air Force how doctrinally
    do you approach the analysis of platforms to determine this
    could be profitable to go, an unmanned direction. These would
    be platforms we would never want to go unmanned. All my
    military LAs [Legislative Liasons] have always been people who
    have flown things, and so I am all into pilots. But I am just
    kind of curious about how you approach this question for your
    future investment about what can be done unmanned and what
    necessarily needs an onboard crew.
        General James. Senator, I think we start with where does
    having an unmanned platform in some way, shape, or form make
    the mission either more cost-effective or more successful. An
    example initially was ISR [Intelligence Surveillance
    Reconnaissance]. You can actually orbit over a point in space--
    you can monitor a target for hours and hours and hours beyond
    what the human body can tolerate. But we have less than 10
    percent of our aircraft fleet is unmanned at this point in
    time. That will likely grow over time. When it becomes safe
    enough to fly unmanned systems that move freight over time and
    distance in a predictable way with the autonomy to manage
    routes, et cetera, I think you will see it grow there.
        We have to be careful about cost curves that look a lot
    like airplane cost curves that we have discussed earlier for
    unmanned systems. That will not work. We cannot keep going
    bigger and more cosmic. We have to go smaller in some cases and
    look at augmenting manned platforms. You know, swarms is a
    great concept. If it can be managed from an airborne platform
    or remotely by a human in the loop, they would become
    incredibly effective very, very quickly.
        We are looking for those ideas where it is practical, it is
    affordable, and we can build a program we can execute in the
    near to mid-term before we start to change a mission area to
    remotely piloted with vehicles.
        Senator Kaine. You mentioned the swarm concept. We have not
    spent too much time talking about that here, but I gather that
    that is a very important component of this thinking about sort
    of the third offset. If that is going to be a big strategic
    direction going forward, that would necessarily involve the
    innovation around the creation of new unmanned platforms.
        General James. Yes, sir. Man-machine interface coupled with
    autonomy, coupled with thinking systems is exactly what the
    third-rail strategy is all about. We have been working on this
    for the last couple years.
        Senator Kaine. How much of that work--oh, I am already
    over. I am sorry, Mr. Chair. I will stop there and follow up
    later.
        Chairman McCain. Senator Rounds?
        Senator Rounds. Thank you, Mr. Chairman.
        I just want to go back just a little bit. I also attended
    the classified briefing on the B-21. I was curious about when
    we talk about this hybrid contracting strategy of the cost plus
    incentive and then the fixed-price, have you ever used it
    before. Clearly there was a logic and you understood the need
    to look at keeping our costs under control and working it
    through. You have touched about it here with Senator King a
    little bit and so forth. But is there anything else with regard
    to the approach that was determined that we really have not
    delved into today that you think should be said?
        Ms. James. I think we have covered it fairly well today,
    Senator. The key components are thinking how we look to the
    programs of the past, both those that had done poorly and those
    that had done well. Given the specifics of this program, some
    of which involves mature technologies, that suggests less risk,
    but when you are talking about a never-before-developed
    platform and then the very important integration, that suggests
    that there is risk. As I mentioned for that development phase,
    we did think cost plus incentive was the way to go but
    carefully constructing those incentives to get the types of
    behaviors from the contractor that we seek.
        The Chief is in charge of requirements. The stable
    requirements is very important. We think we have budgeted well
    for this. We took the independent cost estimate and we budgeted
    to that level, which is higher. That gives us a margin of
    protection, and we are looking to move into the production
    phase, which is firm fixed-price, as quickly as is feasible.
    The incentives are structured to make that happen.
        Echoing what the Chief said, it ultimately will come down
    to persistent focus and the human beings who will be overseeing
    this to keep it on track. Certainly we--and there is another
    team of people as well. We are very committed to doing that.
        Senator Rounds. With regard to your readiness goals, the
    priorities and the responses that you have to demands that are
    there right now, how would you assess the high-end combat
    skills such as those that would be employed against a near peer
    competitor? I know we are talking a little bit about the A-10
    and so forth, and I know that in its current environment there,
    it has a high survivability rate. If you are talking about near
    peer competition, there may be some real challenges with the A-
    10, but that would not just be the A-10. It would be other
    areas as well.
        What would you believe to be the biggest obstacles in the
    Air Force's readiness recovery?
        General James. To answer your first question, sir, how do I
    see us against a very tech savvy, well-equipped foe, we are
    rusty. That is not what we have been doing for the last 25
    years. We have been operating in a different environment.
        I think the key being ready for the full spectrum of
    operations that we could potentially face is consistent and
    persistent investment over time in the mission critical
    infrastructure that allows you to train to that level. We have
    heard discussion from Senator Heinrich, for example, about
    training ranges, black and white world test infrastructure,
    simulation infrastructure so that you can actually simulate a
    threat that our fifth generation capabilities will be operate
    against. Building that in the real world in a training range is
    cost-prohibitive. We have to get into the simulation business
    and go to virtual constructive and then add live training into
    it.
        All those things have to happen to develop a force over
    time, and that is the long-range readiness issue that we have
    to invest in now to recover. That will take us 8 to 10 years
    once we have a chance to reset the force from what we are doing
    today, which is not going to happen soon.
        Senator Rounds. I have got just about a minute left, but I
    am really curious. You talk long-term. What about the near-term
    and mid-term readiness rebuilding efforts? Can you rank
    basically how this is fitting in with the need to modernize
    specifically the purchases of the F-35, the KC-46, the B-21,
    the cybersecurity needs that we need to address, the
    capabilities, the ISR priorities? How does that fit in terms of
    the rebuilding efforts right now for modernization that we are
    challenged with as you talk about? How does it fit in?
        General James. Senator, for us it has to fit in at the top
    of the priority list. The prioritization right now in our
    budget, as we make decisions, wherever we can, we prioritize at
    this point manpower, size of the force. We cannot get any
    smaller. We just cannot do what we are trying to do right now
    plus anything new if we get any smaller.
        The second thing is readiness because when the Nation
    calls, we have to be able to answer.
        Then the third thing is modernization. This year, what you
    are seeing in our budget is we have cut the force for 25 years
    straight, and now we cannot cut it anymore and still do our
    job. We cut readiness for about 10 years to pay for
    modernization, and about five years ago, we decided we cannot
    do that anymore. We are not going to be ready enough as a force
    to do the job if we are called.
        Now the only place we have left to go for money to balance
    things out is modernization. That is what the budget reflects.
    That is why you are seeing the F-35 slid to the right, even
    though we have been trying to protect it. You are seeing other
    programs that make F-16's and F-15's viable in 10 years against
    the threat we expect then are being delayed because we just do
    not have the money to do it. It is a balancing act, Senator.
        Senator Rounds. Thank you, Mr. Chairman.
        Chairman McCain. Senator Donnelly?
        Senator Donnelly. Thank you, Mr. Chairman.
        Secretary James, I want to start by thanking you for the
    time you spent with me at Grissom Air Base in Indiana last
    year. It sent an important message to the men and women of
    434th and the communities that support them about the
    importance of their mission.
        Madam Secretary, when do you anticipate we will see another
    KC-46 basing opportunity for a Reserve-led unit? Either one can
    answer.
        Ms. James. Yes. Chief, if you have that date or do you have
    it written down?
        The next time a basing decision for a Reserve unit. Is that
    what you said, sir, for the KC-46?
        Senator Donnelly. That is correct.
        General James. I think the next update will be actually
    late winter this year, late this year, early next year, and
    then that will be the decision that has already been announced
    for MOBE-4. The primary base has already been identified and
    the alternates have been identified. That environmental study
    has now started and it will be done the end of this year.
        The next one, I believe, starts--the next study--we are
    going to start looking at it in late fiscal year 2017--or
    excuse me--calendar year 2017 for the next selection of the
    next KC-46 base.
        Ms. James. Would that be for the Reserve----
        General James. I do not remember which is the next----
        Ms. James. We are going to get back to you on this so that
    we get you a good time frame.
        Senator Donnelly. In the last basing decision, the Air
    Force emphasized the importance of Reserve-led associate units,
    which aligns with the recommendation of the Air Force
    Commission report that recommended expanding the number of
    associate units. Do you anticipate that the Air Force will be
    creating more Reserve-led associate wings in the future?
        Ms. James. I am very interested in associate wing
    structures, and so we cannot say for sure, but we are pushing,
    pushing, pushing for additional integration at all times. I
    think it certainly is a possibility and we will just have to
    continue to review as we go forward.
        General James. Senator, we mentioned the integrated wing
    that we will start testing this year. That integrated wing is
    actually a Reserve wing, and it will be led by a Reserve
    commander with Active Duty fully embedded inside the wing.
        Senator Donnelly. Secretary James, when we talk about the
    growing threats to U.S. air superiority, many people assume we
    are talking about a distant prospect of direct conflict with
    countries like Russia and China. But while that is a reality,
    we also need to be prepared for a more immediate concern, which
    is the spread of advanced Russian and Chinese weapon systems
    into the wars we are already fighting. We are seeing advanced
    air defenses spread to countries throughout the Middle East and
    Africa, including Syria where our pilots are already flying.
        General Welsh, understanding we are in an unclassified
    setting, how concerned are you for our airmen and women if they
    have to face systems like Russia's S-400 in the near future?
        General James. Senator, I am very concerned about it. That
    is why I keep insisting that we have to modernize. An air force
    that does not stay ahead of the technology curve will fail. 53
    countries today are flying Russian fighters around the world.
    They will export their new capabilities as they field them, and
    their new capabilities will be better than our old stuff.
        Senator Donnelly. General, are you willing to provide us,
    you know, as time provides, a classified briefing regarding the
    threats our airmen are facing even not so much with Russia and
    China but where their equipment is being utilized?
        General James. Sir, I would be honored to do that.
        Senator Donnelly. Thank you very much.
        Secretary James, is the Air Force committed to commonality
    as a means to modernize and maintain the triad in a way to work
    together to not only be more efficient but also help on the
    budget end as well?
        Ms. James. We are definitely actively exploring different
    elements of commonality with the Navy as we together are
    looking to modernize the three legs of the triad. Yes, we are
    looking at that very closely.
        Senator Donnelly. Thank you, Mr. Chairman.
        Chairman McCain. Senator Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman.
        Madam Secretary, General Welsh, thank you for your
    testimony.
        I want to begin by just thanking you and the airmen you
    lead for what you do. You know, your testimony highlights a lot
    of things that I do not think most Americans are aware of like
    constant combat operations for a quarter century. It is
    remarkable. The broader number of areas in which you
    specialize, fighters, close air support, ISR, strategic
    airlift, two-thirds of the nuclear triad, GPS [Global
    Positioning Systems] systems.
        You know, my State sees a lot of this on a daily basis. As
    you know, the F-22 fighter squadron just recently deployed to
    Korea and Japan as a show of force for our allies there. We are
    intercepting Russian bombers again almost on a weekly basis.
    You know, in Alaska, we have become the combat air power in the
    Asia-Pacific, if not for the country, in terms of F-16's, F-
    22's, C-17's, KC-135's, AWACS, HH-60's, the C-130's, F-35's
    come in JPARC [Joint Pacific Alaskan Range Complex] . I just
    appreciate and see a lot in terms of the airmen that you are
    leading.
        Let me ask a basic question. Actually two. How is morale?
    When you are here testifying talking about cutting forces,
    cutting readiness, that has got to impact morale.
        Then a broader, more strategic question, you are here
    talking about a budget that is cutting our ability to do what
    the Air Force does best, the smallest Air Force in our history.
    Why do you believe the President or Secretary of Defense is
    putting forward such a small budget? Why do we not begin with
    morale?
        General James. Morale actually, if you visit as many airmen
    as I am privileged to visit and Chief Cody is privileged to
    visit and Secretary James is privileged to visit, you walk away
    with the perception that morale is pretty darned good. They are
    a little tired.
        Senator Sullivan. Great.
        General James. They have questions. They are concerned
    about the future because they actually are very connected to
    what goes on in this city and all these issues we have been
    talking about.
        Senator Sullivan. Right.
        General James. They pay attention. Even our very young
    airmen do. All the services are this way now. They are worried
    about their future, the future of their mission set, what is
    happening to their airplane, their squadron, their family
    services. All those things are of interest to them. They sense
    this pressure on resources, which is going to affect those over
    time. But when it comes to how proud they are of who they are,
    of what they represent, of the people they stand beside, and of
    how well they do their job, morale is not an issue.
        Senator Sullivan. That is good to hear.
        How about on the budget?
        General James. I think the budget is--well, you will have
    to talk to the President and the Secretary of Defense to get
    why they are submitting the budgets they are, sir.
        But I will tell you this, the folks in the Air Force just
    see what we are asked to do and they want to do it better than
    anybody else on the planet can do it. When they do not feel
    they have the right tools to get that done or there are too
    many things to do for the number of people they have standing
    around, they get frustrated by that.
        Senator Sullivan. Let me ask on the F-35's. You know,
    Lieutenant General Bogdan has highlighted that you are
    beginning to reduce the unit price of the F-35A to well below
    $100 million, but your budget proposes to decrease procurement
    to 43 from 48. Does this risk undermining or reversing the
    reduction of unit costs in terms of what you have been able to
    do to drive down costs?
        Ms. James. I was going to say we do not believe so, not for
    the short run. The reason for that, because when you decrease
    the buy, ordinarily the unit cost does go up, but what the
    dynamic is over the next several years is that because of the
    FMS [Foreign Military Sales] buys being higher, we believe that
    the unit cost will be stable, reasonably stable, and not go up
    dramatically because of this. As you said, General Bogdan is
    very focused on cost control and continuing to do better and
    better.
        Senator Sullivan. Do you believe that the reduction in
    procurement--is that going to impact the arrival of F-35's that
    are scheduled in places like Eielson or other bases around the
    country?
        General James. Senator, over the next 15 years--if we
    stayed at the lower production rate, over the next 15 years, it
    would mean two fewer squadrons to field between now and 2030.
    It is going to affect someplace.
        In the near term, it will not have a dramatic effect
    because we will be standing units up. But by 10 to 15 years
    from now, you will start to see a delay in beddown of units.
        Senator Sullivan. Let me ask one final question. I want to
    follow up on what Senator King had talked about on the
    procurement timeline and how the procurement timeline for major
    weapon systems has increased dramatically over the years. In
    the NDAA [National Defense Authorization Act] last year, the
    chairman and others on this committee were very focused on
    giving you more authority over procurement.
        What do you believe is the most important thing we can do,
    either the services or the Congress or both, to help bring down
    the procurement timeline of major weapon systems that we have
    seen grow over the years that I do not think anyone is
    satisfied with?
        Ms. James. Well, first of all, the changes of last year I
    think are very positive. To the extent now that the Air Force
    and the Navy and the Army will be able to be the MDA [Milestone
    Decision Authority], the decision authority for milestones,
    going forward on some of the newer programs, I think that will
    help as we go forward.
        My advice to you would be to continue--and we do the same
    thing with our regulations--continue to look to streamline,
    wherever possible. Sometimes we have the approach of lots and
    lots of oversight. We do this. You do this. Although that is I
    think a good idea on troubled programs--we have to do that when
    things have gone amiss--sometimes you need to ease up a little
    bit on the vast majority of programs that are actually going
    quite well. Because we have a set of rules that tends to apply
    to most programs at a certain dollar level, even the programs
    that are executing well, nonetheless, have the weight of what I
    will call a lot of oversight. I would say continue to look
    streamline, and we should do the same thing on our end.
        Senator Sullivan. General, any thoughts?
        General James. Senator, I believe that really reform
    acquisition--you should start will smaller programs and look at
    them in a very concentrated way. Ninety-five percent of the
    acquisition programs in the Air Force are cost and schedule.
    They do not get the same attention the big programs do, but
    they are going tremendously well, and they normally do.
        If you identified some category of those smaller programs
    and went to the program managers and their industry partners
    and said, what can you do to take 50 percent of time and 25
    percent of cost out of your small program and then gave them
    leeway to do that and looked at the results, we may be able to
    learn which things are not adding value to the process and then
    bring those up into the bigger programs.
        When we start with the big programs, nobody really wants to
    give up oversight control, and it is harder to make change that
    way. But we have got a lot of programs that work really well.
    Let us make them work much, much better and then learn the
    lessons from that to change the enterprise.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        I would like to continue the line of questioning that
    Senator Sullivan began on the F-35. The delay in procurement of
    five F-35's was accompanied also by the pushback, the delay in
    60 aircraft per year as a procurement plan. You are saying
    today that will not increase the per-unit cost because there
    will be FMS, foreign military sales? By what countries? What
    increase in per-country sales by what countries and when?
        Ms. James. I will have to get you that detail.
        Senator Blumenthal. Well, how can you testify, with all due
    respect, that you are confident that the per-unit will not rise
    when you cannot tell us what countries will be buying more of
    the aircraft?
        Ms. James. General Bogdan, the program manager, has
    informed us that because of FMS buys, he does not project that
    the unit cost will go up in a substantial or material way. That
    is his assessment.
        I will get you the list of FMS customers.
        Senator Blumenthal. Do you have information as to any
    countries that will be buying more?
        General James. Senator, I know countries' air chiefs who
    have talked to me about their countries' desire to buy into the
    program. They have not fully committed to the program yet, and
    I do know there are air chiefs who would like to buy more in
    the near to mid-term. With your permission, rather than talking
    about them publicly, I would be glad to give you--tell which
    ones those are after the hearing.
        Senator Blumenthal. I think this is an important point
    because we know what happens when sales decline. Ordinarily, as
    Secretary James has observed quite rightly, the per-unit cost
    rises, and the viability of this program really depends on it
    being affordable and the credibility of the companies and the
    entire Air Force budget depends on this kind of information. I
    certainly would appreciate that information, and I know--I
    agree with you--that there are countries that would like to buy
    more, but we also have seen that other countries are as hard-
    strapped as we are, in fact, even more so because their
    economies may be less robust than ours. That kind of
    information is really important.
        How important do you think that the F-35 program is to the
    Air Force modernization plans, General?
        General James. Sir, the F-35 program at this point in time
    is essential to our modernization program. Capabilities are
    going to be fielded by both China and Russia in the next five
    to six years, if not a couple years sooner, that will make
    airplanes that we have in the fleet today, except for the F-22,
    not competitive. We have to have some level of ability to
    compete with those threats in the future.
        Senator Blumenthal. Well, I agree with you completely,
    which is why I am so concerned about the affordability of the
    program and the trust and confidence of the American people
    that it can be done within the limits of what our spending can
    be.
        Let me turn to the----
        Chairman McCain. Before you leave that issue, it is well
    known that the new Canadian Government is reconsidering their
    commitment to buy the F-35. That is amazing. I do not know
    where the witnesses have been residing, missing out on these
    international decisions that are clearly under review by many
    nations because of the cost of the F-35.
        Please proceed.
        Senator Blumenthal. Thank you, Mr. Chairman.
        Let me turn to the National Guard and Reserve units. I
    know, Madam Secretary, you had responsibility as an Assistant
    Secretary for our Reserve program. I am concerned that the
    Active Air Force is receiving C-130J aircraft. Our National
    Guard and Air Force Reserve will still be flying the C-130H.
    Perhaps, General Welsh, you could tell us a little bit about
    your strategy for outfitting the Air National Guard and Air
    Force Reserve with the most suitable modern aircraft.
        General James. Thanks, Senator. I think it is important to
    remember how we ended up where we are. When we built the C-
    130H's, the newest C-130, we put it into the Guard and Reserve,
    and the Active kept the C-130E model. The newest fleets were in
    the Guard and Reserve. Then the C-130J came along and it was
    time to recapitalize the oldest C-130's which were in the
    Active force. That is why the C-103J went there first.
        The C-130J buy ends at the end of this FYDP [Future Years
    Defense Program] essentially as we finish populating our Air
    Force Special Operations Command C-130J fleet. We believe that
    we need more C-130J's in the total force. We right now are
    building and have almost finalized the modernization plan for
    the entire fleet. We are doing this in conjunction with the
    Guard, the Reserve, and the Active Duty. It is led by Air
    Mobility Command. Every State TAG [The Adjutant General] is
    going to be part of this review process and final affirmation
    of the plan. We will do the AMP [Avionics Modernization
    Program] increment 1 and 2 to do the near-term and the far-term
    navigation update, and then modernization of those C-130H
    models. As part of that plan, we will identify units at the
    back end of that modernization for increment 2 as ones that
    would probably be the best choice if we can generate funding
    for C-130J between now and that point in time in 2028 to start
    populating those squadrons with C-130J's wherever we can get
    the money to do it.
        We need to modernize our 130 fleet. All these units are
    fantastic units and contributing routinely to the joint fight
    around the world.
        Senator Blumenthal. I agree totally. They are fantastic
    units. They are contributing greatly, and they need a
    modernized fleet. Thank you for making that point.
        My time has expired, but if you have additional details, I
    would welcome them in written form. Thank you very much,
    General. Thank you, Madam Secretary.
        Chairman McCain. Senator Graham?
        Senator Graham. Thank you, General. Thank you very much for
    your service. Secretary James, thank you for coming.
        Your favorite topic, the A-10. If you had all the money
    within reason in the world, would you keep the A-10 or would
    you want to retire it?
        General James. I would keep the A-10 and build a new low-
    threat CAS platform. I would replace the A-10 with it when it
    was fielding, and I would use the other money to build manpower
    to stand up the F-35 in the Air Force. We need the capability.
    We are stressed. We have been for 25 years. We are downsizing.
    That is what I would do, and I think it is a logical plan. We
    just do not have the money to do it.
        Senator Graham. I think that is the point. We are having
    all these fights about the A-10. But it is a budget-driven
    problem.
        General James. Sir, this is not about the A-10 at all. It
    is about having to make decisions. I find myself in an almost
    surreal position arguing to divest things I do not want to
    divest, to pay a bill we were handed in law, and we are not
    being allowed to pay it by the institution that passed the law.
        Senator Graham. What do you think is the biggest
    consequence of sequestration to the Air Force thus far?
        General James. My opinion. I will let the boss jump on
    here, sir.
        But, Senator, my opinion is it is not really the mechanism
    of sequestration. That was a shock in 2013. It is more the
    Budget Control Act caps and how they have reset the sense of
    what is good in a budget. We are still $12 billion below what
    we had planned even four years ago for our budgets. All the
    force structure that we had in place in the Air Force at that
    time that we have had trouble divesting was based on a top line
    that was $12 billion to $20 billion per year more than what we
    are going to have going forward. We have to make some very
    difficult decisions to live within that top line.
        Senator Graham. If we go back to sequestration, what awaits
    us from an Air Force point of view?
        General James. Exactly what we saw in 2013, sir, decreased
    training, decreasing readiness, much more frustration on the
    part of our people. When they looked out windows at airplanes
    they could not fly, we had a problem with moral then. If we do
    that again, we will have a much bigger one than we did last
    time.
        Senator Graham. Is it affecting families?
        General James. I think it affects families' concern more
    than it directly affects families, to be fair. We have done a
    pretty good job of protecting family programs. But the tension
    associated with it, the concern about the future of their
    platform, their unit, their tasking affects everybody.
        Senator Graham. In your time in the military, have you ever
    seen more threats to the Homeland than you do today?
        General James. No, sir, not threats to the Homeland.
        Senator Graham. Secretary James, anything you want to add
    right quick?
        Ms. James. I would just add that every program that has
    been discussed here today is a good program, and it all comes
    down to money. Somehow if you have got to balance your books,
    as we have to submit a budget each year, you have to make
    choices about what you are going to invest in and what you are
    going to cut. None of the cuts are easy cuts. They all hurt
    some element of the force. Every single program pretty much
    that has been discussed here today falls into that category.
        As the Chief said, we always ask at every juncture Congress
    to work with us. I know this committee has been leaders in this
    regard, but to convince everybody else that we have to lift
    sequestration permanently because, of course, it will come back
    to us in fiscal year 2018 if action does not occur.
        Senator Graham. The Russian rocket problem is not a
    sequestration problem. Is it?
        Ms. James. That is one and the contract strategy for the B-
    21 is one that we discussed here today. But most of the other
    issues I think have related to money.
        Senator Graham. Why do you think we have such fights with
    the Air Force in this committee? They seem to happen a lot.
        Ms. James. Well, these are lively discussions from our
    oversight committee and the people who are executing on the
    programs.
        Senator Graham. Does it make sense to you what we are
    trying to say about the Russian rockets--the committee?
        Ms. James. It certainly makes sense and I agree and I too
    want to get off the reliance of the RD-180 as quickly as
    possible.
        General James. Senator, can I make one comment?
        Senator Graham. Sure, absolutely. But tell me how does this
    movie end with the Russian rocket debate. But go ahead. I am
    sorry.
        General James. Well, let me slip back to the fight comment
    you made. I think the discussions we have, whether it is my
    discussion earlier with the chairman or it is any other
    discussions we have with members of the committee, come from
    the same passion for providing national security for this
    country.
        Senator Graham. It just seems that we fight more with the
    Air Force than anybody, and I am in the Air Force--or used to
    be, anyway. Still am in my own mind. Just take that back. I
    mean, we got four branches of the service. We seem to tangle
    with you all more than anybody, and it is not that we do not
    respect the Air Force. I certainly do. It was one of the
    highlights of my life to have been a part of it.
        But you promise us, Secretary James, that this rocket
    engine thing is going to end well, that Senator McCain will be
    pleased one day soon?
        [Laughter.]
        Ms. James. I promise you we are working very hard on the
    problem. We are getting all of the analysis done, and I am sure
    at the end of the day, you know, we will get your guidance,
    your law that will pass. The new NDAA will settle it going
    forward.
        Senator Graham. Well, that will be a good day.
        Thank you both. Thank you, General Welsh. You have provided
    really good leadership at a tough time for the Air Force. I
    sincerely mean that.
        To all those who fly, flight, our job is to let you win.
    Thanks much.
        Chairman McCain. Well, to illustrate the point, I received
    a letter today after several months from Secretary James saying
    that concerning the Russian rocket, quote, assuming a Delta-
    Falcon phase two split buy, the pre-decisional Air Force
    estimate projects a cost in excess of $1.5 billion. This
    morning you said not $1.5 billion. You said $5 billion.
        Ms. James. I said somewhere between $1.5 billion and $5
    billion, depending on the assumptions and when RD-180 access
    would stop.
        Chairman McCain. Actually I quote. Assuming a Delta-Falcon
    phase 2 split buy, the pre-decisional Air Force estimate
    projects a cost increase in excess of $1.5 billion. It does not
    mention $5 billion in this letter, Secretary James. I can read
    English.
        Ms. James. That figure of $1.5 billion assumes the block
    buy continues, that we still have RD-180's for the block buy.
    If there were a decision by Congress to break the block buy, to
    stop access to those RD-180's, that could create even larger
    costs. The $5 billion comes from the Mitchell study of about a
    year and a half ago.
        Chairman McCain. But you do not mention any of that in this
    letter.
        Ms. James. I am mentioning it today. It depends on
    assumptions.
        Chairman McCain. I am to disregard really the letter you
    sent to me that I have been waiting several months for. Maybe
    that helps explain some of the difficulties that we have.
        This hearing is adjourned.
        [Whereupon, at 11:34 a.m., the hearing was adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            THURSDAY, MARCH 10, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

       U.S. STRATEGIC COMMAND, U.S. NORTHERN COMMAND, AND U.S. SOUTHERN
                          COMMAND PROGRAMS AND BUDGET

        The committee met, pursuant to notice, at 10:02 a.m. in
    Room SD-G50, Dirksen Senate Office Building, Senator John
    McCain (chairman) presiding.
        Committee members present: Senators McCain, Inhofe, Wicker,
    Ayotte, Fischer, Cotton, Ernst, Tillis, Sullivan, Graham, Reed,
    Nelson, Manchin, Gillibrand, Blumenthal, Donnelly, Hirono,
    King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good morning. The committee meets today to
    receive testimony on the posture of U.S. Northern Command,
    Southern Command, and Strategic Command to inform its review of
    the Defense Authorization Request for Fiscal Year 2017.
        I'd like to extend our appreciation to the witnesses for
    their many years of distinguished service, and to the men and
    women of our military who defend our Nation every day.
        Admiral Tidd, this is your first time testifying before the
    committee as the Commander of U.S. Southern Command [SOUTHCOM].
    After nearly 2 months in command, I look forward to your
    assessment of the challenges within your area of
    responsibility, as well as your strategy to confront them. It's
    clear you face a daunting array of security and governance
    challenges in the region, yet SOUTHCOM continues to suffer from
    persistent resource shortfalls that undermine efforts to
    confront these challenges. I hope you will outline for the
    committee where you are being forced to accept the greatest
    risk as a result of these shortfalls. Of particular concern is
    the deteriorating situation in Central America, where feeble
    governance, endemic corruption, and weak security institutions
    are allowing transnational criminal organizations to operate
    with impunity. We, of course, must improve and adequately
    resource our drug interdiction strategy to combat these groups,
    but we must also renew our efforts to combat the real driver of
    drug trafficking: the demand here at home. The demand for the
    drugs that these groups traffic--heroin, methamphetamine, and
    cocaine--is too high, and the profits too great, to dissuade
    these criminals from their illicit actions.
        To be clear, the threat posed by these groups extends
    beyond the drugs they smuggle into our communities. The
    smuggling routes they control are also used to traffic weapons,
    bulk cash, and human beings. As your predecessor, General
    Kelly, testified before this committee, terrorist organizations
    could seek to leverage these same smuggling routes to move
    operatives with intent to cause grave harm to our citizens or
    even bring weapons of mass destruction into the United States.
        On a more positive note, I'm interested in your assessment
    of the ongoing talks in Colombia and how you believe the United
    States can best support our partners as they enter a new and
    likely more challenging era. Colombia, once on the cusp of
    becoming a failed state, has emerged from decades of conflict
    as a stark example of what sustained U.S. support and
    engagement can achieve. It's vitally important that we continue
    to invest in our relationship during this critical period so as
    not to squander the extraordinary progress that has been
    achieved.
        I'd like to take a moment to recognize the military
    servicemembers conducting detention operations at Guantanamo
    Bay. Too often in the course of debating the future of the
    detention facility, we lose sight of the remarkable men and
    women who serve honorably under extraordinarily difficult
    conditions. Admiral, please convey our deepest appreciation for
    their service and the professionalism they display each and
    every day on behalf of our Nation.
        Admiral Gortney, I look to you for an update on the current
    state of United States-Mexican security cooperation and
    opportunities for our two nations to strengthen this vital
    partnership. While Mexico's efforts to combat transnational
    criminal organizations have resulted in notable successes by
    capturing or killing senior cartel leaders, such as El Chapo,
    the security situation remain highly volatile and continues to
    directly impact the security of our southern border. Heroin,
    largely produced in Mexico, continues to ravage communities all
    across the Nation and demands a renewed effort to combat this
    scourge, both in our seats and also at its source.
        I also look forward to your assessment of the increasing
    threat posed to the Homeland by the development of advanced
    missile capability--of advanced missiles capable of carrying
    nuclear payloads by Russia, Iran, and North Korea.
        Admiral Haney, the strategic threats to the United States
    and its allies have increased exponentially in just the few
    short years since you've taken the helm of Strategic Command.
    While nuclear, cyber, and counterspace threats generally have
    been on the rise, Secretary Carter's warning that, quote,
    ``We're entering a new strategic era,'' has great implications
    for STRATCOM [U.S. Strategic Command]. Return to great power
    competition noted by the Secretary means that deterring Russia
    and China once again assumes primacy in your planning and
    operations. Whatever President Obama may have hoped for, the
    United States can no longer seek to reduce the role of nuclear
    weapons in our national security strategy or narrow the range
    of contingencies under which we would have to consider their
    use. U.S. Strategic Command faces significant near- and longer-
    term challenges.
        In about 15 to 20 years, U.S. nuclear submarines, ICBMs
    [intercontential ballistic missiles], air-launch cruise
    missiles, heavy bombers, and nuclear-capable tactical fighters
    will have to be withdrawn from operational service, having been
    extended well beyond their original service lives.
    Modernization programs are in place to replace these systems,
    but there is no slack left in the schedule. Today's Congress
    supports fully the modernization of the U.S. nuclear deterrent.
    Any reduction in funding over the next decade, however, could
    delay the development of these replacement systems, increasing
    strategic risk at a time when Russia and other countries
    continue to modernize their nuclear capabilities.
        Russia, then, is your near-term challenge. Russia's
    aggression in Ukraine and destabilizing actions in Syria take
    place under a nuclear shadow. Russia has threatened our NATO
    allies with nuclear strikes, is developing a new nuclear
    ground-launch cruise missile capable of ranging most of Europe,
    and has fired air- and sea-launch cruise missiles against
    targets in Syria, missiles that could be armed with nuclear
    warheads and flown against European and United States targets.
        Your task, Admiral Haney, is to ensure that strategic
    Command is prepared to deter Russian nuclear provocations. This
    requires better intelligence about Russian nuclear capabilities
    and plans, a nuclear planning process tied to EUCOM [European
    Command] and NATO operations, and a survivable, well-exercised,
    and ready nuclear force.
        Finally, as this committee continues its review of the
    Goldwater-Nichols Act, we're interested to hear your views as
    to whether our defense enterprise is organized properly to
    perform the missions that cut across the functional and
    geographic boundaries we have drawn. We also welcome any ideas
    on reform we might consider to make our defense enterprise more
    effective without minimizing the vital tasks that must be done.
        I noted, to the members of the committee, that yesterday we
    had an all-Army panel, and today it's an all-Navy panel, a
    definite upgrade.
        [Laughter.]
        Chairman McCain. Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you, Mr. Chairman.
        May I point out that the meeting of the United States Naval
    Academy Alumni Association will take place immediately
    following the hearing in the ante room.
        [Laughter.]
        Senator Reed. Thank you, Mr. Chairman.
        I want to welcome our witnesses, particularly Admiral Tidd,
    who's appearing before this committee for the first time. Thank
    you, sir, for your service.
        Admiral Gortney, this could be your last hearing before the
    committee. Thank you for your extraordinary service in so many
    different capacities. Not only you, but your families, have
    served with great distinction and great sacrifice. Obviously,
    the men and women in your commands have done so much.
        Admiral Haney, likewise to your family and to the men and
    women of your command.
        I'm pleased to see some senior noncommissioned officers
    here. Thank you for what you do to lead our forces.
        Admiral Haney, your command has responsibilities for the
    functions that are global in nature--space and nuclear, to name
    a few. But, your first and foremost responsibility is to ensure
    that the nuclear triad can deter threats that are existential
    to our Nation. This administration has committed to the
    modernization of all three legs of our triad. Our current
    nuclear forces cost about 4 percent of our DOD [Department of
    Defense] budget, which is a relatively good bargain,
    considering the threats they deter on a daily basis. But, in
    the late 2020s, as the Chairman has mentioned, when this
    modernization is at its peak, that figure will rise to about 7
    percent of the DOD budget. While this is about half of what we
    spent at the height of the Cold War, it is still a considerable
    amount of money, and I will want to hear your views on the
    importance of this modernization and how it can be done in the
    most cost-effective manner possible.
        Admiral Gortney, your mission is to protect the Homeland,
    to deter and defeat attacks on the United States, and to
    support civil authorities in mitigating the effects of
    potential attacks and natural disasters. While Admiral Haney is
    responsible for synchronizing global missile defense, planning,
    and operation support, you are responsible for the operation of
    our Homeland ballistic missile defense system. We look forward
    to hearing about the ongoing improvements to the ground-based
    missile defense system, particularly the enhancement of sensors
    and discrimination capabilities.
        In addition, NORTHCOM [Northern Command] works closely with
    other Federal agencies, the Governors, and the National Guard
    to collaborate on responding to natural and manmade disasters,
    and partners with Canada and Mexico to promote security across
    our borders. I look forward to hearing about your current
    efforts in these areas and how these would be impacted by the
    return of sequestration next year.
        A number of the problems in NORTHCOM originate from the
    SOUTHCOM AOR. Drug traffickers and transnational criminal
    organizations are not bound by geographic borders, and the
    violence and instability they engender have pushed individuals
    to flee, often seeking sanctuary on our shores. An obvious
    answer then is to address the problem at the root. Of course,
    such efforts require a whole-of-government approach,
    incorporating the capabilities of interagency partners, such as
    the State Department, FBI, and the Drug Enforcement Agency.
    Consequently, any cuts made to their budgets have direct
    implications on the ability, particularly, of SOUTHCOM
    [Southern Command] to carry out its mission.
        SOUTHCOM is responsible for maintaining our security
    relationship in the region. The closest military-to-military
    relationship in the AOR [Area of responsibility] is with
    Colombia, who, with our sustained assistance, has undergone a
    remarkable transformation. It is now equally important to
    ensure that the peace implementation phase of this
    transformation is as robustly supported as the kinetic
    operations.
        Admiral Tidd, as you stated in your testimony, nowhere is
    our own security more inextricably intertwined to that of our
    neighbors, partners, and friends than in Latin America, and the
    Caribbean. I look forward to hearing your views on how we can
    best maintain our engagement in this important area of the
    world.
        Thank you very much, Mr. Chairman.
        Chairman McCain. Welcome the witnesses. Your complete
    statements will be made part of the record.
        Admiral Haney.

     STATEMENT OF ADMIRAL CECIL E. D. HANEY, USN, COMMANDER, U.S.
                           STRATEGIC COMMAND

        Admiral Haney. Good morning, Chairman McCain, Ranking
    Member Reed, and members of the committee.
        I'm honored to be here with you today and pleased to
    testify with Admiral Bill Gortney, Commander, U.S. Northern
    Command, Admiral Kurt Tidd, Commander, U.S. Southern Command.
    I'm also honored to represent my team of sailors, soldiers,
    airmens, and marines, and civilians who carry out the various
    missions assigned to U.S. Strategic Command. They are dedicated
    professionals who represent our most precious resource and
    deserve our unwavering support. As a result of their efforts,
    our Nation's strategic nuclear deterrent force remains safe,
    secure, effective, and ready, and we are working hard to
    improve the resiliency and flexibility in space and cyberspace.
        It is critical, as you've stated, that we modernize our
    strategic nuclear deterrent capabilities that underpin our
    Nation's security. As you know, the current global security
    environment is more complex, dynamic, and uncertain than
    possibly anytime in our history as adversaries and potential
    adversaries challenge our democratic values and our security in
    so many ways. They are modernizing and expanding their nuclear
    capabilities, developing and testing counterspace and
    cyberspace technologies, and are advancing conventional and
    asymmetric weapons.
        Future deterrent scenarios will likely include multiple
    adversaries operating across multiple domains and using anti-
    access aerial denial asymmetric warfare in ``escalate to de-
    escalate'' tactics. These trends affect strategic stability.
        Given all of this, the missions of U.S. Strategic Command
    remain important to our joint military forces, to our Nation
    and our allies and partners. Comprehensive strategic deterrence
    and assurance and escalation control is far more than just
    nuclear weapons and platforms. It includes a robust
    intelligence apparatus, space, cyberspace, conventional and
    missile defense capabilities, and comprehensive plans that link
    together organizations in a coherent manner.
        Additionally, we engage daily on a broad range of
    activities across our other mission areas, including
    intelligence, surveillance, and reconnaissance, combating
    weapons of mass destruction, joint electronic warfare, and
    analysis and targeting.
        These guide my command priorities. Achieving comprehensive
    strategic deterrence, assurance, and escalation control
    requires a long-term approach to investing in capabilities in a
    multi-generational commitment to intellectual capital. The
    President's Budget for fiscal year 2017 strikes a responsible
    balance between national priorities, fiscal realities, and
    begins to reduce some of the risks we have accumulated because
    of deferred maintenance and sustainment. This budget supports
    my mission requirements, but there is no margin to absorb new
    risk. Any cuts to that budget will hamper our ability to
    sustain and modernize our forces.
        Thank you. I look forward to your questions.
        [The prepared statement of Admiral Haney follows:]

                Prepared Statement by Admiral Cecil E. D. Haney
                                  introduction
        Mr. Chairman and distinguished members of the committee, I am
    honored to be here today. Thank you for the opportunity to provide
    testimony on the posture of United States strategic forces, my
    assessment of the President's Fiscal Year 2017 Budget, and how United
    States Strategic Command (USSTRATCOM) is confronting today's complex
    global security environment. I am also pleased to be here with Admiral
    Bill Gortney, Commander of United States Northern Command; and Admiral
    Kurt Tidd, Commander of United States Southern Command. I thank you all
    for your continued support to our Nation's defense.
        I have the privilege of leading a motivated team of strategic
    warriors focused on mission excellence. While today, the Nation's
    strategic nuclear deterrent force remains safe, secure, effective and
    ready, we are working diligently to improve the resilience,
    responsiveness, credibility and flexibility of our operational plans
    and capabilities. USSTRATCOM is focused on deterring strategic attack,
    providing assurance to our allies and partners, and providing
    warfighting solutions to other Combatant Commands and partners across
    the spectrum of operations. While executing our global
    responsibilities, we continue to forge enduring partnerships with
    agencies and organizations across the U.S. Government, academia,
    commercial industry, and Allied nations.
        The momentum we have established is largely due to those who
    dedicate themselves to national security in spite of uncertainty and
    resource challenges: the soldiers, sailors, airmen, marines, and
    civilians who carry out and support our strategic missions. Thank you
    for the opportunity to publicly acknowledge their service, devotion and
    professional skill.
        Over the last two years, I have gained considerable insight
    regarding the progress and work remaining to deliver comprehensive
    strategic deterrence, assurance and escalation control. My focus here
    is to provide clarity, make recommendations on required steps for
    continued success, and demonstrate how USSTRATCOM supports strategic
    stability and national security.
        Much remains to be done to sustain and modernize the foundational
    nuclear deterrent force that we need to protect the Nation from
    existential threats in an increasingly uncertain and unpredictable
    environment. We must continue to meet critical investment timelines to
    ensure that aging platforms and weapons systems do not reach the point
    at which their viability becomes questionable.
        The President's Budget offers a balanced approach to national
    priorities and fiscal realities, and reduces some accumulated risk as
    we pursue modernization across USSTRATCOM mission areas. The Bipartisan
    Budget Act of 2015 provided near-term fiscal stability for these
    critical missions, and we appreciate Congressional and White House
    support in this effort. I support continued bipartisan efforts to
    achieve long-term relief from the constraints imposed by the Budget
    Control Act of 2011, especially given the multi-year acquisition
    timelines required to modernize our strategic systems.
        Maintaining and improving comprehensive strategic deterrence,
    assurance and escalation control requires a multi-faceted, long-term
    approach to investing in strategic capabilities and a renewed, multi-
    generational commitment of intellectual capital. As I look at trends in
    the security environment, continued long term investment is needed to
    ensure that current progress transitions into long-term success. Our
    allies and adversaries are observing and assessing the fiscal emphasis
    placed on our Nation's strategic deterrence and assurance capabilities.
    We cannot afford to send mixed messages on their importance by
    underfunding them.
                          global security environment
        Today's global security environment is complex, dynamic and
    volatile; perhaps more so now than at any other time. The dangers
    presented by this unpredictable security environment are compounded by
    the continued propagation of asymmetric methods, the unprecedented
    proliferation of advancing technologies, and the increasingly
    provocative and destabilizing behavior by current and potential
    adversaries. Some nations are investing in long-term military
    modernization programs, including capabilities that could pose an
    existential threat to the United States. A number of others are
    developing, sustaining, or modernizing their nuclear forces, including
    weapons and platforms that are mobile, hardened and underground.
        Russia. Russia warrants our attention. Its new security strategy
    makes clear that Russia seeks to re-assert its great power status.
    Russia is modernizing its conventional and strategic military programs,
    emphasizing new strategic approaches, declaring and demonstrating its
    ability to escalate if required, and maintaining a significant quantity
    of non-strategic nuclear weapons. Russia has engaged in destabilizing
    actions in Syria and Ukraine (Eastern and Crimea), while also violating
    the Intermediate-range Nuclear Forces (INF) Treaty, and other
    international accords and norms. Russia is also developing counter-
    space and cyber capabilities
        Despite these activities, and assertions by some that the United
    States and Russia are in a nuclear arms race, there is continued
    adherence to the New Strategic Arms Reduction Treaty (New START) by
    both nations. In compliance with a series of treaties, the United
    States has reduced its stockpile by 85 percent relative to its Cold War
    peak. Instead of dozens of delivery systems, we now have four strategic
    delivery platforms. We seek no new military capabilities in our nuclear
    forces. Rather, we seek to retain and modernize only those capabilities
    needed to sustain a stable and effective deterrent capability. We are
    on track to achieve New START limits of 1550 deployed warheads and 700
    deployed delivery systems by February 2018.
        The benefit of New START is that it promotes stability by
    maintaining equivalency in nuclear weapon numbers and strategic
    capability. It also promotes transparency via inspections and helps
    assure our non-nuclear allies they do not need their own nuclear
    deterrent capabilities. However, to maintain strategic stability as we
    draw down to New START central limits, the remaining systems must be
    safe, secure, effective and ready.
        China. In addition to pursuing regional dominance in the East and
    South China Seas, China continues making significant military
    investments in nuclear and conventional capabilities. China is re-
    engineering its long-range ballistic missiles to carry multiple nuclear
    warheads and continues to develop and test hyper-glide vehicle
    capability. China's pursuit of conventional prompt global strike
    capabilities, offensive counter space technologies, and exploitation of
    computer networks raises questions about its global aspirations. While
    China periodically reminds us of its ``No First-Use'' nuclear policy,
    these developments--coupled with a lack of transparency on nuclear
    issues such as force disposition and size--impact regional and
    strategic stability.
        North Korea. North Korea's behavior over the past 60 years has been
    very problematic. Today, North Korea continues heightening tensions by
    coupling provocative statements and actions with advancements in
    strategic capabilities, including claims of miniaturized warheads;
    developments in road mobile and submarine launched ballistic missile
    technologies. Most recently, North Korea has conducted its fourth
    nuclear weapons test and another missile launch of a satellite into
    space, furthering its ICBM research. These actions show disdain for
    United Nations Security Council resolutions and a dangerous lack of
    regard for regional stability.
        Iran. As Iran follows the mandates of the Joint Comprehensive Plan
    of Action, we must be vigilant to detect if Iran ever shifts its
    intentions to pursue a nuclear weapon. Iran continues to develop
    ballistic missiles and cyberspace capabilities--and we remain focused
    on countering its destabilizing activities in the region.
        Violent Extremist Organizations (VEOs). Ungoverned or ineffectively
    governed regions remain incubators for those who seek to attack the
    world's peaceful societies. VEOs recruit and operate freely across
    political, social, and cyberspace boundaries. The effect of weapons of
    mass destruction (WMD) in the hands of VEOs could be catastrophic, and
    highlights the importance of our non-proliferation and counter WMD
    efforts.
        In summary, the global strategic environment is increasingly
    complex. Unlike the bipolarity of the Cold War, today's multi-polar
    world with state, non-state, and mixed-status actors is more akin to
    multiplayer, concurrent and intersecting games of chess that severely
    challenge regional and global security dynamics. Future conflicts will
    not be contained within prescribed borders, stove-piped domains, or
    segregated areas of responsibility. We must view threats as
    transregional, multi-domain and multi-functional, requiring a
    comprehensive approach to strategic deterrence, assurance and
    escalation control.
                         usstratcom in the 21st century
        USSTRATCOM counters diverse and complex threats through the
    execution of its fundamental mission: to detect and deter strategic
    attacks against the U.S. and our allies, and to defeat those who attack
    if deterrence fails. USSTRATCOM is assigned nine distinct
    responsibilities: Strategic Deterrence; Space Operations; Cyberspace
    Operations; Global Strike; Joint Electronic Warfare; Missile Defense;
    Intelligence, Surveillance and Reconnaissance; Countering Weapons of
    Mass Destruction; and Analysis and Targeting. These diverse assignments
    are strategic in nature, global in scope, and intertwined with Joint
    Force capabilities, the interagency process and the Whole-of-Government
    approach. Each mission supports or is interconnected with the others,
    and their combined capabilities enable a comprehensive approach to
    strategic deterrence, assurance and escalation control in the 21st
    century.
        Deterrence is a fundamentally human endeavor, firmly rooted in
    psychology and social behavior. At the most basic level, deterrence is
    achieved through one of two mechanisms. The first is an aggressor's
    recognition that unacceptable costs may be imposed for taking an action
    and recognition that forgoing this action may result in lesser costs.
    The second is an aggressor's belief that the contemplated action will
    not produce its perceived benefit, or that not acting will produce a
    greater perceived benefit. These elements combine to convince potential
    adversaries that they will not succeed in an attack, and even if they
    try, the costs will far outweigh the benefits. USSTRATCOM's
    capabilities underpin these fundamental elements of deterrence.
        Achieving comprehensive deterrence, assurance and escalation
    control requires nuclear weapons systems along with a robust
    intelligence apparatus; space, cyberspace, conventional, and missile
    defense capabilities; global command, control, and communications; and
    comprehensive plans that link organizations and knit their capabilities
    together in a coherent way.
        Priorities. USSTRATCOM is guided by my six overarching priorities:
        1. Deterring strategic attack against the United States and
    providing assurance to our allies. Strategic attacks can occur through
    a variety of means in any domain. They may impact many people or
    systems, affect large physical areas, act across great distances,
    persist over long periods of time, disrupt economic or social
    structures, or change the status quo in a fundamental way.
        2. Providing the Nation with a safe, secure, effective and ready
    nuclear deterrent force. Foundational documents such as the 2010
    Nuclear Posture Review, the 2013 Report on Nuclear Weapons Employment
    Strategy, the 2014 Quadrennial Defense Review (QDR), and the 2015
    National Military Strategy have consistently repeated this mandate. I
    am committed to providing our Nation with a viable and credible nuclear
    deterrent force.
        3. Delivering comprehensive warfighting solutions. To effectively
    deter, assure, and control escalation in today's security environment,
    threats must be surveyed across the ``spectrum of conflict.''
    Escalation may occur at any point, in varying degrees of intensity,
    with more than one adversary, in multiple domains, to include ``below
    threshold activities'' that would not ordinarily propel international
    action. Our actions and capabilities must convince any adversary that
    they cannot escalate their way out of a failed conflict, and that
    restraint is always the better option. Doing so requires a deeper,
    broader understanding of our potential adversaries, so that we can deny
    action; hold critical nodes at risk; and prevent activities,
    perceptions and misperceptions from escalating. We must also look at
    our military capabilities in a holistic manner, and fully integrate
    them within our other elements of national power. We must pursue a
    Whole-of-Government approach to deterrence, including allies and
    partners in our efforts, with ready forces in all domains.
        4. Addressing challenges in space and cyberspace with capability,
    capacity and resilience. Space capabilities remain foundational to our
    way of life not only for the United States but for the international
    community at large. Yet some nation states are investing in counter-
    space capabilities. We must assure our continued access to space
    through improved space situational awareness, operating procedures,
    resiliency and other operational concepts central to our ability to
    maintain an advantage in space. Cyberspace underpins all of my mission
    areas and has become a critical facet of national power. We must
    continue to develop a robust Cyber Mission Force with the authorities,
    skills and resources to protect our DOD networks against a maturing set
    of cyberspace threats. Additionally, cyber defense of future networked
    systems must be a design priority.
        5. Building, sustaining and supporting partnerships. We aim to work
    seamlessly with the other Combatant Commands, across the Federal
    Government, commercial sector, academia and with partners and allies to
    apply the scope of the USSTRATCOM portfolio toward a synchronized
    pursuit of national objectives. This robust interaction must occur at
    all levels at USSTRATCOM and includes operations, planning, exercising
    and wargaming.
        6. Anticipating change and confronting uncertainty with agility and
    innovation. Sound decision-making requires thorough analysis to
    prioritize our activities with flexible, agile and adaptable thinking.
    This effort includes a variety of wargames, demonstrations and
    exercises to evaluate deterrence and escalation control options. We
    will support the DOD Defense Innovation Initiative and the associated
    Advanced Capability and Deterrence Panel's efforts. This will help us
    identify new operational concepts, develop cutting edge technology, and
    enable a continuing evolution of ideas on how to deter current and
    potential adversaries.
                    mission area capabilities & requirements
        We must maintain a military capability that provides our leadership
    with the decision space to respond in the best interest of the United
    States. This includes the ability to mitigate current and future risk
    as it pertains to nuclear, space and cyberspace threats. Therefore,
    prioritizing resources to meet our requirements necessitates a
    thoughtful assessment of national priorities in the context of fiscal
    realities. The President's Budget supports my mission requirements, but
    there is no margin to absorb risk. Any cuts to the budget will hamper
    our ability to sustain and modernize our military forces, and will add
    significant risk to our strategic capabilities.
    Nuclear Deterrent Forces
        Today, America's nuclear forces remain safe, secure, effective and
    ready. For more than 70 years, thanks in part to our credible nuclear
    forces, the United States has deterred great power war against nuclear-
    capable adversaries.
        Nuclear Triad. Our nuclear Triad is a requirement. The policy of
    maintaining a nuclear Triad of strategic nuclear delivery systems was
    most recently re-iterated in the 2014 QDR. Our Intercontinental
    Ballistic Missiles, Ballistic Missile Submarines, Air-Launched Cruise
    Missiles, and nuclear capable heavy bombers and associated tankers each
    provide unique and complementary attributes that together underpin
    strategic deterrence and stability--and each element is in need of
    continued investment. The Triad provides a hedge against technical
    problems or changes in the security environment and must consist of
    independently viable weapons systems and platforms which present
    adversaries with a complex, multi-pronged problem. The fiscal year 2017
    budget request funds the Ground Based Strategic Deterrent program to
    replace our aging Minuteman ICBM fleet, which for decades have served
    to complicate an adversary's decision to launch a comprehensive
    counterforce strike on the United States. The fiscal year 2017 budget
    request funds the Ohio-Replacement Program to ensure the uninterrupted
    deployment of the Triad's most survivable leg. The Long Range Strike-
    Bomber, Long Range Stand-Off Cruise Missile, and B61-12 gravity bomb
    are needed to provide the flexibility, visibility and ability to
    forward-deploy and to support our extended deterrence commitments to
    our allies.
        Intercontinental Ballistic Missiles (ICBMs). Our ICBM force
    provides a responsive, highly reliable and cost effective deterrent
    capability. To maintain an effective Minuteman III force through 2030,
    USSTRATCOM supports several near-term sustainment efforts, including
    ICBM Fuze Modernization, Launch Control Center Block Upgrade, and
    Airborne Launch Control System Replacement. Vital ICBM security
    improvements include a UH-1N Helicopter Replacement, Payload
    Transporter Replacement and ICBM Cryptographic Upgrade. Beyond 2030,
    the Ground Based Strategic Deterrent program is essential to
    recapitalize the ICBM force prior to Minuteman age out I fully support
    an integrated Ground Based Strategic Deterrent weapon system that
    recapitalizes flight systems, ground launch systems, command and
    control, and support equipment. I am encouraged by the ongoing Air
    Force and Navy effort to study the feasibility of sharing common
    technology between their respective programs in order to reduce costs
    and preserve the unique skills required to field capable ballistic
    missile weapon systems.
        Ballistic Missile Submarines (SSBNs). Recapitalizing our sea-based
    strategic deterrent force remains my top modernization priority. The
    Navy's SSBNs and Trident II D5 ballistic missiles constitute the
    Triad's most survivable leg. The Ohio-class SSBN fleet is undergoing
    significant sustainment efforts to maintain our nation's required high
    operational availability and extend the life of the D5 ballistic
    missile. USSTRATCOM continues to strongly support and work with the
    Navy as it modernizes the SSBN fleet. The Ohio Replacement SSBN,
    currently in development and expected to be fielded in 2031, will
    continue to serve as the Nation's survivable strategic deterrent into
    the 2080s. Despite a hull life extension from 30 to 42 years, the
    current Ohio-class will quickly approach the end of its effective
    service life. No further extension is possible. Any further delay will
    put the reliability of our sea-based nuclear deterrent at unacceptable
    risk. In addition, we must continue our commitment to the United
    Kingdom to develop and field the Common Missile Compartment to ensure
    both nations' SSBNs achieve operational capability to replace the
    existing platforms.
        Heavy Bombers. Our dual-capable B-52 and B-2 bombers are the most
    flexible and adaptable leg of the nuclear Triad and provide significant
    conventional capabilities. Bombers play a key role in stabilizing and
    managing crises by providing a visible signaling option and rapid hedge
    against operational and technical challenges in other legs of the
    nuclear Triad. Ongoing and planned sustainment and modernization
    activities, to include associated Nuclear Command, Control and
    Communications upgrades, will ensure our bombers provide credible
    deterrent capabilities until their planned end-of-service-life. I fully
    support the Air Force program for fielding a new, highly survivable
    penetrating conventional and nuclear Long Range Strike Bomber (LRS-B).
    When coupled with a new Long Range Stand-Off (LRSO) cruise missile and
    the B61-12 gravity bomb, the LRS-B will provide the President with
    flexible options to address a range of contingencies in non-permissive
    environments. Maintaining an air-delivered standoff and direct attack
    capability is vital to meeting our strategic and extended deterrence
    commitments and denying geographic sanctuaries to potential
    adversaries. The new LRSO is needed to replace the aging Air Launched
    Cruise Missile (ALCM), which has far exceeded its originally planned
    service life, is being sustained through a series of service life
    extension programs, and is required to support our B-52 bomber fleet.
    Likewise, the B61-12 is needed to extend the life of aging gravity
    nuclear weapons and provide continued viability for both the B-2
    strategic bomber and dual capable fighter aircraft supporting our NATO
    and extended deterrence commitments.
        Foundational to the nuclear triad is a synthesis of dedicated
    sensors, assured command and control, nuclear weapons and their
    enabling infrastructure, treaties and non-proliferation activities.
        Sensors. Indications and warning are necessary for maximum decision
    space, and strategic missile warning remains one of our most important
    capabilities. Along with persistent and tailored intelligence, our
    Integrated Tactical Warning and Attack Assessment network provides
    timely, accurate, unambiguous and continuous tactical early warning,
    allowing us to select the most suitable course of action in rapidly
    developing situations. While the Defense Support Program is nearing the
    end of its operational life, the Space-Based Infrared System program is
    on track to provide continuous on-orbit warning. The survivable and
    endurable segments of these systems, along with Early Warning Radars
    and nuclear detonation detection elements, are in urgent need of
    sustainment and modernization. We must continue to maintain legacy
    systems and address the ever-increasing risk to mission success. Prompt
    and sufficient recapitalization of these critical facilities and
    networks--to include electromagnetic pulse protection and survivable
    endurable communications with other nodes in the system--will be
    pivotal in maintaining a credible deterrent.
        Nuclear Command, Control and Communications (NC3). All USSTRATCOM
    missions require robust global Command, Control, Communications, and
    Computer (C4) capabilities and infrastructure supporting the
    President's national-decision making process across a spectrum of
    scenarios. These communications capabilities are crucial to providing
    the President and his key advisors the right information to expand
    decision space. USSTRATCOM is teaming with the White House, national
    laboratories, and the private sector to develop a Global C4 system,
    setting the conditions for timely, informed National decision making
    anywhere on the globe. The Council on Oversight of the National
    Leadership Command, Control and Communications System has proven
    effective in synchronizing and prioritizing modernization efforts, and
    articulating those priorities to Congress.
        Maintaining a credible nuclear deterrent for the long term requires
    recapitalization of key systems and capabilities throughout the NC3
    architecture. The unpredictable challenges posed by today's complex
    multi-domain, multi-threat security environment make it increasingly
    important to optimize our aging NC3 systems architecture while
    leveraging new technologies. Maintaining nuclear deterrence and
    strategic stability requires a command and control architecture
    comprised of interdependent fixed and mobile systems and nodes that
    deliver capability throughout the space, air and land domains. Through
    continued funding for NC3 modernization programs, we can ensure
    effective command and control of the Nation's forces well into the
    future.
        In space, we are transitioning from Military Strategic and Tactical
    Relay (MILSTAR) to Advanced Extremely High Frequency (AEHF) satellite
    communications systems. The AEHF satellite constellation system,
    coupled with requisite ground node and airborne platform Family of
    Advanced Beyond Line-of-Sight terminals (FAB-T) and the Presidential
    and National Voice Conferencing (PNVC) system, will extend enhanced
    capabilities to enable collaboration between the President and senior
    advisors under any circumstance and also assure connectivity with the
    nuclear forces.
        Our efforts to field an air layer network supported by AEHF and a
    modernized Very Low Frequency/Low Frequency (VLF/LF) capability will
    increase resiliency and reliability across the NC3 architecture and
    begins to address the emerging threats to our space-based
    communications. I support the investment plan to replace our aging very
    low frequency receivers on the E-6B Airborne Command Post (ABNCP) and
    the E-4B National Airborne Operations Center (NAOC), providing assured,
    world-wide survivable communications into the future. Additionally, the
    Air Force continues to fund the very low frequency receiver on the B-2
    bomber fleet, and began a program to install next generation protected,
    assured, and survivable communications on the B-2.
        Within the land component, there are efforts underway to upgrade
    fixed and mobile warning systems to enable them to leverage the
    evolving Space Based Infra-Red System (SBIRS) capability. Progress has
    also been made on the construction of the new USSTRATCOM Command and
    Control (C2) Facility, which will support all our missions and will be
    a key component of our future nuclear and national C2 architecture. The
    C2 Facility, which is on track for occupancy in 2018, serves as a
    visible reminder to adversaries of the importance and national
    commitment to modernize our aging NC3 facilities.
        Weapons and Infrastructure. Today's stockpile remains safe, secure,
    effective, and meets operational requirements. However, our nuclear
    weapons (now averaging 27 years of service) and supporting
    infrastructure (some of which date back to the Manhattan Project) are
    in dire need of modernization and life extension. Surveillance
    activities, Life Extension Programs (LEPs), and Stockpile Stewardship
    efforts are essential to mitigating age-related effects and
    incorporating improved safety and security features without a return to
    underground nuclear explosive testing. Continued talent pool investment
    with our nuclear scientists and engineers is also paramount to
    providing viability to our stockpile requirements.
        As a member of the Nuclear Weapons Council (NWC), I work closely
    with my DOD and Department of Energy National Nuclear Security
    Administration (NNSA) counterparts to ensure we maintain a safe,
    secure, and effective nuclear stockpile. Active and sustained execution
    of the NWC's long-term ``3+2'' strategy to deliver three ballistic
    missile and two air-delivered warheads is crucial to addressing near-
    term technical needs and future capability requirements. W76-1 and B61-
    12 LEPs are on track and are necessary to maintain confidence in the
    reliability, safety and intrinsic security of our nuclear weapons.
    Additionally, early activities are underway to synchronize the LRSO
    cruise missile program with the W80-4 warhead LEP to ensure these
    programs are fielded in time to maintain a viable stand-off nuclear
    capability. The President's Budget ensures schedule alignment of the
    cruise missile and its associated warhead.
        Treaties. International agreements such as New Strategic Arms
    Reduction Treaty (New START), the Open Skies Treaty (OST), and the
    Intermediate-range Nuclear Forces (INF) Treaty contribute to strategic
    stability through transparency, confidence building, and verification.
    The State Department has primary responsibility for treaty
    administration, and USSTRATCOM remains closely involved in their
    execution. While these agreements have served valuable roles in
    promoting strategic stability, treaty violations are a significant
    cause for concern.
        In meeting treaty obligations, the United States Air Force has
    eliminated all non-operational intercontinental ballistic missile
    silos, and is placing 50 intercontinental ballistic missiles into a
    non-deployed status. All intercontinental ballistic missiles now carry
    only a single warhead. The Air Force has also eliminated non-
    operational B-52G series heavy bombers, and is converting 42 B-52H's to
    conventional-only bomber missions. Additionally, the United States Navy
    is sealing four launch tubes on each Ohio-class SSBN, removing 56
    launch tubes from accountability under New START.
        Budget. Sustaining and modernizing the nuclear enterprise
    infrastructure is crucial to maintaining a viable nuclear deterrent
    force. It is impressive to see today's systems working well beyond
    their expected service life, but we cannot rely on that indefinitely.
    Aging weapon systems and supporting infrastructure are stressing our
    ability to maintain a viable and credible force.
        I share concerns about the cost of modernization, but the greater
    worry is the cost if we do not make needed investments. To reverse the
    long trend of flat or even declining resources, there must be a
    sustained, multi-decade investment program to our weapons, delivery
    systems and supporting infrastructure. As stated by the Congressional
    Budget Office, the expected cost of nuclear forces represents roughly 5
    percent to 6 percent of the total costs of the planned defense budgets
    for the next ten years. The importance of the foundational nuclear
    deterrent force to national security, assurance to our allies, our non-
    proliferation objectives and strategic stability far outweigh the
    expense of recapitalization. Failing to provide the resources requested
    in the fiscal year 2017 budget request would delay the development of
    these programs and unacceptably degrade our credibility and ability to
    deter and assure. Our Nation must make this investment.
    Space Operations
        The U.S. must maintain assured access to space. Our national space
    capabilities allow us to globally navigate, communicate, and observe
    events in areas where non-space sensors are not feasible. Space
    capabilities are also a vital component of comprehensive deterrence and
    assurance and are critical to supporting our deployed forces and our
    national decision-making processes. Investment in these capabilities is
    vital to our national security. We greatly appreciate the continued
    support of Congress in helping to increase the resiliency and vitality
    of our space assets.
        The space domain has increasingly become contested, degraded, and
    operationally limited. These are not new challenges. Some countries
    have clearly signaled their intent and ability to conduct hostile
    operations in space as an extension of the terrestrial battlefield.
    These operations would deny U.S. Forces the advantages of space, which
    have enabled us to favorably shape events in all corners of the globe.
        In response to growing space threats, the DOD and Intelligence
    Community (IC) established the Joint Space Doctrine and Tactics Forum
    (JSDTF), which I co-chair with Ms. Betty Sapp, Director, National
    Reconnaissance Office. The JSDTF's goals are to ensure U.S. space
    policy, doctrine, operational concepts, strategies and planning
    scenarios reflect that space is a contested domain, populated by
    dynamic actors. We have already made significant improvements in the
    integration of exercises and wargames, and are revising associated
    joint doctrine, as well as new tactics, techniques and procedures for
    our space operators. The JSDTF will foster the transformation of how
    the U.S. operates in space by promoting seamless functionality between
    the DOD and IC--a tight bond we must continue to strengthen.
        Another key initiative is the establishment of the Joint
    Interagency Combined Space Operations Center (JICSpOC) located at
    Schriever Air Force Base in Colorado. This center combines the efforts
    of USSTRATCOM, Air Force Space Command, and the intelligence community
    with a goal to create unity of effort and facilitate information
    sharing across the national security space enterprise. At its current
    phase, the JICSpOC is providing a robust location to conduct
    comprehensive operational experimentation. The JICSpOC will ensure the
    space enterprise meets and outpaces emerging and advanced space threats
    and will provide vital information for national leadership, allies,
    partners and the Joint Force. It will also serve to enhance the
    Nation's deterrent posture by demonstrating the United States is
    prepared when our space capabilities are threatened.
        A component to all of these efforts is Space Situational Awareness
    (SSA)--the information that allows us to understand what is on orbit,
    where it is, where it is going, and how it is being used. Consistent
    with long-standing obligations and principles of the Outer Space Treaty
    and other international legal standards, our goal is to ensure space
    remains a safe domain for all legitimate users. Sharing SSA information
    and collaborating with other nations and commercial firms promotes safe
    and responsible space operations, reduces the potential for debris-
    producing collisions and other harmful interference, builds
    international confidence in U.S. space systems, fosters U.S. space
    leadership, and improves our own SSA through knowledge of owner/
    operator satellite positional data.
        USSTRATCOM has negotiated SSA Sharing Agreements and Arrangements
    with 51 commercial entities, two intergovernmental organizations
    (EUMETSAT and European Space Agency), and ten nations (Spain, France,
    Italy, Japan, Australia, Canada, South Korea, United Kingdom, Germany,
    and Israel) and is in the process of negotiating additional agreements.
    Through these sharing agreements, USSTRATCOM assists partners with
    activities such as launch support; maneuver planning; support for
    satellite anomaly resolution, electromagnetic interference reporting
    and investigation; support for de-commissioning activities; and space
    object conjunction assessments.
        The Geosynchronous Space Situational Awareness Program (GSSAP)
    achieved initial operational capability in October of 2015, and
    USSTRATCOM is now operating GSSAP satellites to enable our cutting-edge
    SSA capabilities. GSSAP facilitates space-monitoring activities that
    contribute to global safety of spaceflight, as well as the peaceful
    access to space.
        At the nucleus of USSTRATCOM's approach to space security is
    mission assurance--ensuring combatant commanders have required access
    to space-based capabilities. USSTRATCOM's Joint Functional Component
    Command for Space (JFCC-SPACE), located at Vandenberg Air Force Base in
    California, leads the effort, and through the Joint Space Operations
    Center (JSpOC), executes continuous and integrated military space
    operations and routinely tracks thousands of space objects in orbit
    around the Earth. This includes more than 1,300 active satellites
    operated by approximately 60 nations and a wide variety of government,
    commercial, and academic organizations. The JSpOC also maintains the
    catalog of all artificial Earth-orbiting objects, charts preset
    positions for orbital flight safety, and predicts objects reentering
    the Earth's atmosphere.
        We must sustain judicious and stable investments to preserve the
    advantages we hold in this complex environment. Examples include the
    Space Fence program which will greatly expand the capacity of the Space
    Surveillance Network; investments in modeling and simulation that will
    increase our understanding of the space environment and adversary
    capabilities; and funding for satellite communications that are
    resistant to interference. We must also continue to seek innovative and
    solutions with Allies and our commercial partners to ensure access to
    space operations remains available. These include active and passive
    protection measures for individual systems and constellations, and a
    critical examination of the architectural path we must follow to ensure
    resilience and affordability in our space capabilities.
    Cyberspace Operations
        This year will mark the sixth anniversary of United States Cyber
    Command (USCYBERCOM). USCYBERCOM imparts an operational outlook and
    attitude to the management of the DOD's approximately seven million
    networked devices and 15,000 network enclaves.
        Our primary focus for cyberspace operations within DOD is building
    the capability and capacity to protect DOD networks, systems, and
    information; defend the nation against cyberattacks; and support
    operational and contingency plans. The Cyber Mission Force (CMF)
    construct addresses the significant challenges of recruiting, training
    and retaining people, in addition to acquiring the facilities and
    equipment necessary for successful cyberspace operations. We are
    creating 133 cyber mission teams manned by more than 6,000 highly
    trained people by the end of fiscal year 2018. To date, 84 of those
    teams are fielded and assigned to a variety of missions, including our
    ongoing efforts to degrade, dismantle, and ultimately destroy ISIL.
    These teams support combatant commands and national missions. Budget
    stability is crucial to achieving this vision.
        On 30 September 2015, the Secretary of Defense and the Chairman of
    the Joint Chiefs of Staff signed the DOD Cybersecurity Culture and
    Compliance Initiative (DC3I), tasking USSTRATCOM and USCYBERCOM to lead
    implementation. DC3I fosters long-term improvement through training,
    inspections, reporting and accountability. Improving our cybersecurity
    culture requires a holistic approach that addresses people, processes,
    and technology. Such efforts will continue to be critical to defending
    our DOD networks.
    Global Strike
        USSTRATCOM's Joint Functional Component Command for Global Strike
    (JFCC-GS) operates from Offutt AFB, Nebraska. JFCC-GS provides a unique
    ability to command and control our global strike capabilities and build
    plans that rapidly integrate into theater operations. This includes
    integration of combat capability associated with kinetic and non-
    kinetic effects.
        Conventional Prompt Global Strike (CPGS) capability offers the
    opportunity to rapidly engage high-value targets without resorting to
    nuclear options. CPGS can provide precision and responsiveness in Anti-
    Access/Area Denial environments while simultaneously minimizing
    unintended military, political, environmental or economic consequences.
    I support continuing research and development of CPGS capabilities.
    Missile Defense
        Ballistic missile proliferation and lethality continues to increase
    as countries acquire greater numbers of ballistic missiles, increase
    their ranges, and incorporate countermeasures. North Korea possesses
    the Taepo Dong 2 space launch vehicle/ICBM, and has displayed the KN08
    road-mobile ICBM that is likely capable of reaching much of the
    continental United States. North Korea also possesses hundreds of
    Short- and Medium-Range Ballistic Missiles capable of threatening South
    Korea, Japan, and forward-deployed United States forces in Eastern Asia
    and the Western Pacific. Iran's ballistic missile capability also
    presents a significant challenge to United States interests in the
    Middle East. Iran's overall defense strategy relies on a substantial
    inventory of ballistic missiles capable of striking targets throughout
    Southwest Asia and parts of Europe.
        Accordingly, effective missile defense is an essential element of
    the U.S. commitment to strengthen strategic and regional deterrence
    against states of concern. The Ground Based Midcourse Defense (GMD)
    system protects the United States Homeland against a limited ICBM
    attack from North Korea and potential future threats from Iran.
    However, continued investment in three broad categories is required to
    lower costs and improve our capabilities against growing threats: 1)
    persistent and survivable sensors, 2) increased inventories of Ground
    Based Interceptors (GBI) with improved performance and reliability and
    3) increased regional capability and capacity. These needs can be
    addressed by the continued funding of priority programs such as: Long-
    Range Discrimination Radar (LRDR), Redesigned Kill Vehicle (RKV), Aegis
    Ballistic Missile Defense, Terminal High-Altitude Area Defense follow-
    on, Overhead Persistent Infra-Red sensors, Upgraded Early Warning
    Radar, and Joint Tactical Ground Stations. Collectively, these
    improvements increase interceptor effectiveness and lower costs to
    defeat threats.
        We have made significant progress in reaching our missile defense
    goals. To enhance Ballistic Missile Defense System (BMDS) sensors and
    discrimination, we are using available technology to improve sensors,
    battle management, fire control and kill vehicles, while fielding LRDR
    to improve tracking and discrimination for Homeland defense against
    Pacific theater threats. We are also increasing the number of GBIs from
    30 to 44 by the end of 2017. Upgrades continue to improve GBI fleet
    reliability, and the development of the RKV began last year with
    deployment expected in approximately 2020. The RKVs will be more
    reliable, cost-effective, and easier to produce.
        The European Phased Adaptive Approach (EPAA) contributes to the
    defense of our deployed forces in Europe and our European NATO Allies.
    EPAA Phase 1 was achieved in December 2011. Phase 2 is going through
    testing and integration and we expect it to achieve operational
    capability in Spring 2016. Phase 3 remains on schedule to be
    operational in the 2018 timeframe and will provide defensive coverage
    against medium- and intermediate-range threats with the deployment of a
    second Aegis Ashore site in Poland and an upgraded SM-3 Block IIA
    interceptor. The EPAA continues to be interoperable with NATO's
    Ballistic Missile Defence system.
        While significant investments in intercept technology have
    increased our missile defense capability, much work remains. Increases
    in the quantity and quality of threats increase the risk that adversary
    missiles will penetrate our defenses and reach their intended targets.
    We are working with the Joint Integrated Air and Missile Defense
    Organization, the Missile Defense Agency and industry partners to
    explore improvements to the current BMDS. We must also examine the
    potential to prevent attacks by countering threats prior to launch.
    Efforts to defeat missile threats across the launch spectrum rely on
    awareness and warning and must be based on actions that are
    synchronized within a fully integrated missile defense architecture to
    maximize our limited defensive capacity.
    Countering Weapons of Mass Destruction (CWMD)
        The U.S National Security Strategy states ``there is no greater
    threat to the American people than weapons of mass destruction,
    particularly the danger posed by the pursuit of nuclear weapons by
    violent extremists.'' The DOD Strategy for CWMD also affirms that the
    pursuit of WMD and potential use by actors of concern pose a threat to
    U.S. national security and stability around the world. As DOD's global
    synchronizer for CWMD planning efforts, USSTRATCOM supports this
    strategy by leveraging the expertise resident in our Center for
    Combating Weapons of Mass Destruction (SCC-WMD), the Standing Joint
    Force Headquarters for Elimination (SJFHQ-E), and our partners at the
    Defense Threat Reduction Agency (DTRA)--all located at Ft. Belvoir,
    Virginia. Together our organizations conduct real-world and exercise
    CWMD activities with the other combatant commands to identify,
    prioritize, and mitigate WMD risks posed by the proliferation of WMD
    technology and expertise to nation-states and non-state actors.
        To execute the DOD Strategy for CWMD, we have identified a need for
    comprehensive situational awareness that incorporates collaborative
    tools, continuously assesses the WMD threat, and provides a holistic
    awareness of the WMD environment. This capability would provide an
    enhanced awareness of emergent catastrophic-scale WMD threats that
    require collaboration across the interagency and partner nations. There
    is also an urgent need to update agent defeat weapon systems and
    develop modeling and simulation to assess collateral damage during WMD
    weapon attacks. USSTRATCOM is working closely with DTRA to resolve
    modeling and simulation shortfalls and ensure that cutting-edge
    technology is applied to WMD consequence.
        The National Strategic Research Institute (NSRI) at the University
    of Nebraska, a University Affiliated Research Center in partnership
    with USSTRATCOM and the DOD, is providing our nation with cutting-edge
    mission-essential research and development capabilities in Combating
    Weapons of Mass Destruction (CWMD). The NSRI experienced another
    successful year conducting scientific research to help ensure
    preparedness for WMD threats.
    Joint Electronic Warfare / Joint Electromagnetic Spectrum Operations
        The electromagnetic spectrum (EMS) reaches across geopolitical
    boundaries and domains, and is tightly integrated into the conduct of
    commerce, governance and national security. Commercial demand for
    spectrum access results in increased pressure on bandwidth
    traditionally used for military operations. Additionally, our potential
    adversaries are actively pursuing capabilities to contest our use of
    the EMS.
        Joint Electromagnetic Spectrum Operations (JEMSO) strengthens U.S.
    national objectives and enables the combat capability of the Joint
    Force by ensuring access to the EMS while denying adversaries the same.
    USSTRATCOM is developing JEMSO policy and doctrine, addressing
    capability gaps across the DOD, and working closely with the Combatant
    Commands, Services and other U.S. Government agencies through advocacy,
    planning and training.
    Intelligence, Surveillance, & Reconnaissance (ISR)
        The demand for ISR has outpaced our ability to meet all needs. At
    the same time, we are focused on increasing the effectiveness and
    persistence of ISR capabilities while reducing business costs. Located
    at Joint Base Anacostia-Bolling, Washington, DC, USSTRATCOM's Joint
    Functional Component Command for ISR (JFCC-ISR) is working with the
    Joint Staff, Services, Combatant Commands and the Intelligence
    Community to improve the management of DOD's existing ISR capabilities.
    I fully support maximizing the agile use of the capabilities we have,
    while also enhancing allied and partner contribution and cooperation.
    These efforts are designed to increase the persistence of our ISR
    capabilities, reduce the risk of strategic surprise, and increase our
    ability to respond to crises.
    Targeting and Analysis
        Targeting requires dedicated analysis. USSTRATCOM's Joint Warfare
    and Analysis Center (JWAC) in Dahlgren, VA enhances our Strategic
    Deterrence and Global Strike missions by providing unique comprehensive
    analysis. JWAC's ability to solve complex challenges for warfighters--
    using a combination of social and physical science techniques and
    engineering expertise--is invaluable to protecting the Nation and
    helping the Joint Force accomplish its missions.
                                   our people
        People remain our most precious resource and deserve our
    unequivocal commitment to their well-being. Just as we sustain and
    modernize our platforms and weapons, we must sustain and modernize our
    workforce. Maintaining a talent pool of nuclear scientists and
    engineers is also paramount to providing viability to meet our
    stockpile requirements. Likewise, investing in the future of the
    professionals who operate, maintain, secure, and support our nuclear
    enterprise is critical. Tomorrow's leaders must have the ability to
    stretch their intellect well beyond one-dimensional problems. They must
    be able to operate in a multi-dimensional environment with multiple
    activities taking place simultaneously.
        My visits throughout the past year confirmed my belief that we have
    an outstanding team in all of our mission areas. I am honored to lead
    such a focused, innovative and professional group dedicated to
    delivering critical warfighting capabilities to the Nation. Whether
    they are underwater on an SSBN, underground in a Launch Control Center,
    in the air on a bomber, or supporting missions from cyberspace to outer
    space, these great Americans do all they can for our Nation.
                                   conclusion
        Achieving strategic deterrence, assurance and escalation control
    will require a multi-faceted, long-term approach to investing in
    strategic capabilities and a renewed commitment to sustaining
    intellectual capital. The sustainment and recapitalization of our
    Nation's strategic capabilities is sorely needed and must not be
    delayed.
        In today's uncertain times, your support, combined with the hard
    work of the exceptional men and women of United States Strategic
    Command, will ensure that we remain ready, agile and effective in
    deterring strategic attack, assuring our Allies and partners, and
    addressing current and future threats.

        Chairman McCain. Admiral Gortney.

     STATEMENT OF ADMIRAL WILLIAM E. GORTNEY, USN, COMMANDER, U.S.
       NORTHERN COMMAND AND COMMANDER, NORTH AMERICAN AEROSPACE
                            DEFENSE COMMAND

        Admiral Gortney. Chairman McCain, Senator Reed,
    distinguished members of the committee, it's an honor to be in
    front of you here today with my longtime shipmates, Admiral
    Cecil Haney and Admiral Kurt Tidd.
        First off, I'd like to thank you for the 2-year budget
    relief to sequestration. Last year, I talked about
    sequestration being the biggest threat to national security.
    The Bipartisan Budget Act of 2015 is a much appreciated step in
    the right direction, and we all look forward to a more
    permanent solution in the future.
        I also appreciate the time many of you have spent with me
    over the past two weeks. From our discussions, I believe our
    time is spent--best spent if I quickly summarize the range of
    significant threats to the Homeland, because I agree with DNI
    [Director of National Intelligence] Clapper when he told your
    committee last month, ``Unpredictable instability has become
    the new normal.''
        I look at threats to the Homeland from those most dangerous
    to most likely. On the most dangerous, the nation-states:
    Russia, China, North Korea, where the peninsula is more
    unstable than it's ever been since the Armistice, and, of
    course, Iran. Non-state actors: Daesh, and, in the future,
    whatever adaptation Daesh will morph into. Then transnational
    organized crime who move product--drugs, humans, weapons, or
    anything that will make them a profit, exploiting the many
    seams between the nations in North, Central, and South America,
    the seams between the many agencies of the Governments of those
    nations, the seams created by the inadequate authorities,
    resources, and training of many of those agencies in those
    nations, and, yes, the seams created by the geographic
    boundaries of our combatant command structure, seams for which
    Kurt Tidd and I are accountable to close while we work the
    military-to-military effort of our Nation's whole-of-government
    approach to the many shared challenges within North, Central,
    and South America.
        The number-one priority of the Department and NORAD
    [Northern American Aerospace Defense Command] and NORTHCOM is
    Homeland defense. It's a no-fail mission, and it's just as
    important today as when NORAD and NORTHCOM were established,
    with one single commander responsible for the defense of our
    Homeland through the many domains of air, space, maritime,
    land, and cyber, although, within cyber, our responsibility
    extends only as far as defending our own networks.
        Today's evolving and resurgent threats are a function of
    the return-to-great-power competition and the continuing global
    terrorist threat. These threats create vulnerabilities best
    mitigated through an integrated and binational approach across
    the multiple domains, which requires a fully integrated defense
    in the air, space, sea, and land domains. As a result, together
    NORAD and NORTHCOM have evolved well past our Cold War and 9/11
    origins, and are today inseparable. We defend the Homelands in
    the air through the NORAD, and the remaining domains through
    NORTHCOM, facing the traditional and nontraditional threats in
    our assigned battlespace. NORAD and NORTHCOM work seamlessly
    together in defense of our Homeland. We're focused on complete
    unity of command and unity of effort. We are two commands, but
    a single, fully-integrated headquarters organized and trained
    to face the diverse array of evolving threats to our Nation's
    security.
        Outside the traditional military threat and again created
    by the return-of-great-power competition is the nontraditional
    threat to the Homeland. To counter this threat, I'm a
    supporting commander to the Department of Homeland Security,
    the Department of Justice, and the many law enforcement
    agencies engaged in this crucial fight. Here, my primary
    concern are homegrown violent extremists who are self-
    radicalized and are in the receive-only mode and not actively
    communicating back to Daesh. These extremists are targeting SOF
    [Special Operations Forces], Department of Defense personnel
    and facilities, and our own fellow citizens. This is what
    occurred in Chattanooga on a DOD facility and in San Bernardino
    against our Nation's civilian population. As the commander
    accountable for setting the force-protection condition of DOD
    facilities in the continental United States, we at NORTHCOM
    work closely with the Army, Navy, Air Force, and Marine Corps
    in order to balance the enduring nature of this threat with the
    services' ability to complete the many missions they have here
    in the Homeland.
        In closing, I want to mention our Homeland partnerships
    that enable our success. We partner continuously with the
    numerous interagency components of the government. These
    include the National Guard, both airmen and soldiers, the
    intelligence community, law enforcement agencies, and our
    closest mission partner, the Department of Homeland Security.
    Our mission partners maintain nearly 60 liaison officers in our
    headquarters, and these patriots are fully embedded into our
    ops and our intel organization.
        Building partnership capacity within the Homeland is
    absolutely vital to our mission. At NORTHCOM, 70 percent of our
    major exercise--and this is nearly 200 each year--are focused
    on our mission partners as the primary target audience of the
    exercise programs. We call this Theater Security Cooperation
    within the Homeland. This is NORTHCOM supporting our mission
    partners, and our mission partners supporting us, which is why
    we view these Homeland partnerships as our center of gravity,
    as they are critical to the success across all of our assigned
    mission areas.
        Thank you for giving me the opportunity to speak, and I
    welcome your questions.
        [The prepared statement of Admiral Gortney follows:]

                Prepared Statement by Admiral William E. Gortney
                                  introduction
        Chairman McCain, Ranking Member Reed, and distinguished members of
    the Committee, I appreciate the opportunity to appear before you today
    to discuss the posture of United States Northern Command (USNORTHCOM)
    and North American Aerospace Defense Command (NORAD). I am here
    representing the Commands' soldiers, sailors, airmen, marines, coast
    guardsmen, national guardsmen, reservists, and civilians safeguarding
    our nation amidst the most diverse and challenging security atmosphere
    in our history. Brave men and women are confronting this rapidly
    changing defense environment head-on. It is an honor and a privilege to
    serve alongside them and I am grateful to the Committee for the support
    you provide.
        North America is increasingly vulnerable to a vast array of
    evolving threats--from highly capable, national powers to disaffected
    individuals who act in response to extremist propaganda. These threats
    are growing and becoming much more diffuse and less attributable.
    Moreover, I believe that many of the crises originating as regional
    conflicts elsewhere in the world are rapidly manifesting themselves
    here at home and they continue to challenge our ability to warn and
    defend.
        The complexity and volatility of our strategic environment demands
    that we advance and sustain the capabilities to protect our Homelands.
    I believe the President's fiscal year 2017 budget represents a balanced
    approach to maintaining our strategic advantage within the realities of
    a fiscally-constrained environment. We are still feeling the impacts of
    sequestration, primarily because the majority of the Services' cuts
    were from the operations and maintenance accounts, which directly
    impedes their ability to provide trained and equipped servicemembers to
    Combatant Commands. I thank the Committee for your support in passing
    the Bipartisan Budget Act of 2015, which represents another important
    step toward permanent relief from the sequestration caps in the Budget
    Control Act of 2011.
        We are resolute in our commitment to deter, prevent, and defeat
    attacks against the United States and Canada. We stand ready to provide
    rapid and robust support to the primary lead agencies responding to
    domestic disasters and the law enforcement agencies (LEAs) charged with
    combating transnational organized crime. We continue to strengthen our
    regional and Homeland partnerships; they are our center of gravity.
                             strategic environment
        The expansive complexity of the contemporary security environment
    makes defending the Homeland a continual challenge. The spectrum of
    threats to our national security ranges from traditional nation-state
    military capabilities to individuals with access to increasingly
    destructive technologies. The diffusion of capability, the inexact art
    of predicting intent, and the complications of attribution all
    contribute to a blurring of lines between traditional military threats
    and asymmetric threats that trigger military support or response.
    Technological advances and proliferation coupled with pockets of
    instability will generate a growing array of potential threats against
    which we must posture ourselves. Many of our potential adversaries are
    pursuing advanced weapons development not seen in decades.
    Individually, they pose serious concerns to our national security and
    the international community. Collectively, they represent a vast
    spectrum of complex and volatile threats that I believe will only
    continue to grow and threaten the Homeland if we hesitate to act
    decisively.
                                     russia
        A resurgent Russia continues to assert itself on the world stage.
    No longer content merely to pursue primacy within its near abroad,
    Russia's forays into Syria highlight Vladimir Putin's willingness to
    employ military power to advance his agenda outside Russia's near
    abroad. Last year I stated that Russia is progressing toward its goal
    of deploying long-range, conventionally armed cruise missiles
    comparable to Western systems. In 2015 these efforts came to fruition,
    as Russia employed heavy bombers, surface vessels, and a submarine to
    launch advanced conventional cruise missiles at targets in Syria. These
    operations served as a proof-of-concept for weapons systems and tactics
    ultimately intended to provide flexible deterrent options in a future
    crisis.
        Russia's strategic nuclear forces remain the only foreign military
    threat that could imperil our nation's existence, and Moscow continues
    to spend significant resources to modernize its nuclear arsenal and
    delivery systems. While Russia seeks to avoid a strategic conflict with
    the United States, Moscow perceives itself to be threatened by a
    coordinated Western effort to erode its sovereignty, weaken its
    economy, and undermine its regime. I am concerned these threat
    perceptions could prompt Russia's leaders to misinterpret our
    intentions in a crisis, leading to inadvertent escalation.
                                     china
        As part of its long-term, comprehensive military modernization
    program, China continues to modernize and expand its strategic forces
    with a focus on improving its ability to survive a first strike and
    penetrate United States' missile defenses. Concerned that that United
    States precision strike and missile defense capabilities undermine its
    strategic deterrent, Beijing is working to improve the survivability of
    its nuclear force to ensure a credible second-strike capability.
        China continues to supplement its modest silo-based
    intercontinental ballistic missile (ICBM) force with a growing number
    of road-mobile ICBMs and is now in the process of operationalizing its
    first viable class of ballistic missile submarines, which, if
    successful, would be China's first sea-based strategic nuclear
    deterrent. China is also developing a range of anti-access and area-
    denial weapons which, along with its cyber, counter-space, and
    strategic nuclear capabilities, are designed to discourage United
    States intervention in a regional crisis. Meanwhile, Beijing's
    diplomatic strategy appears to be focused on limiting United States
    options by denying physical and political access in key regions around
    the globe.
                                  north korea
        North Korea's recent hostile cyberspace activity, nuclear testing,
    and continued ballistic missile development represent a dangerous
    threat to our national security. North Korea's recent nuclear test and
    satellite launch demonstrate Kim Jong Un's commitment to developing
    strategic capabilities, as well as his disregard for United Nations
    Security Council resolutions. The regime's efforts to develop and
    deploy the road-mobile KN08 ICBM have profound implications for
    Homeland missile defense, primarily because the missile obviates most
    of the pre-launch indicators on which we have traditionally relied to
    posture our defenses. While the KN08 remains untested, modeling
    suggests it could deliver a nuclear payload to much of the Continental
    United States. We assess Kim Jong Un is unlikely to attack our Homeland
    unless he perceives an imminent threat to his regime's survival.
    However, we are concerned the possession of a nuclear ICBM could
    embolden the regime's intransigence below the nuclear threshold and
    complicate our response to a crisis on the peninsula. While I do not
    believe that North Korea's efforts to develop a submarine-launched
    ballistic missile represent a near-term threat to the United States
    Homeland, the program underscores the level of effort and resources the
    regime is willing to devote to developing advanced weapon systems. As
    the combatant commander charged with defending the Homeland, I take
    this threat very seriously, particularly in light of North Korea's
    unpredictable leadership.
                                      iran
        Iran poses multiple significant security concerns to the United
    States, and I remain wary of its strategic trajectory. Last year's
    conclusion of the Joint Comprehensive Plan of Action was a welcome
    development, but, Iran's continuing pursuit of long-range missile
    capabilities and ballistic missile and space launch programs, in
    violation of United Nations Security Council resolutions, remains a
    serious concern. Iran has successfully orbited satellites using a
    first-generation space launch vehicle and announced plans to orbit a
    larger satellite using its ICBM-class booster as early as this year. In
    light of these advances, we assess Iran may be able to deploy an
    operational ICBM by 2020 if the regime choses to do so. Additionally,
    Iran has invested in developing advanced offensive cyberspace
    capability and has demonstrated cyberspace operations that could
    threaten our critical civil infrastructure.
                               violent extremists
        In addition to the challenges posed by global and regional powers,
    a more insidious threat comes from extremists who undermine our
    national security through radicalization and violence. Here in the
    Homeland, we face a pernicious terrorist threat from the self-
    proclaimed Islamic State of Iraq and the Levant (ISIL), which I choose
    to refer to as Daesh. Their sophisticated and robust social media
    campaign is motivating citizens to do harm to fellow citizens. Daesh
    has a strong recruiting narrative amplified by abundant attention in
    traditional and social media, which can resonate amongst disaffected
    Westerners. The tragic attacks in Chattanooga and San Bernardino
    underscore the difficulty intelligence and law enforcement face in
    detecting Homegrown Violent Extremists (HVEs) who do not show outward,
    reported signs of radicalization prior to an attack.
        Meanwhile, we remain attuned to the potential for foreign terrorist
    organizations to conduct more complex, directed attacks in North
    America. al Qaeda and Daesh have communicated their intent to attack
    North America, and Daesh demonstrated its capability to conduct
    horrific, large scale attacks with the November 13th attacks in Paris.
    In addition, we have observed a continued focus on aviation targets,
    most notably by the probable bombing of a Russian airliner over the
    Sinai Peninsula in November. While much work needs to be done, since 9/
    11, our law enforcement partners and the wider Intelligence Community
    have vastly improved procedures to deter or prevent similar coordinated
    attacks, but terrorists are constantly adapting. We are prepared to
    support civil authorities when asked if a complex or large-scale attack
    were to take place.
                         transnational organized crime
        Transnational Organized Crime (TOC) presents a dangerous and highly
    sophisticated threat to the United States and a challenge to global
    stability. Transnational Criminal Organizations (TCOs) exploit
    infrastructure, corrupt officials, challenge societal norms, and are
    responsible for attacks on law enforcement and innocent civilians. TCOs
    represent the principal suppliers of illicit drugs into the Homeland
    and the trafficking of precursor chemicals for use in illicit drug
    production. TOC erodes the rule of law through extortion, violence and
    other illicit activity, which creates a security vulnerability that
    could be exploited by state and non-state actors.
                               lines of operation
        In my statement to this Committee last year, I described the unique
    aspects of USNORTHCOM as the nation's Homeland geographic combatant
    command (GCC) and NORAD as the nation's oldest bi-national command. I
    explained the importance of prioritizing our complementary and
    individual functions with a focus on our shared end states. Our key
    Lines of Operation are more critical than ever to our mission success.
    We map all of our activities to these Lines of Operation, which shape
    our activities and effort.

          USNORTHCOM and NORAD Lines of Operation
         ---------------------------------------------------------------
           Defense of our Homelands
           Defense Support of Civil Authorities
           Homeland Partnerships
           Regional Partnerships
           The Arctic
           Professionalism and Excellence
           Warfighters and Families

                            defense of our homelands
        As the Commander of USNORTHCOM and NORAD, my primary task is to
    defend the Homelands. Defense of our Homelands is our dominant line of
    operation, and it is the core focus of USNORTHCOM and NORAD primary
    missions. We are ever mindful of the supreme responsibility we have of
    defending the security of the United States, our citizens, and our
    allies and partners. In 2015, we celebrated NORAD's 57th year defending
    North America against attack through our no-fail aerospace warning and
    aerospace control missions. NORAD was born in the Cold War and expanded
    to an internal threat focus after 9/11. By contrast, USNORTHCOM was
    born in the aftermath of 9/11 and shaped by the seminal nature of those
    attacks. Both Commands are ever-adapting within the strategic
    environment, and we work hard to develop our capabilities to outpace
    threats.
                                missile defense
        USNORTHCOM's most prominent Homeland defense mission is Ballistic
    Missile Defense (BMD). Currently, our BMD architecture is designed
    primarily to defend against limited long range ballistic missile
    attacks from North Korean and Iran. In light of an evolving threat and
    the increasingly enigmatic and unpredictable nature of North Korea's
    dictator, Kim Jong Un, I believe it is imperative that the United
    States continue to develop more capable forces and broader options for
    effective ballistic missile defense. Our BMD architecture is comprised
    of a group of independent, yet interrelated components that form a
    complex and unified defensive network. This system of systems cannot be
    modernized and maintained sequentially; each component must be improved
    concurrently to outpace the evolving threat. I agree with and support
    the modernization priorities set by Vice Admiral Jim Syring and his
    team at the Missile Defense Agency (MDA), including improvement in our
    discrimination sensors, lethality of our kill vehicles, sustainment of
    the BMD architecture, and development of our kinetic and non-kinetic
    options. I am grateful to this committee for your support and
    commitment to modernizing our Ballistic Missile Defense System (BMDS).
        We are on the right path to improving our sensors through the
    development and deployment of the new Long Range Discrimination Radar
    (LRDR). This critical midcourse sensor is expected to provide
    persistent sensor coverage and vastly improve our target tracking and
    discrimination capability. The LRDR will help us evaluate our
    countermeasure options and increase the capability of our Ground Based
    Midcourse Defense (GMD) interceptors.
        We remain on track to deploy the final 14 interceptors in Alaska,
    which will give us 44 missiles in the ground by the end of 2017.
    Finishing the inventory is a big step toward the robust BMDS of the
    future, but it is critical that we not stop there. We need to continue
    working on enhancements to the current Exo-atmospheric Kill Vehicle
    (EKV), and investments in the future Redesigned Kill Vehicle (RKV). We
    need to invest in the lethality of our kill vehicles, and in ways to
    get us to the right side of the cost curve. Our adversaries are
    developing relatively inexpensive technologies, which we assess can
    reach the Homeland. By contrast, our interceptors are vastly more
    expensive. Today, our BMDS is in an unsustainable cost model, which has
    us postured to shoot down inexpensive rockets with very expensive ones.
        I believe that Homeland defense is fundamentally an ``away game'',
    and missile defense is no exception. Today's GMD system is designed to
    intercept incoming threats after the launch is initiated. While that
    approach offers us sufficient decision space, we need to augment our
    defensive posture with one that is designed to defeat ballistic missile
    threats in the boost phase as well as before they are launched, known
    as ``left of launch.'' In concert with our public and private
    stakeholders, MDA is working on an emerging technology that will enable
    us to employ non-kinetic methods to defeat ballistic missile threats
    when we receive indications that a launch is imminent. I believe this
    technology will reduce the overall cost of engagement-based missile
    defense and provide us options to defeat ballistic missiles that
    continue to proliferate around the world.
        We work closely with other GCCs, functional combatant commands, and
    partner nations to leverage capabilities that enable us to protect the
    Homeland. Thanks to agreements with the Government of Japan, United
    States Pacific Command (USPACOM) was able to deploy a second Army Navy/
    Transportable Radar Surveillance and Control Model 2, or AN/TPY-2 to
    Japan, which dramatically improved our ability to ``defend forward.''
        In addition to the proliferation of ballistic missile threats, I am
    deeply troubled by the development of advanced long-range cruise
    missiles and the growing threat they represent to North America. Russia
    possesses both conventional and nuclear cruise missiles with the range
    to reach North America and it has proliferated some advanced cruise
    missile technologies to other actors. This threat is real and it is
    imperative that we develop effective response options to outpace the
    threat and enhance our deterrence. We are working with the Joint
    Integrated Air and Missile Defense Organization (JIAMDO), MDA, and
    other stakeholders to improve our Cruise Missile Defense (CMD)
    capabilities.
        Effectively countering and defeating cruise missiles requires a
    layered and integrated architecture that can defend across the full
    spectrum of the engagement sequence. Cruise missiles represent a real
    operational challenge because of their increased standoff capability,
    low altitude and small radar signatures. Although no single system can
    counter all cruise missiles, we have confidence in our layered
    architecture to defend the Homeland. To defeat this more capable
    threat, we are working on enhancements to each of the individual
    systems, including our Indications and Warnings capabilities, wide-
    area-surveillance, and advanced fire control infrastructure.
        We are in the first segment of our three-phase Homeland Defense
    Design (HDD) effort, which will improve our capability to find, fix,
    track, target, and engage growing air threats, such as those posed by
    cruise missiles, low-slow aircraft, and long-range aviation. In this
    first phase, we are testing and evaluating advanced sensors as well as
    integrated command and control capabilities. In addition to the new
    STateside Affordable Radar System (STARS), we had begun a three-year
    operational exercise of the Joint Land Attack Cruise Missile Defense
    Elevated Netted Sensor System (JLENS). This exercise has been an
    opportunity for us to see how well JLENS can fit into the existing
    Integrated Air Defense System (IADS) of the National Capital Region
    (NCR), including deployment of a JLENS Fire Control System aerostat,
    which is designed to work in tandem with the surveillance aerostat.
        Unfortunately, on October 28, 2015, the JLENS Fire Control System
    aerostat detached from its mooring station on Aberdeen Proving Ground,
    Maryland, and eventually grounded in a wooded area in northeast
    Pennsylvania. The Army is conducting a thorough investigation to
    determine the cause of the incident. Although this was a setback to our
    operational exercise, we still believe the JLENS system shows great
    promise in defense of the NCR. If the outcome of the investigation
    leads to the resumption of the operational exercise, we will work with
    the Army and the Office of the Secretary of Defense, as well as
    Congressional Defense Committees, on the way forward to continue our
    assessment of JLENS' performance in support of cruise missile defense.
           aerospace warning, aerospace control and maritime warning
        In 1958, the United States and Canada formalized the bi-national
    agreement, which created NORAD to provide centralized operational
    control of continental air defenses against the threat of Soviet
    bombers. Every subsequent renewal of that agreement helped reshape the
    partnership to meet evolving threats to North America. After the fall
    of the Soviet Union, and in light of non-traditional aerospace threats,
    NORAD expanded its mission to include air sovereignty, warning, and
    assessment. In the aftermath of September 11, 2001, NORAD's paradigm
    changed, and we began to focus on aviation security issues originating
    within Canada and the United States. For the last 14 years, Operation
    NOBLE EAGLE has defended our nation against 9/11-style terrorist
    attacks and other non-traditional aviation threats.
        Aerospace warning and aerospace control of North America remains
    NORAD's primary missions. The command retains robust air defense
    capabilities to execute the air sovereignty mission over Canada, Alaska
    and the continental United States. Today, we are confronted with an
    unprecedented spectrum of aerospace and maritime challenges, ranging
    from resurgence in Russian naval and aerospace activity to the
    proliferation of private Unmanned Aircraft Systems (UAS).
        In addition to expanded military activity in Europe and the Middle
    East, we are observing a significant rise in Russian military
    assertiveness in the approaches to North America. Russian Long Range
    Aviation activity has surged, beginning with regular out-of-area
    patrols in 2007, culminating with a record number of out-of-area
    patrols in 2014 and the first-ever combat use of Russian heavy bombers
    in the Syrian conflict in November 2015.
        NORAD is responsible for monitoring and identifying all aircraft of
    interest approaching North America that may enter the sovereign
    airspace of either Canada or the United States. On July 4th, 2015,
    NORAD fighter aircraft intercepted and visually identified two sets of
    Russian Tu-95 ``Bear'' long-range bombers flying in the United States
    Air Defense Identification Zone, one in the airspace west of Alaska's
    coast and another off the coast of central California. Although none of
    the four bombers entered United States or Canadian sovereign airspace
    and were not a direct threat to our national security, they do
    represent a strategic demonstration of Russian military capability. I
    believe these flights are one way the Kremlin delivers the message that
    Russia remains a power with global reach.
        In addition to increasing activity from state-actors and the
    potential for 9/11-style attacks, the growing availability and
    expanding capability of small manned and unmanned aerial systems will
    challenge the DOD, the Department of Homeland Security (DHS), and our
    law enforcement partners defending our airspace. UAS constitute a
    rapidly-developing industry, with increasingly sophisticated and yet
    simple-to-operate systems available for purchase by the general public,
    increasing the likelihood that more of these aircraft will be used in
    the National Airspace System. Although the vast majority of these
    devices are operated in a lawful manner, their growing availability
    increases the likelihood of illicit use. Countering increased
    proliferation of non-traditional aviation technology (NTAT) will take a
    whole-of-community approach, with law enforcement at every level
    playing a critical role.
        NORAD is postured to defend against threats to North America by
    aircraft, cruise missiles, and medium or large UASs. However, the
    layered detection infrastructure used to detect, identify, and track
    these threats is not designed for smaller non-traditional aircraft or
    UAS. On April 15, 2015, a small manned gyrocopter departed from
    Gettysburg, Pennsylvania and flew to the NCR, landing on the grounds of
    the Capitol in Washington, DC. The gyrocopter unknowingly exploited an
    operational challenge in detecting and tracking low-altitude and slow-
    speed aerial vehicles.
        The airspace surrounding the NCR, known as the Washington DC.
    Special Flight Rules Area (SFRA) is monitored by the Integrated Air
    Defense System (IADS), which is a vast network of radars, cameras, and
    other detection and warning devices. The IADS is extremely capable of
    identifying and tracking potential threats to the NCR--anything from
    large commercial aircraft down to small, single-propeller recreational
    aircraft. Our post-event analysis revealed that the gyrocopter was
    detected by several of our integrated sensors as it approached and
    transited the SFRA. However, some of the aircraft's operational
    parameters, including speed, altitude, and radar cross-section fell
    below the thresholds necessary to differentiate it from surrounding
    objects , including weather, terrain, and birds. This event reinforced
    the fact that detecting and tracking low-altitude and slow-speed aerial
    vehicles is a significant technical challenge. The post-event analysis
    was a turning point for the interagency community's efforts addressing
    the technical and procedural changes necessary to detect, track, and
    mitigate threats posed by these non-traditional aviation technologies.
        As the spectrum of aerospace and maritime threats expands, we test
    and evaluate our ability to warn and defend against a range of
    scenarios. We challenge ourselves to outpace the known threats and
    anticipate the unknown ones. In order to test responses, systems and
    equipment, NORAD conducts numerous exercises with a variety of
    scenarios, including airspace restriction violations, hijackings and
    responses to unknown aircraft. This year, we conducted fourteen robust
    interagency live-fly aerospace defense exercises. These training events
    are scenario-based and are intended to exercise all aspects of our
    airspace defense plans. Defending the airspace in the NCR requires
    close collaboration with all the interagency stakeholders; therefore,
    we coordinate and exercise with our key partners, including the Federal
    Aviation Administration (FAA), the National Capital Region Coordination
    Center (NCRCC), the Joint Air Defense Operations Center (JADOC), the
    Civil Air Patrol, the U.S. Coast Guard, and the Continental NORAD
    Region (CONR) Eastern and Western Air Defense Sectors.
        In addition to NORAD's traditional air defense role, our mission
    set also encompasses maritime warning, which includes the unique
    responsibility of providing maritime domain awareness and maritime
    warning of activities conducted in the maritime approaches and internal
    waterways of North America. Although NORAD does not have a maritime
    control mission, we are uniquely postured to process, assess and
    disseminate intelligence and operational information to our Canadian
    and United States interagency partners. The maritime approaches to
    North America are extremely congested, which makes executing a
    unilateral, bilateral or bi-national response to a threat challenging.
    We issued eight maritime warning advisories in 2015, providing a
    critical bi-national Homeland defense support capability.
                                homeland defense
        Global violent extremism is on the rise and it is neither
    restricted to a single ideology nor constrained by borders. The 2015
    attacks in Paris, Mali, Chattanooga, San Bernadino, and others
    represent a growing radical movement of groups and individuals inspired
    by a range of beliefs that promote or use violence to undermine our
    universal values. Here in the Homeland, we are seeing a growing use of
    violence by domestic terrorists and HVEs, many of whom are radicalized
    by violent extremist groups like Daesh, and al Qaeda.
        We collaborate with the Federal Bureau of Investigation (FBI), DHS,
    and many other federal agencies to provide unity of effort to deter,
    prevent, and defend against threats to our Homeland. Our federal
    partners and allies have successfully deterred or prevented some
    violent plots, but blind spots and intelligence gaps are common when
    trying to counter terrorism, so we must prepare for those times when we
    have no specific warning. In making assessments of possible threats, we
    gather and share snippets of information and try to determine how
    individual threat reports may morph into threat streams. We assess
    these threats against four specific attributes: plausibility,
    credibility, specificity, and imminency. In a number of cases, we are
    able to establish that the threats are plausible and credible, but
    often times we lack specific and imminent pre-operational indicators,
    which makes preventing these attacks especially challenging.
        As the Commander of USNORTHCOM, I am responsible for protecting DOD
    installations and personnel from domestic threats. One of my assigned
    tasks is setting the baseline Force Protection Condition (FPCON) for
    DOD installations in the Homeland. Earlier this year, we began to
    observe a growing focus on targeting members of the United States
    military, in addition to virtual targeting of DOD personnel after Daesh
    released the names and addresses of U.S. servicemembers.
        On May 7, 2015, I raised the FPCON level in the United States to
    FPCON Bravo, which is only the second time that has been done since 9/
    11. My decision was a prudent measure to ensure increased vigilance and
    safeguarding of DOD personnel, installations, and facilities within my
    USNORTHCOM Area of Responsibility (AOR). I believe terrorists will
    continue to emphasize targeting DOD personnel for the foreseeable
    future, so establishing a preemptive, unpredictable frequency of
    actions will mitigate threats to our installations, personnel, assets,
    resources, and infrastructure.
        After the tragic July 16th shootings in Chattanooga, I released an
    additional force protection advisory that mandated several additional
    randomly-applied security measures within FPCON Bravo, with an emphasis
    on off-installation activities, including recruiting stations, Reserve
    centers, and Reserve Officer Training Corps units. With this threat not
    diminishing, these increased security measures will likely become our
    new normal, so we implemented measures that were practicable and
    sustainable for the facilities affected.
        For the Homeland, I believe Daesh's center of gravity is in their
    narrative and a perception of success in bringing about a 21st century
    ``caliphate.'' Our objective must move beyond defending against violent
    extremism to preventing it entirely by breaking their cycle of
    radicalization, which will require countering their narrative at the
    grassroots level. Countering the narrative of terrorists like al Qaeda
    and Daesh requires a globally unified response, including positive and
    proactive contributions from national and local governments, local
    communities, and the private sector.
               counternarcotics and transnational organized crime
        The trafficking and the endemic abuse of illicit drugs represent a
    national security threat to the United States. The primary criminal
    drug threat is posed by Mexican TCOs, the main suppliers of cocaine,
    heroin, methamphetamine, and marijuana throughout the United States.
    TOC distribution networks and drug trafficking enterprises are
    expanding, most notably among the heroin and methamphetamine markets.
    Here in the Homeland, TCOs maintain relatively low profiles to avoid
    confrontations with law enforcement, but their domestically-affiliated
    gangs commit violent crimes to maintain power in their territories and
    control their local drug markets. In addition to illicit drug
    trafficking, these intricate TOC networks move legal goods, weapons,
    natural resources, and people, with revenues comparable to the gross
    domestic product of small countries.
        Combating TOC requires unity of effort among federal, state, local,
    and foreign governments. We will continue to work together with our
    interagency partners in assisting Mexico and other countries around the
    world to respond to the evolving threats posed by transnational
    criminal organizations. Central to this effort is strengthening our
    partner nations' ability to enhance the rule of law so that judicial,
    law enforcement, security, and community organizations can effectively
    combat the TCOs.
        USNORTHCOM works very hard to develop the trusted partnership
    opportunities with our domestic law enforcement agencies and Mexican
    military partners to align and synchronize our efforts. We provide
    title 10 counterdrug support to federal, state, and local law
    enforcement agencies, and we coordinate with the National Guard to
    synchronize DOD support to domestic law enforcement. When requested by
    Mexico, and in a manner consistent with the human rights provisions of
    the Leahy Law, USNORTHCOM cooperates with the U.S. Country Team and the
    Mexican military to support efforts building C-TOC capacities to
    disrupt and degrade TCO activities.
        We provide operational counterdrug support through our subordinate
    command, Joint Task Force North (JTF-N), which recruits and employs
    title 10 units on a strictly voluntary basis filling domestic law
    enforcement gaps with mostly military-unique capabilities. In 2015,
    JTF-N provided support to 51 specific multi-domain and multi-LEA
    operations, including detection and monitoring, ground surveillance,
    and mobility support.
        In addition to providing critical military-unique support to LEA,
    the operational support provided by the title 10 units significantly
    benefits DOD, because in many cases, it simultaneously achieves many of
    the supporting unit's critical training requirements. The planning,
    interagency collaboration, and dynamic execution of these missions
    closely approximates the missions these units will perform during
    future deployments, and the setting of southwest border operations
    mirrors the austere environment common to many forward-deployed
    locations.
        USNORTHCOM is just one supporting organization in the much larger
    interagency and international law enforcement effort to counter TOC in
    the global environment. We contribute, as the other combatant commands
    do, by addressing threats in our AOR, providing support to our
    interagency and host nation partners, and collaborating with each other
    to close gaps and seams. We will continue our efforts to enhance mutual
    trust, increase collaboration, improve C-TOC capacity, and to
    contribute to a cooperative defense of North America.
                                     cyber
        Cyber threats are increasingly among the most serious national
    security dangers faced by the United States today, and I remain adamant
    in considering activity in cyberspace as integral to an overall
    domestic attack assessment. More and more we are confronted by a range
    of actors, from nation states like Russia, North Korea, China, and
    Iran, to profit-motivated criminals and ideologically-driven hackers.
    Both state and non-state actors attempt to target critical
    infrastructure, information and telecommunication systems, and
    financial institutions. What makes cyber attacks so difficult to defend
    against is the speed at which the technology advances, coupled with the
    diffuse nature of the attacks and the difficulty to attribute the
    source.
        Cyber attacks pose a serious risk to the networks and systems
    controlling our critical infrastructure. The U.S. military is dependent
    on privately owned critical infrastructure, an attack on which could
    yield potentially severe consequences in a time of crisis. We are
    working with our Government and industry partners to isolate our
    vulnerabilities and identify ways to prevent malicious cyber activity
    while defending our networks.
        In addition to the millions of daily vulnerability probes of our
    networks and other cyber sabotage activity, we have seen a rise in
    Chinese cyber espionage, resulting in a significant loss of
    intellectual property and sensitive information that resides on some of
    our unclassified systems. This loss of vital intellectual property has
    the potential to damage our national security and impede our economic
    growth.
                      defense support of civil authorities
        As the USNORTHCOM Commander and a GCC with responsibility for 49 of
    50 states, I have the responsibility to provide DOD assistance to
    federal, state, local, territorial, and tribal authorities within the
    Homeland. Defense Support of Civil Authorities (DSCA), our second Line
    of Operation, is a unique authority by which we facilitate DOD support
    in response to requests for assistance from civil authorities for
    domestic emergencies, law enforcement support, and other domestic
    activities. DSCA covers the spectrum of civil activities, from
    localized weather incidents to the response to weapons of mass
    destruction events. The DOD has a long history of supporting civil
    authorities with specialized skills, capabilities, and capacities
    maintained for the battlefield that provide stability in the wake of
    catastrophic events at home. Our support has been significantly shaped
    by lessons learned in the aftermath of Hurricanes Katrina and Sandy,
    and we conduct vigorous exercises to forge our enduring partnerships
    with agencies and organizations across the country. We stand ready to
    support the lead federal agencies (LFA) in responding quickly to
    natural and manmade disasters and to the effects of terrorist attacks.
        The most prominent and frequent support we provide is disaster
    response assistance to DHS's Federal Emergency Management Agency
    (FEMA). Last year's FEMA major disaster declarations were mostly in
    response to severe storms, flooding, and wildfires. We directly
    supported disaster relief operations to several states that suffered
    widespread flooding, including South Carolina. One of the worst fire
    seasons in recent United States history occurred this past year, with
    wildfires spreading throughout much of the Western United States and
    straining federal, state, and local firefighting capacity. Of note,
    2015 was the worst year on record for wildfires in Washington State,
    culminating in a rash of fires that resulted in a federal emergency
    declaration. As a result of widespread fires, the National Interagency
    Fire Center (NIFC) set the national Preparedness Level (PL) at PL5, the
    highest level, which indicated that wide geographic areas were
    experiencing major incidents which had the potential to exhaust all
    agency fire resources. For the first time since 2006, the NIFC
    submitted a Request For Assistance (RFA) through USNORTHCOM, with final
    approval by the Secretary of Defense for DOD firefighting support. In
    August 2015, NIFC's request was approved, and with the help of the
    United States Army, we deployed 200 soldiers from 17th Field Artillery
    Brigade located at Joint Base Lewis-McChord in Washington to provide
    ground support to the fire-fighting effort. The crews assisted the fire
    prevention efforts, and constructed firebreaks to slow or stop the
    progress of the fire.
        As incidents in the Homeland develop, we work closely with our
    interagency partners to provide options for DOD support, should they
    require our assistance. In November, the DHS and U.S. Department of
    Health and Human Services (HHS) observed an increase in the number of
    unaccompanied children (UC) and family units apprehended along the
    Southwest Border, with a trend that was projected to exceed its organic
    housing capacity. The Office of Refugee Resettlement at HHS initiated a
    plan to expand its temporary capacity to house unaccompanied children,
    which included a request to the DOD to identify facilities capable of
    temporarily housing UCs. In support of HHS and with the help of the
    Services, we coordinated the use of several DOD installations that
    could be used for this purpose, under a reimbursable agreement between
    the agencies. In January 2016, 129 UCs arrived at Holloman Air Force
    Base, New Mexico under the care of HHS' Administration for Children and
    Families and USNORTHCOM remains ready to facilitate the use of other
    DOD installations if needed.
                             homeland partnerships
        The focal point of USNORTHCOM and NORAD's power and strength are in
    the partnerships that we create and sustain with joint, interagency,
    and multinational organizations. Our trusted partnerships are our
    center of gravity and are critical to our success across the spectrum
    of our missions. Homeland Partnerships, our third line of operation,
    underscore every one of our mission areas, and are best represented by
    the integration in our headquarters of nearly 60 DOD and non-DOD
    federal agencies, department representatives, and liaison officers. I
    view Homeland defense as a team effort, and I rely on partnerships with
    my fellow combatant commands, the Services, and our interagency
    partners to accomplish this mission.
        We have built on our partnership with the Joint Improvised-threat
    Defeat Agency (JIDA) and the resulting collaboration with the lead
    federal agencies to protect the Homeland from next-generation
    Improvised Explosive Devices (IED).
        We continue to develop our key partnership with the DHS and provide
    support through frequent strategic, operational and tactical dialogue.
    I collaborate regularly with DHS Secretary Jeh Johnson through visits
    and monthly video teleconferences. I believe that his Southern Border
    and Approaches Campaign will further unify Homeland defense and
    security along our southern border. We are underway with the first of
    three deliberate phases of support toward an end state of fully
    integrated and synchronized operational activities with DHS's new Joint
    Task Forces (JTFs).
                             regional partnerships
        USNORTHCOM and NORAD do not face today's complex strategic
    environment alone. Our allies and partner nations actively contribute
    to the cooperative defense of North America. Strong and reliable
    Regional Partnerships, our fourth line of operation, are critical for
    us to protect our shared values and ways of life and defend our nations
    in depth. We are inextricably linked with our partners through
    geography, economies, and demographics, and conduct deliberate security
    cooperation with them to strengthen our defense in depth and advance
    our mutual security interests.
                                     canada
        For over 57 years, NORAD has been a model for international
    cooperation and a symbol of trust and confidence between the United
    States and Canada. Our partnership is reinforced by our common values,
    and today, the men and women who wear the cloth of these two great
    nations work side-by-side throughout USNORTHCOM and NORAD. We are
    fortunate to have dedicated Canadian military members fully integrated
    throughout the NORAD Command and staff, including the three-star
    Canadian officer who serves as my NORAD Deputy Commander. This year, we
    hosted our 8th annual Tri-Command Staff Talks among USNORTHCOM, NORAD,
    and Canadian Joint Operations Command (CJOC), during which we were able
    to advance several key initiatives, including combined training and
    exercises, and synchronization of our requirements and capabilities
    advocacy processes. Going forward, I will promote our alliance with
    Canada to enhance our interoperability and contribute to combined
    operations.
        With our Canadian partners, we are focusing on a deliberate
    collaborative investment strategy to outpace current and potential
    adversaries and counter emerging threats through a seamless and layered
    defense. As a result of our recent NORAD Strategic Review directed by
    the Chairman of the Joint Chiefs of Staff and the Canadian Chief of the
    Defence Staff, we commenced an effort to modernize NORAD. One of the
    first parts of our modernization is the North Warning System, which is
    the linchpin of our ability to detect, assess, and track airborne
    activity along the northern border of North America. Over the next
    decade, a priority will be research and development in next-generation
    indications and warning systems for the northern approaches to improve
    detection, surveillance, and engagement of current and emerging
    threats, ensuring our ability to monitor, control, and respond if
    necessary.
                                     mexico
        This year, the military-to-military relationship between the United
    States and Mexico reached unprecedented levels of coordination. Today
    we are strategic partners, respecting the laws and sovereignty of our
    individual nations, while confronting shared security challenges. We
    have developed an enduring cooperative relationship with the
    Secretariat of National Defense (SEDENA) and the Secretariat of the
    Navy (SEMAR). We work closely with the Mexican military to enhance
    planning, tactical skills, communication capabilities to include
    cybersecurity, and incorporation of human rights principles. In 2015
    alone, I personally met with top military leaders of Mexico on eight
    separate occasions to strengthen our relationships and enhance our
    coordination.
        I expect the safety and security of North America will be a long-
    term fight, and we continue to help the Mexican military build
    partnership capacity at their pace. We continued our training and
    equipping efforts focusing on ensuring the timely delivery of a record
    Foreign Military Sales (FMS) investment of over a billion dollars by
    the Government of Mexico in UH-60 Blackhawk helicopters and High
    Mobility Multipurpose Wheeled Vehicles (HMMWV). We also began the
    process this year of partnering with United States and Mexican civil
    organizations to enhance the Government of Mexico's ability to control
    and regulate their southern border with Guatemala and Belize. The focus
    of our efforts in this region is to collaborate on improving the
    communications network and investing in a biometrics system to promote
    interagency coordination and reduce insecurity.
        This past summer, in conjunction with our Customs and Border
    Protection Air and Marine Operations partners, we conducted our second
    annual bilateral security cooperation exercise with Mexico, which
    demonstrated the significant progress we have made in training,
    information sharing and interoperability with the Mexican military. The
    exercise employs a cooperative response scenario designed to exercise
    and refine procedures to monitor, track and coordinate a response to an
    illegal flight transiting the border between the United States and
    Mexico. We expanded the scope of this year's exercise by including a
    two-phase live-fly portion, with the first phase simulating a hijacked
    aircraft originating from the United States and transiting into Mexico.
    The second phase was a simulated stolen aircraft suspected of carrying
    narcotics which originated in Mexico and transited into the United
    States. Not only did these two scenarios improve our information
    sharing and mutual warning processes, the enhanced air control
    procedures we developed provided the foundation necessary to streamline
    a coordinated response to suspicious aircraft transiting our shared
    border.
        Our combined efforts to promote democratic values, respect human
    rights, and counter TCOs continue to be a key focus of the training
    provided by the Western Hemisphere Institute for Security Cooperation
    (WHINSEC). This program provides a critical foundation for mutual
    security and democracy, and the relationships formed by the students at
    WHINSEC reinforce the trust and cooperation among the participating
    nations.
                                  the bahamas
        Increased tourism, maritime, and commercial activity complicated by
    a resurgence in illicit trafficking and foreign influence, makes the
    Caribbean region a significant challenge in maintaining our national
    security. We are working with our regional partners to build domain
    awareness and develop capabilities to counter illicit trafficking and
    smuggling. Our ``third border'' with The Bahamas is the basis for a
    partnership critical to the security of the United States. The Bahamian
    Government is a willing partner, though they are limited in their
    security capacity, so we are forging a strong partnership through our
    support of the Royal Bahamas Defence Force (RBDF) and are helping them
    build capabilities that enhance detection, monitoring and interdiction
    of the migrant and drug flows that transit their country.
                                   the arctic
        Climate change and receding polar sea ice in the Arctic combined
    with global interest in emerging economic opportunities and an increase
    in human activity pose unique security challenges for the United
    States. Although the Arctic remains a vast, harsh and challenging
    operating environment, many Arctic nations are demonstrating increased
    interest and presence in the region. I believe that The Arctic, our
    fifth line of operation, represents the intersection between geography
    and interests. I view the Arctic as an emerging region where we will be
    called upon to support other federal agencies and work with our
    regional partners to safeguard the stability and security of the
    region.
        We believe that while the likelihood of military conflict in the
    Arctic in the short term is low, international interest and presence
    are growing and it is necessary that the United States, and
    specifically the DOD, plan for a wide range of challenges and
    contingencies. Today, the often harsh operating environment yields
    significant variability in the pace and scope of change in commercial
    activity, which complicates our ability to plan and invest in our
    required capabilities. Constrained budgets and competing priorities
    dictate that we take a proactive, yet prudent approach to our
    investments in Arctic capabilities.
        As the Commander of USNORTHCOM, one of my assigned tasks is to be
    the DOD advocate for Arctic capabilities. In this role, I am
    responsible for collaborating with DOD Arctic stakeholders to help
    identify capability requirements and shortfalls across the spectrum of
    DOD operations and champion their resolution with our trusted partners.
    Our Arctic Capabilities Advocacy Working Group (ACAWG) is a
    collaborative forum among DOD, interagency, and trusted international
    Arctic stakeholders, including geographic and functional combatant
    commands, the Joint Staff, the Military Departments and Services, and
    DOD agencies that supports these actions.
        Our ACAWG is taking a prudent, fact-based approach to Arctic
    advocacy and investment so that we do not over invest, under invest, or
    be late to need. We are looking at short, middle, and long-term
    material and non-material capabilities across the spectrum of DOD
    operations, including Doctrine, Organization, Training, Materiel,
    Leadership and Education, Personnel, Facilities and Policy. Our forces
    must be able to navigate, communicate, and sustain themselves to be
    effective in the region. To facilitate this, we are looking at
    capabilities that support domain awareness, communications,
    infrastructure, and sustainable presence.
        Establishing a presence in the Arctic is an extremely costly
    proposition, with estimates running three to ten times the cost of
    building comparable facilities elsewhere. I believe that large
    fundamental infrastructure investments are not required to establish a
    large physical presence in the Arctic. Instead, we are concentrating on
    scalable infrastructure sufficient for us to support contingency and
    emerging Arctic missions, with a focus on qualified and equipped forces
    that have essential Arctic-capable platforms that can deploy and
    operate freely in the region, when required.
        The United States has assumed the Chairmanship of the Arctic
    Council at a crucial time amidst growing international presence and
    interest in the Arctic. I believe that it is in the best interest of
    the United States that we accede to the Law of the Sea Treaty to give
    us a stronger position as we negotiate the complexities of territorial
    concerns and maritime security interests.
                                   conclusion
        Our final two Lines of Operation, Professionalism and Excellence
    and Warfighters and Families, are perhaps the most pivotal because they
    underpin our endeavors across the spectrum of our assigned missions. We
    hold ourselves to the highest standards of personal and professional
    conduct. We reinforce our warfighters by ensuring that they are
    properly trained for their missions, while also providing the family
    advocacy programs, community outreach and service support functions
    that are critical to the families who, in turn, support our warriors.
        Despite what is likely to be an onerous fight against increasingly
    diffuse threats, we are very fortunate to be able to depend on the
    brave men and women who choose to wear the cloth of their nation and
    defend their fellow citizens. We embrace our no-fail mission at a time
    when our unique capabilities are needed most, and with your support,
    together with the exceptional men and women of USNORTHCOM and NORAD and
    our trusted partners, we will remain the greatest force for freedom,
    safety, and security for North America. I look forward to your
    questions.

        Chairman McCain. Admiral Tidd.

        STATEMENT OF ADMIRAL KURT W. TIDD, USN, COMMANDER, U.S.
                            SOUTHERN COMMAND

        Admiral Tidd. Chairman McCain, Ranking Member Reed,
    distinguished members of this committee, thank you for the
    opportunity to speak with you today.
        I'm honored to represent the men and women of United States
    Southern Command, and I'm very pleased to be here today with my
    very good friends and shipmates, Cecil Haney and Bill Gortney.
        I'd like to thank the Congress, and this committee
    specially, for its longstanding support to our mission and to
    our partners in Central America, South America, and the
    Caribbean.
        I'd like to focus my opening remarks very quickly on three
    Cs and three Gs. The Cs are connections, Colombia, and Central
    America.
        The first C, of connections. Security in this hemisphere
    connects directly to other parts of the world. Smuggling
    networks run through South America directly into our Homeland.
    Foreign terrorist fighters flow from the Caribbean to Syria and
    to Iraq. As part of their global strategy, Russia attempts to
    discredit our reliability as a trustworthy partner here in our
    own region. These issues transcend artificial boundaries, and
    they demand a transregional, united response.
        The second C is Colombia. As has already been recognized,
    this committee knows well Colombia's transformation has been
    remarkable. Once on the brink of failure, Colombia is now on
    the brink of peace. But, the hardest work lies ahead, extending
    government influence into dangerous criminal-controlled
    territory, confronting the persistent threat of cocaine
    production and trafficking, and, above all, securing a just
    peace that will end more than 50 years of conflict. With the
    blood and treasure that they have already sacrificed, with all
    that they continue to do to export security across the region,
    the Colombian people have more than earned our sustained
    support.
        The third C is Central America. As we recognized during the
    2014 migrant crisis, what happens on the streets of San
    Salvador and Tegucigalpa have a--has a direct impact on the
    streets of Tucson and Providence. Our Central American partners
    are doing all they can to win their countries back from vicious
    gangs and narcotraffickers, but they cannot do it alone.
    Because we remain the number-one world's consumer of illicit
    drugs, we owe it to them to do our part.
        Now to the three Gs: global networks, global competitors,
    and Guantanamo Bay.
        Global networks are the biggest threat that we face in our
    region. No two networks are alike. Some are international
    criminal enterprises focused on transporting any illicit cargo
    for the right price. Others are small operations that smuggle
    desperate migrants. Still others support terrorist
    organizations through financing and through the spread of their
    violent extremist ideology. No matter the motivation of these
    groups, though, all of them have a corrosive effect on the
    stability and the security of every country that they infect,
    including our own.
        Global competitors. They also operate deliberately in the
    western hemisphere as part of their broader global strategies.
    The most concerning of them is Russia, which portrays the
    United States in our theater as unreliable and as withdrawing
    from this pivotal region.
        Finally, Guantanamo Bay, where we conduct the most
    principled, humane detention operations anywhere in the world.
    We will continue to do so until the very last detainee steps on
    an airplane and departs the island. I know this committee
    shares my enormous pride in the men and women who serve in this
    demanding, sensitive, and often thankless mission with honor
    and with the utmost discipline, professionalism, and integrity.
    They are every bit as engaged in the war and every bit as
    deserving of our thanks and praise when they return home, just
    as their brothers and sisters who have returned home from Iraq
    and Afghanistan. I thank very much your recognition of the hard
    work that they do.
        Mr. Chairman, members, thank you again for the opportunity
    to appear before you today. I look forward to our continued
    discussions.
        [The prepared statement of Admiral Tidd follows:]

                   Prepared Statement by Admiral Kurt W. Tidd
                                  introduction
        Mr. Chairman, Ranking Member Reed, and distinguished Members of the
    Committee: thank you for the opportunity to appear before you today to
    discuss U.S. Southern Command's activities in Central America, South
    America, and the Caribbean. Before I begin, I would like to thank the
    Congress--and this Committee in particular--for its longstanding
    support to our mission and to our partners in the region. Our efforts
    are made possible through your help and by the hard work of our service
    components, Joint Task Forces, and our soldiers, sailors, marines,
    airmen, coast guardsmen, civilians, and contractors.
        In my short time in command, I have dedicated myself to expanding
    my knowledge of U.S. Southern Command's area of responsibility (AOR).
    The Latin America and Caribbean of today is far different than it was a
    quarter of a century ago. \1\ The region is home to a substantial
    middle class that actively seeks more responsive and transparent
    governments able to deliver promised services. There is little risk of
    armed conflict between neighboring states; border disputes are settled
    in diplomatic channels, not on battlefields. Governments are more
    democratic and respectful of human rights than at any point in the
    region's history. Militaries are more capable, professional, and among
    their countries' most trusted institutions. \2\ These militaries are
    also some of our most reliable partners, committed to working with us
    and with one another to confront threats to hemispheric security.
    ---------------------------------------------------------------------------
        \1\ Secretary of State John Kerry, Remarks at the 45th Annual
    Washington Conference of the Council of the Americas. April 21, 2015.
        \2\ Latin American Public Opinion Project (LAPOP): 2014
    AmericasBarometer, Vanderbilt University.
    ---------------------------------------------------------------------------
        Despite these improvements, the region still faces persistent,
    unresolved challenges. The slowing Chinese economy and falling global
    commodity prices are causing economic downturns across Latin America.
    Violent crime, widespread poverty, and fragile institutions continue to
    plague many nations. Pervasive corruption, inequality, chronic
    unemployment, deteriorating citizen safety, and limited economic
    opportunity drive migration, propel young men and women to join violent
    gangs, or set the conditions for instability and potential violent
    radicalization. Lack of state presence, ineffective governance, and
    weak rule of law provide fertile ground for the drug trade and the
    spread of powerful criminal networks. Public frustration with slow
    economic growth, social exclusion, and endemic government corruption
    fuels social protests and unrest. In certain countries there is a
    troubling trend toward authoritarianism: elected leaders that shun
    democratic standards, abuse human rights, muzzle the press, and
    suppress the opposition. Natural disasters such as ?hurricanes,
    earthquakes, volcanoes, fires, floods, and drought--as well as
    potential regional epidemics like the Zika virus--loom as ever-present
    ?dangers.
        The good news is none of these challenges is insurmountable, but
    all warrant continued engagement. Because no nation in the region poses
    a direct, conventional military threat to the United States, Latin
    America tends to rank fairly low on force allocation priorities. This
    is understandable--but often requires what is, in my view, an
    unfortunate trade-off. Our attention to other parts of the world should
    not come at the expense of the significant gains made in our own
    hemisphere. Over the last twenty years, prudent engagement by the U.S.
    military has supported democratic governance and economic development,
    nurtured and developed professional defense forces, and encouraged
    greater security collaboration. Along with the State Department and
    other interagency partners, we have worked hard to realize a vision of
    the Americas where countries share responsibilities, cooperate as
    equals, and advance common interests and values.
        Now, as criminal networks threaten the integrity of institutions
    and jeopardize citizen security, we must help countries build on the
    considerable progress achieved to date and continue working towards our
    shared priorities. As competitors seek to challenge our aim of being
    the region's security partner of choice, we must redouble our
    commitments and reinvigorate our partnerships. As the world works to
    contain the spread of violent extremism and confront challenges to a
    rules-based international order, we must seek new ways to strengthen
    our network of allies and partners. As we face an increasingly complex,
    interconnected security environment, we must look beyond borders and
    boundaries and seek not just whole-of-government, but whole-of-
    hemisphere solutions to our shared challenges. Mr. Chairman, positive
    and persistent U.S. engagement remains essential to advancing a Western
    Hemisphere that is prosperous, stable, and secure. \3\ With the
    continued support of the Congress and in full collaboration with our
    interagency and regional partners, U.S. Southern Command will continue
    working towards that goal.
    ---------------------------------------------------------------------------
        \3\ The White House, National Security Strategy. February 2015.
    ---------------------------------------------------------------------------
        Finally, Mr. Chairman, Members: I am humbled and honored to be part
    of the great team at U.S. Southern Command, and I look forward to
    working with you and your staffs in the coming years. I intend to focus
    my efforts in four key areas: ensuring we remain the premier security
    partner of choice in this hemisphere; deepening our interagency
    collaboration to generate heightened trust; becoming the innovation
    platform for the Department of Defense, interagency, and international
    partners; and enabling the critical transregional operations and
    initiatives of our sister Combatant Commands and interagency partners.
    We will continue to pursue an era of inclusive engagement with this
    vital part of the world and advance our ``Partnership for the
    Americas.''
                              security environment
        The security environment in Latin America and the Caribbean is
    characterized by complex, diverse, and non-traditional challenges to
    U.S. interests. The principal challenge remains transnational criminal
    networks, which are well-organized, well-financed, well-armed, and
    technologically advanced. These networks are efficient, adaptive,
    innovative, and exceptionally ruthless. They will transport anything or
    anyone--cocaine, heroin, weapons, people, even wildlife--if they
    believe the potential profit is greater than the potential risk.
    Enormous profits allow criminal networks to acquire capabilities that
    rival or even exceed those of the states that battle them, including
    high-powered rifles and machine guns, transport planes, and long-range
    submersibles. In response to these extraordinary circumstances,
    democratic governments have deployed their militaries to support
    overwhelmed police forces.
        The overarching threat to our national security, however, is not
    just the range of illicit commodities that are trafficked, but instead
    the destabilizing operations, corruptive influence, and global reach of
    many of these networks, some of which smuggle `special interest aliens'
    (SIAs). Although the vast majority of SIAs are seeking economic
    opportunity, such as some from Iran, or are refugees fleeing war, like
    some from Syria, there is a risk that violent extremist organizations
    could exploit established networks, established smuggling routes, or
    other regional vulnerabilities--including lax immigration and border
    security, corrupt government officials, or the enabling capabilities of
    criminal organizations--to enter and move through the region
    undetected.

                Spotlight: Syrian SIAs in the AOR
            --------------------------------------------------------
              In 2015, partner nation officials detained
              six groups of Syrians in Honduras, St. Maarten, Costa
              Rica, the Dominican Republic, and Paraguay.
              In each case, access to fraudulent or stolen
              documents and corrupt law enforcement officials
              facilitated SIA movement through numerous countries
              in the AOR.

        Let me talk for a moment on that last vulnerability. Whether Sunni
    or Shiite extremists would wittingly collaborate with criminal groups
    to accomplish their goals is up for debate. Many people are quick to
    dismiss the possibility of these groups working together in this part
    of the world. They believe the absence of evidence of a relationship is
    evidence of its absence. Mr. Chairman, we at U.S. Southern Command
    can't be that certain. We know that extremist groups are ideologically-
    driven and want to harm the United States. We know that criminal
    organizations are profit-driven and will engage in illicit activities
    that increase their bottom line. We also know that both operate in the
    same dark underworld of illicit finance, fraudulent documents, and
    weapons trafficking and that violent extremist organizations have
    availed themselves of some of these criminally-provided services. What
    U.S. Southern Command lacks is the intelligence necessary to identify,
    monitor, and fully illuminate and understand these networks and the
    resources necessary to significantly disrupt, degrade and ideally
    dismantle them.
        Like our counterparts in the U.S. Government and the Congress, we
    are also deeply concerned by the `triple threat' posed by foreign
    terrorist fighters: they strengthen transnational terrorist groups,
    incite others back home to conduct attacks, and can ultimately return
    to launch acts of terror. \4\ ISIL's strategic communication efforts
    have resonated around the world, including in parts of Latin America
    and the Caribbean. Since 2013, we have seen a small number of
    individuals and their families leaving the region to join ISIL in Syria
    or Iraq. The appeal of violent extremist ideology to some Caribbean
    citizens and their subsequent travel to Iraq and Syria remains a
    concern; not just for us, but for our friends and partners across the
    region.
    ---------------------------------------------------------------------------
        \4\ House Committee on Homeland Security, Final Report of the Task
    Force on Combating Terrorism and the Foreign Fighter Threat. September
    2015.
    ---------------------------------------------------------------------------
        As in other parts of the world, the potential return of violent
    extremists is a threat. These individuals could be well positioned to
    spread ISIL's poisonous ideology and potentially inspire or execute
    acts of terror against U.S. or partner nation interests. Many partner
    nations are unable to monitor the potential return of foreign fighters
    and often lack robust counterterrorism legislation and capabilities to
    confront this threat. There is a significant and growing consensus--
    which I have personally observed during conversations with security
    chiefs across the region--about the threat of radicalization to
    violence in this hemisphere; San Bernardino and Paris are clear
    examples and dramatic wake-up calls that radicalization can happen
    anywhere. We will work with our partners to enhance support to the
    global coalition to counter ISIL, other transregional terrorist
    threats, and violent extremist organizations.
        As a state sponsor of terrorism, Iran's nefarious involvement in
    the Western Hemisphere also remains a matter for concern. While Iranian
    engagement has waned in recent years, President Rouhani recently
    indicated that Tehran intends to increase economic, scientific, and
    cultural ties with Latin America though he has made this same pledge
    several times since his election in 2013. Additionally, Lebanese
    Hezbollah maintains an extensive regional network of supporters and
    sympathizers, some of whom are involved in trade-based money laundering
    and other illicit activities to generate revenue, a portion of which
    goes to support the parent organization in the Middle East. Lebanese
    Hezbollah also maintains an infrastructure with the capability to
    conduct or support terrorist attacks. As with every aspect of our
    counterterrorism efforts, the U.S. Government remains vigilant against
    these threats, working closely with our partners to protect the
    southern approaches to the United States.
        Apart from what I have already discussed, several other trends
    impact regional stability. In El Salvador, Guatemala, and Honduras,
    many of the conditions that caused the 2014 migration crisis of
    unaccompanied children--high homicide rates, chronic poverty, and lack
    of economic opportunity--remain the same or are worsening, leading the
    UN High Commissioner for Refugees to call for action to respond to the
    `looming refugee crisis' in the region. \5\ While apprehensions on our
    border are down, Mexico's apprehensions at its southern border have
    increased dramatically over the past three years. \6\ Sustainable
    development and security gains must continue apace if the sub-region is
    to address its long-standing challenges. To this end, I would like to
    thank the Congress for providing funding to our State Department and
    USAID partners as part of the U.S. Strategy for Engagement in Central
    America, a five-year initiative that will help State Department and
    USAID address the root causes of migration.
    ---------------------------------------------------------------------------
        \5\ Comments made by UN High Commissioner for Refugees Antonio
    Guterres on the release of The UN Refugee Agency's report Children on
    the Run: Unaccompanied Children Leaving Central America and Mexico and
    the Need for International Protection. October 28, 2015.
        \6\ Customs and Border Patrol apprehended 145,316 Central American
    migrants (including 39,970 UACs) at the US SW Border in fiscal year
    2015. From October 2014 to April 2015, Mexican officials stopped nearly
    93,000 Central American migrants, far exceeding the 49,800 detained in
    the same period 12 months earlier.
    ---------------------------------------------------------------------------
        Central America is still awash in weapons and street gangs such as
    MS-13 and M-18, both of which originated in the United States and have
    close, direct, and growing ties with their U.S. counterparts. As an
    indication of how dire the situation is in El Salvador, its Supreme
    Court designated these groups as terrorists by ruling they violate the
    fundamental rights of the population and seek to usurp state power.
    Gangs are targeting the police and military with homemade grenades and
    car bombs and terrorizing Salvadoran citizens. According to the FBI,
    MS-13 is now present in 42 U.S. states, with a significant presence in
    Houston, Long Island, Charlotte, and Washington, DC. \7\ Mr. Chairman,
    the simple fact is that economic and security crises in Central America
    reverberate almost immediately through communities across our country.
    ---------------------------------------------------------------------------
        \7\ National Gang Intelligence Center Assessment, November 2015.
    ---------------------------------------------------------------------------
        Further south, rising crime, violence, and deteriorating economic
    conditions continue to plague Venezuela. Due to speculation about the
    potential end of United States immigration policies favorable to
    Cubans, an increasing number of Cuban migrants are traveling overland
    through Central America and Mexico to cross at the United States
    Southwest border, with over 30,000 arriving via this route in fiscal
    year 2015--in addition to more than 4,000 that arrived via traditional
    maritime routes through the Florida Straits. Haiti--one of the most
    unstable and least developed nations in the Western Hemisphere--will be
    especially vulnerable as the electoral crisis drags on and the United
    Nations stabilization mission draws to a close.
        Our Colombian partners have made heroic strides battling the FARC,
    but a peace accord will not spell the end of their security challenges.
    Even if a peace accord is signed this spring, Colombia will confront
    other threats, including criminal networks that will gladly recruit
    experienced ex-FARC members and exploit the potential power vacuum
    generated by the FARC's demobilization. As an example, the
    transnational criminal network Clan Usuga is quickly becoming a
    significant threat to Colombian national security. The 3,000-strong
    group is comprised of former paramilitaries; has agents throughout
    Central and South America and Spain; and is expanding into Venezuela to
    increase its share of the drug trade. All of these issues warrant
    continued active United States engagement to ensure our partners in
    Central America and the Caribbean can address sources of instability
    and Colombia can deliver on the promise of a hard-won peace.

             Spotlight: Colombia's Counter IED Capacity
          ------------------------------------------------------------
             The Colombian military, with our support and that of our
            interagency partners like JIDA, has reduced IED incidents
            by 21 percent in 2015. Casualties from IEDs are down 38
            percent and the ``found and cleared'' rate for IEDs is
            nearly 80 percent.

        We must also contend with global competitors from outside our
    hemisphere that are strategically and purposefully operating in the
    Western Hemisphere. In this part of the world, Russia's actions are
    directly connected to its broader global efforts to demonstrate that
    Russia is a global power capable of challenging United States
    leadership and the established rules-based international system.
    Russian officials' rhetoric, high-level political visits, and military-
    security engagements are designed to displace the United States as the
    partner of choice in the region. Over the past year, Russia continued
    to maintain a presence in Latin America, collecting information about
    the region and the United States. Since mid-December 2014, Moscow has
    deployed an oceanographic and a hydrographic research ship to
    Nicaragua; an intelligence collection ship to the United States east
    coast and Caribbean; and an additional oceanographic research ship to
    the Caribbean. This is four naval deployments to Latin America in less
    than twelve months, all of which involved data or intelligence
    collection. Russia also reached an agreement with Nicaragua for
    simplified port access and logistical support, and regularly broadcasts
    anti-American propaganda in Ecuador, Argentina, and Venezuela via
    Russian state-owned RT-TV, which also broadcasts to the United States,
    and via online news and Sputnik Mundo, which is targeted to Latin
    American audiences. Russia uses this media to create doubts about
    United States intentions and criticize United States policies.
        We need to engage proactively and deepen security cooperation with
    our partners in the Americas. We strongly suspect that Russia's actions
    in the Western Hemisphere are not driven by events in this AOR, but
    rather are integrated into a larger, more holistic approach. This
    requires an equally integrated, transregional response on our part.
    When it comes to transregional competitors, we are closely coordinating
    with fellow combatant commanders to ensure we are contributing not just
    in our area of responsibility but across regional boundaries to ensure
    competitors are unable to exploit seams between our areas of
    responsibility.
        In contrast to Russia, China's primary focus in the region is on
    trade and investment. Still, China seeks to forge security
    relationships as part of its strategy to increase its influence in the
    region. Military engagements tend to focus on soft-power, with offers
    of training in Beijing, high-level visits, donations of equipment, and
    naval diplomacy efforts. During May-June 2015, a Chinese Naval
    Hydrographic Survey Ship made port calls in Brazil and Ecuador during
    its circumnavigation. The Chinese Navy's 20th Naval Escort Task Force
    made a port call in Cuba in November as part of their goodwill cruise
    around the world. Additionally, the Chinese hospital ship PEACE ARK
    visited Peru, Grenada, and Barbados in 2015 to provide medical services
    to local communities, marking the vessel's second visit to the region
    since 2011. Chinese defense firms also continue to make inroads into
    the Latin American arms markets through low-cost military hardware, no-
    strings-attached sales and financing, and offers of co-production
    facilities in the region. While China's competition for regional
    influence does not pose a direct military threat to our interests in
    this hemisphere, it does reinforce the importance of ensuring China's
    activities abide by regional political, economic and security norms. It
    also underscores the importance of the United States remaining engaged
    in this important part of the world.
                               command priorities
        To address these challenges, we work with our partners to defend
    the southern approaches to the United States, respond to regional
    contingencies, and promote security cooperation with the 31 nations and
    16 areas of special sovereignty in our AOR. We focus on one no-fail
    mission and four priorities, which I would like to discuss today.
        We continue to conduct safe, humane, legal, and transparent care
    and custody of the remaining detainees currently at Joint Task Force
    Guantanamo (JTF-GTMO). Detention operations are a demanding, sensitive,
    and often thankless mission. The medical and guard force deal with
    enormous stress and are subject to near-constant verbal and physical
    assaults by detainees. Some of our female troops must continue to deal
    with the frustration of a temporary court order that prevents them from
    performing their assigned duties, even though they are all fully
    trained, immensely qualified, and embody the values of equality and
    diversity that our nation espouses to the world and holds dear. Despite
    these challenges, and as many of you have witnessed first-hand, the men
    and women at JTF-GTMO conduct the most humane, principled detention
    operations anywhere in the world, often exceeding the requirements of
    U.S. laws and the Geneva Convention. I thank you for your continued
    active support for these tremendous young men and women and invite you
    to continue to visit them to see for yourselves the conditions under
    which they labor, and the quiet professionalism with which they execute
    their duties.
        Unlike the conduct of our troops, the condition of many JTF-GTMO
    facilities falls far short of acceptable standards. As the Congress
    knows, most of the facilities constructed to temporary standards are
    deteriorating rapidly due to the harsh environment, ongoing mission
    demands, and a chronic lack of funds for maintenance and
    recapitalization. Last year, rains associated with Hurricane Joaquin
    resulted in widespread leaks in troop housing--an unsurprising
    occurrence, given the dilapidated condition of these buildings. With no
    long-term military construction, we expect to continue addressing life,
    health, and safety issues in an incremental, piecemeal manner that
    rapidly becomes more costly than investment in new construction.
        In concert with our law enforcement, intelligence community,
    diplomatic, and regional partners, we remain focused on countering
    transnational organized crime (CTOC). Our Joint Interagency Task Force
    South (JIATF-S) is at the forefront of our efforts to combat the
    illicit drug trade and to illuminate the networks engaged in this
    nefarious activity. Although receiving only 1.5 percent of the total
    U.S. counterdrug budget, JIATF-S and its international partners disrupt
    three times the amount of cocaine seized at or within U.S. borders.
    While the U.S. Navy was only able to provide limited surface ships to
    and U.S. Customs and Border Protection assets, as well as significant
    contributions by partner nations and Allies, helped disrupt 192 metric
    tons of cocaine in fiscal year 2015. Operations like MARTILLO not only
    strike a blow to powerful criminal networks, they ultimately save U.S.
    lives and resources by stopping hundreds of tons of cocaine, heroin,
    and other drugs destined for our cities and towns.

                                                Operation MARTILLO Fiscal Year 2015 Disruptions
                          ------------------------------------------------------------------------------------------
                           Cocaine                               192 MTs
                           % disrupted by partners               35%
                           Marijuana                             62,995 lbs
                           Bulk cash                             $11.4 million

        In response to the insecurity that drove last year's unaccompanied
    children crisis, we are prioritizing our capacity-building efforts in
    the Northern Tier of Central America. We thank the Congress for its
    support to our CTOC activities and for recognizing the important role
    security plays in addressing the sub-region's long-standing challenges.
    Through equipment support, infrastructure projects, counterdrug
    training, and aggressive information sharing, we are improving our
    partners' maritime interdiction and border security capabilities and
    enhancing regional domain awareness. To complement these efforts, last
    year our Marine component deployed a Special-Purpose Marine, Air,
    Ground Task Force (SPMAGTF) to help partner nations extend state
    presence and security in Honduras, Guatemala, El Salvador, and Belize.
    Working alongside Honduran military and government officials, U.S.
    Marines built roads and a C-130 capable airfield and provided essential
    water services to vulnerable populations. Working in tandem with Joint
    Task Force-Bravo, the SPMAGTF promises to be one of our most responsive
    forces; sourced mainly by Marine Reservists, it provides us with an
    agile, forward-deployed, rapid response capability that is without
    equal.

             Spotlight: Support to Interagency Operations
          -------------------------------------------------------------
             In 2015, we supported United States Immigration and
            Customs Enforcement's (ICE) Operation CITADEL, which
            targeted the smuggling of migrants from the Middle East,
            Asia, Africa, and Latin America into the United States.
            This operation led to the dismantlement of large-scale
            criminal networks and the rescue of many unaccompanied
            children.

        We also dedicate significant effort to remaining vigilant against
    the threat of violent extremism, and I thank the Congress for providing
    the dedicated resources to support this important mission. Our
    counterterrorism (CT) efforts center on building and supporting partner
    nation capacity to detect and defeat terrorist threats within their
    borders. We are working with partners from across the region to counter
    extremism, recruitment, and radicalization to violence in vulnerable
    communities. Over the past year our Special Operations Forces (SOF)
    conducted multiple engagements such as subject matter expert exchanges,
    counterterrorism-focused exercises, and civil affairs activities. These
    efforts--coupled with support to U.S. Country Teams and interagency
    operations--ensure our nation and those of our friends remain secure.
    As discussed earlier, transnational organized crime and terrorist
    networks are intersecting layers of a global illicit economy. We will
    begin to explore if and how taking a counter network approach against
    illicit networks can improve our insight and successes in both our CTOC
    and CT efforts.

                 Spotlight: DOD Rewards Program
          -------------------------------------------------------------
             In 2015, the DOD Rewards Program enabled partner nation
            authorities to bring 135 members of terrorist
            organizations to justice.

        Whether countering transnational organized crime and terrorism,
    supporting disaster response operations, establishing cyber defense
    capabilities, or emphasizing a solid human rights foundation, building
    partner capacity is the cornerstone of everything we do. Our efforts
    help build and nurture committed and capable partners who can control
    their borders, address drivers of insecurity and instability, respond
    to natural and man-made disasters, and contribute to regional
    security--all of which help generate an extended layered defense of the
    U.S. Homeland and protect our interests. Although it is impossible to
    do justice to all the incredible work being done by our joint task
    forces, service components, and the National Guard's State Partnership
    Program, I would like to share a few highlights of our capacity-
    building efforts in the region. \8\
    ---------------------------------------------------------------------------
        \8\ For a full overview of component activities, please see the
    Annex.
    ---------------------------------------------------------------------------
        After 51 years of armed conflict, Colombia--a strategic ally,
    friend, and preeminent partner--is on the verge of ending the
    hemisphere's longest-running guerilla war. Thanks to its own efforts
    and our sustained assistance, Colombia has been transformed from a near
    failed state into a major regional player with significant political
    influence, world-class security forces, and a growing economy. The
    Colombian military has grown from an internal defense force to a
    respected exporter of counterdrug and counter IED expertise \9\ and is
    standing up a regional demining center of excellence. The Colombian
    Navy is also a regular contributor to NATO counter-piracy operations
    off the coast of Africa as well as counterdrug patrols in our own
    hemisphere with JIATF-South.
    ---------------------------------------------------------------------------
        \9\ In 2015, USSOUTHCOM and the Department of State Bureau of
    International Narcotics and Law Enforcement supported military and
    civilian law enforcement capacity-building activities by Colombian
    military and law enforcement personnel. USSOUTHCOM provided assistance
    to the COLMIL to execute 85 military BPC activities. These activities
    were focused on maritime interdiction, support to law enforcement
    entities, security and maintenance of vessels at port, riverine
    training, command and control, border security, intelligence training,
    and human rights training.
    ---------------------------------------------------------------------------
        Colombia's transformation is remarkable, but it will still face an
    uncertain period with many new challenges even when an accord is
    reached. In many ways the hardest work lies ahead. For Colombia to
    successfully consolidate the promise of its decades-long struggle, the
    United States must remain as fully engaged a post-peace accord partner
    as we ever were during Colombia's struggles. U.S. Southern Command will
    continue to support Colombia's efforts to: take the FARC off the
    battlefield and out of illicit activities; successfully implement a new
    counternarcotics strategy and establish state presence; conduct
    humanitarian demining; and transform the Colombian military to adapt to
    an evolving security environment. On a broader level, it is also
    essential that we continue providing Colombia a robust and agile
    assistance package that will help it successfully address the new
    security, developmental, and human rights challenges posed by a post-
    accord environment.
        To enhance the professional development of the region's military
    officers and senior enlisted leaders, U.S. Southern Command conducts or
    facilitates International Military Education and Training (IMET),
    military and defense exchanges, and security seminars. Through the
    Defense Institution Reform Initiative (DIRI) and William J. Perry
    Center for Hemispheric Defense Studies, we are supporting the increased
    professionalization of regional defense organizations. These programs
    help build accountable, transparent armed forces that can ensure the
    sustainability of U.S. security cooperation investments, increase
    citizen safety, and uphold universal values such as good governance,
    rule of law, and respect for human rights. We are also supporting the
    development of a competent and professional Non-Commissioned Officer
    (NCO) corps through close interaction during engagements, exercises,
    and at defense institutes like the Western Hemisphere Institute for
    Security Cooperation (WHINSEC) and Inter-American Air Force Academy
    (IAAFA).

             Spotlight: Building Cyber Defense Capacity
          -------------------------------------------------------------
             We are building cyber security and cyber defense
            capabilities with seven regional partners and working with
            Brazil, Peru, Colombia, and Chile as they establish
            dedicated cyber defense commands or capabilities.

        As the only Combatant Command with a dedicated human rights office,
    we continue to make progress engaging our partners on this foundational
    issue. Last year, Paraguay became the 11th partner nation to commit to
    implementation of the U.S. Southern Command-sponsored Human Rights
    Initiative (HRI) within its military forces. We also supported civil-
    military dialogues in Honduras and Guatemala and held the first-ever
    HRI event in Haiti. Partner nations acknowledge their responsibility to
    respect and protect human rights, but generally lack the resources to
    build strong programs. Requests for HRI assistance far exceed our
    ability to support--which is why we encourage regional militaries to
    share their expertise with one another. During last year's Tradewinds
    exercise, Caribbean security officials led multiple training tracks on
    human rights issues, advancing our goal of increased human rights
    integration in multinational exercises.
        Like HRI, our humanitarian assistance and humanitarian and civic
    assistance programs also yield significant `return on engagement.'
    These programs help improve our partners' abilities to provide
    essential services to their citizens, reduce human suffering, and
    support economic development. But they do more than that-- they remind
    the world that our military's greatest strength is more than our proven
    ability to project power around the globe, it is the generosity and
    compassion of our people. There is perhaps no better symbol of that
    generosity than deployments by our world class hospital ship USNS
    Comfort. As part of Continuing Promise 2015, medical and support staff
    from across the U.S. military and the region worked alongside nearly
    400 volunteers to treat 122,268 patients and conduct 1,255 surgeries.
    In an historic event during the Comfort port call in Haiti, U.S. and
    Cuban medics worked side by side to treat Haiti's poor and exchange
    best medical practices. Continuing Promise is without a doubt one of
    the U.S. military's most impactful missions, but future Comfort
    deployments are in jeopardy due to the U.S. Navy's budget constraints.

              Spotlight: Partnership with NGOs Aboard the Comfort
           -----------------------------------------------------------
              More than 400 volunteers from NGOs and academic
             institutions worked alongside U.S. military members,
             serving as doctors, nurses, and surgeons. USNS Comfort
             also hosted the NGO Operation SMILE, which provided 279
             life-changing surgeries to patients in the region.

        Additionally, our annual Beyond the Horizon and New Horizons
    humanitarian exercises help advance security, prosperity, and good
    governance in equal measure, while also building the capacity of
    partner nations to respond to disasters without request for U.S.
    assistance. As part of these exercises, United States Air Force and
    Army medical teams conducted readiness training that treated over
    30,000 patients in El Salvador, Panama, and Honduras. In partnership
    with regional militaries and civilian agencies, we constructed disaster
    relief warehouses, emergency operation centers, schools, clinics, and
    hospitals in remote or under-serviced areas. These exercises were
    supported by private sector and NGO partners, who provided nearly $4
    million in donations of gifts-in-kind and services for the citizens of
    Latin America. In these and other activities, we work closely with
    other U.S. agencies--including the Department of State and USAID--to
    support their efforts in promoting resilient democratic societies
    through sustainable, long-term development.
        I would also like to highlight one of our most successful capacity-
    building efforts: the Global Peace Operations Initiative (GPOI). In
    partnership with the State Department, GPOI allowed us to train and
    equip more than 3,500 peacekeepers (male and female) from six partner
    nations. These partners are currently deployed to four United Nations
    (UN) peacekeeping missions in Africa and Haiti. The relatively small
    investment--$7.6 million in fiscal year 2015--not only supported
    training and equipping of peacekeepers, but also enabled El Salvador to
    deploy an attack helicopter unit to the U.N. Mission in Mali; allowed
    Peru to deploy a heavy engineer company to the U.N. mission in the
    Central African Republic; assisted Chile's efforts to create a regional
    gender integration training capability; and helped Uruguay sustain
    critical enabling helicopter and riverine capabilities supporting the
    U.N. mission in the Democratic Republic of Congo. All of these efforts
    help maintain stability in war-torn states and troubled regions,
    protect civilians, and deliver critical humanitarian aid. Given the
    multiple benefits of GPOI, I fully support continuing and expanding
    this important program throughout the region.
        The State Partnership Program and our multinational exercises
    continue to build a strong Inter-American system of persistent defense
    cooperation. A force multiplier to our efforts, National Guard units
    from 19 states conducted 215 activities that developed core
    competencies in regional military forces, promoted the concept of
    citizen-soldiers as public servants, and reinforced our bilateral
    relationships with 28 countries. In the Caribbean, we conducted a
    highly successful iteration of our annual Tradewinds exercise, which
    brought together more than 750 participants from 17 different nations
    to work together on real-life training scenarios related to disaster
    response and CTOC operations.
        As part of Southern Seas 2015, UNITAS--the United States Navy's
    longest-running annual maritime exercise--brought together North
    American, South American, Pacific, and African maritime forces from
    eight countries to improve interoperability and build working
    relationships at sea. Last year we had the largest U.S. Force
    participating in the exercise's history, courtesy of the creative
    employment of the USS George Washington and associated air wing during
    her transit through the region. While these types of maritime
    engagements offer unparalleled opportunity to engage with our partners
    in areas of maritime law and policy, discussion of issues like
    excessive maritime claims can become derailed by the United States'
    status as a non-party to the United Nations Convention on the Law of
    the Sea. Accession to the Convention gives the United States a seat at
    the table and thus an immeasurably stronger position from which to
    engage our partners on maritime security concerns.
        Finally, contingency planning and preparation--which includes other
    exercises like Panamax, Fused Response, Fuerzas Humanitarias and
    Integrated Advance--prepares our team to respond to regional crises and
    enhances interoperability with our interagency and regional partners.
    These efforts not only improve our planning, training, and readiness,
    they build invaluable relationships across agencies, departments, and
    governments. For example, in the event of a natural disaster in Central
    America, our Joint Task Force Bravo--located at Soto Cano Airbase in
    Honduras--will be at the forefront of our response efforts. Essentially
    a small aviation regiment with 18 helicopters, JTF-Bravo is our only
    permanently deployed contingency force in the region. The outstanding
    men and women of JTF-Bravo regularly conduct life-saving search and
    rescue missions and provide humanitarian assistance and logistical
    support to Honduran and regional counterdrug operations.
        We train for a variety of contingencies, one of which is a mass
    migration event. We work closely with our interagency partners in the
    State Department, the Department of Homeland Security, and other
    regional partners to monitor increased migrant flows. Last year, we
    conducted a mission rehearsal exercise at United States Naval Station
    Guantanamo Bay to test our ability to support a response to a
    humanitarian crisis in the Caribbean. As the only permanent Department
    of Defense base in Latin America, the United States Naval Station
    provides persistent U.S. presence and immediate access to the entire
    region. It serves as a forward operating base for DHS-led migrant
    operations and a distribution and staging area for foreign humanitarian
    assistance and disaster relief operations. If directed to execute
    today, resource and capacity challenges at the Naval Station would
    significantly impact our support to the Department of Homeland Security
    and the Department of State operational and contingency plans. These
    challenges call into question our ability to provide safe care,
    custody, and transportation of interdicted migrants, which is
    especially concerning given recent increases in migrant flows.
                          critical needs and concerns
        U.S. Southern Command is committed to honoring the trust American
    taxpayers place in us, and we strive to make every defense dollar
    count. Through better business practices, we are working to mitigate
    funding reductions and gain efficiencies throughout our headquarters.
    Our most significant challenge is under-sourcing of assets, an issue
    that will be compounded should sequestration return. For every
    additional capacity-building activity we conduct, we can further
    strengthen the security network that keeps our partners stable and our
    Homeland secure. For every additional ship and air asset we are able to
    dedicate to the detection and monitoring mission, we can disrupt
    approximately 20 more metric tons of cocaine. For every additional ISR
    resource we are provided, we can better illuminate threat networks in
    the region. Yet even with the limited resources we have, we punch well
    above our weight class. We are in fact, a world-class welterweight: we
    are fast and agile; we are well trained; and we have the strength and
    stamina for the long run--qualities that are essential for success
    against the threats and challenges in our area of responsibility.
        To help mitigate shortfalls in the detection and monitoring
    mission, we employ creative and non-traditional approaches like
    adapting anti-IED technology for use in counterdrug operations in dense
    jungle and mountainous terrain. Looking ahead, we will continue to
    explore alternatives to traditional sourcing solutions, including
    driving innovation and experimentation into training and exercises.
    With a multitude of willing and welcoming partners in Latin America and
    the Caribbean, we have a unique experimentation training environment,
    perfect for expanding war gaming; testing new operational concepts,
    tactics, technologies and procedures; and exploring new ways to combine
    capabilities and improve interoperability. Additionally, we will
    continue to pursue opportunities to use innovative ISR platforms. I
    especially want to thank the Congress for the additional funding, which
    is helping increase our domain awareness and enhance ongoing CTOC
    operations.
        While JIATF-South--through excellent interagency and partner nation
    coordination--has developed impressive air and maritime awareness of
    drug movements, when the networks hit terra firma we go dark. To
    address these blind spots, we are exploring how we might partner even
    more closely with the interagency and partner nations to improve
    synchronization and fully illuminate threat networks. We will work with
    our Central American partners, the Department of State, the
    intelligence and law enforcement communities, and U.S. Country Teams
    every step of the way as we improve our collective effort to degrade
    and disrupt the corrosive operations of criminal networks.
        Finally, I thank the Congress for your continued support to U.S.
    Southern Command's talented men and women and their families.
    Unfortunately, our servicemembers, especially our junior enlisted
    personnel, face a significant quality-of-life challenge: the lack of
    affordable housing. In almost all respects, Miami is the perfect city
    for our headquarters. I say `almost' because the cost of living is one
    of the highest in the nation. Many of our assigned personnel cannot
    afford to live near the command, and government housing acquired
    through domestic leasing is expensive and extremely competitive. We are
    currently working with the Department of Army to develop our formal
    housing requirement, and we will work closely with the Congress as we
    move forward to improve the quality of life of our men and women in
    uniform.
                                   conclusion
        In closing, I am sure members of this Committee will agree: nowhere
    is our own security more inextricably intertwined to that of our
    neighbors, partners, and friends than in Latin America and the
    Caribbean. In an increasingly chaotic and insecure world, this region
    can and should serve as a beacon of hope, peace, prosperity, and
    partnership. This is both the promise and the potential of our shared
    home. It is a goal shared by our partners and one that we can achieve--
    but only by remaining engaged and only by working together. Day in and
    day out, the outstanding team at U.S. Southern Command is doing exactly
    that: we are building partnerships that protect our interests, defend
    our Homeland, uphold the global common good, and advance security, good
    governance, and opportunity. Once again, thank you for your persistent,
    sustained support for your U.S. Southern Command, and I look forward to
    our discussion.
           Annex: 2015 Joint Task Force and Component Accomplishments
         joint interagency task force south (jiatf-s) key west, florida
          Joint Interagency Task Force South contributed to the
    disruption of 192 metric tons of cocaine in fiscal year 2015, worth
    nearly $3.9 billion wholesale. This represents 76 percent of all
    documented U.S. cocaine removals that were likely directed towards the
    U.S. market. JIATF-S employs an integrated defense forward capability
    for the ongoing efforts at the U.S. Southwest Border and for U.S.
    operations in the Western Hemisphere using tactical control (TACON)
    ship days, TACON flight hours, and by monitoring illicit air activity
    using Forces Surveillance Support Center relocatable over-the-horizon
    radar.
          Operation MARTILLO: The vast majority of JIATF-South
    successes came as a result of JIATF-South leadership and coordination
    of Operation (OP) MARTILLO, the multi-lateral effects-based operation
    designed to deny the Central American littoral routes to illicit
    traffickers. Begun on January 15, 2012, OP MARTILLO results to date
    include the disruption of 595 metric tons of cocaine, the seizure of
    $25.8 million in bulk cash, and the seizure of 1486 detainees and 478
    vessels and aircraft. OP MARTILLO has had the desired effect of
    increasing partner nation participation in U.S. efforts to disrupt
    illicit trafficking and counter transnational organized crime.
          Operational Results and Impact: In the air domain, over
    the past year, JIATF-South documented a 53 percent decrease in illicit
    air tra20.cks destined for Central America (primarily Honduras).
    Decisions made by some of our partner nations to establish lethal air
    interdiction policies have impeded JIATF-South's efforts to share
    illicit air track information with those partner nations. Ultimately,
    air trafficking continues to be a declining percentage (3 percent) of
    overall cocaine flows. In the maritime domain, during the same period,
    JIATF-South documented a 20 percent increase in the overall volume of
    cocaine departing the source zone in South America. Eastern Pacific
    flow currently accounts for more than 68 percent of documented cocaine
    movement. It is assessed the increase in Eastern Pacific cocaine
    movement is at least partially caused by trafficker adaptation to
    focused law enforcement pressure in the Western Caribbean. JIATF-South
    is currently developing strategies to better apply requisite pressure
    against each threat vector, so as to curtail transit options available
    to traffickers. The increase in documented flow is partially due to
    increased law enforcement reporting and contributions from partner
    nations to augment collective situational awareness. JIATF-South
    identified several transatlantic maritime cases in fiscal year 2015 and
    established a liaison officer at the Maritime Analysis Operations
    Center-Narcotics in Lisbon, Portugal to facilitate the targeting of
    these cases by European law enforcement agencies. JIATF-South Counter
    Threat Finance team targeted $30.5 million in bulk cash and closely
    worked with DEA Lima, Peru on several investigations. JIATF-South
    Container Cell supported investigations resulting in 7 MTs of cocaine
    seized in commercial shipping containers and continues to develop
    relationships to increase situational awareness of global movements of
    cocaine via commercial shipping.
          Supporting Defense of the Homeland. The establishment of
    three Department of Homeland Security Joint Task Forces, JTF-East, JTF-
    West, and JTF-Investigations in 2015 has the potential to greatly
    enhance the interagency effort to defend the southern approaches.
    JIATF-South has been integrally involved with and fully supports the
    development of these organizations so that efforts to counter illicit
    trafficking will be synchronized to produce the greatest combined
    effect. Since its inception in September 2012, OP Unified Resolve, the
    counter illicit trafficking operation supporting Puerto Rico, has
    substantially improved and formalized interoperability between JIATF-
    South, Coast Guard District 7, Coast Guard Sector San Juan, and the
    Customs and Border Protection (CBP) Office of Air and Marine Caribbean
    Air and Marine Branch in our shared Counter Illicit Trafficking
    operations. Under the new DHS JTF construct OP Unified Resolve will be
    coordinated by Joint Task Force-East.
          Role of Partner Nations: In fiscal year 2015, 50 percent
    of JIATF-South disruptions were marked by partner nation participation.
    The role of our Latin American partners should not be understated. Of
    the 250 illicit trafficking events disrupted by JIATF-South in fiscal
    year 2015, 88 of these (35 percent) would not have been successful
    without the support of our international partners. Many Central
    American partners have greatly increased their ability to respond to
    illicit trafficking cases cued by JIATF-South including Guatemala,
    Panama, and Costa Rica who collectively responded to twice the number
    of events in fiscal year 2015 compared to fiscal year 2014. The success
    of JIATF-South continues to draw support as several additional nations
    have expressed interest in joining the international effort to counter
    illicit trafficking. The contributions of ships and aircraft to the
    Transit Zone effort by the U.K., France, the Netherlands, and Canada
    continue to be significant and needed.
          Innovation and Transition to Counter Network Operations:
    Recognizing the holistic nature of the threats and challenges to the
    U.S. from TCOs in the Western Hemisphere, JIATF-South's planning
    process is orienting the command and its focus towards countering the
    organizations responsible for undermining the stability and security of
    the region. With their authorities firmly planted in the detection and
    monitoring (D&M) of illicit trafficking, JIATF-South will employ
    several initiatives to focus their core mission set on illuminating
    illicit networks for disruption. Network focused D&M will rely on
    Tactical Development Analysis, Threat Finance Information, and
    Container Cell intelligence to develop awareness and increase
    effectiveness in a fiscally austere environment. Additionally, JIATF-
    South is leveraging interagency partnerships to develop the ability to
    detect and monitor illicit trafficking activity, using the cyber
    domain.
                     joint task force guantanamo (jtf-gtmo)
                              guantanamo bay, cuba
          Safe and Humane Custody and Control: JTF-GTMO conducted
    safe, humane, legal, and transparent custody and control of detainees,
    including those convicted by military commission. High Value Detainees
    (HVDs) and non-HVDs maintained family contact via mail, telephone calls
    and, in areas which support this service, videophone conferences
    coordinated by the International Committee of the Red Cross (ICRC).
    High quality care, to include routine and urgent medical care, was
    provided to detainees on a 24-hour basis. General surgical care, dental
    care, preventative medicine, optometry and mental health services were
    provided, or arranged, as was targeted specialty care on a recurring
    basis.
          Legal and Transparent Operations: Assessments of
    detention conditions by the ICRC continued with four visits in 2015.
    All detainees were provided the opportunity to meet with ICRC delegates
    and medical personnel during these visits. Additionally, detainees are
    granted access to legal representation. For non-High Value Detainees,
    during fiscal year 2015 JTF-GTMO scheduled 385 habeas meetings (259
    were completed) and 222 commissions meetings (141 completed). With
    respect to High Value Detainees, JTF-GTMO scheduled 43 habeas meetings
    (29 completed) and 1,781 commissions meetings (894 completed).
    Committed to transparency, JTF-GTMO hosted 75 media representatives
    from 40 domestic and international news organizations and answered
    hundreds of media queries during the past year. Similarly, JTF-GTMO
    also hosted 166 Distinguished Visitor visits totaling more than 1100
    personnel, including seven Congressional Delegations, Service Chiefs
    and senior DOD, DHS, DOJ and DOS policy makers.
          Military Commissions: Support for the Military
    Commissions process is a priority of JTF-GTMO. These proceedings are
    open to observation by the media, victim family members, non-
    governmental organizations and other visitors. In fiscal year 2015,
    JTF-GTMO supported 3 days of hearings which addressed pre-trial motions
    in the case of United States v. Mohammad, et al., the five individuals
    accused of coordinating the September 11, 2001 attacks on the United
    States (referred to in the press as ``the 9/11 Five'') and 4 days of
    hearings to address pre-trial motions in the case of United States v.
    Al Nashiri, the alleged USS Cole bomber. Additionally, the Court
    arraigned and conducted 7 days of hearings to address pre-trial motions
    in the case of United States v. al Iraqi, an alleged al Qaeda commander
    charged with law of war offenses.
            In the ``9/11 Five'' military commission, the judge's 7
    January 2015 interim order bars female guards from touching (absent
    exigent circumstances) the 9/11 Five detainee-accused during movements
    to and from attorney-client meetings and commission hearings. This
    order remains in effect until the judge hears evidence and argument and
    makes a final ruling. The cancellation of several commissions sessions
    in 2015 prevented the resolution of this issue. The practical effect of
    the judge's order is that it prohibits female guards from participating
    in commissions-related movements of the 9/11 Five detainee-accused.
    Male guards therefore complete extra duties that female guards may not
    perform. The judge's order resulted in fifteen (15) Equal Opportunity
    (EO) complaints because a portion of the guard force cannot perform
    their assigned duties based on gender. The EO complaints are
    unresolved.
          Infrastructure: Sustainment costs continue to rise due to
    the many facilities at JTF-GTMO that are past their designated
    lifecycle. Sustainment, Restoration and Modernization (SRM) costs have
    steadily increased the last four years ($19M, $20M, $21M, $24M). Eight
    military construction (MILCON) projects, valued at $231M, were planned
    for fiscal year 2015-18 to address infrastructure concerns. Six of
    those projects, valued at $207M, or 90 percent of the total Military
    Construction (MILCON) budget were cancelled in January 2015.
          Detainee Movement Operations: JTF-GTMO conducted 12
    Detainee Movement Operations during fiscal year 2015 which transferred
    35 detainees to 10 different countries.
                         joint task force-bravo (jtf-b)
                          soto cano air base, honduras
          Joint Task Force-Bravo is a forward-based expeditionary
    joint task force operating as U.S. Southern Command's lead forward
    element in the Central American (CENTAM) region. The Joint Task Force
    integrates and synchronizes efforts, provides assets and capabilities
    to enable others to operate, and executes operations in support of the
    CCDR's priorities of Countering Transnational Organized Crime (CTOC),
    Humanitarian Assistance / Disaster Relief, Building Partner Nation
    Security Capacity, and Contingency planning/support to promote regional
    cooperation and enhance security throughout Central America. JTF-Bravo
    performs the following missions:
          Facilitates integration of Partner Nation and U.S.
    Government agencies to develop a common understanding of Transnational
    Criminal Organizations (TCO) and enables operations to counter
    identified TCO networks.
          Conducts combined operations with military and law
    enforcement elements from the U.S. and Partner Nations to disrupt and
    deter organized crime networks in Central America.
          Consistently refines and evolves a common understanding
    of the environment and its efforts to enable partners to counter
    threats to both the CENTAM region and the American Homeland
          Provides a running estimate of the environment to both
    synchronize and integrate operations to achieve the right, overall
    effects against Criminal Transnational Organizations / Illicit
    Facilitation Networks.
          Supports efforts dedicated to Building Partner Capacity
    by providing subject matter expertise and capabilities throughout
    CENTAM in areas ranging from medical support to the local population
    and fire-fighting capabilities, to logistical support to partner nation
    militaries.
          Serves as U.S. Southern Command's first responder for
    natural disasters and humanitarian events within CENTAM.
          Is prepared to provide SOUTHCOM a no-notice command and
    control node throughout CENTAM in a natural disaster scenario.
          Manages the only all-weather day/night C-5 Galaxy-capable
    airfield in CENTAM, supporting ongoing operations and maintaining
    readiness to facilitate humanitarian assistance and disaster relief
    throughout CENTAM.
          JTF-B's operations enable DOD, DOS, IA, and PN efforts
    throughout CENTAM. Over the past year, JTF-B provided air movement
    support to the Honduran military for twelve iterations of Operation
    CARAVANA during 2015 (moving 3,525 pax and 135,500 pounds of
    equipment), allowing them to position forces into isolated regions of
    eastern Honduras and posturing them to effectively deter Illicit
    Facilitation Networks. JTF-B also conducted 25 medical missions during
    2015. These missions provided vital care to underserviced communities
    within Central America, increasing the local population's faith in
    government, providing HN medical training, and fostering goodwill
    across the region. In addition, JTF-B also assisted the Government of
    Belize in drug eradication efforts and supported U.S. Law Enforcement
    and military units in training the Belizean Defense Forces--providing
    time and space as the Belize forces continue to develop capacity.
          Finally, JTF-B conducted or directly supported a number
    of vital Contingency Operations, such as a high visibility mission to
    repatriate Central American citizens back to their home counties,
    supported 15 MEDEVAC missions in 2015--including a Honduran soldier
    seriously injured in a drug interdiction off the shore of Gracias a
    Dios, Honduras, a Search and Rescue mission of a missing American off
    the coast of Roatan, Honduras, as well as in the search effort for
    survivors of a capsized ferry off the coast of Nicaragua. JTF-B's
    continuing activities demonstrate U.S. commitment to CENTAM, posturing
    our Nation as the partner of choice and a force that will serve the
    people of Central America for years to come.
                           u.s. army south (arsouth)
                      headquarters: ft sam houston, texas
          Security Cooperation: ARSOUTH conducted 164 security
    cooperation events with 23 countries in U.S. Southern Command's area of
    responsibility. These events represent both engagements and building
    Partner Nation capabilities with other militaries in the region.
          Countering Transnational Organized Crime (CTOC): ARSOUTH,
    with the support of the Texas Army National Guard, 72nd IBCT, conducted
    CTOC tactical training in Guatemala and Honduras. They also conducted
    information training in Guatemala, Honduras and El Salvador. The four
    Mission Essential tasks trained were: Border Control Operations,
    Command Post Activities, Information Support to Operations, and
    Sustainment Operations. These training efforts contributed to the
    capacity-building efforts of our Partner Nations, enabling selected
    elements of their security forces to better focus on basic border
    control and security operations. U.S. Army South has supported 60
    operations in the SOUTHCOM AOR, contributing to the arrest of 71
    individuals including 14 HVT's, and seizure of 12.5 metrics tons of
    cocaine and $12.3 million. These operations have contributed to the
    disruption of TCO networks especially in Honduras and Guatemala.
          Information Security Cooperation: In addition to the CTOC
    training effort, ARSOUTH conducted Information engagements as a part of
    the Distinguished Visitor Program, Bilateral Staff Talks, and all
    regional Professional Development Exchanges, enabling military
    information capacity building in support of Guatemala, Honduras, El
    Salvador, Colombia, Chile and Peru.
          Counter Terrorism: ARSOUTH conducted 10 Subject Matter
    Expert Exchanges in six countries that included over 750 host nation
    soldiers. The engagements included: Medical, Search and Rescue,
    Logistics, Maintenance and Communications.
          Civil-Military Relations: ARSOUTH conducted Civil-
    Military Relations Professional Development Exchanges in Brazil,
    Colombia, Chile, Dominican Republic, Nicaragua, Panama, Peru,
    Guatemala, Honduras and El Salvador, improving the ability of these
    countries to conduct inter-organizational coordination during
    humanitarian assistance / disaster relief operations and in countering
    transnational criminal organizations. These exchanges demonstrate the
    synergy and value of interagency collaboration and provide an effective
    forum for executive-level information-sharing, both bilaterally and
    regionally.
          Humanitarian Assistance Program (HAP): HAP focuses on
    activities which help build partner nation capacity to provide
    essential services to their populace, with particular emphasis on
    response to disasters and other crises, reinforcing citizen security,
    and sustaining stability in a particular country or throughout the
    region. ARSOUTH, as USSOUTHCOM's Executive Agent for the construction
    facet of HAP, completed 21 projects in 2015, and also initiated the
    planning for 22 future construction projects across the AOR.
          Global Peace Operations Initiative (GPOI): GPOI is a
    security assistance program to enhance international capacity to
    conduct United Nations and regional peace support operations. ARSOUTH,
    as USSOUTHCOM's GPOI construction executive agent, executed 14 projects
    in Central and South America and initiated the planning for three
    future projects (El Salvador and Uruguay).
          Conference of the American Armies (CAA): The CAA (20
    member Armies, 5 observer Armies and two International Military
    Organizations) strengthens relationships and improves interoperability
    in peacekeeping and disaster relief operations through the creation and
    implementation of practical initiatives approved by the Army
    commanders. Army South organized and led delegations representing the
    U.S. Army Chief of Staff at conferences on IEDs, Disaster Response,
    Interagency Operations and CAA Procedures in Colombia, Mexico, Brazil
    and Chile.
          Exercise Beyond the Horizon (BTH): Humanitarian and Civic
    Assistance Field Training Exercises were conducted in El Salvador and
    Panama. BTH El Salvador yielded six engineer projects and three general
    Medical Readiness Training Exercises (MEDRETEs), treating a total of
    24,627 patients. In the El Salvador effort, over 1,760 U.S troops
    participated, and the host nation provided 163 security, engineering
    and medical personnel. BTH Panama included an Ophthalmology specialty
    MEDRETE which removed 250 cataracts from pre-screened patients, while a
    general MEDRETE treated 4,760 local patients. Forty eight U.S. troops
    participated in these efforts, while the Panamanian Ministry of Health
    and the Panamanian National Police provided over 60 personnel for this
    bilateral collaborative initiative.
          Exercise Fuerzas Aliadas--Humanitarias (FA-HUM): This
    year's Humanitarian Assistance/Disaster Relief Table Top Exercise (TTX)
    was hosted by Honduras, to build Partner Nation capacity to respond to
    a major disaster and strengthen military/security force collaboration
    and cooperation in the region. The TTX exercised the coordination,
    response and integration of Honduras' SINAGER (National Risk Management
    System) members and other International Cooperation members. It greatly
    improved their ability to respond to an adverse event, activating
    SINAGER and national, regional, and international emergency protocols.
          Exercise PANAMAX 2015: This year's Joint/Combined
    operational exercise focused on the defense of the Panama Canal and
    designated ARSOUTH as HQ, Multi-National Forces-South. The Crisis
    Action Planning Phase had 127 participants--82 U.S. and 45 Partner
    Nation personnel from 9 countries. ARSOUTH also hosted the CFLCC with
    Colombia as the lead country which included 62 personnel from 15
    Partner Nations and 29 U.S. personnel. In addition, ARSOUTH
    participated in a bilateral exercise with the Government of Panama
    (PANAMAX-Alpha) where 20 United States personnel worked with the
    Panamanians coordinating United States forces assistance during
    simulated security operations.
          Exercise Integrated Advance 2015: For 2015 Integrated
    Advance is a Command Post (CPX) and Field Training Exercise (FTX)
    focused in the Caribbean and designed to conduct combined security,
    peacekeeping and selected maritime operations. This Joint operational
    exercise focused on the interagency planning required for a United
    States response to a Caribbean Mass Migration. ARSOUTH formed the core
    of the JTF-MIGOPS with 127 personnel (including 52 from other military
    services and government agencies).
                  u.s. naval forces southern command (usnavso)
                         headquarters: mayport, florida
          U.S. Naval Forces Southern Command/U.S. FOURTH Fleet
    (USNAVSO/FOURTHFLT) employs maritime forces in cooperative maritime
    security operations in order to maintain access, enhance
    interoperability, and build enduring partnerships that foster regional
    security in the USSOUTHCOM Area of Responsibility (AOR).
          Continuing Promise 2015 (CP 15): U.S. Navy Hospital Ship
    USNS Comfort completed her longest and most successful CP in history,
    conducting mission stops in 11 partner nations (Belize, Guatemala,
    Jamaica, Nicaragua, Panama, El Salvador, Colombia, Dominica, the
    Dominican Republic, Honduras, and Haiti) from April through September
    2015. The CP-15 medical team treated 122,268 patients, including 1,255
    surgeries conducted aboard the Comfort, along with 279 surgeries
    conducted by the non-government organization ``Operation Smile'' aboard
    the Comfort. The CP-15 also featured 1,285 subject matter expert
    exchanges, 94 engineering projects, and 85 community relations events.
    Almost 400 members of non-government organizations deployed as part of
    the CP team, which included approximately $5.24 million dollars in
    donations to the 11 partner nations. CP-15 sent a strong message of
    U.S. commitment and partnership with the people of the Caribbean,
    Central and South America, and directly impacted more people in our
    partner nations than any other U.S. Navy mission.
          Southern Seas 2015 (SS 15): Task Force 49 (TF 49), led by
    Commander Carrier Strike Group Nine, deployed to the USSOUTHCOM AOR,
    sailing around South America from the end of September through mid-
    December 2015. TF-49 participated in both UNITAS Pacific, hosted by
    Chile, and UNITAS Atlantic, hosted by Brazil. This was the largest and
    most capable U.S. Force to participate in UNITAS in the more than 50-
    year history of the multi-national maritime exercise. UNITAS is the
    longest-running naval exercise in the world. USS George Washington also
    conducted multi-day bilateral exercises with the Japan Self-Defense
    Force, the Peruvian Navy, the Chilean Air Force, and the Brazilian Navy
    as well as receiving distinguished visitors from Panama, Colombia,
    Uruguay, Argentina, and Paraguay.
          Southern Partnership Station (SPS): SPS is a series of
    Navy/Marine Corps engagements focused on Theater Security Cooperation
    (TSC), specifically Building Partner Capacity (BPC), through Subject
    Matter Expert Exchanges (SMEEs) with partner nation militaries and
    civilian security forces. SPS engagements include Community Relations
    projects that focus on our partnerships, shared interests, and shared
    values. 2015 SPS Deployments:
            SPS Joint High Speed Vessel 2015 (SPS JHSV 15): USNS
    Spearhead built partner capacity while conducting TSC engagements
    through the use of Adaptive Force Packages (AFPs) ashore in Belize,
    Guatemala, Colombia, and Honduras. The sailors, marines, soldiers,
    airmen, NCIS agents, and civilian mariners making up the Spearhead Team
    built upon the firm foundation of the JHSV 14 deployment, and the
    persistent annual presence of Spearhead and the AFPs in the USSOUTHCOM
    AOR are reaping rewards of partnership and interoperability.
            SPS Oceanographic 2015 (SPS OCEANO 15): With the
    support of the Naval Oceanographic Office, survey ship USNS Pathfinder
    conducted hydrographic surveys in the Western Caribbean, shore-based
    Fleet Survey Teams conducted hydrographic surveys in coastal waters of
    Peru, Honduras, and Jamaica, and a Light Detection and Ranging aircraft
    and crew conducted hydrographic surveys in the coastal waters of
    Honduras. All SPS OCEANO surveys are conducted with the assistance of
    partner nation personnel and equipment, and support USSOUTHCOM's
    Oceanographic, Hydrographic, and Bathymetric Program and the Chief of
    Naval Operations Global Maritime Partnership Initiative. All
    hydrographic survey and environmental assessment data is shared to
    enable safe and effective maritime navigation and access to the
    littoral for naval and joint forces.
          Operation MARTILLO: Two frigates, one destroyer, one
    coastal patrol ship, JHSV SPEARHEAD, four fixed-wing maritime patrol
    aircraft squadrons, and one scientific development squadron detachment
    deployed to support Operation MARTILLO, conducting D&M Operations under
    the tactical control of Joint Interagency Task Force South, targeting
    illicit trafficking routes in the waters off Central America.
          USS Columbus: The Los Angeles-class fast attack submarine
    deployed to the USSOUTHCOM AOR. Columbus visited United States Naval
    Station Guantanamo Bay, Cuba, and made two Panama Canal transits.
          PANAMAX 2015: Chile served as Combined Forces Maritime
    Component Commander (CFMCC) for the annual PANAMAX Exercise, which
    exercises defense of the approaches to the Panama Canal. Chile led a
    multinational staff of more than 50 military and civilian personnel
    from 16 Partner Nations (including the U.S.), all based at USNAVSO/
    FOURTHFLT Headquarters in Mayport. In this year's PANAMAX, the CFMCC
    staff worked through the Navy Planning Process to produce a Concept of
    Operations (CONOP) with notional forces, for presentation to the
    Combined Joint Task Force led by U.S. Army South. Now in its 13th year,
    PANAMAX focuses on ensuring the defense of the Panama Canal, increasing
    multinational force interoperability while supporting the training
    requirements of all participating nations' civil and military services.
                      12th air force (air forces southern)
                headquarters: davis-monthan afb, tucson, arizona
          Security Cooperation: Twelfth Air Force (Air Forces
    Southern) (hereafter AFSOUTH) led 50 security cooperation events in 11
    USSOUTHCOM partner nations. Engagements focused on countering
    transnational organized crime, communications, aircraft operations and
    maintenance, ISR, space, cyberspace security, safety, command and
    control, space capabilities, aerospace medicine, air evacuation,
    expeditionary medicine, information sharing, mobility, Future
    Engagement Talks, logistics, aircrew search and rescue, and
    humanitarian assistance and disaster relief. The 571st Mobility Support
    Advisory Squadron completed 19 air advisor events in Belize, Brazil,
    Colombia, Curacao, El Salvador, Guatemala, Honduras, Jamaica, Panama,
    and Peru, training 417 partner nation military members.
          Legal: The AFSOUTH Staff Judge Advocate promoted Law of
    Armed Conflict adherence and Human Rights Law in 9 legal engagement
    activities with Brazil, Chile, Colombia, Guatemala, Honduras, and
    Trinidad & Tobago.
          Airlift Missions: AFSOUTH executed 85 theater airlift
    missions, moving more than 4,267 passengers and 406 tons of cargo
    throughout USSOUTHCOM's area of responsibility.
          System of Cooperation among the American Air Forces
    (SICOFAA): SICOFAA strengthens relationships and improves
    interoperability in peacekeeping and disaster relief operations through
    the creation and implementation of practical initiatives approved by
    the commanders of the 20 SICOFAA member Air Forces and the 5 observer
    Air Forces. USAF Chief of Staff and the 12 AF (AFSOUTH) Commander
    participated in the annual American Air Chiefs Summit (CONJEFAMER) in
    Mexico City in June 2015. Delegates from USAF and AFSOUTH participated
    in five SICOFAA committee meetings and the CONJEFAMER planning
    conference.
          Medical Support: AFSOUTH provided medical planning and
    oversight of detainee movement operations and forward operating
    location missions; delivered operational health expertise and steady-
    state planning for contingency and real world operations across
    USSOUTHCOM AOR; supplied counterdrug operations medical guidance and
    planning support; and coordinated USAF medical engagements for New
    Horizons and Beyond the Horizon exercises. Surgeon General provided
    Crisis Action Team support for PANAMAX and Integrated Advance. AFSOUTH
    International Health Specialists conducted 15 Theater Security
    Cooperation global health engagements with partner nations addressing
    flight medicine, air evacuation, force health protection, and
    expeditionary medicine advancing regional collaboration across the
    aerospace medicine enterprise.
          New Horizons 2015 (Honduras): AFSOUTH trained 120 U.S.
    Military personnel in this joint exercise. Engineering personnel
    constructed one new 1400 square foot school and drilled two water wells
    supporting 3,000 Honduran citizens. During the exercise, deployed
    medical personnel not only provided care for U.S. members, but also
    volunteered their medical capabilities to the local hospital emergency
    room by treating 678 Honduran civilians and providing over 100 surgery
    consults. Additionally, deployed communications support personnel wired
    the local hospital offices for internet capability. International
    Health Specialists conducted a 12 day infectious disease assessment for
    the local Ministry of Health and provided a final report with
    recommendations to improve local health conditions.
          ISR: AFSOUTH provided command and control for ISR
    missions in support of USSOUTHCOM priorities. AFSOUTH executed 939 ISR
    missions and 5,423 flight hours, resulting in over 4,544 images and
    nearly 9,235 minutes of video. This information assisted in numerous
    drug trafficking seizures in the SOUTHCOM AOR by the United States and
    its partner nations in fiscal year 2015. AFSOUTH continues to assist
    critical partner nations in counter-drug/counter-narcotics trafficking
    efforts and is currently working to enable Air Force operational and
    ISR capability in both Guatemala and Honduras. AFSOUTH assists both
    Colombia and Peru in maintaining the strategic initiative against
    illegally-armed combatants who previously threatened the very existence
    of those nations.
                    marine corps forces south (marforsouth)
                          headquarters: doral, florida
          Theater Security Cooperation: In 2015, MARFORSOUTH
    completed more than 120 Security Cooperation events in 21 countries.
    This resulted in over 750 Partner Nation Marine Corps and Defense Force
    personnel trained. While continuing to foster long-term relationships
    based on mutual respect and common values, MARFORSOUTH conducted a
    variety of key leader engagements throughout the USSOUTHCOM area of
    responsibility that reinforced our commitment to partner nation
    leadership. To meet shared security objectives in combatting
    transnational organized crime, MARFORSOUTH delivered tailor-made
    training to our partners by establishing persistent presence security
    cooperation teams in Belize, El Salvador, Guatemala, and Honduras. This
    was training often conducted hand-in-hand with our Colombian Marine
    Corps partners through the United States/Colombia Action Plan.
          SPMAGTF-SC-15: From June to November 2015, U.S. Marine
    Corps Forces, South deployed Special-Purpose Marine, Air, Ground Task
    Force-SOUTHCOM (SPMAGTF-SC) to Central America. Leveraging a force one-
    tenth the size of those in CENTCOM and AFRICOM, SPMAGTF-SC temporarily
    deployed to one of the most austere locations in Honduras to provide
    support to partner nation militaries and populations living in extreme
    poverty and at the highest risk for involvement in illicit activities.
    Using SPMAGTF-organic aircraft and engineering support, marines and
    sailors throughout Honduras, El Salvador, Guatemala, and Belize focused
    on building and maintaining partnership capacity through shared values,
    challenges, and responsibility. The Marines built three schools,
    improved a partner nation military airfield, and provided essential
    water services to those in need. This force was instrumental in
    bringing together the national level government of Honduras with remote
    populations mostly segregated by terrain, expanding governance and
    visibility on key issues in the region.
          SPS-JHSV 15--Marine Detachment (MARDET): MARFORSOUTH
    deployed 35 Marines and Sailors to Guatemala and Honduras in support of
    United States Naval Forces Southern Command/United States Fourth
    Fleet's Southern Partnership Station (SPS) initiative. The MARDET
    provided engineer support to the SPS mission and met emergent
    requirements under OPERATION ESCUDO UNIDO. This is the first iteration
    of SPS that included a USMC Deputy Mission Commander, who was an
    integral part of the Navy Expeditionary Combat Command's C2 structure
    for the mission. 32 of the engineers supported airfield construction at
    Mocoron in Gracias a Dios, as well as humanitarian construction
    assistance and water purification projects in the area.
          Tradewinds Phase II (Ground): In June 2015, MARFORSOUTH,
    in partnership with the Belize Defence Force, Canada, and 17 other
    partner nations from the Caribbean Region, executed Exercise Tradewinds
    2015 Phase II (Ground), a combined Field Training Exercise (FTX) in
    Belize, in order to enhance combined Counter Transnational Organized
    Crime (CTOC) operations capability and promote interoperability and
    multinational relationships throughout the theater. There were over 400
    participants in the Belize-hosted, MARFORSOUTH-led ground portion of
    the exercise that accomplished the capacity building exercise through
    five distinct exercise tracks in a Subject Matter Expert Exchange
    (SMEE). The tracks included nine days of interoperability training in
    command and control, jungle tactics, military support to law
    enforcement, instinctive shooting, and riverine skills. Of note,
    Tradewinds 2015 facilitated the positive increase of mil-to-mil
    relationships between Mexico and Belize that resulted in training and
    cooperation that was exclusive of the exercise and enhances the border
    security of both nations.
          MLAC-15: In August 2015 United States Marine Corps
    Forces, South executed the Marine Leaders of the Americas Conference in
    Cartagena, Colombia to increase professional exchanges and strengthen
    relations among naval infantry forces within the Western Hemisphere.
    This sixth iteration was co-hosted by commander, United States Marine
    Corps Forces Command on behalf of the Commandant of the U.S. Marine
    Corps, U.S. Marine Corps Forces, South and the Infanteria de Marina de
    Colombia. This event provided the Commandant of the Marine Corps with
    an opportunity to meet and engage senior Marine Corps and naval
    infantry leaders from 15 partner nations.
          UNITAS Amphibious 2015: From 14-25 November 2015,
    approximately 1,000 representatives from Brazil, Canada, Chile,
    Colombia, Mexico, Paraguay, Peru, and the United States participated in
    UNITAS Amphibious 2015, a combined Field Training Exercise in the
    vicinity of the Ilha do Governador and Ilha da Marambaia, Brazil, in
    order to enhance interoperability in Amphibious Operations, and
    Humanitarian Assistance/Disaster Relief (HA/DR) missions. The U.S.-
    sponsored exercise, UA 2015, develops and sustains relationships--which
    improve the capacity of our PN security forces to achieve common
    desired regional goals. This annual exercise fosters friendly
    cooperation and understanding among all participating forces.
          Security Augmentation Force (SAF): The SAF is
    MARFORSOUTH's designated company of marines that reinforces Diplomatic
    Missions in the AOR, as required in support of `New Normal'
    requirements. In close coordination with Department of State, the SAF
    is postured in CONUS should an Ambassador decide that the local guard
    force is unwilling, unable, or insufficient to provide security to his
    mission. While there are currently no high threat posts in the AOR, the
    potential for a natural disaster is possible for some Embassy
    locations. MARFORSOUTH deploys its Marine Liaison Element to visit each
    Embassy, solidifies plans of action with the Country Team, and captures
    relevant information that will enable SAF in rapidly responding to
    crisis.
                  special operations command south (socsouth)
                        headquarters: homestead, florida
          Building Partner Capacity: SOCSOUTH elements worked with
    Partner Nation units in Belize, Brazil, Colombia, the Dominican
    Republic, El Salvador, Honduras, Guatemala, Guyana, Panama, and Peru to
    improve their capacity to conduct ground and maritime interdiction,
    broaden and reinforce their civil affairs programs, engage in Military
    Information Support Operations (MISO), and develop their intelligence
    capacities. Through active engagement, SOCSOUTH helped Partner Nations
    develop self-sustaining capabilities to better protect themselves,
    contribute to regional security and stability, and collaborate with
    U.S. and other forces.
            SOCSOUTH used episodic engagements-including 26 Joint
    Combined Exchange Training (JCET) events--with multiple Central
    American, South American, and Caribbean partners to develop United
    States forces' skills and enhance Partner Nation interoperability.
            In Brazil, SOCSOUTH JCETs allowed United States and
    Brazilian counter-terrorism forces to share best practices for
    operating in a range of complex environments and assisted the
    Brazilians' capacity building efforts in preparation for the upcoming
    Olympic Games.
            In Colombia and Peru, SOCSOUTH continued to partner
    with these Andean Ridge nations as they confronted narco-terrorist
    insurgencies and global illicit trafficking networks. Colombia's
    enhanced capacity is a significant supporting element of that nation's
    ongoing peace process.
            In Honduras, SOCSOUTH teams and Colombian counterparts
    continued to help train National Police officers of the TIGRES special
    response unit as part of expanded United States support to Honduran
    authorities as they confront sources of insecurity in urban and remote
    rural areas.
            In Belize, El Salvador, and Guatemala, SOCSOUTH teams
    engaged the Partner Nation in cooperative activities to reinforce their
    Naval Special Forces maritime interdiction capabilities. Guatemalan and
    Salvadoran Naval Special Forces conducted seven major maritime
    interdiction operations in support of Joint Interagency Task Force-
    South's (JIATF-S) multinational collaborative efforts against regional
    illicit traffickers.
          Civil Affairs: In 2015, 14 civil affairs teams and civil-
    military support elements engaged eight Partner Nations as they worked
    to enhance civil-military relations, reduce the vulnerability of key
    populations impacted by transnational organized crime or violent
    extremism, and improve/extend governance in underserved regions.
          Military Information Support Operations: SOCSOUTH
    maintained military information support teams in six Partner Nations
    supporting Colombia's Demobilization and Counter Recruitment Programs,
    Guatemalan Interagency Task Forces, Panamanian security services'
    outreach programs in the Darien border region, the global DOD Rewards
    Program, and United States Government Anti-Trafficking in Persons
    efforts. These activities supported a broad range of efforts against
    transnational organized criminal and violent extremist organizations.
          Intelligence Analytical Support to U.S. Country Teams:
    SOCSOUTH provided support to U.S. Country Teams efforts focused on
    terrorism, human smuggling network s, and transnational organized
    crime.
            SOCSOUTH helped develop host nation capabilities and
    country team support through a number of subject matter exchanges.
            SOCSOUTH supported multiple U.S. Country Team and
    Homeland Security Investigations (HSI) collaborations with Partner
    Nations, with emphasis on countering Special Interest Aliens involved
    in cross-border criminal activities.
          Building Intellectual Capital: SOCSOUTH, in conjunction
    with the Colombian Joint Staff College, conducted six Counter-Terrorism
    Fellowship Program (CTFP)-funded seminars in Bogota, Colombia during
    2015. Subject-matter expert presenters from the United States,
    Colombia, and other nations collaborated with hundreds of participants
    from 18 Western Hemisphere and NATO countries. Late in the year,
    SOCSOUTH worked with Partner Nation defense and security institutions
    in El Salvador to build a complementary regional CTFP series in that
    country.
          Fuerzas Comando 2015: Fuerzas Comando is a USSOUTHCOM-
    sponsored, SOCSOUTH-executed multinational exercise featuring a Special
    Operations skills competition and a Senior Leader Seminar designed to
    promote military-to-military relationships , increased
    interoperability, and improved regional security. Approximately 700
    military, law enforcement, and civilian personnel took part. The 2015
    skills competition was held in Poptun, Guatemala and included
    participation by 18 Partner Nations and the United States. In the city
    of Antigua, distinguished representatives from each nation discussed
    approaches to combating terrorism, organized crime, and illicit
    trafficking at the Senior Leader Seminar.
          Fused Response 2015: SOCSOUTH executes an annual CJCS-
    directed exercise to validate time sensitive crisis action planning, as
    well as training, readiness, interoperability and capability of Special
    Operations Forces in support of regional crises and contingencies.
    Fused Response 2015 was a Joint and Combined exercise held across
    several locations in Honduras. United States military and civilian
    personnel and aircraft operated with their Honduran counterparts to
    refine rapid crisis response procedures and learn from each other's
    best practices.
          Panamax 2015: In this annual USSOUTHCOM-sponsored, 19-
    nation exercise, regional forces support the Government of Panama as it
    protects safe passage through the Panama Canal, ensures its neutrality,
    and preserves its national sovereignty. SOCSOUTH took part as a member
    of the multinational Special Operations team led by Brazil.
          Gator Aide 2015: Exercise Gator Aide is a Personnel
    Recovery exercise designed to validate USSOUTHCOM's non-conventional
    assisted recovery capabilities. SOCSOUTH worked with U.S. interagency
    partners to enhance each other's readiness to prepare for, plan, and
    conduct specialized search and rescue operations throughout the region.

        Chairman McCain. Thank you very much, Admiral Tidd.
        Admiral Gortney, it's been described by many Governors and
    law enforcement individuals in the Northeast and the Midwest
    that the drug overdose deaths of manufactured heroin is now, in
    the view of some Governors, a, quote, ``epidemic.'' That is now
    being brought to my attention, and many, many others,
    particularly those who represent these States. How's it getting
    in?
        Admiral Gortney. It's coming through the traditional legal
    border crossings in very small quantities, some----
        Chairman McCain. By individuals or vehicles, or both, or--
    --
        Admiral Gortney. Both. Both, sir. By very small quantities,
    because of the profit margin. I was just down in--at the San
    Diego-Tijuana border crossing, an immense challenge separating
    the legal versus the illegal activity that comes across the
    border and how the technology is--that our Custom and Border
    Patrol and Immigration are using is being circumvented by a
    very adaptable enemy.
        Chairman McCain. What do we need to do?
        Admiral Gortney. Well, two things, sir. We need to work on
    the technologies that allow us to detect this. We need to work
    at the root cause within Mexico, in the case of the poppy
    production and the eradication of the poppies. We'd work with
    SEDENA [Secretariat of National Defense] and SEMAR [Secretariat
    of Navy] on that, in our mil-to-mil responsibilities, as well
    as working with our partners north of the border. We do that
    through JTF [Joint Task Force] North, helping them improve
    their--our mission partners improve their capability and
    capacity where----
        Chairman McCain. Should we expect more of the Mexican
    Government?
        Admiral Gortney. I would think we--yes, sir, we do need to
    expect more of the Mexican Government and all of the agencies
    within the Mexican Government.
        Chairman McCain. The manufactured heroin is much easier
    than cultivated heroin.
        Admiral Gortney. Yes, sir. Between heroin and
    methamphetamines, the precursors in methamphetamines are coming
    from China, factories in China, and we have to tackle all of
    the illicit drugs that are coming across the border, sir.
        Chairman McCain. Part of it, as you mentioned in your
    remarks, it has got to do with the fundamentals of economics,
    and that's supply and demand. If there's a demand, there's
    going to be a supply.
        Admiral Gortney. That's absolutely correct, sir.
        Chairman McCain. Admiral Tidd, you, I think very correctly,
    applauded the agreement in Colombia with the FARC. I think it
    is a testimony to the Colombian people and government, first of
    all, but it is a sign and a story that we should understand
    better, and that is, it's been a long-term investment by the
    United States of America of billions over time because the
    heroin--excuse me--the cocaine was obviously a threat to the
    United States of America. But, now we are hearing that poppy
    cultivation--or cocaine--is way up. Is that correct?
        Admiral Tidd. Yes, sir, that's correct. I think in the next
    set of figures that will come out, we're going to see a very
    significant increase in coca production.
        Chairman McCain. With the cocoa production up, that means
    there's going to be more cocoa coming into the--cocaine coming
    in the United States.
        Admiral Tidd. I'd--that's what I would expect, yes, sir.
        Chairman McCain. That's where the market is. What do we
    need to do there? Because obviously it will lower the cost of
    cocaine, the--more people will find it affordable. What do we
    do there?
        Admiral Tidd. Sir, I think it's a multifaceted approach.
    First and foremost, we need to continue to stand steadfast with
    our Colombian friends. As you recognized, it's a--it is a
    relationship that extends over decades. We will need to
    continue to work very closely with them.
        With regard to the actual movement of cocaine, those
    transnational criminal networks that have moved the cocaine, we
    need to do everything that we can to apply pressure on them to
    detect, to illuminate, and then to disrupt them. That
    disruptive work will require the efforts of both--all of our
    interagency partners as well as allied partners.
        Chairman McCain. Admiral Gortney, what--we know that Mr.
    Baghdadi, the head of ISIS, has--is sending people out of ISIS
    in the wave of refugees that have left Syria and Iraq. What is
    the threat of someone--individual or individuals coming across
    our southern border?
        Admiral Gortney. I think if someone can find a seam to
    enter into our country, legally or illegally, they're going to
    exploit that particular seam. That's why we work very closely
    with our mission and partners to the south while we look into
    the drugs, we look to the left and right to see, within those
    seams, if there's anything else that be moving--in this case,
    terrorists.
        Chairman McCain. What more do we need to do in order to
    secure our southern border? Have we made progress in securing
    our southern border, or is it basically the status quo?
        Admiral Gortney. I think the efforts have been effective,
    but not nearly as effective as we would like them to be. We're
    working against a very adaptive enemy who will exploit the
    seams. As we make an advance in one area, they're very quickly
    able to overcome that. We're not able to stay out in front of
    that, their OODA [observe, orient, decide and act] loop, so to
    speak. That's where we need to--that's where we need----
        Chairman McCain. Well--so, what do we need to do? Isn't it
    true that more and more of those who are being apprehended are
    what we call OTM [on the move], other than Mexican?
        Admiral Gortney. That's correct. There's--as I look at it,
    it's the mass migration that are escaping the conditions within
    Central America, and the cartels are moving the people. The
    other problem is the drugs. The one that is the most concerning
    to us is the heroin that is being produced and shipped out of
    Mexico, and the methamphetamines. Moved by the same cartels.
        Chairman McCain. What do we need to do?
        Admiral Gortney. We need to tackle both. They both have
    different problem sets.
        Chairman McCain. I mean, do we need more Border Patrol? Do
    we need more towers? Do we need more--in other words, what more
    do we need to do to increase our border security?
        Admiral Gortney. The first thing, for the people, is
    improving the conditions within Central America, a whole-of-
    government approach, working with the countries down there to
    improve the conditions so that people want to remain within----
        Chairman McCain. That's a long-term project. What about
    the----
        Admiral Gortney. Yes, sir.
        Chairman McCain. What about the short term?
        Admiral Gortney. Sir, both of them demand long-term
    problems. This is a 30-year fight that we have to confront.
    When it comes to the drugs, it's working with our mission
    partners in those countries, as well as Mexico. It's improving
    the technology along----
        Chairman McCain. What about security on the border itself?
    Is it--we need more technology? We need more towers? We need
    more Border Patrol? What do we need?
        Admiral Gortney. I would say that the--having been on the
    Mexican-Guatemalan border and then the Arizona and the Mexican
    border, the threat is a function of the--what we need is a
    combination of analyzing the threat, the terrain, the
    technology, and the training of the people. Efforts along all
    of those, both with our people and then working with Mexico and
    with Guatemala and Belize is exactly in order against all of
    those.
        Chairman McCain. Senator Reed.
        Senator Reed. Well, thank you very much, Mr. Chairman.
        Let me begin with Admiral Haney. Admiral Haney, we are in
    the process of modernizing the triad, for very obvious and
    compelling reasons. With respect to the air aspects, there is
    proposals for a new penetrating bomber, but that bomber also
    needs ordnance to carry. Two items which you could comment upon
    are the replacement for our existing air-launched cruise
    missile and also the B61-12 gravity bomb. But, a related issue
    would be timing of--improvements on these delivery systems
    might, in fact, be--come along before the new penetrating
    bomber, but they would be very, very useful on whatever
    platform it's applying. I presume that, but you might confirm
    or refute.
        Admiral Haney. Ranking Member Reed, the air leg associated
    with our triad of platforms is very important, in terms of
    complex deterrents that any adversary that would want to
    escalate their way out of a failed conflict would have to also
    deal with. That's important in strategic stability. As you've
    indicated here, and I will articulate, it's very important that
    we move forward with the replacement bomber, in that our B-52
    fleet, the planes flying today were off the assembly line in
    1962. We'll still be flying that plane into the 2040s. Even our
    B-2 fleet is about 25 years old. It's important that we're able
    to have that capability--stealth platform to deliver both
    nuclear and conventional missions.
        With regards to nuclear arsenals for that plane in order to
    have both flexible deterrents as well as visible deterrents,
    it's important that we replace the air-launch cruise missile.
    It was built in the '70s for a 10-year lifespan, well beyond
    that span today. That's why it's very important that we replace
    it with the long-range standoff cruise missile program that's
    just now getting underway in part of the President's budget for
    2017. We already have a cruise missile, but it's well beyond
    its lifespan, and we need to replace it.
        We also have programs associated with the B61-12 nuclear
    bomb that replaces four variants of, again, aging bombs. This
    helps us reduce our stockpile and have a more effective
    deterrent.
        Senator Reed. Just a follow-up question. As you develop
    this new air-launch cruise missile, it--I presume, and correct
    me if wrong, it could be launched from numerous platforms, even
    existing platforms. Is that correct?
        Admiral Haney. Absolutely. B-52, for example, which
    launches our air-launch cruise missile, doesn't have stealth
    characteristics. We'll use this new long-range standoff.
        Senator Reed. Thank you.
        Admiral Haney. You're welcome.
        Senator Reed. Admiral Gortney, you have many
    responsibilities in your--as you've indicated in your testimony
    and your response to the Chairman. One issue, though, is
    missile defense--national missile defense. Can you give us,
    sort of, an update on the long-range discrimination radar? How
    is it going? Also, generally, our posture when it comes to
    missile defense.
        Admiral Gortney. We're on track with long-range
    discriminating radar and the necessary investments to keep our
    ballistic missile defense architecture to make it the very best
    we can and then to improve it. We want to thank the Members of
    Congress for those investments. We're in good shape there, sir.
    We're on path to have 44 interceptors in the ground by the end
    of 2017; 40 in the great State of Alaska and four in
    California.
        Also, we thank you for the investments to help us get on
    the correct side of the cost curve, because right now we're on
    the wrong side of the cost curve, both in theater ballistic
    missile defense and intercontinental ballistic missile defense
    against rogue nations. Admiral Jim Syring, at MDA, and I asked
    for those investments and the research and development to help
    us get on the correct side of the cost curve. They're in the
    budget, and we thank you for that. Those that pay out, we'll be
    coming to you and asking you to put those into production once
    we understand what they do. I'm confident in the capability
    that we have today.
        Senator Reed. Just a follow-up question. This is always a
    subject of constant evaluation and reevaluation, but, at this
    juncture, your view would--on the need for an East Coast array
    of missiles, that need is not evident at this moment?
        Admiral Gortney. I do not see it, sir. If the threat
    manifested itself from Iran today, I have the ability to engage
    it today. If I had one dollar to invest, I'd put it to where we
    could engage in those capabilities that get us on the correct
    side of the cost curve. Those capabilities will work both for
    theater ballistic missile defense for our servicemembers and
    their families overseas, as well as ballistic missile defense
    for here in the Homeland.
        Senator Reed. Thank you.
        Admiral Gortney. Yes, sir.
        Senator Reed. My time is run out. But, Admiral Tidd, I want
    to commend your efforts and also the--your testimony today. One
    of the chief issues that I think emerges from your testimony is
    the need to build capacity in our allies in the region, that we
    can't, by far, do it alone. That is a multi-agency effort, not
    just SOUTHCOM, but SOUTHCOM plays a very critical role,
    because, for many in Latin America and South America, you used
    to represent not just Department of Defense, but the United
    States in your command. A quick comment, because my time is
    expired.
        Admiral Tidd. Yes, sir. Thanks very much.
        Where the Department is--of Defense--is able to play a
    useful is, we have a regional and a subregional look. The
    actual activities occur on a country-by-country basis, but
    we're able to look across the entire region and, I think,
    provide a very useful service to our interagency partners.
        Senator Reed. Thank you, sir.
        Chairman McCain. Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chair.
        I--in this morning's Air Force Times, Admiral Haney, I
    noticed the--it caught my eye because Senator Rounds and I were
    just on Diego Garcia--that the Air Force is deploying three B-
    2s there. You're quoted in the article, announcing--making this
    announcement in this morning's Air Force Times. Any comments
    you want to make about that deployment of those three B-2s in
    Diego Garcia?
        Admiral Haney. Senator Inhofe, I would not describe it as a
    deployment. We take our global----
        Senator Inhofe. That's how it was characterized in the
    article, though.
        Admiral Haney. Well, I didn't get interviewed by----
        Senator Inhofe. All right.
        Admiral Haney.--Air Force Times, so I would say they
    probably mixed some of my earlier statements, et cetera.
        We actually send out our bombers--B-52s, B-2s--number one,
    were we invited to participate in exercises with our allies and
    partners. We do that throughout the globe. We do Pacific
    operations, as well.
        Senator Inhofe. Yeah. Well, that's good.
        I want to--there's an area where I have sensed that there
    is a disagreement between our military intelligence, on one
    side, and the State Department, on the other side, having to do
    with the Open Skies Treaty. Russia has reportedly announced its
    intent to submit plans for aerial surveillance flights, which I
    understand are permitted under the Open Skies Treaty, over the
    United States using advanced digital cameras. Several in the--I
    think Clapper made some comments, and certainly Lieutenant
    General Vincent Stewart, Director of Defense Intelligence
    Agency, with--concerned about this because of the advanced
    technology that's out there. To quote him, he says, ``The
    things that you can see, the amount of data you can collect,
    the things you can do with post-processing allows Russia, in my
    opinion, to get incredible foundational intelligence on
    critical infrastructure, bases, ports, all of our facilities.''
    He was critical of this. What is your thinking about this?
    Where do you fall down on this?
        Admiral Haney. Senator Inhofe, I think, as with all things,
    we have to take a balanced approach, but we have to look at
    this very carefully. Clearly, we, back here recently, did an
    Open Skies Treaty mission over Russia with one of the 32 other
    signors of the treaty. It's a mechanism by which we are able to
    have transparent mechanisms with our allies and other partners
    in that group, while at the same time we have to be careful as
    we look through the technology advances using digital media
    versus film. Sustaining film is problematic today. This is--got
    to be in balance. Clearly, I'm concerned of any Russian ability
    to gain intelligence on our critical infrastructure.
        Senator Inhofe. Now, when we were going over Russia, were
    we using the advanced digital equipment?
        Admiral Haney. We were not, because we haven't gotten that
    far yet.
        Senator Inhofe. They're ahead of us, then. All right.
        The--when Senator Reed was talking about the--all three
    legs, you were concentrating on the air legs of the triad.
    The--Admiral Winnifeld recently made the statement--and I'll
    quote him--he said, ``Any remaining margin we have for
    investing in our nuclear deterrent has been steadily whittled
    away as we've pushed investments further and further into the
    future.'' Do you think, Admiral Haney, that Russia is actively
    modernizing their nuclear weapons delivery system and we're
    just--are they ahead of us?
        Admiral Haney. Well, I would----
        Senator Inhofe. If so, is this a concern?
        Admiral Haney. Well, Russia's modernization program in
    their nuclear deterrent forces is of concern. Period. Dot. End.
    The piece when you look at what they've been modernizing, it
    didn't just start. They've been doing this, quite frankly, for
    some time, with a lot of crescendo of activity over the last
    decade and a half.
        Senator Inhofe. Yes, we've been talking about it for a long
    period of time, that we have not been keeping up in our
    program, as many people think we should. A lot of us, when
    we're back in the--our own States, we hear things that are
    going on, and some things really catch the attention of the
    American people. I brought up these two issues, because these
    are two that do make a difference and the people are aware of,
    and there are concerns out there.
        Thank you.
        Chairman McCain. Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman.
        Admiral Tidd, welcome to Florida. Welcome to Miami.
        Admiral Tidd. Sir, it's a delightful place to live.
        Senator Nelson. In your three Cs and three Gs, you talked
    about this efficient network that moves things from south to
    north, not only drugs, human trafficking, all kinds of
    contraband. Do you have enough resources to do that in the
    President's Budget?
        Admiral Tidd. Sir, the simple fact of the matter is, we do
    not. I do not have the ships, I do not have the aircraft to be
    able to execute the detection and monitoring mission to the
    level that has been established for us to achieve.
        Senator Nelson. This is a unique role, where the Navy in
    the Caribbean and the Pacific coordinates with the law
    enforcement arm of the Coast Guard. They need assistance, too,
    don't they?
        Admiral Tidd. Sir, I would agree completely. It is very
    much a team sport. The activities that are orchestrated by our
    Joint Interagency Task Force South in Key West Florida involve
    the efforts of all of the State--excuse me--all of the Federal
    law enforcement agencies as well as the Department of Defense.
    Coast Guard plays a very significant role.
        Senator Nelson. We have seen some lessening of the violence
    and the drug lords in Honduras. That used to be the number-one
    murder capital in the world. Just this past weekend, I met, on
    several occasions, with the President of Costa Rica. They seem
    to be fairly stabilized. But, we're getting more drugs coming
    into stable places in the past, such as Panama. That being the
    Panama Canal, an expanded canal, what do you think is the
    threat there?
        Admiral Tidd. Senator, the adversary that we are dealing
    with is very flexible, very agile, and it's like squeezing a
    balloon; when we squeeze in one place, if we are not able to
    apply pressure across the entire breadth of the network, they
    will adapt and move to the area that they think they can get
    in. As we have been--had some success working with our Honduran
    partners, as they have been able to get out and apply greater
    pressure in areas that previously had been denied to them,
    we're seeing the--that the drug traffickers are moving the
    landing points for the--where the drugs are coming ashore in
    Central America to different countries.
        Senator Nelson. Couldn't we get a lot more support from
    Mexico, where all these drugs, basically, other than the ones
    that are going the water route to Puerto Rico, some to Haiti--
    couldn't we get a lot more support from Mexico, since they come
    there and then they go across the border?
        Admiral Tidd. Senator, I would defer that specific question
    to----
        Senator Nelson. I know----
        Admiral Tidd.--to Admiral Gortney.
        Senator Nelson.--it's not in your AOR, but what do you
    think?
        Admiral Tidd. What I think is that we continue to work very
    closely with the militaries of all of the countries of Central
    America. I know that NORTHCOM works closely with the Mexican
    military to improve their capability and capacity to get this
    problem. Our ability to share information effectively plays a
    significant role.
        Senator Nelson. Well, at least we got El Chapo. That was a
    step in the right direction.
        Tell me about Haiti. They've got this interim government.
    Is it working until they can finally declare a President?
        Admiral Tidd. Sir, I think the situation in Haiti--every
    morning that we wake up, we watch--and to make sure that they
    have not had significant crises that have occurred there.
    They're going to have their hands full for a long time to come.
        The role played by the U.N. peacekeeping operation,
    MINUSTAH [United Nations Stabilization Mission in Haiti], there
    has been absolutely critical in sustaining that--the stability
    that is there. We've got some key partners in the nation, most
    notably Brazil that has been a real backbone of that MINUSTAH
    operation. We would hope that countries like that would
    continue to make those contributions.
        Senator Nelson. Basically, bottom line, until they improve
    in their economic depravity, it's going to be a nation whose
    government is always subject to a lot of corruption.
        Admiral Gortney, what do you think about Mexico in helping
    us out?
        Admiral Gortney. I think they're in a 30-year fight, going
    after immense challenges. The number-one problem is corruption.
    If you look at the root cause that you've got to solve first--
    and this is Admiral Soberon's words, not mine--is to go after
    the corruption within the country. We need to assist them
    across our whole-of-government approach in this 30-year fight.
    They're great mission partners. SEDENA and SEMAR are great
    mission partners, but they have an immense challenge. We do
    everything we can to assist them with that.
        Senator Nelson. Isn't it interesting that you can rely on
    that elite unit at the federal level, but you get anywhere
    below that, it's just--you can't even say anything about intel;
    otherwise, it gets to the drug lords.
        Admiral Gortney. Yes, sir. You mentioned the--recapture of
    El Chapo. Those Mexican marines were trained by United States
    marines.
        Senator Nelson. Well, that's very good.
        With that, I'll say, Mr. Chairman, the marines are standing
    tall.
        Chairman McCain. Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Admiral Gortney, our adversaries are continuing to invest
    in developing advanced long-range cruise missiles. That can
    hold the United States at risk. I think we have really thin
    defenses against those. Can you talk a little bit about the
    JLENS program and what role this plays in defending the United
    States against a cruise missile attack?
        Admiral Gortney. Yes, ma'am. The three types of missiles we
    worry about, the third one is the cruise missile attack. The
    Russians have--are employing these cruise missiles in Syria
    today, both from bombers, ships, and submarines. When there's
    no operational or tactical requirement in the battlefield to do
    it, they're messaging us that they have this capability, and
    those missiles can--have made it either a conventional or a
    nuclear-tipped warhead.
        In order to defeat this threat--I've been defending against
    them since I was a lieutenant JG, and I've shot over 1300 of
    them. If you want to defeat this threat, you have to be able to
    detect it. In order to do that, you need an array--a radar that
    is above the horizon. That can come in many forms. It can be
    the AWACs, it can be the E-2 Hawkeye for the Navy, or it can be
    JLENS [Joint Land Attack Cruise Missile Defense Elevated Netted
    Sensor System]. What it does for us here in the national
    capital region as we're executing our test, is putting this
    array up. It fills a gap--at the classified level I can't say
    in this forum--it fills a cap--a capability gap that I do not
    have today. We look forward to restarting the JLENS program
    after the very unfortunate mishap that we have. We understand
    what happened. We've put in place the mitigation efforts. We
    look forward to completing it, because, should it bear out, it
    fills a gap that I do not have today against this particular
    threat.
        Senator Fischer. Thank you, sir.
        Admiral Haney, last week General Rand, who commands Global
    Strike Command, he testified that the Huey helicopters
    providing security for our ICBM fields, they cannot meet the
    emergency response requirements. Can you talk about the current
    capability gap that we have and the need that we see to replace
    those helicopters?
        Admiral Haney. Senator Fischer, the--General Rand's
    comments were spot on the mark there. These current
    helicopters, these UH-1Ns, don't have the lift capability, the
    speed capability to meet the requirements that have been
    improved--validated through a number of studies, as well as
    Might Guardian exercises, and what have you. They don't have
    the lift to get the amount of security forces to the scene.
    When you look at these missile fields, they're vast, and they
    cover large areas, as you well know. They--in order to meet
    those kinds of requirements, we need a new helicopter.
        Senator Fischer. Would you say that need is urgent?
        Admiral Haney. I would definitely say the need is urgent.
        Senator Fischer. Thank you, Admiral.
        Thank you, Mr. Chairman. I have to run, to preside.
        Chairman McCain. Senator Manchin.
        Senator Manchin. Thank you, Mr. Chairman.
        Thank you all for your service and for being here today.
        I think, Admiral Tidd, if I could, you know, you were
    talking about the drugs, and this and that. If you were going
    to rate--and I've just heard a couple of statistics--but how
    the drugs are getting here, most predominantly--by air, sea,
    over ground, or through tunnels?
        Admiral Tidd. I would defer to Admiral Gortney to----
        Senator Manchin. Okay.
        Admiral Tidd.--talk how they actually get across the U.S.
    border into the United States. But, as they go through the
    SOUTHCOM region, they go by air and by sea.
        Senator Manchin. Okay.
        Admiral Tidd. Then over land of Central America.
        Senator Manchin. How do they get into the United States
    border? Across it----
        Admiral Gortney. Through all mechanisms, sir. Everything
    that we talked about, that Admiral Tidd talked about, through
    the tunnels----
        Senator Manchin. I've heard that--and, sir--and, Admiral,
    that's the--I had not heard that tunnels were so prevalent. I
    heard that tunnels are probably one of the most pervasive ways
    that this stuff is getting in, and we're not doing a whole lot
    about the tunnels.
        Admiral Gortney. Well, sir, I've been in one of the
    tunnels.
        Senator Manchin. Okay.
        Admiral Gortney. I've looked at the tunnel detection
    capability that Custom and Border Patrol use, the technology
    that they have applied to that, and then crawled through the
    tunnels with them. It's a--once again, it's a very adaptive
    enemy that goes out there. If they can find a mechanism in
    order to----
        Senator Manchin. Are we destroying the tunnels?
        Admiral Gortney. Yes, sir, we are, those that we find. As
    they detect them, they then work the law enforcement piece on
    each side to find out where the entry and exit piece is, what
    is the network that is controlling that entry and exit piece
    after that, and working both sides of the borders on it. Then,
    once the--once they understand that, they'll go ahead and
    destroy and fill in the tunnel.
        Senator Manchin. Do you think a wall is needed?
        Admiral Gortney. Sir, we--a wall will not solve the immense
    problems that go out there. You need all of the technology.
        Senator Manchin. I know. Would it help? I'm just saying--
    because people believe--of course, there's a lot of rhetoric
    about a wall----
        Admiral Gortney. Yeah.
        Senator Manchin.--these days in the news, but I'm--
    sincerely, do you believe that it could help, or would help,
    more----
        Admiral Gortney. Well----
        Senator Manchin.--than not having a wall?
        Admiral Gortney. The--I have flown the border between what
    we call our middle border, on the Arizona side, and I've seen
    the technology that is applied there, be it sensors, be it
    fencing. Every type of fencing that happens to be out there,
    because the terrain demands different types of fencing----
        Senator Manchin. Sure.
        Admiral Gortney.--for it, and we need to put in place all
    of that technology across our border as we try and work with
    our mission partners south of the border, as well as cut back
    significantly the demand signal here in our country.
        Senator Manchin. If I could follow up with you again,
    Admiral, as--yesterday, Lieutenant General Thomas submitted in
    written testimony that ISIS-inspired lone actors pose the most
    direct and immediate threat to United States Homeland. As we
    saw in San Bernardino and Dallas. There are many folks in my
    State of West Virginia that have a lot of concerns with our
    Government when our Government considers accepting refugees
    from overseas. They're more concerned about, Are we doing the
    proper vetting process? I would ask, Should we accept Syrian
    refugees into this country at this time? Are we able to do the
    proper vetting, since we have such little facts about those
    people coming?
        Admiral Gortney. Homeland Security has a very robust
    vetting process for everybody that comes into this country,
    particularly focused on the Syrian refugee challenge that's
    coming this way. I have confidence in the program, but no
    program is perfect, sir. When I look at people that are trying
    to come to do nefarious activity in our country, the ones that
    I am not--I am most concerned are those that enter the country
    legally, under a legal means, because then they have freedom of
    maneuver to operate within the United States. Those that try
    and enter illegally have hooks that we may have opportunities
    to pick up. Then, if they're maneuvering inside, they have--do
    not have the freedom of maneuver inside the country. It is the
    vetting process, a very robust vetting process that Homeland
    Security has, that is absolutely critical----
        Senator Manchin. But, you all recommend that we do not
    reduce that vetting process whatsoever.
        Admiral Gortney. No, I would not----
        Senator Manchin. Thank you.
        Admiral Gortney.--at all.
        Senator Manchin. Admiral Haney, if I could ask you. In
    recent days, we have once again seen North Korea threaten to
    conduct a preemptive nuclear strike and reduce Seoul into a sea
    of fire and ashes. Now, I know we always hear that rhetoric
    anytime we partner with South Korea, as we're doing right now,
    to conduct military exercises, but it seems to be a lot
    stronger this time. It seems to be growing stronger every year.
    Do you feel there is a linkage to North Korea's ratcheted
    rhetoric and their more aggressive missile test?
        Admiral Haney. Well, I won't, Senator, try to rationale----
        Senator Manchin. Right.
        Admiral Haney.--North Korean behavior and Kim Jung Un's
    behavior. I will state that the nuclear test, the fourth test
    they just did here, and the space launch that they just did,
    further enhanced their understanding and knowledge associated
    with this. North Korea has made many claims--miniaturization of
    nuclear warheads. They've paraded around their KNO-8
    intercontinental ballistic missile. I think we have to take
    these problems seriously, because it's clear to me they are
    working hard to----
        Senator Manchin. Is it more aggressive than you've seen in
    the past?
        Admiral Haney. Absolutely.
        Senator Manchin. So--thank you.
        Thank all of you.
        Chairman McCain. Admiral, if I could just follow up. Your
    greater concern is people who come into this country legally,
    as opposed to coming across our border. Is that a correct----
        Admiral Gortney. Yes, sir, because it's their ability of
    freedom of maneuver to operate within our country. Anytime that
    someone is--comes through illegally, we have the--a better
    opportunity to detect them and pick them up. As they're in the
    country, just as the San Bernardino attack showed out, the
    woman involved entered the country legally. We did not have the
    sensors, the ability to detect what she wanted to do. You've
    got to tackle both of them as we go forward.
        If you look at the Paris attacks, they entered the EU
    legally. They operated--they had freedom of maneuver to operate
    within the EU on the continent, because of the policies that
    they have in the EU--operated and planned the attack in a
    country that did not have the authorities that Paris did, and
    then freely move into France to conduct the attack. Disabling
    their--this freedom of maneuver is--I think is absolutely
    critical, which goes back to the vetting policy that was asked
    before, sir.
        Chairman McCain. Senator Cotton.
        Senator Cotton. Thank you.
        Admiral Tidd, I want to talk about the potential for
    migrant flows into the United States from Latin America, as we
    saw during the migrant crisis in the summer of 2014. Obviously,
    there are push factors involved, given the crime and the
    violence in, say, Central America. But, there are always pull
    factors involved, as well. This is one reason why President
    Obama stated, in 2014, that parents in Central America
    shouldn't send their children to the United States through
    coyotes or human traffickers. Similarly, you see, in Europe,
    after Chancellor Merkel said that Germany would take all
    migrants and refugees, there was a significant increase in the
    flows, not just from places like Syria and Iraq, but from many
    other countries in Africa and Asia.
        Therefore, I'm very troubled by what I heard last night in
    the Democratic debate. It's easy to write off political debates
    as theater, but we're the world's superpower. There's only six
    people right now who are likely to be our next President of the
    United States, our next Commander in Chief. Last night, the two
    candidates in the Democratic side said, essentially, that they
    would never send any children back to their country of origin
    if they make it to the United States. What kind of message did
    that send to families in Central America and South America
    about the risk they're willing to undertake to send their
    children to the United States through human traffickers and
    through coyotes?
        Admiral Tidd. Senator, I think one of the most effective
    things that the Department of Homeland Security was able to do
    to begin to curtail that movement of children coming into the
    country back in 2014 was to try to change the messages that
    were being communicated via social media back to family
    members, that, ``It's safe, it's easy to come in. You won't be
    incarcerated.'' They put a hard push to communicate that, if
    you come across the border, you will be held until you can be
    processed for return back home. I think all of the steps that
    can be taken to deal with those pull factors would be critical.
        Senator Cotton. I agree. I mean, I don't think it's an
    especially moral policy what Chancellor Merkel has proposed in
    Europe or what we heard last night. We're essentially saying,
    to people who are poor and oftentimes in countries racked by
    violence, that if you can survive, you can stay here.
        Admiral Tidd. The critical work that you identified to try
    to change the push factors out of those countries, the long-
    term sustained work that's being done by Department of State,
    by USAID [United States Agency for International Development]
    to try to provide economic opportunities so that those--the
    people will find that it is economically a much better decision
    to remain home, and then the work that's being done to try to
    improve security within those countries so that it is not a--
    it's a life-or-death decision to remain home--that's the key to
    the long-term----
        Senator Cotton. I agree, on the long-term solution, the
    work that you and all the men and women of SOUTHCOM do and have
    done for many years are critical to build that kind of capacity
    in the countries that send the most migrants here. But, I also
    think that statements by American leaders, that essentially
    create a full employment opportunity for human traffickers are
    very damaging, not just for our country, but for the young
    children that might be sent here.
        I'd like to stay in your AO [area of operation] and turn to
    Guantanamo Bay. I led a delegation of the freshmen on this
    committee and the Intelligence Committee last year to see
    Guantanamo Bay. We were very impressed by the operations. We
    were even more impressed by the men and women you have serving
    there. Could you explain to us a little bit about the stressful
    and sometimes dangerous working conditions they face handling
    these depraved terrorists?
        Admiral Tidd. Senator, thanks for the opportunity. We--
    I've--in the short two months that I've been in the--this
    position, I've visited Guantanamo Bay twice to see for myself,
    to be able to assess exactly the high degree of professionalism
    and discipline that the men and women execute that mission. As
    you observed, it is very difficult, very challenging,
    oftentimes under enormous pressure from both the expectations
    from outside, but then also just the actions of the detainees
    there. There have been a--in the last 12 months, 100 assaults
    committed by the detainees on our guard force, assaults in the
    form of splashing, scratching, pushing, shoving, those sorts of
    activities, and then threats of worse if they had the ability
    to do that. The fact that our men and women never respond in a
    negative way, that they continue to remain very professional, I
    think is testimony to the fact that they are supremely well
    trained, they are exceptionally well qualified for the mission
    that we ask them to do. All of the American people can be very
    proud of the job that they've done--that they have done and
    continue to do.
        Senator Cotton. Thank you.
        My time is expired.
        Chairman McCain. Senator Blumenthal.
        Senator Blumenthal. Thanks, Mr. Chairman.
        Admiral Haney, you note in your testimony, and I'm quoting,
    ``Recapitalizing our sea-based strategic deterrent'' remains
    your top priority, end quote. Considering the gap that we're
    facing in submarine capabilities, do you think that we ought to
    consider building three submarines a year--two Virginia-class
    and one Ohio replacement?
        Admiral Haney. Oh, Senator Blumenthal, I am supportive, and
    as you correctly stated----
        Senator Blumenthal. I am, too. I am, too, and I appreciate
    your support.
        Admiral Haney.--the building and the capability that we
    need to have, in terms of the Ohio replacement, SSBN, is a top
    priority. As I mentioned also, having conventional capability
    across our joint military forces is also important. We've got
    to get that balance right. I'm not--to give you an acquisition
    strategy on the number per year and what have you, there, I
    will say we need to have a--I depend upon the strong submarine
    force and all their capabilities, but, in particular, to have
    that strategic survivable capability underwater is very
    important to our Nation as a whole.
        Senator Blumenthal. I didn't ask you to commit to doing it,
    but to consider doing it, which I think is really important.
    Privately, I think that the Navy has been receptive to this
    idea of two Virginia-class submarines a year, plus the ORP
    [Office of Research Protections] at least for some period of
    time. In order----
        Admiral Haney. Well, I can I'd like to see five per year,
    but, you know, we have to do things in reason. From the spirit
    of what we need as a country as a whole, we've got to get that
    balance right. We do know, as I'm thinking you're implying,
    correctly so, that our submarine force does bring significant
    value to our Nation.
        Senator Blumenthal. Admiral Tidd, some of the reports that
    we've had indicate that we can actually see illicit
    substances--opioids, heroin--transported across waters, even
    across borders, but we lack the equipment and manpower to
    intercept and interdict and stop them. Is that true?
        Admiral Tidd. Senator, it is. First, what I'd like to do is
    thank the exceptional efforts of the Congress to provide
    additional resources as they became available for us to be able
    to increase the resources that we do have. The--we've been able
    to apply those resources very quickly in some new ways and to
    be able to take advantage of some nontraditional capabilities
    to increase our ability to see the movement and things that are
    going on.
        It still only gives us glimpses. We're not able to maintain
    a persistent view of activities going on within the theater. As
    you rightly point out, our ability to interdict is extremely
    limited. The number of surface ships largely provided by the
    U.S. Coast Guard, but the U.S. Navy also provides some limited
    capability, as well, but even that, it's not enough for us to
    be able to deal with the--what we're able to see.
        We try to mitigate that by increasing the capability of our
    partner nations, and they've--and the development that we've
    been able to do in their intercept capability and interdiction
    capability has made a significant improvement. As it stands
    right now, about half of the interdictions that occur, occur
    with the help of partner nations.
        Senator Blumenthal. Well, my time is limited, but let me
    just emphasize how important I think the American people
    believe it is to interdict and intercept the flow of these
    illicit substances. Clearly, the demand side needs to be
    addressed. In fact, we are seeking to do so through the
    Comprehensive Addiction and Recovery Act, which is only a step
    in the right direction, because it lacks the resources to
    provide the kind of treatment and services and even law
    enforcement support that we need to do. The demand side is
    important, but equally so, the work that you're doing is
    absolutely critical. I recognize that the dedicated men and
    women under your command are working as hard and long as they
    can with the limited resources they have.
        I'm hopeful that we can get from you a more specific list
    of resources, whether it's equipment, ships, aircraft, that you
    think are necessary. I'm not asking you to provide it now, but
    I would, for the record, ask that you provide it to the
    committee.
        Thank you, sir.
        Admiral Tidd. Sure.
        Senator Blumenthal. Thank you very much, Mr. Chairman.
        Thank you all for your dedicated service to our Nation.
        Chairman McCain. Senator Ayotte.
        Senator Ayotte. Thank you, Chairman.
        I want to thank all of you for your service and leadership
    for our country.
        Admiral Gortney, in the 2016 NDAA [National Defense
    Authorization Act], I was able to include a very--a bipartisan
    effort that was focused in asking the Secretary of Defense to
    carry out research, development, testing, and evaluation
    activities with Israel on anti-tunnel capabilities to detect,
    map, and neutralize Hamas and Hezbollah terrorist tunnels that,
    of course, are used for those tunnels to come up and commit
    attacks in Israel. But, we also know that this is a very
    important issue, not only in protection of our friend and ally,
    Israel, but also on our southern border, because we know that
    tunnels on our southern border can be used to smuggle drugs,
    like heroin and Fentanyl, which are devastating my State, into
    the United States, and they also presumably could be used by
    other bad actors, including terrorists.
        Admiral Gortney, has there been collaboration with Israel
    on terror tunnels that has benefited NORTHCOM's and the Joint
    Task Force North's efforts to develop technology to detect,
    map, and neutralize drug-smuggling tunnels on our southern
    border?
        Admiral Gortney. Absolutely, ma'am. It's very, very helpful
    for us. You know, we don't have a monopoly on good ideas in our
    country. When we can partner with our partners overseas that
    have a similar challenge, it's very, very--it's been very, very
    beneficial, both for us and for our partners in the Custom and
    Border Patrol.
        Senator Ayotte. Excellent. I'm glad to hear it. I look
    forward to continuing to focus on those efforts.
        How much of this is an issue as we look at--in New
    Hampshire, we had a record number of drug overdose deaths this
    year from heroin and Fentanyl--420. It's been devastating. In
    fact, right now, on the Senate floor, we have the Comprehensive
    Addiction Recovery Act, which is focused, obviously, on the
    prevention, the treatment, and support for our first responders
    so that they can help bring people back from drug overdoses.
    But, thinking about the interdiction piece, what's happening
    over our southern border on this issue? This is something I've
    raised also with Secretary Johnson. Can you give us an update
    on your interdiction efforts?
        Admiral Gortney. Yes, ma'am. Our interdiction efforts, we
    work both sides of our middle border. North of our border, we
    do the Department of Defense support with our mission partners
    through JTF North. You know, just last year, it was a $10.7
    million program that we were given for JTF North, and they
    assisted in pulling--taking $436 million of drugs off the
    street with our mission partners. We use the services in order
    to do that. In a 30-day period, over one stretch of territory
    that Custom and Border Patrol was asking us to take a look at,
    they were able to interdict 1 pound of marijuana and only one
    trafficker. We put United States Marine Corps ground sensor
    platoon who were in their training in order to deploy, and, in
    that same 30--in another 30-day period over that same terrain,
    they were able to pull up 1200 pounds of marijuana and 75
    traffickers. Being able to assist with them is absolutely
    critical for that.
        Senator Ayotte. What are you seeing on heroin and Fentanyl?
        Admiral Gortney. Heroin and Fentanyl are coming through our
    normal passages, the legal entry control points across our
    border. Heroin, predominantly through the San Diego passage.
    Very, very small shipments, which is very, very difficult for
    our partners to be able to detect with the technology that they
    have today.
        Senator Ayotte. What more could we do to assist you to give
    you some more technological tools or personnel to try to
    address this? Because what's happening in New Hampshire and
    across the country is, the price of heroin and Fentanyl, of
    course, have gone down dramatically, and you've got people----
        Admiral Gortney. Ten dollars a pop in any----
        Senator Ayotte. Yeah. They're going from prescription
    drugs, unfortunately, to heroin, and people are dying.
        Admiral Gortney. That's correct. Everywhere, ma'am. We've
    got to--we have to tackle this from both sides of the problem.
    Where our mission partners--what do our mission partners need
    in the capabilities to detect, improvements with all of our
    whole-of-government approach with Mexico and Central and South
    America. I'm responsible for the Mexican piece, of the mil-to-
    mil piece. Then we have to work on the demand signal. Sir, I
    want to--Senator Donnelly, with your anti-opiate bill that goes
    to the floor today, absolutely critical. You know, we look at
    this, the three of us look at this through not only military
    officers that are tasked to defend the Nation and what we can
    do in order to do that, but we look at it as fathers and
    grandfathers, as well. We have to go after the demand signal
    while we work the interdiction piece.
        Senator Ayotte. Let me just thank Senator Donnelly, because
    this is something that he's been a great leader on that we've
    worked together, and appreciate his efforts on this and focus
    on it, and others on this panel who have been working on it.
        I also wanted to ask, Admiral Gortney, in your prepared
    statement, you said that you assess that Iran may be able to
    deploy an operational ICBM by 2020 if the regime chooses to.
    Well, we know, in the last several days--first of all, we had a
    ballistic missile test in October, one in November, and, in the
    last 2 days, we've had several ballistic missile tests from
    Iran. Can you give us the detail on that assessment? Obviously,
    they're testing this capacity--where they stand on this
    development.
        Admiral Gortney. Yeah. None of their tests violate any of
    the agreements that are out there, but I think it's indicative
    of where their minds are. I don't see a change in their
    behavior. If they had the capability today, I have the ability
    to engage it today. We watch very closely. We thank the
    committee and all of Congress for the investments that allow us
    to be able to outpace that particular threat.
        Reading their intentions, I don't see a change from the
    Iranians' behavior.
        Senator Ayotte. In other words, bad behavior.
        Admiral Gortney. Yes, ma'am.
        Senator Ayotte. Thank you.
        Chairman McCain. Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman.
        I would like to thank Senator Ayotte. She's been a great
    partner in this effort to try to stop the flow of heroin. I
    know what a challenge it's been in New Hampshire and in my
    State. We've both worked in a real bipartisan way to try to get
    this done. She's been a great partner.
        The Chairman mentioned, at the beginning, about the fact
    that this is an epidemic. I just want to tell you, a little
    town in my State, Connorsville, Indiana, and it's, you know, a
    little southeast of Indy. We've lost young person after young
    person after young person, older people, too, to heroin deaths.
    Six dollars per is what it's taking, in terms of each time they
    use heroin, it's 6 bucks. The extraordinary talent we're
    losing, the extraordinary family damage it causes, it takes
    your breath away, as all of you know. In some of the saddest
    cases, they are vets. They're our family in the military who
    this has happened to. We know we have a demand problem. We're
    trying to get our hands around that and get it fixed. But, as
    you look at this, how much is getting through that--you know,
    that--whether it's the heroin or the Fentanyl or whatever--that
    you look, and you go--of the percentage coming through, how
    much are we stopping?
        Admiral Gortney. I don't have the percentages in front of
    me, and----
        Senator Donnelly. I'm not looking for an exact number.
        Admiral Gortney. Yeah. I'm hesitant of using the percentage
    of our confiscation as a metric of success, because of the
    increase--you know, if you're measuring from 2 years ago or----
        Senator Donnelly. Right.
        Admiral Gortney.--or that, it's--I just don't think it's a
    very good metric that we can either hang on our hat on--that we
    would not want to hang our hat on. We have to do more. We have
    to do more throughout Central--Mexico and Central and South
    America with those mission partners, our whole-of-government
    approach with that, with the eradication effort, which, you
    know, currently 570 hectometers--hecta-acres, the Mexican--
    SEDENA, the navy, has eradicated of--just in poppies last year.
    But, it's still not enough. Once again, as Admiral Tidd talked
    about, the balloon--when we think about the balloon, the
    pressure to stop the interdiction, we also have to work the
    demand piece on top of it.
        Senator Donnelly. Do we have intelligence services who are
    working this to try to find out--you know, as we talked,
    Admiral, about it's this group and that group and that group--
    do we have intelligence agencies that are working to try to
    find out when this is going out, where it's going out, to try
    to help with that effort?
        Admiral Gortney. Absolutely, sir. We're working and passing
    that information with our mission partners, as well as
    developing their capability to determine that on their own.
        Senator Donnelly. Well, if you could both put together, in
    effect, almost--I don't know if this is the right term--a wish
    list saying, ``Look, if we had this, we could stop this much
    more. If we had this, we could prevent this portion.'' If you
    could provide that to us, I'd be very, very grateful.
        Admiral Gortney. We'll take that for a task, sir.
        Senator Donnelly. Thank you.
        Senator Donnelly. Admiral Haney, when you look at
    hypersonics, there's a wealth of open-source reporting on
    efforts by Russia, and particularly China, to develop
    hypersonic weapons that could pose a serious challenge to our
    missile defenses. Within DOD, our most advanced hypersonic
    effort is CPGS [conventional prompt global strike], and I was
    wondering what your thoughts are on the value of CPGS to
    STRATCOM and the Nation.
        Admiral Haney. I feel that the Conventional Prompt Global
    Strike is a very important----
        Senator Donnelly. I apologize, I use----
        Admiral Haney.--program----
        Senator Donnelly.--I use military-speak.
        Admiral Haney.--is also a very important approach that we
    have to continue to pursue, one, to understand that technology,
    but, as you've stated, since other nations are also pursuing
    it, our ability to counter it is also very important.
        Senator Donnelly. Admiral Gortney, I want to get your
    perspective on our missile defense priorities this year. You
    know I work with Senator Sessions and a number of our wonderful
    colleagues here in regards to this area. We have a strong
    commitment to the success of our GMD [Ground Based Midcourse
    Defense] system. I was wondering if you could let me know if
    our current GMD architecture with interceptors in Alaska and
    California provide cover for the entire continental United
    States, including the East Coast, against the threats.
        Admiral Gortney. Yes, sir, I am able to deal with rogue
    nations from any direction at this particular time with what we
    have. We appreciate the investments in making that which we've
    got, as best as we got, the improvement in sensor and, again,
    like we talked, the necessary R&D investments to get us on the
    correct side of the cost curve and continue to outpace the
    threat.
        Senator Donnelly. Well, I want to thank all of you for your
    service. As I mentioned, we have a lot of threats overseas, but
    every week, there are stories about young men and women who are
    dying from heroin, from opioids. Our EMTs are overwhelmed and
    using Narcan to try to bring people back in anti-overdose
    situations. We not only want to protect our country from our
    enemies overseas, but to keep our people safe. You're right on
    the front line. We appreciate your hard work on this. Don't
    ever think, for a minute, that we don't realize what a
    challenge it is and that you don't have our full support.
        Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Sullivan.
        Senator Sullivan. Thank you, Mr. Chairman.
        I wanted to thank you, gentlemen, for your service.
        I also want to follow up on the line of questioning that
    Senator Donnelly was just talking about, in terms of missile
    defense. He and Senator Sessions--actually, everybody on this
    committee has been a real strong supporter of that. Having both
    the two COCOM [combatant command] commanders in front of us who
    are tasked with that, I'd like to dig into some details.
        Admiral Haney and Admiral Gortney, can North Korea range
    any part of the United States right now, in terms of their
    missile capability? That's either the mainland or Alaska or
    Hawaii or any American territories in the Pacific.
        Admiral Gortney. Sir, as the Commander accountable of
    holding the trigger to defend the Nation against that
    particular threat, I assess that they have the ability to put
    an ICBM in space and range the continental United States and
    Canada. The----
        Senator Sullivan. Clearly, then, Hawaii and Alaska are in
    range.
        Admiral Gortney. Absolutely. Yes, sir.
        Senator Sullivan. Would--do we anticipate that will have
    a--you say ICBM, but nuclear capability ICBM now----
        Admiral Gortney. Yes, sir.
        Senator Sullivan.--or soon?
        Admiral Gortney. I assess, as the commander there, that
    it's the prudent decision on my part to assume that he has the
    capability to nuclearize--miniaturize and nuclearize--
    miniaturize a nuclear weapon and put it on an ICBM. I have the
    ability----
        Senator Sullivan. Today.
        Admiral Gortney. Today.
        Senator Sullivan. Range the continental United States.
        Admiral Gortney. Range all of the States of the United
    States and Canada. We have the ability to engage that threat.
    Intel community gives it a very low probability of success, but
    I don't--do not believe the American people want to base my
    readiness assessment on a low probability.
        Senator Sullivan. I think you're very correct on that.
        How about Iran? Same question.
        Admiral Gortney. Iran, we do not assess they have the
    ability to do it today. Should they have the ability to do it
    today, I have the ability to engage it today.
        Senator Sullivan. When do you think they'll have the
    ability?
        Admiral Gortney. It's a decision on their part, sir, and
    it's a decision if they want to nuclearize, whether they want
    to develop--complete the development of an ICBM and then the
    reentry vehicle. We track very carefully all three of those
    pieces.
        Senator Sullivan. Do you think they're cooperating with
    North Korea on some of this right now to----
        Admiral Gortney. Absolutely. Absolutely.
        Senator Sullivan. You anticipate that that threat will
    continue to grow and probably they'll be able to reach Hawaii,
    Alaska, the East Coast, continental U.S. within----
        Admiral Gortney. The----
        Senator Sullivan.--five years?
        Admiral Gortney. Well----
        Senator Sullivan. If they continue on their current path.
        Admiral Gortney. We look at it in a one, two, and three, a
    decision to nuclearize, a decision to put it on a warhead, and
    a decision to be able to actually put the reentry vehicle all
    together. When they make that decision, it's a one-two-three
    decision on their part. We track--and we look very closely--we
    have the intel community looking very closely at each one of
    those pieces.
        Senator Sullivan. I've been supportive of the Department of
    Defense, Obama administration's missile defense budget. You
    probably saw, this committee's been very supportive of that.
    I've lately heard concerns that maybe in this year's budget
    there's not enough. Can you--either of--Admiral Haney or
    Admiral Gortney, can you talk about what you think, in terms
    of--given these threats, which are quite significant, the role
    of Fort Greeley, the role of our GBIs [Ground Based
    Interceptors]. Do we think we have enough right now?
    Importantly, do we have enough--particularly on the radar and
    ground-base interceptor element right now, but do we have
    enough to deal with the threat that certainly seems to be
    increasing? Does 41 do it, or should we anticipate having more?
    Because it doesn't look like the Iranians or North Koreans are
    going to be standing down their missile capability anytime
    soon.
        Admiral Gortney. It'll be 44 interceptors by the end of
    2017.
        Senator Sullivan. Fourty-four.
        Admiral Gortney. Fourty-four in Fort Greeley in the great
    State of Alaska, and the necessary sensors are going all in
    place of Alaska because of the strategic importance of Alaska.
    It's not going to be enough, because it's not going to be able
    to outpace the threat in the number of rate counts, the number
    that can be shot at us as----
        Senator Sullivan. Right.
        Admiral Gortney.--we project into the future, which is why
    the investments that you all have supported in our research and
    development are so important, to get us on the correct side of
    the cost curve. Because, on our current path, using the current
    technologies and a one interceptor versus one warhead in
    midcourse is a failing proposition----
        Senator Sullivan. Yeah.
        Admiral Gortney.--because they can produce more than we can
    ever possibly afford to put in the ground.
        Senator Sullivan. Do we--do you anticipate, in 5 to 10
    years, as the threat grows, as the rogue-nation missile
    capability increases, as the number of missiles they have
    increases, as their ability to nuclearize payloads--miniaturize
    the nuclear payloads increases, are we going to need more
    ground-base interceptors to keep up with that threat?
        Admiral Gortney. We're going to need more capability to
    engage the threat throughout its flight, keep them on the
    ground, kill them on the rails, kill them in boost phase, and
    then get more warheads in space in midcourse. We have to be
    able to engage it right now throughout the flight of the
    profile, not just in midcourse with a--one rocket against a
    very--one very expensive rocket against another rocket.
        Senator Sullivan. In your professional military opinion, do
    we have enough--is the current budget on these issues, given
    the threat, which you've just laid out is quite significant,
    including North Korea being able to hit the continental United
    States--does the current budget, in your professional military
    opinion, have enough resources dedicated to missile defense to
    keep us safe now and, importantly, to keep up with this growing
    threat?
        Admiral Gortney. Working very closely with Admiral Syring,
    who's in charge of developing this at the Missile Defense
    Agency. Last year's budget, we think, was adequate for us to
    improve what we have and invest in those technologies and see
    if those technologies will bear out to get us on the correct
    side of other cost curve and engage throughout the flight of
    these missiles.
        Senator Sullivan. This year's budget?
        Admiral Gortney. This year's budget, yes, sir.
        But, should--should those technologies come forward, the
    budget's not enough to put those capabilities into production
    and to deliver those capabilities. Once we prove, say, the
    laser technology that can hit their--multi-object kill vehicle
    technology that's out there--should those technologies bear
    out--and they are very, very promising--then we're going to be
    needing an increase in the budget to put those capabilities in
    place.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Senator Reed [presiding]. On behalf of Chairman McCain,
    Senator King.
        Senator King. Thank you, Senator Reed.
        We've been talking a lot--I think the fact that you've--
    practically every Senator has asked questions about drugs is an
    indication of how serious this problem is in all of our States.
    We've talked about the border. We've talked about maritime
    asset ships, intelligence. But, these drugs--you mentioned
    Colombia, Mexico--are grown in great big fields. What effort is
    being made with these other countries to put a stop to that? I
    mean, if somebody in Iowa was growing 100 acres of poppies and
    turning it into heroin, I think we'd do something about it. Is
    there any effort made, in terms of our relationship with these
    so-called partner countries, to control the production of this
    stuff?
        Admiral Tidd?
        Admiral Tidd. I'll start on that one. Senator, yes,
    Colombia has made some very significant efforts. I think you're
    familiar with their aerial eradication program. That was----
        Senator King. But, haven't they backed off----
        Admiral Tidd.--making progress----
        Senator King.--recently?
        Admiral Tidd. That is correct. As they have negotiated a--
    the peace accord, one of the conditions of that peace accord
    included stopping the aerial eradication program and now going
    in for manual eradication. One of the challenges with manual
    eradication, they have to be able to put their military forces
    into and control the territory that right now has been denied
    territory to them. That's going to be one of the reasons
    they're going to be facing some very stiff fights even as the
    peace accord, if signed, comes into effect, because they will
    be going up against narcotraffickers who control that land, as
    well as the actual growers, the peasants themselves. This is
    their source of livelihood, and they are going to be giving up
    that source of livelihood. It'll be a----
        Senator King. It may be a source of livelihood, but it's a
    source of death up here.
        Admiral Tidd. Absolutely.
        Senator King. I don't understand calling somebody an ally
    who's--and having them produce these death-dealing substances.
        Same question about Mexico, Admiral Gortney.
        Admiral Gortney. Yes, sir. The--in the crop eradication,
    just SEDENA alone, their navy and marine corps, about 270,000
    hecta-acres and 500---of marijuana--and 570,000 hecta-acres of
    poppy. It's not nearly enough. As a result, they've just
    purchased more helicopters, a little bit cheaper than----
        Senator King. ``They'' being the Mexicans?
        Admiral Gortney. Mexicans--SEDENA and SEMAR--to increase
    that poppy eradication effort, as well as the other internal
    security challenges that they're confronting as they're working
    their way against the cartels.
        Senator King. Changing the subject. Admiral Gortney, your--
    have jurisdiction over the Arctic, or at least a significant
    part of it. The administration proposed, this year--and I
    support the proposal--for the beginning, a downpayment, if you
    will, on a new icebreaker. That's good. The problem is, that
    icebreaker will really replace what we have; it doesn't
    increase our capacity. Isn't it true that we really need more
    icebreaker capacity as the Arctic begins to open up for trade
    and development and transport?
        Admiral Gortney. Well, speaking for my closest mission
    partner, other maritime partner, which is the United States
    Coast Guard, I would agree with them that they do need more
    icebreaker, more capacity and capability out there.
        Senator King. Yeah. I don't want to look a gift horse in
    the mouth. We've got to get this new one started. But, it's
    really--that really is replacing the----
        Admiral Gortney. Yes, sir.
        Senator King.--the Polar Star, not giving us any new
    capacity. Okay.
        Admiral Haney, deterrence has been a strategic basis of our
    nuclear strategy since 1945 or thereabouts, but deterrence
    rests on a theory of a semblance of rationality on the other
    side. Does deterrence work with North Korea? Are they concerned
    about the possibility of being obliterated if they attack?
        Admiral Haney. Senator King, I think--I can't tell you
    exactly what Kim Jung Un, the leader of North Korea, thinks
    today, this very minute, but he has to know that he faces a
    very credible response across our joint military forces if he
    decides to do the unthinkable.
        Senator King. That--the deterrence, the fact that that
    would--there would be a--assured destruction is a fact that's
    known in North Korea.
        Admiral Haney. Again, I have not had a opportunity to talk
    to the leaders of North Korea, but I am convinced they look at
    our whole joint military force. That's why we see reactions to
    some of our exercises and what have you. I think they have a
    keen appreciation to the fact of what we bring as a complete
    force, not just the nuclear capability I lead.
        Senator King. As they say, it would behoove us to let there
    be no misunderstanding. Of course, the other side of this
    question is deterrence against nonstate actors, which is even
    more of a difficult--from a theoretical point of view,
    particularly people who don't care about dying. Where do you
    strike back? Where do you--where is the retaliation? I think
    that's a--that's a second level of theoretical problem with the
    theory of deterrence as applied to current threats that we
    face.
        Admiral Haney. Senator, as you have articulated, deterrence
    is complex, and it requires a deep understanding of the
    adversary, an understanding of what feeds the adversary and,
    consequently, has to be tailored for each specific adversary.
    That requires a lot of critical thinking and overall
    comprehensive approaches in multiple domains as we see
    adversaries even--including violent extremist organizations,
    use cyberspace, for example, in order to recruit and in order
    to finance their mechanisms. Those kind of things have to
    become more costly for them to pursue, and it is still--I would
    argue that deterrence is complex, but the fundamentals still
    apply.
        Senator King. Thank you.
        I'm out of time. For the record, could Admiral Gortney and
    Admiral Tidd give us something in writing on why we should not
    join NORTHCOM and SOUTHCOM and if there's a Goldwater-Nichols
    II--not now, because I am out of time, but perhaps a written
    statement? Because I know that's a question that's going to
    come up before the committee.
        Admiral Gortney. Yes, sir. Be happy to do that.
        Admiral Tidd. Yes, sir.
        Senator King. Thank you.
        Senator Reed. On behalf of Chairman McCain, Senator Ernst.
        Senator Ernst. Thank you, Senator Reed.
        I'm disappointed that our Chairman stepped out. We have
    some wonderful naval officers here in front of us today. Thank
    you so much.
        But, Senator Reed, I would have you notice that the senior
    enlisted advisor to Admiral Tidd is an Army command sergeant
    major from Iowa.
        Thank you so much for being with us today, Sergeant Major.
    Thank you, gentlemen, for your great service to our Nation.
        Admiral Tidd, we had a wonderful conversation the other
    day, and we did talk, during our conversation, about SOUTHCOM's
    limited Active Duty capabilities due to the prioritization from
    DOD in other areas of operation. But, I am very proud of the
    job that our citizen soldiers do in that area. Our National
    Guard has done a lot of work in the SOUTHCOM AOR to support
    United States security and to build our partner capabilities in
    Central and South America. Whether, as we discussed, it's
    serving with honor and integrity at Guantanamo Bay or working
    to end the flow of narcotics into the country or partnering
    through state partnership programs with many of our allies, our
    Guard has been vital to SOUTHCOM and to our regional security.
        Sir, if you could please describe some of the ongoing
    efforts by the Guard in SOUTHCOM, please.
        Admiral Tidd. Absolutely, Senator. I think it goes without
    saying, we would not be able to execute the lion's share of our
    missions in the absence of contributions by the National Guard,
    whether in the form of units rotating through Guantanamo Bay,
    as has been so effectively accomplished, to state partnership
    programs that provide a sustained continuity of contact with
    countries over the years, building their partner capacity,
    enabling them to do the sorts of jobs, and also going to the
    Army's recently established regionally aligned force prospect
    that the lion's share of the regionally aligned force to the
    SOUTHCOM region comes out of the National Guard. It is--it's
    absolutely critical to our ability to execute our mission.
        Senator Ernst. Okay, thank you. I appreciate it so much.
        We also briefly discussed the activities of Russia, Iran,
    and China, and Central and South America. Could you just tell
    us, in this open forum, what activities you've seen in that
    area? That came as a surprise to me.
        Admiral Tidd. Thank you, Senator.
        The--as we look at the transregional nature of our
    activities, if you are interested in what Russia is engaged in,
    you don't just look at eastern Europe. If you're interested in
    what China is engaged in, you don't just look at the South
    China Sea. Iran, the same story, you don't just look at the
    Middle East. Russia, who--which, arguably, has virtually no
    strategic interests of note in the southern region, is engaged
    in a direct competition to displace the United States for
    influence within the region. They are going back in and
    redeveloping the historical contacts that they had with a
    number of countries throughout the region, developing weapon
    sales at extremely low rates--low costs. What gives us great
    concern is, they are engaging in a concerted effort to convince
    partners that the United States is not a reliable ally, that we
    are withdrawing from the region.
        Essentially, any steps that plays into that narrative that
    makes it look like the United States does not provide the
    forces or is shrinking down the presence of the United States
    or consolidating to get at--slightly, at Senator King's point
    that consolidating combatant commanders simply plays into that
    false narrative that the United States is not interested in the
    region.
        In China, it's largely an economic competition. They're
    looking for markets and resources. Iran is essentially
    establishing cultural centers and other sorts of activities,
    but, we think, at a higher level of classification, we can talk
    to some of the other activities they're engaged in.
        Senator Ernst. But, bottom line up front, you do believe
    this is something we need to keep an eye on.
        Admiral Tidd. They--if you are concerned about those
    countries on a global scale, you cannot afford not to be
    watching what they are engaged in, in the SOUTHCOM region.
        Senator Ernst. Thank you very much.
        Thank you, gentlemen.
        I'll yield back my time.
        Chairman McCain [presiding]. Senator Heinrich.
        Senator Heinrich. Thank you, Chairman.
        Admiral Gortney, we've dramatically increased resources for
    Border Patrol in recent years, and we need to continue that
    push. I think the Chairman pressed you hard on that issue. But,
    we've often neglected the equally critical role that our
    Customs and Border Protection officers play in protecting the
    overall integrity of that border. Your comments really got to
    that when you mentioned the incredible problem of manufactured
    heroin in small quantities that are actually moving through our
    ports of entry. Should we be resourcing those ports of entry as
    seriously as we resource the border overall?
        For some of our colleagues who don't come from border
    States, it's just important to remember that we have Border
    Patrol agents, the guys in the green uniforms, who are out
    there all along the border, from east to west, and then we have
    these officers, whose job it is to sit at the ports of entry
    and make sure that we stop any illegal activity, being it
    moving narcotics, cash, other contraband, back and forth across
    that border.
        Admiral Gortney. Yes, sir. We need to invest for all of
    them. When I was at the port of entry there in San Diego, I was
    extremely impressed with the dedication of the patriots that
    are doing that. A very, very difficult task. Their motivation,
    their training, their professionalism, confronting an immense
    challenge. Anything we can do to increase their capacity and
    their capability, this Nation needs to invest in.
        Senator Heinrich. Thank you for your comments on that.
        I want to follow up with Admiral Tidd and go back to 2014,
    when your predecessor, General Kelly, said that he was able to
    see 75 percent of the cocaine trafficking heading towards the
    United States, but that they had to, quote, ``simply sit and
    watch it go by,'' unquote, because of the lack of resources.
    Now, I know some of that has changed, but we should all find
    this unacceptable, especially considering that the drug cartels
    are making on order of $85 billion a year in annual profits,
    which is literally what is fueling the violence, the corruption
    in Central America, and driving the refugee crisis that we see.
        Admiral Tidd, how many interdiction assets do you have at
    your disposal? What are your requirements?
        Admiral Tidd. On a given day, on average, we tend to have
    between five and six surface ships--those are largely Coast
    Guard cutters; one to two U.S. Navy platforms. The established
    requirement in order to interdict at the established target
    level of 40 percent is up to 21 surface platforms. It is--it's
    a question of resources.
        Senator Heinrich. Right.
        Admiral Tidd. Allocation of resources and priorities across
    all of the threats the country faces is--I don't question that.
    I understand it. I was involved in it. But, it is simply a
    matter of resources.
        Senator Heinrich. I want to thank you for your work on this
    front. I asked that question specifically to shine a light on
    how wide a gap there is between how we have resourced your men
    and women who do that work, and where we would like that to be,
    which is why I asked you specifically what the requirement is.
    We're nowhere close. We've gotten better. We need to keep a
    focus on that and not let that slip.
        Let me ask you, too, What percentage of your ISR
    requirements are being met today?
        Admiral Tidd. Overall, approximately 11 percent of the
    requirement.
        Senator Heinrich. I think that--that's a pretty sobering
    number for all of us, as well, Mr. Chair.
        My time is almost done. I want to switch to Admiral Haney
    and just ask you a broad question about why you believe the
    combination of LRSO and LRSB is so important. My hope is you
    can also explain the strategic importance of nuclear
    modernization efforts and the tools that they will provide the
    combatant commanders like yourself.
        Admiral Haney. Well, to your first question, it is very
    important for our Nation to have the adequate strategic
    deterrence and assurance mechanisms and methodologies and
    capabilities. From the air leg of our triad, it's very
    important that our platforms are appropriately armed in order
    to be credible. That includes B-52 aircraft, B-2s, which we
    will be flying both of those for some time to come, as well as
    the long-range strike bomber, stealth aircraft. Even while we
    have stealth aircraft, it's important that we have standoff
    capability. As we watch our adversaries work to have better
    anti-access aerial denial kinds of capabilities, we must have
    standoff in order to manage strategic stability as we should.
    As a result, I see the long-range strike--long-range standoff
    option being critical to all of those platforms, all three of
    them.
        Senator Heinrich. Thank you very much, Mr. Chair.
        Chairman McCain. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chair.
        Gentlemen, I apologize for not being in the hearing. I've
    got a competing Judiciary hearing, and I've got to run for a
    vote. Admiral Haney and Admiral Gortney, thank you for being
    here.
        Admiral Tidd, I want to focus a little bit more on your
    command in--at a couple of things. One, I think the 11 percent
    coverage for a very critical area of other region is important.
    I'd like for you to talk--I know a lot of times we talk about
    SOUTHCOM, we talk about the work we're doing in Colombia and
    down in Latin America, drug interdiction, but you and I have
    had discussions. One thing I'd like for you to expand on, and
    it relates to a question that Senator Ernst asked, and maybe
    even focus a little bit on Iran's activity in Hezbollah and a
    number of other things that we're seeing there that are
    potentially systematically over time going to change the
    environment in your sphere of influence. Can you talk a little
    bit about that?
        Admiral Tidd. With--specifically with regard to Iran, there
    has been a longstanding presence of Hezbollah, one of other
    principal surrogates of Iran in the region. Their activities
    have largely been involved in logistics support, providing
    funds back to Lebanon, to Hezbollah itself, but it also is
    available as a potential to conduct other activities. It's a
    force in being, obviously, and they watch very closely what
    the--we watch very closely what they are doing, where they are.
        The--what makes it particularly noteworthy is, there are
    not large implantations within Central and South America of
    Muslim communities. They tend to be very small. This interest
    on the part of Iran is in developing partnerships,
    relationships, in order to escape the diplomatic isolation that
    they found themselves in over the last decade--couple of
    decades.
        The greater concern that we're beginning to see now is on
    the part of Islamist extremist groups. There is now a general
    recognition throughout the region in meetings with senior
    security chiefs from across the Caribbean, in particular, but
    also Central American countries. They recognize the risk of
    radicalization--self-radicalization occurring within their
    countries. There have already been a number of fighters that
    have gone over to Iraq and Syria to fight. We have seen
    indications--there have been a number of them that have been
    killed. I think we all saw the video of the 14-year-old from
    Trinidad-Tobago that was videotaped engaged in an act of
    terrorism, executing a Syrian combatant. That is there, and the
    countries are worried about the return flow of those foreign
    fighters coming back.
        Senator Tillis. Thank you.
        I don't want you to comment, because it relates to policy,
    but, you know, you could make a logical argument that, as
    Iran's economy improves, as money returns back to Iran as a
    result of this--the Iran agreement that I opposed, that we
    could even see more shifting of resources. It could accelerate
    the pace of what they're doing in your area of responsibility.
    I think we need to make sure that we're paying attention to it.
    It's not one that you normally think about when you talk about
    the--think about the Iran threat.
        I want to, in my remaining time, have you talk about
    Guantanamo Bay, and not with respect to the detainees. But,
    there's also discussions out there about, you know, maybe we
    don't need Guantanamo Bay or our presence there at all. Could
    you give me some sense of what you think the strategic
    significance of that land mass is with respect to your area of
    responsibility and our ability to respond in that part of the
    world?
        Admiral Tidd. Senator, the first time I visited Guantanamo
    Bay was in 1979. We have significant strategic interests at the
    Naval Station Guantanamo Bay that will continue long past
    whenever detention operations end. It is a critical point to
    support Coast Guard operations and the detection and monitoring
    mission across the Caribbean Basin. It is absolutely critical
    to supporting any sort of a migrant crisis that might occur. In
    fact, as I know you're aware, there is a very small MILCON
    [military construction] request in to do some basic level
    construction. If we were to have a migrant crisis, we would
    need to be able to rapidly build up the facilities to deal with
    up to 10,000 migrants in a 72-hour period, and as many as
    45,000 beyond that. Without that MILCON, we--it--we--right now,
    we are completely incapable of meeting that timeline, should we
    have to do it, and we would need that, to be able to have a
    fighting chance of being able to do it so that we would not
    have--bring that large number of migrants into the United
    States. It's a--it is a small downpayment that we think is
    probably a prudent investment to be able to do that.
        Guantanamo Bay will remain critical long past the detention
    operations.
        Senator Tillis. I think that we just need to underscore
    that. If you talk about our ability to complete missions, the
    humanitarian missions alone, in addition to other potential
    uses, that it would be irresponsible for us to consider any
    dialogue around not having that continue to be an important
    asset for us in that part of the country.
        Gentlemen, thank you all for your time. I will--because my
    colleague here almost never misses a hearing to talk about the
    four-two-five, I will say that I still share his opinion that
    that's a very important capability that we have in Alaska. I'm
    glad that General Milley seems to have taken that position, and
    I look forward to us coming to the resolution that I think my
    colleague from Alaska hopes we get to.
        Thank you all.
        Thank you, Senator.
        Senator Reed [presiding]. Thank you.
        On behalf of Chairman McCain, Senator Hirono.
        Senator Hirono. Last, but not least. Thank you, Mr.
    Chairman.
        Thank all of you for your testimony and being here today.
        You've been asked a lot of questions, particularly, Admiral
    Gortney, on our missile defense system. I'm probably going to
    want to chat with you further, or perhaps for the record, on
    whether or not we are--in terms of our need to increase our
    capability to stop the missiles throughout the flight of the
    missile, whether we're putting our resources in the right
    proportions with regard to stopping these missiles. That--I
    just wanted to mention that to you as a follow-up later.
        Senator Hirono. Admiral Haney, cyber has become a
    significant part of the DOD establishment. The Army and the Air
    Force have laid out requirements and started establishing
    cyber-protection teams and units around the country, with many
    of them in the National Guard units. I wanted to ask, How is
    this process working? What is your forecast for when future
    units will be established to meet these requirements? I'd note
    that, in Hawaii, we have everything that is going on in the
    Asia-Pacific region and where--the home of PACOM [Pacific
    Command], NSA [National Security Agency] Hawaii, much of our
    defense infrastructure in the Pacific. I would certainly like
    to have you keep Hawaii in mind as you move forward with these
    cyber-protection units. Can you talk a little bit about how
    things are going?
        Admiral Haney. Senator Hirono, the--this initiative of
    using Guard units to also augment our Active Duty units, I
    think is critical for our future. This was a start. Clearly,
    National Guard gets a vote, in terms of how we continue to
    progress in this regard. As you know, the threats to our Nation
    and our international community of nations is pretty high
    regarding how actors, both nonstate and state actors, are
    applying malfeasance, in terms of working against us in the
    cyber domain. Critical to our critical infrastructure, critical
    to how we fight as a military, and what have you. Quite
    frankly, we continue to grow. I'm proud of the cyber-protection
    teams I, as the combatant commander, have gotten to work with.
    I know, as I've talked to other combatant commands, including
    the two to my left, we appreciate the work that they are able
    to do. We're still growing these teams. We don't have them all
    at the right level yet. More to follow.
        Senator Hirono. Of course, once you develop the teams, we
    must be ever-flexible, because they--what happens in the cyber
    arena is constantly changing. In terms of the timeframe for
    these future units to at least be put in place, what is your
    timeframe? Are we talking about 2 more years? A year?
        Admiral Haney. I'd have to take that question for the
    record, Senator. I don't have that. I know there's work going.
    We've just gotten started. In terms of how we will continue to
    build for the future, more to follow.
        Senator Hirono. Thank you very much.
        Admiral Tidd, regional epidemics like the Zika virus are
    concerning and threatening the well-being of our citizens. One
    case of the Zika virus was reported this year, so far, in
    Hawaii, and four were also reported in 2015 and 2014. Can you
    describe the role that SOUTHCOM has in dealing with epidemics
    such as these?
        Admiral Tidd. Yes, Senator. The--as a result of the initial
    Ebola outbreak, a large interagency network was put together,
    and SOUTHCOM was a key participant in that. That was
    reenergized with the outbreak of Zika that we're seeing.
        We remain postured to be able to respond to requests for
    assistance from our partner nations in SOUTHCOM, but we have
    put out specific guidance to the men and women, part of our
    command, who are operating down in that region Those--the
    policies that affect them, the protective measures, are largely
    the--exactly the same protective measures that have been in
    place to protect them from exposure to dengue fever, to the
    Chikungunya, and other mosquito-borne illnesses. We continue to
    emphasize that.
        To date, we've had only two of our military personnel--two
    males--who have been diagnosed and confirmed to have had Zika.
    They've recovered and returned to duty. We've had one family
    member--a pregnant female family member who has taken advantage
    of a policy to return to the United States. The family was--had
    been scheduled to return already, and it was a slightly
    accelerated return on her part.
        But, we're working with the countries, primarily in
    training in the mosquito eradication programs. Their militaries
    obviously are very heavily engaged in those activities. That's
    where we stand right now. We have a Navy medical unit down in
    Peru that has been doing a lot of work in the experimental
    development of vaccines and that type of work, and also in the
    detection.
        Senator Hirono. Thank you very much. Especially for places
    such as Hawaii, with so much tourist traffic from areas that
    have had these outbreaks, it is really important. Thank you
    very much for your efforts.
        Admiral Tidd. Senator.
        Senator Hirono. Thank you, Mr. Chairman.
        Senator Reed. On behalf of Chairman McCain, Senator Graham,
    please.
        Senator Graham. Thank you all.
        Admiral--I can say that to everybody. The Navy's doing well
    with these commands. Have any of you served in Iraq or
    Afghanistan?
        [A show of two hands.]
        Senator Graham. Admiral Gortney and Admiral Tidd. While
    there, did you serve with American Muslims in uniform?
        Admiral Gortney. Yes, sir, I did.
        Admiral Tidd. Yes, sir.
        Senator Graham. What is your view of the service of those
    who are Muslim in the United States military?
        Admiral Gortney. They're patriots who serve their Nation.
        Admiral Tidd. Concur.
        Senator Graham. Do you agree that we're in a war between
    radical Islam and the world at large?
        Admiral Gortney. Yes, sir. It's a generational war.
        Senator Graham. That the biggest victims of radical Islam
    are people within the faith who will not bend to their will:
    other Muslims.
        Admiral Gortney. I'd have to say they're a threat to both
    inside and outside the faith.
        Senator Graham. But, when you add up the numbers of people
    killed, there's more Muslims than anybody else.
        Admiral Gortney. That's correct.
        Senator Graham. Do you believe it's in our national
    security interest to help those in the faith who would fight
    back against radical Islam?
        Admiral Gortney. Yes, sir, I would.
        Admiral Tidd. Yes, sir.
        Senator Graham. Thank you.
        I just want to be on the record, here, that, to those
    3,500, plus or minus, American Muslims serving in uniform, I
    appreciate your service, that of your family, and I respect
    your faith.
        Admiral Gortney, in the next decade, if nothing changes in
    North Korea and potentially Iran, are we going to face more
    threats from a missile launch against the United States by a
    rogue nation, or less?
        Admiral Gortney. A greater threat, sir.
        Senator Graham. Okay. If we go back to sequestration, do we
    compromise your ability to deal with that threat?
        Admiral Gortney. I believe it would, sir.
        Senator Graham. Admiral Tidd, over the next decade, do you
    see more instability in the region in Southern Command, or
    less?
        Admiral Tidd. I see no less.
        Senator Graham. Okay.
        Admiral Tidd. I see no less.
        Senator Graham. How many ships are you supposed to have?
        Admiral Tidd. Senator, if I were to accomplish the goal of
    40 percent interdiction, I would require 21 ships.
        Senator Graham. How many do you have?
        Admiral Tidd. On average, about six to seven.
        Senator Graham. To get to where you need to go, you need
    more ships.
        Admiral Tidd. Correct.
        Senator Graham. How many Navy ships do you have available
    to you?
        Admiral Tidd. On average, one to two.
        Senator Graham. The rest are Coast Guard.
        Admiral Tidd. They are, yes, sir.
        Senator Graham. In Southern Command, the United States Navy
    is able to generate two ships?
        Admiral Tidd. In--because of the demand for surface
    platforms in other theaters that are a higher priority, yes,
    sir, that's correct.
        Senator Graham. If we sent you more ships, it wouldn't be a
    waste of money, would it?
        Admiral Tidd. Senator, it would come at the expense of
    other higher-priority theaters.
        Senator Graham. But, if we had a larger budget, it would
    make sense to build more Navy ships, at least from your
    command's point of view?
        Admiral Tidd. Sir, I would never turn down additional
    ships.
        Senator Graham. When you say you need 17--what number did
    you say?
        Admiral Tidd. Twenty-one.
        Senator Graham. Twenty-one. I'm sure somebody just didn't
    make that up. That was----
        Admiral Tidd. No, sir, there is a fairly lengthy study that
    went in to derive that requirement.
        Senator Graham. That 40 percent interdiction is drugs and
    other contraband coming to the country?
        Admiral Tidd. That's correct.
        Senator Graham. If we've got a drug problem here, we're not
    doing much to stop it, because we're certainly under-resourcing
    you. Would you agree with that?
        Admiral Tidd. I would.
        Senator Graham. It's one thing to build a wall, which makes
    sense to me. It--but, it also seems like we should build up the
    Navy to interdict the flow of drugs and other contraband into
    our country.
        If we go back to sequestration, the chance of you getting
    more ships goes down, not up. Is that correct?
        Admiral Tidd. Senator, we're still suffering from the
    hangover from the last sequestration. Ships that had delayed
    maintenance, aircraft that had delayed maintenance. Those ships
    are not available now to be able to operate in our theater. Any
    future sequestration would be catastrophic.
        Senator Graham. Admiral Haney, in your lane, what's the
    effect of going back to sequestration from your point of view?
        Admiral Haney. My point of view, going back to
    sequestration would be crippling, in that it would put
    significant risk of these programs that we need for our joint
    military force, as a whole, and particularly these long-term
    programs that are associated with my mission space.
        Senator Graham. Thank you all for your service.
        Senator Reed. Thank you, Senator Graham.
        On behalf of Chairman McCain, thank you, gentlemen, for
    your testimony and for your service.
        The hearing is adjourned.
        [Whereupon, at 12:03 p.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator James Inhofe
                                    northcom
        1. Senator Inhofe. How do you assess North Korea's current
    ballistic missile capabilities and how does the fiscal year 2017 budget
    request support your ability to counter the threats?
        Admiral Gortney. North Korea has been developing and producing
    ballistic missiles for over three decades. Through its space launches,
    North Korea has successfully demonstrated many of the technologies
    required for an intercontinental ballistic missile (ICBM). Meanwhile,
    North Korean military parades in recent years have showcased road-
    mobile ICBMs, which we assess the regime is developing primarily as a
    means to deter external attack. Though not yet flight-tested, we assess
    they are capable of ranging the continental US, albeit with low
    reliability.
        We are well-postured against the current threat from a rogue
    nation. The Ground Based Midcourse Defense system covers all of the
    United States, including the East Coast, against missile threats from
    North Korea. Looking ahead, we must continue investments designed to
    improve our sensor architecture, enhance our kill vehicles, and
    sustain/test the entire ballistic missile defense system. Programs
    funded in the budget such as the Long Range Discrimination Radar, the
    Re-designed Exoatmospheric Kill Vehicle, discrimination improvements
    for Homeland defense, and the Space-based Kill Assessment experiment
    are key contributors.

        2. Senator Inhofe. Do you believe that Russia is testing the
    readiness of our forces along the western boundary? Will the fiscal
    year 2017 DOD budget impact your ability to protect our shores from
    these threats?
        Admiral Gortney. With regard to Russian activities on their Western
    boundary (e.g. the Baltics or Ukraine), this is really a USEUCOM
    question, but yes, I believe they are testing our forces. As the
    Commander of NORAD and USNORTHCOM, I am especially cognizant of the
    potential of Russia's Northern Fleet and its Long Range Aviation based
    in the West to reach North America. Over the past six years, I have
    seen Russia resume some of its naval operations in the approaches to
    North America, and I have seen an increase in the amount of strategic
    heavy bomber activity globally.
        With regard to Russian activities to our West (e.g. in the United
    States Arctic, Alaska and the Aleutians or the West Coast of CONUS),
    yes, I am absolutely convinced they are testing our forces, assessing
    our capabilities, and sending strategic messages (like flying strategic
    heavy bombers off the West Coast on the 4th of July).
        I also believe that the fiscal year 2017 budget request strikes a
    prudent balance among the modernization of the joint force, its size,
    and its readiness, and continues to keep faith with servicemembers and
    their families. We are countering Russia's aggressive policies through
    investments in a broad range of capabilities. The fiscal year 2017
    budget request will allow us to modify and expand air defense systems,
    develop new unmanned systems, design a new long-range bomber and a new
    long-range stand-off cruise missile, and modernize our nuclear arsenal.

        3. Senator Inhofe. With across the board military personnel
    reductions, what other contingencies will fall back on the states that
    federal elements used to support?
        Admiral Gortney. I am confident that the Department, with its total
    force of Active, Reserve, and National Guard forces, is fully ready to
    carry out its missions, including responding to contingencies.
    Therefore, I do not foresee any contingencies falling back on the
    states.

        4. Senator Inhofe. You acknowledged in your opening statement that
    sequestration cuts deeply impacted NORTHCOM's readiness, how much will
    another year of sequestered funds impact the forces of NORTHCOM?
        Admiral Gortney. The stability provided by the Bipartisan Budget
    Act of 2015 is a much-needed step in the right direction. However, what
    is needed most is a permanent fix to the Budget Control Act of 2011 to
    restore predictability and stability into the budget process. Another
    year of sequestration will impact the Services' plans and schedules to
    regenerate force readiness and modernize capabilities in order to keep
    pace with existing threats.
                                    stratcom
        5. Senator Inhofe. In order to ensure one of our nuclear triad legs
    remains effective, are the DOD and Navy budgets going far enough?
        Admiral Haney. Our current Triad systems are remaining in service
    well beyond their expected service lives and we must properly resource
    our recapitalization programs across all the Services to avoid
    unacceptable gaps is our deterrence capabilities. The Triad enterprise
    is receiving strong budget support from the Navy and Air Force.
    However, our continued success depends on the Department of Defense and
    Congress providing stable and adequate funding over the long-term.
        Recapitalizing our sea-based strategic deterrent force remains a
    top Defense Department and USSTRATCOM modernization priority. The
    fiscal year 2017 President's Budget request for Ohio-class SSBN
    sustainment, Trident II D5 missile modernization, and the Ohio
    Replacement SSBN program is sufficient to support USSTRATCOM mission
    requirements. When the Ohio-class submarines begin retiring in 2027,
    they will be the longest served submarines in U.S. Navy history at 42
    years. Given the previous decision to delay the Ohio Replacement
    program, there is no additional engineering margin to extend our Ohio-
    class submarines. I fully support the Navy's effort to leverage
    lessons-learned from the Virginia-class attack submarine acquisition
    program as well as manage overall force cost by transitioning the very
    capable Trident II D5 missile into the Ohio Replacement SSBN.
        Similar to our sea-based deterrent force, our land-based strategic
    deterrent is in need of recapitalization to ensure it remains credible
    in the future. The Minuteman III was initially deployed in the 1970s
    and will remain in service through 2030, nearly sixty years of service.
    While the missile has gone through multiple life extension programs,
    much of the launch infrastructure has not been modernized since initial
    deployment in the 1960s. The Ground Based Strategic Deterrent program
    is the first substantial full weapon system recapitalization effort
    since the Minuteman III entered service and must start deploying by the
    mid-2020s to prevent a strategic capability gap.
        The Air Force is upgrading and recapitalizing air-delivered
    strategic capabilities to ensure the most flexible and visible Triad
    leg will continue to fully support U.S. deterrence and assurances
    commitments worldwide. USSTRATCOM fully supports Air Force ongoing
    efforts to sustain legacy platforms (B-2/B-52) until their planned end-
    of-life, and develop and field the new B-21 dual-capable bomber and
    Long Range Stand-off cruise missile to maintain an effective and
    credible air delivered nuclear deterrent.

        6. Senator Inhofe. Are the systems currently in our arsenal
    currently degrading our nuclear deterrent? If so, when were the last
    modernizations completed?
        Admiral Haney. Today, our nuclear forces are safe, secure,
    effective, and ready to support our national security challenges.
    However, our legacy Triad delivery and weapon systems are at or well
    beyond their expected service lives, with little to no margin to absorb
    additional risk. The Defense Department is faced with two formidable
    but not insurmountable challenges: sustaining our current deterrent
    systems until retirement and deploying future forces without degrading
    our deterrent capabilities. USSTRATCOM fully supports ongoing efforts
    to sustain legacy platforms and develop and field those capabilities
    required to accomplish the Deterrence and Assurance mission.
    Development of these follow-on capabilities must remain on track to
    avoid strategic capability gaps.
        The Ohio-class SSBN fleet is undergoing significant sustainment
    efforts to maintain high operational availability and extend the
    service life. Simultaneously, the Navy is conducting a Trident II D5
    missile life extension in order to transition the missile to the Ohio
    Replacement SSBN. The Ohio Replacement Program is the first sea-based
    recapitalization effort in over 30 years and must proceed on schedule
    to maintain an effective and credible sea-based deterrent. There is no
    additional engineering margin to extend our Ohio-class submarines. When
    the Ohio-class submarines begin retiring in 2027 at 42 years of service
    life, they will be the longest serving submarines in U.S. Navy history.
        The Minuteman III Intercontinental Ballistic Missile (ICBM) was
    initially deployed in the 1970s and will remain in service through
    2030. Unfortunately, much of the launch infrastructure has not been
    modernized since initial ICBM deployment in the 1960s. The Air Force
    estimates Minuteman III is sustainable until flight system attrition
    begins in the 2028. The Ground Based Strategic Deterrent (GBSD) program
    is the first substantial full weapon system recapitalization effort
    since the Minuteman III entered service and must start being fielded by
    the mid-2020s. Successfully fielding the GBSD weapon system will ensure
    our ICBM deterrent capability beyond 2030. Like the sea-based strategic
    deterrent, ICBM enterprise success depends on stable and adequate
    funding over the long-term.
        Our dual-capable B-52 and B-2 bombers and their associated weapons
    have performed their nuclear deterrent mission for over seven decades
    through significant sustainment and modernization efforts. The Air
    Force has ensured the effectiveness of these aging aircraft through
    multiple payload capabilities, survivability and communications
    upgrades. Our legacy capabilities are effective against current
    threats, but will be increasingly challenged in the 2020s as
    adversaries field more complex air defenses. The B-21 Long Range
    Strike-Bomber, Long Range Stand-off cruise missile, and B61-12 gravity
    bomb are all needed to provide the flexibility, visibility and
    capability to meet strategic mission needs and support extended
    deterrence commitments to our allies.

        7. Senator Inhofe. If it took six years to create the first 84
    teams, is it reasonable to assume that USCYBERCOM is still on track to
    create the remaining 50 in the next 30 months? How crucial is current
    funding levels to this goal?
        Admiral Haney. In 2013, my sub-unified command, USCYBERCOM, began
    to build the capability known as the Cyber Mission Force (CMF). Of the
    target total of 133 CMF teams, 123 are in varying levels of
    development. We have 33 teams that have achieved Full Operational
    Capability (FOC), and 68 have achieved Initial Operating Capability.
        USCYBERCOM, working with the Services, remains committed to
    achieving FOC for the entire Cyber Mission Force by 30 Sep 2018. The
    current funding levels and a consistent funding stream are crucial to
    meet the timelines given to USCYBERCOM. If the Defense Department is
    impacted by budget shortfalls or delays, this goal and associated
    timelines will be severely impacted.
                                    southcom
        8. Senator Inhofe. Where is SOUTHCOM restricted in dealing with
    this problem prior to it reaching the United States? If you had
    additional allocations in the budget, how would you rectify this
    shortfall?
        Admiral Tidd. SOUTHCOM does not have any specific restrictions,
    however, we are limited in our ability to execute our statutory
    requirement to detect and monitor (in support of law enforcement
    interdiction) illicit traffic in maritime and sea domain en route to
    the United States due to a lack of resources. Our largest shortfall is
    not in funding, but in surface assets with which to conduct this
    mission.
        In order to meet the U.S. Government national goal to remove 40
    percent of documented cocaine movement through the transit zone,
    USSOUTHCOM requires 21 vessels. Over the last year, our average number
    of surface assets has been seven, the vast majority of which were U.S.
    Coast Guard assets. Our current ideal breakdown of the 21 vessels
    includes 14 medium range ships (similar to the Littoral Combat Ship or
    future Offshore Patrol Cutter), 3 long range ships (like a Cruiser,
    Destroyer, or National Security Cutter), and 4 coastal patrol boats.
    The most useful vessels to USSOUTHCOM are medium and long range ships
    equipped with a flight deck that provides persistent offshore presence,
    capable of conducting Airborne Use of Force (AUF), with embarked law
    enforcement teams.
        As the Services face asset shortfalls and readiness challenges,
    those shortfalls trickle down to the Combatant Commands. Frankly,
    SOUTHCOM feels the cuts associated with those shortfalls in a
    disproportionate manner. Because we cannot buy our way out of an asset
    shortfall, we use any additional funds to build our partners' capacity
    to complement our interdiction efforts and protect their own
    territorial land and waters. We also look at innovative ways to employ
    contract and experimental surface and air platforms.

        9. Senator Inhofe. Despite the excellent job our troops at GITMO
    under very difficult circumstances, a court order is denying our female
    troops from performing the jobs they are trained to do--what is the
    current status of this court order? What impact is it having on the
    morale of our service-members there?
        Admiral Tidd. Thank you for your recognition of our troops,
    Senator. All of the personnel participating in the detention operations
    mission at GTMO--to include military, civilian, male, and female--
    perform their duties with the utmost professionalism, to the highest
    standards.
        This ``temporary'' court order was issued on January 7, 2015 and is
    still in effect. The court's order limits ``the use of female guards to
    physically touch the accused during movements to and from attorney-
    client meetings and Commission hearings, absent exigent
    circumstances.'' It has resulted in decreased unit readiness, decreased
    unit cohesion and a negative impact on morale. Additionally, the troops
    are concerned it could impact their career progression . . . .it is our
    responsibility to ensure that does not happen.

        10. Senator Inhofe. What specifically is SOUTHCOM conducting with
    Columbia to ensure our support is evident? Is WHINSEC (Western
    Hemisphere Institute for Security Cooperation) and IMET (International
    Military Education and Training) assisting in ridding Columbia of the
    FARC rebels?
        Admiral Tidd. Colombia is a strong strategic ally, with which we
    coordinate closely every day to further security throughout the entire
    region. Colombia's transformation has been remarkable, but it will
    still face an uncertain period with many new challenges even if a peace
    accord is reached. For Colombia to successfully consolidate its hard-
    earned gains, the United States must remain as fully engaged a post-
    peace accord partner as we ever were during Colombia's struggles.
    United States Southern Command will continue to support Colombia's
    efforts to take the FARC off the battlefield, successfully implement a
    new counternarcotic strategy, establish state presence in areas where
    it had not previously existed, conduct humanitarian demining, and
    transform the Colombian military to adapt to an evolving security
    environment.
        As a broader United States interagency, it is also essential that
    we continue providing Colombia a robust and agile assistance package
    that will help it successfully address the new security, developmental,
    and human rights challenges posed by a post-accord environment. This
    includes the training, education, and frankly, relationship-building
    that takes place through programs such as IMET at institutions such as
    the Inter-American Air Forces Academy (IAAFA), the United States Army
    Sergeants Major Academy (USASMA), the National Defense University
    (NDU), all U. S. Service War Colleges, and WHINSEC.
        WHINSEC plays a critical security cooperation role in Colombia and
    sets conditions for future access and long term relationships--in fact,
    many WHINSEC alumni have attained key positions of prominence across
    the Colombian military. The school's curriculum is an integral
    component of the Colombian military officers and non-commissioned
    officers' development and continued professionalization, ``Preparing
    the leadership of the future.''
        -  WHINSEC plays an important academic and technical advisory role
    assisting the Colombian Army to develop new courses to support
    transformation and creation of new military occupational skills to
    perform DDR related missions.
        -  WHINSEC's instructors have done a superb job integrating into
    Colombia the same academic core values used in the WHINSEC schoolhouse.
    Through collaboration with WHINSEC, Colombian military professional
    development courses now include elements of military justice systems &
    procedures, civil-military relations, and human rights modules, all of
    which will be directly integrated into DDR initiatives.
        -  WHINSEC's U.N. Peacekeeping Operations Course is another example
    where Colombian officers are trained to support DDR challenges using
    contemporary lessons. In these courses, Officers are given instruction
    and preparation to assume DDR management and advisory roles as
    transition staff members. Additionally, the Colombians utilize this
    course as part of their ``train the trainer'' program for the newly
    established Peace Operations and Civil Affairs Training Center (ESMAI)
    located in Bogota, which will support future Colombian Military U.N.
    PKO missions as part of their transformation Regional Security Exporter
    line of effort.
        Over the years the IMET account has been one of the most effective
    security cooperation programs in the SOUTHCOM arsenal. Not only has a
    large number of the Colombian military senior and mid-level leadership
    professionally benefited from IMET courses, but the application of the
    knowledge learned during IMET funded courses has been instrumental in
    improving the overall defense capabilities of the Colombians. The IMET
    program will continue to support the DDR and Colombian Ministry of
    Defense Transformation process through these specific types of courses:
        -  Strategy and Defense Policy--provide the Colombian military the
    skills needed to formulate policy and strategy to address security,
    developmental, and human rights challenges during the DDR process.
        -  Executive programs in Defense decision making--provide the
    Colombian military the knowledge and lessons that could be applied
    during the transformation planning.
        -  Joint Operations--educate the COLMIL officers in joint
    operations, decision making, and planning processes and combined-
    operations in a joint environment.
                                   __________
                  Questions Submitted by Senator Kelly Ayotte
                                  drug tunnels
        11. Senator Ayotte. You testified that the collaboration between
    Israel and the United States with regard to tunnels has ``been very,
    very beneficial, both for us and for our partners in Customs and Border
    Patrol.'' Can you provide some details?
        Admiral Gortney. Yes, collaboration with Israel has provided
    significant gains in terms of our knowledge of tunnel issues. With
    Israel, we share similar problem sets on the border. Four specific
    areas where we have gained invaluable knowledge are: magnetic, mapping
    and borehole technologies for sensing and detecting tunnel activities;
    remediation techniques to temporarily or permanently close tunnels;
    identification of key indicators of tunnel activity and tunnel
    improvised explosive devices; and adoption of Israeli equipment (`foam
    in a bag') currently in use in Arizona to block tunnel entry and exit
    points.

        12. Senator Ayotte. Will you keep my office updated on this and let
    us know what more we can do to help you to fight drug smuggling
    generally and also to fight drug tunnels under our southern border?
        Admiral Gortney. Yes, I will keep your office updated on our
    efforts. We support the Department of Homeland Security in carrying out
    its mission to secure the Southwest Border, including through detection
    and monitoring, as well as with tunnel detection capabilities and
    analytical support. Joint Task Force North is my lead for coordinating
    our Federal military support to law enforcement counternarcotics/
    counter-transnational organized crime efforts along the Southwest
    Border, providing a critical link with Federal military, National
    Guard, and law enforcement partners through their long-standing
    relationships.
                     united states naval station guantanamo
        13. Senator Ayotte. Setting aside the detention center, what is the
    strategic and operational value of United States Naval Station
    Guantanamo?
        Admiral Tidd. The Naval Station at Guantanamo Bay is an important
    strategic base, and the only one of its kind in the Western Hemisphere.
    This base supports the Department of Defense and the broader U.S.
    Interagency, to include the Department of State (DOS) and Department of
    Homeland Security (DHS) in various mission sets. From this strategic
    base of operations, the U.S. conducts detection, monitoring, and
    intercept of illicit traffic and other threats, as well as staging for
    disaster and humanitarian relief efforts. There is also an active DOS
    and DHS Migrant Operations Center at GTMO that maintains a steady-state
    migrant processing mission.
        As Secretary of Defense Carter recently stated before the House
    Appropriations Committee Subcommittee on Defense in response to a
    question about the future of the Naval Station, ``GTMO is a strategic
    location . . . The Naval Station is secure.''

        14. Senator Ayotte. Would it be a mistake to give it back to Cuba?
    If so, why?
        Admiral Tidd. I agree with the Secretary of Defense that Guantanamo
    Bay is a strategic operating base and that it would be a mistake to
    lose it. Again, it is the only one of its kind in the Western
    Hemisphere and the missions of various Departments would be compromised
    if we could no longer operate out of that facility.
                         milcon, substandard facilities
        15. Senator Ayotte. What are SOUTHCOM's MILCON requirements for JTF
    Gitmo so that we can ensure our troops there have the safe and quality
    living conditions they deserve?
        Admiral Tidd. Senator, thank you for your steadfast support of the
    personnel carrying out the important detention operations mission at
    Guantanamo Bay. I would also like to thank the Congress for funding two
    MILCON projects at GTMO that are already underway and will improve both
    the safety and quality of life of our troops--the dining facility, and
    the clinic that greatly reduces detainee movements which reduces risk
    to the guard force.
        As noted in our response to Chairman Thornberry of the House Armed
    Services Committee, we do have an unfunded requirement for
    unaccompanied personnel housing facilities at GTMO. The existing
    facilities were constructed 10 to 60 years ago. The Department has
    requested $13.7M in fiscal year 2017 Facilities, Sustainment,
    Restoration, and Modernization (FSRM) funding, but this will only
    provide a short-term fix. Full replacement of these facilities is the
    safest option, at a cost of $115M.
                                   __________
                  Questions Submitted by Senator Dan Sullivan
                       the arctic and the 4-25 ibct (abn)
        16. Senator Sullivan. In your best military judgment, considering
    the statements from senior military leaders below--both before and
    after the recent announcement--do you support General Milley's desire
    and best military judgment to keep the 4-25 IBCT (ABN)--in its
    entirety--in Alaska for at least another year, if not longer?
        Admiral Gortney. I support General Milley's decision to keep the 4-
    25th IBCT (ABN) for another year. Alaska is a strategic location, and
    having one of the Army's five airborne brigade combat teams in Alaska
    gives the United States flexibility in a time of strategic instability.
    While not assigned to USNORTHCOM, the 4-25th IBCT (ABN) is able to take
    advantage of cold weather training facilities in an austere environment
    that are matched by few places in the world.

        17. Senator Sullivan. In your best military judgment, what kind of
    unique capabilities does the 4-25 IBCT (ABN) bring to USNORTHCOM?
        Admiral Gortney. The 4-25th IBCT (ABN) are worldwide deployable
    forces assigned to USPACOM. The 4-25th IBCT (ABN) has the capability to
    support USNORTHCOM's defense support of civil authorities and search
    and rescue missions throughout the austere conditions in the Alaska
    Joint Operations Area, when approved by the Secretary of Defense.

        18. Senator Sullivan. What kind of message does keeping the unique
    capabilities of 4-25 IBCT (ABN) in Alaska send to President Putin about
    United States resolve in the Arctic?
        Admiral Gortney. The 4-25th IBCT (ABN) is a worldwide deployable
    force assigned to USPACOM with a flexible warfighting capability for
    our nation similar to the other four airborne brigade combat teams in
    the United States. Their forward-based location in Alaska underscores
    the United States commitment to worldwide deployability and the
    capability to operate in all environments.
                                   __________
                    Questions Submitted by Senator Mike Lee
        19. Senator Lee. Between SOUTHCOM, NORTHCOM, the Drug Enforcement
    Agency, Department of Homeland Security, Central intelligence Agency,
    Department of Justice, and others agencies involved in the region, who
    is the lead on addressing the regional violence in Mexico and Central
    America as it pertains to U.S. security?
        Admiral Gortney. In line with the President's National Security
    Strategy of 2015, regional violence in Mexico and Central America is
    addressed through a whole-of-government approach, with U.S. military,
    intelligence, law enforcement, and other agencies working together in
    close coordination under their respective agency authorities to engage
    foreign partners and to defend the United States Homeland. I believe
    the primary threat to the U.S. security in this region stems from
    transnational criminal organizations and the violence and instability
    that results from their illicit activity. The U.S. Department of State
    and our Embassies in each country lead the coordination efforts of U.S.
    federal agencies as we support our partners in Mexico and Central
    America.
        Admiral Tidd. First and foremost, each nation has primary
    responsibility for securing its own sovereign territory, to include the
    security of its citizens. However, it is clearly in the interest of the
    U.S. to support those nations as they address internal as well as
    regional security because their security is inextricably tied to our
    own. As with all matters of foreign affairs, the State Department has
    the overall lead for U.S.engagement abroad. I can speak specifically to
    the Department of Defense's role, which is to support our partner
    nations and other U.S. Federal Agencies' efforts in the region within
    the authorities granted to the department.

        20. Senator Lee. What, if any, role has SOUTHCOM had in the United
    States' response to the Zika virus in Brazil and Latin America, and
    what role will this Combatant Command play in implementing programs or
    utilizing funding if granted by Congress?
        Admiral Tidd. The President's supplemental request of $1.9B for
    Zika response did not include any funds for the Department of Defense
    (DOD). However, the supplemental did include transfer authority to
    allow for flexibility across the Federal Government to respond to
    emerging requirements. The support that SOUTHCOM is currently providing
    to partner nations who request assistance is being funded out of our
    baseline OHDACA funds.
        To date, we have provided three minimal cost projects for Zika
    mitigation and prevention in Colombia, and one minimal cost project in
    Costa Rica. In Colombia, the projects provided for the purchase of
    basic preventative materials (i.e. mosquito repellent, mosquito nets)
    to be distributed to the local population in Zika endemic areas. In
    Costa Rica, the project will support the Ministry of Health in the form
    of laboratory reagents and supplies for Zika virus detection. In
    addition, as part of our State Partnership Program, we have provided
    Subject Matter Expert Exchanges (SMEEs) in vector control and disease
    surveillance for both Suriname and Guyana.
        Navy Medicine Research Unit-6 (NAMRU-6), located in Lima, Peru,
    developed a laboratory improvement program for partner nation military
    laboratories. PROMELA (Programa de Mejoramiento de Laboratorios de las
    Fuerzas Militares de Latinoamerica) improves partner nation military
    laboratories' capability to test for pathogens. In addition, NAMRU-6 is
    actively engaged in infectious disease research projects in the region
    through satellite sites in Colombia, Guatemala, Honduras, Paraguay,
    Bolivia, Venezuela, and Peru and has the ability to test for the Zika
    virus.
        At the request of the Government of Paraguay, SOUTHCOM will partner
    with USAID, the Pan American Health Organization, and the Ministry of
    Health to identify gaps within their institutions to effectively
    respond to the Zika virus. An entomologist and virologist from NAMRU-6
    will conduct assessments to include an evaluation of the Paraguay's
    capacity to detect and diagnose the virus as well as addressing
    treatment, surveillance, pest management, waste disposal, and vector
    control.
        If requested, SOUTHCOM could provide additional regional support to
    include vector control education, supplies and materials; laboratory
    supplies; and SMEEs on field sanitation, disease surveillance,
    epidemiology, and entomology.

        21. Senator Lee. I have read in some slightly dated material that
    SOUTHCOM, ``. . . is supporting the development of a regional maritime
    interdiction strategy, as well as providing equipment and training to
    improve maritime and air domain awareness.'' What is the status of
    developing this multinational maritime strategy, and what plans does
    SOUTHCOM have going forward with this strategy?
        Admiral Tidd. The strategy to which you are referring is an annex
    to the larger U.S. Strategy for Engagement in Central America, an
    effort being led by the International Narcotics and Law Enforcement
    Bureau at the Department of State. The purpose of this annex is to
    assist partner nation maritime forces in building comprehensive
    maintenance and logistics systems that will improve maritime
    operational readiness within their littoral waters, and build the
    systems and a culture for effective preventative maintenance within the
    respective maritime service(s). This is funded by various State
    Department foreign assistance accounts, mainly International Narcotics
    Control & Law Enforcement, Foreign Military Financing, and
    International Military Education & Training.
        SOUTHCOM contributes to this effort via a broad range of activities
    which build partner nation capacity to counter illicit trafficking. Our
    primary focus is on those partner nation units which have a clearly
    established role in directly supporting law enforcement efforts. We
    have conducted baseline assessments of these units' capabilities, and
    provide a combination of training, equipment, and infrastructure
    support as appropriate to mitigate their most critical capability gaps.
    Examples include the provision of sensors for maritime patrol aircraft,
    high-speed interceptor boats and tactical radio systems, construction
    of coastal stations and command center facilities, and training on
    maintenance/logistics support systems.

        22. Senator Lee. In addition to the detention center at Guantanamo
    Bay, there is also the critical Naval Base. Why is this base so useful
    for our operations in the Caribbean? What strategic value do we gain by
    maintaining this presence?
        Admiral Tidd. The Naval Station at Guantanamo Bay is the only
    strategic base of its kind in the Western Hemisphere. This base
    supports the Department of Defense as well as the Department of State
    (DOS) and Department of Homeland Security (DHS) in various mission
    sets. From this strategic base of operations, the U.S. conducts
    detection, monitoring, and intercept of illicit traffic and other
    transnational threats, as well as staging for disaster and humanitarian
    relief efforts. There is also an active DOS and DHS Migrant Operations
    Center at GTMO that maintains a steady-state migrant processing
    mission.
        As Secretary of Defense Carter recently stated before the House
    Appropriations Committee Subcommittee on Defense in response to a
    question about the future of the Naval Station, ``GTMO is a strategic
    location . . . The Naval Station is secure.''

        23. Senator Lee. Congress has previously taken an interest in the
    security situation surrounding the Olympic games, as they are known for
    being targets of terrorist attacks, havens for trafficking, and sources
    of international political tension. What are the security concerns
    surrounding the 2016 Olympic Games in Rio de Janeiro, and how is
    SOUTHCOM involved in addressing them?
        Admiral Tidd. We share your concern that a gathering of this size
    with a high level of media exposure providing a world-wide audience is
    a natural target. We also share Brazil and the international
    community's commitment to ensuring a safe and secure 2016 Olympic
    Games.
        All U.S. security support for the Olympics is being coordinated by
    the International Security Events Group (ISEG), which is led by the
    Department of State. In response to specific Brazilian requests,
    SOUTHCOM has provided training, subject matter expert exchanges, and
    other support to assist Brazil in expanding its capacity to deal with
    threats in preparation for the Games. Brazilian Federal Police and
    Naval Special Forces are participating in a Joint Combined Exchange
    Training (JCET) with U.S. Special Forces with a focus on security
    operations at key Olympic venues. United States Special Forces units
    have also received an invitation to observe the Brazil Federal Police
    Special Operations Units at the Integrated Tactical Center in Rio de
    Janeiro, which is a great opportunity to integrate our nations'
    counterterrorism forces. We stand ready to support our Brazilian
    partners in achieving the goal of a safe Olympic Games.

        24. Senator Lee. As the Department of Defense has struggled with
    how to fight ISIL in the Middle East and North Africa, much attention
    ahs been given to this and other terrorist organizations in that
    region. We know, however, that terror groups also seek havens in South
    and Central America and have been successful in launching attacks in
    such places as Argentina in the past. What efforts are being made to
    prevent the growth of Sunni and Shia extremist groups in South
    America--both in terms of recruitment and plotting of attacks in the
    region? Has there been any noticeable increase in activity in the
    region, or any sense of competition between Iranian sponsored groups
    and ISIL?
        Admiral Tidd and Admiral Gortney. Both Sunni and Shi'a Islamic
    extremists are present in Latin America and primarily engage in support
    activities, radicalization, and recruitment on behalf of terrorist
    organizations abroad. We asses that extremists in the region do have
    the capability to support an attack against Western interests.
        Unlike other parts of the world, however, there is relative peace
    and understanding between Sunni and Shi'a Muslims in the region. Of
    concern is the possibility that those who are returning from conflict
    zones in the Middle East could enflame religious hostilities, possibly
    leading to widespread sectarian violence within the region's currently
    moderate Muslim communities. In a worst case scenario, this could lead
    to instability in some regional nations.
        ISIL's strategic communication efforts have resonated in parts of
    Latin America and the Caribbean. We believe at least 120 foreign
    terrorist fighters have traveled from the region to join ISIL in Syria
    or Iraq. The spread of violent extremist ideology in the Caribbean has
    been a long-standing concern--not just for us, but for our friends and
    partners across the region--especially given the Caribbean's close
    geographical, cultural, and linguistic ties to the United States. This
    is especially disconcerting given that many partner nations are unable
    to monitor the potential return of foreign fighters and often lack
    robust counterterrorism laws and capabilities to confront this threat.
        It has become apparent to us that with each advancement in our
    understanding comes a corresponding increase in our awareness of the
    threat and the potential these organizations have to threaten the U.S.
    and its interests within Latin America and the Caribbean.
        Lebanese Hezbollah maintains an extensive regional network of
    supporters and sympathizers, some of whom are involved in trade-based
    money laundering and other illicit activities to generate revenue (in
    the range of tens of millions of dollars annually), a portion of which
    goes to support the parent organization in the Middle East. Lebanese
    Hezbollah also maintains an infrastructure with the capability to
    conduct or support terrorist attacks. As with every aspect of our
    counterterrorism efforts, the United States Government remains vigilant
    against these threats, working closely with our partners to protect the
    southern approaches to the United States.
        SOUTHCOM's counterterrorism (CT) efforts focus on building and
    supporting partner nation capacity to detect and disrupt terrorist
    threats within their borders. We are working with partners from across
    the region to counter extremism, recruitment, and radicalization to
    violence in vulnerable communities. Over the past year our Special
    Operations Forces (SOF) conducted multiple engagements such as subject
    matter expert exchanges, counterterrorism-focused exercises, and civil
    affairs activities. These efforts--coupled with support to U.S. Country
    Teams and interagency operations--ensure our nation and those of our
    friends remain secure. We are also exploring how counter network
    approaches might improve our counterterrorism efforts.
                                   __________
                Questions Submitted by Senator Claire McCaskill
                     commander, u.s. strategic command--b-2
        25. Senator McCaskill. With the recent deployment of three B-2
    Spirits from Whiteman Air Force Base to the U.S. Pacific Command area
    of responsibility, I am pleased to know that there is a program in
    place to upgrade their communications capabilities. I know there has
    been a lot of discussion regarding the affordability of maintaining and
    upgrading the nuclear triad and I also understand next generation
    programs can be a timely matter with the length of time the acquisition
    program can take. When will this upgrade be complete?
        Admiral Haney. Bombers are the most flexible and visible leg of the
    Triad. They provide key capabilities in support of U.S. deterrence and
    assurance commitments worldwide, and play an important role in
    conventional power projection. The B-2 Stealth Bomber plays a uniquely
    important role in U.S. conventional power projection and nuclear
    deterrence. Robust and survivable communications are essential to
    execute world-wide conventional and nuclear deterrence and assurance
    missions.
        The Advanced Extremely High Frequency (AEHF) SATCOM program
    provides robust anti-jam and highly survivable connectivity to ensure
    that the nation's only penetrating stealth bomber will continue to be
    able to strike any target worldwide. The B-2's AEHF and receive-only
    very low frequency (VLF) modernization programs are instrumental in
    supporting the bomber's conventional and nuclear missions, especially
    in anti-access, area denial environments. The B-2 AEHF program is fully
    funded and on track to field in 2021.
        The B-2 is also receiving Increment 1 of the Common Very Low
    Frequency Receiver (CVR Inc 1), which directly supports nuclear command
    and control effectiveness. CVR Inc 1 will start fielding in late 2017.
    The B-2's AEHF and CVR Inc 1 programs leverage communications
    investments made in other programs to lower risk and cost and provide
    leveraging options for other strategic platforms such as the B-52 and
    RC-135. USSTRATCOM fully supports both programs, and urges that they
    continue to be fully funded to avoid any mission gaps.

        26. Senator McCaskill. What would be the consequences of a delay in
    completing the communications upgrades on the B-2?
        Admiral Haney. Bombers are the most flexible and visible leg of the
    Triad. They provide key capabilities in support of U.S. deterrence and
    assurance commitments worldwide, and play an important role in
    conventional power projection. The B-2 Stealth Bomber plays a uniquely
    important role in U.S. conventional power projection and nuclear
    deterrence. Robust and survivable communications are essential to
    execute world-wide conventional and nuclear deterrence and assurance
    missions.
        The B-2's communications modernization programs are mission-
    critical enablers for both nuclear and conventional missions. Previous
    efforts to modernize B-2 communications were delayed or cancelled due
    to funding and technical issues. Current efforts are fully supported,
    but further delays will create unacceptable mission limitations.
        The B-2's Advanced Extremely High Frequency (AEHF) satellite
    communication (SATCOM) modernization will replace the bomber's legacy
    Ultra High Frequency (UHF) SATCOM capability. The UHF capability is
    vulnerable to jamming and does not effectively support the B-2's
    stealth capabilities. Furthermore, the satellite constellation which
    supports UHF SATCOM is approaching end-of-life. A previous 'just-in-
    time' effort to add an AEHF capability to the B-2 was canceled in 2013
    due to technical and cost issues. Those issues have been resolved and
    the current AEHF effort is fully funded with program start in fiscal
    year 2017. This program can also be leveraged to cost-effectively meet
    Extremely High Frequency requirements for other strategic platforms
    such as the B-52 and RC-135.
        The B-2's Very Low Frequency (VLF) capability, known as Common VLF
    Receiver Increment 1 (CVR Inc 1), provides required receive only
    connectivity in support of nuclear command and control. It is fully
    funded and on schedule.
                        commander, u.s. northern command
        27. Senator McCaskill. As we look at ways to improve the efficiency
    and effectiveness of the Department of Defense, it has been suggested
    that we should relook at the Unified Command Plan which draws the
    geographical boundaries for Combatant Commands. If U.S. Northern
    Command and U.S. Southern Command were combined into one command, would
    the Commander be able to execute the missions and requirements of both
    commands?
        Admiral Gortney. From a span of control perspective, it would be
    extremely difficult for the Commander to execute the missions and
    requirements of both U.S. Northern Command and U.S. Southern Command if
    they were combined into one combatant command. Furthermore, I would be
    very concerned that this merger would dilute the Commander's focus on
    Homeland Defense, the Department's highest priority mission, as well as
    undermining the key Homeland and regional partnerships developed by
    U.S. Northern Command and U.S. Southern Command. In addition to the
    partnerships with Canada, Mexico, The Bahamas, 49 States, 2
    territories, and the District of Columbia, a merger would add an
    additional 31 countries, 15 dependencies and areas of special
    sovereignty to a merged Commander's portfolio. I believe this expanded
    span of responsibility would seriously challenge a single Commander's
    ability to sustain and develop our partnerships, with whom we share
    responsibility for the defense of North America.

        28. Senator McCaskill. What, if any, additional risks would the
    U.S. incur?
        Admiral Gortney. I believe that by combining U.S. Northern Command
    and U.S. Southern Command, the U.S. would incur risk to our Homeland
    defense mission as well as to our Homeland and regional partnerships.
    One of the many lessons learned from the terrorist attacks of September
    11, 2001 was the need for a single combatant command to be assigned the
    Homeland defense mission as its number one priority mission. U.S.
    Northern Command is responsible for defending all of the approaches to
    the US, including air, land and sea against threats, and we must
    coordinate with both of our North American neighbors who are part of
    our in-depth Homeland defense architecture. In addition, a merger would
    significantly undermine our ability to support civil authorities in
    responding to disasters and emergencies in the U.S. Homeland.
                        commander, u.s. southern command
        29. Senator McCaskill. As we look at ways to improve the efficiency
    and effectiveness of the Department of Defense, it has been suggested
    that we should relook at the Unified Command Plan which draws the
    geographical boundaries for Combatant Commands. If U.S. Southern
    Command and U.S. Northern Command were combined into one command, would
    the Commander be able to execute the missions and requirements of both
    commands?
        Admiral Tidd. If NORTHCOM and SOUTHCOM were combined into one
    command, I believe we would inevitably sub-optimize both critical
    mission sets. NORTHCOM's Homeland Defense mission and SOUTHCOM's
    external focus of Theater Security Cooperation in our shared
    neighborhood of the Western Hemisphere are very distinct in nature.
    Unless we decide as a nation that one of those missions is no longer
    important, I believe we will continue to need two separate Commands to
    focus on each unique mission.

        30. Senator McCaskill. What, if any, additional risks would the
    U.S. incur?
        Admiral Tidd. If SOUTHCOM and NORTHCOM were combined, again, we run
    the risk of sub-optimizing both unique missions. I would defer to
    Admiral Gortney to address the specific risks that would be involved in
    a suboptimization of NORTHCOM. However, I can tell you that our
    neighborhood, Latin America and the Caribbean, already perceives that
    the U.S. is losing interest in the region due to low prioritization of
    assets and resources. At the same time, extra-hemispheric actors such
    as Russia, China, and Iran are steadily increasing their engagements
    and investments in this region. Minimizing the strategic importance of
    this region by diluting the SOUTHCOM mission would only play into the
    current perception in the region and open the door to those external
    actors to gain influence in our near-abroad.
                                   __________
               Questions Submitted by Senator Richard Blumenthal
                               illicit substances
        31. Senator Blumenthal. You noted during your testimony that
    USSOUTHCOM's ability to interdict flows of illicit substances is
    extremely limited. Can you please provide a list of resources--
    equipment, ships, aircraft--that you believe are necessary to more
    effectively intercept and interdict the flow of illicit substances?
        Admiral Tidd. In order to meet the U.S. Government national goal to
    remove 40 percent of documented cocaine movement through the transit
    zone, USSOUTHCOM requires 21 vessels. Our current ideal breakdown of
    the 21 vessels includes 14 medium range ships (similar to the Littoral
    Combat Ship or future Offshore Patrol Cutter), 3 long range ships (like
    a Cruiser, Destroyer, or National Security Cutter), and 4 coastal
    patrol boats. The most useful vessels to USSOUTHCOM are medium and long
    range ships equipped with a flight deck that provides persistent
    offshore presence, capable of conducting Airborne Use of Force (AUF),
    with embarked law enforcement teams.
        As you know, we also face significant shortfalls in the area of
    intelligence, surveillance, and reconnaissance (ISR). To have a better
    understanding of the environment and threats in our region, we require
    persistent airborne and maritime ISR assets with precise geo-location
    and identification capabilities. Because of the geography in this part
    of the world, we would also need ISR capabilities able to collect in
    triple-canopy, adverse weather, across air, ground, and sea.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            TUESDAY, MARCH 15, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                     POSTURE OF THE DEPARTMENT OF THE NAVY

        The committee met, pursuant to notice, at 2:32 p.m. in Room
    SH-216, Hart Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Wicker, Ayotte, Fischer, Ernst, Tillis, Sullivan,
    Reed, Nelson, McCaskill, Shaheen, Gillibrand, Blumenthal,
    Donnelly, Hirono, Kaine, and King.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good afternoon.
        The committee meets today to receive testimony on the plans
    and programs of the Department of the Navy for fiscal year
    2017.
        I want to thank each of our witnesses for their
    distinguished service to the Nation, as well as the sailors,
    marines, and civilians they lead who are serving around the
    world today.
        Last month, the Director of National Intelligence provided
    this committee a candid and unsettling picture of the worldwide
    threats to our national security, which have steadily increased
    since dangerous reductions in defense spending were enacted in
    2011.
        The unwillingness of the administration and too many in
    Congress to chart a different course has forced our sailors and
    marines to try to do more with less. By any measure, today's
    fleet of 272 ships is too small to address critical security
    challenges. Even with recent shipbuilding increases, the Navy
    will not achieve its requirement of 308 ships until 2021, and
    there is no plan to meet the bipartisan National Defense
    Panel's recommendation for a fleet of 323 to 346 ships.
        The last five carrier strike group deployments have
    exceeded 8 months, taking their toll on our ships, aircraft,
    and sailors. This has forced the Navy to accept carrier
    presence gaps in order to complete deferred maintenance.
        Similarly, by the end of this fiscal year, the Marine Corps
    will be reduced to 182,000 marines, even as General Neller
    testified last year that the optimal size for the force is
    186,000. The Marines have a requirement for 38 amphibious
    ships, but they only have 30 in the fleet. Marine Corps
    aviation is in crisis. Many aircraft are down hard. Pilots are
    not flying, and nondeployed Marine aviation squadrons are short
    in the number of aircraft needed to train or respond in a
    crisis.
        Budget cuts and force reductions, together with high
    operational tempo, have forced sacrifices of vital training and
    time at home with families, putting our All-Volunteer Force
    under considerable strain.
        Given the obvious needs of our Navy and Marine Corps to
    restore readiness and modernize their ships, aircraft, and
    combat vehicles, the President should have requested a defense
    budget that reflects the scale and scope of the national
    security threats we face and the growing demands they impose on
    our sailors and marines. Instead, the President chose to
    request the lowest level of defense spending authorized by last
    year's budget agreement and submitted a defense budget that is
    actually less in real dollars than last year, despite the fact
    that operational requirements have grown.
        Even with the relief of the Bipartisan Budget Act,
    insufficient funding has forced the Navy to propose
    inactivating seven guided missile cruisers for up to 10 years.
    I am particularly concerned about the Navy's proposal to cut a
    carrier air wing, which appears to ignore the versatility of
    our air wings to rely on overly optimistic projections for its
    yet unproven optimized fleet response plan and could reduce
    operational flexibility in a time of growing uncertainty.
        The answer to our forces' readiness shortfalls is not the
    reduction of squadrons but the proper funding of flight hours,
    depot maintenance, and the procurement of new aircraft, many of
    which such as additional F-18's were not requested purely for
    budgetary reasons.
        As we consider the future of the carrier air wing, I
    continue to believe the Nation needs an unmanned carrier-based
    penetrating strike aircraft. While I am frustrated with the
    slow pace of development towards this goal, I am hopeful the
    so-called MQ-25 Stingray will be an important step in this
    direction by facilitating the rapid development of unmanned
    carrier-based tanking and ISR [intelligence, reconnaissance,
    surveillance] capabilities.
        The President's Budget includes significant funding
    requests for major Navy and Marine Corps acquisition programs,
    which require continued oversight by this committee to ensure
    these programs make the best use of limited taxpayer dollars.
        Initial cost overruns more than doubled the cost of each
    littoral combat ship [LCS] and development costs now exceed $3
    billion and counting. Meanwhile, key warfighting capabilities
    of the LCS, including mine countermeasures and anti-submarine
    warfare, have fallen years behind schedule and remain unproven.
        Because of the long-running cost, schedule, and performance
    issues with this program, I support the Department's proposal
    to down-select to one variant no later than 2019 and reduce the
    inventory objective to 40 ships. I am encouraged to see the
    Navy has begun the process of identifying the LCS replacement,
    and I hope we can transition to a more capable, small surface
    combatant expeditiously.
        I am also pleased that after more than $2 billion in cost
    overruns for each of the first three Ford-class carriers, this
    budget request reflects cost reductions of nearly $700 million
    for these ships. I expect this to be just the start of cost
    reductions in this program. Given continued technological
    challenges and schedule delays, the Navy must take all steps
    necessary to control costs in this program.
        I also look forward to reviewing the Navy's report on
    alternative carrier designs, which is due to this committee on
    April 1st, which I expect to provide alternatives to the sole
    source status quo and options to increase competition.
        The Ohio-class replacement submarine is an equally
    important program which will carry about 70 percent of the
    Nation's deployed nuclear warheads. The cost of this program
    will be second only to the joint strike fighter. Make no
    mistake. The Nation and the Navy cannot afford--literally
    cannot afford--any margin for error or growth in cost of this
    program. We must get it right the first time with lessons
    learned from past acquisition experience, including accurate
    cost estimating, technology maturity, avoiding concurrent
    design, or development with production, off-ramps for high-risk
    systems, and meeting reliability targets for critical systems.
        Similarly, given the importance of replacing our aging
    fleet of amphibious vehicles, the Marine Corps must learn the
    lessons of past failures, such as the expeditionary fighting
    vehicle, and deliver this needed capability on time and cost
    and up to expectations.
        As the Navy and Marine Corps move forward with these
    significant acquisition programs, I would like to hear from our
    witnesses how they intend to implement the new acquisition
    authorities contained in last year's defense authorization bill
    to improve acquisition outcomes and save taxpayer dollars.
        Finally, Admiral Richardson, almost 2 months ago, the
    government of Iran captured 10 Navy sailors and their vessels
    in a blatant violation of international law. Senior
    administration officials reacted as if nothing out of the
    ordinary occurred. Indeed, some even praised and thanked the
    Iranians. By failing to affirm and defend basic principles of
    international law, the administration has placed our Navy and
    Coast Guard vessels and the men and women who sail them at
    greater risk in the future. While I understand the Navy is
    continuing to investigate this matter, I request that you bring
    the committee up to date on the findings of the investigation
    and the welfare of the crew members who were detained.
        I look forward to the testimony of our witnesses on these
    and many other important issues confronting our Navy and Marine
    Corps.
        Senator Reed?

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Well, thank you very much, Mr. Chairman. Let
    me join you in welcoming Secretary Mabus and Admiral Richardson
    and General Neller. Thank you, gentlemen, for your service to
    the Nation.
        This afternoon, we will discuss the Department of the
    Navy's fiscal year 2017 authorization request. We certainly are
    grateful for your service, and I want to especially welcome
    Admiral Richardson and General Neller. This is your first
    posture hearing. welcome aboard I think they say in the Navy.
        You face a huge range of challenges as you strive to
    balance the need to support ongoing operations and sustain
    readiness with the need to modernize and keep the technological
    edge critical to our military's success.
        Last year, the Department of the Navy was facing serious
    readiness problems caused by deferred maintenance, reduced
    steaming and flying hours, and canceled training and
    deployments. The continued emphasis on readiness in this year's
    budget will address some of the Navy's most serious readiness
    problems. I am interested in hearing the witnesses' views on
    this matter, which are absolutely critical.
        All areas of our naval forces are maintaining an extremely
    high operational tempo. Demand is overwhelming for attack
    submarines, air and missile defense cruisers, destroyers and
    strike fighters. In addition, the Navy is now in its fourth
    year of operating with fewer than required 11 aircraft
    carriers. During the next decade, as a first priority, the Navy
    will need to buy a new class of strategic missile submarines to
    replace the Ohio-class submarines. I am interested in hearing
    how the Navy is managing current demands on its assets and how
    it plans to manage future modernization demands, particularly
    how it will use the National Sea-Based Deterrence Fund as we
    begin procurement funding of the Ohio replacement in fiscal
    year 2017.
        General Neller, you have stated in your words
    recapitalization of our force is essential to our future
    readiness with investments in ground combat vehicles, aviation,
    command and control, and digitally interoperable protected
    networks. The Marine Corps continues to make modernization of
    ground vehicles a priority by developing the Amphibious Combat
    Vehicle [ACV] to replace the aging inventory of Amphibious
    Assault Vehicles [AAV], as well as the Joint Light Tactical
    Vehicle [JLTV] in which the Marine Corps is partnering with the
    Army.
        Both programs awarded contracts last fall, but were
    subjected to protests. While the JLTV protest has been
    resolved, the Marine Corps is still awaiting a decision for the
    ACV. I would welcome an update from our witnesses on the status
    of these programs and if they believe there will be significant
    delays in fielding due to delays in the acquisition program.
        The Department of the Navy budget has its usual number of
    significant programs, some of which have issues with their
    execution. However, I want to note specifically one program,
    and that is the procurement of the V-22 tilt rotor aircraft.
    The Navy budget would break the current multiyear procurement
    contract. When Congress authorizes a multiyear procurement
    contract, we are agreeing to authorize the administration to
    commit future Congresses to a specific procurement program. In
    return, I believe that there is a commitment by the
    administration that absent remarkable changes in the situation,
    the administration will live up to the contract and future
    budget requests. I am very interested in hearing more about why
    the Navy proposes to break this contract.
        The Defense Department's Defense Strategic Guidance, issued
    in January 2012, followed by the 2014 QDR [Quadrennial Defense
    Review], announced a renewed strategy for United States
    military orientation on the Asia-Pacific. Consistent with that
    strategy, the Defense Department has been working to realign
    United States military forces of South Korea and Okinawa and
    plans to position Navy and Marine Corps forces in Australia,
    Singapore, and possibly elsewhere in the region.
        The Department has also begun implementing a plan to
    forward-deploy more ships, as shown by the Navy's rotational
    deployment of littoral combat ships to Singapore. I am
    interested in hearing how the Navy will ensure that the LCS
    deployments will not further delay operational testing of the
    LCS and the LCS mission modules which are both significantly
    behind schedule already.
        Again, let me thank you for your service and for your
    dedication to the men and women of the Navy and the Marine
    Corps. I look forward to your testimony.
        Chairman McCain. Secretary Mabus, welcome.

    STATEMENT OF HONORABLE RAYMOND E. MABUS, JR., SECRETARY OF THE
                                  NAVY

        Mr. Mabus. Thank you, Mr. Chairman, Ranking Member Reed,
    members of the committee. Thank you for the opportunity to
    discuss the Department of the Navy.
        As you pointed out, Mr. Chairman, this is the first budget
    testimony before this committee for the Chief of Naval
    Operations [CNO], Admiral Richardson, and the Commandant of the
    Marine Corps, General Neller. In the time since they took these
    positions, I have had the privilege of their frank,
    professional, and invaluable counsel. They are officers of the
    highest caliber who expertly lead our Navy and Marine Corps
    during ever-tightening fiscal constraints and an increasingly
    dynamic threat environment.
        This is my eighth time and my last to appear before you at
    a budget hearing. For me, leading the Department of the Navy is
    the greatest honor of my life. I could not be more proud of our
    sailors, our marines, and our civilians.
        I am also proud of the many steps we have taken and the
    changes we have made to ensure that the Navy and Marine Corps
    remain the greatest expeditionary fighting force the world has
    ever known.
        First and foremost, we continue to provide presence. That
    unrivaled advantage on, above, beneath, and from the seas gives
    our leaders options in times of crisis, reassures our allies,
    deters our adversaries. There is no next best thing to being
    there. Maintaining that presence requires gray hulls on the
    horizon.
        While there has been discussion about posture versus
    presence, the simple fact is that for the Navy and Marine
    Corps, our posture is presence. In every case, from high-end
    combat to a regular warfare to disaster relief, our naval
    assets get on station faster, we stay longer, we bring whatever
    we need with us, and since we operate from our ships, which are
    sovereign American territory, we can act without having to ask
    any other nation's permission.
        Resourcing that presence depends on four fundamentals:
    people, our sailors and our marines; platforms, our ships and
    aircraft and systems; power, how we use energy to make us
    better warfighters; and partnerships, our relationship with
    international allies and most importantly with the American
    people.
        When I took this post almost 7 years ago, we had an
    incredibly committed and capable force, but each of these four
    words staring with ``P'' was under pressure. Our people were
    under stress from high operational tempo and extended
    deployments. Our fleet was shrinking and too many of our
    platforms were costing too much. Our use of power was a
    vulnerability, and our partners were seeking reassurance of our
    sustained engagement. Now our people, platforms, power, and
    partnerships are stronger than they have been in many years,
    enabling us to provide that invaluable presence.
        People. We have instituted sweeping changes in personnel
    policy. Promotions are based more on merit and less on tenure.
    Commanding officers are empowered to meritoriously promote more
    sailors and marines. We have made career paths more flexible.
    One example, thanks to Congress, is the Career and Admission
    Program, which has been greatly expanded.
        We have also increased the professional development and
    educational opportunities to bring America's best ideas to the
    fleet by adding 30 graduate school slots through our Fleet
    Scholars Education Program and sending high-performing sailors
    on SECNAV [Secretary of the Navy] industry tours to great
    American companies like FedEx and Amazon where they learn
    private sector best practices that can be applied when they
    return.
        We are absolutely committed from leadership to the deck
    plates on combating the crime of sexual assault and the tragedy
    of suicide.
        We have also revamped physical fitness assessments, making
    them more realistically aligned with the jobs we do, and we
    have promoted healthier lifestyles through better nutrition and
    a culture of fitness.
        All billets in both services are now open to women.
    Standards will absolutely not be lowered, but anyone who can
    meet the standards will be able to do the job. This will make
    us a more effective combat force.
        We are trying to mitigate stress on sailors and marines and
    their families by making deployments more predictable,
    extending hours for child care, and creating collocation
    policies.
        To tap into the innovative culture inherent in the Navy and
    Marine Corps, we established task force innovation, which takes
    good ideas from deck plate sailors and field marines,
    recognizes funds, and rapidly moves these good ideas fleet-
    wide.
        On platforms, we have reversed the decline in ship count,
    and thanks to Congress and, in particular, to this committee,
    our Navy will reach, as you pointed out, Mr. Chairman, 300
    ships by 2019 and our assessed need of 308 ships by 2021.
        In the 7 years before I took office, the Navy contracted
    for 41 ships. In my 7 years, we have contracted for 84, and we
    have done so while increasing aircraft purchases by 35 percent,
    all with a smaller top line. Practices like firm fixed price
    contracts, multiyear buys, stable requirements have driven down
    costs on virtually every class of ship, and we are also in the
    process of recapitalizing nearly every naval aviation program.
        We have expanded unmanned systems on, under, and above the
    sea and put increased focus on them by establishing a deputy
    assistant secretary for unmanned and an office of unmanned
    warfare systems on the CNO [Chief of Naval Operations] staff,
    known as N-99, designed specifically to coordinate all the
    unmanned programs.
        We are also implementing advanced energy technologies like
    electromagnetic railguns and laser weapons.
        Power. To increase our lethality and operational
    flexibility, I set goals of having 50 percent of sea and shore-
    based energy derived from alternative sources by 2020,
    competitive with the price of conventional power. We met that
    goal ashore by the end of last year.
        Energy efficiency has also been greatly increased on our
    bases and at sea. Since 2009, both the Navy and Marine Corps
    have achieved large drops in oil consumption.
        Partnerships. I have traveled nearly 1.2 million miles to
    144 different countries and territories, visiting our sailors
    and marines, our allies and our partners. 12 of my trips have
    been to Afghanistan where I visited every Marine Corps forward-
    operating base in Helmand to be with our forward-deployed men
    and women and have actively engaged with our allies and friends
    around the world to build and maintain a network of navies with
    whom we train, operate, and trust.
        We have worked in close partnership with Congress to
    fulfill the constitutional mandate to provide for and maintain
    a navy. As President George Washington said, it follows then as
    night succeeds the day that without a decisive naval force, we
    can do nothing definitive, and with it, everything honorable
    and glorious.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Mabus follows:]

                 Prepared Statement by the Honorable Ray Mabus
        Chairman McCain and Ranking Member Reed, members of the Committee,
    thank you for the opportunity to discuss the readiness and posture of
    the Department of the Navy. With Chief of Naval Operations John
    Richardson and Commandant of the Marine Corps Bob Neller, I have the
    great privilege of representing the sailors and marines who serve our
    nation around the world, the civilians who support them and all of
    their families.
        This is the first testimony before this committee for Admiral
    Richardson and General Neller in these positions. In the time since
    they took these critical posts, I have had the privilege of their
    frank, professional and invaluable counsel. They are officers of the
    highest caliber who expertly lead our Navy and Marine Corps during
    ever-tightening fiscal constraints and an increasingly dynamic threat
    environment.
        This is my eighth time, and my last, to appear before you. For me,
    leading the Department of the Navy is the greatest honor of my life. I
    could not be more proud of our sailors, marines, and civilians. I'm
    also proud of the many steps we've taken and changes we've made to
    ensure that the Navy and Marine Corps remain as they have been for over
    240 years as the greatest expeditionary fighting force the world has
    ever known
        This statement, together with those provided by Admiral Richardson
    and General Neller, presents to you and to the American people an
    overview of the Department of the Navy and highlights our priorities as
    we move forward with the fiscal year 2017 (FY17) budget process. As the
    Secretary of the Navy, I am responsible for recruiting, training, and
    equipping the sailors, marines, and civilians who spend every day
    working to defend the American people and our national interests.
        Every year, as we review our current posture, we must ask
    ourselves, as a Department, as a military, and as a nation, how to
    balance our national security demands. We face an increasing array of
    threats, conflicts and challenges around the globe, even as our fiscal
    and budgetary situation continues to strain resources. Consistently,
    when a crisis occurs, the leaders of this country want immediate
    options, so they ask for the Navy and Marine Corps, for our carrier
    strike groups and our amphibious ready groups, for our sailors and
    marines, for our presence. With 90 percent of global trade traveling by
    sea, 95 percent of all voice and data being transferred under the ocean
    and more than 80 percent of the world's population living within 60
    miles of the sea, there is no question that now, more than ever, we are
    living in a maritime century.
                             the value of presence
        What our Navy and Marine Corps uniquely provide is presence--around
    the globe, around the clock--ensuring stability, deterring adversaries,
    and providing the nation's leaders with options in times of crisis. We
    are ``America's away team'' because sailors and marines, equally in
    times of peace and war, are deployed around the world to be not just in
    the right place at the right time but in the right place all the time.
    In every case, from high-end combat to irregular warfare to disaster
    relief, our naval assets get on station faster, we stay longer, we
    bring whatever we need with us and, since we operate from our ships,
    which are sovereign American territory, we can act without having to
    ask any other nation's permission. While there has been discussion
    about posture versus presence, the simple fact is that for the Navy and
    Marine Corps, our posture is presence.
        For more than seven decades, Navy and Marine Corps presence has
    kept international sea lanes open around the world. For the first time
    in history, one nation--America--is protecting trade and commerce not
    just for ourselves and our allies but for everyone. Today, $9 trillion
    in goods are traded by sea annually, supporting 40 million jobs in the
    U.S. alone and benefiting nearly every consumer on earth. These
    statistics make it clear that the health of the world's economy depends
    in large part on the United States Navy and Marine Corps.
        The security and stability of the international system of trade and
    finance is tied irrevocably to the free movement of goods and data
    across, above and under the sea, and is more than just a military
    concern. It impacts every American in the prices we pay for goods and
    services and the very availability of those goods and services. While
    the Navy's activities often take place far away and out of sight of
    most citizens, the impact of our global naval presence isn't a
    theoretical construct; its effects are palpable throughout American
    life.
        The economic benefit is just one that comes from our sailors and
    marines doing their job across the globe. That ubiquitous presence
    reassures our allies and deters our adversaries. If conflict comes, we
    will fight and win. Our presence is an unrivaled advantage that we
    provide our nation. There is no ``next best thing'' to being there.
    Maintaining that presence requires gray hulls on the horizon.
        With each year's budget decisions, we determine what the future
    Navy and Marine Corps will look like. Just as the Fleet and Corps we
    have today are the result of decisions made a decade ago, so will
    tomorrow's Fleet and Corps be a result of the decisions we make today.
    For this reason, we have to balance the needs of our Navy and Marine
    Corps today with those of our nation tomorrow.
        Our combatant commanders understand the critical expeditionary
    capability the Navy and Marine Corps team brings to the fight. Whether
    we are conducting security cooperation around the world, deploying
    Marines in response to a humanitarian crisis or launching strikes from
    our carriers, it is clear Navy and Marine Corps presence provides great
    value to our decision makers and our nation. The emergence of a diverse
    set of challenges, including Russia, North Korea, China, Iran and ISIS
    demands continued emphasis on our Naval and expeditionary forces. We
    absolutely cannot afford to forfeit the capabilities of our future
    maritime power and superiority.
                       around the globe, around the clock
        You only need to look around the world to see our Navy and Marine
    Corps are first on-station and demonstrate an instrumental and
    prominent role in our national security strategy.
        For the first 54 days of the air campaign against Islamic State
    militants in Iraq and Syria, the only strikes came from Navy F/A-18
    Hornets off USS George H.W. Bush in the Arabian Gulf because land-based
    fighters could not participate until host nations approved.
        During a 10-month deployment ending in June 2015, USS Carl Vinson
    Strike Group conducted 12,300 sorties, including 2,383 combat missions
    against Islamic State of Iraq and Syria (ISIS).
        The operational tempo of Naval Special Operations Forces (NAVSOF)
    remains high, as they continue operations in the Middle East, Horn of
    Africa, and Central Asia. NAVSOF is manning the Combined Joint Special
    Operations Task Force-Iraq and deploying forces to Afghanistan.
        In March 2015, USS Gary intercepted a suspected narcotics-
    trafficking vessel off the coast of Central America and seized 5,200
    kilograms of cocaine.
        In July 2015, USS Porter entered the Black Sea to reassure NATO
    allies of our commitment to regional stability by conducting naval
    exercises with ships from 30 different nations including Spain,
    Portugal, France, Turkey, Greece and Bulgaria.
        Last fall, as a visible demonstration of our commitment to
    maintaining freedom of navigation for everyone, USS Lassen patrolled
    the Spratly Islands and nearby artificial reefs in the South China Sea.
    USS Curtis Wilbur conducted similar freedom of navigation operations by
    patrolling near the disputed Triton Island earlier this year.
        When tensions rose in Yemen last summer, marines embarked with
    sailors onboard Navy craft to shore up security and surveillance in
    surrounding waters in preparation for a potential crisis.
        The 31st Marine Expeditionary Unit (MEU) deployed to Saipan to
    provide Defense Support to Civil Authorities after Typhoon Soudelor
    killed 30 people and displaced 150,000 others in the Commonwealth of
    the Northern Marianas.
        Within 40 hours of President Obama's order, a Special Purpose
    Marine Air-Ground Task Force deployed marines, sailors, aircraft and
    equipment to Liberia to respond to the Ebola crisis, providing critical
    airlift and surgical capability as part of U.S disaster relief efforts.
        Maritime presence has been a tenet of our democracy since its
    inception; the founding fathers wrote in the Constitution that Congress
    is authorized to ``raise'' an Army when needed, but mandated it
    ``maintain'' a Navy. Maintaining our great Navy and Marine Corps is
    what assures Americans at home, our friends and allies, as well as our
    adversaries that we are ready to respond when called upon to any
    crisis, anywhere.
        Early on in my tenure as Secretary, I outlined four principles that
    enable our Navy and Marine Corps' to sustain their global presence.
    They are People, Platforms, Power and Partnerships. Those have been,
    and continue to be, the key factors in assuring the capability,
    capacity and success of our naval services, which is why they have
    been, and will remain, my top priorities.
     people--sustaining the world's most formidable expeditionary fighting
                                     force
        The sailors, marines, and civilians serving today are the best
    force we've ever had. But for more than a decade we asked a lot of
    everyone, because unlike other services, we deploy equally in peacetime
    and wartime. There are no permanent homecomings for sailors and
    marines. Despite all we've asked, they have performed magnificently.
    We've taken steps to maintain the health and resilience of our force
    across every facet of the Department. We have addressed issues like
    operational readiness levels, personal well-being for our people and
    their families, creating more options for career flexibility, opening
    new slots for graduate education, improving our advancement process,
    and promoting equality of opportunity. We have made the Navy and Marine
    Corps stronger, focused not only on retaining the incredible expertise
    and professionalism that resides within these two services, but also
    that draws from the broadest talent pool America has to offer.
        Our sailors and marines make Navy and Marine Corps presence
    possible by operating the platforms, harnessing the power, and building
    the partnerships necessary to fulfill our national security strategy.
    Seven years ago when I took office, we had a committed and capable
    force, but our people, and our platforms, were under stress from high
    operational tempo and extended deployments.
        To return stability to our sailors, marines, their families, and to
    our maintenance cycles, one of our first priorities was to develop and
    institute the Optimized Fleet Response Plan (OFRP). This is a program
    that the Navy is using to schedule and plan our deployments and the
    maintenance of our platforms. Entering its third year since
    implementation, OFRP is beginning to fully demonstrate its advantages
    to the Fleet. USS Eisenhower Carrier Strike Group and USS Makin Island
    Expeditionary Strike Group will be first to deploy later this year
    entirely under the OFRP. Our men and women know there is no way to
    completely eliminate the unexpected, because events around the world
    can and do take on a life of their own. However, increasing the
    predictability of deployments will help improve resilience in our
    sailors and marines and their families and also has the added benefit
    of helping us properly support our maintenance requirements and
    readiness posture.
        Under the OFRP, we continue to meet all operational commitments,
    and sailors, marines, and their families are giving us positive
    feedback on this and other initiatives like increases to Hardship Duty
    Pay--Tempo (HDP-T), a pro-rated additional pay that kicks in when a
    deployment extends beyond more than 220 consecutive days, and Career
    Sea Pay, paid to those who have spent a total of three years at sea and
    Career Sea Pay-Premium for those E-6 and above who have spent a total
    of eight years in sea-going assignments. These incentives reward those
    who take the hard and challenging billets at sea, which form the
    backbone of our operations.
        Taking care of our people is about more than just operational
    stability. Through our 21st Century Sailor and Marine Initiative,
    implemented in 2012, we have provided a holistic approach to assuring
    we have the healthiest, fittest, and most resilient force in the world.
    We have focused on helping our sailors and marines maximize their
    personal and professional readiness by assisting them and their
    families with the mental, physical and emotional challenges of military
    service. Eliminating the stovepipes that existed between many of the
    programs designed to support our people allows us to better address
    issues like suicide and sexual assault in a comprehensive way that
    protects our sailors and marines and makes them stronger.
        In suicide prevention, we are continuing to accelerate our efforts
    in 2016 by becoming more assertive on early recognition, education and
    open dialogue to promote climates supportive of psychological health.
    We are expanding our Ask, Care, Treat (ACT) initiative that focuses on
    training, counseling, and intervention. To date, over 40,000 sailors
    have received training via Navy Operational Stress Control (OSC)
    courses. Our partnerships with the Navy and Marine Corps Public Health
    Center, the Defense Suicide Prevention Office, and the Bureau of Navy
    Medicine and Surgery have maximized our public health approach to
    suicide prevention. Furthermore, we are adding to the nearly 800
    Suicide Prevention Coordinators (SPC) trained in 2015, enhancing local
    suicide prevention efforts at the deckplate by having a qualified
    program advocate at nearly every command.
        Sexual assault is a crime with devastating impacts to the Navy and
    Marine Corps. Every sailor and marine deserves a working environment
    respectful of all, completely intolerant of sexual assault, and
    supported by programs of prevention, advocacy, and accountability.
    We've implemented many actions to attack this insidious threat. While
    there is still work to be done, we have instituted an increasingly
    effective Sexual Assault Prevention and Response program and Victim's
    Legal Counsel, which together encourage increased reporting and provide
    critical support to those who come forward, and I am the only Service
    Secretary who has my Sexual Assault Prevention Response Officer report
    directly to me. We are also taking steps to prevent and respond to
    perceptions of retaliation or ostracism on the part of the courageous
    people who report these crimes- whether by the chain of command or
    peers.
        Our Sexual Assault Prevention and Response programs are many and
    varied. Through our InterACT Bystander intervention training we've
    educated more than 52,000 sailors and marines at 220 training events on
    how to stop a potentially dangerous scenario from leading to an
    assault. Our Navy Chaplain Corps has teamed with clinicians to
    establish CREDO, a 48-hour retreat event with workshops focused on
    teamwork, community building, personal resiliency and reconciliation.
    In-person education is augmented by numerous interactive training tools
    available to all sailors and marines ashore and afloat. But no matter
    how much we've done and continue to do, we will not consider our
    mission a success until this crime is eliminated.
        Protecting our Department from instability and destructive and
    illegal behavior is important, but equally important is promoting
    healthy lifestyles that result in a more capable and ready fighting
    force. Our high operational tempo demands a year-round culture of
    fitness. We have completely revamped the Physical Fitness Assessment to
    focus on producing warfighters, capable of accomplishing any mission
    any time, a measure that not only improves readiness but reduces
    overall medical costs. To set sailors and marines up for success, we
    opened a 24-hour a day, seven-day a week gym on every base worldwide
    and we began issuing the Navy Fitness Suit, a uniform item the marines
    already have. sailors earn Fitness Suit patches for outstanding
    performance, and those who maintain that level of performance over
    three cycles receive the ``Outstanding Fitness Award.''
        To complement physical training with well-balanced diets, we've
    increased efforts to provide nutritious food options to sailors and
    marines at sea and ashore. In 2012, the Marines introduced the ``Fueled
    to Fight'' nutrition program, designed to promote a healthy lifestyle
    by providing more nutritious food choices. At base dining facilities, a
    labeling system identifies healthier options and enhances the Marine's
    ability to make a healthy choice. The Navy also created their version,
    called, ``Fuel to Fight,'' launched by the SEALS at Naval Amphibious
    Base Little Creek, which increases the availability of lean-proteins,
    vegetables, and complex carbohydrates in our galleys. We are further
    developing the concept at one sea-based and one shore-based unit this
    year and will implement it Fleet-wide in 2017.
        Part of overall health is emotional health. In order for sailors
    and marines to remain focused on the mission, they should not be
    distracted by concerns about their home life. The Department of the
    Navy takes very seriously its commitment to support our Navy and Marine
    Corps families, and we have taken actions to make service more family
    friendly. We established 24/7 Child Care Development Centers at three
    Fleet concentration areas and increased access to childcare by a total
    of four hours, two hours on either side of the previously existing
    timeframe, at all locations.
        In July of last year, I tripled paid maternity leave from 6 to 18
    weeks, a period subsequently reduced to 12 weeks by the Secretary of
    Defense. Meaningful maternity leave when it matters most is one of the
    best ways that we can support the women who serve our county. This
    flexibility is an investment in our people and our Services, and a
    safeguard against losing skilled servicemembers. In our line
    communities, for example, we were losing about twice as many female
    servicemembers as male, most leaving between 7-12 years of service. We
    believe extending maternity leave will save money and increase
    readiness in the Department of the Navy by keeping people in.
        Under a Congressional authorization, we piloted the Career
    Intermission Program (CIP) beginning in 2009. CIP allows a sailor or
    marine to take up to three years off, with a two-year payback for each
    year taken. When they return they compete against people who have been
    on active duty the same amount of time, as opposed to those from their
    previously assigned year-group. Career flexibility does not come at the
    cost of advancement potential. Our early participants have successfully
    rejoined the Fleet and, again due to Congressional action, we are
    expanding this program to help retain talented sailors and marines.
        While we have taken steps to provide additional services and career
    flexibility so sailors and marines can address their needs personal
    needs, we have also aggressively enhanced professional development
    opportunities to strengthen our All-Volunteer Force. In a world
    increasingly dependent on inter-service, inter-agency, and
    international cooperation, that development takes place over the entire
    span of one's career. To broaden background diversity in our officer
    corps, we re-opened NROTC units at Harvard, Yale, Columbia and
    Princeton after a 40-year hiatus.
        We also established the Fleet Scholars Education Program, adding 30
    new graduate school positions allocated by warfighting commanders to
    eligible officers. Our first participants are now studying at Harvard,
    Dartmouth, and Yale.
        Outside the classroom, we recognize the value that private sector
    ingenuity adds to American innovation, so we have also sent officers to
    work at places like FedEx and Amazon as part of SECNAV Industry Tours.
    Those who participate in these programs are our very best, and, in
    return for their experience, we expect them to bring their knowledge
    back to the Fleet and to continue to serve under the requirement that
    for every month spent away, a sailor or marine owes three months back.
        We want people to take advantage of these and other opportunities,
    and we want them to commit to a career beyond any prescribed service
    obligation. That means creating an advancement system based primarily
    on merit, not tenure. In the Navy, we removed arbitrary ``zone stamps''
    from officer promotion boards this year which can unnecessarily create
    bias. Additionally, for enlisted, we increased the number of
    advancement opportunities available to Commanding Officers to spot
    promote their best and brightest sailors via the Meritorious
    Advancement Program. Next year, we expect those numbers to grow even
    further.
        In the Marine Corps we are revamping our manpower models to develop
    the force and address gaps in our Non-commissioned Officer ranks. Sixty
    percent of Marines are on their first tour and 40 percent are E-3 and
    below. We've implemented the Squad Leader Development Program to mature
    and further professionalize the force. This Program screens small unit
    infantry Marines, selects candidates based on performance and provides
    them with opportunities for education, qualification and assignment.
        After returning predictability to the Navy and Marine Corps and
    creating an environment that supports families and promotes
    professional development, I took actions to make a career in the
    Department attractive and viable to the broadest spectrum of American
    talent. We now actively cultivate a force representative of the nation
    it defends. Doing so maximizes our combat effectiveness, because a
    diverse force is a stronger force.
        This year, twenty-seven percent of the freshman class at the Naval
    Academy Class is comprised of women, more than a one-third increase
    from the summer of 2009 when I first took office. For the first time in
    American history, all billets in the Navy and Marine Corps will be open
    to every member of this year's graduating class, and to all others,
    officers and enlisted, throughout the Fleet.
        I started integrating women into previously closed jobs shortly
    after taking office by opening up submarines and the coastal riverines
    to women. Later, in 2013, Secretary Panetta and Chairman Dempsey
    decided that the default position would be to open all military
    positions to women or seek an exemption to the policy. When weighing
    this decision, I took a methodical and comprehensive approach.
    Ultimately, I decided that denying any individual who meets an
    established standard the opportunity to serve because of their gender
    not only goes against everything we value as Americans, but it will
    most certainly diminish our combat effectiveness. We have already
    proven that is the case with respect to things like the color of
    someone's skin or who they love.
        While we celebrate diversity in all of our people, we are uniform
    in purpose as part of an organization that prioritizes service over
    self. Rather than highlighting differences in our ranks, we have
    incorporated everyone as full-participants by moving, with some few
    exceptions, to common uniforms in both the Navy and the Marine Corps so
    that our forces have a common appearance. Now and in the future, we
    will present ourselves not as male and female sailors and marines, but
    as United States sailors and marines.
        In the Reserves, during fiscal year 2015 we mobilized 2,700
    individual Reserve sailors and marines to support operations worldwide.
    This allows us to focus our active component on filling critical sea
    billets to help ensure Fleet wholeness and readiness. This year, we
    were reminded of the sacrifices our Reserves make with the attack at
    Navy Operational Support Center (NOSC) Chattanooga that took the lives
    of five of our sailors and marines. At home, we have taken steps to
    provide force protection against these kinds of terrorist acts at off-
    installation NOSCs, and as of December 2015, 70 of 71 off-installation
    NOSCs now have armed Selected Reservists. More than 150 NOSC staff
    personnel have graduated the Navy's Security Reaction Force Basic (SRF-
    B) course in support of the Navy Reserve Force Protection mission. For
    Marine Corps reserve centers, 146 of 161 locations have armed duty
    personnel, and the remaining 15 sites are in the process of training
    personnel to be armed. Abroad, our Reserve sailors and marines are
    deployed globally, and we will continue to maintain a Reserve that is
    ready, relevant, and responsive to the nation's needs.
        The Department's civilian workforce supports our uniformed force
    and is critical to the success of our missions. Our civilian employees
    have endured multi-year pay freezes, a hiring freeze, furloughs and
    continued limits on performance awards that impacted morale. Results of
    a Federal Employee Viewpoint Survey indicated that, while our civilians
    appreciated the role they play in our mission, they felt recognition
    and training were lacking. Where possible, through such efforts as
    Operation Hiring Solutions, the Department has mitigated the impacts to
    Fleet readiness and operations and to increase civilian employee job
    satisfaction. Our efforts have produced tangible results, demonstrated
    by increased civilian retention rates over the last two consecutive
    years.
        This patriotic workforce is the foundation of how the Department of
    the Navy operates. In order to ensure we have the most capable people,
    in the right positions, we run a number of leadership development
    programs. Annually we select participants for senior leader, executive
    leader, and developing leader programs to provide education and
    training that will help our people tackle the issues we face now and in
    the future.
             platforms--growing our fleet despite shrinking budgets
        To provide the presence the American people and our nation's
    leaders expect and have come to rely on, our sailors and marines need
    the right number and composition of ships, aircraft, weapons, vehicles,
    and equipment to execute the missions mandated by our National Security
    Strategy. That means we must have a properly sized Fleet. Quantity has
    a quality all its own.
        When I first took office, I committed to growing the Fleet to meet
    our validated requirement and strengthen the acquisition process by
    employing stricter management and increased competition. In the seven
    fiscal years from 9/11/2001 to 2009, our Fleet declined from 316 to 278
    ships, and during that period, the Navy contracted for only 41 ships,
    not enough to keep our Fleet from declining nor keep our shipyards open
    and healthy. In the seven fiscal years following 2009, we will have
    contracted for 84 ships. We will have done so while increasing aircraft
    purchases by 35 percent, despite decreasing defense budgets.
                                  shipbuilding
        Navy shipbuilding is an essential part of our country's larger
    shipbuilding and repair industry, which provides more than 400,000 jobs
    and contributes more than $37 billion to America's gross domestic
    product. Shipbuilding enhances and strengthens economic security as
    well as national security. The work we have done, and must continue to
    do, will reinforce the importance of maintaining a partnership with the
    industrial base, as well as keep our shipbuilding industry strong and
    ready to support the national security needs of our Navy and our
    country.
        Across our shipbuilding portfolio, we have employed direct,
    impactful actions including increased competition within and across
    product lines, using block buys and multi-year procurements when
    products are mature; ensuring designs are stable before entering into
    production; pursuing cross-program common-equipment buys; and achieving
    affordability through hard-but-fair bargaining. This would not have
    been possible without Congressional approval on items like multi-year
    procurements.
        Stability and predictability are critical to the health and
    sustainment of the industrial base that builds our Fleet. Changes in
    ship procurement plans are significant because of the long lead time,
    specialized skills, and extent of integration needed to build military
    ships. The skills required to build ships are perishable, and, in the
    past, we have lost talent in this critical industry when plans have
    changed. Each ship is a significant fraction of not only the Navy's
    shipbuilding budget but also industry's workload and regional
    employment. Consequently, the timing of ship procurements is a critical
    matter to the health of American shipbuilding industries, and has a
    two-to-three times economic multiplier at the local, regional and
    national levels.
        The Navy will continue to consider and, when appropriate, use
    innovative acquisition strategies that assure ship construction
    workload and sustain the vendor base while imposing cost competition.
    We will continue to invest in design for affordability, modularity and
    open systems architectures while incentivizing optimal build plans and
    shipyard facility improvements and supporting shipbuilding capability
    preservation agreements. These initiatives support affordability,
    minimize life-cycle costs, improve and ensure quality products,
    facilitate effective and efficient processes, and promote competition--
    which all support Department priorities.
        Our efforts to maintain and affordably procure our Fleet's ships
    and submarines have continued through this past year. The Department
    has established a steady state Ford-class procurement plan designed to
    deliver each new ship in close alignment with the Nimitz-class ship it
    replaces. CVN 78 cost performance has remained stable since 2011 and
    this lead ship will deliver under the Congressional cost cap. The
    fiscal year 2016 National Defense Authorization Act (NDAA) reduced this
    cost cap for follow-on ships in the CVN 78 class by $100 million.
    Stability in requirements, design, schedule, and budget, is essential
    to controlling and improving CVN 79 cost, and therefore is of highest
    priority for the program. In transitioning from first-of-class to
    follow-on ships, the Navy has imposed strict configuration and cost
    controls to ensure CVN 79 is delivered below the cost cap. CVN 80
    planning and construction will continue to use class lessons learned to
    achieve cost and risk reduction. The CVN 80 strategy seeks to improve
    on CVN 79 efforts to schedule as much work as possible in the earliest
    phases of construction, where work is both predictable and more cost
    efficient.
        In our attack submarine program, we awarded the largest contract in
    Navy history, $18 billion, to build 10 Virginia-class submarines.
    Because Congress authorized a multi-year contract for these 10 boats,
    giving our shipyards stability and allowing them to order materials in
    economic quantities, we were able to save the taxpayer more than $2
    billion and effectively procured 10 boats for the price of nine.
        We are continuing procurement of two Virginia-class submarines per
    year under the Block IV 10-ship contract which runs through fiscal year
    2018. We will also continue to develop the Virginia Payload Module
    (VPM), which is planned for introduction in fiscal year 2019, as part
    of the next Virginia-class multiyear procurement (Block V).
        The Arleigh Burke-class (DDG 51) program is one of the Navy's most
    successful shipbuilding programs--62 of these ships are currently
    operating in the Fleet. We are in the fourth year of a multi-year
    procurement, and thanks to the work at shipyards in Mississippi and
    Maine and our acquisition team, the DDG 51 competitive multiyear
    contract is saving more than $2 billion. The two Arleigh Burke-class
    destroyers requested in fiscal year 2017, which will complete the
    current multiyear contracts, will provide significant upgrades to
    integrated air and missile defense and additional ballistic missile
    defense capability (Flight III) by incorporation of the Air and Missile
    Defense Radar.
        With our Littoral Combat Ships (LCS), the average ship construction
    cost, under the current block buy contracts, has decreased by nearly 50
    percent in comparison to LCS hulls contracted prior to 2009. We now
    have six ships of this class delivered, 18 currently on contract, and
    two additional ships to award this fiscal year. We are currently
    upgrading the design, which will significantly increase LCS lethality
    and survivability, to be introduced no later than fiscal year 2019, and
    potentially as early as fiscal year 2018. Because of these ships'
    enhanced counter-surface and counter-submarine capabilities,
    contributing to their role in Battle Group operations, we are re-
    designating these future ships as Frigates.
        Our budget request also includes incremental funding for the next
    big deck amphibious assault ship, LHA 8. We are in the midst of an
    innovative solicitation which solicits bids for LHA 8, the replacement
    Fleet oiler T-AO(X), and early design efforts for the replacement for
    the LSD 41/49 class LX(R). These bids which uniquely support both
    stability and competition within the amphibious and auxiliary sectors
    of the industrial base, will be awarded this fiscal year
        Ohio Replacement (OR) remains our top priority program. Prior
    modernization programs, such as our first strategic deterrence
    procurement, ``41 for Freedom,'' were accompanied by topline increases.
    The Navy greatly appreciates Congressional support in overcoming the
    challenges posed by funding the OR Program.
        The fiscal realities facing the Navy make it imperative that we
    modernize and extend the service lives of our in-service ships to meet
    the Navy's Force Structure Assessment requirements. An important
    element of mitigation is the extension and modernization of our Arleigh
    Burke class destroyers and Ticonderoga class cruisers (CGs).
        The fiscal year 2017 President's Budget includes funding for the
    modernization of two destroyers to sustain combat effectiveness, ensure
    mission relevancy and to achieve the full expected service lives of the
    AEGIS Fleet. The destroyer modernization program includes Hull,
    Mechanical, and Electrical (HM&E) upgrades as well as combat systems
    improvements with upgraded AEGIS weapons systems. Advanced Capability
    Build (ACB) 12 to include open architecture computing environment, BMD
    capability, installation of the Evolved Sea Sparrow Missile (ESSM),
    integration of the SM-6 missile, and improved air dominance with
    processing upgrades and Naval Integrated Fire Control-Counter Air
    capability. This renovation reduces total ownership costs and expands
    mission capability for current and future combat capabilities.
        Cruiser modernization ensures long-term capability and capacity for
    purpose-built Air Defense Commander (ADC) platforms. Of our 22 total
    cruisers, 11 recently modernized CGs will perform the ADC function for
    deploying Carrier Strike Groups while the Navy modernizes our other 11
    ships. As these are completed, they will replace the first 11 on a one-
    for-one basis as each older ship reaches the end of its service life
    (35 years) starting in fiscal year 2020. Our modernization schedule
    commenced in fiscal year 2015 on a 2-4-6 schedule in accordance with
    Congressional direction: two cruisers per year for a long-term phase
    modernization, for a period no longer than four years, and no greater
    than six ships in modernization at any given time.
        The Budget supports CG Modernization and proposes a plan that will
    save $3 billion over the FYDP by inducting the remaining cruisers into
    modernization following their current planned operational deployments.
    This differs from the current plan in that we would put a total of four
    CGs in phased modernization in fiscal year 2017. We understand that
    this request does not align with previous Congressional direction, but
    feel it is the best way to honor today's operational demands as we
    prepare for future strategic requirements.
                                    aviation
        With the support of Congress, we continue to strengthen our Naval
    Aviation force. We are in the process of re-capitalizing every major
    aviation platform in the Navy and Marine Corps inventory. The MV-22B
    has replaced the CH-46E/CH-53D, and we are in the process of replacing
    all other Navy and Marine Corps aircraft. We also continue to focus on
    unmanned aviation. We are investing in the MQ-4C Triton, MQ-8C Fire
    Scout, RQ-21 Blackjack, and RQ-7B Shadow plus initiating efforts to
    provide carrier-based unmanned aviation capability with the RAQ-25
    Stingray.
        Our investments focus on developing and integrating capabilities by
    using a family of systems approach, when viable, to maintain
    superiority against rapidly evolving threats. Using current and future
    platforms, weapons, networks and technologies, we will ensure Naval
    Aviation relevance and dominance in the future. For legacy weapons
    systems, we are addressing aviation readiness by investing in
    operations and support accounts to mitigate training and platform
    readiness issues. Our procurement of new aircraft and synchronization
    of readiness enablers will improve our ability to project power over
    and from the sea.
        The Strike Fighter inventory should be viewed in two separate and
    distinct phases. The near term challenge is managing a Department of
    Navy Tactical Aviation (TACAIR) force that has been reduced in capacity
    through a combination of flying many more flight hours than planned,
    pressurized sustainment and enabler accounts, legacy F/A-18A-D Hornet
    depot throughput falling short of the required output due to
    sequestration and other factors, and the impact of delays to completing
    development of the Joint Strike Fighter program. As a result of
    aggressive efforts instituted in 2014 across the Department to improve
    depot throughput and return more aircraft back to service, fiscal year
    2015 depot throughput improved by 44 percent as compared to fiscal year
    2014, returning to pre-sequestration levels of throughput. TACAIR
    aviation depots are expected to continue to improve productivity
    through 2017, and fully recover the backlog of F/A-18A-D aircraft in
    2019 at which time the focus will shift toward F/A-18E/F service life
    extension. In the far term, the Strike Fighter inventory is
    predominantly affected by the rate at which we can procure new TACAIR
    aircraft. The fiscal year 2017 budget request increases both the F/A-
    18E/F and F-35 strike fighter aircraft in order to mitigate near-term
    and far-term risks to our strike fighter inventory in the most
    affordable, effective manner possible.
        Critical to power projection from the sea, the E-2D Advanced
    Hawkeye, our new and upgraded airborne early-warning aircraft,
    completed Fleet integration and deployed with USS Roosevelt (CVN 71)
    Carrier Strike Group. We are continuing Full Rate Production under a
    multi-year contract and Fleet transition is underway. We expect to
    integrate the advanced capabilities with Forward Deployed Naval Forces
    (FDNF) by 2017. We continue to recapitalize the P-3C Orion with P-8As,
    and are on-schedule to complete the purchase within the FYDP to bring a
    total of 109 P-8As to the Fleet. Our P-8s will continue to undergo
    incremental improvements.
        Finally, we expect to complete EA-18G Growler Fleet transition in
    fiscal year 2016. As the DOD's premier tactical Airborne Electronic
    Attack / Electronic Warfare aircraft, the Growler is crucial to power
    projection ashore in a saturated electronic warfare environment. With
    Congress' addition of seven EA-18Gs in fiscal year 2016, we will have
    160 of these aircraft in 15 squadrons to support the Navy requirement.
    With the retirement of the Marine Corps' last EA-6B Prowlers in 2019,
    these highly capable aircraft take over the nation's airborne
    electronic attack mission.
        Our rotary wing and assault support communities are in the midst of
    large-scale recapitalization. In the vertical lift community, multi-
    year production contracts for the MV-22 continue. We have taken
    advantage of joint service commonality in the V-22 to fill a crucial
    enabler in the Carrier On-board Delivery mission. In the Marine Corps,
    procurement of the AH-1Z continues to deliver combat proven-
    capabilities. Finally, with its first flight last fall, the CH-53K King
    Stallion is poised to bring significant improvements in our heavy lift
    capabilities.
                                unmanned systems
        Currently, our warfare communities--air, sea, undersea and ground--
    are all doing superb work in unmanned systems which are critical to our
    ability to be present. They increase the combat effectiveness of our
    deployed force while reducing the risk to our sailors and marines,
    allowing us to conduct missions that last longer, go farther, and take
    us beyond the physical limits of pilots and crews. Launching and
    recovering unmanned aircraft from the rolling decks of aircraft
    carriers, launching unmanned rotary-wing patrols from our small surface
    combatants, and deploying unmanned underwater vehicles globally are
    vital elements both now and in the future for maritime presence and
    naval warfare. We have enhanced our focus on unmanned systems and
    prioritized efforts under purposeful leadership at the level of the
    Deputy Assistant Secretary of the Navy for Unmanned Systems and the new
    office of Unmanned Warfare Systems of the staff of the Chief of Naval
    Operations, also known as N99.
        We are moving ahead with a number of unmanned programs in the
    effort to rapidly integrate new capability into the fleet. The MQ-8B
    Fire Scout began regular deployments in 2014. When USS Fort Worth
    deployed to Singapore recently, the ship took a mixed aviation
    detachment of a manned MH-60R helicopter and MQ-8B Unmanned Aerial
    Vehicle's (UAV). This kind of hybrid employment, pairing our manned and
    unmanned systems to take advantage of the strengths of each, will be a
    hallmark of our future approach to unmanned systems. The first
    operational variant of the larger and more capable next generation Fire
    Scout, the MQ-8C, recently completed developmental testing and a
    successful operational assessment. This aircraft is scheduled to be
    deployable by the end of 2017 and will bring double the endurance and
    double the payload of the older versions.
        The MQ-4C Triton is a key component of the Navy Maritime Patrol
    Reconnaissance Force. Its persistent sensor dwell capability, combined
    with networked sensors, will enable it to effectively meet ISR
    requirements in support of the Navy Maritime Strategy. The MQ-4C Triton
    will establish five globally-distributed, persistent maritime ISR
    orbits beginning in fiscal year 2018 as part of the Navy's Maritime ISR
    transition plan. Currently, MQ-4C Triton test vehicles have completed
    53 total flights and will continue sensor flight testing this spring.
        In 2015, the Office of the Secretary of Defense conducted a
    comprehensive Strategic Portfolio Review (SPR) of DOD ISR programs. The
    results of the SPR, and a subsequent ISR portfolio review, as reflected
    in our PB17 budget is the restructure of the Unmanned Carrier-Launched
    Airborne Surveillance and Strike (UCLASS) program. The RAQ-25 Stingray
    will deliver the Navy's first carrier-based unmanned aircraft, a high-
    endurance platform that will replace today's F/A-18E/F aircraft in its
    role as the aerial tanker for the Navy's Carrier Air Wing (CVW), thus
    preserving the strike fighter's flight hours for its primary missions.
    Stingray will also have the range and payload capacity associated with
    high-endurance unmanned aircraft to provide critically-needed, around
    the clock, sea-based ISR support to the Carrier Strike Group and the
    Joint Forces Commander. The Navy envisions that the open standards to
    be employed in the Stingray design will enable future capabilities to
    be introduced to the aircraft after it has been fully integrated into
    the CVW.
        Autonomous Undersea Vehicles (AUV) are a key component of the
    Navy's effort to expand undersea superiority AUVs are conducting sea
    sensing and mine countermeasure tasks today with human-in-the-loop
    supervision. While nominal force structure requirements for fiscal year
    2025 have not been determined, the Navy is committed to growing both
    the size and composition of the AUV force. In the near-term, AUVs
    present an opportunity to increase undersea superiority and offset the
    efforts of our adversaries.
        The Large Displacement Unmanned Underwater Vehicle (LDUUV) is an
    unmanned undersea vehicle to offload ``dull, dirty, dangerous''
    missions from manned platforms beginning in 2022. LDUUV will be
    launched from a variety of platforms, including both surface ships and
    submarines. The craft's missions will include ISR, acoustic
    surveillance, ASW, mine counter-measures, and offensive operations.
        The Surface Mine Countermeasure Unmanned Undersea Vehicle (SMCM
    UUV) commonly referred to as Knifefish employs low-frequency broadband
    synthetic aperture sonar. Knifefish is planned for incorporation into
    increment four of the LCS mine countermeasures mission package.
                                    weapons
        The fiscal year 2017 budget invests in a balanced portfolio of ship
    self-defense and strike warfare weapons programs. The Navy has made
    significant strides in extending the Fleet's layered defense battle-
    space while also improving the capabilities of the individual ship
    defense layers in order to pace the increasing anti-ship missile
    threat.
        Standard Missile-6 (SM-6) provides theater and high value target
    area defense for the Fleet, and with Integrated Fire Control, has more
    than doubled its range in the counter-air mission. As the Secretary of
    Defense announced a few weeks ago, we are modifying the missile to
    provide vital anti-surface capability. The Evolved Sea Sparrow Missile
    (ESSM) program awarded the Block 2 Engineering Manufacturing and
    Development contract in 2015, which will borrow from the SM-6 active
    guidance section architecture to improve ship self-defense performance
    against stressing threats and environments. Rolling Airframe Missile
    (RAM) Block 2 achieved IOC in May 2015, providing improved terminal
    ship defense through higher maneuverability and improved threat
    detection.
        For strike warfare, the Department's Cruise Missile Strategy has
    been fully implemented with the PB17 budget submission. This strategy
    sustains Tomahawk Blocks III and IV through their service lives;
    integrates modernization and obsolescence upgrades to the Block IV
    Tomahawk during a mid-life recertification program which adds 15-years
    of additional missile service life; fields the Long Range Anti-Ship
    Missile (LRASM) as the Offensive Anti-Surface Warfare (OASuW) Increment
    1 solution to meet near to mid-term threats; and develops follow-on
    Next Generation Strike Capability (NGSC) weapons to address future
    threats and to replace or update legacy weapons. This plan brings next
    generation technologies into the Navy's standoff conventional strike
    capabilities. NGSC will address both the OASuW Increment 2 capabilities
    to counter long-term anti-surface warfare threats, and the Next
    Generation Land Attack Weapon (NGLAW) to initially complement, and then
    replace, current land attack cruise missile weapon systems.
                                 ground forces
        The focus of our Marine Corps ground modernization efforts
    continues to be our ground combat and tactical vehicle (GCTV)
    portfolio, along with the Command and Control (C2) systems needed to
    optimize this effectiveness of the entire MAGTF once ashore.
        The key priority within the GCTV portfolio is the replacement of
    the legacy Amphibious Assault Vehicle (AAV) with modern armored
    personnel carriers through a combination of complementary systems. The
    Amphibious Combat Vehicle (ACV) program is the Marine Corps' highest
    ground modernization priority and will use an evolutionary, incremental
    approach to replace the aging AAVs with a vehicle that is capable of
    moving Marines ashore, initially with surface connectors and ultimately
    as a self-deploying vehicle. ACV consists of two increments, ACV 1.1
    and ACV 1.2. Increment 1.1 will field a personnel carrier with
    technologies that are currently mature. Increment 1.2 will improve upon
    the threshold mobility characteristics of ACV 1.1 and deliver C2 and
    recovery and maintenance mission role variants.
        In parallel with these modernization efforts, a science and
    technology portfolio is being developed to explore a range of high
    water speed technology approaches to provide for an affordable, phased
    modernization of legacy capability to enable extended range littoral
    maneuver. These efforts will develop the knowledge necessary to reach
    an informed decision point in the mid-2020s on the feasibility,
    affordability, and options for developing a high water speed capability
    for maneuver from ship-to-shore.
        We are also investing in the replacement of a portion of the high
    mobility, multi-purpose, wheeled vehicle (HMMWV) fleet which are
    typically exposed to enemy fires when in combat. In partnership with
    the Army, the Marine Corps has sequenced the Joint Light Tactical
    Vehicle (JLTV) program to ensure affordability of the entire GCTV
    portfolio while replacing about one third (5,500 vehicles) of the
    legacy HMMWV fleet with modern tactical trucks prior to the fielding of
    ACV 1.1.
        Critical to the success ashore of the MAGTF is our ability to
    coordinate and synchronize our distributed C2 sensors and systems. Our
    modernization priorities in this area are the Ground/Air task Oriented
    radar (G/ATOR) and the Common Aviation Command and Control System
    (CAC2S) Increment I. These systems will provide modern, interoperable
    technologies to support real-time surveillance, detection and targeting
    and the common C2 suite to enable the effective employment of that and
    other sensors and C2 suites across the MAGTF.
                                   innovation
        As we continue to use better procurement strategies for ships,
    aircraft, and other weapons systems, we are also using better ideas to
    enhance the utility of current assets and to accelerate future
    capabilities to the Fleet. The Navy and Marine Corps have always been
    at the cutting edge of technology. To tap into the ingenuity inherent
    in our force, I created Task Force Innovation: a group from across the
    department comprised of thinkers, experts, and warfighters with diverse
    backgrounds and from every level. The Task Force is anchored in the
    Department as the Naval Innovation Advisory Council, with a location on
    each coast. These councils rely on feedback from databases such as
    ``the Hatch,'' a crowdsourcing platform that cultivates solutions from
    those who know best, our deckplate sailors and marines in the field.
        To facilitate ways for new technologies to reach the Fleet
    unhindered by the overly-bureaucratic acquisitions process, we are
    implementing Rapid Prototyping strategies. This initiative provides a
    single, streamlined approach to prototyping emerging technologies and
    engineering innovations to rapidly response to Fleet needs and
    priorities.
        We are also continuing the research and development of promising
    technologies such as 3D printing, directed energy weapons, robotics,
    adaptive force packaging at sea and unmanned vehicles to counter
    projected threats and using the entire force to prove these concepts.
    We are continuing the development and testing of the Electromagnetic
    Railgun and Hyper Velocity Projectile (HVP) as part of a broader Gun/
    Projectile Based Defense strategy. We plan to demonstrate this
    capability this fiscal year in preparation for follow-on at sea
    testing. In 2014, we deployed the first operational Laser Weapons
    System (LaWS) onboard PONCE in the Arabian Gulf. Lessons-learned from
    the 30 kilowatt LaWS installation are directly feeding the Navy's
    investment in Solid State Laser weapons. The Navy is developing a 100-
    to-150 kilowatt laser prototype for at-sea testing by 2018.
        To secure our superiority in cyberspace, we are building a new
    cyber warfare center of excellence at the Naval Academy, and we have
    more than doubled our cyber workforce since 2009. In addition to
    growing the cyber domain, we are also re-designating appropriate
    positions to count as part of the cyber workforce. The Department is
    diligently working on ensuring cyber workforce billets are properly
    coded in our manpower databases for tracking and community management
    efforts.
        There has been a concerted effort to protect cyber positions from
    drawdowns and maximize direct and expedited civilian hiring authorities
    to improve cyber readiness and response. Additionally, the DON is
    supporting the DOD Cyber Strategy in the stand-up of the Cyber Mission
    Force teams; 40 teams by Navy, 3 teams by Marine Corps and 1,044 cyber
    security positions within Fleet Cyber and Marine Forces Cyber commands.
    These positions require unique cyber security skills and qualifications
    to perform a multitude of cyber security functions that will enhance
    the Department of the Navy cyber security and defense capability.
                  power--alternative energy fueling the fight
        Energy is a necessary commodity for modern life, and it plays a
    critical geopolitical role around the world. Access to fuel is often
    used as a weapon, as we have seen with Russian action against Ukraine,
    and threats against the rest of Europe. Although the price of oil has
    recently declined, the overall trend strongly suggests that over time,
    the prices could return to the higher levels.
        Aside from the obvious economic instability that comes with the
    volatile price of oil, being overly reliant on outside energy sources
    poses a severe security risk, and we cannot afford to limit our sailors
    and marines with that vulnerability and lack of stability. When I
    became Secretary, our use of power was a vulnerability; we were losing
    too many Marines guarding fuel convoys in Afghanistan and volatile oil
    prices were stressing many areas, particularly training.
        In 2009, the Department of the Navy set out to change the way we
    procure, as well as use, energy, with the goal of having at least half
    of naval energy--both afloat and ashore--come from non-fossil fueled
    sources by 2020. By using alternative energy sources, we improve our
    warfighting capabilities; reduce our reliance on foreign sources of
    fossil fuels; and reduce the ability of potential adversaries the
    opportunity to use energy as a weapon against us and our partners.
        Pioneering new advancements in how we power our platforms and
    systems is nothing new for the Navy and Marine Corps. For two centuries
    we have been a driver of innovation, switching from sail to steam,
    steam to coal, coal to oil, and harnessed the power of nuclear
    propulsion. Operationally, energy matters now more than ever; our
    weapons platforms today use far more energy than their predecessors.
    The new technology we develop and acquire will ensure we maintain a
    strategic advantage for decades to come. Fueling the ships, aircraft,
    and vehicles of our Navy and Marine Corps is a vital operational
    concern and enables the global presence necessary to keep the nation
    secure.
        After successfully testing the Great Green Fleet at the Rim of the
    Pacific Exercise in 2012, just last month USS John C. Stennis Strike
    Group departed on a routine operational deployment, steaming on an
    blend of conventional and alternative fuels, as well as conducting
    underway replenishments at sea with these fuels. The three stipulations
    we have for our alternative fuels are they must be drop-in, they cannot
    take away from food production, and they must be cost competitive.
        The alternative fuels powering the Great Green Fleet 2016 were
    procured from a company that makes its fuel from waste beef fats. These
    alternative fuels cost the Department of Defense $2.05 per gallon. It
    is critical we continue to use cost-competitive blended alternative
    fuels in our ships and aircraft to ensure operational flexibility. For
    example, of the three crude oil refineries in Singapore one is 50
    percent owned by China, while an alternative fuel plant is owned by a
    Finnish company.
        This past year, we surpassed the goal the President set in his 2012
    State of the Union Address, when he directed the Department of the Navy
    to have a gigawatt (one-half of our total ashore energy needs in the
    U.S.) of renewable energy by 2020. The Renewable Energy Program Office
    (REPO) coordinates and manages the goal of producing or procuring cost-
    effective renewable energy for our bases, and the power we are buying
    through our REPO projects will be cheaper than our current rates over
    the life of the contract. Today, we have in procurement more than 1.1
    gigawatts of renewable energy for our shore installations--five years
    ahead of schedule.
        In August, the Department of the Navy awarded the largest renewable
    contract in federal government history with the Western Area Power
    Administration. This solar project will meet a third of the energy
    needs for 14 Navy and Marine Corps installations, bringing them 210 MW
    of renewable power for 25 years, and saving the Navy $90 million.
        In the Marine Corps, the Expeditionary Energy Office (E2O)
    continues to focus on increasing their operational reach and empowering
    Marines in the field. E2O is doing amazing work. The Marine Corps hosts
    two expos--one on each coast--every year where they ask industry
    leaders to bring their latest technology, and, if the Marines see an
    operational use for it, they can buy it. They have invested in items
    such as small, flexible and portable solar panels that can save a
    company of Marines in the field 700 pounds in batteries. The Marines
    are also working on kinetic systems for backpacks and knee braces that
    harvest energy from a Marine's own movement. These technologies are
    making our Marines lighter, faster and more self-sustainable on the
    battlefield.
        Across the Fleet and Marine Corps, we have taken numerous energy
    conservation measures that are aimed at energy efficiency, and have had
    dramatic impact on our energy use.
        For example, two of our newest amphibious ships, USS Makin Island
    and USS America use a hybrid propulsion system that has an electric
    power plant for slower speeds and traditional engines for speeds over
    12 knots. When Makin Island returned from her maiden deployment, she
    came back with almost half her fuel budget, despite the fact she stayed
    at sea an additional 44 days.
        We had a Chief suggest we change all the lightbulbs on our ships to
    LEDs. Now every time a ship comes in for overhaul, we are changing out
    the bulbs. This simple change is saving us more than 20 thousand
    gallons of fuel per year per destroyer. They also last far longer, give
    off better light, and reduce our maintenance costs.
        Our sailors are using a Shipboard Energy Dashboard that provides
    them with real-time situational awareness of the energy demand on the
    various systems that are running, allowing sailors to see the impact
    the way they operate a ship can have on fuel consumption. Sailors
    across the Fleet are taking it upon themselves to make their own
    platforms as efficient as possible, and the results are tangible.
        The Department of the Navy's efforts in energy efficiency have
    strongly contributed to a decline in the Navy's demand for oil nearly
    15 percent from fiscal 2008 to fiscal 2014, and the Marines slashed
    their oil consumption 60 percent over that same period, according to a
    recent report by the Office of the Undersecretary of Defense for
    Acquisitions, Technology and Logistics. While drawdowns in Iraq and
    Afghanistan have certainly contributed to these numbers, improvements
    in our use of energy have had an impact on our overall consumption.
        Diversifying our energy supply for our ships, our aircraft, and our
    bases helps guarantee our presence and ability to respond to any crisis
    because we can remain on station longer or extend our range, reducing
    the delays and vulnerabilities associated with refueling.
        We are a better Navy and Marine Corps for innovation, and this is
    our legacy. Employment of new energy sources has always been met with
    resistance, but in every case, adoption of new technologies enhanced
    the strategic position of our nation through improvements in the
    tactical and operational capabilities of our force. Our focus on power
    and energy is helping to ensure the United States Navy and Marine Corps
    remain the most powerful expeditionary fighting force in the world and
    enhance their ability to protect and advance American interests around
    the globe.
        partnerships--building partnerships to advance our shared values
        In this maritime century, cooperation with our international allies
    and partners is critical to defending the global system, as it broadens
    responsibility for security and stability, while diffusing tensions,
    reducing misunderstandings, and limiting conflict. It is through a
    cooperative effort that we will assure our navies can provide the
    necessary presence to maintain freedom of navigation and maritime
    security around the world.
        I have traveled almost 1.2 million miles and visited 144 countries
    and territories and all 50 states to meet with sailors and marines and
    to build partnerships both at home and abroad. International meetings
    establish the trust that helps us deter conflict and respond in a
    coordinated and effective manner to manmade or natural crises. We
    strengthen these partnerships in times of calm because, in times of
    crisis, you can surge people, you can surge equipment, but you cannot
    surge trust.
        We continue to focus our efforts on the rebalance of assets to the
    Pacific as an important part of our partnership efforts. Having the
    right platforms in the right places is a vital piece of ensuring our
    friends and allies understand our commitment to this complex and
    geopolitically critical region. We're moving more ships to the central
    and western Pacific to ensure our most advanced platforms and
    capabilities are in the region, including forward basing an additional
    attack submarine in Guam and forward stationing four Littoral Combat
    Ships in Singapore. Also, we're providing two additional multi-mission
    Ballistic Missile Defense destroyers to Forward Deployed Naval Forces
    (FDNF) in Japan and the P-8A maritime patrol aircraft are making their
    first rotational deployments in the region. Additionally, USS Ronald
    Reagan replaced USS George Washington as our carrier homeported in
    Japan.
        We are hubbing Expeditionary Transfer Docks (T-ESD) 1 and 2 in the
    vicinity of Korea/Northeast Asia, and hubbing Expeditionary Fast
    Transports (T-EPF) to Japan and Singapore. In the longer term, by 2018
    we will deploy an additional Amphibious Ready Group to the Pacific
    region and we will deploy a growing number of Expeditionary Fast
    Transports and an additional Expeditionary Sea Base there.
        The U.S. Seventh Fleet along with allies and partner nations
    combined for over 110 exercises throughout 2015 to train, build partner
    capability and relationships, and exchange information. The largest
    exercise, Talisman Sabre in the Asia-Pacific region, in July 2015,
    featured 21 ships, including U.S. Navy aircraft carrier USS George
    Washington and more than 200 aircraft and three submarines. USS Fort
    Worth participated in Cooperation Afloat Readiness and Training (CARAT)
    exercises with partner navies from Cambodia, Philippines, Malaysia,
    Indonesia, Brunei, and Bangladesh to conduct maritime security
    cooperation exercises.
        In addition to participating in many of the exercises as part of
    the Navy-Marine Corps team, the Marine Corps is also building its
    capacity to work with our Asia-Pacific partners. Marines participated
    in 46 exercises in the region in 2015. Examples include Cobra Gold, a
    crisis-response exercise with partners from Thailand, Singapore, Japan,
    Republic of Korea, Indonesia, and Malaysia, and exercise Talisman
    Saber, a United States-Australia exercise focusing on high-end combat
    operations and peacekeeping transitions. Additionally, Marine
    Rotational Force Darwin sustains more than 1,000 Marines on a revolving
    basis to conduct exercises, security cooperation and training with the
    Australian Defense Force and other countries in the region. This will
    increase over the next few years to a full Marine Air Ground Task
    Force.
        As we rebalance our expeditionary forces to the Pacific, we will
    remain focused on maintaining maritime superiority across all domains
    and geographies, ensuring we don't neglect obligations in places like
    Europe.
        As a continuation of the North Atlantic Treaty Organization's 65-
    year mission to keep all nations free without claiming territory or
    tribute, we moved the fourth ballistic missile defense capable DDG, USS
    Carney, to Rota, Spain, to join USS Donald Cook, USS Ross and USS
    Porter to enhance our regional ballistic missile defense capability,
    provide maritime security, conduct bi-lateral and multilateral training
    exercises, and participate in NATO operations. We've also established
    an AEGIS ashore site in Romania to provide additional shore-based
    ballistic missile defense capability in Europe, with a second
    installation in Poland scheduled to come online in the 2018 timeframe.
        The Navy and Marine Corps continue to demonstrate support for our
    allies and friends and American interests in the European region.
    Alongside the Marine Corps' Black Sea Rotational Force's operations in
    Eastern Europe, a series of Navy ships have deployed into the Black Sea
    to ensure freedom of navigation and work with our partners there.
        This past fall USNS Spearhead completed the Southern Partnership
    Station 2015 in South America. As Spearhead sailed through the
    Americas, the sailors and marines aboard participated in subject matter
    expert exchanges and building partner capacity throughout the region.
    In October, USS George Washington and USS Chafee participated in the
    annual multinational exercise UNITAS, which was hosted by the Chilean
    Navy and included personnel from Brazil, Ecuador, El Salvador,
    Guatemala, Honduras, New Zealand and Panama to conduct intense training
    focused on coalition building, multinational security cooperation and
    promoting tactical interoperability with the participating partner
    nations. USS George Washington also deployed as part of Southern Seas
    2015, which seeks to enhance interoperability, increase regional
    stability, and build and maintain relationships with countries
    throughout the region while circumnavigating South America. A unique
    symbol of our desire to build a strong relationship is evident in
    deployments by our world class hospital ship USNS Comfort. As part of
    Continuing Promise 2015, medical and support staff from across the U.S.
    military and the region worked alongside nearly 400 volunteers to treat
    122,268 patients and conduct 1,255 surgeries. In an historic event
    during the USNS Comfort port call in Haiti, United States and Cuban
    medics worked side-by-side to treat Haiti's poor and exchange best
    medical practices. Continuing Promise is without doubt one of the U.S.
    military's most impactful missions, but future USNS Comfort deployments
    will be affected by today's budget realities. Our security is
    inextricably linked with that of our neighbors, and we continue to work
    with innovative and small-footprint approaches to enhance our
    interoperability with partners in the Americas.
        For some people around the world, sailors and marines who sail
    aboard our ships are the only Americans they will ever meet, and it is
    they who represent our country around the world.
        In December, I hosted the leaders of our partner navies from West
    Africa and from Europe and the Americas for the Gulf of Guinea Maritime
    Security Dialogue. Naval leaders from 16 nations bordering the Gulf of
    Guinea as well as 37 heads of navy, delegates and representatives from
    Europe and the Americas came to discuss collaborative solutions to
    piracy, extremism, trafficking and insecurity in the region. We
    discussed a unified code of conduct for maritime law enforcement and
    more direct cooperation in the region. As the economies in the Gulf of
    Guinea continue to grow, so does the increasing relevance of guarding
    against maritime terrorism, illicit trafficking of drugs, people and
    weapons, extremism moving from east to west, and other transnational
    crime. The United States Navy and Marine Corps will continue to work
    with our partners in West Africa and help them improve their
    capabilities and promote collaboration.
        Working alongside other navies enhances interoperability, provides
    key training opportunities, and develops the operational capabilities
    of the countries and navies with which we have shared values. As we
    look toward future operations, multinational cooperation will continue
    to be vital to suppressing global threats, and building these strong
    partnerships now seeks to enhance and ensure our operational
    superiority into the future.
        Outside of our international partnerships, the Department of the
    Navy's collaboration with industry, both in technology development and
    ship and aircraft building and repair, bolsters economic security as
    well as national security interests at home and abroad.
        Finally, our Navy and Marine Corps require the support of the
    American people to maintain presence. I continue to honor our most
    important partnership--the one with the American people--by naming
    ships after people, cities, and states, as a reflection of America's
    values and naval heritage, and to foster that powerful bond between the
    people of this country and the men and women of our Navy and Marine
    Corps.
                        fiscal year 2017 budget summary
        The Department of the Navy's proposed budget for fiscal year 2017
    is designed to achieve the President's Defense Strategic Guidance
    (DSG): protect the Homeland, build security globally, and project power
    and win decisively when called upon. In doing so we have looked across
    the FYDP to maintain our ability to conduct the primary missions listed
    in the DSG to 2021 and beyond. Overall the fiscal year 2017 President's
    Budget balances current readiness needed to execute assigned missions
    while sustaining a highly capable Fleet, all within a continually
    constrained and unpredictable fiscal climate.
        Our approach to this budget has focused on six objectives. First,
    maintain a credible and modern sea-based strategic deterrent. Second,
    sustain our forward global presence to ensure our ability to impact
    world events. Third, preserve the capability to defeat a regional
    adversary in a larger-scale, multi-phased campaign, while denying the
    objectives of--or imposing unacceptable costs on--a second aggressor in
    another region. Fourth, ensure that the force is ready for these
    operations through critical afloat and shore readiness and personnel
    issues. Fifth, continue and affordably enhance our asymmetric
    capabilities. Finally, sustain our industrial base to ensure our future
    capabilities, particularly in shipbuilding.
        Even as we deal with today's fiscal uncertainty, we cannot let slip
    away the progress we've made in shipbuilding. It takes a long time,
    measured in years, to produce a deployable ship. It is the least
    reversible thing we might do to deal with budget constraints. If we
    miss a year, if we cancel a ship, it is almost impossible to recover
    those ships because of the time involved and the inability of the
    industrial base to sustain a skilled set of people without the work to
    support them. To do the job America and our leaders expect and demand
    of us, we have to have those gray hulls on the horizon.
        Because of the long lead time needed for shipbuilding, it is not
    the responsibility of just one administration. This Administration and
    Congress, in previous budgets, have guaranteed we will reach a Fleet of
    300 ships by fiscal year 2019 and 308 by fiscal year 2021. This FYDP
    establishes a proposed shipbuilding trajectory for our Battle Force and
    its underpinning industrial base in the years following fiscal year
    2021, while maintaining decision space for the next Administration and
    Congress. As such, the fiscal year 2017 President's Budget requests
    funding for seven ships: two Virginia class attack submarines, two DDG
    51 Arleigh Burke class destroyers, two Littoral Combat Ships (LCS), and
    the LHA 8 Amphibious Assault Ship. The budget request also includes
    funding for refueling and complex overhauls (RCOH) for aircraft
    carriers USS George Washington and USS John C. Stennis.
        The plan for LCS/FF requests funding for two ships in fiscal year
    2017, preserving the viability of the industrial base in the near term
    and creating future decision space for Frigate procurement should
    operational requirements or national security risk dictate the need.
        The fiscal year 2017 President's Budget includes funding for the
    modernization of destroyers ($3.2 billion total invested in fiscal year
    2017-fiscal year 2021) to sustain combat effectiveness, to ensure
    mission relevancy, and to achieve the full expected service lives of
    the AEGIS Fleet. The budget also requests $521 million across the FYDP,
    in addition to current Ships Modernization, Operations and Sustainment
    Fund (SMOSF) funding, to support cruiser modernization. The Navy will
    continue to work with Congress to develop and evaluate funding options
    to continue this vital modernization.
        Above the sea, our naval aviation enterprise grows. Specifically,
    we continue our recapitalization efforts of all major platforms and
    increase procurement of F/A-18E/F and F-35 aircraft, and make key
    investments in current and future unmanned aviation systems and strike
    warfare weapons capabilities.
        While accelerating new platforms and capabilities to the Fleet is a
    priority, it is equally important to reduce the maintenance backlog
    created by sequestration. The fiscal year 2017 budget provides
    additional investments in shipyard and aviation depots in both civilian
    personnel and infrastructure to achieve that end. As we execute our
    readiness strategy, our focus remains on properly maintaining ships and
    aircraft to reach their expected service lives and supporting a
    sustainable operational tempo.
        The cyber domain and electromagnetic spectrum dominance remain
    Department priorities. The budget includes an increase of $370 million
    over the FYDP ($107 million in fiscal year 2017) across a spectrum of
    cyber programs, leading to significant improvements in the Department's
    cyber posture. Specific elements include funding for engineering of
    boundary defense for ship and aviation platforms and for afloat cyber
    situational awareness.
        While hardware upgrades and additions are crucial, our investment
    in people must be equally prioritized. The fiscal year 2017 budget
    includes a 1.6 percent pay raise for sailors and marines and adds
    billets for base security. Our personnel initiatives receive funding
    aimed to recruit, train, and retain America's best.
        Our priorities combine to achieve one objective--naval presence.
    That presence is weighted to meet the national security strategy. The
    fiscal year 2017 budget sustains a forward deployed presence and
    continues the rebalance to the Pacific. The number of ships operating
    in the Asia-Pacific will increase from 52 today to 65 by 2020.
        Crafting the Department of the Navy's budget did not come without
    hard choices. To achieve a balance between current and future
    capabilities, we were compelled to make several risk-informed
    decisions. We have proposed deactivating the 10th Carrier Air Wing.
    This primarily administrative move improves the alignment of carrier
    air wing and aircraft carrier deployment schedules and alleviates
    excessive time between deployments for CVWs attached to CVNs in lengthy
    maintenance phases, without losing any aircraft.
        Finally, throughout my tenure, as part of my Department of the Navy
    Transformation Plan, I have stressed the importance of accountability.
    We are moving very quickly to an audit ready environment. Congressional
    support has been critical in providing the resources we need to bring
    our systems into compliance.
                                   conclusion
        As the longest-serving Secretary since World War I, I have truly
    been able to get to know the men and women of this Department, and I
    have led institutional change--from inception to reality.
        In order to provide our nation with presence, to deter our
    adversaries and assure our allies, and provide our nation's leaders
    with options in times of crisis, we have enhanced our capabilities
    across every area of this department. By focusing on our people,
    platforms, power and partnerships, we assure we remain the greatest
    expeditionary fighting force the world has ever known.
        Today there is no operational billet in the Navy or Marine Corps
    that is closed to anyone based on their gender. Men and women wear
    uniforms common in appearance so they are uniformly United States
    sailors and United States marines. Career paths are flexible and
    provide unprecedented opportunities for professional growth. We promote
    based more on merit and not just tenure. We are encouraging retention
    in the Department by creating an environment that doesn't force our
    sailors and marines to choose between serving their country and serving
    their families.
        We are seeking innovation from within the talent inherent in our
    sailors and marines. We have established an innovation network, with
    crowdsourcing platforms established to allow new ideas to get from the
    deckplates to our leaders.
        We are growing the fleet. By the end of this fiscal year, we will
    have contracted for 84 ships, which will give America a 300-ship Navy
    by 2019 and a 308-ship Navy by 2021. We stood up a new Deputy Assistant
    Secretary of the Navy and OPNAV staff for Unmanned Systems development,
    making us leaders in this emerging capability.
        The Navy has fundamentally changed the way we procure, use and
    think about energy. In the past seven years, the Navy and Marine Corps
    have significantly lowered fuel consumption. We have sailed the Great
    Green Fleet on alternative fuel blends and met our goal of having 1
    gigawatt of renewable energy powering our shore-based installations
    five years early.
        We are rebalancing our Fleet to meet the goal of having 60 percent
    of our assets in the Pacific region by the end of the decade, and we
    continue to contribute to security cooperation and international
    exercises with our friends and allies around the world.
        Since the inception of our nation, America's Navy and Marine Corps
    have paved the way forward for this country.
        As President George Washington once said, ``It follows then as
    certain as that night succeeds the day, that without a decisive naval
    force we can do nothing definitive, and with it, everything honorable
    and glorious.''

        Chairman McCain. General Neller?

    STATEMENT OF GENERAL ROBERT B. NELLER, USMC, COMMANDANT OF THE
                              MARINE CORPS

        General Neller. Chairman McCain, Ranking Member Reed,
    distinguished members of the committee, thank you for the
    opportunity to appear today to talk about the posture of the
    United States Marine Corps and your marines.
        Our marines remain forward-deployed in Iraq and Afghanistan
    embarked with their shipmates aboard Navy ships serving in
    every nation and every climb and place. Our goal and respective
    maritime character and expeditionary capability have been ably
    demonstrated during the past year.
        However, as we continue in conflict around the world, there
    really has not been what we would call an inter-war period to
    reset and reconstitute our force. Today's marines are deploying
    at a rate comparable to our commitment during Operation Iraqi
    Freedom and Enduring Freedom.
        As we focus our attention across the globe in a security
    environment where the only certainty is uncertainty, we must
    make decisions about strategy and structure that will determine
    our Nation's and our Marine Corps' capability in the future.
        History has not been kind to militaries that fail to evolve
    and change, and we see in the 21st century the potential for
    dramatic change. The character of the 21st century is rapid
    evolution, and it is imperative we keep pace with that change.
        The efforts of the 114th Congress provided sufficient
    resources to support the Marine Corps' near-term readiness, and
    we thank Congress and this committee for that stability.
        Nevertheless, as overall financial resources have been
    diminished, the Marine Corps has protected the near-term
    operational readiness of its deployed and next-to-deploy units
    in order to meet operational commitments. This means that our
    units today deploying are ready, but we do not have the depth
    on our bench for major contingencies. The Marine Corps is no
    longer in a position to simultaneously generate current
    readiness, reset our equipment, sustain our facilities, and
    modernize to ensure future readiness.
        Maintaining the quality of the men and women in today's
    Corps is our friendly center of gravity, that which we must
    protect. This is the foundation from which we make marines win
    our Nation's battles and return quality citizens to American
    society.
        As the Marine Corps draws down to 182,000 marines at the
    end of this fiscal year, we continue to assess the capabilities
    and needs of our future force, whether it be the use of the F-
    35 fifth generation fighter, cyber warfare, information ops,
    special operations, embassy security guards, or our security
    cooperation group.
        Modernization is our future readiness and the
    recapitalization of our force is essential to this future
    readiness. Your continued investment in facilities sustainment,
    equipment reset, modernization, ground combat vehicles,
    aviation, command and control, and digitally interoperable
    protected networks is critical.
        The Congress' intent for your Marine Corps to serve as the
    Nation's force in readiness guides who we are and what we do,
    and being ready is central to our identity as marines. With the
    continued support of Congress, the Marine Corps will remain
    ready with ready forces today and modernize to generate
    readiness in the future.
        Again, I thank you for the opportunity to appear before you
    today, and I look forward to your questions.
        [The prepared statement of General Neller follows:]

                 Prepared Statement by General Robert B. Neller
    the commandant's posture of the united states marine corps president's
                                  budget 2017
                                    prologue
        The United States Marine Corps is the Nation's expeditionary force
    in readiness. The intent of the 82nd Congress defined and shaped our
    culture, organization, training, equipment, and priorities. Marines
    appreciate the leadership of the 114th Congress in reaffirming that
    role, especially as the strategic landscape and pace of the 21st
    Century demands a ready Marine Corps to buy time, decision space, and
    options for our Nation's leaders. Congress and the American people
    expect Marines to answer the call, to fight, and to win.
        Our global orientation, maritime character, and expeditionary
    capability have all been ably demonstrated during the past year. The
    capabilities of our total force are the result of the planning and
    execution of committed marines and sailors operating under the
    leadership of my predecessors. These capabilities and the posture of
    our force would not be possible without the support and actions of the
    Congress. As our attention is spread across the globe in a security
    environment where the only certainty is uncertainty, we must make
    decisions about our strategy and structure that will determine our
    Nation's military capability in the future. Today's force is capable
    and our forward deployed forces are ready to fight, but we are fiscally
    stretched to maintain readiness across the depth of the force, and to
    modernize, in order to achieve future readiness.
                                   situation
        The current global security environment is characterized by
    violence, conflict and instability. Multidimensional security threats
    challenge all aspects of our national power and the international
    system. The expansion of information, robotics, and weapons
    technologies are causing threats to emerge with increased speed and
    lethality.
        Over the last 15 years, the United States fought wars in the Middle
    East, and your Marines continue to respond to crises around the globe.
    There has not been an ``inter-war period'' to reset and reconstitute
    our force. Your marines and sailors have remained operationally
    committed at the same tempo as the height of our operations in Iraq and
    Afghanistan. As we have remained engaged in the current fight, our
    enemies and potential adversaries have not stood idle. They have
    developed new capabilities which now equal or in some cases exceed our
    own.
        This unstable and increasingly dangerous world situation is further
    complicated by a constrained resource environment from which we must
    continue current operations, reset our equipment, maintain our
    warfighting readiness, and at the same time, modernize the force.
    Therefore, it has become necessary that we continually balance our
    available resources between current commitments and future readiness
    requirements. This requires pragmatic institutional choices and a
    clear-eyed vision of where we need to be in 10-20 years.
                       what marines are doing today . . .
        Today, Marines remain forward deployed in Iraq and Afghanistan, and
    ready to respond to crisis around the world. Marines and sailors are
    presently managing instability, building partner capacity,
    strengthening allies, projecting influence, and preparing for major
    theater combat operations. In 2015, Marines executed approximately 100
    operations, 20 amphibious operations, 140 theater security cooperation
    events, and 160 major exercises.
        Our Nation has Marines on the ground in Iraq and Afghanistan today,
    and we anticipate our commitment could grow in the future. Marines
    continue to advise, train and enable the Iraqi Security Forces and
    other designated Iraqi forces with peer-to-peer advising and infantry
    training. In Afghanistan, Marines continue to serve as advisors with
    the Republic of Georgia's Liaison Teams (GLTs) in support of Operation
    Resolute Support. From forward-deployed locations afloat and ashore,
    Marine tactical aviation squadrons continue to support operations in
    Syria and Iraq. In 2015, aviation combat assets executed over 1,275
    tactical sorties and 325 kinetic strikes that have killed over 600
    enemy combatants and destroyed over 100 weapons systems and 100
    technical vehicles.
        Our Amphibious Ready Group/Marine Expeditionary Unit (ARG/MEU)
    Teams continue to show their capability a flexible and agile maritime
    force. In 2015, the Marine Corps deployed over 12,000 Marines with our
    shipmates on Navy warships. This past year, five separate MEUs
    supported every combatant commander, participating in exercises and
    executing major operations. The 31st MEU, our Forward Deployed Naval
    Force in the Pacific, performed disaster relief operations on Saipan
    after Typhoon Soudelor passed through the Commonwealth of the Northern
    Mariana Islands (CNMI). Marines were ashore to support the relief
    effort within 12 hours of notification and delivered a total of 11,000
    gallons of fresh water and 48,000 meals.
        As part of the New Normal your Corps deployed two Special Purpose
    Marine Air Ground Task Forces--Crisis Response (SPMAGTF-CR) to US
    Central Command and US Africa Command. These forces are tailored to
    respond to crises and conduct security cooperation activities with
    partner nations, but they do not provide the same flexibility and
    responsiveness of an ARG/MEU. Our SPMAGTF assigned to CENTCOM today
    provides dedicated Tactical Recovery of Aircraft and Personnel (TRAP)
    support to Operation Inherent Resolve, in Iraq and Syria, and
    simultaneously provides a flexible force for crisis and contingency
    response. In AFRICOM, our SPMAGTF supported Embassies through
    reinforcement, evacuation, and operations to reopen a previously closed
    Embassy in Central African Republic. Your Marines also supported
    operations during the Ebola crisis and assisted with elections.
    Finally, a SPMAGTF deployed to the US Southern Command in 2015.
    SPMAGTF-SC's primary focus was the reconstruction of a runway in
    Mocoron Airbase, Honduras and theater security cooperation and training
    in Honduras, El Salvador, Guatemala and Belize.
        The Marine Corps' activities in the Pacific are led by Marine
    Forces Pacific (MARFORPAC) headquartered in Honolulu, Hawaii, with a
    forward stationed Marine Expeditionary Force (MEF), III MEF,
    headquartered in Okinawa, Japan. III MEF contributes to regional
    stability through persistent presence and Marines remain the Pacific
    Command's (PACOM) forward deployed, forward stationed force of choice
    for crisis response. The Marine Corps continues to rebalance its force
    lay-down in the Pacific to support Defense Strategic Guidance (DSG),
    with 22,500 Marines West of the International Date Line, forward-based,
    and operating within the Asia-Pacific Theater. The planned end state
    for geographically distributed, politically sustainable and
    operationally resilient MAGTFs in the Pacific is a long-term effort
    that will span the next 15 years. The Marine Rotational Force-Darwin
    (MRF-D), based in Australia's Robertson Barracks, is in its fourth year
    of operation. This year we will deploy approximately 1,200 Marines to
    Darwin for a six-month deployment.
        The Marine Corps continues to work closely with the State
    Department to provide security at our Embassies and Consulates. Today,
    Marines are routinely serving at 174 Embassies and Consulates in 146
    countries around the globe. Approximately 117 Embassies have increased
    support in accordance with the 2013 NDAA. We have added 603 Marines to
    the previously authorized 1,000 Marine Security Guards; 199 in new
    detachments, 274 towards increased manning at current detachments, and
    130 towards the Marine Security Augmentation Unit (MSAU). Additionally,
    the US Embassy in Havana, Cuba was reopened on July 2015, with Marines
    serving at this Embassy as they do in any other.
        Our partnering capabilities assure allies, deter adversaries, build
    partner capacity, and set conditions for the readiness to surge and
    aggregate with a Joint, Coalition or Special Operations force for major
    theater combat operations. Partnering also trains our Marines for
    environments in which we are likely to operate. In 2015, the Marine
    Corps, in conjunction with combatant commanders and the Marine Forces
    Component Commands, conducted more than 140 security cooperation
    activities, including exercises, training events, subject matter expert
    exchanges, formal education key leader engagements, and service staff
    talks. Your continued support has allowed the Marine Corps to operate
    throughout the world today; now we must ensure our readiness tomorrow.
                              five areas of focus
        Today, in addition to supporting the combatant commander's
    requirements, the Marine Corps is focused on near-term efforts in five
    interrelated areas that are vital to achieving our future success:
    People, Readiness, Training, Naval Integration, and Modernization.
    Across these five areas, three major themes run throughout: maintaining
    and improving the high quality people that make up today's Marine
    Corps; decentralizing the training and preparation for war while
    adhering to Maneuver Warfare principles in the conduct of training and
    operations; and modernizing the force, especially through leveraging
    new and emerging technologies. The future requires Marines to embrace
    change to leverage the rapid advancements in technology at the pace of
    the 21st Century in order to gain an operational advantage over any
    potential adversary we may face in the future.
                                     people
        The success of the Marine Corps hinges on the quality of our
    Marines. This is the foundation
        from which we make Marines, win our Nation's battles, and return
    quality citizens to American society. The Marine Corps will maintain a
    force of the highest quality which is smart, resilient, fit,
    disciplined and able to overcome adversity. Maintaining the quality of
    the men and women in today's Corps is our friendly center of gravity.
    Our goal is to ensure every Marine is set up for success on the
    battlefield and in life, and understands their value to the Marine
    Corps and the Nation.
        The Marine Corps continues to benefit from a healthy recruiting
    environment that attracts quality people who can accomplish the
    mission. Our recruiting force continues to meet our recruiting goals in
    quantity and quality and is postured to make this year's recruiting
    mission. We are on track to meet our active duty end strength goal of
    182,000 Marines in fiscal year 2016, and we will look to maximize the
    capabilities of each and every Marine. Where it makes sense, we will
    look to leverage the unique skills of our Reserve Marines to align what
    they bring from the civilian sector and better enable the readiness of
    our Total Force.
        As the Marine Corps completes our current draw down, competition
    for retention will continue. We will strive to retain the very best
    Marines capable of fulfilling our leadership and operational needs.
    This is accomplished through a competitive career designation process
    for officers and a thorough evaluation process for enlisted Marines
    designed to measure, analyze, and compare Marines' performance,
    accomplishments, and future potential. The Marine Corps continues to
    retain quality Marines in a majority of occupational fields while
    others, like aviation and infantry, are more challenging. An additional
    challenge for all Marines is remaining focused on training for war
    balanced against the volume of mandatory ``top down'' training
    requirements not directly associated with warfighting.
        Marine Leaders have a moral obligation to ensure the health and
    welfare of the Nation's Marines from the day they make the commitment
    to serve. We take this responsibility very seriously and strive to
    maintain the trust and confidence of Congress and the American People
    by immediately addressing any challenge to Marine Corps readiness and
    finding solutions through our people and readiness programs. We have
    reinvigorated the Marine for Life Program and continue to progress with
    our Marine Corps Force Integration Plan (MCFIP), Sexual Assault
    Prevention and Response Program (SAPR), Protect What You've Earned
    Campaign (PWYE), Suicide Prevention and Response Program, our Wounded
    Warrior Regiment, Marine and Family Programs, and Transition Assistance
    Programs. The Marine Corps remains focused on solutions to address the
    destructive behavior of sexual assault, suicide and hazing. The abuse
    of alcohol has proven to be a contributing factor across the spectrum
    of force preservation issues that impact the readiness of our force.
    Our goal continues to be the elimination of this destructive behavior
    from our ranks, and we believe that preserving our commanders' ability
    to lead in this area is a vital element to reaching this objective.
                                   readiness
        The Congressional intent to serve as the ``Nation's Force in
    Readiness'' guides who we are and what we do--being ready is central to
    our identity as Marines. As a force, we will remain ready to fight and
    win across the range of military operations and in all five warfighting
    domains--maritime, land, air, cyber and space. The fiscal reductions
    and instability of the past few years have impacted our readiness. As
    resources have diminished, the Marine Corps has protected the near-term
    operational readiness of its deployed and next-to-deploy units in order
    to meet operational commitments. This has come at a risk.
        The Marine Corps will continue to prioritize the readiness of
    deployed and next-to-deploy units over non-deployed units. The majority
    of our units are deploying ready while our non-deployed commands lack
    sufficient resources to meet the necessary personnel, training, and
    equipment readiness levels in order to respond today. However, to meet
    Congress' intent that we remain the nation's force in readiness, the
    Marine Corps requires a ``ready bench'' that is able to deploy with
    minimal notice and maximum capability.
        Our aviation units are currently unable to meet our training and
    mission requirements primarily due to Ready Basic Aircraft shortfalls.
    We have developed an extensive plan to recover readiness across every
    type/model/series in the current inventory, while continuing the
    procurement of new aircraft to ensure future readiness. The recovery
    and sustainment of our current fleet is necessary to support both
    training and warfighting requirements. Each type/model/series requires
    attention and action in specific areas; maintenance, supply, depot
    backlog, and in-service repairs. For example, in our F/A-18 community
    we are 52 aircraft short of our training requirement and 43 aircraft
    short of our warfighting requirement due to back log and throughput at
    the Fleet Readiness Depot and our inventory of spares. If these
    squadrons were called to on to fight today they would be forced to
    execute with 86 less jets than they need. With the continued support of
    Congress, Marine Aviation can recover its readiness by re-capitalizing
    our aging fleet first as we procure new aircraft to meet our future
    needs and support our ground forces.
        Simultaneous readiness initiatives are occurring with our ground
    equipment. Our post-combat reset strategy and Equipment Optimization
    Plan (EOP) are key components of the overall ground equipment
    ``Reconstitution'' effort. As of Jan 2016, the Marine Corps has reset
    78 percent of its ground equipment with 50 percent returned to the
    Operating Forces and our strategic equipment programs. This strategic
    war reserve is our geographically prepositioned combat equipment both
    afloat and ashore where it makes the most sense to respond to
    contingencies. We remain focused on this recovery effort and project
    its completion in May of 2019. This service-level strategy would not
    have been possible without the continued support of Congress and the
    hard work of your Marines.
        The Facility Sustainment, Restoration and Modernization (FSRM)
    initiative and current state of facilities is the single most important
    investment to support training, operations, and quality of life. The
    2017 budget proposes funding FSRM at 74 percent of the OSD Facilities
    Sustainment Model. This reduced funding level is an area of concern.
    FSRM is a top priority to fix.
        The sustainment of military construction (MILCON) funding is
    crucial to managing operational training and support projects. Marine
    Corps readiness is generated aboard our bases and stations. As we
    transition to new capabilities and realign our forces in the Pacific,
    adequate MILCON will be a key enabler for the Marine Corps' future
    success.
        Readiness is not just in our equipment supply and maintenance, but
    in the quality and challenging nature of our training through the
    mental, spiritual and physical readiness of marines and sailors across
    the force. Readiness is the result of a variety of factors: commitment
    by leadership, standards-based inspections, evaluated drills and
    training exercises, and an understanding by all marines and sailors
    that the call can come at any time. We must be ready and able to
    answer.
                    training, simulation and experimentation
        The Marine Corps' training and education continuum requires
    parallel and complementary efforts, from Squad Leader to MAGTF
    Commander. Organizing and executing high quality training is a
    difficult task. It takes time, deliberate thought, and effort. Our
    approach to training must evolve. It will emphasize the basics:
    combined arms, competency in the use of our weapons and systems, and
    expeditionary operations; but it must reemphasize operations in a
    degraded command, control, communications, computers and intelligence
    (C41) environment, camouflage/deception, operations at night,
    operations in a nuclear, biological and chemical (NBC) environment, and
    decision-making in rapidly unfolding and uncertain situations. We must
    provide opportunities to experiment and work with the latest
    technological advances.
        Our war gaming supports the combat development process in order to
    develop and refine emerging concepts, conceptualize force design, and
    identify future capabilities and deficiencies within the future
    operating environments. War gaming achieves this purpose by permitting
    the dynamic, risk free consideration of disruptive ideas and
    capabilities which enable innovation and inform Service priorities. War
    gaming also supports the development of operating concepts and
    facilitates analysis of alternatives across the ROMO. The Marine Corps
    is committed to the future development of a war gaming facility at
    Marine Corps Base Quantico to enhance the study of the evolving
    characteristics of, and the requirements for, successful warfighting in
    the future. The Marine Corps is working to leverage virtual and
    constructive training environments with better tools to train higher
    level staffs and a focus on our leaders, from the Battalion to the
    Marine Expeditionary Force level. Enabled by technology, we will
    increase the amount of training each unit can accomplish in mentally
    and physically stressing environments for all elements of the MAGTF
    before they execute on a live training range or in combat.
        Our current training schedule of major events will all focus on
    building on our maritime based operational capability and at the same
    time providing venues for experimentation. We will emphasize and
    increase opportunities for force-on-force training and operations in
    degraded environments in order to challenge Marines against a
    ``thinking enemy'' and maximize realism.
        Demanding and challenging Professional Military Education (PME) is
    the best hedge against uncertainty and its purpose is to prepare for
    the unknown. Marines and sailors of all ranks have the responsibility
    to educate themselves. The Marine Corps University (MCU) educates over
    75 percent of Marine Corps' Captains and Majors and provides PME
    opportunities for 100 percent of our enlisted force. Our training and
    education initiatives contribute to our readiness and enhance our
    ability to integrate with the Naval and Joint Force.
                   integration with the naval and joint force
        In order to be the Nation's expeditionary force in readiness the
    Marine Corps must remain a naval combined arms expeditionary force. Our
    naval heritage is based on more than tradition; it is mandated by law
    as our primary service responsibility. Marines will reinforce our role
    as a naval expeditionary force to create decision space for national
    leaders and assure access for the Joint force as part of a naval
    campaign. As the service with the primary Department of Defense
    Directive and Title 10 responsibility for the development of amphibious
    doctrine, tactics, techniques, and equipment, our capabilities are
    reliant on the Nation's investment in our partnered Navy programs. This
    requires the proper balance of amphibious platforms, surface
    connectors, and naval operating concepts to shape our force explicitly
    as part of the Joint Force, understanding where we will both leverage
    and enable the capabilities of the Army, Air Force and Special
    Operations Forces.
        The Navy and Marine Corps Team require 38 amphibious warships, with
    an operational availability of 90 percent, to support two Marine
    Expeditionary Brigades, in order to provide the Nation a forcible entry
    capability. The Marine Corps fully supports the Secretary of the Navy
    and Chief of Naval Operations' efforts to balance amphibious platforms
    and surface connectors that facilitate operational maneuver from the
    sea and ship-to-objective maneuver. The Long Range Ship Strategy (LRSS)
    increases the amphibious warship inventory to 34 by fiscal year 2022.
    We appreciate Congress providing the funding to procure a 12th LPD and
    the funding for a second ship with the same hull form.
        The LPD and the LX(R) represent the Department of the Navy's
    commitment to a modem expeditionary fleet. L-class ships with aircraft
    hangars and the command and control capabilities for the distributed
    and disaggregated operations that have become routine for our ARG/MEU
    teams. The Marine Corps fully supports the Navy's decision to use the
    LPD-17 hull for the LX(R) program. This decision is an acquisitions
    success story that provides a more capable ship, at lower cost, with
    increased capacity, on a shorter timeline to better support how Marines
    are operating today and are likely to in the future.
        Steady state demand and crisis response sea basing requirements
    must be met through creative integration of all platforms and
    formations. This requires an integrated approach that employs warships,
    alternative shipping and landing basing in a complementary manner.
    Corresponding to the amphibious ship effort is our investment in
    tactical ship-to-shore mobility because at some point in the naval
    campaign, the landing force is going to land. The Amphibious Combat
    Vehicle (ACV) is critical in the conduct of protected littoral maneuver
    and the projection of Marines from sea to land in permissive,
    uncertain, and hostile environments. Our planned investments are framed
    by our capstone service concept, Expeditionary Force 21 (EF-21).
    Working with our naval partners, we are aggressively exploring the
    feasibility of future and existing sea based platforms to enhance the
    connector capabilities of our LCACs and LCUs. We have a need to modify
    traditional employment methods and augment amphibious warships by
    adapting other vessels for sea-based littoral operations. Maritime
    Prepositioning Ship squadrons have one Maritime Landing Platform (MLP)
    that is effectively a ``pier in the ocean.'' These ships can move pre-
    positioned war reserves into theater and serve as afloat staging bases
    to receive and transfer equipment and supplies as part of an integrated
    MAGTF or regionally oriented MEB. The end-state is a ``family of
    systems'' designed to enhance mobility, interoperability,
    survivability, and independent operational capabilities to further
    enhance sea basing and littoral maneuver capabilities well into the
    21st Century. The Marine Corps will continue to work closely with the
    Navy to implement the 30-year ship building plan and to address the
    current readiness challenges of the amphibious fleet.
        The continued development of Information Warfare and Command and
    Control capabilities are also required for the Marine Corps to operate
    against increasingly sophisticated adversaries. This requires
    investments in interoperable combat operations centers. We are
    identifying and developing command and control systems and information
    technology architecture to support operations and ensure our ability to
    maneuver. Framed by service-level concepts like the Navy's Cooperative
    Strategy 21 (CS-21), we will collaborate with the Navy on a Naval
    Operating Concept revision in order to shape future naval campaigning
    and naval expeditionary operations. This concept will include a greater
    Marine Corps contribution to Sea Control operations through
    interoperability with the Navy Composite Warfare Commander (CWC)
    structure in order to disrupt, dismantle and defeat Anti Access/Area
    Denial (A2/AD) threats and optimize the single naval battle success on
    and from the sea. Since Marines and Special Operations Forces (SOF)
    remain forward deployed, we must create true integration models to
    maximize the capabilities of the sea-based MAGTF, including command and
    control (C2), alongside our SOF partners. The end state is a fully
    integrated and ready Navy and Marine Corps team, trained and resourced
    to support our joint operating concept.
                          modernization and technology
        History has not been kind to militaries that fail to evolve, and
    the change we see in the 21st Century is as rapid and dramatic as the
    world has ever known. That said the Marine Corps' modernization and
    technology initiatives must deliver future capabilities and sustainable
    readiness. Marines will continue working to do what we do today better,
    but equally important, must be willing to consider how these same tasks
    might be done ``differently.'' The Marine Corps must continue to
    develop and evolve the MAGTF, ensuring it is able to operate in all
    warfighting domains. To do so Marines are invigorating experimentation
    of new concepts in order to advance our capabilities.
        We will continue to develop our concepts to take advantage of the
    capabilities of the F-35 Joint Strike Fighter and all of our emerging
    aviation platforms, particularly in regard to sensor fusion and
    electronic warfare. Marines will continue to experiment with and
    exercise new ways to get the most out of the MV-22 and challenge
    previous paradigms in order to provide the most effective MAGTFs to our
    combatant commanders.
        We will establish and define, in doctrine, our distributed
    operations capability in our MAGTFs by the end of fiscal year 2016.
    With distributed capabilities, we must also ensure our forces are not
    constrained at the littoral seams between combatant commanders. You can
    also expect the Marine Corps to continue to pursue technologies that
    enhance our warfighting capabilities such as unmanned aerial systems
    (UAS) and robotics, artificial intelligence, 3-D printing, and
    autonomous technologies that provide tactical and operational
    advantage.
        The Marine Corps Warfighting Lab leads our experimentation effort
    to capitalize on existing and emerging technology and MAGTF level
    exercises. In conjunction with our coalition partners, the Navy and
    Marine Corps team has experimented with dispersed sea based SPMAGTFs,
    integrated MAGTFs in Anti-Access/ Area Denial environments,
    incorporated emerging digital technologies with aviation platforms and
    our ground forces, and conducted naval integration with interoperable
    Special Operations Forces during Joint Exercises. We will continue to
    emphasize experimentation during our exercises as a way to inform the
    development of distributed doctrine and future operating concepts.
    Exercises serve as a test bed for experimentation as we search for
    faster, cheaper and smarter acquisition processes and programs.
        The following equipment platforms and acquisition initiatives
    require special mention:
                        amphibious combat vehicle (acv)
        The ACV is an advanced generation eight-wheeled, amphibious,
    armored personnel carrier that will support expeditionary maneuver
    warfare by enhancing tactical and operational mobility and
    survivability. The Marine Corps plans to procure 694 vehicles: 204 in
    the first increment and 490 in the second increment. Our plan is to
    have our first battalion initially capable in the 4th quarter of fiscal
    year 2020 and all battalions fully capable by the 4th quarter of fiscal
    year 2023. Your investment in this program provides the Marine Corps
    with an advanced ship to shore maneuver capability for the Joint Force.
                          joint strike fighter (f-35)
        The F-35 is a fifth generation fighter that will replace the Marine
    Corps' aging tactical aviation fleet of F/A-18 Hornets, AV-8B Harriers,
    and EA-6B Prowlers. The F-35 will have a transformational impact on
    Marine Corps doctrine as we work to both do what we're doing today
    better and ``differently.'' The Marine Corps plans to procure 420
    aircraft: 353 F-35Bs and 67 F-35Cs. The first F-35B squadron achieved
    initial operating capability in July 2015, and our second squadron will
    become operational in June 2016. The Marine Corps plans to complete its
    F-35 transition by 2031. We believe the Congressional support
    investment in this program will pay significant dividends for the
    capabilities of the Marine Corps and the Joint Force.
                                     ch-53k
        The Marine Corps' CH-53K ``King Stallion'' helicopter will fulfill
    the vertical lift requirement for amphibious and Joint Forcible Entry
    Operations. This CH-53 transition is critical to increasing the
    degraded readiness of the CH-53E community and decreasing the
    platform's operations and maintenance costs. The Marine Corps plans to
    procure 200 aircraft. The program achieved Milestone B in December
    2005. The CH-53K's first flight occurred in October 2015 and our two
    aircraft have flown 25.8 hours.
       command, control, communications, computers and intelligence (c41)
        The modernization and technology effort of the Marine Corps
    requires an integrated network that is deployable, digitally
    interoperable, and supportive of rapid advancements in technology and
    the evolution of combat capabilities. The Marine Corps Enterprise
    Network (MCEN) establishes a comprehensive framework requiring the
    development of command and control architecture to simplify and enable
    operating forces to use services in a deployed environment. The
    priority is to provide worldwide access to MCEN services from any base,
    post, camp, station network, tactical network and approved remote
    access connection. Our goal is to provide an agile command and control
    capability with the right data, at the right place, at the right time.
        Digital Interoperability (DI) is the effective integration of
    Marines, systems, and exchange of data, across all domains and networks
    throughout the MAGTF, Naval, Joint, and Coalition Forces, to include
    degraded or denied environments, in order to rapidly share information.
    This is a vital step in linking the MAGTF and the Joint Force to get
    the vast amount of information collected on all platforms into the
    hands of the warfighters that need it; in the air, on the ground and at
    sea.
        The Marine Corps' goal is to retain our tactical advantage across
    the range of military operations with today's and tomorrow's systems.
    Our end state is to field and operationalize ongoing programs and
    continue to develop solutions that will enhance institutional
    capabilities and retain our tactical advantage across the ROMO.
                                 our challenges
        The character of the 21st Century is rapid evolution. Our potential
    adversaries have not stood still, and it is imperative that we keep
    pace with change. Two years ago, the 35th Commandant, came before
    Congress and testified that:

        ``...the 36th Commandant will reach a point, probably two years
    from now, where he's going to have to take a look at that readiness
    level and say, I'm going to have to lower that so that I can get back
    into thesefacilities that I can't ignore, my training ranges that I
    can't ignore, and the modernization that I'm going to have to do
    eventually. Otherwise we'll end up with an old Marine Corps that's out
    of date. `` \1\
    ---------------------------------------------------------------------------
        \1\ Gen Amos. Posture of the United States Marine Corps. CMC, Mar
    2014.

        This is where we find ourselves today. The Marine Corps is no
    longer in a position to generate current readiness and reset our
    equipment, while sustaining our facilities, and modernizing to ensure
    our future readiness. The efforts of the I 14th Congress have provided
    sufficient resources to support the Marine Corps' near-term readiness
    and we thank the Congress for this fiscal stability. However, PB17
    increasingly stretches the Nation's Ready Force. We are deploying
    combat ready-forces at a rate comparable to the height of our
    commitment to Operations Iraqi Freedom and Enduring Freedom; we are
    facing future facilities challenges as we try to sustain our current
    installations; and we are struggling to keep pace as our potential
    adversaries rapidly modernize. This is not healthy for your Marine
    Corps or for the security of our Nation.
        The Marine Corps is now on its way down to 182,000 Marines by the
    end of fiscal year 2016. Although our recruiting force continues to
    meet our recruiting goals we are challenged to retain certain
    occupational fields like infantry and aviation. The 21st Century
    demands capabilities in 5th Generation Fighter Aircraft (F-35), Cyber
    Warfare, Information Operations, Special Operations, Embassy Security
    Guards, and the Security Cooperation Group that advises and assists our
    allies and partner nations. The Marine Corps must continue to develop
    and retain these capabilities with quality Marines.
        In last year's fiscal year 2015 budget we were compelled, due to
    fiscal pressures, to limit and reduce training for our operating
    forces. In this year's fiscal year 2016 budget our operation and
    maintenance funding was further reduced by 5.6 percent. This reduction
    has been carried forward into our fiscal year 2017 budget. Two years of
    fiscally constrained operation and maintenance funds will force us to
    employ a prioritized readiness model for our deploying forces and
    prevents us from our desired readiness recovery, both in operational
    training and facilities sustainment. This means the Marine Corps will
    not have as deep and as ready a bench to draw from for a major
    contingency.
        Modernization is future readiness. The recapitalization of our
    force is essential to our future readiness with investments in ground
    combat vehicles, aviation, command and control, and digitally
    interoperable protected networks. We have important combat programs
    under development that need your continued support. The Amphibious
    Combat Vehicle (ACV) will replace our Amphibious Assault Vehicle (AAV),
    which is now over four decades old. The Joint Strike Fighter will not
    only replace three aging platforms, but provides transformational
    warfighting capabilities for the future. Our ground combat vehicles
    like the Light Armored Vehicle (LAV) have an average age of 33 years
    and our Ml Al tanks have an average age of 26 years. The Marine Corps
    is grateful for Congress' support of our wartime acquisition and reset
    efforts of the MRAP, HMMWV, and the contracting of the Joint Light
    Tactical Vehicle (JLTV). In summary, the increasingly lean budgets of
    fiscal year 2016 and fiscal year 2017 will provide increased readiness
    challenges and cause shortfalls in key areas. This reality will force
    tradeoffs.
                                   conclusion
        ``Onefact is etched with clarity; the Marine Corps, because of its
    readiness tofight, will have a vital role in anyfuture war.'' \2\
    Senator Mike Mansfield
    ---------------------------------------------------------------------------
        \2\ Honorable Mansfield. Fixing the Personnel Strength of the
    United States Marine Corps, Adding the Commandant of the Marine Corps
    as a Member of the Joint Chiefs of Staff. 82nd Congress, 1st Session,
    House of Representatives, HR 82-666, 30 Jun 1951.
    ---------------------------------------------------------------------------
        Marines will continue to meet the high standards the American
    people have set for us. As responsible stewards of the Nation's
    resources, the Marine Corps remains committed to its auditability in
    order to provide the best Marine Corps the Nation can afford. We will
    therefore continue to produce highly trained Marines, formed into
    combat-ready forces, and provide the capabilities the Joint Force
    requires. The wisdom of the 82nd Congress as reaffirmed by the 114th
    Congress remains valid today--the vital need of a strong force-in-
    readiness. Marines are honored to serve in this role.

        Marines are innovators and the history of the Marine Corps is
    replete with examples of innovation out of necessity. With the
    continued support of Congress, the Marine Corps will maintain ready
    forces today and modernize to generate readiness in the future because
    when the Nation calls, Marines answer and advance to contact.

        Chairman McCain. Admiral Richardson?

     STATEMENT OF ADMIRAL JOHN M. RICHARDSON, USN, CHIEF OF NAVAL
                               OPERATIONS

        Admiral Richardson. Mr. Chairman and Ranking Member Reed,
    distinguished members of the committee, I am honored and
    humbled to appear before you today as your CNO on behalf of our
    more than 500,000 active and Reserve sailors, our civilians,
    and families to discuss the Navy's budget request.
        To start, I want to thank you for your leadership in
    keeping our Nation secure and in keeping our Navy the strongest
    that has ever sailed the seas. This year's budget continues
    that important work.
        It is always good to start by framing the problem. America
    is a maritime nation, and our prosperity is tied to our ability
    to operate freely in the maritime environment. Today's
    strategic environment is increasingly globalized and
    increasingly competitive. Global systems are used more,
    stressed more, and contested more.
        The maritime system has seen explosive growth. For the
    first time in 25 years, there is competition for control of the
    seas. From the sea floor to space, from deep water to the
    shoreline, and in the information domain, things are
    accelerating. The global information system has become
    pervasive and has changed the way we all do business, including
    at sea. Technology is being introduced at an unprecedented rate
    and is being adopted by society just as fast.
        Finally, a new set of competitors are moving quickly to use
    these forces to their advantage, and for the first time in 25
    years, the U.S. is facing a return to great power competition.
    These new forces have changed what it means for the Navy and
    Marine Corps to provide maritime security.
        While the problems are much more numerous and complex, our
    responsibility remains the same. Naval forces must provide our
    leaders credible options to protect America from attack,
    advance our prosperity, further our strategic interest, assure
    our allies and partners, and deter our adversaries, which rests
    on the ability of the Navy and our sister services to win
    decisively if conflict breaks out. If we do not adapt, we will
    perform below our potential and worse, we may fall behind our
    competitors.
        To do this, the Navy is focusing on four lines of effort.
    We are going to strengthen our Navy team, strengthen our
    operating and warfighting at and from the sea, expand and
    strengthen our partnerships, and achieve high-velocity learning
    at every level.
        Unquestionably, the most part of our Navy is our team.
    Everything we do starts and ends with our sailors, civilians,
    and their families. As our platforms and missions become more
    complex, our need for talented people continues to be a
    challenge. We need to recruit, train, and retain the right
    people, and our sailor 2025 initiatives are aimed squarely at
    that challenge. These efforts are based on our core values of
    honor, courage, and commitment and demonstrated through four
    core attributes of integrity, accountability, initiative, and
    toughness. That team is committed to our mission, which
    requires us to strengthen naval power at and from the sea.
        This budget reflects some very tough choices as we achieve
    this aim. We have prioritized shipbuilding and the industrial
    base. First in that effort is the Ohio replacement program,
    which I believe is vital to our survival as a Nation. We are
    taking steps to more deeply engrain information warfare. We are
    also investing in our naval aviation enterprise, rapidly
    integrating unmanned systems, and bolstering our investments in
    advanced weapons.
        In addition to these investments, we are adjusting our
    behaviors to keep pace with a world that continues to
    accelerate. We are doubling down on an approach that relies
    more heavily on experimentation and prototyping. We are
    pursuing multiple avenues to drive shorter learning cycles into
    all that we do. We must learn faster.
        To close, I want to mention that recently I had the honor
    to spend time with Senior Chief Ed Byers, who was awarded the
    Medal of Honor by the President on behalf of the Congress.
    Senior Chief Byers represents the very best of our service men
    and women. He is emblematic of this generation's continued
    commitment to our core values and to their fellow Americans.
    The SEAL [Sea, Air, Land] ethos reads in part, my loyalty to
    country and team is beyond reproach. I humbly serve as a
    guardian to my fellow Americans, always ready to defend those
    who are unable to defend themselves. I do not advertise the
    nature of my work nor seek recognition for my actions.
        Mr. Chairman, all our people want to do is protect their
    great Nation. It is my job to lead them well and prepare them
    for that task. The 2017 Navy budget is this year's best
    approach to solving the problems and seizing the opportunities
    that face the Navy today.
        I thank you and look forward to your questions.
        [The prepared statement of Admiral Richardson follows:]

                Prepared Statement by Admiral John M. Richardson
        Chairman McCain, Ranking Member Reed, and distinguished members of
    the Committee, it is an honor to appear before you today. This is my
    first of hopefully many chances to discuss the future of the United
    States Navy with you, and as your Chief of Naval Operations, I look
    forward to continuing to work closely with you to ensure that your Navy
    is best postured to defend America's interests around the globe.
        Prior to my confirmation, I testified that my most serious concern
    was the gap between challenges to America's security and prosperity and
    the resources available to protect them. In January of this year, I
    outlined this gap in more detail when I released A Design for
    Maintaining Maritime Superiority (the ``Design''), which describes an
    increasingly competitive environment and the lines of effort the Navy
    will pursue to execute our mission in that environment. The thinking in
    the Design reflects inputs from leaders inside and out of the Navy and
    is guiding our way forward. It shaped our budget submission and shapes
    my testimony below.
        The 2017 budget is this year's best approach to solving the
    problems and seizing the opportunities that face the Navy today. The
    budget reflects some constants; America has been a maritime nation
    since we began. Our prosperity continues to depend on our maritime
    security--over 90 percent of our trade is shipped over the seas--and
    this linkage will only tighten in the future. Against the backdrop of
    this historical truth, current problems and opportunities are growing
    rapidly. The maritime environment has remained remarkably constant
    since man first put to sea thousands of years ago. The oceans, seas,
    shipping lanes and chokepoints are physically unchanged in the modern
    era, but the maritime system has seen explosive growth in the past 25
    years. Traffic over the seas has increased by 400 percent since the
    early 1990's, driving and outpacing the global economy, which has
    almost doubled in the same period. Climate change has opened up trade
    routes previously closed. Access to resources on the seafloor has also
    increased, both as Arctic ice has receded and as technology has
    improved. Just as it has in the past, our future as a nation remains
    tied to our ability to operate freely on the seas.
        That maritime freedom is coming under increasing pressure and
    stress. For the first time in 25 years, there is competition for
    control of the seas. Nations like China and Russia are using their
    newfound maritime strength not only to advance their national goals,
    but also to challenge the very rules and standards of behavior upon
    which so many nations since the end of World War II have based their
    growth. We should interpret this challenge to international rules and
    order as a challenge to our own security and prosperity, and to the
    security and prosperity of all who support an open, fair architecture.
        It is against this background that I consider the gravity of the
    Navy's mission statement, as reflected in the Design:

            ``The United States Navy will be ready to conduct prompt and
            sustained combat incident to operations at sea. Our Navy will
            protect America from attack and preserve America's strategic
            influence in key regions of the world. U.S. naval forces and
            operations--from the sea floor to space, from deep water to the
            littorals, and in the information domain--will deter aggression
            and enable peaceful resolution of crises on terms acceptable to
            the United States and our allies and partners. If deterrence
            fails, the Navy will conduct decisive combat operations to
            defeat any enemy.''

        To me these words are not an abstraction, and are easiest to
    appreciate in the context of what naval forces do every day. As just
    one example, there was a day last fall when:

          The destroyer USS Donald Cook transited the
    Mediterranean, following an 11-nation multinational exercise in the
    Black Sea and a port visit to Odessa, Ukraine--demonstrating our
    commitment to our NATO allies;
          Sailors at the Navy Cyber Defense Operations Command in
    Suffolk, VA monitored intrusion prevention sensors that actively
    mitigated almost 300,000 instances of unauthorized or adversary
    activity across the Navy network enterprise, including more than 60,000
    threats to afloat networks;
          The Kearsarge Amphibious Readiness Group, with the 26th
    Marine Expeditionary Unit aboard, participated in a Turkish-led
    amphibious exercise, demonstrating our combined capability and
    physically displaying our commitment to U.S. allies and partners;
          Five ballistic missile submarines patrolled the oceans
    (the latest in over 4,000 patrols since 1960), providing 100 percent
    readiness in providing strategic deterrence;
          USS Fort Worth, a Littoral Combat Ship, swapped crews in
    Singapore after participating in a Cooperation Afloat Readiness And
    Training (CARAT) exercise with the Bangladesh Navy, developing
    cooperative maritime security capabilities that support security and
    stability in South and Southeast Asia.
          Sailors from a Coastal Riverine Squadron and an Explosive
    Ordnance Disposal unit participated in an exercise in Cambodia,
    increasing maritime security cooperation and interoperability between
    the two navies;
          Navy SEALS trained and advised Iraqi forces in the fight
    against ISIL extremists, facilitating, mentoring, and enhancing their
    ability to secure their territory;
          Members of the Navy Expeditionary Combat Command provided
    tactical intelligence training to Ghanaian Maritime Law Enforcement and
    Naval servicemembers at Sekondi Naval Base, increasing our partners'
    capacity and capability to secure their territorial waters;
          The aircraft carrier USS Ronald Reagan launched four F/A-
    18 fighters to intercept and escort two approaching Russian TU-142 Bear
    aircraft that approached as the carrier was operating in the Sea of
    Japan, operating forward to preserve freedom of action; and
          The fast-attack submarine USS City of Corpus Christi
    operated in the Western Pacific, after participating with the Indian
    and Japanese Navies in Exercise Malabar 2015, increasing our level of
    engagement with our partners across the Indo-Asia Pacific.

        All of these events occurred on a single day: October 27, 2015. But
    none were in the headlines. That is because on that day the guided
    missile destroyer USS Lassen conducted a freedom of navigation
    operation in the South China Sea, one of the many visible
    demonstrations of our international leadership and national commitment
    to preserving a rules-based international order that the Navy conducts
    routinely around the world.
        Your Navy's ability to execute these responsibilities--our
    mission--is becoming more difficult as three interrelated forces act on
    the global economic and security environments, and as new actors rise
    to challenge us. I have already described the first force--the force
    exerted by the expanding use of the maritime domain, on, over, and
    under the seas. This global system is becoming more used, stressed, and
    contested than perhaps ever before, and these trends show no signs of
    reversing.
        The second force is the rise of the global information system.
    Newer than the maritime system, the information system is more
    pervasive, enabling an even greater multitude of connections between
    people and at a much lower cost of entry. Information, now passed in
    near-real time across links that continue to multiply, is in turn
    driving an accelerating rate of change.
        The third interrelated force is the rising tempo at which new
    technologies are being introduced. This is not just information
    technologies, but also those that incorporate advances in material
    science, increasingly sophisticated robotics, energy storage, 3-D
    printing, and networks of low-cost sensors, to name just a few
    examples. The potential of genetic science and artificial intelligence
    is just starting to be realized, and could fundamentally reshape every
    aspect of our lives. As technology is developed at ever-increasing
    speeds, it is being adopted by society more quickly as well--people are
    using these new tools as quickly as they are produced, in new and novel
    ways.
        Our competitors and adversaries are moving quickly to use these
    forces to their advantage, and they too are shifting. For the first
    time in decades, the United States is facing a return to great power
    competition. Russia and China demonstrate both the advanced
    capabilities and the desire to act as global powers. This past fall,
    the Russian Navy operated at a pace and in areas not seen since the
    mid-1990's, and the Chinese PLA(N) continued to extend its reach around
    the world. Their national aspirations are backed by a growing arsenal
    of high-end warfighting capabilities, many of which are focused
    specifically on our vulnerabilities. Both nations continue to develop
    information-enabled weapons with increasing range, precision and
    destructive capacity, and to sell those weapons to partners like Iran,
    Syria, and North Korea.
        From a strategic perspective, both China and Russia are also
    becoming increasingly adept in coercion and competition below the
    thresholds of outright conflict, finding ways to exploit weaknesses in
    the system of broadly accepted global rules and standards. For example,
    Russia has continued its occupation and attempted annexation of another
    nation's territory. As perhaps the most startling example, China's land
    reclamation and militarization of outposts amidst the busiest sea lanes
    on the planet casts doubt on the future accessibility of our maritime
    domain. China is literally redrawing the map in the South China Sea by
    creating artificial islands, to which they then claim sovereign
    territorial rights, now complete with surface to air missiles and high
    performance radars. Their activity creates great uncertainty about the
    intentions and credibility of their leadership.
        Russia and China are not the only actors seeking to contest United
    States and global interests in the emerging security environment.
    Others are also pursuing advanced technology, including military
    technologies that were once the exclusive province of great powers;
    this trend will persist. Coupled with an ongoing dedication to
    furthering its nuclear weapons and missile programs, North Korea's
    provocative actions continue to threaten security in Northeast Asia and
    beyond. Iran's advanced missiles, proxy forces and other conventional
    capabilities pose threats to which the Navy must remain prepared to
    respond. Finally, international terrorist groups such as ISIL and al
    Qaeda have proven their resilience and adaptability and pose a long-
    term threat to stability and security around the world.
        In summary, these new forces have changed what it means for the
    Navy and Marine Corps to provide maritime security; the problems are
    more complex, demanding, and numerous than ever before. But our
    responsibility remains the same. Naval forces must provide our leaders
    credible options that allow them to advance the nation's prosperity,
    defend its security, further its strategic interests, assure its allies
    and partners, and deter its adversaries--which rests on the ability of
    the Navy and our sister services to decisively win if conflict breaks
    out. The breadth of challenges we face demands a range of options, and
    they must be credible. Only then can the United States effectively
    advocate as a maritime power for the system of global rules and
    standards that underpin shared prosperity now and in the future.
        It is becoming increasingly difficult for the Navy to present a
    sufficient number of credible options for leadership. While the
    predictability provided by the 2015 Bipartisan Budget Act is greatly
    appreciated, the Navy's fiscal year 2017 budget submission comes on the
    heels of four prior years' budgets that collectively provided $30
    billion less than requested levels to the Department of the Navy. It
    represents yet another reduction of almost $5 billion from 2016 funding
    levels. We have started the last six years with a continuing
    resolution, with an average duration of 120 days. In response, we have
    had to modify our behaviors with a host of inefficient practices, the
    use of short-term contracts offering less than best value to the
    government, and the associated increased workload on our shrinking
    headquarters staffs. Continuing Resolutions can also delay critical
    programs, including those with little to no margin for delay, such as
    the Ohio Replacement Program. It's worse than that: the fiscal
    uncertainty sends ripples through the entire system--the industrial
    base is hesitant to invest, and our people remain concerned about the
    next furlough or hiring freeze or overtime cap. This unpredictability
    adds to the burden on our Navy team and drives prices up.
        The challenges are increasing and funding is decreasing. America
    remains the primary leader of the free world, with the most capable
    military force on the planet. We remain a maritime nation whose future
    is inextricably tied to the seas. Our Navy has tremendous
    responsibilities to ensure that future is secure and prosperous. Within
    those constraints, our fiscal year 2017 budget proposal reflects the
    best portfolio of credible options to achieve our mission. Budget
    constraints are forcing choices that limit our naval capability in the
    face of growing and rising threats. The Navy's budget addresses our
    gaps on a prioritized basis, and starts to accelerate our capabilities
    so that we can maintain overmatch relative to our adversaries.
                    strengthen our navy team for the future
        Without question, the most important part of our budget is our
    investment in our Navy Team--our Active and Reserve sailors, our Navy
    civilians, and their families. I am pleased that we were able to
    provide a 1.6 percent pay raise for our sailors this year, outpacing
    inflation and 0.3 percent more than last year. Just as important are
    the investments we are making to improve the environment for the Team.
    As the Design makes clear, some of the biggest impacts that we can make
    on our warfighting capability do not involve a lot of money, but
    instead are changes to how we do business.
        These changes can't come soon enough. As our platforms continue to
    become more technologically advanced and missions become more complex,
    our need for talented, qualified recruits will grow. Further, the
    competition for that talent grows more intense every day. This budget
    keeps us on a good path. Our sailor 2025 program is a dynamic set of
    initiatives, process improvements and management tools designed to
    increase career choice and flexibility, provide advanced, tailored
    learning, and expand support to our Navy families. In fiscal year 2017,
    we begin to fully invest in the Sailor 2025 Ready Relevant Learning
    initiative, which will begin to create a new way of training our
    sailors through mobile, modular learning, re-engineered content, and an
    improved IT infrastructure.
        In this budget, we fund a wide range of initiatives to strengthen
    our sailors individually and as a team. The Design highlights the
    importance of our core values of honor, courage and commitment, as
    demonstrated through four core attributes--integrity, accountability,
    initiative, and toughness. We are implementing a strategy, headed up by
    our 21st Century Sailor Office, to inculcate these attributes
    throughout the fleet and improve sailor readiness and resilience. We
    continue to further develop a climate of dignity and respect throughout
    the Fleet. We also look to eliminate the toxic behaviors that destroy
    the fabric of the team--including sexual harassment and assault, hazing
    and alcohol abuse. We have increased funding over the FYDP to address
    sexual assault prevention and response, adding 24 new positions to the
    Naval Criminal Investigative Service--on top of 127 additions in the
    previous two years--to speed investigations while continuing our
    support for programs aimed at prevention, investigation,
    accountability, and support for survivors such as the Victim Legal
    Counsel Program.
        As we seek greater efficiencies, planned adjustments allow us to
    take modest reductions (3,600 sailors in fiscal year 2017) in our
    active duty end strength. These are consistent with advances in
    training methods and with standing down the Carrier Air Wing 14. There
    will be no reductions in force or any other force-shaping initiatives--
    we will achieve this through natural attrition. Nobody will lose their
    job.
        One of my observations since taking office is that we can do more
    to increase the synergy between our military and civilian workforces.
    Your Navy civilians are integral to all that we do. They work in our
    shipyards and aviation depots, provide scientific and technical
    expertise in our labs, and guard our bases and other facilities. To
    respond to increasing security concerns, we have invested this year in
    increased force protection measures, including in those civilians who
    keep our people and property safe. Some of the maintenance and
    readiness shortfalls we are still digging out from were made worse by
    civilian hiring and overtime freezes and a furlough in fiscal year
    2013. Worse, these actions strained the trust within our team. This
    budget adds a net of over 1,300 civilian positions in fiscal year 2017
    to support additional maintenance, enhance security, and operate our
    support ships, and continues the investments in our civilian shipmates
    that help to forge one seamless team. Even as we implement these key
    initiatives to address security and to recover readiness, we balance
    that growth with reductions over the FYDP of 3,200 FTE (1.8 percent),
    for a net reduction of 1,900.
                   strengthen naval power at and from the sea
        That team, with our Marine Corps partners, is committed to our
    mission, which must be conducted in the environment I described above.
    The Design calls for us to strengthen naval power at and from the sea
    to address the growing scale, congestion, and challenge in the maritime
    domain. The Ohio Replacement Program (ORP) is paramount to that effort,
    and remains our top priority. In my opinion, it is foundational to our
    survival as a nation. This budget funds the ORP; construction is
    planned to start in fiscal year 2021. This start date is vitally
    important to prevent any impact to continuous at-sea deterrence at a
    time when it could be even more relevant than today.
        To the maximum extent possible, we have also prioritized
    shipbuilding and the industrial base that supports it. Our current
    fleet of 272 ships is too small to meet the array of mission
    requirements our nation demands. In this budget, we remain on a path to
    achieve 308 ships by 2021. This year, we are funding two advanced
    guided missile destroyers with upgraded radars (DDG Flight IIIs with
    SPY-6), two Virginia-class attack submarines, two Littoral Combat
    Ships, and the procurement of an amphibious assault ship replacement
    (LHA(R)). The Ford carrier remains under its cost cap and will deliver
    in 2016; we are continuing to exercise strong oversight and discipline
    to ensure the cost of her sister ships Kennedy and Enterprise also
    remain under budget. We have exceeded our shipyard investment goal--
    we're at 8.1 percent, well beyond the 6 percent legislative
    requirement.
        As the Design emphasizes, we are fully committed to further
    ingraining information warfare into our routine operations. This is
    essential to the Navy's future. For example, we are increasing
    procurement of the Surface Electronic Warfare Improvement Program
    (SEWIP) Block II and III by 45 units. We are also investing in network
    modernization afloat and ashore through 10 installations of the
    Consolidated Afloat Networks and Enterprise Services (CANES) system in
    fiscal year 2017.
        To help remediate one of our most stressed areas, we have enhanced
    our investments in the naval aviation enterprise. We are investing in
    bringing fifth generation aircraft to the fleet, adding ten F-35Cs over
    the FYDP. We are also replacing F-18 airframes that are meeting the end
    of their projected service lives faster than projected, adding 16F/A-18
    E/Fs over the next two years. Further, we are adding upgrades to the
    Super Hornet to make it more capable in a high-end fight. We are
    updating our strategy to more rapidly integrate unmanned aerial
    vehicles into our future air wing. Revisions to our unmanned carrier-
    launched airborne surveillance and strike (UCLASS) program will help us
    to meet current mission shortfalls in carrier-based surveillance and
    aerial refueling capacity, and better inform us about the feasibility
    of future additional capabilities we desire.
        To meet an increasingly lethal threat, this budget bolsters our
    investments in advanced weapons across the FYDP. We are buying 100
    additional tactical Tomahawks, 79 more air-to-air AMRAAM missiles,
    additional sea-skimming targets, and accelerating our investments in
    SM-6 missile development in order to provide a full range of capability
    enhancements to the fleet. However, budget pressures also caused us to
    cut other weapons investments such as the Mk-48 torpedo and AIM-9X air-
    to-air missile. Many of our production lines are at minimum sustaining
    rates, and the low weapons inventory is a continuing concern.
                 achieve high velocity learning at every level
        All of these investments will deliver important capabilities to
    better posture us for the current and future environment. But, as or
    more importantly, we must also adjust our behavior if we are to keep
    pace with the accelerating world around us.
        This budget reflects some of that increase in pace. We are changing
    how we approach training and education to take advantage of new tools
    and to push learning out to where our sailors spend the bulk of their
    time--their units. The intent is not to burden those units more, but to
    empower their leaders and give sailors the best tools to support what
    science is increasingly revealing about how people learn most
    effectively.
        It also means that Navy leaders, up to and including me as the CNO,
    must exercise full ownership of how we develop and acquire new
    capabilities for the future. That ownership has four elements:
    authority, responsibility, accountability, and technical expertise. I
    am committed to exercising that ownership, and to creating or
    supporting new ways to exercise it faster.
        We are doubling down on an approach that relies more heavily on
    experimentation and prototyping, connected at the hip with the Fleet,
    to help meet mission needs while simultaneously helping us to better
    define our requirements. We are pulling our more ambitious projects
    closer to the present so we can learn our way forward, faster and with
    better information. We are taking this approach with the Remote
    Minehunting System, Large Displacement Unmanned Undersea Vehicle
    (LDUUV), and UCLASS programs, and we will continue to seek additional
    programs to which it can be applied.
        We are also reexamining our processes and organization to ensure
    they are best aligned to support a faster pace. This budget includes a
    small amount of funding for the Rapid Prototyping, Experimentation, and
    Demonstration initiative, a process we have already begun to implement
    that ``swarms'' technical experts to Fleet problems, rapidly generates
    operational prototypes, and gets them into the hands of sailors and
    marines so we can continue to refine and improve them. We also are
    standing up a capability along the lines of the Air Force's Rapid
    Capabilities Office; we'll call it the Maritime Accelerated
    Capabilities Office (MACO). This will concentrate requirements,
    technical, and acquisition expertise on high-priority projects to fast-
    track their development and fielding.
        Finally, Congress has rightly pressed us to reexamine whether we
    are being as efficient as we can be. Our budget reflects some of the
    efforts that we are taking in that regard, but fundamentally, we are
    focused on making every dollar count. I am taking a personal role in
    that process, asking hard questions and pushing us to become more cost-
    effective and agile as we apply a learning-based approach to all that
    we do.
                                   conclusion
        This year's budget request represents a portfolio of investments
    that employ our available resources to best effect. The gap between our
    responsibilities and our funding levels represents risk--risk of
    sailors' lives lost, of a weakened deterrent, of a slower response to
    crisis or conflict, of greater financial cost, of uncertainty for our
    international partners--all of which affect the security and prosperity
    of America. While it is impossible to quantify this risk precisely, I
    believe the balance reflected in this proposal improves our prospects
    going forward.
        Such improvements are much needed. Concurrent with increasing
    global challenges, budget pressures have led the Navy to reduce our
    purchases of weapons and aircraft, slow needed modernization, and
    forego upgrades to all but the most critical infrastructure. At the
    same time, maintenance and training backlogs--resulting from continued
    high operational tempo and exacerbated by sequestration in 2013--have
    delayed preparation for deployments, which in turn has forced us to
    extend units already at sea. Since 2013, eight carrier strike groups,
    four amphibious readiness groups, and twelve destroyers have deployed
    for eight months or longer. The length of these deployments itself
    takes a toll on our people and the sustainability and service lives of
    our equipment. Further, these extensions are often difficult to
    anticipate. The associated uncertainty is even harder on sailors,
    marines, and their families and wreaks havoc on maintenance schedules,
    complicating our recovery still further.
        We cannot continue to manage the risks we face absent broader
    change. As CNO, I will strive to keep the U.S. Navy on the road to
    remaining a force that produces leaders and teams who learn and adapt
    to achieve maximum possible performance. We will achieve and maintain
    high standards to be ready for decisive operations and if necessary, to
    prevail in combat. We will fight for every inch of advantage. In this
    way, we will provide sufficient, credible, options to leadership in
    order to guarantee America's security and prosperity now and into the
    future. I very much look forward to working with you and your fellow
    Members of Congress as we proceed.

        Chairman McCain. Thank you.
        Admiral Richardson and General Neller, the fiscal year
    request for the Navy is 5 percent less than last year, $8
    billion less. What does that do to readiness, Admiral?
        Admiral Richardson. Sir, our readiness continues to be
    challenged. I prioritized, in terms of allocating our readiness
    dollars, that our forward-deployed forces will be ready to
    deploy. In terms of achieving readiness in our Reserve forces,
    those forces that will provide reinforcements, we continue to
    see that recovery date move out to the right as we are able to
    meet our current bills projecting a current-day readiness.
    Digging out of that debt is something that moves forward.
        Chairman McCain. General?
        General Neller. In order to make up the delta, Chairman, we
    took some risk in the facilities and some other things also in
    O&M [Operations and Maintenance]. There was some reduction in
    some exercises that we are able to do. But we did our very best
    to fund our readiness accounts for both ground and aviation so
    that we can sustain and improve our overall readiness. I
    think----
        Chairman McCain. General Dempsey testified before this
    committee that if we continued sequestration, it would put us
    on the ragged edge of readiness and ability to defend the
    Nation. Do you agree with what General Dempsey said?
        General Neller. I would agree that if we end up at
    sequestration levels, yes, Chairman, that we will be there.
        Chairman McCain. We put you into the acquisition equation,
    both you and Admiral Richardson. Has that been a good thing?
        General Neller. I think it has been a good thing, Chairman.
    I spend a lot of time talking to our acquisition people and Mr.
    Stackley, the acquisition professional for the Department of
    the Navy, and we have conversations whether it is amphibious
    ships or amphibious combat vehicles or ground tactical
    vehicles. I spend a lot of time talking about where we are
    programmatically, and I understand----
        Chairman McCain. It has helped.
        General Neller. It has.
        Chairman McCain. Admiral?
        Admiral Richardson. Senator, I would agree with General
    Neller. It has helped a great deal, and I look forward to
    taking some major steps in exercising those authorities, and I
    look forward to doing more.
        Chairman McCain. Admiral, the LCS, the Remote Multi-Mission
    Vehicle--we have spent over $700 million of taxpayers' money
    over the last 17 years. Is your new role in acquisition going
    to cure outrages such as this $700 million over 17 years? It is
    still not ready.
        Admiral Richardson. Sir, you have got my complete
    commitment that I will be involved in the details and will do
    everything I can to prevent those types of decisions.
        Chairman McCain. We can count on the carrier not to
    experience continued cost overruns?
        Admiral Richardson. Sir, I think for the last few years, we
    have seen that the carrier cost has come under control. The
    future carriers are also coming in under their cost caps. We
    have the disciplined processes in place and the oversight to
    keep it that way.
        Chairman McCain. There has been a proposal for a separate
    kind of fund to accommodate for all the new construction,
    particularly the new submarine. Do you support such an idea?
        Admiral Richardson. Sir, the National Sea-Based Deterrence
    Fund--I have got to say that I really endorse what that fund
    stands for, which is that we are taking this extremely
    important program, a nationally important program and elevating
    the discussion to a national level.
        Chairman McCain. Well, we want the discussion to be at a
    national level, but I am not sure every new weapon system then
    would not warrant the same kind of special treatment. That is
    the dilemma here.
        Admiral, there is a new report out just today. Iran state
    TV says the country has retrieved thousands of pages of
    information from devices used by 10 United States Navy sailors
    briefly detained by Iran in January. The Tuesday report quotes
    General Ali Razmjou saying the information was retrieved from
    laptops, GPS [Global Positioning System] devices, and maps.
    Razmjou is naval commander [of the Second Naval Zone] in the
    powerful Revolutionary Guard. General Razmjou said the move
    falls within Iran's rights under international regulations. Do
    you agree with that?
        Admiral Richardson. I do not, sir. According to
    international law, there was no authority to board those
    vessels. Those were sovereign U.S. vessels. They had the right
    to be where they were, and they should not have been seized.
        Chairman McCain. As you mentioned, against international
    law. They interviewed a military man apologizing. They put them
    on their knees with their hands behind their heads. They then
    also videoed an individual crying. Then they decorated the
    people--the Iranians that did it. Then they had a parade.
        What do you think we should have done in response to all
    that, Admiral Richardson? Would you not agree that this was a
    humiliation for the most powerful nation on earth, the United
    States of America?
        Admiral Richardson. Sir, I think the Navy has been very
    clear in terms of expressing our complete protest----
        Chairman McCain. That was sufficient, expressing a protest.
        Senator Reed?
        Senator Reed. Well, thank you very much, Mr. Chairman.
        I want to first thank the Secretary for his distinguished
    service over many years. I was just thinking. Are you the
    longest serving Secretary of the Navy or will you be?
        Mr. Mabus. I am the longest serving since World War I.
    Josephus Daniels, who served during World War I, has the record
    that I do not think anybody will touch.
        Chairman McCain. He became famous for banning alcohol on
    board Navy ships.
        [Laughter.]
        Mr. Mabus. I am hopeful my legacy will be a little brighter
    than that.
        Senator Reed. I think he was most famous because his
    assistant secretary of the Navy was Franklin Roosevelt, but
    that is another story entirely.
        Mr. Mabus. It is where sailors would say very sarcastically
    let us go get a cup of Josephus. It is where ``a cup of Joe''
    came from because alcohol got replaced with coffee, as you as a
    Navy veteran and me as a Navy veteran know very well.
        Senator Reed. Thank you, Mr. Secretary.
        I also note that the Petty Officer of the Navy, Master
    Chief Stevens is here. Chief, thank you and thank you for all
    of the non-commissioned officers that make up our Navy and all
    the men and women of the Navy.
        I want to follow up on a point, Mr. Secretary, that the
    chairman raised, which is critical, which is the need for the
    Ohio-class replacement, but the need also for a scrupulous
    budget process that ensures we do not see some of the
    repetition of cost overruns we saw in other programs.
        Last year, in the Defense Authorization Act at section
    1022, we took the fund, which the Admiral was just asked about,
    and expanded authorities to include incremental funding,
    economic order quantity, et cetera. We also asked for a report
    from the Navy with respect to the fund.
        Let me just--several issues for both you and Admiral
    Richardson.
        First, it has been, I presume--but I would like you to
    confirm. This is the number one modernization priority of the
    Navy. Is that correct, Mr. Secretary?
        Mr. Mabus. Yes.
        Senator Reed. Then the expanded authorities under the
    National Sea-Based Deterrence Fund--Admiral Richardson and Mr.
    Secretary, you support those enthusiastically I hope.
        Admiral Richardson. Sir, I think that to recapitalize this
    extremely important program, our number one program--I look
    forward to the combination of appropriations and authorities to
    get this job done.
        Senator Reed. The point I think you made, Admiral
    Richardson, is this sort of falls outside the just traditional
    Navy shipbuilding because this is part of our nuclear triad,
    which is the strategic defense of the United States. In fact, I
    would anticipate down the line, as other components, the air
    and land components, come on, they would have the benefit of
    some type of national defense support also.
        Admiral Richardson. Sir, it seems to make sense.
        The other thing that sets this apart, not only its
    importance, but the fact that we only do this generationally.
    It is something that happens about--it has been 40 years since
    we built the Ohio-class.
        Senator Reed. Is there any idea about when we can expect
    that report coming up under section 1022 of the Defense Act?
        Mr. Mabus. I will give you a definitive answer very soon.
        Senator Reed. Yes, thank you.
        Mr. Mabus. But on the cost, I do want to point out that so
    far we have taken $10 billion out of this program going
    forward: $8 billion in terms of construction costs, about a
    billion dollars in operational maintenance, and about a billion
    dollars in non-recurring engineering. We want every one of
    these boats to come in under $5 billion in then-year dollars.
        Senator Reed. Thank you, Mr. Secretary.
        Mr. Secretary, also I mentioned in my opening comments the
    difficult choice with respect to the V-22. Can you give us some
    context? I know none of these choices are easy because of the
    constraints that you face.
        Mr. Mabus. Senator, it is my understanding that while the
    Marine part of the V-22 contract is ending, the Navy part, the
    carrier onboard delivery, the COD replacement, is picking up.
    It was certainly not our intent to break the multiyear. In
    fact, we thought we were folding this under the multiyear. If
    we inadvertently are breaking the multiyear, that was certainly
    not our intent. The Marines in their unfunded priority list
    have additional V-22's that they would also like to procure.
        Senator Reed. Finally, General Neller, let me just thank
    you for your service and the service of the men and women in
    the Corps.
        Just a comment is that you are right now trying to get the
    ACV out the door, and it builds on our experience with the
    expeditionary fighting vehicle, which was not a happy time.
    Like the chairman, I hope your personal involvement in the
    acquisition process and your efforts can get this system to the
    Corps as quickly and as cost-effectively as possible.
        General Neller. Senator Reed, I was involved with the EFV
    [Expeditionary Fighting Vehicle] and I understand the concern
    on the cost. This is a totally different approach using
    commercial, off-the-shelf vehicles. We are hopeful that the
    protest will get resolved so that the two vendors will be able
    to provide 16 vehicles each and we will be able to down-select
    to a single vehicle from there and buy these vehicles. I will
    be watching very closely the schedule and the cost of these
    vehicles.
        Senator Reed. Thank you very much, sir. Thank you, General.
        Chairman McCain. Senator Sessions?
        Senator Sessions. Thank you, Mr. Chairman.
        Admiral Richardson, it is conventional thought, is it not,
    that the triad is important? This administration supports the
    entire triad, but the Ohio submarine replacement program would
    be critical to that and perhaps the most important part of it
    for our national security.
        Admiral Richardson. Sir, I think all the legs of the triad
    are critically important. Ours is obviously--the one we are
    focused on is the sea-based leg, which will carry 70 percent of
    the warheads in the future.
        Senator Sessions. I know that we have challenges with
    financing because we are going to have a number of big programs
    that are going to arise at that same time.
        But, Mr. Secretary, you would remain committed to moving
    forward, would you not, with the Ohio replacement? Also the
    fact that it is now not going to have to be refueled would be
    another cost saver in the years to come.
        Mr. Mabus. That is correct. We only have to build 12
    instead of 14 because it does not have to be refueled.
        Senator Sessions. Now, Mr. Secretary, the Navy analysis for
    the littoral combat ship has gone on for quite a long time. It
    started in the 1990's. I remember Admiral Vern Clark, CNO,
    advocated this. We had the requirement of 55, and then we went
    to 52. This is a requirement that arose in the Navy and has
    been maintained by every CNO and every Secretary of the Navy
    since, I guess, the program began.
        How do you decide that this is a requirement for the Navy?
    Is there not a formal process you go through?
        Mr. Mabus. There is, Senator. It is called the Force
    Structure Assessment. The last one we did--well, we did one in
    2012, which revalidated the need for 52. That was refreshed in
    2014, which also validated the need for 52 small surface
    combatants. We are in the process now of doing another Force
    Structure Assessment.
        Senator Sessions. Well, you had the fleet recommendations,
    the combatant commander's recommendations, worldwide
    requirements all considered. Is that correct?
        Mr. Mabus. That is correct. All requirements are
    considered.
        Senator Sessions. Well, how is the production on the ship
    going now? Is it at or below the congressional cap for cost?
        Mr. Mabus. It is a good bit below. The first concern--and
    rightfully so--was on cost. The price of ships coming off the
    line today is about 50 percent of the first ones that came off
    the line.
        Senator Sessions. Historically the first ship in its class
    and the second one probably are more expensive than when you
    move along. It seems to me, having seen that shipyard line
    being produced, that ship being produced now, it is moving out
    at a really fine pace. The bugs are getting out of it,
    virtually all gone. It is coming through an assembly line
    almost like an automobile.
        I fear that we are going to end up raising the cost per
    copy if we reduce the number of ships and we end up like we did
    with the B-2 and a lot of other programs. Congress says we are
    going to do this. The Navy sets out to achieve the goal, and
    then we alter the plan. Is there a danger that cost per copy
    would go up?
        Mr. Mabus. I think it is almost a certainty, that if you
    reduce numbers, the cost per copy will go up.
        Senator Sessions. There are a lot of capabilities that the
    ship has. They are putting modules on it. One of the modules is
    the anti-submarine capability. Admiral Richardson, I know you
    are not happy with where we are on that. Does this strike a
    blow first at the validity of the ship? Number two, is it a
    challenge you think cannot be overcome? It is a technological,
    high-tech challenge. Is it something that we can fix?
        Admiral Richardson. Sir, we can fix this. We are behind on
    the testing there. It is not where I want it to be. I just
    commissioned, with Secretary Stackley, a 60-day study on the
    future of the program to incorporate the lessons that we have
    learned to date, but this is nothing that cannot be overcome.
        Senator Sessions. We absolutely have to have an improved
    anti-mine system. Do we not?
        Admiral Richardson. We do, yes, sir.
        Senator Sessions. That is one of the bases for the littoral
    combat ship in its original plan.
        Admiral Richardson. That is one of its missions, yes, sir.
        Senator Sessions. Well, I hope we can get to the 308-ship
    Navy, but I do not know how we will get there if we lose
    another 12 ships. If you replace it with a ship that costs two
    or three times as much, that is going to be difficult. It also
    is lean in terms of fuel use and low crew, 40-60 crew to
    operate the ship compared to 200 or so for the next destroyer
    type ship. I am concerned about this and I hope that we can
    continue to discuss it as time goes by.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Shaheen?
        Senator Shaheen. Thank you all very much for being here
    today and for your service to the country.
        Admiral Richardson, I want to start with you and ask about
    the status of the Virginia payload module because I understand
    that the hope is that it will address the loss of strike
    capability with the retirement of four guided missile
    submarines. Can you talk about that a little bit and what the
    current status of the program is?
        Admiral Richardson. Yes, ma'am. That is exactly right. Our
    SSGNs, the submarines that carry large loads of Tomahawk
    missiles, are going to retire in the mid to late 2020's, and
    our plan is that by building Virginia-class submarines with the
    payload module installed, we increase the Tomahawk load by 28
    missiles per submarine. That program is on track to be
    incorporated in the Virginia-class program in fiscal year 2019.
    We will do one in that year and two per year after that,
    consistent with the Virginia-class buy. That is really just the
    beginning of that program, ma'am. Not only will it allow us to
    reconstitute our strike capacity, but with that much payload
    volume and large ocean interfaces, we can also do special
    operations forces, unmanned vehicles, a host of other options.
        Senator Shaheen. Can you talk about the cost effectiveness
    of doing that?
        Admiral Richardson. It is extremely cost-effective to add
    that type of capability into a program that is healthy. We need
    to make sure that we abide by those practices which allow us to
    achieve and maintain cost-effectiveness.
        Senator Shaheen. Give me a comparison, if you would. Why
    does that make more sense than some other options we might
    have?
        Admiral Richardson. Well, you are just really talking about
    a smaller incremental cost on an already healthy program by
    inserting that module rather than designing in a completely new
    program to reconstitute that. As well, by distributing these
    over more than the four SSGNs we have right now, you not only
    do it in a fiscally responsible but you increase the options to
    the warfighter as well.
        Senator Shaheen. Thank you.
        Secretary Mabus, in your recent testimony before the House
    Appropriations Subcommittee, you pointed out that the Navy has
    a maintenance backlog problem. Obviously, one of the areas that
    has been challenging has been in our public shipyards, and as
    someone who represents the Portsmouth Naval Shipyard, I know
    that that has been an issue, but one that I was very pleased to
    see that the administration put in more than the goal of 6
    percent for maintenance.
        Can you talk about what you expect this year in the budget
    and whether you will actually be able to use that entire
    recommendation from the administration for the 7 percent?
        Mr. Mabus. Thank you, Senator.
        First, Portsmouth and all our public shipyards are doing a
    terrific job. They were caught, as were so many other things,
    in sequester, the hiring freeze, and there was this maintenance
    backlog that built up that we are gradually reducing. As you
    pointed out, we went above the mandatory 6 percent to try to
    ease that. We are also hiring to the level that those public
    shipyards need: 33,500 total employees in those shipyards. We
    will certainly be able to use these monies in Portsmouth and in
    the other public shipyards. It will allow us to reduce that
    backlog. Right now, under the current budget, we think we will
    be completely out from that backlog by 2019, so 3 years from
    now.
        Senator Shaheen. That is great.
        You also have talked about, from the posture hearing last
    week, that SOUTHCOM [United States Southern Command] is short
    on surface vessels. As you may know, we have had a real
    challenge in the State of New Hampshire and throughout the
    country in terms of heroin and the extent to which heroin is
    affecting our communities and families. I just wonder if you
    could talk about what progress in combating trafficking of
    narcotics you have seen with the Navy's involvement and whether
    the shortfall of surface ships in SOUTHCOM might help with
    this, if we could address that shortfall.
        Mr. Mabus. Well, it one of the reasons that we remain so
    committed to building the fleet to get to that force structure
    assessment of 308 ships because certainly drug interdiction,
    the other things we do with our partners in South America and
    in the Caribbean is a large part of that.
        We simply have not had the fleet, as the chairman pointed
    out. It takes a long time to build a Navy ship and to build a
    fleet. Once it declines, it takes a long time to turn it
    around. But we are trying using different types of ships,
    things like the expeditionary fast transport down there which
    has the speed to interdict. As the fleet grows, you are going
    to see more naval assets in SOUTHCOM.
        Senator Shaheen. Well, thank you. Obviously, that will be
    very important to help us deal with this epidemic.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ayotte?
        Senator Ayotte. Thank you, Chairman.
        I want to thank you, Secretary Mabus and Admiral
    Richardson, for including in your request for funding for 2017
    for the new junior enlisted barracks at Portsmouth Naval
    Shipyard. Thank you for really making sure that we prioritize
    that because I know the conditions were not good there. I am
    very appreciative of that and thank you.
        I also wanted to ask both of you. You both mentioned in
    your written testimony the large displacement unmanned
    underwater vehicles. Secretary Mabus, I note that you said in
    your prepared testimony that you are going to begin to have
    these vehicles take on some missions in 2022.
        As these UUV's are fielded to ensure that we are using our
    resources wisely, I would encourage the Navy to utilize
    existing public shipyard infrastructure where possible to
    support the engineering, technical problems, logistics, and
    maintenance because you have some expertise there that I think
    you can take advantage of. Obviously, with the budget
    situation, to the extent we can use the expertise that exists
    at our shipyards--and obviously, the Portsmouth Naval Shipyard
    has some tremendous expertise.
        Admiral Richardson and Secretary Mabus, will you be looking
    for opportunities to use our existing capabilities and
    expertise as we continue to develop the unmanned underwater
    vehicles that I know that we are going to be developing to help
    defend the Nation?
        Mr. Mabus. Yes.
        Senator Ayotte. Great.
        Admiral Richardson. Yes, we have absolutely. Particularly
    the team at Portsmouth has some deep skills in deep
    submergence, submarine rescue types of things, exquisite types
    of capability there that we will be turning to.
        Senator Ayotte. That would be great, Admiral. I know they
    are anxious to partner with you on this and hope to be able to
    give some assistance to you as we further develop this area to
    defend the Nation. I appreciate it.
        I also wanted to ask about a report that, Admiral
    Richardson--in October of 2015, the New York Times reported
    that Russian submarines and spy ships are aggressively
    operating near the vital undersea cables that carry almost all
    of our global Internet communications, raising concerns among
    some American military and intel officials that the Russians
    might be planning to attack those lines in times of tension or
    conflict.
        What is your assessment of what is happening in terms of
    Russian intentions and activity related to undersea cables?
    Obviously, this is very important in terms of our
    communications system. To the extent you can talk about it in
    this setting, what are we doing from the Navy perspective to
    protect those assets?
        Admiral Richardson. Ma'am, you are exactly right. About 99
    percent of our international transatlantic Internet traffic
    rides on those cables, and that cannot be reconstituted if that
    gets disrupted. We are, obviously, taking that threat very
    seriously. It is extremely difficult to talk about any of that
    in this forum, but I would welcome the chance to talk to you
    and give you the full classified brief.
        Senator Ayotte. We will set that up. I appreciate it.
        Admiral Richardson. Yes, ma'am.
        Senator Ayotte. Also, not to pick on you today, but I did
    have a follow-up question either to you or Secretary Mabus, and
    that is related to our attack submarine fleet.
        What I wanted to understand is what our current
    requirements are for the attack submarine fleet and when the
    requirement was established and also what percentage of
    combatant commander requests for attack submarines is the Navy
    currently meeting.
        Admiral Richardson. Yes, ma'am. Our current requirement is
    for 48. That level I think was established in 2006. Whether I
    am off by a year or 2, it was a long time ago, and the security
    environment has changed a great deal since then. I commissioned
    a study to reassess that level this year.
        Currently, as you know, ma'am, the attack submarine profile
    will dip below that requirement of 48 submarines in the 2020's.
    That has got us very concerned. We able to meet about 50 to 60
    percent of combatant commander demands right now, and so it is
    a very high demand asset.
        Senator Ayotte. Mr. Secretary?
        Mr. Mabus. It is an example, Senator, of when you miss a
    year building a ship, because we missed some years--we only
    built one submarine instead of two--you just do not make that
    up. That is why we are committed to two submarines per year. We
    have got a multiyear----
        Senator Ayotte. That is what is critical as we look at 2022
    where we dip to one Virginia-class, that we have got to figure
    out that we can build two.
        Mr. Mabus. One of the things that we are trying to figure
    out----
        Senator Ayotte. Sorry. 2021.
        Mr. Mabus. 2021 because that is the year the Ohio-class
    replacement starts. But you are absolutely right. We are
    working on how to get the capability and the capacity to do two
    Virginia's- and the Ohio-class at the same time. I am confident
    that will part of the 2018 budget.
        Senator Ayotte. That is excellent. We look forward to
    working with you on that. I think it is critical as well, as we
    look at the need out there.
        I appreciate, Admiral, that you are already undertaking a
    reexamination because, as you have rightly pointed out,
    conditions have completely changed since 2006, and we know of
    existing threats that are out there that really increase our
    need for capacity. We appreciate it.
        Thank you, all of you.
        Chairman McCain. Senator Donnelly?
        Senator Donnelly. Thank you, Mr. Chairman.
        I thank all the witnesses for your being here and for the
    Master Chief as well.
        Admiral Richardson, as you know, Indiana is home to Naval
    Surface Warfare Center-Crane. The foremost mission of the lab
    is supporting the Navy's strategic weapons system, and given
    the priority of nuclear modernization, I wanted to invite you
    to Crane, if you can make it out there.
        Admiral Richardson. Sir, I will put it on the list as a
    priority.
        Senator Donnelly. Thank you very much.
        Secretary Mabus, in regards to mental health, I am
    concerned our services are not adequately staffed to provide
    troops with ready and timely access to mental health care.
    Every quarter, the Navy submits reports that use the current
    number of Navy mental health providers for both the number of
    providers required and the number authorized. As we look at
    this, I would like to see the Navy's last four quarterly
    reports on mental health requirements and staffing, if you can
    provide that for us.
        Mr. Mabus. I will do that right away, Senator.
        Senator Donnelly. Very good. We would also like an
    explanation, as you look at that, on how you calculate your
    mental health staffing requirements and your recommendations
    for whether and how we can modify the PHRAMS [Psychological
    Health Risk-Adjusted Model] or another model to better meet the
    Navy's needs, if you can do that.
        Mr. Mabus. We will do that, Senator.
        [The information referred to follows:]

        Senator Donnelly, as you requested, here are the last four
    quarterly reports on our mental health requirements. In addition, I
    believe that it is important to discuss our approach and growth in
    mental health staffing over the past server years, which is included
    below the reports.
        The fiscal year 2015 second quarter staffing numbers are:

    ----------------------------------------------------------------------------------------------------------------
                                                                  MIL                 CIV             CONTRACTOR
    ----------------------------------------------------------------------------------------------------------------
    Psychologist........................................      84% (140/166)       78%  (95/122)       84% (102/122)
    Psychiatrist........................................      91% (108/119)        86%  (37/43)       99%  (24/25)
    Social Worker.......................................      99%  (73/74)        82%  (85/104)       80%  (73/91)
    Mental Health Register Nurse........................     145%  (64/44)        33%  (12/36)        92%  (81/88)
    Mental Health Nurse Practitioner....................     133%  (32/24)        33%   (1/3)        100%   (9/9)
    Other Licensed MH Provider..........................  ..................      70%  (19/27)        93%  (39/42)
    Technician/Counselor................................     116% (434/373)      158%  (38/24)        90% (200/221)
    ----------------------------------------------------------------------------------------------------------------

        The fiscal year 2015 third quarter staffing numbers are:

    ----------------------------------------------------------------------------------------------------------------
                                                                  MIL                 CIV             CONTRACTOR
    ----------------------------------------------------------------------------------------------------------------
    Psychologist........................................      87% (146/167)       79%  (97/122)       84% (100/119)
    Psychiatrist........................................      98% (118/120)       91%  (39/43)        81%  (21/26)
    Social Worker.......................................      99%  (73/74)        83%  (86/104)       82%  (71/87)
    Mental Health Register Nurse........................     136%  (60/44)        33%  (12/36)        88%  (76/86)
    Mental Health Nurse Practitioner....................     146%  (35/24)        33%   (1/3)        100%   (8/8)
    Other Licensed MH Provider..........................  ..................      59%  (16/27)        95%  (39/41)
    Technician/Counselor................................     114% (426/373)      154%  (37/24)        90% (199/220)
    ----------------------------------------------------------------------------------------------------------------

        The fiscal year 2015 fourth quarter staffing numbers are:

    ----------------------------------------------------------------------------------------------------------------
                                                                  MIL                 CIV             CONTRACTOR
    ----------------------------------------------------------------------------------------------------------------
    Psychologist........................................      87% (148/167)       79% (103/132)       81%  (93/114)
    Psychiatrist........................................      94% (113/120)       86%  (38/48)        77%  (24/31)
    Social Worker.......................................     101%  (75/74)        78%  (83/106)       70%  (62/89)
    Mental Health Register Nurse........................     136%  (60/44)        38%  (14/37)        88%  (71/81)
    Mental Health Nurse Practitioner....................     146%  (35/24)        25%   (1/4)         99%  (10/11)
    Other Licensed MH Provider..........................  ..................      61%  (17/28)        94%  (30/32)
    Technician/Counselor................................     115% (428/373)      132%  (37/28)        88% (177/202)
    ----------------------------------------------------------------------------------------------------------------

        The fiscal year 2016 first quarter staffing numbers are:

    ----------------------------------------------------------------------------------------------------------------
                                                                  MIL                 CIV             CONTRACTOR
    ----------------------------------------------------------------------------------------------------------------
    Psychologist........................................      98% (164/166)       88% (105/132)       77%  (96/124)
    Psychiatrist........................................      84% (109/129)       86%  (36/48)        61%  (17/28)
    Social Worker.......................................     101%  (77/76)        76%  (81/106)       78%  (70/90)
    Mental Health Register Nurse........................     134%  (59/44)        33%  (12/36)        92%  (81/88)
    Mental Health Nurse Practitioner....................     133%  (32/24)         0%   (0/4)         99%   (9/10)
    Other Licensed MH Provider..........................  ..................      64%  (18/28)        95%  (35/37)
    Technician/Counselor................................     107% (409/380)      132%  (37/28)        91% (188/206)
    ----------------------------------------------------------------------------------------------------------------

        Our end strength is driven by Operation Plans. We assign the active
    duty staff in locations where they can best serve active duty needs,
    and concurrently maintain skills and proficiencies needed for an
    operational assignment. As part of this effort, we place providers,
    including mental health staff, in operational units to improve access
    and service.
        We augment AD staff with civilians, either Government Service or
    contract, based on enduring demands; for example, our ability to
    recruit in specific markets to meet in-garrison demand by monitoring
    patient workload, access, and the capacity of the TRICARE network. As
    such and in response, we have grown 195 active duty and GS civilian
    mental health staff in the specialties of psychiatry, clinical
    psychology, social worker, mental health nurse practitioner, and mental
    health nurses from fiscal years 2009 through 2015. This has enabled us
    to meet the fiscal year 2010 NDAA section 714 requirement to grow
    mental health providers by 25 percent.
        Senator Donnelly, thank you for the question on how we calculate
    our mental health staffing requirements. It is important that Congress
    understands that the Operation Plans drive our uniformed requirements
    and our Military Treatment Facilities serve as our readiness platforms
    to provide a ready force at a moment's notice. This requirement is
    complemented with the need to maintain skills and proficiencies at our
    Military Treatment Facilities needed for an operational assignment and
    ensure that we are optimizing our wartime requirement when in garrison.
        Over this past year, the Tri-Service Manpower Workgroup, the
    Manpower and Personnel Operations Group and the Medical Deputies Action
    Group have worked to develop metrics to optimize and synchronize our
    manpower requirements across the MHS for peacetime service to the
    warfighter.
        While there are workload-based outputs, the Tri-Service Manpower
    Workgroup has determined that the Psychological Health Risk Adjusted
    Model for Staffing (PHRAMS) does not accurately project the mental
    health needs of each Service's total overall mission, nor does it
    accurately account for operational requirements or emerging mental
    health needs.
        The Navy recommends that the Services continue to evaluate the
    existing PHRAMS tool as a potential supplemental methodology to support
    and/or assist with mental health manpower resource allocation decisions
    within each Service and across the MHS for peacetime optimization.

        Senator Donnelly. Great.
        This is probably for Admiral Richardson. You know, when I
    was younger, I remember the Pueblo incident in North Korea, and
    that boat is still there. I remember, in reading and following
    it, one of the biggest problems we had was when it was taken,
    there were really no assets around to try to help out from what
    was indicated. We saw what happened with the riverine boats.
        You know, obviously, there is an investigation going on.
    But from what is read and how much is true we do not know. Talk
    about cannibalizing parts from a third boat to try to put a
    second boat together, problems with satellite gear, problems
    with other things that were involved. What we want to try and
    do, obviously, is to avoid these kinds of scenarios in close
    border areas and in places especially like North Korea and the
    Iranian border.
        What is being done to ensure this does not happen again?
    That is question one, and then question two is, if it does,
    what are doing to make sure they do not take the boat and bring
    it to wherever they are going?
        Admiral Richardson. Right. All of those questions are very
    valid questions. Those are the exact questions I have and about
    100,000 more. That is what the investigation is getting after.
    We intend that to be comprehensive to address all of those
    factors.
        But we are not waiting for that to get done in terms of
    moving out and starting to improve the way that we operate,
    support those ships, particularly those ones that are forward-
    deployed. The team and 5th Fleet and really around the Navy has
    taken a look at how that system works and where the
    vulnerabilities are and shoring those up.
        With respect to the support that those boats had, they were
    in the middle of the Persian Gulf, as you know. There were two
    carriers there. There was no shortage of support. It happened
    on a very quick timeline. But the response was--the details of
    that will be part of the investigation, and we look forward to
    a briefing you on that when it is done.
        Senator Donnelly. Is one of the things that we are checking
    on the status of our riverine inventory, the quality of it,
    what shape it is in, maintenance of it, all of those kind of
    things? Because one of the things that concerned me was to see
    to get two going, we needed three. You are in a position where
    neither--two out of three could not do it on their own. It had
    to kind of be put together to put one together. I was wondering
    where we are with that.
        Admiral Richardson. Absolutely. We are looking at every
    aspect of the readiness generation of that part of our Navy and
    the rest. You say you do not want it to happen in forward-
    deployed places near threat countries. I do not want it to
    happen anywhere in our Navy. We are looking comprehensively.
        Senator Donnelly. Because one of the things is, as you well
    know and as you all care so much about, you do not want to put
    these sailors in a position of having to make almost impossible
    decisions.
        Admiral Richardson. Absolutely right, sir.
        Senator Donnelly. General Neller, I want to ask you. We
    just saw Vladimir Putin talk about the number of troops in
    Syria that he is supposedly going down now. We do not know if
    he is actually going to do it, if he is not going to do it. You
    are the leader of a lot of extraordinary soldiers in that
    neighborhood, you know, in the area. I was wondering what your
    opinion is of what is going on with him and what the
    appropriate response is and how you think this plays out.
        General Neller. Senator, I can only take it face value. We
    all found out yesterday that he decided he is going to withdraw
    because he said he accomplished his mission. Obviously, there
    is a political piece to this.
        As far as on the battle space, cessation of hostilities was
    honored to some degree by his forces. I think it potentially
    creates an opportunity for some forces, to include those that
    we support. If the amount of aviation support that they are
    getting from the Russians is going to go down, it should
    enhance their ability to maneuver.
        There has been some progress. The one town, Shaddadi, was
    taken by YPJ [Women's Protection Units]. There is other
    progress going on. I know a little bit more about what is in
    Iraq, but I think Iraq is a different case than Syria. But I
    think--and I have not talked to the Chairman about this, but my
    personal opinion is that I think it creates some opportunity
    for those forces that we have been supporting to possibly make
    a little more progress.
        Senator Donnelly. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ernst?
        Senator Ernst. Thank you, Mr. Chair.
        Gentlemen, thank you for being here today.
        General Neller, as you know, the Marine Corps just
    completed an exercise, Ssang Yong, and it was a multilateral
    amphibious assault exercise conducted in the Pacific by Navy
    and Marine forces with the Republic of Korea and other allies.
    This exercise successfully demonstrated full spectrum combined
    amphibious operations and was a powerful reassurance measure to
    a number of our allies and, of course, a strong statement of
    power projection to our adversaries, which is very important I
    feel.
        We have yet to see the requisite number of amphibious ships
    underway to test the full capacity of a baseline expeditionary
    strike group, Marine Expeditionary Brigade in the training
    environment. With that as an intro, we know that there is a
    shortage of amphibious ships.
        Can you provide further insights on how these shortfalls
    impact the readiness of the Corps and your ability to provide
    scaleable MAGTFs [Marine Air-Ground Task Forces] as your
    contribution to the joint force? If you would please expound on
    that, please.
        General Neller. Well, Senator, thank you for the question.
        If you went by COCOM [Combatant Commands] requests for
    forces, the requirement for amphibs would be close to 50. The
    stated requirement between Admiral Richardson and my
    predecessor was 38 to come up with a number of 34, which is
    what you need to embark two Marine expeditionary brigades,
    which is what is at the high end for a forcible entry
    capability.
        The landing at Ssang Yong combined two Marine Expeditionary
    Units. It was commanded by the 3rd Marine Expeditionary
    Brigade, General Jansen out of Okinawa. But it was comprised of
    six of our ships and then a number of ROK [Republic of Korea]
    Marine ships, and there were also Australian and New Zealand
    soldiers that were part of the landing force.
        Right now, we have 30 amphibious ships. Based on the
    readiness of those ships, we could probably get--it has
    actually improved. The fleet readiness plan is--because we have
    worked really closely with the Navy, the fleet readiness plan
    is improving the overall readiness of the amphibious fleet, but
    it has to be that in conjunction with procurement of more new
    ships.
        We will be up to 34 ships by 2024 and up to 38 by 2028, and
    then we will go back down on the other side if there is not a
    change.
        That is what our requirement is. We cannot meet all the
    requirements of the combatant commanders today, which is why we
    have two land-based special purpose MAGTFs to provide a
    comparable capability for crisis response.
        I appreciate the question. We are working very hard. This
    budget and this Congress has funded the 12 LPD [landing
    platform/dock], LPD-28, and they are in budget. The FYDP
    [Future Years Defense Program] is the LX(R), first class of a
    new ship, which would start to be built in 2020, which gets us
    to this number of 34.
        Senator Ernst. I appreciate that.
        Is that your best advice to us, General Neller, is simply
    funding, or is there more that we can be doing as Congress?
        General Neller. I hate to say that things can be solved by
    money, but as we talked about and the Secretary mentioned, if
    you buy ships en bloc and you have an overlap, the cost of the
    ship goes down. That is an overall greater commitment of
    resources, but once you skip a year, the workforce degrades,
    the cost of the construction goes up. You cannot procure
    materials, early materials. There is money in this budget and
    then fiscal year 2018 plan to buy lead materials for the LX(R).
    The best way and the most cost effective way to build ships is
    to, when you decide on a design, block them out and have an
    overlap so you build them and there is no gap.
        Senator Ernst. Thank you, General.
        Secretary Mabus, on February 2nd, the last time that you
    appeared in front of the committee, we discussed the fact that
    the Director of Naval Intelligence, the Navy's top intelligence
    officer, has been without an active security clearance for over
    2 years. Is this individual still in that position?
        Mr. Mabus. Yes, he is, Senator. Let me give you some detail
    about that.
        When I was informed in late 2013 that Admiral Branch was
    possibly connected to the GDMA [Glenn Defense Marine Asia]
    case, I thought because of his position, I should remove his
    security clearance in an excess of caution. I was also told,
    though--assured--at that time that a decision would be made
    within a very short time, a matter of weeks I was told, as to
    whether he was involved and what would be the disposition of
    the case. We continued to check on that over and over and over
    again and got nothing.
        By the early fall, September of 2014, I decided that we had
    to nominate a successor, which we did, but because of some
    intervening events, that nomination did not get up here until
    last fall. At the same time that nomination got up here, we had
    a new Chief of Naval Operations who rightfully wanted to make
    sure that flag officers were in the positions with the best
    skill set and the best qualifications.
        Senator Ernst. I understand.
        Mr. Mabus. One other thing that I do think is important.
    During this entire time, I have been checking with General
    Clapper, the head of national intelligence, to ask him if there
    is any degradation of naval intelligence, if there is any
    concern about how we are operating or the quality of
    information that we are gathering or how we are processing
    that. I have been assured that we are not--that there is not
    any.
        Admiral Branch's two deputies, each of whom has more than
    30 years experience, both are taking up the part of his job
    that requires the classification access. He also has a lot of
    other hats, including managing a 55,000 strong force, which he
    continues to do.
        Senator Ernst. I do understand that. I still do have a
    problem with it. I think to lead a Department, you need to lead
    from the front, and if you have deputies that are doing your
    job, you are not leading. I still have an issue with that, and
    I think we will follow up at another time because I am over
    time.
        Thank you, Mr. Chair.
        Chairman McCain. Senator Kaine?
        Senator Kaine. Mr. Chairman, with your position, I would
    like to swap places with Senator King so he can get to an Intel
    meeting.
        Chairman McCain. No.
        [Laughter.]
        Senator King. That was the answer I was expecting somehow.
    Thank you, Mr. Chairman.
        First, I want to welcome back our colleague, Senator
    McCaskill. Great to see you back at our committee and wish you
    good health.
        Admiral Richardson, General Neller, welcome to your first
    of these hearings. Admiral Richardson, I was at Naval Reactors
    yesterday, your former command, and I can assure you it is in
    good hands and really an impressive operation.
        Secretary Mabus, you have done an extraordinary job. I was
    sitting here thinking when you took this job, there were
    certain words and terms that either were not heard of at all or
    certainly did not have the meaning that they have today. I made
    a short list: ISIS [the Islamic State of Iraq and Syria], South
    China Sea, the Ukraine, nuclear North Korea, Syria, cyber
    attack. All of those are things that have come to fruition as
    challenges since you have been Secretary. You have confronted
    extraordinary challenges, not the least of which is
    sequestration, all the kinds of budget problems that we have
    had, and this accelerating threat environment that we are in. I
    just want to thank you for really I think extraordinary service
    over a very difficult period. I want to acknowledge that. I
    hope some day there is a ship named after you and it is built
    in Bath just because I know you are from Mississippi.
        [Laughter.]
        Senator King. I could not resist.
        Mr. Mabus. Talk to some successor of mine about that.
        Senator King. Yes, I will. I will remember that.
        Admiral Richardson, to follow up, the decision about naval
    forces and planning and looking into the future, many of those,
    if not all, were made before that list I read, before those
    changes. Are we adequately addressing the change in the world
    that is affecting the necessity and the needs of the Navy of
    the future? I worry, to use a tired analogy, that we have got
    an aircraft carrier moving and we may not be necessarily
    turning it to respond to new challenges.
        Admiral Richardson. Senator, you have hit right at the
    heart and soul of where I am trying to get the Navy. One is to
    be more agile so that we can keep pace with the accelerating
    security environment. But to your point, a number of those
    concerns were not even on the list of things when we did our
    last force structure assessment, which is why I have
    commissioned a new one this year.
        Senator King. I think you mentioned earlier in your
    testimony there are a couple of other studies you are doing of
    adequacy of forces and shipbuilding and those kinds of things.
        Admiral Richardson. Yes, sir. In addition to the force
    structure assessment, which will get to sort of the composition
    and the overall force, I am looking--and General Neller is my
    partner in this in terms of are we looking at and appreciating
    all of the creative opportunities and combining the fleet we
    have right now in new and effective ways to make sure that we
    do not miss a trick in terms of doing that. We have got some
    fleet design studies that we owe this committee and we had
    started on our own, and so we look forward to working together
    with General Neller on that.
        Senator King. I appreciate that.
        We have been talking some about the Ohio-class replacement
    which, of course, the bow wave is starting in about 5 years
    right outside of this FYDP. It bothers me the way we budget
    around here, and we have no capital budget. You are talking
    about a 40- or a 50-year asset. You know, we borrow money to
    pay park rangers? salaries and we pay cash for 40-year assets.
    I mean, that is upside down from the way any business or other
    rational organization would do. You do cash for operations and
    you borrow for capital assets. Should we not be thinking about
    this when you are building something and trying to pay for it
    in 3 or 4 years that is going to last 40 or 50 years?
        Admiral Richardson. Sir, I think we should take a look at
    all of that. We have got plused up for the fiscal year 2021
    start of that program. It is going to be important to see those
    additional funds going forward, or we are going to decimate our
    shipbuilding budget.
        Then, as has been talked about, the National Sea-Based
    Deterrence Fund. That could provide us some options in terms of
    not only doing sensible things fiscally but, by virtue of doing
    that, also achieve some significant savings on the order of 10
    or more percent. I think that the combination of the
    appropriations and the authorities would allow us to do exactly
    what you say, sir.
        Senator King. Well, I hope we can talk. I have been talking
    with Chairman Enzi on the Budget Committee about rethinking how
    we do our Federal budget so that we can have a capital budget.
    Of course, that presupposes we know what we own, but that is a
    separate question.
        Secretary Mabus, do you have a comment on this funding
    problem?
        Mr. Mabus. Just to reemphasize what the CNO said. We have
    known for quite a while and the three CNOs I have been
    privileged to serve with have all testified that we have to
    have additional funds for the Ohio-class replacement because,
    as Admiral Richardson said, it is a once in a generational
    thing. The two times we have done this before, 41 for Freedom
    in the 1950s and 1960s, the Ohio-class in the 1970s and 1980s,
    we have added additional funds because it is a national level
    program.
        Admiral Richardson. Sir, if I could, throughout that, we
    have got to commit to, as you implied, full transparency and
    auditability of that money as it is applied to this extremely
    important program. Even as we consider these options, we are
    committed to that level of transparency and auditability.
        Senator King. Thank you, Mr. Chairman.
        Chairman McCain. Senator Fischer?
        Senator Fischer. Thank you, Mr. Chairman.
        General Neller, you and the Admiral have both discussed the
    importance of technological innovation in this year's budget.
    Can you talk about the role that the 3rd Battalion of the 5th
    Marines will have in testing the prototype technologies this
    year?
        General Neller. Senator, thanks for that question.
        We are going to take 3rd Battalion, 5th Marines, or 3-5.
    They are currently deployed in Okinawa. When they come back,
    they will have at least a year and a number of exercises. One
    will be Rim of the Pacific, or RIMPAC, and then we will put
    them out at Yuma in support a Marine air weapons tactics
    squadron out in training. We are going to give them certain
    capabilities. We are also going to reorganize certain elements
    of their force in a different way to work on the ability to
    distribute them across the battlefield. There will be a
    communication piece. There will be an ISR piece with unmanned
    systems. There will be different ways to move them around the
    battlefield because we will have the aviation assets that will
    be out there for that exercise.
        We are using them rather than creating a unit because they
    will be a cohesive unit, and we are very confident that the
    young marines in that unit will take advantage of whatever
    capabilities we give them and they will tell us whether they
    are effective or not and/or they will come up with their own
    ideas. We are counting on the youth and the familiarity with
    technology, having grown up in part of the digital generation,
    to help us do that. We will test and learn and give them
    everything we can give them, and they will come up with new
    ideas.
        Senator Fischer. Do you think there is going to be a
    continuing need for this sort of testing, or are you going to
    consider dedicating a specific unit to this role? Is it
    temporary? Is it going to be continual?
        General Neller. I think we will use every exercise that we
    have with large formations like the MEF [Marine Expeditionary
    Force], our Corps level headquarters or brigades. There will be
    a number of amphibious exercises on both the east and west
    coast. We will, as we have in the past, have them experiment
    with different operational designs, as Admiral Richardson
    talked about, different ways to embark the force, different
    ways to deploy ashore. We will take advantage of the existing
    exercises and training opportunities, and if we find something
    that works, then we will adopt it and we will see how it goes.
        We have got to change, and the world is changing very
    quickly. My concern is that we change faster than our
    adversaries, and I think exercises and taking units like this
    to practice or play with this stuff is going to help us.
        Senator Fischer. Admiral Richardson, can you discuss the
    Maritime Accelerated Capabilities Office? Specifically, how is
    it going to work, and what is it going to focus on?
        Admiral Richardson. Yes, ma'am. We are setting that up as
    sort of a speed lane for acquisition. This is one of the areas
    where I am trying to take advantage of those additional
    authorities that were granted to Service Chiefs. It will be
    based on the Air Force's Rapid Capability Office, which has
    assembled all of the decision and approval authorities in a
    very streamlined package so that for those programs for which
    it is appropriate, we can just move quickly move through the
    milestones and the acquisition process, get those technologies
    into production, and then out to the fleet very quickly.
        My goal is that we start by setting that speed lane up. We
    have a couple test cases go through that. I would say that the
    Stingray, the unmanned carrier-based aircraft, would be one of
    those very first ones. Then as we adapt, we move more and more
    programs out to that speed lane and overall speed the process
    up.
        Senator Fischer. Thank you, sir.
        General Neller, I understand that the majority of the
    Marine Corps budget goes towards the personnel costs. We spoke
    about this the other evening, and that is even before the Force
    of the Future initiatives that Secretary Carter has recently
    announced. How do these initiatives factor into how you are
    going to manage the force, and what challenges are they going
    to present to you?
        General Neller. Like all the services, Senator, we have
    worked very closely with OSD [the Office of the Secretary of
    Defense] on the Force of the Future. Some of the things we are
    already doing, and so it will have no impact, as far as we
    think we have a proper way to recruit. There are certain things
    like additional educational opportunities where there will be
    potentially some expense, and there are other things I do not
    think we know yet.
        A lot of these things are going to be in a pilot program
    and will not be immediately adopted. But there is going to be
    some expense with some of them, and we will just have to figure
    out how we are going to do that.
        Senator Fischer. I know every military person who is
    protecting our freedoms--they want to play a meaningful role. I
    do not think it is just--as we look to the Force of the Future
    initiatives, I do not think it is just that. I think that they
    also want to have the training and they want to have the
    resources that they need to complete the mission. They want to
    have the new technologies that we spoke about earlier. Could
    address that just in a few sentences, please?
        General Neller. We are in a unique position in that we
    continue to deploy forces to meet combatant commanders'
    requirements. We have to sustain the legacy force that we have,
    and at the same time, we want to modernize. There is pressure
    on that.
        It was mentioned in unfunded requirements. One of the first
    things we would probably do is put money back in the current
    operations and maintenance and sustainment. We have protected,
    to the best of our ability, the modernization because keeping
    old legacy gear sustainable is fine, but what we really need is
    we need to get the new gear not just because the marines like
    the new gear, because they need another gear, whether it is a
    joint light tactical vehicle or the amphibious combat vehicle
    or the ground-air task-oriented radar of any of the command and
    control stuff or the new aircraft that we are going to buy. We
    need that to be successful on the battlefield in the future
    because our adversaries have done the same thing. They have
    recapitalized while we have been focused on the fights that we
    have been in in the last 15 years.
        Senator Fischer. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Kaine?
        Senator Kaine. Thank you, Mr. Chair.
        Thanks to the witnesses. Secretary Mabus, congratulations
    to you and to all. We had a hearing this morning in the
    Readiness Subcommittee, a readiness posture hearing, and I will
    say that Admiral Howard and Assistant Commandant Paxton
    performed admirably. We learned that the Assistant Commandant
    is the longest serving Assistant Commandant of the Marine Corps
    since 1950. We are in a day of witnesses before us with long
    tenures.
        The readiness hearing was a shocking one. I had a
    classified briefing about readiness issues last week, and what
    I am going to say now is not classified material. This is open
    material. We talked about it at the hearing.
        Today, less than half of our Marine Corps units are ready
    to perform their, quote, wartime missions, despite having a
    congressionally mandated role as the Nation's crisis response
    force. Especially on the aviation side--and I will get to this,
    General Neller--80 percent of aviation squadrons do not have
    the required number of aircraft to train. General Paxton talked
    a bit about that.
        On the Navy side, less than half of our Navy's ships are
    ready to meet wartime plans. Deferred and unplanned maintenance
    continues to delay training timelines and prolonging
    deployments. That prolonging of deployments, which used to be 6
    months to now 8 to 10, means that ships come back that are
    significantly more challenged in terms of maintenance issues.
    These are some of the issues that we talked about this morning.
        I know this committee is really interested in this topic
    and request. Senator McCain has written a letter to the Service
    Chiefs asking for the fiscal year 2017 unfunded requirements
    priorities list. I think some of those letters are coming back
    to us or maybe some early drafts are coming back to us. I would
    encourage on the unfunded priorities requirements list, they in
    fact be prioritized rather than just a big list because that
    will help us as we grapple with the NDAA [National Defense
    Authorization Act] challenge. I am going to make that a
    question for the record as well.
        What is the status right now on the aviation side, naval
    and marine, the status of aircraft awaiting repair at the
    aviation depots? Has there been any improvements in this
    awaiting-repair category, and how are we funding depots? What
    is our ability to bring down that amount of aircraft awaiting
    repair?
        Admiral Richardson. Sir, I will take the first stab at
    that. This is something that General Neller and I are working
    very closely on because this affects both of us. This divot in
    backlog in ready basic aircraft, really the backlog in the
    aircraft depots, goes back a few years, really exacerbated by
    fiscal year 2013 and the sequestration that happened then.
        We are doing a very systematic appraisal of that process
    and we are seeing improvements. We improved 44 percent this
    year over last year, and so we are seeing the throughput of
    that--the depots improve. General Neller and I were at the
    fleet readiness--the depot in California. We walked through the
    entire line. They have got a very systematic approach that
    looks at all of the limiting lines, and we look forward to sort
    of continuing to improve that throughput.
        Additionally, we are looking forward--these are the legacy
    aircraft, particularly the strike legacy Hornets. We are
    looking forward to when the Super Hornets come through, we are
    learning all of the lessons. We are starting to get prepared
    for when they come through in the depots. Then as has been
    submitted with our budget and also on the unfunded list that
    you mentioned is the request for buying additional Super
    Hornets in both 2017 and 2018 to help to mitigate that. We are
    taking a full court press. We are funding those depots to
    pretty much the maximum executable capacity right now, and we
    are leaning that system out to get everything we can out of
    that.
        Senator Kaine. Great.
        General Neller?
        General Neller. Senator, as the CNO said, I think these
    accounts are fully funded. There is a number of fleet readiness
    centers. We have also contracted with additional vendors like
    Boeing and L3 to do more for the fixed wing aircraft. If they
    can fulfill their contract--and they did last year--and they do
    it again and the fleet readiness centers improve their
    processes--I think at the initial when all these planes kind of
    descended on them, you know, the processes they had were not
    effective. The planes sat and they waited. They have gotten
    much better. I get this not from my own observation but from
    talking to other people that had visited them a year ago,
    saying the process here is much improved. They got a much
    better flow. I believe that we are--in that particular model
    type series of airplane for F-18A and D, we are at the bottom
    and we are on our way up and we are going to get better.
        Every model type series of aircraft in the Navy and the
    Marine Corps is a little bit different. Right now, we are in
    the middle of recapitalizing every one of those, F-35 to
    replace the F-18, the AV-8B, and the EA-6B. We are still in the
    procurement process for MV-22 Osprey. We are buying Hueys and
    Cobra attack helicopters. The Hueys are almost complete, and
    there have been some issues with that. Then we are just in the
    experimentation and the prototyping and flying of the 53
    replacement.
        I would say right now, the 53 is probably in the worst
    place because of a number of things that are going to get fixed
    by this new airplane, but this new airplane is not going to be
    ready for probably 3 or 4 more years. That procurement will
    have to be something that goes back to the acquisition that we
    are going to have to watch and we are going to have to guard.
        If we can get more parts, we can get the sustainment at the
    depots. We are going to get more basic aircraft on the line.
    Our pilots will fly more hours. Our readiness will go up, and
    the marines and the sailors that fly these aircraft will do
    what they want to do, which is fly. There is even a retention
    piece to this that we have talked about because if you are not
    flying, then you are not doing what you came in to do. There is
    a whole lot of things, even maintainers.
        It is very complicated, but I think we got a comprehensive
    plan. We met with our leadership of the aviation enterprise,
    the Navy and Marine Corps, the other day. The money is there.
    It is just we are going to have to watch it and press it, and
    it is going to take a little bit of time.
        Senator Kaine. Great. Thank you very much.
        Thanks, Mr. Chair.
        Chairman McCain. Senator Wicker?
        Senator Wicker. Thank you.
        Admiral Richardson, our most recent 30-year shipbuilding
    plan has a target size of 308 ships for the Navy. Chairman
    McCain touched on this in his opening statement.
        I am interested in the methodology behind the Navy's
    shipbuilding requirements. What year was the 308-ship
    determination made?
        Admiral Richardson. Sir, that was made in 2012 and it was
    updated in 2014.
        Senator Wicker. What was the number in 2012 and what was
    the number in 2014?
        Admiral Richardson. It was 308 throughout. The 2014 just
    validated the 2012 assessment.
        Senator Wicker. Has anything happened around the world
    since that determination was made that would make us revise
    that force structure?
        Admiral Richardson. Yes, sir. At the time we did that
    original assessment, we were not contending with the resurgent
    Russia, ISIL was not on the map, and the Peoples Liberation
    Army and Navy was in a much different place. The security
    environment has changed.
        Senator Wicker. Three major developments.
        Admiral Richardson. At least, yes, sir.
        Senator Wicker. Will you be pushing for a revised force
    structure assessment, and when might we see that?
        Admiral Richardson. Sir, I have already commissioned that
    to start. We intend for that to briskly get done through the
    spring and look forward to seeing that done in the summer.
        Senator Wicker. All right. Right now we are on pace to get
    to 308 when?
        Admiral Richardson. In 2021.
        Senator Wicker. Well, we look forward to seeing an accurate
    force structure based on the current threats.
        Admiral Richardson. Yes, sir. I look forward to briefing
    you on that.
        Senator Wicker. Thank you very much.
        Let me ask you, General Neller, about amphibious ships. You
    recently told the House Armed Services Committee that the
    Marine Corps needs ships cheaper and faster. I think we
    certainly agree with that.
        As you know, Congress added an additional LPD amphibious
    ship after feedback from your predecessor, General Amos. We
    appreciate his input and his service as we do yours, sir.
        The Navy is now looking to develop the LX(R) class of
    amphibious ships that will replace our aging dock landing
    ships. The Navy has made a decision that the LX(R) vessels will
    use the current LPD-17 hull form. Do you believe that the LPD-
    17 hull form provides all the capability that you need to
    replace our legacy dock landing ships?
        General Neller. Senator, thanks for the question.
        Yes, I do. We have got a lot of confidence in the LPD-17
    class ship, and again, we appreciate the funding for the 12th
    ship of that class, LPD-28. There was discussion, before I
    assumed this post, of whether just to go to an LPD-28 repeat.
    Their was a costing figure for LX(R) that we did not believe
    LPD-28 could meet at that time. The decision was made to go
    with the hull form and come up with a new design that would be
    similar to that, but it would meet the costing of about $1.6
    billion and then to further drive down the cost of the ship
    down to $1.4 billion.
        That is going to be competed between two shipyards, and I
    am confident that they will come up with a design that is
    similar to the LPD-17 class ship and we can make it in time.
    The first class of that ship is supposed to be put under
    contract in 2020.
        Senator Wicker. If we could find the money, sir, would you
    support acceleration of the LX(R) ship competition?
        General Neller. Absolutely, Senator. If we could find the
    money and we could do a block buy where these ships would be--
    as Secretary Mabus said, anytime we can build them year after
    year, we keep the workforce employed. They get faster, they get
    better. The ship is a better quality. It is put out faster and
    then generally comes in at a lower price.
        Senator Wicker. Thank you.
        Admiral Richardson, in the short time we have left, tell us
    what the future holds for the autonomous surface vessels.
        Admiral Richardson. Sir, I would say that the autonomous
    surface vessel is one of, I would say, a suite of unmanned
    capabilities that really, behind the Secretary's leadership,
    the Navy is doubling down on. I think that these autonomous
    surface vessels provide a capability that can be used in a
    number of different areas. I have got my eye on it with respect
    to the mine hunting mission. I think that that and a number of
    other areas--but I would be happy to brief you in a classified
    setting--are real opportunities for the unmanned in general and
    the surface vessel in particular.
        Senator Wicker. Secretary Mabus, do you have anything you
    would like to add in 20 seconds?
        Mr. Mabus. It is the reason that we have stood up the
    Deputy Assistant Secretary for Unmanned, N-99, on the CNO's
    staff is to make sure that we are utilizing all the
    technologies in a comprehensive way in unmanned because we are
    the only service that does it under, on, and above the sea and
    to make sure that as we move forward, because these are going
    to play such a huge role in the future, that we have the
    technology right and that we are not duplicating, we are not
    using any money unnecessarily but that we are pushing forward
    to do the things the CNO just talked about.
        Senator Wicker. Thank you, and I look forward to that
    classified briefing, Admiral. Thank you.
        Chairman McCain. Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        Secretary Mabus, I too want to add my thanks to you for
    your service and wish you the very best going forward.
        General Neller, in early March, Japan's Prime Minister Abe
    announced that he has decided to temporarily suspend
    preliminary work on the Futenma replacement facility in Henoko
    on Okinawa. He stated that talks between the local government
    and Tokyo on the relocation of the base would continue.
        How do you see this situation in Japan, Okinawa, playing
    out? What impact will this have on our overall relocation
    strategy, including what we are doing in Guam and what we need
    to be doing in CNMI [the Commonwealth of the Northern Mariana
    Islands] and going forward?
        General Neller. Well, Senator, first, there is no linkage
    between Guam and what is going on with the Futenma replacement.
    I see that, even though we have pushed some number of projects
    to the right, I think we are still on track to move the number
    of marines to Guam and do that work.
        As far as Okinawa, because part of the judgment is that
    there will be no work at the Futenma replacement up at Camp
    Schwab vicinity in Henoko during this time, and they would
    expect that they are going to reconvene a court rule--or
    whatever adjudicating authority is going to review this thing
    until March.
        There was not a whole lot of work being done because we
    were not able to get concrete in. We were going to build a
    concrete plant there. That buys us some time to do that. But
    some of the work that was being done out on the reef to get
    ready to fill in the landfill in--so right now there is nothing
    going on.
        But we continue to support the Japanese Government trying
    to get an agreement with the prefecture of Okinawa to build the
    FRF [Futenma Replacement Facility]. We will have to wait and
    see what happens in March.
        Senator Hirono. You are talking about a year from now?
        General Neller. That is what the agreement was, as I
    understand.
        Senator Hirono. As a time frame for them to decide one way
    or the other.
        General Neller. The judge asked them to try to come up with
    an agreement, and then the government of Japan issued what was
    called a corrective action order, which gave the government of
    Okinawa, the governor, until March to reply. Until that time,
    there is no work being done up there.
        Senator Hirono. More delays. Well, it is what it is.
        Secretary Mabus, I believe that U.S. energy security is a
    vital component of our overall national security. I have had
    conversations with Department officials who agree that our
    country's energy security needs are closely tied to our overall
    national security. The amount of operational energy the Navy
    needs to carry out its mission is significant, and while fuel
    costs are low right now, as we know from history, prices do
    fluctuate and they will probably go up.
        I know that the Navy has done significant work in this
    area, and I commend your leadership on this issue. Can you
    update us on how the fiscal year 2017 budget affects your
    efforts to reduce energy consumption, use cleaner alterative
    sources, and increase U.S. energy security?
        Mr. Mabus. Thank you, Senator.
        First, the goal is to have at least 50 percent of our
    energy needs met by alternative sources afloat and ashore.
        Ashore, we are there. We got there by the end of 2015, and
    it is making us more resilient. We are beginning to now move to
    things like microgrids so we can pull ourselves off the grid.
    In case something happens, we can still do our military
    mission. We are doing this almost exclusively through public-
    private ventures.
        At sea, the Great Green Fleet is deployed now. It is
    sailing on a mixture of marine diesel and biofuels. These
    biofuels were procured by the Defense Logistics Agency under a
    regular RFP [Request For Proposal]. They are competitively
    priced as the law requires and as we require. It is becoming
    the new normal for that.
        The example that I give is in Singapore, you have got an
    oil refinery--one of their oil refineries there that is owned,
    a majority, by the Chinese. Right down the road is a biofuels
    plant owned by a Finnish company. We need to not be dependent
    on one type or one location of fuel.
        Finally, we are also making a lot of headway in terms of
    efficiencies, reducing the amount of energy that we use. The
    Navy is down in terms of oil usage by 16 percent since 2009.
    The Marine Corps is down about 60 percent. Part of that is
    fewer operations in Afghanistan and Iraq, but the Marines have
    also been leaders in terms of energy efficiency and making
    energy where you fight so that you so that you do not have to
    resupplied.
        Senator Hirono. Thank you.
        General Neller, thank you for your efforts in this regard.
        Chairman McCain. Senator Tillis?
        Senator Tillis. Thank you, Mr. Chair.
        Gentlemen, welcome and thank you for your service.
        General Neller, I had a question for you that relates to
    personnel. I think you are down about 20,000--by the end of the
    year, about down 20,000 Active marines from the 2012 numbers. I
    am kind of curious how that reduction has affected your
    deployment-time-to-home ratio and any other issues related to
    retention, morale, or effects on families.
        General Neller. Well, Senator, when we grew the force to
    202,000 to meet the operational demand and provide adequate
    depth-to-dwell when we were fully engaged in Iraq and
    Afghanistan. As we have withdrawn the bulk of that force and we
    are bringing the force down to 182,000, that is as 2-to-1
    force. In some cases, based on the type of unit, it is inside
    that.
        It remains to be seen what that is going to do to families
    and retention. It does give us a very short time to get ready
    to go. We would prefer to be a three-to-one force, which is why
    the optimal force, based on the current force structure, was
    said to be 186.8, which gave us a 3-to-1 for aviation squadrons
    and infantry battalions, which is the normal deployment.
        We think 2-to-1 is the minimum. As General Paxton mentioned
    today in the readiness hearing, we are going to have to cut
    back some of the capabilities we provide to combatant
    commanders in order to reduce some of the tempo and pressure on
    the force, particularly in aviation, and we are prepared to do
    that not because we want to but we have to give the forces
    enough time to reset and we have to give them enough time to do
    the training that they need so that when they do deploy, they
    are ready to go.
        We are watching this very closely. It has our attention,
    but I think right now it has not been a factor, but I am
    concerned about it.
        Senator Tillis. It seems to me when you have got threats
    going in the other direction, to touch on what Senator King
    discussed and I think what Senator Fischer alluded to, you
    know, we have got threats today that we did not have in 2012.
    Admittedly we are not as engaged in, say, Iraq and other areas
    of the world. But it seems like while the threat profile is
    going up, our ability to actually provide the combatant
    commanders what they need is going down. It just does not seem
    like the right trend lines. We need to continue to watch it.
        This may be for Secretary Mabus or Admiral Richardson. I
    read a news report the other day. Believe me, I do not believe
    anything I read, and I knew that I was going to come here and
    see you guys. I thought I would ask you. The Navy is reported
    to have, in reaction to, I guess, some failing their physical
    fitness standards tests and not necessarily achieving the
    existing body mass index requirements, that there have been a
    change in those requirements. Is that report true? A simple yes
    or no answer is okay if it is no.
        Mr. Mabus. The answer is they have been changed but not for
    that reason.
        Senator Tillis. Can you give me an idea of why they have
    been changed?
        Mr. Mabus. Yes, because first we would measure people to do
    the body fat analysis. We would measure their neck and their
    waist. If they did not pass that, they did not get to take the
    physical fitness test until they got into spec. One of the
    things that that penalized were weightlifters, people that were
    in great shape, because their necks were big. It did not make
    much sense. We were removing more people for failing the
    physical fitness test than we were for drugs.
        Senator Tillis. Secretary Mabus, I completely get that. I
    think that that would make sense.
        The other part of the report--maybe it is not accurate--is
    that some of the physical fitness test standards had also been
    changed because of some challenges that we were having. Is that
    true or false?
        Mr. Mabus. They have not been lowered. Some of them have
    been changed to make them more realistic in terms of what we
    do. I mean, the Marines have the combat fitness test. The Navy
    wanted to move toward making it job-related.
        But we have also gone to--people were training for the
    test. We were doing it every 6 months. They would not get in
    shape until the last couple weeks. They would go on these crash
    diets and it was going to be dangerous. Now we are doing spot
    tests. You know, you show up one day and it is your lucky day
    and you get to put on your PT [physical training] gear and you
    go out and do the PFT [Physical Fitness Test]. What we are
    trying to do is have a culture of fitness that you stay fit all
    the time, not just for the test, and that the physical fitness
    requirements have something to do with the military
    requirements of your job.
        Senator Tillis. Thank you, Mr. Chair.
        Senator Reed [presiding]. On behalf of Senator McCain,
    Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman.
        Gentlemen, thank you for your public service. Mr.
    Secretary, your public service, long and distinguished
    governor, Ambassador to Saudi Arabia, and now a very long-
    serving 7 years as Secretary. Thank you.
        Today the administration walked back its plans for drilling
    off of the east coast of the Atlantic. It is my understanding
    that the Pentagon was one of the ones that objected, as the
    Pentagon objected years ago to the drilling off of the coast of
    Florida where we have the largest testing and training range in
    the entire United States.
        Do any of you all want to give us some insight into the
    Pentagon's objection that caused the administration to walk
    this back this morning?
        Mr. Mabus. We, as the Navy, had some concerns, particularly
    on our test ranges and our ability to do exercises in the
    affected areas. We made those concerns known. There were
    concerns about both aircraft and ships in the affected areas.
        Senator Nelson. Well, that sounds like the similar concerns
    that were voiced by all branches several years ago in the Gulf
    of Mexico. In that particular case, it is also a test and
    evaluation area for the development of new weapon systems
    because they have got a range that they can go 300 miles over
    water and even onto land if they need to. It sounds like
    similar objections.
        Mr. Mabus. I know what the objections are this time. The
    other one, believe it or not, preceded my service, which
    evidently dates back to World War I now.
        [Laughter.]
        Mr. Mabus. But my understanding is the concerns were
    similar.
        Senator Nelson. For the Admiral or the Secretary, what do
    you see as the future for the LCS and particularly the fast
    frigate?
        Mr. Mabus. Let me take the first crack at that and then
    turn it over to the CNO.
        We have got a validated need for 52 small surface
    combatants. As the CNO testified, that was done in 2012. That
    was redone in 2014. We are currently doing another one. This
    will be the only mine hunting platform that we have. This is a
    crucial part of the fleet going forward for both counter-
    surface and counter-submarine.
        There was a concern about lethality and survivability a
    couple years ago. We did a yearlong study, came up with the
    frigate program that substantially increases survivability,
    substantially increases lethality on this ship, while
    maintaining the modular concept, the open architecture so that
    as technology improves, we can improve. It is one of the
    critical programs as we go forward to meet the needs that we
    have.
        The final thing I would say is that our deployments of this
    ship to Singapore have been very successful both in terms of
    operationally, both in terms of testing things in real-world
    environments and also in terms of reassurance to our allies and
    our friends in that region. Our plans continue to be to forward
    deploy four LCSs/frigates to Singapore.
        Admiral Richardson. Senator, the Secretary covered it
    pretty comprehensively. I would just add that this frigate
    plays a vital role in the fleet going forward in terms of
    contributing to maritime security in the fullest sense,
    operating alone in concert with allies and also operating as
    part of the large battle force. The enhancements that will go
    into this frigate will not only make that a much more lethal
    and survivable platform, but to the best of our ability, we
    will back-fit those into the other ships of the class so that
    we improve the capability of the whole class.
        Senator Nelson. Admiral, in the pecking order of importance
    to the country, where do you put the dispersal of surface
    assets with regard to home ports so that you do not get them
    all in one place?
        Admiral Richardson. Sir, we go through a very comprehensive
    process called our Strategic Laydown Process which addresses
    that concern. We update that annually. Dispersal is a key part
    of that to make sure that all of our ships are placed around
    the world to not only maximize their utility but also to
    minimize their vulnerabilities. That dispersal is a very
    important aspect of that.
        Senator Nelson. Is that why on the Pacific that you have
    three home ports for the carriers?
        Admiral Richardson. That would be one element of it. Yes,
    sir.
        Senator Nelson. Why do we only have one home port instead
    of the two that used to be for our carriers on the Atlantic?
        Admiral Richardson. Yes, sir. Really the answer, based
    completely on a strategic laydown, I think would easily lead us
    to two home ports on the east coast for our aircraft carriers.
    When the fiscal situation allows us to appreciate the capital
    investment required to develop that second port, we look
    forward to achieving that.
        Senator Nelson. Have you got any ideas when that might
    occur?
        Admiral Richardson. Sir, we are making some extremely tough
    choices in the current budget environment, and so as long as
    this type of an environment persists, it is going to be very
    difficult.
        Senator Nelson. Well, at least the long lead item is done,
    and that is the dredging. You got that done all the way out, a
    mile and a half out, into the Atlantic.
        Admiral Richardson. Yes, sir.
        Senator Nelson. Thank you, Mr. Chairman.
        Senator Reed. Thank you.
        On behalf of Chairman McCain, Senator Sullivan, please.
        Senator Sullivan. Thank you, Mr. Chairman.
        Thank you, gentlemen for your service and testimony today.
        I wanted to follow up on an issue that this committee has
    been very focused on and that is the activities in the South
    China Sea, what China is doing with regard to militarizing
    certain reefs, what we have been doing as part of our strategy.
    You know, Admiral Harris was testifying recently and talked
    about how China--he stated China had militarized these
    formations. As you know, Secretary Carter gave a very strong
    policy speech that many of us were out at the Shangri-La
    Dialogue in Singapore last year about American broader policy.
    I think that was very strongly supported by members of this
    committee on both sides of the aisle.
        I think, though, there has been some sense of confusion by
    the implementation of that policy. Admiral Richardson, do you
    believe in your professional military opinion that we should be
    increasing the level of United States naval activity in the
    South China Sea within the 12-mile radius or zone of the
    militarization of some of these island formations? Should we be
    doing that on a regular basis and with some of our allies? I
    will leave it up to you or the Secretary.
        If you can articulate--you know, there is some confusion
    sometimes. Is it innocent passage? Is it freedom of navigation
    operations? When we are going within the 12-mile zone, which we
    have on occasion, what has been the policy from the Navy's
    perspective?
        Admiral Richardson. Sir, I think just to reiterate what the
    President and the Secretary of Defense has said is the policy
    is that we will continue to advocate for the current
    international rules that govern behavior at sea and that we
    will continue to sail, fly, and operate wherever international
    law allows. That is worldwide. This freedom of navigation
    program is a worldwide program, but because of the activity and
    the importance of the South China Sea--30 percent of the
    world's trade goes through that body of water--and because of
    the activity of the Chinese, there has been a lot of attention
    there.
        My advice is that we would continue to advocate for that,
    and we are ready to do more of those types of freedom of
    navigation operations in the South China Sea. When decision-
    makers are ready to do that, the Navy is ready to do that.
        Senator Sullivan. Do we do those, for example, on a routine
    basis? Do we transit the Taiwan Strait now on a routine basis?
        Admiral Richardson. We do, yes, sir, that and other places.
    Wherever there are excessive maritime claims, part of program's
    purpose is to challenge those maritime claims.
        Senator Sullivan. Let me ask just another quick question.
    It is a different part of the world, but there has been a lot
    of interest in this committee by members, not just myself, but
    on the Arctic and what is happening in the Arctic, how it is a
    very strategic location, how there are new sea lanes opening
    up. The Russians have undertaken a massive military buildup in
    that part of the world, not only for new BCTs [Brigade Combat
    Teams] and a new Arctic military command, but as you know,
    significant increases in icebreakers. They have 40. They are
    looking to add 12 more. We have two. One is broken.
        If there was a policy decision made to do freedom of
    navigation operations in the Arctic or, alternatively, let us
    say the Russians with all their capability tried to shut down
    sea lanes in the Arctic in the summer when they are opening, do
    we even have the capability right now to conduct FONOPs
    [Freedom of Navigation Operations] in the increasingly
    important area of the Arctic with one and a half icebreakers?
        Admiral Richardson. Sir, it would depend on the conditions
    that are there. As you pointed out, that has become an
    increasingly strategic area of the world, one that we are
    focused on. As we do this renewed look at the demands and the
    force structure assessment to meet those demands this summer,
    the increasing strategic importance of the Arctic will be a key
    part of that.
        Senator Sullivan. Are we looking at increasing maritime
    operations there, looking at perhaps the importance of an
    Arctic port. There are issues that I think can demonstrate
    America's resolve in an increasingly important area.
        We have had discussions of how there is this battle between
    the Coast Guard and the Navy on who is in charge of
    icebreakers. But what it seems to do is just get us to the
    point of indecision, and we do not seem to be moving forward on
    it. Even the President, when he was in Alaska, talked about an
    icebreaker gap that we need to close, but we do not see the
    services kind of coming to any kind of agreement on why it is
    important or who is going to do it.
        Admiral Richardson. I think it is collaboration and
    cooperation between the Navy and the Coast Guard in terms of
    how we provide access and security in the Arctic. The
    icebreaker mission is clearly theirs, and I know Admiral
    Zukunft is focused on that very clearly.
        Senator Sullivan. Well, they do not have the budget for a
    new icebreaker.
        Admiral Richardson. Sir, we are making hard choices in our
    budget as well.
        Senator Sullivan. Again, I see this stalemate between the
    Navy and the Coast Guard on the issue of icebreakers. That is
    kind of demonstrated even by your testimony, Admiral.
        Admiral Richardson. Sir, I do not see it as a stalemate.
    This mission is clearly--right now, the icebreaker mission is a
    Coast Guard mission, and we look forward to collaborating and
    cooperating with them on that.
        Senator Sullivan. Mr. Chairman, do I have time for one more
    question? Oh, I am sorry. I did not see Senator Blumenthal.
        I just wanted to follow up on Senator McCain's question on
    the Iranian capture of our sailors. I know he already asked it,
    but you know, these are well trained American sailors. They
    have at least a 50-caliber in terms of weapons on their naval
    vessels. What were the ROEs [Rules of Engagement] that enabled
    our sailors to even be captured? I mean, if a hostile Iranian
    patrol boat is approaching a United States naval ship in
    international waters, is the ROE not to not be captured? How
    did that happen?
        Admiral Richardson. Sir, clearly international law would
    prohibit boarding U.S. sovereign territory, which those
    riverine craft were.
        Senator Sullivan. Did we try to resist being boarded?
        Admiral Richardson. There is always the inherent right to
    self-defense in our rules of engagement. The specific ROE and
    what exactly unfolded as that happened will be part of the
    detailed investigation. When that is complete and reviewed, I
    look forward to briefing you on the details there.
        Senator Sullivan. Okay, thank you.
        Thank you, Mr. Chairman. Thank you, Senator Blumenthal.
        Senator Reed. Thank you.
        On behalf of Chairman McCain, Senator Blumenthal, please.
        Senator Blumenthal. I want to second all my colleagues in
    thanking each of you for your extraordinary service to our
    Nation over so many years and also your commitments in terms of
    undersea warfare capability to both the Virginia and Ohio
    replacement programs.
        I know, Secretary Mabus, you have been asked this question
    before, but do we not need to consider building, in effect,
    three submarines a year, two Virginia-class and one Ohio
    replacement program? I would like you to perhaps clarify what
    you have said on this topic. I believe that Senator Ayotte may
    have asked you this question.
        Mr. Mabus. Yes, we do. Right now, the plan is, starting in
    2021 when the Ohio-class replacement begins to be built, we
    would drop to one Virginia-class that year. However, we are
    undertaking a look right now--and a pretty intensive look
    because we do think it is important to continue the two
    Virginia-class ships a year. It is a capacity issue, capacity
    for our shipyards, the ability to do it. It is a capability
    issue. But we clearly have the need for the two Virginia-
    classes.
        Those boats are coming in at the cost they are, at the
    schedule they are, which is sometimes up to a year ahead of
    schedule because we are able to buy them two a year as a
    multiyear buy. As I mentioned to Senator Ayotte, this will be
    part of the 2018 budget submission. I am confident that that
    will go in there. We are trying every way we can, working with
    you, working with Congress to figure out a way to have that
    three submarine a year build because if we do not, if we miss a
    year on the Virginia, it is going to make the attack submarine
    situation, particularly in the late 2020s/early 2030s, even
    more significant.
        Senator Blumenthal. As I understand your answer, there is a
    need to build those three submarines a year, and the question
    really is whether the shipbuilders have the capacity. If they
    were to tell you--I am certainly not speaking for them--that
    they can do it, you would, in effect, make a decision to go
    forward, assuming that the funding is there because our
    national defense is well served by it and because it would
    provide those boats at the lowest possible per-unit price.
        Mr. Mabus. I think that is a very good summary. The
    shipyards--and that is what we are dealing with them now. We
    think they can have the capacity to do this so that little
    clause you put in, ``assuming the funding is there,'' becomes
    the critical part.
        Senator Blumenthal. Admiral Richardson?
        Admiral Richardson. Senator, if I could just pile on a
    little bit there. Just from the warfighting need, as you know,
    sir, we dip below the stated requirement for 48 attack
    submarines in the 2020s. That boat, because it comes on line
    pretty early, if we get that in 2021, does a tremendous amount
    to mitigate the volume of that trough. It has a very asymmetric
    effect, which is why we are considering every possibility to
    get that done.
        Senator Blumenthal. When we talk about the need for a
    certain number of Virginia-class submarines and the need for
    the Ohio replacement program, this need is not an abstract,
    hypothetical, theoretical need. It is a matter of our potential
    adversaries building their own undersea warfare capability,
    particularly China and Russia moving ahead on their plans. Is
    that correct?
        Admiral Richardson. Sir, that is exactly correct. That
    number comes from, I believe, a 2006 study and we are
    refreshing that requirement this year as part of our force
    structure assessment, which takes into account those threats
    that you just mentioned.
        Senator Blumenthal. There is no reason to believe that the
    intentions of Russia and China, who are our most advanced
    competitors in this sphere, are in any way moderating or
    reducing their plans to build their undersea warfare
    capability.
        Admiral Richardson. Sir, that is our understanding. Yes,
    sir.
        Senator Blumenthal. Will that need also contemplate other
    means of undersea warfare capability besides submarines?
        Admiral Richardson. Sir, we are looking at the full host of
    undersea capabilities to include not only manned submarines,
    both the Ohio replacement and Virginia-class attack submarines.
    We are going to enhance the capability of the Virginia-class by
    putting in the Virginia payload modules starting in fiscal year
    2019, and we are also looking at unmanned technologies undersea
    as well.
        Senator Blumenthal. I think I am the last questioner, but I
    want to close again by simply thanking you for your dedication
    to the submarine program, which means so much to our Nation,
    for your frequent visits to Groton. We would welcome you back
    anytime you are able to come. I will be extending invitations
    to you. I hope you can be there because we learn from your
    presence there, as well as from your commitment to this
    program. Thank you very much.
        Senator Reed. Thank you, Senator Blumenthal.
        Gentlemen, thank you for your testimony. Thank you for your
    extraordinary service to the Nation and to the Navy and the
    Marine Corps.
        On behalf of Chairman McCain, let me declare the hearing
    adjourned. Thank you.
        [Whereupon, at 4:37 p.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                     Questions Submitted by Senator McCain
                                 lcs way ahead
        1. Senator McCain. The President's Budget request includes a down-
    select to one Littoral Combat Ship variant no later than 2019 and to
    cap procurement at 40 ships. Can you explain the benefits of this
    program restructuring?
        Secretary Mabus. and Admiral Richardson. The Navy's requirement for
    52 Small Surface Combatants was validated through the 2014 Force
    Structure Assessment (FSA) and no subsequent analysis has revised this
    requirement.
        The truncation to 40 Small Surface Combatants reflects a
    consequence of the hard choices that had to be made to deliver the PB17
    budget in compliance with the Bipartisan Budget Act. Secretary Carter
    concluded that the Navy could accept risk associated with slowing the
    rate of ship construction in the near term in order to rebalance its
    investments towards other warfare systems and advanced capabilities.
        In accordance with Secretary Carter's decision, the Navy plans to
    competitively award one LCS to each shipbuilder in 2017, and proceed
    with completion of respective Frigate designs to support a competitive
    down-select to a single shipbuilder in 2018 based on the proposed
    Frigate design. This acquisition strategy sustains competition for the
    single ship awards in 2017 and delivers the desired Frigate capability
    ahead of the original, approved schedule. However, it is recognized
    that this down-select decision also places one of our shipbuilders and
    much of the support industrial base at risk of closure. The Navy will
    use this current period of stable production--prior to the down-select
    decision--to thoroughly assess the impact of such potential closure on
    our strategic shipbuilding industrial base, the cost of our
    shipbuilding program, and our ability to support in-service ships, in
    order to identify appropriate actions to mitigate these impacts to the
    extent practical.
                             ohio-class replacement
        2. Senator McCain. In terms of program cost, the Ohio replacement
    submarine program will be second only to the Joint Strike Fighter.
    These submarines will carry about 70 percent of the nation's deployed
    nuclear warheads. If the Ohio replacement program turns into an
    acquisition debacle, the consequences will be dire for the Navy and for
    the Nation. What steps are you taking to ensure you get it right the
    first time with lessons learned from past acquisition experience, such
    as the CVN-78 aircraft carrier program, including: accurate cost
    estimating, technology maturity, avoiding concurrent design or
    development with production, off-ramps for high risk systems, and
    meeting reliability targets for critical systems?
        Secretary Mabus. and Admiral Richardson. The Navy recognizes the
    critical national importance of the Ohio Replacement (OR) program and
    is taking proactive steps to ensure that the program is successfully
    executed. Program measures include tight control over requirements,
    high degree of design completion prior to construction, maximum
    practical critical technology reuse, aggressive design for
    affordability program, detailed risk management program, extensive
    employment of engineering development models to retire risk, and
    continuous active review of program cost to enable timely course
    correction, if required. This will provide the Navy, the Department of
    Defense and the Nation confidence in long-term successful program
    execution.
        The OR program commenced with significant effort to establish the
    right warfighting requirements for the program. In June 2015 the Chief
    of Naval Operations approved OR's Capabilities Development Document
    (CDD) defining the authoritative, measurable, and testable capabilities
    needed to perform the mission and in August 2015 the Joint Requirements
    Oversight Council validated OR's CDD. The program completed the Navy's
    Gate 4 in November 2015 to confirm that the proper requirements have
    been established for the technical baseline for steady design maturity.
    The OR program has instituted formal and rigorous change control to
    manage the program's technical baseline and ensure the requirements are
    maintained and controlled at the appropriate level.
        Maximizing design maturity at the start of platform construction is
    a critical lesson learned from other shipbuilding programs. Increased
    design maturity will limit many of the complications that negatively
    impact both cost and schedule resulting from simultaneous design and
    production. To illustrate the effect of design maturity (i.e., drawings
    released to the shipbuilder) on various programs, the lead Seawolf-
    class submarine achieved design maturity of 6 percent, and the lead
    Virginia-class submarine reached approximately 43 percent at
    construction start. The target design maturity for OR is 83 percent at
    start of construction.
        Technical maturity is another major focus area for the OR program
    and will reuse many of the proven technologies from both the Virginia-
    and Ohio-class programs. It will also re-host the Trident D5 Strategic
    Weapon System, limiting the potential impact that immature
    transformational technologies could have on the program. The reuse of
    proven technologies mitigates technical risk and ensures a credible and
    survivable sea-based strategic deterrent.
        To ensure maximum cost and schedule savings, the OR program has
    initiated prototyping and pre-construction testing of key systems.
    These efforts are critical to address potential technical risks and
    include the Strategic Weapons System Ashore in Cape Canaveral, Launcher
    Test Facility at China Lake, and the Compatibility Test Facility in
    Philadelphia for propulsion system testing. Manufacturing risk
    reduction prototyping, including the Missile Tube and its outfitting,
    Quad Pack of Missile Tubes and Missile Tube Module (MTM), is also in
    process.
        The OR program will also leverage Virginia's extensive experience
    with modular construction. The Virginia program successfully improved
    schedule through modifying construction plans by using super-lifts,
    reducing 10 modules into 4. OR will implement a six super-module build
    plan based off the Virginia program to significantly reduce
    construction schedule and costs. The government, design yard, and
    shipbuilder are working together conducting detailed construction
    planning efforts to determine the optimal build sequence. The program
    is also continuing to identify opportunities to further acquisition
    efficiency, reduce schedule risk, and improve program affordability.
        Credible detailed cost estimates are critical to the OR program's
    success to achieve the appropriate cost targets. The program
    established an initial lead ship cost estimate and affordability
    targets for follow-on ships in December 2010 in support of the
    Milestone A. An updated cost estimate, largely based on actual data
    from the Ohio- and Virginia-class programs, will be done to support the
    program's Milestone B decision in August 2016. The updated cost
    estimate will incorporate all cost reduction initiatives to date and
    adjust affordability targets if necessary.
        The Navy is committed to recapitalize the nation's sea-based
    strategic deterrent by ensuring the right requirements are established
    and implemented, design maturity is maximized and the technical
    baseline is strictly managed. The program's incorporation of mature and
    proven technologies, prototyping initiatives, and focus on
    affordability, are integral to successful execution. These efforts will
    ensure the OR program is successful, assure our Nation's strategic
    deterrence and ensure best value for the American taxpayers.
                          next amphibious ship (lx(r))
        3. Senator McCain. The Navy's shipbuilding plan lists LX(R) as
    planned for a fiscal year 2020 authorization. To what extent could this
    ship be accelerated while still preserving competition and is
    acceleration to fiscal year 2019 reasonable? Would accelerating this
    ship to fiscal year 2018 result in a non-competitive, sole-source
    situation?
        Secretary Mabus. The Department of the Navy plans to execute a
    competitive acquisition strategy for the LX(R) program. The Navy will
    review proposals leading to source selection for the lead ship in
    fiscal year 2018, award detail design and advance procurement in fiscal
    year 2019, and exercise the option for construction in fiscal year
    2020. The Preliminary Design and Systems Engineering Technical Review
    have been completed and Contract Design efforts will begin shortly
    after contract award. Twelve months are required to complete Contract
    Design efforts in order to further refine and incorporate affordability
    initiatives into the design to meet both lead ship and average follow-
    on ship affordability targets. With the authority provided by Congress
    in the fiscal year 2016 NDAA which authorizes the use of Advance
    Procurement (AP) funding for design work and material, the Navy is
    evaluating opportunities for accelerating the detail design contract to
    late fiscal year 2018, as well as acceleration of the lead ship start
    of construction.
                                      f-35
        4. Senator McCain. Can you certify that all F-35s procured in
    fiscal year 2016 will be delivered with the full Block 3F capability,
    including hardware, software and weapons carriage?
        Secretary Mabus. The F-35 program currently plans to deliver F-35A
    aircraft with full Block 3F capability (hardware, software and weapons)
    before the end of fiscal year 2017. However, before the Services can
    certify this, there are two challenges that must first be addressed: 1.
    Resolving F-35 BLK 3i software instability; and 2. Developing a
    suitable plan to complete the Weapons Delivery Accuracy (WDA) test and
    analysis in time for full weapon envelope and clearance. At this time,
    the Department of the Navy, in coordination with the Department of the
    Air Force and the F-35 Program Office are continuing to resolve these
    challenges. Once the test results from the latest software stability
    fixes are known (late April 2016 timeframe) and the new weapons test
    plan is laid out, the F-35 Joint Program Office will be able to provide
    evidence to the Services for certification of Full Block 3F capability,
    and specifically, to the Secretary of the Air Force for F-35A aircraft
    procured in fiscal year 2016. This certification is expected in the
    early/mid-May 2016 timeframe.
                                     mv-22
        5. Senator McCain. In your judgement, would procuring 16 MV-22 in
    fiscal year 2017 be in breach of the multi-year procurement contract
    which stipulates 18 aircraft would be procured? What would be the
    effect of procuring only 16 aircraft in fiscal year 2017?
        Secretary Mabus. The quantity reduction of two aircraft in fiscal
    year 2017 would breach the terms and conditions of the MYPII contract
    in its final year. This would effectively create a partial termination
    for convenience of the contract to which Industry would have the
    ability to seek compensation. Two mitigation strategies are in-work.
    The first is an fiscal year 2017 Unfunded Priority List (UPL) request
    for two aircraft. Second is the opportunity to replace the two aircraft
    with pending international orders from Japan and/or an fiscal year 2016
    CV-22 plus up aircraft by the United States Air Force. The Government
    of Japan's request for four aircraft is anticipated by March 2016. The
    program office intends to exercise the MYPII Fiscal Year 2016 Variation
    in Quantity contract clause by June 30, 2016.
        The impact to cost and schedule resulting from an fiscal year 2017
    reduction of two aircraft is unknown at this time. A partial
    termination for convenience proposal from industry and dialogue with
    industry would be required to assess the specific impacts. The areas of
    impact would include Overhead/Labor rates, direct/indirect labor and
    material, and termination costs for: Economic Order Quantity
    components, Long Lead components, and suppliers. A preliminary
    assessment from within the government indicates a minimum of a $17
    million cost impact resulting from a termination of two aircraft
    without consideration of possible alternatives to mitigate these
    impacts. The program office has engaged with industry on the viability
    of replacing the two aircraft of concern with potential international
    requirements from Japan with generally favorable response. However this
    mitigation is contingent on a Japan procurement case that is not
    anticipated before June 2016. The contractual commitment for full
    funding of the fiscal year 2017 MYPII procurement is by December 31,
    2016.
                                carrier air wing
        6. Senator McCain. The Navy has indicated that the long periods
    between deployments for some carrier air wings is one reason the Navy
    would like to deactivate one air wing. Has the Navy considered
    deploying air wings, in whole or in part, in an expeditionary manner to
    alleviate long periods between deployments. Why or why not?
        Admiral Richardson. The Carrier Air Wing is tailored for maximum
    effectiveness when employed as an integrated warfighting unit in
    conjunction with a Carrier Strike Group (CSG) complement of warships.
    However, there are some instances where Carrier Air Wing assets can be
    employed in an expeditionary manner. The Navy currently employs
    electronic attack, helicopter, and strike fighter assets in support of
    individual unit deployment programs and the Department continually
    evaluates all opportunities to best support combatant commander demand.
                                   __________
                 Questions Submitted by Senator Senator Ayotte
              industrial base--dependency on sole source suppliers
        7. Senator Ayotte. To what degree are key programs in the Navy
    dependent on sole source suppliers?
        Admiral Richardson. In the context of major weapon systems
    procurement (e.g., MDAPs), the Navy is dependent on sole source
    suppliers to the extent we are unable to establish a viable competitive
    environment throughout the entire life cycle of a particular program.
    Major weapon systems are very complex--the costs to design and develop
    the weapon system, as well as to establish and qualify a manufacturing
    source can be considerable--often exceeding several billion dollars.
    Therefore, while initial design and development efforts are commonly
    contracted using full and open competitive procedures, once a source is
    selected, that source is typically the only viable source through the
    production and manufacturing phase of the program. This is due to the
    high investment costs required to become a duplicate manufacturing
    source; typically so large as to preclude other members of industry
    from making a return on that considerable investment.
                                   __________
                    Questions Submitted by Senator Sullivan
                              fonops in the arctic
        8. Senator Sullivan. If a policy decision was made to do so, does
    the U.S. Navy currently have the capability to conduct surface FONOPs
    in the Arctic? Specifically, under what sea-ice conditions can FONOPs
    of all types be conducted or not conducted?
        Admiral Richardson. The Navy's surface combatants are currently not
    designed to operate in sea-ice conditions. Surface combatants
    participate in Arctic and sub-Arctic exercises, but they are not ice-
    hardened and operate only in open water conditions found in limited
    areas during the summer melt season. In any Arctic operation there are
    many environmental risk factors including sea ice, wind, ice
    accumulation on equipment, and impacts to communications and satellite
    coverage. Therefore, surface ship operations, including FONOPS, will be
    limited to open water conditions and executed only after a rigorous
    assessment of the operating environment and application of the
    principles of operational risk management (ORM).

        9. Senator Sullivan. With only two aging icebreakers--one medium
    one and one heavy one that is always deployed to Antarctica--what are
    the risks to U.S. Naval vessels to conducting surface FONOPs in the
    Arctic without icebreaker support?
        Admiral Richardson. The Navy's surface combatants are not designed
    to operate in sea-ice conditions. Surface combatants participate in
    Arctic and sub-Arctic exercises, but they are not ice-hardened and
    operate only in open water conditions found in limited areas during the
    summer melt season. In any Arctic operation there are many
    environmental risk factors to consider. Risk factors include sea ice,
    wind, ice accumulation on equipment, and impacts to communications and
    satellite coverage.
        After assessing all risk factors associated with operating in the
    Arctic extremes, a combatant commander would require extraordinary
    circumstances before directing a Naval Component Commander to conduct a
    FONOP with a surface vessel in conditions where ice breakers would be
    required.

        10. Senator Sullivan. Given Russia's increased aggressiveness
    across the globe and their militarization of the Arctic, including
    their recent investments in icebreakers and Arctic ports, is our
    deficiency in icebreakers a capability gap for the U.S. Navy, current
    and in the future, for future U.S. involvement in the Arctic? How does
    this capability gap affect U.S. Arctic strategic interests?
        Secretary Mabus. and Admiral Richardson. The current U.S.
    deficiency in icebreaker capability is not a capability gap for the
    U.S. Navy for current and future Navy operations in the Artic. The U.S.
    Navy has no defense requirement for polar icebreaking capability. U.S.
    Navy defense requirements for operational forces in the Artic are
    currently provided by its undersea and air assets. The Navy's existing
    posture is appropriate to address the near-term defense requirements of
    the U.S. in the Artic. Moreover, no combatant commanders have
    identified a requirement for icebreaking capability.
        The national requirement for this capability is provided by the
    U.S. Coast Guard. The U.S. Navy supports the U.S. Coast Guard's request
    for moedernization of the national icebreaking capability. U.S.
    national interests from a defense perspective are not affected by this
    icebreaker capability gap. From a non-defense perspective, this
    capability gap affects U.S. national interests in the Arctic regarding:

          the conduct and support of scientific research,
          the protection of U.S. economic interest in the U.S.
    Exclusive Economic Zone
          the conduct of search and rescue law enforcement and
    protection of marine resources.

        11. Senator Sullivan. Do you agree that we need a more robust
    Arctic strategy--one that does a better job of assessing the new
    threats in the region and one that reflects Russian as a potential
    adversary?
        Secretary Mabus. The National Strategy for the Arctic Region, the
    Department of Defense Arctic Strategy, the U.S. Coast Guard Arctic
    Strategy, and the Navy Arctic Roadmap remain valid and relevant
    strategies that have guided our security and safety efforts to date.
    Additionally, Arctic nations have demonstrated a desire to leverage
    existing international frameworks to resolve disputes peacefully. As
    directed by section 1068 of the National Defense Authorization Act for
    Fiscal Year 2016, the Department of Navy is prepared to work with the
    Department of Defense on the update to their Arctic Strategy.

        12. Senator Sullivan. Secretary Mabus, do you agree that the Navy
    should relook and potentially rewrite the Navy's 21st Century Arctic
    Roadmap following the completion of the new DOD Arctic Strategic,
    required in section 1068 of the fiscal year 2016 NDAA?
        Secretary Mabus. The U.S. Navy Arctic Roadmap 2014-2030 remains
    aligned with National and DOD strategies and outlines the U.S. Navy's
    strategic approach to the Arctic region in step with changing
    environmental conditions. While balancing all of our global defense
    responsibilities, the Navy will continually assess our preparedness in
    response to changes in the Arctic environment or changes in the
    security environment.
                                   __________
                    Questions Submitted by Senator McCaskill
                                f/a-18 inventory
        13. Senator McCaskill. You've stated the Navy has a strike fighter
    inventory issue. Last year, the President's Budget requested no funding
    to procure Super Hornets, yet the Congress funded five Super Hornets in
    the fiscal year 2016 Omnibus. This year the Navy is requesting two
    Super Hornets and projects requesting 14 Super Hornets in the fiscal
    year 2018 request. The Navy has also included a request for 14 Super
    Hornets as their number one priority on this year's Unfunded
    Requirements List. Why has the Navy made F/A-18s the number one
    priority on its unfunded requirement request?
        Admiral Richardson. The Department of the Navy (DON) remains
    challenged with end of life planning for F/A-18 aircraft that reach the
    end of their service life before replacement aircraft (F-35B/C) are
    delivered into service. The near-term challenge is due to a combination
    of reduced strike fighter aircraft procurement, higher than planned
    TACAIR utilization rates, and F/A-18A-D depot production falling short
    of the required output. The mid-term challenge encompasses F/A-18E/F
    service life extension efforts to sustain inventory capacity to meet
    warfighting requirements. In the far-term, inventory capacity is
    predominantly affected by new aircraft procurement, particularly the F/
    A-18E/F and F-35.
        Although the fiscal year (FY) 2017 President's Budget request takes
    many steps towards addressing the gap between aircraft supply and the
    Department's Master Aviation Plan demand with legacy aircraft
    sustainment, new aircraft procurement, and fleet utilization, an
    additional 14 aircraft in fiscal year 2017 will reduce risk in the
    near-term, and address a long-term inventory shortfall by assuring
    aircraft with useful life into the 2030s. I have included these
    additional aircraft as the number one priority on this year's Unfunded
    Priorities List to highlight the need to address this critical gap in
    warfighting requirements.

        14. Senator McCaskill. Why did you make the decision to signal that
    you will request 14 Super Hornets in your fiscal year 2018 request?
        Admiral Richardson. The Fiscal Year 2017 President's Budget request
    continues to address the requirement for an additional two to three
    operational squadrons of F/A-18E/F aircraft to sustain the strike
    fighter inventory. Congressionally authorized and appropriated aircraft
    in fiscal year (FY) 2016 begin to reduce the shortfall, but nonetheless
    the Department of the Navy (DON) is still experiencing risk in our
    Strike Fighter Inventory Management strategy.
        The additional aircraft will reduce risk in near and mid-term
    inventory capacity as we begin to assess service life extension
    requirements to sustain the F/A-18E/F inventory into the future. The
    aircraft requested in the base budget, Overseas Contingency Operations
    (OCO) budget, and Unfunded Priority List (UPL) would alleviate near-
    term demand on the F/A-18E/F Super Hornet fleet which has experienced
    higher than planned utilization in support of current operations.
        Furthermore, as we study the service life extension plan for the F/
    A-18E/F Super Hornet fleet, current forecast models predict Out Of
    Reporting (OOR) figures will exceed what was originally expected,
    inducing additional risk to inventory management.
        The F/A-18E/F Super Hornet will be the mainstay of the Navy's
    strike fighter force into the 2030's. Accordingly, the DON has
    requested the continued procurement of these aircraft to simultaneously
    maintain operational readiness and reduce risk in our strike fighter
    inventory.

        15. Senator McCaskill. What will be the effect on future Navy
    operations if Congress does not approve funding for the 14 Super
    Hornets on the fiscal year 2017 Unfunded Requirements List?
        Admiral Richardson. The Navy will be unable to close the gap
    between inventory capacity and operational demand without Congress'
    support for additional F/A-18E/F aircraft. These aircraft alleviate
    near-term overutilization challenges with the existing Super Hornet
    fleet and decrease risk in the F/A-18E/F service life extension plan by
    improving F/A-18E/F pipeline aircraft availability.

        16. Senator McCaskill. What will be the effect on future Navy
    operations if Congress does not approve funding for the 14 Super
    Hornets you plan to request in the fiscal year 2018 budget?
        Admiral Richardson. The Navy will be unable to close the gap
    between inventory capacity and operational demand without Congress'
    support for additional F/A-18E/F aircraft. These aircraft alleviate
    near-term overutilization challenges with the existing Super Hornet
    fleet and decrease risk in the F/A-18E/F service life extension plan by
    improving F/A-18E/F pipeline aircraft availability.
                           defense acquisition reform
        The National Defense Authorization Act of 2016 required each of the
    Service Chiefs to review their individual defense acquisition
    authorities and make recommendations to the Armed Services Committees
    changes they believe are necessary to strengthen their role in the
    development of requirements, acquisition processes, and budget
    practices.

        17. Senator McCaskill. Based on your review, do you have any
    recommendations to improve the management of the Navy acquisition
    workforce?
        Admiral Richardson. Acquisition involves professionals in the areas
    of requirements generation, program management, and financial
    management. The three areas are critical in ensuring we define,
    resource, and deliver the needed capability to our warfighters. The
    training and development pipelines for our program management and
    financial management workforce are well defined and well managed.
    Congress has been instrumental in providing tools to strengthen our
    program management workforce by providing the Defense Acquisition
    Workforce Development Fund (DAWDF) (enacted in fiscal year 2008) and
    the Acquisition Demonstration performance management system (Acq Demo).
    DAWDF is now an enduring fund and authorities for Acq Demo have been
    extended through fiscal year 2020 so we can demonstrate the value of
    this tool and consider extension or permanence. I am working with my
    leadership team on professionalizing our requirements generation
    workforce. I do not anticipate additional authorities needed at this
    time.

        18. Senator McCaskill. Based on your review, do you have any
    recommendations to improve the management of the Marine Corps
    acquisition workforce?
        General Neller. This is an interim reply. We will follow-up with a
    completed response no later than 25 May by submitting our Report to
    Congress under the National Defense Authorization Act for fiscal year
    2016. Specifically, this refers to section 808, Report on Linking and
    Streamlining Requirements, Acquisition and Budgets Processes of the
    Armed Services. The report will include recommendations to Congress to
    increase funding flexibility and stability, consider ideas to effect
    protest reform, and streamline oversight. It will also provide details
    on the following discussion.
        The Marine Corps continues to implement management actions that
    integrate and synchronize our capability and material developers while
    resourcing staff and their processes. These processes, and the people
    who manage and execute them, can make key differences individually or
    collectively in our modernization programs. We will also undertake a
    comprehensive review of our acquisition workforce structure with a
    focus on our military acquisition professionals as well as civilian
    leadership. We are looking closely at the new roles and relationship of
    the Principal Military Deputy, established in section 802, NDAA fiscal
    year 2016. We will define a more detailed understanding of how this
    works for the CMC and our leadership team, including the requirements,
    acquisition and budget process owners. Related to the workforce review,
    we will evaluate how best to sustain the momentum of focus on and
    improvement to our processes. This evaluation is to produce an
    institutional solution for sustained acquisition improvement, including
    all associated supporting and supported processes.
        We look forward to providing a more in-depth and comprehensive
    answer next month.
                           f-35 joint strike fighter
        19. Senator Kaine. Both the Marine Corps and the Air Force have
    conducted their Environmental Impact Studies (EIS) for their F-35
    basing plan. In light of the continued requests by the Administration
    to conduct a BRAC, an indication of your basing plan would be
    beneficial. Could you provide a rationale as to why the Navy has not
    yet conducted a study? When does the Navy anticipate it will conduct an
    EIS?
        Secretary Mabus. The Department's F-35 procurement plan determines
    the timeline for basing action. In line with the rebalance to the
    Pacific, the Department completed the F-35C West Coast home basing
    actions first. In 2014, Navy selected Naval Air Station Lemoore as the
    future West Coast home base for F-35C squadrons after the preparation
    of a West Coast EIS. Military construction projects are currently
    underway to support the first F-35C arrival in January 2017.
        The Navy is currently developing future basing requirements for
    2022 and beyond. East Coast basing actions will follow consistent with
    other aircraft home basing efforts. Once requirements are established,
    the basing decision process will include an EIS. The EIS along with
    required construction will take several years. Based on this timeline,
    the Navy will not begin the EIS process prior to fiscal year 2018 and
    may begin later depending on the F-35 procurement plan.
                           unfunded priorities lists
        20. Senator Kaine. Please provide your services prioritized,
    unfunded priorities list.
        General Neller. Attached is the Marine Corps' prioritized, unfunded
    priority list.

        Admiral Richardson. Attached is my fiscal year 2017 unfunded
    priorities list.

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            THURSDAY, MARCH 17, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                      DEPARTMENT OF DEFENSE BUDGET POSTURE

        The committee met, pursuant to notice, at 9:40 a.m. in Room
    SD-G50, Dirksen Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Wicker, Ayotte, Fischer, Cotton, Rounds, Ernst,
    Tillis, Sullivan, Lee, Graham, Reed, Nelson, Manchin, Shaheen,
    Gillibrand, Blumenthal, Donnelly, Hirono, Kaine, King, and
    Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good morning. Good morning, all.
        The Senate Armed Services Committee meets this morning to
    receive testimony on the Department of Defense's Fiscal Year
    2017 Budget Request, the associated Future Years Defense
    Program, and the posture of U.S. Armed Forces.
        We welcome our witnesses. We thank each of you for your
    service to our Nation and to the soldiers, sailors, airmen, and
    marines serving here at home and around the world.
        Before I proceed with my statement, let me just say that,
    yesterday, disturbing statement made a senior executive of the
    United Launch Alliance [ULA] were reported in the media. These
    statements raise troubling questions about the nature of the
    relationship between the Department of Defense and ULA. This
    committee treats with the utmost seriousness any implication
    that the Department showed favoritism to a major defense
    contractor or that efforts have been made to silence Members of
    Congress.
        Mr. Secretary, I expect that you will make a full
    investigation into these statements and take action, wherever
    appropriate.
        Last month, the Director of National Intelligence provided
    this committee a candid and unsettling picture of our worldwide
    threats. Just consider what has occurred over the past 5 years.
    While al Qaeda remains a real and potent threat, the vanguard
    of global terrorism is increasingly led by ISIL [Islamic State
    of Iraq and the Levant], which has metastasized across the
    Middle East, Africa, and South Asia, and which has already
    launched attacks into the heart of Europe and inspired an
    attack here in the United States. Russia has invaded Ukraine,
    annexed Crimea, menaced our NATO [North Atlantic Treaty
    Organization] allies, intervened militarily in Syria, and is
    now regarded by Chairman Dunford, and many of our military
    leaders say, as our Nation's greatest threat. China has
    continued its rapid military modernization, steadily
    militarized the South China Sea, and used coercion and the
    threat of force to bully our Asian allies and partners. North
    Korea has launched brazen cyberattacks against the United
    States, continued to advance and test its nuclear weapons
    program, and conducted provocative missile tests, including a
    potential ICBM [intercontinental ballistic missile] capability.
    Rather than moderating its malign activities in the Middle
    East, as advocates of the nuclear agreement predicted, Iran has
    instead increased its support for its terrorist proxies from
    Syria to Yemen, conducted advanced missile tests, in violation
    of U.N. [United Nations] Security Council resolutions, and
    fired rockets near a U.S. aircraft carrier. More recently, Iran
    seized two U.S. Navy vessels, detained 10 U.S. sailors, and
    propagandized the entire incident, in total violation of
    international law and centuries of maritime tradition.
        These are the growing threats we face in the world. The
    Department of Defense remains guided by a strategy that
    predates all of these developments. It is based on assumptions
    about the world that no longer apply. What's worse, the same is
    true about our Nation's defense spending. While the
    requirements for our military have grown, the Budget Control
    Act [BCA] arbitrarily capped defense spending back in 2011.
    Despite periodic relief from these caps, each of our military
    services remain undersized, unready, and underfunded to meet
    the current and future threats.
        This translates into real things that our military, as
    remarkable and determined as it is, simply cannot do for our
    Nation. Our aircraft carriers no longer provide constant
    presence in the Middle East or the western Pacific. Just one-
    third of Army brigade combat teams are ready to deploy and
    operate decisively. The Air Force is the smallest it's ever
    been, and more than half of its squadrons are not combat
    mission-ready. Marine Corps aviation is in crisis, and the
    Assistant Commandant testified this week that his forces cannot
    execute our Nation's defense strategy.
        The effects on the present force are bad enough. The
    effects on the future force are worse. Years and years of
    deferred maintenance and delayed modernization are creating a
    mountain of bills that will soon come due. From 2018 to 2021
    alone, the Department of Defense needs $100 billion above the
    BCA caps just to meet current requirements. In reality, those
    requirements are inadequate, additional resources will be
    needed, and the longer we try to delay that bill, the bigger
    and worse it gets, and the more we run the risk of a return to
    sequestration.
        This is a crisis of our own making. I'm speaking of the
    Congress, as well. It is why many of us are so concerned about
    the President's Budget request for fiscal year 2017. There's a
    lot to like about this request. Many of the investments,
    especially related to the so-called ``third offset strategy''
    are critical and long overdue. That said, though our Nation is
    asking our military to do more over the next fiscal year, the
    President's defense budget request, in real dollars, is
    actually less than it is this year. As a result, the Department
    was forced to cut $17 billion it said it needed last year,
    purely for budget reasons. To be sure, the temporary effects of
    more positive economic assumptions and lower fuel prices soften
    the blow. Nevertheless, the Department cut over $10 billion in
    real military capability to mitigate this shortfall.
        Nothing in the Bipartisan Budget Act prevented the
    President from requesting more than he did. He did not have to
    fund our growing operational requirements by cutting
    modernization and procurement. He chose to do so. These are
    just some of the consequences. The Army had to cut 24 UH-60
    Black Hawk helicopters. The Air Force had to cut 5 F-35As this
    year and 45 over the next 4 years. The Navy plans to lay up an
    additional 5 Ticonderoga-class cruisers. The Marine Corps cut
    77 joint light tactical vehicles, $1.3 billion in military
    construction, and family housing has been cut. Certain critical
    nuclear modernization efforts, including an ICBM replacement
    and the B61 nuclear bomb tail kit, have been further delayed.
        The unfunded requirements of the military services now
    total nearly $18 billion. That represents the additional ships,
    airplanes, helicopters, fighting vehicles, training, and other
    programs that our military leaders say they need simply to
    carry out our increasingly antiquated defense strategy and an
    acceptable level of risk. Last year, the former Chairman of the
    Joint Chiefs, General Dempsey, described the Future Years
    Defense Plan as, quote, ``the lower ragged edge of manageable
    risk in our ability to execute the defense strategy.'' Now,
    here were are, 1 year later and $17 billion less than what our
    military needed and planned for. I do not know what lies
    beneath the, quote, ``lower ragged edge of manageable risk,''
    but this is what I fear it means, that our military is becoming
    less and less able to deter conflict, and if, God forbid,
    deterrence does fail somewhere and we end up in conflict, our
    Nation will deploy young Americans into battle without
    sufficient training or equipment to fight a war that will take
    longer, be larger, cost more, and ultimately claim more
    American lives than it otherwise would have.
        This is the growing risk we face, and we can't change
    course soon enough. We should not threaten the stability
    provided by the budget--Bipartisan Budget Act. We should build
    on it. Therefore, we make a virtue out of stability. Let's
    recall, this budget agreement ends this year, and defense
    spending over the next 4 years is capped by a law at $100
    billion less--less than what our witnesses will testify our
    military needs. That kind of stability is not the answer, it is
    the problem. If we cut into our military muscle again this
    year, our looming budget problems just get worse.
        Finally, another priority of this committee will remain the
    defense reform effort that we began last year, including a
    review of the Goldwater-Nichols legislation that is now
    making--marking its 30th anniversary. Over the past year,
    Senator Reed and his staff and I and my staff, we have held
    hearings and conducted interviews with dozens of former and
    currently serving military and civilian defense leaders,
    including discussions with our distinguished witness today. The
    result is that I believe we have a rather clear definition of
    the challenge that we all must address. The focus of Goldwater-
    Nichols was operational effectiveness, improving our military's
    ability to fight as a joint force. The challenge today is
    strategic integration. By that I mean improving the ability of
    the Department of Defense to develop strategies and integrate
    military power globally to confront a series of threats, both
    states and nonstate actors, all of which span multiple regions
    of the world and numerous military functions. Put simply, our
    competitors are catching up, and our defense organization must
    be far more agile and innovative than it is.
        As the committee considers what steps may be necessary to
    improve our defense organization, we are committed to work
    closely with both of you, and we would welcome any thoughts and
    recommendations you are prepared to share today.
        Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Well, thank you very much, Mr. Chairman.
        Let me join you in welcoming our witnesses and thanking
    them for their service.
        The President's Fiscal Year 2017 Budget submission for
    Department of Defense includes nearly $583 billion in
    discretionary spending and complies with the funding levels
    included in the Bipartisan Budget Act of 2015 [BBA]. Of this
    amount, $523.9 billion is included in the base budget, and
    $58.8 billion is designated for the overseas contingency
    operations account.
        As the committee considers the Department's funding
    request, we must always be mindful of the risks facing our
    country and our national security challenges. Russia's
    increasingly aggressive posture in eastern Europe and the
    Middle East must be monitored, contained, and, when necessary,
    countered. China continues to invest aggressively in its
    military, particularly in capabilities that allow them to
    project power and deny access to others. North Korea recently
    conducted a rocket launch, in violation of multiple United
    Nations Security Council resolutions, and continues to be an
    immediate and present danger to global security. Finally, Iran
    is a significant concern to the committee, particularly its
    recent missile tests and ongoing support to nonstate actors
    across the Middle East. Our Nation's counterterrorism fight
    continues to be a top priority. It has been a year of
    significantly--security and political transition in
    Afghanistan, and we must continue to evaluate how we can best
    enable efforts by the government of Afghanistan to protect and
    govern its people. In Iraq, ISIL has how lost significant
    territory, but difficult tasks remain, including evicting ISIL
    from population centers. Furthermore, the dangers posed by the
    disrepair of the Mosul Dam must be addressed. In Syria, ISIL
    maintains control of many areas while the world evaluates what
    Russia's recent announcement of a withdrawal means for
    negotiations. As ISIL loses ground in some areas, it gains
    footholds in new nations, like Libya.
        In light of these ongoing national security challenges we
    face around the world, we must closely scrutinize the budget
    request to ensure critical priorities have sufficient funding,
    scarce resources are not devoted to underperforming programs,
    and, where possible, allocate money to those areas that need
    additional funds.
        With regard to our military forces, after nearly a decade
    and a half of continuous military operations, we must take a
    hard look at the readiness levels across all the services. In
    fact, this committee has repeatedly heard testimony from senior
    military leaders that rebuilding readiness levels is their
    highest priority.
        The fiscal year 2017 budget request makes needed
    investments in readiness accounts that will help the military
    services, but it will take time to rebuild readiness. That is
    why it is vitally important that readiness accounts be
    protected from cuts. I would welcome any comments from our
    witnesses on the importance of rebuilding readiness and if they
    believe the services are on track to meet their full-spectrum
    readiness goals.
        Another challenge is the modernization of military
    platforms and equipment. While the readiness of our troops is
    paramount, we cannot neglect investments in modernization.
    Building and maintaining readiness levels requires that our
    forces have access to equipment that is properly sustained and
    upgraded. However, in order to meet the top-line funding levels
    set by the 2015 BBA, the Department's budget request modified
    base budget funding for some procurement and modernization
    efforts. While difficult choices must be made, we must ensure
    that this budget does not jeopardize shipbuilding and aviation
    procurement accounts, as well as targeted investments in
    research and development and that foster new technology. I
    would like to know if our witnesses feel confident that the
    reductions in the procurement accounts will not adversely
    impact these programs by adding substantial cost to the overall
    program or extensively delaying the fielding of any platform.
        The well-being and quality of life of our men and women in
    uniform, and that of the civilian workforce, remain a priority
    concern. We are mindful that we must support and maintain a
    high quality of life, but also a high quality of service. The
    administration's request includes a 1.6 percent pay raise for
    both the military and civilian employees, and a robust array of
    benefits. These funds are critical to ensuring that military
    and civilian pay remains competitive in order to attract and
    retain the very best for military and Government service.
        The committee also understands, however, that military and
    civilian personnel costs comprise nearly one-half of the
    Department's budget, and we are committed to implementing
    reforms that will slow that growth.
        Finally, we need to address the long-term budget situation
    that we find ourselves in. Last year, the Senate had a healthy
    debate on how to manage the needs in light of the Budget
    Control Act. At the time, I argued that meeting our national
    security challenges required relief for the Department of
    Defense as well as other agencies that contribute to the
    defense and prosperity of the Homeland. It is a daunting task
    to decide how to allocate finite resources for a myriad of
    priorities, and I recognize the Department had to make hard
    choices in order to comply with the 2015 budget agreement. I
    believe the Senate, in a bipartisan fashion, should repeal the
    BCA and establish a more reasonable limit on discretionary
    spending in an equitable manner that meets all of our needs as
    a Nation.
        I look forward to this morning's testimony.
        Thank you again, Mr. Chairman.
        Chairman McCain. Welcome, Mr. Secretary. We look forward to
    hearing from you and General Dunford. Thank you for appearing.

    STATEMENT OF HONORABLE ASHTON B. CARTER, SECRETARY OF DEFENSE;
    ACCOMPANIED BY HONORABLE MICHAEL J. McCORD, UNDER SECRETARY OF
           DEFENSE (COMPTROLLER) AND CHIEF FINANCIAL OFFICER

        Secretary Carter. Thank you, Chairman. Thanks for the
    opportunity. Chairman, Secretary--excuse me--Senator Reed, all
    the members of the committee, thank you so much for the
    opportunity to be here, for me, the Chairman, and for our Under
    Secretary, and, above all, for your steadfast support to our
    DOD [Department of Defense] men and women all over the world,
    military and civilian alike, who serve and defense us. I'm very
    pleased to be here.
        I'm pleased to be here with Chairman Dunford. We will be
    discussing the President's 2017 defense budget and other
    matters, the--a budget which marks a major inflection point for
    the Department of Defense.
        In this budget, we're taking the long view. We have to,
    because, even as we fight today's fights, we must also be
    prepared for what might come 10 and 20 and 30 years down the
    road.
        Last fall's Bipartisan Budget Act gave us some much needed
    stability after years of gridlock and turbulence. I want to
    thank you and your colleagues for coming together to help pass
    it. That budget set the size of our budget, and, with this
    degree of certainty, we focused on its shape, changing that
    shape in fundamental but carefully considered ways to adjust to
    a new strategic era and to seize opportunities for the future.
        Let me describe the strategic assessment that drove our
    budget decisions. First of all, it's evident that America is
    still today the world's foremost leader, partner, and
    underwriter of stability and security in every region of the
    world, as we've been since the end of World War II. That's
    thanks, in large part, to the unequivocal strength of the
    United States military. As we continue to fulfill this enduring
    role, it's also evident that we're entering a new strategic
    era, as has been noted. Today's security environment is
    dramatically different from the last 25 years, requiring new
    ways of investing and operating. Five evolving strategic
    challenges--namely Russia, China, North Korea, Iran, and
    terrorism--are now driving DOD's planning and budgeting, as
    reflected in this budget.
        I want to focus first on our ongoing fight against
    terrorism, and especially ISIL, which we must and will deal a
    lasting defeat, most immediately in its parent tumor in Iraq
    and Syria, but also where it's metastasizing. We're doing that
    in Africa and elsewhere, and also in Afghanistan, where we
    continue to stand with the Afghan Government and people. All
    the while, we're continuing to help to protect our Homeland. As
    we're accelerating our overall counter-ISIL campaign, we're
    backing it up with increased funding this year. We're
    requesting 50 percent more than last year.
        We've gained momentum against ISIL since the Chairman and I
    last appeared before you. Notably, the Iraqis took--retook
    Ramadi and are now reclaiming further ground in Anbar Province.
    In Syria, capable and motivated local forces, supported by the
    United States and our global coalition, have retaken the east
    Syrian town of Shaddadi, severing the last major northern
    artery between Raqqa and Mosul, and therefore between ISIL in
    Syria and ISIL in Iraq.
        Meanwhile, 90 percent of our military coalition partners
    have committed to increase their contributions to help defeat
    ISIL. We have increased strikes on ISIL-held cash depots and
    oil revenues. We've conducted targeted strikes against ISIL in
    Libya. We've also recently killed ISIL's Minister of War, the
    Chechen fighter Omar al Shishani.
        Now, before I continue, I want to say a few words about
    Russia's role. Russia said it was coming into Syria to fight
    ISIL. But, that's not what it did. Instead, their military has
    only prolonged the civil war, propped up Assad; and, as of now,
    we haven't seen whether Russia retained the leverage to find a
    diplomatic way forward, which is what the Syrian people need.
    One thing is clear, though: Russia's entry into Syria didn't
    impact our campaign against ISIL. Along with our coalition
    partners, we're intensifying our campaign against ISIL in both
    Iraq and Syria, and we'll continue to do so until ISIL is dealt
    a lasting defeat.
        Two of the other four challenges reflect a return, in some
    ways, to great-power competition. One is in Europe, where we're
    taking a strong and balanced approach to deter Russian
    aggression. We haven't had to devote a significant portion of
    our defense investment to this possibility for a quarter
    century, but now we do.
        The other challenge is in the Asia-Pacific, where China is
    rising, which is fine, but behaving aggressively, which is not.
    There, we're continuing our rebalance to the region to maintain
    the stability we've underwritten for the past 70 years,
    allowing so many nations to rise and prosper in this, the
    single most consequential region for America's future.
        Meanwhile, two other longstanding challenges pose threats
    in specific regions. North Korea is one. That's why our forces
    on the Korean Peninsula remain ready, as they say, to ``fight
    tonight.'' The other is Iran, because, while the nuclear accord
    is a good deal for preventing Iran from getting a nuclear
    weapon, in other respects our concerns with Iran persist.
        While I'm on the subject of Iran, and given this
    committee's particular interest in this matter, I want to say a
    few words about Iran's treatment of our sailors on Farsi
    Island, back in January. As I made clear then, Iran's actions
    were outrageous, unprofessional, and inconsistent with
    international law. Nothing we've learned about the
    circumstances of this incident since then changes that fact.
    It's because of Iran's recklessness and destabilizing behavior
    in that part of the world, the DOD remains full speed ahead in
    our investments, our planning, and our posture to ensure we
    deter Iran's aggression, counter its malign influence, and
    uphold our ironclad commitments to our regional friends and
    allies, especially Israel, to whom we maintain an unwavering
    and unbreakable commitment.
        Now, addressing all of these five challenges requires new
    investments on our part, new posture in some regions, and also
    new and enhanced capabilities. For example, we know we must
    deal with all these five challenges across all domains, not
    just the usual air, land, and sea, but also especially in
    cyber, electronic warfare, and space, where reliance on
    technology has given us great strength and great opportunities,
    but also led to vulnerabilities that adversaries are eager to
    exploit.
        Key to our approach is being able to deter our most
    advanced competitors. We must have, and be seen to have, the
    ability to ensure that anyone who starts a conflict with us
    will regret doing so. In our budget, our capabilities, our
    readiness, and our actions, we must, and we will, be prepared
    for a high-end enemy, what we call ``full-spectrum.'' In this
    context, Russia and China are our most stressing competitors,
    as they've both developed and continue to advance military
    systems that seek to threaten our advantages in specific areas.
    We see it in the South China Sea and in Crimea and Syria, as
    well. In some cases, they're developing weapons and ways of war
    that seek to achieve their objectives rapidly, before they
    think we can respond. Because of this, DOD has elevated their
    importance in our planning and budgeting.
        In my written testimony, I've detailed how our budget makes
    critical investments to help us address better these five
    evolving challenges. We're strengthening our deterrence posture
    in Europe by investing $3.4 billion for our European
    Reassurance Initiative, quadruple what we invest--what we
    requested last year. We're prioritizing training and readiness
    of our ground forces, as has been noted, and reinvigorating the
    readiness and modernization of our fighter aircraft fleet.
    We're investing in innovative capabilities, like the B-1--B-21
    long-range strike bomber, microdrones, the arsenal plane, as
    well as advanced munitions of all sorts. In our Navy, we're
    emphasizing not just increasing the number of ships, which
    we're doing, but especially their lethality, with new weapons
    and high-end ships, and extending our commanding lead in
    undersea warfare with new investments in unmanned undersea
    vehicles, for example, and more submarines, with the versatile
    Virginia payload module that triples their strike capacity from
    12 Tomahawks to 40. We're doing more in cyber, electronic
    warfare, and space, investing in these three domains a combined
    total of $34 billion in 2017, to, among other things, help
    build our cyber mission force, develop next-generation
    electronic jammers, and prepare for the possibility of a
    conflict that extends into space. In short, DOD will keep
    ensuring our dominance in all domains.
        As we do this, our budget also seizes opportunities for the
    future. That's a responsibility I have to all my successors, to
    ensure the military and the Defense Department they inherit is
    just as strong, if not stronger, than the one I have the
    privilege of leading today. That's why we're making increased
    investments in science and technology, innovating
    operationally, and building new bridges to the amazing American
    innovative system, as we always have, to stay ahead of future
    threats. That's why we're building what I've called the ``force
    of the future,'' because, as good as our technology is, it's
    nothing compared to our people. In the future, we need to
    continue to recruit and retain the very best talent. Competing
    for good people for an All-Volunteer Force is a critical part
    of our military edge. Everyone should understand this need, my
    commitment to it.
        Because we owe it to America's taxpayers to spend our
    defense dollars as wisely and responsibly as possible, we're
    also pushing for needed reforms across the DOD enterprise, from
    continuously improving acquisitions to further reducing
    overhead to proposing new changes to the Goldwater-Nichols act
    that defines much of our institutional organization. I know
    Goldwater-Nichols reform is a focus of this committee.
    Chairman, I appreciate that. Goldwater-Nichols was important,
    had deeply positive results, but, after 30 years, as you've
    said, it needs updates. There are some areas where the pendulum
    may have swung too far, like not involving the Service Chiefs
    enough in acquisition decisionmaking and accountability. There
    are areas, as you've noted, where subsequent world events
    suggest nudging the pendulum further, like taking more steps to
    strengthen the capability of the Chairman and the Joint Chiefs
    of Staff to help address transregional threats, threats in
    multiple domains, and multiple threats within overlapping
    timeframes.
        As you know, last fall we began a comprehensive department-
    wide review of organizational issues like these to identify any
    potential redundancies, inefficiencies, or other areas of
    improvement, to help formulate--and to help formulate DOD's
    recommendations to you. I expect its internal findings by the
    end of March.
        This work is important. Though much is within our existing
    authority to do so, we look forward to working closely with
    Congress to implement needed reforms. As we discussed over
    breakfast last week, Chairman and Senator Reed, I look forward
    to working with you personally on this important matter.
        Let me close on the broader shift reflected in this budget.
    The Defense Department doesn't have, as I've said, the luxury
    of just one opponent or the choice between current fights and
    future fights. We have to do both. That's what this budget is
    designed to do, and we need your help to succeed. I thank this
    committee, again, for supporting the Bipartisan Budget Act that
    set the size of our budget. Our submission focuses on the
    budget's shape, making changes that are necessary and
    consequential. We hope you approve it. I know some may be
    looking at the difference between what we proposed last year
    and what the budget deal gave us. A net total of about $11
    billion less is provided by the Bipartisan Budget Act, out of a
    total of almost $600 billion. But, I want to reiterate that
    we've mitigated that difference, and we're prepared to explain
    how, and that this budget meets our needs.
        The budget deal was a good deal. It gave us stability.
    We're grateful for that. DOD's greatest risk is losing that
    stability this year and having uncertainty and sequester return
    in future years. That's why, going forward, the biggest budget
    priority for us, strategically, is Congress averting the return
    of sequestration, to prevent $100 billion in automatic cuts
    that are looming, so we can maintain stability and sustain all
    these critical investments over time. We've done this before.
    That same support is essential today to address the security
    challenges we face and to seize the opportunities within our
    grasp. As long as we work together to do so, I know our
    national security will be on the right path, and America's
    military will continue to defend our country and help make a
    better world for generations to come.
        Thank you.
        [The prepared statement of Secretary Carter follows:]

             Prepared Statement by Secretary of Defense Ash Carter
                          i. purpose of this testimony
        Chairman McCain, Ranking Member Reed, Members of the Committee:
    Thank you for inviting me here today, and for your steadfast support
    for the men and women of the Department of Defense (DOD), military and
    civilian alike, who serve and defend our country all over the world.
    I'm pleased to be here with Chairman Dunford to discuss President
    Obama's fiscal year (FY) 2017 budget submission for the Defense
    Department.
        At this time last year, we were all facing the bleak prospect of
    looming budget sequestration, and the damage its return would do to our
    people and our mission. I'm grateful that our country's leaders were
    able to come together last fall to avert that dismal future, and reach
    a budget deal that--after several years of fiscal turmoil and
    reductions--has allowed for greater investment in all our elements of
    national security and strength. That was what I urged since becoming
    Secretary of Defense, including in last year's budget testimony before
    this committee, and given the threat environment we face around the
    world, forging that deal was the responsible thing to do. It allows our
    military personnel and their families to know their future more than
    just one year at a time, which they deserve. It lets our defense
    industry partners be more efficient and cutting edge, as we need them
    to be. Perhaps most importantly, it sends a signal to the world--to
    friends and potential foes alike--of our nation's strength and resolve.
        The President's Budget submission accordingly adheres to that
    budget deal--requesting a total of $582.7 billion for the Defense
    Department in fiscal year 2017, for both the base budget and Overseas
    Contingency Operations (OCO) funds combined. How we plan to invest
    those funds, along with our planned investments for the next five
    years--as detailed in the customary Future Years Defense Program (FYDP)
    that's included in the President's Budget submission--are critical to
    DOD's ability to carry out our mission of national defense with the
    excellence the American people expect of their military, which is today
    the finest fighting force the world has ever known.
        As you know, no one got everything they wanted in the budget deal--
    I said last year that we needed to rise above our differences, and I'm
    glad many members of Congress were able to do that--so in budgeting and
    programming for fiscal year 2017, we had to make responsible choices.
    The President's Budget submission reflects those choices, and we need
    your support for them. This is particularly true for prudent and
    necessary reforms--some of which the Congress has long denied, in spite
    of the cost to both DOD and to America's taxpayers. Indeed, while DOD
    is grateful to this and the other defense committees for your support
    for the budget deal, it is also the defense committees that in recent
    years have been tying our hands on reform, as I will address later in
    this testimony.
        We should remember, however, that the budget deal only covered two
    years. Unless Congress addresses the years beyond it and heads off
    sequestration, DOD will face $100 billion in cuts from 2018 to 2021,
    which would introduce unacceptable risks. Washington will need to come
    together once again--not unlike last year, and two years before that--
    to provide stability and protect our national security.
        That's important, because in this budget submission, we're taking
    the long view. We have to, because even as we must fight and win
    today's fights, we must also be prepared to deter and if necessary
    fight and win the fights that might come 10, 20, or 30 years down the
    road. Last fall's budget deal set the size of our budget, and with this
    degree of certainty we focused on changing its shape in fundamental
    ways--making choices and tradeoffs to adjust to a new strategic era,
    and seize opportunities for the future.
            ii. a strategic turning point for the defense department
        Let me now describe the strategic assessment that drove our budget
    decisions. First of all, it's evident that America is still today the
    world's foremost leader, partner, and underwriter of stability and
    security in every region across the globe, as we have been since the
    end of World War II. As we fulfill this enduring role, it's also
    evident that we're entering a new strategic era.
        Context is important here. A few years ago, following over a decade
    when we were focused on large-scale counterinsurgency operations in
    Iraq and Afghanistan, DOD began embarking on a major strategy shift to
    sustain our lead in full-spectrum warfighting. While the basic elements
    of our resulting defense strategy remain valid, it's also been
    abundantly clear to me over the last year that the world has not stood
    still since then--the emergence of ISIL, and the resurgence of Russia,
    being just the most prominent examples.
        This is reflective of a broader strategic transition underway, not
    unlike those we've seen in history following major wars. Today's
    security environment is dramatically different--and more diverse and
    complex in the scope of its challenges--than the one we've been engaged
    with for the last 25 years, and it requires new ways of thinking and
    new ways of acting.
        Accordingly, five evolving challenges are now driving the focus of
    DOD's planning and budgeting.
        Two of these challenges reflect a recognition of--return to, in
    some ways--great power competition. This is something we haven't seen
    for some time, and that requires heightened focus given its potential
    impact on our nation and the world. The first such challenge is in
    Europe, where we're taking a strong and balanced approach to deter
    Russian aggression--we haven't had to devote a significant portion of
    our defense investment to this possibility for 25 years, and while I
    wish it were otherwise, now we do. The second is in the Asia-Pacific,
    where we haven't faced great power competition since the end of World
    War II, and where China is rising, which is fine, but behaving
    aggressively, which is not. There, we're continuing our rebalance, in
    terms of weight of effort, to maintain the regional stability we've
    underwritten for the past 70 years, allowing so many nations to rise
    and prosper in this, the single most consequential region for America's
    future.
        Meanwhile, two other longstanding challenges pose threats in
    specific regions. One is North Korea, which remains dangerous to both
    us and our allies--that's why our forces on the Korean Peninsula remain
    ready, as they say, to ``fight tonight.'' The other is Iran--because
    while the nuclear accord is a good deal for preventing Iran from
    getting a nuclear weapon, and doesn't limit DOD in any way, we must
    still deter Iranian aggression and counter Iran's malign influence
    against our friends and allies in the region, especially Israel, to
    whom we maintain an unwavering and unbreakable commitment.
        Challenge number five, no less important than the other four, is
    our ongoing fight to counter terrorism, and especially defeat ISIL--
    most immediately in its parent tumor in Iraq and Syria, and also where
    it is metastasizing, in Afghanistan, Africa, and elsewhere--at the same
    time as we're protecting our Homeland. While ISIL must and will be
    defeated now, in the longer perspective and in our budgeting we must
    also take into account that as destructive power of greater and greater
    magnitude falls into the hands of smaller and smaller groups of people,
    countering terrorists will be a continuing part of the future
    responsibilities of DOD and other national security leaders.
        DOD must and will address all five of these challenges as part of
    its mission to defend this country. Doing so requires some new
    investments on our part, new posture in some regions, and also new and
    enhanced capabilities.
        Key to our approach is being able to deter the most advanced
    adversaries while continuing to fight terrorist groups. This means we
    must have--and be seen to have--the ability to impose unacceptable
    costs on an advanced aggressor that will either dissuade them from
    taking provocative action, or make them deeply regret it if they do. To
    be clear, the U.S. military will be ready to fight very differently
    than we have in Iraq and Afghanistan, or in the rest of the world's
    recent memory. We will be prepared for a high-end enemy--what we call
    full-spectrum. In our budget, our plans, our capabilities, and our
    actions, we must demonstrate to potential foes that if they start a
    war, we are able to win, on our terms. Because a force meant to deter
    conflict can only succeed in deterrence if it can show that it will
    dominate a conflict.
        We have this ability with respect to North Korean and Iranian
    military forces, as well as in executing the military aspects of
    countering terrorists, as we're doing now against ISIL. That won't
    change, even as we know that military power alone cannot prevail
    without capable and motivated local forces to sustain ISIL's defeat--
    nor can the United States alone deliver a lasting defeat--against the
    toxic ideology of terrorists like ISIL that have so little regard for
    the lives of fellow human beings.
        In this context, Russia and China are our most stressing
    competitors, as they've both developed and are continuing to advance
    military systems that threaten our advantages in specific areas, and in
    some cases, they're developing weapons and ways of war that seek to
    achieve their objectives in ways they hope would preempt a response by
    the United States. Because of these facts, because the implications of
    any great-power conflict would be so dire for the United States and the
    world, and because of those nations' actions to date--from Ukraine to
    the South China Sea--DOD has elevated their importance in our defense
    planning and budgeting to ensure we maintain our advantages in the
    future.
        While we do not desire conflict with any of these nations--and, to
    be clear, though they pose some similar defense challenges, they are
    very different nations and situations--we also cannot blind ourselves
    to the actions they choose to pursue. That is the responsible course of
    action for the Defense Department. Our military is first and foremost a
    warfighting force, and even as we seek to deter wars, we must also be
    prepared to fight and win them, which is itself a key part of
    deterrence.
        Our military must be balanced with the proper size and capability
    to defeat any attack against U.S. Forces and our allies. Because of the
    decisions in this budget, our military will be better prepared for both
    present and future challenges, and better positioned to deter, and if
    necessary fight and win, wars against even the most high-end of
    potential adversaries.
        As this budget addresses those five evolving challenges, it also
    seizes great opportunities--in supporting new and innovative
    operational concepts; in pioneering and dominating technological
    frontiers, including undersea, cyber, space, electronic warfare, and
    other advanced capabilities; in reforming the defense enterprise; and
    in building the force of the future. I will address the investments
    we're making to do so later in this testimony.
      iii. supporting the strength and wellness of today's fighting force
        Before I address how this budget ensures we meet those challenges
    and seize those opportunities, I want to first emphasize our enduring
    commitment to supporting the men, women, and families of the world's
    finest fighting force. Above all, this means exercising the utmost care
    in decisions involving the deployment and employment of our troops. It
    also requires devoting a significant share of our budget every year
    toward supporting the people, military and civilian alike, who execute
    DOD's missions around the world.
        To ensure we have a force that's ready to carry out today's
    missions, this budget invests in the four main things that every
    soldier, sailor, airman, and Marine needs to do their job--the right
    training; the right equipment; the right force size, meaning the right
    number of people alongside them; and the right compensation.
    The Right Training
        In fiscal year 2017 and beyond, the budget makes critical
    investments in training throughout the force to rebuild toward full-
    spectrum combat readiness and continue recovering from the damage
    caused by sequestration in recent years--though, it's important to
    remember that restoring readiness requires not only sufficient funding,
    but also time. The budget maximizes use of the Army's decisive action
    Combat Training Centers, funding 19 total Army brigade-level training
    rotations. It provides robust funding to sustain the Navy and Marine
    Corps' current training levels and readiness recovery plans for fiscal
    year 2017--optimizing Navy training while maximizing the availability
    of naval forces for global operations, and fully funding the Marine
    Corps' integrated combined arms exercises for all elements of its
    Marine Air-Ground Task Forces. Because recent operational demands like
    the fight against ISIL have slowed the Air Force's return to full-
    spectrum readiness, the budget increases funding--as part of a $1
    billion increase over the FYDP to support Air Force readiness--to
    modernize and expand existing Air Force training ranges and exercises
    here at home, providing pilots and airmen with more realistic training
    opportunities when they're not deployed.
    The Right Equipment
        The budget also makes important investments to provide our men and
    women in uniform with functioning, well-maintained equipment so that
    when we send them into the fights of today, they're able to accomplish
    their mission and come home safely. For example, to address the Navy
    and Marine Corps' growing maintenance backlog in tactical aviation, the
    budget funds a 15 percent increase in F-18 depot maintenance capacity,
    and it buys an additional 16 F/A-18 E/F Super Hornet fighter jets
    between now and fiscal year 2018--providing a significant boost to the
    health of the Navy and Marine Corps' 4th-generation fighter aircraft
    fleet so it's ready and capable for today's missions. To help ensure
    the Air Force has enough ready and capable aircraft for both combat
    missions and intelligence, surveillance, and reconnaissance (ISR), the
    budget funds improvements in the avionics and electronic warfare
    systems of legacy fighter and bomber aircraft, and it supports the Air
    Force's `get well plan' for remotely-piloted aircraft.
        The budget also makes critical investments in every domain to
    research, develop, test, evaluate, and procure the right technology and
    equipment our military will need to deter and if necessary fight and
    win full-spectrum conflicts in the future. I will detail those
    investments later in this testimony.
    The Right Force Size
        The flexibility provided by last fall's budget deal allowed us to
    maintain DOD's desired targets across the FYDP for end-strength and
    active-reserve mix for our ground forces--without it, sequestration
    likely would have forced further reductions. Therefore, the budget
    stabilizes our total ground force end-strength by the end of fiscal
    year 2018 with an Army of 450,000 active-duty soldiers, 335,000
    soldiers in the Army National Guard, and 195,000 soldiers in the Army
    Reserve--comprising 56 total Army brigade combat teams and associated
    enablers--and a Marine Corps of 182,000 active-duty Marines and 38,500
    Marine reservists. For the Navy, the budget continues to grow the size,
    and importantly the capability, of the battle fleet--providing for
    380,900 Active Duty and Reserve sailors in fiscal year 2017, and an
    increase from 280 ships at the end of fiscal year 2016 to 308 ships at
    the end of the FYDP. The budget also supports an Air Force of 491,700
    Active Duty, Reserve, and National Guard airmen--maintaining 55
    tactical fighter squadrons over the next five years, and providing
    sufficient manpower to address high operating tempo and shortfalls in
    maintenance specialists for both tactical fighters and remotely-piloted
    aircraft.
    The Right Compensation
        In fiscal year 2017, the budget provides $177.9 billion in pay and
    benefits--including health care, housing allowances, commissaries,
    retirement, and other benefits--for DOD's 2.1 million military
    personnel and their families. I will discuss DOD's proposed reforms to
    some of these areas later in this testimony. To help make sure DOD is
    competitive for the best talent, the budget includes a department-wide
    pay raise of 1.6 percent in fiscal year 2017. This is an increase above
    fiscal year 2016's pay raise of 1.3 percent.
        It's important to note that of all the cuts we've taken to our
    previously-planned budgets since the Budget Control Act was passed,
    including cuts from sequestration--altogether so far totaling at least
    $800 billion over ten years--less than 9 percent of those reductions
    came from military compensation proposals. This should make clear that
    we've worked extremely hard to protect our people, and that we do need
    to address some places where savings can be found, such as through
    modernizing and simplifying our military healthcare system, which I
    address later in this testimony.
    More Than Military Readiness
        Beyond ensuring the combat readiness of America's military, our
    commitment to the force of today also encompasses what we're doing to
    ensure the dignity of our people. We're putting a priority on
    preventing and eliminating sexual harassment and sexual assault in the
    military, investing $246 million in fiscal year 2017 to help support
    survivors, reduce retaliation for reporting, and eradicate these crimes
    from our ranks--and soon, DOD will deliver to Congress our strategy on
    addressing retaliation, in particular. We're also helping provide
    transition support and advocating for employment opportunities for
    veterans, investing a total of $109 million in fiscal year 2017 so our
    people can make the most of their potential and keep making a
    difference when they complete their service in uniform. We're fostering
    greater diversity of our force, because our strength depends on being
    open to the widest possible pool of talent that can meet our
    standards--young Americans today are more diverse, open, and tolerant
    than past generations, and if we're going to attract the best among
    them to contribute to our mission, we ourselves have to be more
    diverse, open, and tolerant, too. It's the only way to compete in the
    21st century.
        That's one reason why we're opening all remaining combat positions
    to women, so that we have access to 100 percent of our population for
    every position in the All-Volunteer Force and every American who can
    meet our exacting standards has the full and equal opportunity to
    contribute to our mission. That said, since the declaration that opens
    all career fields to women is by itself not sufficient for their full
    integration, I've asked the military services to mitigate any concerns
    about combat effectiveness by incorporating my seven guiding
    principles--transparent standards, population size, talent management,
    physical demands and physiological differences, operating abroad,
    conduct and culture, and assessment and adjustment--into their
    implementation plans, which I have reviewed and approved and are now
    being carried out. First and foremost, this means the services will
    continue to apply objective standards for all career fields to ensure
    leaders assign tasks and career fields throughout the force based on
    ability, not gender. This may mean in some cases, equal opportunity may
    not always equate to equal participation. Integration provides equal
    opportunity for men and women who can perform the tasks required; it
    does not guarantee women will fill these roles in any specific number
    or at any set rate, as adherence to a merit-based system must continue
    to be paramount. Also, we must incorporate concrete ways to mitigate
    the potential for higher injury rates among women, and leverage lessons
    learned from Iraq and Afghanistan to address concerns regarding
    operating in areas where there is cultural resistance to working with
    women. We must address attitudes toward team performance through
    education and training, including making clear that sexual assault or
    harassment, hazing, and unprofessional behaviors are never acceptable.
    Our core beliefs in good order, discipline, leadership, and
    accountability are foundational to our success in integration. It is
    absolutely critical that we embark on integration with a commitment to
    the monitoring, assessment, and in-stride adjustment that enables
    sustainable success.
        Finally, it's important to remember that our commitment to the
    force of today is not limited to those who serve in uniform. In fiscal
    year 2017, it also includes $79.3 billion to support our civilian
    workforce of 718,000 Americans--men and women across the country and
    around the world who do critical jobs like helping repair our ships and
    airplanes, providing logistics support, developing and acquiring weapon
    systems, supporting survivors of sexual assault, and helping care for
    our military's wounded, ill, and injured personnel. The budget includes
    $7.7 billion to support our military families, because they serve too.
    It includes $3.1 billion to help take care of our wounded warriors, to
    whom our commitment is and must remain as strong as ever. It includes
    our enduring pledge to support the families of the fallen, whose loved
    ones made the ultimate sacrifice on behalf of our country.
                       iv. adjusting to strategic change
        Another significant portion of our budget goes toward DOD's current
    operations all around the world, in every domain, to help defend our
    country, our allies, and our interests. Our budget's investments and
    programming decisions in this area reflect my commitment to helping the
    President address key national security challenges, and my priorities
    for how we must adjust to strategic change--in countering terrorists,
    whether ISIL, al Qaeda, or others; in taking a strong and balanced
    approach to deter Russian aggression; in operationalizing our rebalance
    to the Asia-Pacific; in deterring Iranian aggression and malign
    influence; in standing alert on the Korean Peninsula; and in addressing
    threats from multiple directions in cyber, space, and electronic
    warfare. We don't have the luxury of choosing between these challenges;
    we must and will address them all, and not only be prepared across the
    spectrum of conflict, but also for the possibility of multiple
    conflicts in overlapping timeframes.
    Countering Terrorism
        It is clear that our mission of countering terrorists and other
    violent extremists around the world will be with us for some time. The
    Department of Defense has strong counterterrorism capabilities, and we
    continue to deploy them to protect America.
    Dealing ISIL a Lasting Defeat
        We must and will deal ISIL a lasting defeat, which is why the
    budget provides $7.5 billion in fiscal year 2017 for Operation Inherent
    Resolve. This investment will be critical to continuing to implement
    and accelerate the coalition military campaign plan that the United
    States has developed, that our key allies support, and that focuses on
    three military objectives: One, destroy the ISIL parent tumor in Iraq
    and Syria by attacking its two power centers in Mosul, Iraq and Raqqa,
    Syria; these cities constitute ISIL's military, political, economic and
    ideological centers of gravity, which is why our plan has big arrows
    pointing toward both. Two, combat the emerging metastases of the ISIL
    tumor worldwide wherever they appear. Three, our most important
    mission, which is to protect the Homeland.
        To eliminate the parent tumor in Iraq and Syria, DOD is enabling
    local, motivated forces with critical support from a global coalition
    wielding a suite of capabilities-ranging from airstrikes, special
    forces, cyber tools, intelligence, equipment, mobility and logistics,
    training, advice and assistance. It must be local forces who deliver
    ISIL a lasting defeat, because only they can secure and govern the
    territory by building long-term trust within the populations they
    liberate. We can and will enable such local forces, but we cannot
    substitute for them. Accordingly, the budget's investment in the
    counter-ISIL campaign includes $630 million for training and equipping
    the Iraqi Security Forces, and $250 million for enabling Syrian anti-
    ISIL forces.
        This is a worthy investment, as we've already started to see our
    investments over the last several months start to pay off. For example,
    it was Iraqi soldiers who took back the Ramadi city center, reversing a
    loss the Iraqi army suffered last spring. Our support to them included
    advanced training, tactics, air support, and the portable bridges that
    carried the Iraqi military across the Euphrates River and into the
    decisive fight. Ramadi, like recent Iraqi gains in Bayji, Tikrit, and
    Sinjar, demonstrates that the approach we are taking is having an
    effect as Iraqis prepare for what will be a tough fight for Mosul.
    Likewise in Syria, local anti-ISIL forces we've enabled with equipment
    and ammunition have had successes in Tal Abyad, al-Hawl, the Tishreen
    Dam, and Shaddadi. It is imperative to keep building on this momentum.
        As we work with our partners to destroy ISIL's parent tumor in Iraq
    and Syria, we must also recognize that ISIL is metastasizing in areas
    like North and West Africa and Afghanistan. Having taken out ISIL's
    leader in Libya in November, we are also now prepared to step up
    pressure on ISIL in Afghanistan to check their ambitions there as well.
        Finally, at the same time that we accelerate our campaign, so must
    every one of our coalition partners--there can be no free riders.
    That's why last month in Brussels I convened the first-ever meeting of
    defense ministers from 27 other countries involved in the military
    coalition to defeat ISIL to follow up after I personally reached out to
    dozens of defense ministers to urge them to consider filling critical
    military and non-military needs in the campaign. I'm gratified to
    report that coalition members responded to our challenge--and not only
    NATO allies like Canada and the Netherlands, but also Gulf nations,
    including Saudi Arabia and the United Arab Emirates. In sum, nearly 90
    percent of the countries participating in the coalition's military
    campaign have either stepped up their role or committed to do so in the
    coming days. Their decisions to expand air operations, send more
    trainers, provide logistical support, help with reconstruction, or make
    other contributions will all help our coalition intensify the counter-
    ISIL campaign and bring about ISIL's lasting defeat.
        None of this changes the fact that our counter-ISIL campaign is a
    hard and complex fight. We have tactical and strategic goals, but they
    will take time--and, as is often said, the enemy gets a vote. For our
    part, we will remain focused, committed, and resilient because this is
    a fight we can, must, and will win, as our efforts to accelerate our
    campaign are already producing real and promising results.
    Ensuring Long-Term Stability in Afghanistan
        After more than a decade of war in Afghanistan, we have to make
    sure our gains there stick, which is why the budget continues to
    support our two missions in Afghanistan--countering terrorism, and
    training, advising, and assisting the Afghan National Defense and
    Security Forces (ANDSF). In support of those two missions, the
    President announced last fall that the United States will maintain a
    continued presence of 9,800 troops through most of 2016 before drawing
    down to 5,500 troops by January 2017. As I told our troops there when I
    visited them this past December, while Afghanistan remains a dynamic
    fight, we are determined to ensure that terrorists--regardless of
    whether they're al Qaeda or ISIL--never have or find safe haven there
    again.
        The budget provides $41.7 billion in fiscal year 2017 for Operation
    Freedom's Sentinel--including funding to support our posture in U.S.
    Central Command, the full funding of $3.4 billion to support the ANDSF,
    and $1.4 billion to support other coalition partners. Importantly, this
    allows us to continue strengthening and developing the ANDSF's
    aviation, logistics, intelligence, and special operations capabilities,
    with the intent of reducing their dependency on us over time. Also, in
    addition to upholding our commitments to Afghanistan, the Afghan
    people, and other partners, the budget reflects that the United States
    will retain several key locations in 2016 and beyond, including
    facilities in Kabul, Bagram, Jalalabad, and Kandahar. As we do so, the
    United States will support the continuation of the NATO mission in
    Afghanistan in 2016 and beyond, and continue to consult with our NATO
    allies and partners to ensure that the U.S. and NATO missions in
    Afghanistan are mutually supportive.
        Our continued presence in Afghanistan is not only a sensible
    investment to counter threats that exist and stay ahead of those that
    could emerge in this volatile region; it also supports the willing
    partner we have in the government of Afghanistan. It is in the United
    States' interest to help them succeed, for the benefit of their
    security, our security, the region and the world.
    Establishing an Alternative to the Detention Facility at Guantanamo
        The Defense Department is resolutely committed to responsibly
    closing the detention facility at Guantanamo Bay through the
    establishment of an alternative detention facility. I share the
    President's belief--and the belief of many in Congress--that doing so
    would benefit our national security, which is why DOD will continue to
    transfer Guantanamo detainees to other countries when we have
    substantially mitigated any security risks to the United States.
        Over the last four months, we completed transfers for 16 detainees,
    bringing the population to 91. Like every transfer that came before
    them, the decision to transfer these detainees happened only after a
    thorough review by me and other senior security officials of our
    Government.
        That said, because many of the remaining detainees currently cannot
    be safely transferred to another country, we need an alternative to
    this detention facility. Therefore, I support the President's plan to
    establish and bring those detainees to an appropriate, secure,
    alternative location in the United States. I appreciate that Congress
    has indicated a willingness to consider such a proposal, and, in
    accordance with the 2016 National Defense Authorization Act, DOD
    delivered that plan to Congress in February. We look forward to working
    with Congress to identify the most appropriate design, legislative
    foundation, and geographic location for future detention and to lift
    the restrictions preventing the responsible closure of the facility at
    Guantanamo.
    Supporting and Maintaining our Counterterrorism Capabilities
        In addition to the specific funds outlined above, the budget also
    reflects other investments we're making in DOD's posture to ensure we
    can counter terrorism effectively wherever it challenges us. For
    example, the budget sustains our robust funding for U.S. Special
    Operations Command, allocating $10.8 billion in fiscal year 2017. To
    bolster our partners in fighting terrorism, it requests $1 billion for
    our Counterterrorism Partnerships Fund. It supports the development of
    DOD's transregional counterterrorism strategy, which I'd like to
    outline now.
        The terrorist threat is continually evolving, changing focus, and
    shifting location, requiring us to be flexible, nimble, and far-
    reaching in our response. Accordingly, the Defense Department is
    leveraging the existing security infrastructure we've already
    established in Afghanistan, the Middle East, East Africa, and Southern
    Europe, so that we can counter transnational and transregional
    terrorist threats like ISIL and others in a sustainable, durable way
    going forward. From the troops I visited in Moron, Spain last October
    to those I visited in Jalalabad, Afghanistan last December, these
    locations and associated forces in various regions help keep us
    postured to respond to a range of crises, terrorist and other kinds. In
    a practical sense, they enable our crisis response operations, counter-
    terror operations, and strikes on high-value targets, and they help us
    act decisively to prevent terrorist group affiliates from becoming as
    great of a threat as the main entities themselves. This transregional
    approach is already giving us the opportunity and capability to react
    swiftly to incidents and threats wherever they occur, and it maximizes
    our opportunities to eliminate targets and leadership. An example of
    this in action was our November strike on Abu Nabil, ISIL's leader in
    Libya, where assets from several locations converged to successfully
    kill him. To help implement this strategy, including in the fight
    against ISIL and its metastasis beyond Iraq and Syria, the budget
    includes an additional $175 million in fiscal year 2017--$9 million to
    help bolster our posture in the Levant, and $166 million to help us
    better address threats in North and West Africa in conjunction with our
    European partners.
        Because the accelerating intensity of our precision air campaign
    against ISIL in Iraq and Syria has been depleting our stocks of some of
    the GPS-guided smart bombs and laser-guided rockets we use against
    terrorists the most, the budget invests $1.8 billion in fiscal year
    2017 to buy over 45,000 more of them. Furthermore, DOD is also
    exploring increasing the production rate of these munitions in our
    industrial base--calling on America's great arsenal of democracy to
    help us and our partners finish the job of defeating ISIL.
        Also, because our remotely-piloted intelligence, surveillance, and
    reconnaissance (ISR) aircraft play an important role in countering
    terrorism, the budget includes $1.2 billion for fiscal year 2017 and
    $4.5 billion over the FYDP to increase the number of around-the-clock
    permissive ISR combat air patrols from 70 today to 90 by the end of
    fiscal year 2018. Using a mix of MQ-9 Reapers, Extended Range Reapers,
    and MQ-1C Advanced Gray Eagles--and comprising 60 patrols from the Air
    Force, 16 from the Army, and 14 that are Government-owned and flown by
    contractors for the Air Force and U.S. Special Operations Command--
    these investments will be critical as the need for ISR continues to
    increase around the world.
        Finally, because it helps us maintain a larger Air Force fighter
    fleet that can drop more smart bombs in our counter-ISIL air campaign,
    the budget also further defers the A-10 Thunderbolt's final retirement
    until 2022. I saw some of the A-10s that are flying bombing missions
    against ISIL when I was at Incirlik Air Base in Turkey last December,
    and we need the additional payload capacity they can bring to the
    fight. Accordingly, we are also changing the rate at which we will
    phase out the A-10 as we approach 2022, as I will explain later in this
    testimony.
    A Strong and Balanced Strategic Approach to Deter Russia
        Despite the progress we've made together since the end of the Cold
    War, Russia has in recent years appeared intent to erode the principled
    international order that has served us, our friends and allies, the
    international community, and also Russia itself so well for so long. In
    Europe, Russia continues to violate the sovereignty of Ukraine,
    Georgia, and Moldova, and actively seeks to intimidate its Baltic
    neighbors. In Syria, Russia has been pouring gasoline on a civil war,
    fueling the very extremism Russia claims to oppose. At sea, in the air,
    in space, and in cyberspace, Russian actors have engaged in challenging
    international norms. Most disturbing, Moscow's nuclear saber-rattling
    raises questions about Russia's leaders' commitment to strategic
    stability, their respect for norms against the use of nuclear weapons,
    and whether they respect the profound caution that nuclear-age leaders
    showed with regard to brandishing nuclear weapons.
        To be clear, the United States does not seek a cold, let alone hot
    war with Russia. We do not seek to make Russia an enemy, even as it may
    view us that way. But make no mistake--we will defend our interests,
    our allies, the principled international order, and the positive future
    it affords us all. That's why the United States is taking a strong and
    balanced strategic approach in response to Russia's aggression:
    strengthening both our allies and ourselves, including through
    investments in this budget, while also giving Russia the opportunity,
    if it chooses, to rejoin the international community and work with us
    where our interests align.
        Since Russia began its illegal attempted annexation of Crimea a
    little over two years ago, DOD's budgets have made valuable investments
    in reinforcing our NATO allies; for example, contributing to NATO's
    Very High Readiness Joint Task Force, and stepping up our training and
    exercises under Operation Atlantic Resolve. This budget builds on that
    significantly, and breaks new ground by re-envisioning and recommitting
    to deterring--and, if deterrence fails, defeating--any aggression
    against our allies in the future. The 20th century NATO playbook was
    successful in working toward a Europe whole, free and at peace, but the
    same playbook would not be well-matched to the needs of the 21st
    century. Together with our NATO allies, we must write a new playbook,
    which includes preparing to counter new challenges like cyber and
    hybrid warfare, better integrating conventional and nuclear deterrence,
    as well as adjusting our posture and presence to adapt and respond to
    new challenges and new threats.
        To further reinforce our NATO allies and build our deterrence
    posture in the face of Russia's aggression, this budget significantly
    increases funding for our European Reassurance Initiative to make a
    total investment of $3.4 billion for fiscal year 2017--more than
    quadrupling the $789 million that we requested last year--allowing us
    to increase the amount of prepositioned equipment sets in Europe as
    well as the number of U.S. Forces, including Reserve forces, rotating
    through Europe to engage with friends and allies. This increase
    supports the persistent rotational presence of an armored brigade
    combat team for 12 months out of the year, which will give us a total
    of three brigade combat teams continuously present in Europe. It
    supports more training and exercises with our European friends and
    allies. It supports more warfighting gear, including forward-stationing
    equipment for an additional armored brigade combat team by the end of
    2017. It supports prepositioning equipment for a division headquarters
    and other enablers in Europe, such that this equipment--along with
    assigned Army airborne and Stryker brigade combat teams and Marine
    Corps heavy vehicles and equipment already in Europe--will allow us to
    rapidly form a highly-capable combined-arms ground force of division-
    plus strength that can respond theater-wide if necessary. It helps
    strengthen our regional air superiority posture--among other things,
    allowing us to keep an additional F-15C tactical fighter squadron based
    in Europe, and also improve airfield infrastructure to enhance
    operations for Air Force fighters and Navy maritime patrol aircraft.
        In addition, the budget reflects how we're doing more, and in more
    ways, with specific NATO allies. Given increased Russian submarine
    activity in the North Atlantic, this includes building toward a
    continuous arc of highly-capable maritime patrol aircraft operating
    over the Greenland-Iceland-United Kingdom gap up to Norway's North
    Cape. It also includes the delivery of Europe's first stealthy F-35
    Joint Strike Fighters to our British allies. Given Russia's use of
    hybrid warfare--exemplified by the so-called `little green men' in
    Ukraine--the budget supports more rotational presence of U.S. special
    operations forces exercising in Europe.
        The budget also significantly funds important new technologies
    that, when coupled with revised operational concepts, will ensure we
    can deter and if necessary win a high-end conventional fight in an
    anti-access, area-denial environment across all domains and warfighting
    areas--air, land, sea, space, cyberspace, and the electromagnetic
    spectrum. While I will address these areas in greater detail later in
    this posture statement, investments that are most relevant to deterring
    Russia include new unmanned systems, enhanced ground-based air and
    missile defenses, new long-range anti-ship weapons, the long-range
    strike bomber, and also innovation in technologies like the
    electromagnetic railgun, lasers, and new systems for electronic
    warfare, space, and cyberspace. The budget also invests in modernizing
    our nuclear deterrent.
        Consistent with our strong and balanced approach, the door will
    remain open for Russia to reassume the role of respected partner going
    forward. While that would be greatly welcomed by the United States, and
    the Department of Defense, it's up to the Kremlin to decide--first by
    demonstrating a willingness to return to the international community.
    Operationalizing the Rebalance to the Asia-Pacific
        The budget also supports operationalizing our rebalance to the
    Asia-Pacific region. In a region home to nearly half the world's
    population and nearly half the global economy, for 70 years the United
    States has helped underwrite a stable security environment that allowed
    the people, economies, and countries in the Asia-Pacific to rise and
    prosper. We fully intend to continue these efforts so that bright
    future can be possible for everyone in this important region.
        Accordingly, the budget helps improve DOD's geographically
    distributed, operationally resilient, and politically sustainable
    posture in the region, through which the United States seeks to
    preserve peace and stability, and maintain our strategic advantage in
    an area that's critically important to America's political, economic,
    and security interests. Investments in the budget reflect how we're
    moving more of our forces to the region--such as 60 percent of our Navy
    and overseas Air Force assets--and also some of our most advanced
    capabilities in and around the region, from F-22 stealth fighter jets
    and other advanced tactical strike aircraft, to P-8A Poseidon maritime
    surveillance aircraft, to our newest surface warfare ships. They also
    reflect how we're developing and implementing new posture initiatives--
    in places like Guam, the Northern Marianas, the Philippines, Australia,
    and Singapore, as well as modernizing our existing footprint in Korea
    and Japan--and continuing to strengthen existing partnerships and
    develop new ones, from India to Vietnam. They reflect our efforts to
    support and strengthen a regional security architecture that benefits
    everyone--from strengthening and modernizing our alliances, to
    bolstering our ties with the Association of Southeast Asian Nations
    (ASEAN), to building the security capabilities of our many friends and
    allies, who increasingly want to do more with us in the region. In
    support of this effort, the budget fully supports our five-year, $425
    million Southeast Asia Maritime Security Initiative begun in fiscal
    year 2016.
        For this region, as it does with Europe, the budget also
    significantly funds important new technologies to ensure we can deter
    and if necessary win a high-end conventional fight in an anti-access,
    area-denial environment across all domains and warfighting areas--air,
    land, sea, space, cyberspace, and the electromagnetic spectrum. These
    investments--which I will outline later in this testimony--are
    important for ensuring our forces can go anywhere, at any time, and
    succeed in whatever mission we ask of them.
        It's important to remember that America's rebalance has never aimed
    to hold any nation back or push any country down. The United States
    wants every nation to have an opportunity to rise, because it's good
    for the region and good for our collective interests. That includes
    China. As we welcome the growth and prosperity of all Asia-Pacific
    nations, it is clear that the United States-China relationship will be
    complex as we continue to balance our competition and cooperation.
    There are opportunities to improve understanding and to reduce risk
    with China--for example, we've agreed to four confidence-building
    agreements, including one meant to prevent dangerous air-to-air
    encounters. But there remain areas of concern.
        For one, the United States joins virtually everyone else in the
    region in being deeply concerned about the pace and scope of land
    reclamation in the South China Sea, the prospect of further
    militarization, as well as the potential for these activities to
    increase the risk of miscalculation or conflict among claimant states.
    U.S. military presence in the region is decades-old, has been
    instrumental in upholding the rules-based international system, and has
    laid the foundation for peace and security in the region. Our interest
    is in maintaining freedom of navigation and overflight, full and
    unimpeded lawful commerce, and that disputes are resolved peacefully.
    To accomplish this, we will continue to fly, sail, and operate wherever
    international law allows. We also expect China to uphold President Xi's
    pledge not to pursue militarization in the Spratly Islands of the South
    China Sea.
        Also, we are closely watching the long-term, comprehensive military
    modernization program that China, as well as other countries, continues
    to pursue. While there is no question that the United States retains a
    decisive military edge in the Asia-Pacific today, China is investing in
    capabilities to counter third-party--including the United States--
    intervention during a crisis or conflict. These capabilities include
    ballistic and cruise missiles of increasingly greater range and
    accuracy, counter-space and offensive cyber capabilities, and
    electronic warfare systems. To maintain a lasting competitive
    advantage, DOD is taking prudent steps to preserve and enhance
    deterrence for the long term. The budget reflects this, including with
    investments to continue adapting our forces, posture, operations, and
    capabilities to deter aggression, defend our allies, and sustain our
    military edge in the Asia-Pacific.
    Deterring North Korea
        The budget also supports investments necessary to deter North
    Korean provocation and aggression, ensure our forces on the Korean
    Peninsula remain ready and capable to `fight tonight' if necessary, and
    defend against threats emanating from North Korea against the United
    States and our allies. This includes threats posed by North Korea's
    nuclear and missile programs, against which DOD is fully capable of
    defending the U.S. Homeland. Our position has been, and remains, that
    North Korea must abide by its international obligation to abandon its
    nuclear and missile programs and stop its provocative behavior.
        North Korea's nuclear test on January 6th and its ballistic missile
    launch on February 7th were highly provocative acts that undermine
    peace and stability on the Korean Peninsula and in the region. The
    United States condemns these violations of U.N. Security Council
    resolutions and again calls on North Korea to abide by its
    international obligations and commitments. We are monitoring and
    continuing to assess the situation in close coordination with our
    regional partners.
        DOD remains fully capable of fulfilling U.S. treaty commitments to
    our allies in the event of a North Korean attack, and we're working
    with our Republic of Korea allies to develop a comprehensive set of
    alliance capabilities to counter the growing North Korean ballistic
    missile threat. I spoke with my South Korean counterpart shortly after
    the nuclear test, and reiterated our commitments as strong and
    steadfast allies. Also, a few hours after the ballistic missile launch,
    the United States and the Republic of Korea jointly announced the start
    of formal consultations to discuss the feasibility of deploying a
    Terminal High-Altitude Area Defense (THAAD) system to the Korean
    Peninsula at the earliest date.
    Checking Iran's Malign Influence while Strengthening Regional Friends
            and Allies
        The Middle East presents a kaleidoscope of challenges, but there,
    as everywhere, DOD's budget--and accordingly our actions and strong
    military posture--is guided by our North Star of what's in America's
    interests. Defeating ISIL in Iraq and Syria, which I discussed earlier,
    is of course one of those interests, but amid this region's complexity
    and uncertainty, we also have other interests of great importance,
    which are to deter aggression; to bolster the security of our friends
    and allies, especially Israel; to ensure freedom of navigation in the
    Gulf; and to check Iran's malign influence even as we monitor the
    implementation of the Joint Comprehensive Plan of Action. That's why
    DOD maintains tens of thousands of American personnel ashore and afloat
    in the region, along with our most sophisticated ground, maritime, and
    air and ballistic missile defense assets.
        While the Joint Comprehensive Plan of Action places significant
    limitations on Iran that will effectively cut off its pathways to the
    fissile material for a nuclear bomb, it does not limit in any way what
    DOD can and will do to pursue our defense strategy in the region. It
    places no limits on our forces, our partnerships and alliances, our
    intensive and ongoing security cooperation, or on our development and
    fielding of new military capabilities--capabilities we will continue to
    advance in order to provide all options, as the President has directed,
    should Iran walk away from its commitments under this deal. If Iran
    were to commit aggression, our robust force posture ensures we can
    immediately respond and rapidly surge an overwhelming array of forces
    into the region, leveraging our most advanced capabilities married with
    sophisticated munitions that put no target out of reach.
        This budget invests in maintaining those abilities going forward,
    which is important, because Iran and its proxies will still present
    security challenges. Iran supports Assad in Syria, backs Hezbollah in
    Lebanon, and is contributing to disorder in Yemen, while still
    directing hostility and violence to our closest ally in the region,
    Israel. To continue to meet our commitments and enhance our cooperation
    with our friends and allies in the region, especially Israel, the
    budget makes critical investments--including $146 million to support
    Israel in fiscal year 2017. This reflects our unshakeable commitment to
    Israel and its security, with funding for Iron Dome, David's Sling,
    Arrow, and other cooperative defense programs--not only ensuring that
    Israel can defend itself, but also preserving and enhancing Israel's
    qualitative military edge, which is a cornerstone of our defense
    relationship.
        Meanwhile, with critical investments in other areas, the budget
    enables DOD to continue to advance our preparations, posture,
    partnerships, and planning to preserve the President's options for any
    contingency. It strengthens the regional security architecture in a way
    that blunts Iran's ability to coerce its neighbors. It helps us stay
    ahead of the risks posed by Iran's ballistic missiles, naval forces,
    cyber capabilities, and support for terrorists and others in the
    region.
    Addressing Threats in Cyber, Space, and Electronic Warfare
        Even as we make adjustments in our budget to address the five
    evolving challenges posed by Russia, China, Iran, North Korea, and
    terrorist groups like ISIL and al Qaeda, we are also making adjustments
    to address emerging and increasing threats that transcend individual
    nations and organizations. That's because, as we confront these five
    challenges, we know we'll have to deal with them across all domains--
    and not just the usual air, land, and sea, but also particularly in the
    areas of cyber, space, and electronic warfare, where our reliance on
    technology has given us great strengths, but also led to
    vulnerabilities that potential adversaries are eager to exploit.
        As I made clear when I released DOD's new cyber strategy last
    April, we have three missions in cyberspace--first and foremost, to
    defend our networks, systems, and information; second, to help defend
    the nation and our interests from cyberattacks of significant
    consequence, working with other departments and branches of Government;
    and third, to provide options that can augment our other military
    systems. Given the increasing severity and sophistication of the
    threats and challenges we're seeing in cyberspace--ranging from ISIL's
    pervasive online presence to the data breaches at the Office of
    Personnel Management--the budget puts a priority on funding our cyber
    strategy, investing a total of $6.7 billion in fiscal year 2017 and
    $34.6 billion over the FYDP. This is a $900 million increase over last
    year's budget. While these funds will help us continue to develop,
    train, and equip our growing Cyber Mission Force, and also make new
    technological investments to strengthen our cyber defenses and
    capabilities--both of which I address later in this testimony--the
    budget also reflects our efforts to make a fundamental shift toward a
    culture of accountability in cyberspace, from instituting a DOD-wide
    cybersecurity scorecard to monitor our progress to increasing
    individual knowledge about practical ways to defend against cyber
    intrusions. Our people understandably hold themselves to very high
    standards when it comes to caring for, attending to, using, and being
    accountable for the weapons they carry into battle, and we must do the
    same when it comes to interacting with our networks and cyber
    capabilities--not only among our cyber warriors and IT professionals,
    but throughout the DOD workforce.
        While at times in the past space was seen as a sanctuary, new and
    emerging threats make clear that's not the case anymore, and we must be
    prepared for the possibility of a conflict that extends into space.
    This means that as we continue to ensure our access to space so we can
    provide capabilities like reconnaissance, GPS, and secure
    communications that enable and enhance our operations in other domains,
    we must also focus on assuring and defending these capabilities against
    aggressive and comprehensive counter-space programs of others. Though
    competitors may understand our reliance on space, we will not let them
    use it against us, or take it away. As I will discuss later in this
    testimony, this budget makes important investments to do just that--
    sustaining and building on the major shifts DOD began funding in last
    year's budget submission--with a total of more than $22 billion for
    space in fiscal year 2017. With the presence of so many commercial
    space endeavors, we want this domain to be just like the oceans and the
    Internet: free and open to all.
        Finally, high-end competitors have also invested in electronic
    warfare systems as a cost-effective way to challenge the United States
    and try to blunt our technological advantage. By jamming our radars,
    communications, and GPS, these systems would seek to disrupt the
    integrated capabilities that allow our forces to identify, target,
    reach, and destroy an enemy with precision. We cannot allow that to
    happen, which is why this budget deliberately invests in buying more
    electronic protection and resiliency for our current systems as well as
    developing more advanced capabilities. I will address these investments
    in more detail later in this testimony.
                    v. seizing opportunities for the future
        The other significant share of our budget goes toward making sure
    DOD will be ready for the future. Our budget's investments and
    programming decisions in this area reflect my commitment to create a
    Defense Department that's open to change and new ideas to ensure a
    better future for both DOD and the nation, and my priorities in doing
    so. These are best understood through the four key pillars of this
    commitment--namely, updating and refining warfighting strategies,
    operational concepts, and tactics; driving smart and essential
    technological innovation; building the force of the future; and
    reforming the DOD enterprise.
        While I will describe what we're doing in each of those areas
    momentarily, the dynamic strategic environment I described earlier in
    this testimony explains why such change is so important--not for the
    sake of change, but for the security of this country. We cannot let
    those challenges overtake us; we have to stay ahead of them and stay
    the best. That's why as Secretary of Defense I've been pushing the
    Pentagon to think outside our five-sided box.
    Updating and Refining Warfighting Strategies, Operational Concepts, and
            Tactics
        Because our military has to have the agility and ability to win
    both the fights we're in, the wars that could happen today, and the
    wars that could happen in the future, we're always updating our plans
    and developing new operational approaches to account for any changes in
    potential adversary threats and capabilities, and to make sure that the
    plans apply innovation to our operational approaches--including ways to
    overcome emerging threats to our security, such as cyberattacks, anti-
    satellite weapons, and anti-access, area denial systems. We're building
    in modularity that gives our chain of command's most senior decision-
    makers a greater variety of choices. We're making sure planners think
    about what happens if they have to execute their plan at the same time
    as another contingency is taking place, so they don't fall into the
    trap of presuming the contingency they're planning for would be the
    only thing we'd be doing in the world at that time. We're injecting
    agility and flexibility into our processes, because the world, its
    challenges, and our potential opponents are not monolithic, and we must
    be just as dynamic to stay ahead of them.
        As I mentioned earlier, DOD is continuing to embark on a force-
    wide, all-service transition from an era focused on counterinsurgency
    operations to an era focused on the full spectrum of military
    operations. While we do so for many important reasons, it's also
    important to note that we don't want to forget or turn our back on
    counterinsurgency, but rather enable most of our forces to be capable
    of doing a lot more than just that. A smaller segment of our force will
    still specialize in these skills, and DOD will retain the ability to
    expand our operational capacity for counterinsurgency missions should
    it become necessary.
        The transition to full-spectrum operations is and will be coupled
    with demonstrations to clearly signal it and make that signal credible,
    which is key to conventional deterrence. The same is true for our
    investments in capabilities--in new technologies, new operational
    concepts, and also innovative ways for how we use what we already
    have--these must and will be demonstrated as well. This is accounted
    for in the budget, as are other investments we're making to recommit
    ourselves to deterrence across the strategic, operational, and tactical
    levels of conflict.
        Recognizing the immense value that wargaming has historically had
    in strengthening our force in times of strategic, operational, and
    technological transition--such as during the interwar years between
    World War I and World War II, when air, land, and naval wargamers
    developed innovative approaches in areas like tank warfare and carrier
    aviation--this budget makes significant new investments to reinvigorate
    and expand wargaming efforts across the Defense Department. With a
    total of $55 million in fiscal year 2017 as part of $526 million over
    the FYDP, this will allow us to try out nascent operational concepts
    and test new capabilities that may create operational dilemmas and
    impose unexpected costs on potential adversaries. The results of future
    wargames will be integrated into DOD's new wargaming repository, which
    was recently established to help our planners and leaders better
    understand and shape how we use wargames while also allowing us to
    share the insights we gain across the defense enterprise.
    Driving Smart and Essential Technological Innovation
        The investments this budget makes in technology and innovation, and
    the bridges it helps build and rebuild, are critical to staying ahead
    of future threats in a changing world. When I began my career, most
    technology of consequence originated in America, and much of that was
    sponsored by the Government, especially DOD. Today, not only is much
    more technology commercial, but the competition is global, with other
    countries trying to catch up with the advances we've enjoyed for
    decades in areas like precision-guided munitions, stealth, cyber, and
    space. Now, as we have in the past, DOD must invest to ensure America
    pioneers and dominates these and other technological frontiers.
        DOD is therefore pursuing new technology development along with new
    operational concepts, and new organizational constructs--all of which
    are reflected in or supported by this budget submission--to maintain
    our military's technological superiority and ensure we always have an
    operational advantage over any potential adversary. How we do this is
    important, because while the Cold War arms race was characterized
    mostly by strength, with the leader simply having more, bigger, or
    better weapons, this era of technological competition is uniquely
    characterized by an additional variable of speed, such that leading the
    race now depends on who can out-innovate faster than everyone else.
    It's no longer just a matter of what we buy; what also matters is how
    we buy things, how quickly we buy them, whom we buy them from, and how
    quickly and creatively we're able to upgrade them and repurpose them to
    be used in different and innovative ways to stay ahead of future
    threats.
        In particular, this means leveraging the capability of current and
    emerging technologies, including commercial technologies wherever
    appropriate. It means demonstrating and seeding investments in new
    capabilities and concepts to counter advanced anti-access, area-denial
    challenges across all domains and in every region where they persist--a
    particular focus of DOD's effort to develop a third offset strategy. It
    means investing in and operationalizing our security by leveraging
    advances in cyber, space, electronic warfare, biotechnology, artificial
    intelligence, and other areas. Our technologies and capabilities must
    be able to operate so that no matter what any of our enemies might
    throw at them, they are able to defeat attempts to be hacked.
        Accordingly, this budget invests a total of $183.9 billion in
    fiscal year 2017, and $951 billion over the FYDP, to help research,
    develop, test, evaluate, and procure the right technology and
    capabilities our military will need to deter and if necessary fight and
    win full-spectrum conflicts in the future. For the second year in a
    row, the budget increases funding for our research and development
    accounts, which total $71.8 billion in fiscal year 2017. That includes
    $12.5 billion specifically invested in science and technology to
    support groundbreaking work happening in the military services, in our
    dozens of DOD labs and engineering centers across the country, and in
    the Defense Advanced Research Projects Agency (DARPA) to develop and
    advance disruptive technologies and capabilities in areas like undersea
    systems, hypersonics, electronic warfare, big data analytics, advanced
    materials, energy and propulsion, robotics, autonomy, and advanced
    sensing and computing.
        At the same time that DOD is making investments in technologies
    themselves, we're also investing in building and rebuilding bridges
    with America's vibrant, innovative technology community and forging
    more connections with the commercial technology base--and it's
    reflected in our budget. In fiscal year 2017, this includes $45 million
    for our Defense Innovation Unit-Experimental (DIUx), which we opened in
    Silicon Valley last August to build relationships and better tap into
    the region's innovation ecosystem. It also includes $40 million for our
    pilot program with the independent, non-profit startup backer In-Q-Tel,
    leveraging its venture capital model to help find innovative solutions
    for some of our most challenging problems. It includes $137 million to
    support our public-private partnership-funded Manufacturing Innovation
    Institutes, including the one focused on flexible hybrid electronics
    that I announced in Silicon Valley last August. In all these areas,
    similar to how DOD's historic investments in things like GPS and the
    Internet later went on to yield great benefits for not just our
    security but also our society, we hope the investments we're making in
    some of these fields along with our partners in the technology industry
    will lead to incredible advances that today we can only imagine.
        Importantly, technological innovation must be done in concert with
    operational innovation. It's not enough to have or create new
    technologies or weapon systems; how they are used is key. The budget
    reflects work DOD has been undertaking in this area though multiple
    lines of effort. First, there's our Long-Range Research and Development
    Planning Program--an effort named after the mid-1970s project that
    brought together a cross-section of military, academic, and private-
    sector experts who paved the way to a future of GPS-guided smart bombs,
    battle networks, and stealth--and also our Advanced Capability and
    Deterrence Panel. Both focus on identifying and charting longer-term,
    leap-ahead investments for strategies and capabilities that will give
    us an advantage several decades from now, and together they make up
    nearly 60 percent of our science and technology investments in this
    budget submission.
        Now, to focus on maintaining our near-term advantage, DOD has an
    office that we don't often talk about, but that I want to highlight
    today. It's called the Strategic Capabilities Office (SCO). I created
    SCO in 2012 when I was Deputy Secretary of Defense to reimagine
    existing DOD, intelligence community, and commercial systems by giving
    them new roles and game-changing capabilities to confound potential
    opponents. I picked a talented physicist to lead it. SCO is incredibly
    innovative, but also has the rare virtue of rapid development and the
    even rarer charter to keep current capabilities viable for as long as
    possible. It's good for both troops and taxpayers alike.
        SCO is focused on thinking differently, which is incredibly
    important to innovation when it comes to technological capabilities.
    Thinking differently put us in space and on the moon. It put computers
    in our pockets and information at our fingertips. It's how we came to
    have airplanes that take off from the decks of ships, nuclear
    submarines beneath the seas, and satellite networks that take pictures
    of the world and show us where we are in it. This kind of bold,
    innovative thinking isn't lost to history. It's happening every day, in
    SCO and many other places throughout the Department of Defense.
        Most people don't often hear about it because most of its work is
    classified; however, SCO has been a tremendously useful part of DOD.
    It's received large support from all the services, as well as our
    combatant commands, the Joint Chiefs of Staff, the intelligence
    community, and also Congress--with its budget growing from $140 million
    in its first year, fiscal year 2014, to reaching $845 million for
    fiscal year 2017 in this year's budget submission. To show the return
    we're getting on those investments, I'd like to highlight some projects
    SCO has been working on that we're funding in the budget.
        First is a project focused on advanced navigation, where SCO is
    taking the same kinds of micro-cameras and sensors that are littered
    throughout our smartphones today, and putting them on our Small
    Diameter Bombs to augment their targeting capabilities. This will
    eventually be a modular kit that will work with many other payloads--
    enabling off-network targeting through commercial components that are
    small enough to hold in your hand.
        Another SCO project uses swarming, autonomous vehicles in all sorts
    of ways, and in multiple domains. For the air, they've developed micro-
    drones that are really fast, and really resilient--they can fly through
    heavy winds and be kicked out the back of a fighter jet moving at Mach
    0.9, like they did during an operational exercise in Alaska last year,
    or they can be thrown into the air by a soldier in the middle of the
    Iraqi desert. For the water, they've developed self-driving boats,
    which can network together to do all sorts of missions, from fleet
    defense to close-in surveillance--including around an island, real or
    artificial, without putting our sailors at risk. Each one leverages the
    wider world of technology. For example, the micro-drones use a lot of
    commercial components and 3D printing. The boats build on some of the
    same artificial intelligence algorithms that NASA's Jet Propulsion
    Laboratory wrote for the Mars lander.
        SCO also has a project on gun-based missile defense, where we're
    taking the same hypervelocity smart projectile developed for the
    electromagnetic railgun, and using it for point defense by firing it
    with artillery we already have in our inventory--including the five-
    inch guns at the front of every Navy destroyer, and also the hundreds
    of Army Paladin self-propelled howitzers. This way, instead of spending
    more money on more expensive interceptors, we can turn past offense
    into future defense--defeating incoming missile raids at much lower
    cost per round, and thereby imposing higher costs on the attacker. In
    fact, we tested the first shots of the hypervelocity projectile out of
    a Paladin earlier this year, and we found that it also significantly
    increases the range.
        There's also a SCO project that we're calling the arsenal plane,
    which takes one of our oldest aircraft platforms, and turns it into a
    flying launch pad for all sorts of different conventional payloads. In
    practice, the arsenal plane will function as a very large airborne
    magazine, networked to fifth-generation aircraft that act as forward
    sensor and targeting nodes--essentially combining different systems
    already in our inventory to create wholly new capabilities.
        The last SCO project I want to highlight is how we're creating a
    brand new capability with the SM-6 missile, an interceptor that's
    designed to launch from our Navy's surface ships and be highly
    maneuverable and aerodynamic to stop incoming ballistic and cruise
    missiles in the atmosphere. It's one of our most modern and capable
    munitions--and thanks to work done by SCO, we've been able to modify
    the SM-6 so that in addition to missile defense, it can also target
    enemy ships at sea. This new anti-ship mode makes the SM-6 doubly
    useful, taking the defensive speed and maneuverability already sitting
    in our Aegis destroyers' launch cells and leveraging it for offensive
    surface warfare lethality. That makes it a potent new capability for
    our fleet, and also a good deal for the taxpayer by using the same
    thing twice. We already know this works; it was fully tested this past
    January to great success. As I will address later in this testimony,
    this new operational concept is strongly reflected in our 2017 budget.
        Those are just a few projects that SCO has worked on so far--and
    they're working on a lot more, including some surprising ones.
        Now, with all of that in mind--from why we need to invest in
    technological innovation, to how we're doing it--let me address the
    specific investments this budget makes in technologies and capabilities
    to deter, and if necessary fight and win, a full-spectrum conventional
    war against even the most high-end of adversaries. In concert, they
    will help maintain our military's edge both under and on the sea, on
    land, in the air, in space, in cyber and electronic warfare, and in the
    modernization and maintenance of our nuclear enterprise.
    Maritime Investments
        In the maritime domain, the budget refocuses our Navy on building
    lethality for high-end conflicts while continuing to grow the battle
    fleet to meet, but not exceed, the department's warfighting posture
    requirement of 308 ships. Our investments reflect an emphasis on
    payloads over platforms, on the ability to strike from sanctuary
    quickly so that no target is out of reach, and on closing capability
    shortfalls that have developed over the last several years.
        First, the budget maximizes our undersea advantage--leveraging and
    growing our commanding lead in an area where the U.S. military should
    be doing more, not less, going forward. It provides funding for
    important payloads and munitions, including $170.8 million in fiscal
    year 2017 and $1.5 billion over the FYDP for an improved heavyweight
    torpedo as well as research and development for an advanced lightweight
    torpedo to stay ahead of existing and emerging undersea challenges. It
    includes $5.2 billion in fiscal year 2017 and $29.4 billion over the
    FYDP to buy nine Virginia-class attack submarines over the next five
    years; four of those submarines--up from three in last year's budget--
    will be equipped with the versatile Virginia Payload Module that can
    more than triple each submarine's strike capacity from 12 Tomahawk land
    attack missiles to 40. The budget also invests $500 million in fiscal
    year 2017, and $3.4 billion over the FYDP, to upgrade 49 of our
    submarines' combat systems and enhance underwater acoustics on nine of
    our existing Virginia-class submarines. It increases funding for
    unmanned undersea vehicles (UUVs) by over $100 million in fiscal year
    2017, part of a total $173 million in fiscal year 2017 and $1.2 billion
    over the FYDP that invests in, among other areas, rapid prototyping of
    UUVs in multiple sizes and diverse payloads--which is important, since
    UUVs can operate in shallow waters where manned submarines cannot. It
    includes $2.2 billion in fiscal year 2017 and $6.4 billion over the
    FYDP to continue procuring the advanced P-8A Poseidon maritime patrol
    and surveillance aircraft. Together, all these investments--totaling
    $8.2 billion in fiscal year 2017, and $41.9 billion over the next five
    years--will ensure we continue to have the most lethal undersea and
    anti-submarine force in the world.
        Second, the budget makes significant investments to bolster the
    lethality of our surface fleet forces, so they can deter and if
    necessary prevail in a full-spectrum conflict against even the most
    advanced adversaries. It invests $597 million in fiscal year 2017, and
    $2.9 billion over the FYDP, to maximize production of the SM-6 missile,
    one of our most modern and capable munitions, procuring 125 in fiscal
    year 2017 and 625 over the next five years--and this investment is
    doubly important given the SM-6's new anti-ship capability. It also
    invests in developing and acquiring several other key munitions and
    payloads--including $1 billion in fiscal year 2017, and $5.8 billion
    over the FYDP, for all variants of the SM-3 high-altitude ballistic
    missile interceptor; $340 million in fiscal year 2017, and $925 million
    over the FYDP, for the Long-Range Anti-Ship Missile; $221 million in
    fiscal year 2017, and $1.4 billion over the FYDP, for the Advanced
    Anti-Radiation Guided Missile, including its extended range version;
    and $435 million in fiscal year 2017, as part of $2.1 billion over the
    FYDP, for the most advanced variant of the Tactical Tomahawk land-
    attack missile, which once upgraded can also be used for maritime
    strike.
        Third, the budget reflects decisions we've made to ensure that we
    look at our overall warfighting posture, rather than only the presence
    that contributes to it, in determining whether our maritime forces can
    deter and if necessary fight and win a full-spectrum conflict. Having
    grown the size and the capability of our surface and subsurface fleet
    over the last seven years, this budget will continue to do both. It
    will ensure we meet the department's 308-ship posture requirement--
    indeed, growing the battle fleet to 308 ships by the end of the FYDP--
    and it will make our naval forces as a whole more capable, more
    survivable, and more lethal than they would have been otherwise.
        The budget invests $3.4 billion in fiscal year 2017 and $18.3
    billion over the FYDP to continue to buy two DDG-51 Arleigh Burke-class
    guided missile destroyers each year over the next five years--a total
    of 10 over the FYDP--as well as $400 million in fiscal year 2017 and
    $2.8 billion over the FYDP for modernizing our destroyers, 12 of which
    will also receive upgrades to their combat systems. It continues to
    support 11 carrier strike groups, investing $2.7 billion in fiscal year
    2017 and $13.5 billion over the FYDP for new construction of Ford-class
    carriers, as well as $2 billion in fiscal year 2017 and $8.9 billion
    over the FYDP for midlife reactor refueling and overhauls on our
    current carrier fleet. As I will discuss in the reform section of this
    testimony, it supports modernizing our guided missile cruisers--
    providing them with more capability and a longer lifespan while freeing
    up significant funds that can be put toward a variety of uses.
        I'd like to now address the Littoral Combat Ship (LCS), where we
    made an important tradeoff so we could put more money in submarines,
    Navy fighter jets, and many other critical areas. As such, the budget
    takes a new approach to the LCS and its associated frigate--buying a
    total of 40, not the 52 or more that were planned starting back in
    2002. Let me explain why. First, to be clear, we're investing in LCS
    and frigates because we need the capability they provide, and for
    missions like minesweeping and anti-submarine warfare, they're expected
    to be very capable. But now, in 2016, we have to further balance our
    shipbuilding investments among guided missile destroyers and Virginia-
    class attack submarines. We face competitors who are challenging us on
    the open ocean with new submarines, ships, aircraft, and missiles--
    advanced capabilities we haven't had to contend with in a long time,
    meaning that we must now invest more in higher-end capabilities across
    our own fleet. The department's warfighting analysis called for 40
    small surface combatants, so that's how many we're buying. Over the
    next 10 years, this will let us invest almost $8 billion more into
    highly lethal ships and capabilities--all the while increasing both the
    number of ships and the capability of our battle fleet. While this will
    somewhat reduce the number of LCS available for presence operations,
    that need will be met by higher-end ships, and it will ensure that the
    warfighting forces in our submarine, surface, and aviation fleets have
    the necessary capabilities to defeat even our most advanced potential
    adversaries. Under this rebalanced plan, we will still achieve our 308-
    ship goal within the next five years, and we will be better positioned
    as a force to effectively deter, and if necessary defeat, even the most
    advanced potential adversaries.
    Land Investments
        To ensure our ground forces have the capabilities to counter
    emerging threats and the demonstrated ability to deter and if necessary
    fight and win a full-spectrum conflict, the budget will help provide
    our Army, Marine Corps, and special operations forces with greater
    lethality in several forms. This includes a next-generation shoulder-
    launched weapon, a life extension program as well as a replacement for
    the Army Tactical Missile System (ATACMS) that can be used for improved
    counter-battery and long-range strike, and increased firepower for
    Stryker armored fighting vehicles. Together these investments comprise
    $780 million in fiscal year 2017 and $3.6 billion over the FYDP.
        Additionally, the budget invests $735 million in fiscal year 2017,
    and $6.8 billion over the FYDP, in the Joint Light Tactical Vehicle
    intended to replace the military's Humvees--procuring more than 2,000
    vehicles in fiscal year 2017, and a total of more than 17,700 vehicles
    over the next five years. It also invests $159 million in fiscal year
    2017, and $1.7 billion over the FYDP, in the Amphibious Combat Vehicle,
    which will replace the Marine Corps' aging Amphibious Assault Vehicle--
    helping procure over 200 vehicles over the next five years. As I
    discuss later in the reform section of this testimony, it supports the
    Army's ongoing Aviation Restructure Initiative--investing $1.1 billion
    for 52 AH-64 Apache attack helicopters in fiscal year 2017, and $5.7
    billion for 275 Apaches over the FYDP, as well as $1 billion for 36 UH-
    60 Black Hawk utility helicopters in fiscal year 2017, and $5.6 billion
    for 268 Black Hawks over the FYDP.
        The budget also invests $9.1 billion for missile defense in fiscal
    year 2017, and $47.1 billion over the FYDP. This reflects important
    decisions we've made to strengthen and improve our missile defense
    capabilities--particularly to counter the anti-access, area-denial
    challenge of increasingly precise and increasingly long-range ballistic
    and cruise missiles being fielded by several nations in multiple
    regions of the world. Instead of spending more money on a smaller
    number of more traditional and expensive interceptors, we're funding a
    wide range of defensive capabilities that can defeat incoming missile
    raids at much lower cost per round, and thereby impose higher costs on
    the attacker. The budget invests in improvements that complicate enemy
    targeting, harden our bases, and leverage gun-based point defense
    capabilities--from upgrading the Land-Based Phalanx Weapons System, to
    developing hypervelocity smart projectiles that as I mentioned earlier
    can be fired not only from the five-inch guns at the front of every
    Navy destroyer, but also the hundreds of Army M109 Paladin self-
    propelled howitzers. Additionally, the budget's missile defense
    investments maintain DOD's commitment to improving our Homeland and
    theater defense systems--as we're increasing the number of deployed
    Ground-Based Interceptors (GBIs) from 30 to 44, redesigning the exo-
    atmospheric kill vehicle to improve the reliability of the Ground-Based
    Midcourse Defense system, and funding improvements and follow-on
    concept development for the Terminal High-Altitude Area Defense (THAAD)
    system. Specifically, we're investing $1.2 billion in fiscal year 2017
    and $5.8 billion over the FYDP for the Ground-based Midcourse Defense
    program; for THAAD, we're spending $640 million in fiscal year 2017 and
    $3.6 billion over the FYDP, which includes procuring 24 interceptors in
    fiscal year 2017 and 149 over the FYDP; and, to research, develop, and
    deploy a new Long-Range Discrimination Radar, we're investing $317
    million in fiscal year 2017 and $1 billion over the FYDP.
    Air Investments
        To ensure the U.S. military's continued air superiority and global
    reach, the budget makes important investments in several areas--and not
    just platforms, but also payloads. For example, it invests $2.4 billion
    in fiscal year 2017 and $8 billion over the FYDP in a wide range of
    versatile munitions--including buying more Small Diameter Bombs, JDAMs,
    Hellfires, and AIM-120D air-to-air missiles. We are also developing
    hypersonics that can fly over five times the speed of sound.
        The budget continues to buy the stealthy, fifth-generation F-35
    Lightning II Joint Strike Fighter. It includes $10.1 billion in fiscal
    year 2017 and $56.3 billion over the FYDP to procure a total of 404 F-
    35s across the force through 2021--43 F-35As for the Air Force in
    fiscal year 2017 as part of 243 to be purchased over the FYDP, 16 F-
    35Bs for the Marine Corps in fiscal year 2017 as part of 97 to be
    purchased over the FYDP, and 4 F-35Cs for the Navy and Marine Corps in
    fiscal year 2017 as part of 64 to be purchased over the FYDP. This
    represents a slight deferral in Air Force F-35 procurement, which we're
    doing in order to free up funds to maintain a larger-size Air Force of
    55 tactical fighter squadrons, and to improve avionics, radar, and
    electronic warfare systems in legacy bomber and fighter aircraft like
    the F-15, F-16, B-1, B-2, and B-52 fleets--increasing their lethality,
    survivability, and therefore usefulness in a full-spectrum conflict. At
    the same time, it also represents an increase in the Navy and Marine
    Corps' F-35 procurement, which is important to ensure sufficient high-
    end capability and numbers in our aircraft carriers' tactical fighter
    fleet.
        Additionally, the budget invests $1.4 billion in fiscal year 2017
    and $12.1 billion over the FYDP for continued development of the B-21
    Long-Range Strike Bomber, as well as $3.1 billion in fiscal year 2017
    and $15.7 billion over the FYDP to continue upgrading our aerial tanker
    fleet--buying 15 KC-46A Pegasus refueling tankers in fiscal year 2017
    as part of 75 aircraft to be purchased over the FYDP.
        The budget also reflects important decisions regarding future
    unmanned aerial systems, such as the Navy's Carrier-Based Aerial
    Refueling System (CBARS), formerly known as the Unmanned Carrier-
    Launched Air Surveillance and Strike (UCLASS) program--by focusing in
    the near-term on providing carrier-based aerial refueling, we're
    setting the stage for a future unmanned carrier air wing. With this
    approach, the Navy will be able to quickly and affordably field the
    kinds of unmanned systems that its carrier air wings need today, while
    laying an important foundation for future, more capable unmanned
    carrier-based platforms. We know we need to ensure aircraft can operate
    off the carrier in high-threat environments, and we're working hard to
    make them unmanned--it's just that the UCLASS program as previously
    structured was not the fastest path to get us there. This approach will
    allow us to get started integrating unmanned aircraft onto our aircraft
    carriers affordably and as soon as possible.
        Furthermore, to maximize the capabilities and extend the reach of
    all our airborne systems, the budget reflects how we're expanding
    manned-unmanned teaming--from buying Navy MQ-4C Triton unmanned
    maritime surveillance and patrol aircraft, which can be paired with our
    P-8A Poseidon aircraft for a variety of missions; to buying Army AH-64
    Apache attack helicopters that can pair with MQ-1C Gray Eagle scouts;
    to buying Air Force F-35s that can network with both payloads and
    platforms.
    Cyber and Electronic Warfare Investments
        This budget significantly increases our cyber capabilities, with
    new investments totaling over $900 million in fiscal year 2017 compared
    to last year's budget.
        Because defending our networks is and must be DOD's number-one
    mission in cyberspace, the budget makes significant investments to
    improve our defensive capabilities to deny a potential attack from
    succeeding. These include $336 million over the FYDP to support more
    capable network perimeter defenses, as well as $378 million over the
    FYDP to train and strengthen DOD's Cyber Protection Teams to respond to
    security breaches, grow our cyber training and testing ranges, and
    support tool development that will let our Cyber Mission Force quickly
    respond to cyberattacks against our networks regardless of where they
    are stationed around the world.
        Reflecting our renewed commitment to deterring even the most
    advanced adversaries, the budget also invests in cyber deterrence
    capabilities, including building potential military response options.
    This effort is focused on our most active cyber aggressors, and is
    based around core principles of resiliency, denial, and response.
        As part of DOD's second cyber mission--defending the nation--the
    budget invests in an advanced capability to disrupt cyberattacks of
    significant consequences. To support DOD's third cyber mission--
    providing offensive cyber options that if directed can augment our
    other military systems--the budget invests $347 million over the FYDP
    to help provide cyber tools and support infrastructure for the Cyber
    Mission Force and U.S. Cyber Command.
        DOD has a unique level of resources and cyber expertise compared to
    the rest of the federal government, and following the recent data
    breaches of the Office of Personnel Management's information technology
    systems, DOD has undertaken responsibility for the development,
    maintenance, and cybersecurity of the replacement background
    investigation systems and their data infrastructure. To provide proper
    support and a dedicated funding stream for this effort, the President's
    Budget includes $95 million for DOD in fiscal year 2017. Also, on a
    separate but related note, the budget invests $454 million over the
    FYDP to ensure DOD will continue to have access to the trusted
    microelectronic components needed in our weapon systems. By developing
    alternative sources for advanced microchips and trusted designs, this
    funding will help ensure the long-term security of our systems and
    capabilities.
        Meanwhile, to protect our platforms and ensure U.S. freedom of
    maneuver in contested environments, the budget also continues to
    support research, development, testing, evaluation, and procurement of
    advanced electronic warfare capabilities--totaling $3.7 billion in
    fiscal year 2017 and $20.5 billion over the FYDP. To enhance the
    electronic survivability and lethality of fighter and bomber aircraft
    like the F/A-18, F-15, and B-2, we're investing in both offensive and
    defensive airborne capabilities, including the Air Force's Defensive
    Management System modernization and Eagle Passive Active Warning
    Survivability System, and also the Navy's Integrated Defensive
    Electronic Countermeasures and Next Generation Jammer. We're upgrading
    the radar on our E-3 Sentry AWACS with enhanced electronic protection
    to make adversary jammers less effective. Investments in the Navy's
    Surface Electronic Warfare Improvement Program will help our ships
    protect themselves better. To help protect our ground forces, the
    budget invests in the Army's Common Infrared Countermeasures and
    Electronic Warfare Planning and Management Tool, as well as the Marine
    Corps' Intrepid Tiger pod.
        While cyber and electronic warfare capabilities provide, for the
    most part, different techniques to achieve similar mission objectives,
    an integrated approach can yield additional benefits. This is reflected
    in our budget, including investments intended to ensure we can hold
    even the most challenging targets at risk.
    Space Investments
        As I mentioned earlier, this budget continues and builds upon
    important investments in last year's budget to help secure U.S. access
    to space and address space as an operational domain.
        After adding over $5 billion in new investments in DOD's 2016
    budget submission to make us better postured for contested military
    operations in space--including over $2 billion in space control efforts
    to address potential threats to U.S. space systems--this budget largely
    sustains those investments over the FYDP. While there is much more work
    ahead, we are on a good path in our efforts to complicate an
    adversary's ability to defeat our systems while also enhancing our
    ability to identify, attribute, and negate all threatening actions in
    space.
        Meanwhile, the budget also supports strengthening our current
    space-based capabilities, and maturing our space command and control.
    It invests in more satellites for our Space-Based Infrared System to
    maintain the robust strategic missile warning capability we have today.
    It allocates $108 million over the FYDP to implement the Joint
    Interagency Combined Space Operations Center (JICSpOC), which will
    better align joint operations in space across the U.S. Government.
        DOD must have assured access to space through multiple reliable
    sources that can launch our critical national security satellites,
    which is why the budget invests $1.8 billion for space launch in fiscal
    year 2017 and $9.4 billion over the FYDP. Because we want to end the
    use of the foreign RD-180 engine as soon as possible, because we have a
    strong desire to preserve competition for space launch in order to
    ensure multiple launch service providers can sustain uninterrupted
    access to space, and to control costs, the budget includes funds for
    competitive public-private partnerships to help develop new launch
    services, which we believe is the most responsible way forward. Merely
    developing a new engine would not give us the assured access to space
    that we require. We plan to take advantage of the emerging commercial
    space launch marketplace using an innovative, more commercial
    approach--investing through competition in new launch services in
    return for priced options for future launches.
    Nuclear Enterprise Investments
        The budget also makes reforms and investments needed to continue
    providing a safe, secure, and effective nuclear deterrent. Compared to
    last year's budget submission, it adds $10 billion over the next five
    years, for a total of $19 billion in fiscal year 2017 and $108 billion
    over the FYDP for maintaining, and modernizing the nuclear force and
    associated strategic command, control, and communications systems. This
    reflects DOD's continuing commitment to the nuclear triad and its
    critical mission.
        In addition to making an array of investments across the nuclear
    enterprise--from increased funding for manpower, equipment, vehicles,
    and maintenance, to technological efforts that improve the
    sustainability of our bomber fleet--the budget also fully funds the
    first stages of our key nuclear modernization effort, in particular the
    replacement of our Ohio-class ballistic missile submarines. The Ohio
    Replacement Program is allocated $1.9 billion in fiscal year 2017 and
    $13.2 billion over the FYDP, which in addition to research and
    development will allow the first year of construction on an
    incrementally-funded first ship to begin in fiscal year 2021.
        We expect the total cost of nuclear modernization to be in the
    range of $350-$450 billion. Although this still presents an enormous
    affordability challenge for DOD, we believe it must be funded. Previous
    modernizations of America's strategic deterrent and nuclear security
    enterprise were accomplished by topline increases to avoid having to
    make drastic reductions to conventional forces, and it would be prudent
    to do so again. I hope DOD can work with Congress to minimize the risk
    to our national defense.
    Building the All-Volunteer Force of the Future
        While we have the finest fighting force in the world today, that
    excellence is not a birthright, and we can't take it for granted in the
    21st century. We have to earn it again and again, starting with our
    most enduring advantage--our people.
        That's what building the force of the future is all about: making
    sure that long into the future, my successors will be able to count on
    the same excellence in people that I do today. We have several
    overarching priorities to help us do that, like attracting a new
    generation of talented Americans, promoting diversity, and rewarding
    merit; carving tunnels through the walls between DOD, the private
    sector, our reserve force, and other agencies across the Government;
    and updating and modernizing our personnel management systems with
    technology and data analysis to help improve the choices and decisions
    we make related to our people.
        I made this commitment to President Obama when he asked me to serve
    as Secretary of Defense, and so shortly after I was sworn in, I visited
    my old high school in Abington, Pennsylvania to outline my vision for
    the force of the future. I talked about how, in the face of
    generational, technological, and labor market changes, we in the
    Pentagon must try to make ourselves even better at attracting talent
    from new generations of Americans. In the months that followed, I went
    to places like Silicon Valley and St. Louis, and heard from companies
    like Facebook, Boeing, and LinkedIn about what they're doing to compete
    for talent in the 21st century. This past December, I announced that
    we're opening all combat positions to women, to expand our access to
    100 percent of America's population for our All-Volunteer Force.
        Throughout this process, we've always been mindful that the
    military is a profession of arms. It's not a business. We're
    responsible for defending this country--for providing the security that
    allows our friends and family members and fellow citizens to go to
    school, go to work, to live their lives, to dream their dreams, and to
    give the next generation a better future.
        The key to doing this successfully is leveraging both tradition and
    change. While the military cannot and should not replicate all aspects
    of the private sector, we can and should borrow best practices,
    technologies, and personnel management techniques in commonsense ways
    that work for us, so that in future generations, we'll keep attracting
    people of the same high caliber we have today--people who will meet the
    same high standards of performance, leadership, ethics, honor, and
    trust we hold our force to today.
        Last spring I asked DOD's Personnel and Readiness chief to lead a
    team in developing a package of bold proposals, which they did--
    building on the great work the military services were already doing,
    and also coming up with some new ideas. Subsequently, a senior
    leadership team led by Deputy Secretary of Defense Bob Work and Vice
    Chairman of the Joint Chiefs of Staff General Paul Selva has been
    working with the Service Vice Chiefs to closely analyze each proposal
    and make recommendations before I decide. While this process is still
    ongoing for some proposals, I've decided to announce my decisions on
    other proposals as I've made them, which I will now detail.
    Greater Permeability and Talent Management
        I outlined the first link we're building to the force of the future
    at George Washington University last November, announcing over a dozen
    new initiatives in several categories that are intended to make our
    future Defense Department better connected to 21st century talent.
        First, we're creating what we call `on-ramps' for people who aren't
    involved with DOD but want to try contributing to our mission. One way
    we're doing this is by having better managed internship programs that
    more effectively transition promising interns into employees. Another
    is our new Defense Digital Service, which brings in talent from
    America's vibrant, innovative technology community for a time to help
    solve some of our most complex problems. We're also going to bring in
    resident entrepreneurs, who will work with senior leaders on
    challenging projects for a year or two. We're going to hire a chief
    recruiting officer to bring in top executives for stints in civilian
    leadership roles, as we had in the past with people like Dave Packard,
    co-founder of HP, who also served as Deputy Secretary of Defense.
        Second, we're creating short-term `off-ramps' for those currently
    in DOD, so they can gain new skills, experiences, and perspectives from
    outside and then bring them back in to help keep us strong, creative,
    and forward-thinking. One way we're doing this is by expanding and
    broadening the Secretary of Defense Corporate Fellowship program,
    including by opening it up to qualified enlisted personnel. Another
    example is the Career Intermission Pilot Program, which lets people
    take a sabbatical from their Military Service for a few years while
    they're getting a degree, or learning a new skill, or starting a
    family. DOD plans to seek authorities to make this program permanent,
    and looks forward to working with Congress to do so--similar to how we
    were able to partner last year to update and modernize retirement
    benefits and ensure that the 80 percent of our force that doesn't serve
    20 years will get the benefits they earned whenever they move on to
    whatever's next in life.
        Third, we're going to use 21st century data and technology to
    improve and modernize our talent management systems. We're launching
    LinkedIn-style pilot programs to help give servicemembers and units
    more choice in matching up for future assignments. We're creating an
    Office of People Analytics to leverage big data to inform our personnel
    policies. We're finally implementing exit surveys, so we can have
    quantitative data on why people decide to leave. To help us keep
    bringing in the best people, we're looking at ways to evaluate recruit
    performance, improve outcomes, and better analyze trends that if left
    unchecked could indicate or lead to our military's insularity from the
    rest of society.
    Family Support and Retention
        Next, in January, I announced our so-called second link to the
    force of the future, a set of several initiatives with a singular
    focus: strengthening the support we provide our military families to
    improve their quality of life. They were developed keeping in mind
    DOD's recruiting, retention, and career and talent management needs, as
    well as our closely-linked readiness and warfighting demands, which
    must always guide us.
        We know that our All-Volunteer Force is predominantly a married
    force--52 percent of our enlisted force is married, and 70 percent of
    our officer force is married. We also have another 84,000 military-to-
    military marriages, with 80 percent of them stationed within 100 miles
    of each other. While we recruit a servicemember, we retain a family.
    This means that what we do to strengthen quality of life for military
    families today, and what we do to demonstrate that we're a family-
    friendly force to those we want to recruit, is absolutely essential to
    our future strength. While we often speak of commitments to family and
    country in the same breath, the stresses of Military Service on our
    families are heavy and well known; among the stresses military families
    face, having and raising children is near the top. We also know that at
    10 years of service, when women are at their peak years for starting a
    family, women are retained at a rate 30 percent lower than men across
    the services. We know that a high level of work and family conflict is
    one of the primary reasons they report leaving service.
        To build the force of the future, tackling these problems is
    imperative, especially when the generation coming of age today places a
    higher priority on work-life balance. These Americans will make up 75
    percent of the American workforce by 2025. Nearly four-in-five of them
    will have a spouse or a partner also in the workforce--twice the rate
    of baby boomers. These Americans wait longer to have children, and when
    they do have children, they want to protect the dual earning power of
    their families to provide for their children accordingly.
        That's why, for starters, we're providing a more competitive
    standard for maternity and paternity leave across our joint force--
    setting 12 weeks of fully paid maternity leave as the standard across
    the joint force, and working with Congress to seek authorities to
    increase paid paternity leave for new fathers from 10 to 14 days, which
    they can use in addition to annual leave. These changes put DOD in the
    top tier of institutions nationwide, and will have significant
    influence on decision making for our military family members. For both
    mothers and fathers alike, this establishes the right balance of
    offering a highly competitive leave policy while also maintaining the
    readiness of our total force. While I don't take lightly that 12 weeks
    of maternity leave represents a downshift from what the Navy pursued
    last summer, we will be at the forefront in terms of competition,
    especially as part of the comprehensive basket of family benefits we're
    providing across the joint force. This will be an increasingly
    important factor as current and future generations of parents have
    different views and expectations in parenting, and we must continue to
    be able to attract and retain the best talent among them.
        Additionally, we're expanding the childcare we provide on our
    bases, because whether for single parents, for families in which both
    parents work outside the home, or for every mother or father in our
    military, childcare hours should be as responsive as possible to work
    demands. Based on feedback from pilot programs, and in the interest of
    responding to typical work hours at our installations, we will increase
    childcare access to 14 hours a day across the force. By providing our
    troops with childcare they can rely on -from before reveille to after
    taps--we provide one more reason for them to stay on board. We show
    them that supporting a family and serving our country are by no means
    incompatible goals.
        We're also making relatively inexpensive improvements so that our
    workplaces are more accommodating to women when they return from
    maternity leave, with a focus on making it easier for them to continue
    breastfeeding if they choose. To make the transition between maternity
    leave and returning to work for military mothers smoother, to enhance
    our mission effectiveness, and to comply with standards that apply to
    nearly every organization outside the military, we're requiring the
    installation or modification of mothers' rooms throughout all
    facilities when there are more than 50 women regularly assigned.
        Furthermore, we can also be more creative about making reasonable
    accommodations for members of our force who face difficult family
    geographic situations while at the same time preserving our force's
    effectiveness. Data indicates that allowing family members to trade the
    ability to remain at a station of choice in exchange for an additional
    Active Duty service obligation is one approach that could increase
    retention, while preserving readiness. DOD will be seeking legislative
    authority to this effect--when the needs of the force permit a
    servicemember to stay at their current location, we will seek to
    empower commanders to make reasonable accommodations, in exchange for
    an additional service obligation.
        Finally, as a profession of arms, we ask our men and women to make
    incomparable sacrifices. We ask them, potentially, to place themselves
    at risk of sacrificing their ability to have children when they return
    home. To account for this more fully in the benefits we provide our
    troops, DOD will cover the cost of freezing sperm or eggs through a
    pilot program for active-duty servicemembers--a benefit that will help
    provide our men and women, especially those deployed in combat, with
    greater peace of mind. This investment will also provide greater
    flexibility for our troops who want to start a family, but find it
    difficult because of where they find themselves in their careers.
        Each of these initiatives is significant in its own right. Taken
    together, they will strengthen our competitive position in the battle
    for top talent, in turn guaranteeing our competitive position against
    potential adversaries. The initiatives approved to date total $867
    million across the FYDP; we've included this in our budget because it's
    a worthy investment that will yield great returns.
    More Still to Come
        While these first two links are important, we will have more to
    announce on the force of the future in the coming months. For example,
    we're taking a serious look at some commonsense reforms in our officer
    promotion system, and I greatly appreciate Congressional leaders from
    both parties who have indicated their support for such reforms in
    principle. We're also looking at ways to improve how we manage our
    civilian personnel, working with the Government-wide Office of
    Personnel Management as well as federal employee unions. In both of
    these efforts, working with Congress will be essential to ensure that
    our force of the future is as strong as the force of today.
    Reforming the DOD Enterprise
        As I've said consistently from the moment I became Secretary of
    Defense, I cannot ask for more taxpayer dollars for defense without
    being candid about the fact that not every defense dollar is spent as
    wisely or responsibly as it could be, and also being determined to
    change that and make our department more accountable. That's why
    reforming the DOD enterprise is so important--from improving how we're
    organized so we can best respond to the challenges and opportunities of
    the future security environment, to continuing to improve our
    acquisition and enterprise-wide business and audit practices, to
    reducing excess infrastructure and overhead, to modernizing the
    military healthcare system.
        Before I address the reforms in this budget submission, it's
    important to consider the recent history of defense reform--how DOD has
    been embarked on a reform path for much of the last seven years, and
    how we appreciate Congress's work with us over the last year on
    acquisition and modernized retirement reforms.
        Despite what some may think, this administration hasn't been
    dragging its feet when it comes to defense reform--the reality has been
    quite the opposite. Beginning in 2009, we reduced the number of senior
    executives and general and flag officers, while working with Congress
    to trim management headquarters staffs by 20 percent, and move DOD
    toward auditability. We've done three iterations of the Better Buying
    Power initiative I established to continuously improve our
    acquisitions, with Better Buying Power 3.0 incorporated into this
    budget, and we're seeing compelling indications of positive
    improvements, including in areas like reduced cost growth and reduced
    cycle time. We've continually submitted much-needed reforms to
    strengthen the efficiency and capability of our force--many of which
    have been continually denied, either in whole or in part, at a cost for
    both taxpayers and our troops. This last part poses a real problem,
    because every dollar Congress denies us in reform is a dollar we can't
    invest in security we need to deter and defend against today's and
    tomorrow's threats.
        Now is the time for action. DOD will work closely with Congress on
    any anticipated reform legislation, and we welcome an open and
    collaborative process. In the past, legislative reform has proven to be
    a double-edged sword--sometimes it leads to constructive change, which
    is good, but other times it just adds to bureaucracy and overhead, even
    if that was never the intent. I hope that with the focus on reform
    we've recently been seeing in this and the other defense committees in
    Congress, we can work together to do reform right. We should, because
    there's a lot that needs to be accomplished in many areas.
    Continuously Improving Acquisition
        DOD has been, and still is, absolutely committed to improving
    acquisition outcomes. After five years of implementing our Better
    Buying Power (BBP) initiatives for continuous process improvements in
    the defense acquisition system, we're seeing compelling indications of
    significant improvement in acquisition outcomes--for example, annual
    growth metrics for contracted costs on our major programs have dropped
    dramatically from a peak of 9.1 percent in 2011 to a 30-year low of 3.5
    percent in 2015, and a much higher percentage of major programs are
    projecting cost reductions relative to initial baselines than in the
    past. While these developments are positive signs, we can and must do
    more to sustain and where possible accelerate our momentum to keep
    improving and deliver better military capability while protecting
    American taxpayers.
        We need to continue reducing overhead and bureaucracy associated
    with the acquisition system, making it more agile and having a faster
    flow of commercial technology into our weapon systems. DOD is
    comfortable with the reforms in the fiscal year 2016 National Defense
    Authorization Act--which included several legislative reforms that DOD
    proposed last year--and we strongly support the increased role of the
    Service Chiefs in acquisition programs, particularly on cost and
    requirements trade-offs. Going forward, it's important that we take the
    responsible approach to absorb these reforms and see their effects
    before making additional major changes.
        DOD also appreciates Congress's interest in flexibility and
    agility, because the pace of threat changes and technology development
    are not compatible with our long cycles of budget submission,
    authorization, and appropriations. DOD will be looking for
    opportunities to work with Congress to improve the efficiency and
    effectiveness of our acquisition process. In particular, we would
    welcome greater flexibility in appropriations or reprogramming to
    initiate development of urgently needed capabilities. The flexibility
    to start a program as soon as a threat is identified would save
    critical time--as much as two years under current practices--and
    position both DOD and industry to more quickly initiate development,
    without a long-term commitment, outside the traditional budget cycle.
    This step would represent a `free' two years of lead time to acquiring
    a new capability.
    Leaner Business Practices and Reducing Excess Overhead and
            Infrastructure
        The budget submission reflects several important efforts to spend
    taxpayer dollars more efficiently, generating savings that would be
    much better invested in other areas like the fight against ISIL or
    deterring Russian aggression.
        Part of this means making more reductions to overhead, and also
    adopting some commonsense business practices that are long overdue--
    which in total we expect to help save nearly $8 billion over the next
    five years. By better managing the 20 percent management headquarters
    reductions I mentioned earlier, including delayering and flattening
    management organizational structures, and also by increasing the
    reduction to 25 percent, reviewing service contracts, and making
    business operations and IT more efficient, we expect to save close to
    $5.9 billion over the FYDP. We're modernizing how we manage our
    commissaries and military exchanges, to optimize their business
    practices and respond to the changing needs of their customers. Unlike
    commissary and military exchange reforms proposed in previous budgets,
    this new approach protects the benefits they provide our people while
    still generating expected savings of about $2 billion over the FYDP.
        We're also making real progress on reforming DOD's myriad systems
    and business processes to meet our commitment to be audit ready by the
    beginning of fiscal year 2018. The three military departments began
    audits of their budgets for the first time last year, and DOD financial
    audits currently cover over 75 percent of our total General Fund
    budgetary resources and just over 90 percent of the current year
    dollars.
        In addition, we need to stop spending so much money to hold onto
    bases we don't need, and implement a domestic round of Base Realignment
    and Closure (BRAC) in 2019 as we're requesting. While it's helpful that
    the fiscal year 2016 National Defense Authorization Act allowed a study
    of DOD's excess infrastructure, the bottom line is that we have more
    bases in more places than we need, with preliminary analysis indicating
    that we have over 20 percent excess infrastructure. To ignore this fact
    while criticizing DOD for wasteful spending is not only a sin of
    omission, but also a disservice to America's taxpayers. Last year's
    Congressional denial forced the BRAC round to slip from 2017 to 2019,
    further prolonging our ability to harvest savings we greatly need. By
    then it will have been 14 years since DOD was allowed to right-size its
    domestic infrastructure, which any business leader or citizen would
    think is ridiculous--and they'd be right. Now is the time to fix it.
    Reexamining Goldwater-Nichols and Defense Institutional Reform
        I appreciate that Congress shares my desire to make institutional
    reform a priority. The Goldwater-Nichols Department of Defense
    Reorganization Act of 1986 was important and had deeply positive
    results, but after 30 years, it needs updates. To help formulate DOD's
    recommendations to Congress on reviewing Goldwater-Nichols reforms, I
    asked our Deputy Chief Management Officer last fall to lead a
    comprehensive review of organizational issues in DOD--spanning the
    Office of the Secretary of Defense (OSD), the Joint Staff, the
    combatant commands, and the military departments--and identify any
    potential redundancies, inefficiencies, or other areas of improvement.
        This review is currently ongoing, and preliminary internal findings
    are expected by the end of March to help shape our forthcoming
    recommendations to Congress. In addition, and without prejudging any
    outcomes, I can say our review is examining areas where the pendulum
    may have swung too far, as in not involving the Service Chiefs enough
    in acquisition decision-making and accountability; or where subsequent
    world events suggest nudging the pendulum further, as in taking more
    steps to strengthen the capability of the Chairman of the Joint Chiefs
    of Staff, the Joint Chiefs of Staff, and the Joint Staff to support
    management, planning, and execution across the combatant commands,
    including for prioritizing military activities and resources across
    combatant command boundaries, and particularly focused on trans-
    regional, multi-domain, and multi-functional threats, as well as
    threats within overlapping time frames; ensuring the Chairman's ability
    to provide their best military advice to me and the President, outside
    the chain of command as conceived of in the law; eliminating
    unnecessary overlap between OSD and the Joint Staff and between the
    service secretariats and staffs; better aligning combatant command
    staffs to their mission; streamlining acquisition requirements and
    decision-making processes to remove unneeded decision-making layers;
    having more flexibility in the laws and policies that govern joint duty
    qualifications; and better aligning the Joint Staff and the combatant
    commands to produce operational advice and respond to transregional
    threats.
        I look forward to the full results of our review, and I hope you
    will too. While DOD's current organization produces sound military
    advice and operational decisions, it often does so in a needlessly
    costly and time-consuming manner--leaving plenty of room for
    organizational improvements that can make us more agile and efficient.
    While much is within our existing authority to do, we will work with
    Congressional committees to frame and seek any needed reforms in
    statute. I look forward to working with you.
    Modernizing and Simplifying the Military Healthcare System
        DOD greatly appreciates that Congressional leaders have said 2016
    will be the year to reform our military healthcare system, TRICARE,
    after having passed retirement modernization reform in 2015. As you
    know, DOD has proposed various ways to reform TRICARE for several
    years, so we look forward to working very closely with Congress in the
    year ahead. The reforms reflected in the budget give beneficiaries more
    simplicity and choice in how they manage their healthcare, while also
    incentivizing the much more affordable use of military treatment
    facilities. This will not only save money, but also maximize the
    workload and readiness of our military's medical force, giving our
    doctors, nurses, medics, and corpsmen the experience they need to be
    effective at their mission. Together this should generate about $548
    million in fiscal year 2017 and almost $7 billion over the FYDP that
    can be better spent in other ways without sacrificing the care of our
    people. It's time to get this done.
    Making Sure Retirement Reform Works
        DOD greatly appreciates being able to work closely with Congress
    last year in reforming the military's retirement system. In this year's
    budget submission, we are including a few modifications to military
    retirement reform to help make sure those reforms work in the best
    possible way for the future strength and success of our military.
        First, continuation pay should not be an entitlement at 12 years of
    service, but rather a vitally important force shaping tool. DOD should
    have the flexibility to determine if and when to offer this benefit so
    we can better retain the talent we need the most at any given time.
        Second, the blended retirement plan that Congress passed last year
    needs some modifications to avoid having adverse effects on retention--
    in particular, slightly raising the maximum matching contribution from
    4 percent to 5 percent. To improve retention, we also propose
    increasing the number of years a servicemember has to serve before
    matching contributions begin--so instead of beginning them at the start
    of their third year of service, it would be at the start of their fifth
    year of service, after their first reenlistment. DOD looks forward to
    working with Congress to make these proposals a reality.
    The Right Force Structure for Current and Future Operations
        The budget also reflects critical decisions on force structure
    reforms, all of which are vital to making sure our troops have the
    capabilities they need for both present and future missions. While
    Congress has too often rejected such reforms out of hand, our decisions
    this year show that when world events and operational demands require
    the Defense Department to change its plans, it does so. In turn,
    Congress must do the same, and recognize that with a set budget and the
    need to invest in advanced capabilities to strengthen high-end
    deterrence, it's time to seriously consider these reforms and stop
    tying our hands from implementing them.
        I mentioned earlier that we're pushing off the A-10's final
    retirement until 2022 so we can keep more aircraft that can drop smart
    bombs on ISIL; in addition to changing when A-10s will be retired,
    we're also changing how it will happen. As 2022 approaches, A-10s will
    be replaced by F-35s only on a squadron-by-squadron basis as they come
    online, ensuring that all units have sufficient backfill and that we
    retain enough aircraft needed to fight today's conflicts.
        While some members of Congress may think the Navy's phased approach
    for modernizing its guided missile cruisers is just a ploy to quickly
    retire them, that is incorrect--in fact, retiring them now or anytime
    soon would be a serious mistake. Our cruisers are the best ships we
    have for controlling the air defenses of a carrier strike group, and
    given the anti-ship missiles being developed by other nations, we not
    only can't afford to go without them; we also need them to be as modern
    and capable as possible, and for them to stay in service as long as
    they can. The Navy's plan is still smarter and more affordable than the
    approach laid out by Congress, saving us $3 billion over the FYDP that
    we're putting to good use elsewhere in the budget. To make clear that
    this is not a ploy to quickly retire our cruisers, we will be
    submitting proposed legislative language that Congress can pass to hold
    the department to its word.
        Additionally, the Army is continuing to implement its Aviation
    Restructure Initiative in accordance with the fiscal year 2015 National
    Defense Authorization Act as the Chief of Staff of the Army reviews the
    recent findings of the National Commission on the Future of the Army.
    While we will revisit the Army's aviation transfer plan when we receive
    the Chief of Staff of the Army's report, the Commission's proposal to
    keep four Apache battalions in the Army National Guard could cost over
    $2.4 billion if the Army fully equips all 20 active battalions and
    keeps all aircraft currently dedicated to its equipment set in South
    Korea. By improving the readiness of the Army's Apache attack
    helicopters, and better leveraging the diverse capabilities Black Hawk
    helicopters bring to the table for National Guard missions--both here
    at home, and around the world when called upon as an operational
    reserve--the Army's planned Aviation Restructure Initiative is in the
    best interests of both the Army as well as the taxpayers who support
    it.
    The Opportunity of Reform
        Regardless of how any of our proposed reforms might be initially
    received, DOD needs Congress to work together with us on a path forward
    for all of them, because there's a real opportunity in front of us.
        With last fall's budget deal, you showed that cooperation and
    prudent compromise for the good of our future security and strength was
    actually possible. Our reform submissions on things like the A-10,
    commissaries, and TRICARE reflect the fact we've heard Congress's
    concerns about past submissions, and made adjustments accordingly.
        If we don't lead the way ahead together, both troops and taxpayers
    alike will be forced to deal with the consequences. Let's work together
    on their behalf.
       vi. requests of this committee: the imperative of working together
        Before concluding, I want to reemphasize the big picture, because
    this budget marks a major inflection point for the Department of
    Defense, and we need your support for it.
        For a long time, DOD tended to focus and plan and prepare for
    whatever big war people thought was coming over the horizon, at one
    point becoming so bad that after a while, it started to come at the
    expense of current conflicts--long-term at the expense of the here-and-
    now. Thankfully we were able to realize that over the last decade,
    correct it, and with help from Congress turn our attention to the
    fights we were in.
        The difference today is that, while such a singular focus made
    sense when we were facing off against the Soviets or sending hundreds
    of thousands of troops to Iraq and Afghanistan, it won't work for the
    world we live in. Now we have to think and do a lot of different things
    about a lot of different challenges--not just ISIL and other terrorist
    groups, but also competitors like Russia and China, and threats like
    North Korea and Iran. We don't have the luxury of just one opponent, or
    the choice between current fights and future fights--we have to do
    both, and we have to have a budget that supports both. That means
    funding a force with the right size, readiness, and capabilities to
    prevail in today's conflicts while simultaneously building a force that
    can prevail in the future--recognizing that future force won't exist
    unless we take actions today. That's what this budget submission was
    designed to do, and we need your help to do it.
        I thank this committee again for supporting the Bipartisan Budget
    Act that set the size of our budget; our submission focuses on the
    budget's shape, and we hope you approve it. I know some may be looking
    at the difference between what we proposed last year and what we got in
    the budget deal, but I want to reiterate that we've mitigated that
    difference, and that this budget meets our needs. The budget deal was a
    good deal--it gave us stability, and for that we remain grateful. Doing
    something to jeopardize that stability would concern me deeply. The
    greatest risk we face in DOD is losing that stability this year, and
    having uncertainty and sequester in future years. That's why going
    forward, the biggest concern to us strategically in the Congress is
    averting the return of sequestration next year so we can sustain all
    these critical investments over time.
        By working together, I am confident we can succeed, because in many
    ways we already have. If we think back to those defense investments and
    decisions that changed the course of our nation's and our military's
    history for the better--and not just in technologies like GPS, the
    Internet, and satellite communications, but also in other areas, like
    jointness and the All-Volunteer Force--they were all able to benefit
    our security and our society because they garnered support across the
    aisle, across branches of Government, and across multiple
    administrations.
        That same support for what's in this budget is essential today to
    address the security challenges we face and seize the opportunities
    within our grasp. We need your support in the decisions that our senior
    military leaders and I are advocating for. We need you to work with us,
    and not tie our hands, when it comes to pursuing smart and critical
    reforms. We need you to provide adequate, stable, predictable
    resources, as only you can, by coming together as you have before--
    including, in the coming years, to avert the return of sequestration
    once again. As long as you do, I know our national security and
    national strength will be on the right path, and America's military
    will continue to defend our country and help make a better world for
    generations to come.
        Thank you.

        Chairman McCain. Thank you.
        General Dunford.

    STATEMENT OF GENERAL JOSEPH F. DUNFORD, JR., USMC, CHAIRMAN OF
                       THE JOINT CHIEFS OF STAFF

        General Dunford. Chairman McCain, Ranking Member Reed,
    distinguished members of the committee, thank you for the
    opportunity to join Secretary Carter and Secretary McCord in
    appearing before you.
        I'm honored to represent the extraordinary men and women of
    the joint force. Our soldiers, sailors, airmen, and marines,
    civil servants, remain our single most important competitive
    advantage. Thanks to your support, the United States military
    is the most capable fighting force in the world.
        With your continued support, the joint force will continue
    to adapt, fight, and win in current operations while
    simultaneously innovating and investing to meet future
    challenges. I don't believe we ever should send Americans into
    a fair fight. Rather, we should maintain a joint force that has
    the capability and credibility to assure our allies and
    partners, deter aggression, and overmatch any potential
    adversary. This requires us to continually improve our joint
    warfighting capabilities, restore full-spectrum readiness, and
    develop the leaders who will serve as the foundation for the
    future.
        The United States is now confronted with challenges from
    both traditional state actors and nonstate actors. The
    Department has identified five strategic challenges, and
    Secretary Carter has already addressed those. Russia, China,
    Iran, and North Korea continue to invest in military
    capabilities that reduce our competitive advantage. They are
    also advancing their interests through competition with a
    military dimension that falls short of traditional armed
    conflict and the threshold for traditional military response.
    Examples include Russian actions in Ukraine, Chinese activities
    in the South China Sea, and Iran's malign activities across the
    Middle East. At the same time, nonstate actors, such as ISIL
    and al Qaeda, pose a threat to the Homeland, the American
    people, our partners, and our allies. Given the opportunity,
    such extremist groups would fundamentally change our way of
    life.
        As we contend with the Department's five strategic
    challenges, we recognize that successful execution of our
    defense strategy requires that we maintain credible nuclear and
    conventional capabilities. Our strategic nuclear deterrent
    remains effective, but it's aging, and it requires
    modernization. Therefore, we're prioritizing investments needed
    for a safe, secure, and effective nuclear deterrent. We're also
    making investments to maintain a competitive advantage in our
    conventional capabilities, and we must further develop
    capabilities in the vital and increasingly contested domains of
    cyber and space.
        As the joint force acts to mitigate and respond to
    challenges, we do so in the context of a fiscal environment
    that has hampered our ability to plan and allocate resources
    most effectively. Despite partial relief by Congress from
    sequester-level funding, the Department has absorbed 800
    billion in cuts and faces an additional 100 billion of
    sequestration-induced risk through fiscal year 2021. Absorbing
    significant cuts over the past 5 years has resulted in our
    underinvesting in critical capabilities. Unless we reverse
    sequestration, we'll be unable to execute the current defense
    strategy, and specifically unable to address the challenges
    that Secretary Carter outlined.
        The fiscal year 2017 budget begins to address the most
    critical investments required to maintain our competitive
    advantage. To the extent possible within the resources provided
    by the 2015 Bipartisan Budget Act, it addresses the
    Department's five challenges. It does so by balancing three
    major areas: investment in high-end capabilities, the
    capability and capacity to meet current operational demands,
    and the need to rebuild readiness after an extended period of
    war. In the years ahead, we'll need adequate funding levels and
    predictability to fully recover from over a decade at war and
    delayed modernization. A bow wave of procurement requirements
    in the future include the Ohio-class submarine replacement,
    continued cyber and space investments, and the long-range
    strike bomber. It will also be several years before we fully
    restore full-spectrum readiness across the services and
    replenish our stocks of critical precision munitions.
        In summary, I'm satisfied the fiscal year 2017 budget puts
    us on the right trajectory, but it will take your continued
    support to ensure the joint force has the depth, flexibility,
    readiness, and responsiveness that ensures our men and women
    never face a fair fight.
        Once again, thank you for the opportunity to appear before
    you this morning. I look forward to your questions.
        [The prepared statement of General Dunford follows:]

                Prepared Statement by General Joseph Dunford Jr.
                                i. introduction
        Chairman McCain, Ranking Member Reed, members of this Committee,
    this posture statement addresses the state of our Nation 's armed
    forces, the current security environment, and the opportunities and
    challenges that lie ahead.
        I am humbled and honored to represent the incredible men and women
    of our Joint Force. During my first five months as Chairman, I have
    engaged soldiers, sailors, airmen, marines, and coast guardsmen at
    every level. I am confident, and you should rest assured, that the
    United States' military is the most capable fighting force in the
    world. The character, ingenuity, competence, and self-sacrifice of the
    servicemembers in our All-Volunteer Force remain our single greatest
    warfighting competitive advantage. I would like to express my gratitude
    to this distinguished body for its support in ensuring that we maintain
    the best equipped, trained, and led force in the world.
        With the continued support of Congress, the Joint Force will
    continue to adapt, fight, and win in current operations while
    simultaneously innovating and investing to decisively win future
    conflicts. We must never send young Americans into a fair fight.
    Rather, we must maintain a Joint Force that assures our allies and
    partners, deters potential adversaries, and has unquestioned overmatch
    when employed. This requires us to focus on improving joint warfighting
    capabilities, restoring joint readiness, and developing leaders who
    will serve as the foundation of the future Joint Force.
                           ii. strategic environment
        The institutions and structures that have underpinned international
    order for the last several decades remain largely intact. However, the
    United States is now confronted with simultaneous challenges from both
    traditional state actors and non-state actors. The Department has
    identified five strategic challenges--Russia, China, North Korea, Iran,
    and Violent Extremist Organizations. Russia, China, Iran, and North
    Korea present two distinct challenges to our national security. First,
    they continue to invest in military capabilities that reduce our
    competitive advantage. Second, these actors are advancing their
    interests through competition with a military dimension that falls
    short of traditional armed conflict and the threshold for a traditional
    military response. This is exemplified by Russian actions in Ukraine,
    Chinese activities in the South China Sea, and malicious cyber
    activities. At the same time, non-state actors such as ISIL, al Qaida,
    and affiliated organizations are destabilizing parts of the
    international community, attacking our global interests and threatening
    the Homeland. We must address these challenges to protect the stability
    of the international order and preserve U.S. influence.
        Successful execution of our defense strategy requires that we
    maintain credible nuclear and conventional capabilities. Our strategic
    nuclear deterrence force remains safe, secure, and effective but is
    aging and requires modernization. We are prioritizing renewed long-term
    investments in early warning sensors; nuclear command, control, and
    communications; and our triad forces. Similarly, we are making
    investments to maintain a competitive advantage in our conventional
    capabilities. However, potential vulnerabilities to our national
    security extend beyond just conventional or nuclear threats. To
    preserve the security of the Homeland, we must prevent the
    proliferation and use of WMD and associated technologies. We must also
    further develop our capabilities in the vital and increasingly
    contested domains of Cyber and Space.
        Future conflict with an adversary or combination of adversaries i s
    taking on an increasingly transregional, multi-domain, and multi-
    functional nature. This is a marked shift from how past conflicts were
    fought and will put significant stress on the Department's
    geographically-based organizational structure and associated command
    and control (C2) architecture. Future conflict will spread quickly
    across multiple combatant command geographic boundaries, functions, and
    domains. We must anticipate the need to respond to simultaneous
    challenges in the ground, air, space, cyberspace, and maritime domains.
    It is this type of operating environment that informed our investments
    in PB17 and our efforts to more effectively integrate joint
    capabilities.
        As the Joint Force acts to mitigate threats to U.S. interests
    against the backdrop of the Department's five strategic challenges, we
    do so in the context of a fiscal environment that hampers our ability
    to plan and allocate resources most effectively. Despite partial relief
    by Congress from sequester-level funding since fiscal year 2012, the
    Department is absorbing approximately $800B in cuts compared to the
    ten-year projection in the fiscal year 2012 Budget, and faces an
    additional $100B of sequestration-induced risk through fiscal year
    2021. Absorbing cuts of this magnitude has resulted in underinvestment
    in critical capabilities. PB17 takes necessary steps toward s balancing
    the needs of meeting current and future operational requirements,
    investing in capability development, and keeping faith with
    servicemembers and their families. We must continue to work together to
    develop future budgets which provide the investment levels and
    flexibility needed to address our national security interests.
                   iii. current assessment of the joint force
        As directed in the 2014 Quadrennial Defense Review, the U.S. Armed
    Forces must be able to simultaneously defend the Homeland while waging
    a global counterterrorism campaign, deter potential adversaries, and
    assure allies. If deterrence fails, the U.S. military must be capable
    of defeating one adversary while denying a second adversary's
    objectives in a different region. Due to shortfalls in capacity and
    critical capabilities such as ISR and long-range strike, as well as
    increased timelines for force movements, the Joint Force will be
    challenged to respond to a major contingency while simultaneously
    defending the Homeland and continuing the counter-VEO mission.
    Capability and capacity shortfalls would be particularly acute if the
    force were called to respond to a second contingency on an overlapping
    timeline. Moreover, some allies and partners are less capable or
    willing to fill these gaps than in the past.
        Today, combatant command assigned missions can be accomplished, but
    all combatant commanders cite resource limitations and capability
    shortfalls that may increase casualties, lengthen response timelines,
    and extend the duration of a future conflict. There are also shortfalls
    in our ability to conduct day to day shaping activities that serve to
    mitigate the risk of conflict and properly posture the force in event
    of conflict. These shortfalls include the number of ready response
    units in the Services' non-deployed force, theater ISR assets, command
    and control, intelligence, cyber operations, precision munitions,
    missile defense, and logistics.
        Recovery of full-spectrum Joint Force readiness remains fragile.
    The adverse impact of budget reductions over the past several years
    combined with a persistently robust global demand for forces and
    capabilities continues to impede our ability to rebuild readiness after
    more than a decade of contingency operations. Regaining full-spectrum
    capabilities and appropriate levels of material readiness will take
    time, resources, and a healthy industrial base.
        The Joint Force has maintained competitive advantage in technology
    for several decades. However, this advantage has been eroded by our
    adversaries' efforts to improve their warfighting capabilities and
    avoid or counter U.S. military technological strengths. Moreover, the
    rapid pace of technological advances combined with the wide
    proliferation of new technologies has allowed our adversaries to more
    easily acquire advanced capabilities. This is highlighted by the
    increasing ease of access to cyber and space technologies and expertise
    in the commercial and private sectors. Adversaries are able to diminish
    the long-term advantage of key U.S. capabilities by leveraging access
    to commercial technology, targeting our defense industrial base with
    cyber espionage and sabotage, and developing capabilities within
    tighter development cycles than our bureaucratic acquisition cycle
    allows.
                    iv. capability trends for key challenges
        The Department's five strategic challenges were the primary driver
    behind our risk assessment. For a classified analysis of these
    challenges and our response options, please review my Chairman's Risk
    Assessment and the Secretary's Risk Mitigation Plan.
        Russia--Russia's actions threaten NATO cohesion and undermine the
    international order. Russia's military modernization and doctrine
    development aim to neutralize traditional U.S. competitive advantages
    and limit strategic options.
        The Russian military presents the greatest challenge to U .S.
    interests. Russia is also the only actor aside from the United States
    that can project strategic power simultaneously in multiple regions. To
    assure our national security and reinforce international order, the
    United States and our NATO allies must improve our military capability,
    capacity, and responsiveness to deter a resurgent Russia. While Russia
    has not signaled the intent to directly attack the United States or our
    NATO allies, Russia's National Security Strategy identifies the United
    States and the expansion of NATO as threatening their national
    security. Moscow's strategic nuclear capabilities represent a potential
    existential threat to the United States, and their non-strategic
    nuclear capabilities threaten our allies and U.S. forward-based forces
    in Europe and Asia. Russia has also shown a willingness to use
    competition short of traditional military conflict--such as in
    Ukraine--to pursue its strategic goals.
        In recent years, Russia has undertaken a long-term strategic
    armaments program designed to develop military capabilities and systems
    that erode our competitive advantage across the spectrum of conflict.
    Russia has modernized its strategic nuclear forces, enhanced their
    force projection and anti-access/area denial (A2/AD) capabilities, and
    significantly increased its proficiency in executing hybrid operations.
    Operations in Ukraine and Syria serve to demonstrate these new
    capabilities and increase their proficiency.
        In the Cyber domain, Russia is a peer competitor of the United
    States and has demonstrated a willingness to exploit cyber to achieve
    its objectives. We suspect Russia has conducted a range of cyber
    operations against Government, academic, and private networks. Russian
    cyber capability could potentially cause considerable damage to
    critical network equipment and national infrastructure throughout the
    United States and Europe. In the near to medium term, Russia is also
    modernizing its counter-space capabilities to defeat a wide range of U
    .S. spacebased capabilities while seeking to secure Russian freedom of
    action.
        In summary, Russia is improving its high-end warfighting
    capabilities and closing the gap on our competitive military
    advantages. Since 2008, Russia has demonstrated increasingly
    sophisticated military capabilities and doctrine. In these operations,
    Russia has broadly operated across the spectrum of conflict to include
    information operations and cyber warfare. Russia is the only actor that
    can project strategic power in multiple regions to threaten U.S.
    national interests and coerce U .S. and allied decision-makers.
        PB17 addresses Russia's aggressive policies and military
    modernization through investment in a number of high-end capabilities.
    The budget request also quadruples funding for the European Reassurance
    Initiative (ERI) to $3.4B in fiscal year 2017 to reassure our NATO
    allies and deter Russian aggression.
        China--China's rapid military modernization and expanding presence
    in Asia and beyond increase the probability for misunderstanding and
    miscalculation.
        China is engaged in a sustained military modernization effort that
    is reducing our competitive military advantage against it. This effort
    is coupled with an ambitious foreign military-tomilitary engagement
    program that aims to acquire advanced tactics, training, and procedures
    from other developed militaries. China is also seeking to improve the
    joint capability of its armed forces to project power-enhancing its
    ability to fight and win a high-intensity regional conflict. Critical
    to Chinese efforts is the development of capabilities that specifically
    counter U.S. operational strength.
        Over the course of the last year, China's military operations have
    expanded in size, complexity, duration, and geographic location.
    Additionally, China continues to make large-scale investments in
    advanced A2/AD capabilities, including short-, medium-, and
    intermediate-range ballistic and cruise missiles employing
    countermeasures to deny U.S. missile defense systems. China is also
    investing in land attack and anti-ship cru i se missiles, counter-space
    weapons, cyber, improved capabilities in nuclear deterrence and long-
    range conventional strike, advanced fighter aircraft, integrated air
    defenses, undersea warfare, and command and control capabilities.
    China's nuclear-capable missile forces pose a military risk to the U
    .S. Homeland. China's landbased missile forces continue to expand,
    increasing the number of nuclear warheads capable of striking the
    United States as well as bases in the Pacific theater.
        The aggregate of China's expanding, well-resourced, and well-
    trained cyberspace forces represent a threat to the United States.
    China's use of computer network attacks in a conflict with the United
    States or our allies and partners could seriously limit access to
    cyberspace and further degrade deployment and sustainment of forces. In
    the Space domain, China continues to enhance its ability to support
    terrestrial operations. By pursuing a diverse and capable range of
    offensive space control and counter-space capabilities, China is also
    working to diminish U.S. space dominance.
        In summary, China's rapid military modernization is quickly closing
    the gap with U.S. military capabilities and is eroding the Joint
    Force's competitive military advantages. China's military forces can
    constrain U.S. military operations in the Western Pacific and hold key
    U.S. infrastructure and facilities at risk. Its strategic capabilities
    are improving and present an increasing risk to the U.S. Homeland and
    our allies.
        PB17 is supportive of our commitment to the Asia-Pacific rebalance.
    It invests in high-end capabilities, particularly those needed to
    maintain undersea dominance and to counter A2/AD capabilities. The
    budget request also funds the buildup of Guam as a strategic hub,
    initiation of P-8 maritime patrol aircraft rotations in Singapore,
    implementation of rotational initiatives in Northern Australia, and
    positioning F-35 fighters in Japan in 2017.
        North Korea--North Korea's nuclear weapons and ballistic missile
    programs, increasing asymmetric capabilities, and willingness to use
    malicious cyber tools threaten the security of the Homeland. These
    capabilities, alongside conventional forces, also threaten our allies
    in the region.
        North Korea has an opaque and confrontational national leadership,
    the fourth largest army in the world, and increasing nuclear and
    ballistic missile capabilities. The regime represents an immediate
    threat to U.S. allies in the region and an increasing threat to U.S.
    territories and the Homeland.
        The United States maintains a competitive military advantage
    against the relatively low technology North Korean military. However,
    in the event of a conflict on the peninsula, North Korea may be able to
    seize the initiative and rapidly escalate hostilities utilizing special
    operations forces, mass, and long-range fires. Risk of large numbers of
    civilian and military casualties remains high.
        North Korea continues to develop its offensive and intelligence-
    collection capabilities aimed at exploiting U.S. and allies' cyber
    domains. North Korea's current cyber capabilities remain modest and
    pose the greatest threat to poorly defended networks. We expect North
    Korea to continue investing in more capable cyber tools to develop
    asymmetric options which can be effective against more sophisticated
    networks.
        In summary, North Korea's ballistic missile and nuclear
    developments, willingness to conduct malicious cyber activities, and
    potential to seize the initiative in a conflict on the peninsula pose
    risks to the security of the United States and our allies.
        As previously noted, PB17 is supportive of our commitment to the
    Asia-Pacific rebalance and accounts for the challenges posed by North
    Korea. The budget provides additional funds for conventional munitions
    and continues investment in missile defense.
        Iran--Continued expansion of Iranian malign influence in the Middle
    East threatens the stability and security of key regional partners.
    Iran is increasingly capable of restricting U.S. military freedom of
    action in the region.
        Iran is improving the quality and quantity of select conventional
    military capabilities. Specifically, Iran continues to leverage its
    position on the Strait of Hormuz to pursue an area denial strategy with
    increasing capability and capacity of ISR, anti-ship cruise missiles,
    fast attack craft, fast inshore attack craft, submarines, and mines.
    Iran augments its maritime patrol capacity with unmanned aerial
    reconnaissance systems and is developing an armed unmanned aerial
    system capability. Improvements in the quality, quantity, and lethality
    of Iran's military capabilities threaten both U.S. interests and
    freedom of action within the region.
        To date, Iran has not demonstrated the capability to strike the
    continental United States with a ballistic missile. However, Iran has
    made significant strides in its missile development programs since
    2009, when it successfully launched its first satellite. In 2010, Iran
    unveiled a new space launch vehicle that--if configured as a ballistic
    missile--would be capable of reaching the United States. In the Cyber
    domain, Iran's capabilities present a limited but increasing threat to
    the United States. Iran has demonstrated some degree of success in
    targeting vulnerable critical infrastructure networks.
        In summary, Iran and its malign activities present the greatest
    threats to U.S. interests in the Middle East and North Africa. Tehran
    has demonstrated the ability to project influence across the region and
    presents an asymmetric threat to the United States and its regional
    partners. Iran's conventional military modernization is not likely to
    compete with U.S. capability, but its ballistic missile force can hold
    key regional U.S. infrastructure at risk.
        PB17 addresses Iran's malign activities though investments in
    capabilities that improve our posture, enhance regional partnerships,
    and provide options in the event of a contingency. Specifically, the
    budget funds additional capabilities for power projection, sea control,
    and regional missile defense.
        Violent Extremist Organizations--VEOs threaten the stability and
    security of key regional partners and many of our closest allies. Their
    ability to inspire attacks threatens the security of U.S. citizens and
    interests at home and abroad.
        VEOs are distinct from the other four threats, representing both an
    immediate and long-term risk. Counter-VEO operations will require
    continued focus and resources even if the Joint Force is called on to
    respond to a contingency involving Russia, China, Iran, or North Korea.
    While VEOs do not pose an existential threat to the United States, they
    continue to increase their abilities to inflict harm upon our vital
    interests. Several of our partner nations -from South Asia to the
    Middle East and Africa--are battling VEOs that have established
    territorial control and are directly challenging existing Governments.
    U.S. values and the rules-based international order are also threatened
    by VEOs. Additionally, VEO-driven conflicts have generated mass
    migration and significant flows of foreign fighters to and from
    conflict zones, which poses risk to the United States and our allies
    and partners in the Middle East, North Africa, and Europe.
        The PB17 submission funds our ongoing counter-VEO operations. PB17
    OCO funding will help establish counterterrorism platforms in South
    Asia (Afghanistan), the Middle East (Levant), East Africa (Djibouti),
    and an enhanced presence in North/West Africa. These platforms will
    provide sustainable, flexible, and scalable nodes from which to conduct
    planning and synchronize operations within the U.S. Government and with
    allies and partners.
                    v. crosscutting sources of military risk
        The Joint Force faces a variety of crosscutting sources of military
    risk: gaps and shortfall s that impact our ability to accomplish our
    missions and objectives, both in today's operations and in tomorrow's
    potential conflicts.
    Multiple, overlapping contingencies
        In accordance with the 2014 Quadrennial Defense Review, the U.S.
    Armed Forces must be capable of simultaneously defending the Homeland
    while waging a global counterterrorism campaign, deterring potential
    aggressors, and assuring allies. If deterrence fails, U.S. Forces must
    also be capable of defeating an adversary and denying the objectives
    of--or imposing unacceptable costs on--a second aggressor in another
    region. The Joint Force will be stressed to execute a major contingency
    operation on desired plan timelines with available assets, while
    simultaneously defending the Homeland and continuing the counterterror
    fight against VEOs. Response to aggression by another adversary at the
    same time would be further limited due to capacity shortfalls, force
    movement timelines, and the dedication of enabling forces and
    capabilities elsewhere.
    Intelligence, Surveillance, and Reconnaissance
        A lack of theater ISR surge capacity diminishes the Joint Force's
    responsiveness and flexibility to support emergent crisis or
    contingency. Current theater ISR assets and associated analytic support
    capacity remains short of combatant commanders' increasing
    requirements.
    High Demand--Low Density Capabilities
        HD/LD capability and capacity shortfalls affect our ability to
    achieve assigned missions. We continue to operate systems in several
    critical mission areas and deploy personnel with specific specialty
    skills at high rates, resulting in minimal to no surge capacity in
    those areas. Similar to ISR, this negatively impacts the Joint Force's
    responsiveness and flexibility to support emergent requirements. HD/LD
    capability shortfalls that pose significant military risk include:
    missile defense systems, naval expeditionary forces, personnel recovery
    assets, airborne command and control systems, explosive ordnance
    disposal assets, air superiority and global precision strike units, and
    cyber mission forces.
    Munitions
        Key precision guided munitions shortfalls are exacerbated by
    ongoing operations and may impact potential contingency response.
    Additionally, our current global inventories are insufficient for
    theater missile defense (TMD), standoff, and air-to-air munitions
    needs.
    Logistics
        We are seeing increasing risk associated with the Joint Logistics
    Enterprise's ready and available capacity. Critical logistics enablers
    lack capacity and responsiveness: 79 percent of such units report
    reduced readiness levels which affects mission accomplishment
    flexibility and increases vulnerability. A majority of these elements
    are motor transportation, engineer, and cargo handling units necessary
    to support the deployment and sustainment of combat elements. Of these
    units, the vast majority reside in the Reserve Component (RC). As such,
    any contingency that requires responses on a timeline faster than that
    designated for RC mobilization will face risk from the lengthened
    timelines for combat forces and their sustainers to arrive in theater.
                                vi. pb17 summary
        PB17 addresses the Department's five strategic challenges--a
    resurgent Russia, a rising China, North Korea, Iran, and VEOs--by
    balancing the demands of readiness, capacity, and capability within the
    resources provided by the 2015 Bipartisan Budget Agreement. The total
    fiscal year 2017 topline, which is approximately $17 billion below what
    we planned in PB16, required us to defer modernization in favor of
    near-term readiness and force structure. These reductions and delays in
    modernization will exacerbate the procurement bow wave we confront at
    the end of the Future Year Defense Program (FYDP) and compound risk to
    the overall balance of the Joint Force.
        PB17 also contains fiscal risk. The budget assumes higher toplines
    in fiscal year 2018-2021, continued favorable economic factors, and
    future efficiencies. We also continue to depend on OCO funding for
    ongoing contingency operations and Joint Force readiness recovery.
    Key Capability Investments
        Given a constrained topline, PB17 prioritizes investments to
    modernize the future Joint Force while balancing capacity and
    readiness.
    TACAIR
        The Air Force accepts risk in the ``air'' domain in order to invest
    in nuclear enterprise, space, and cyber priorities. Cuts in fifth
    generation fighter aircraft procurement create risk in the mid-2020s,
    which will be mitigated by 4th generation fighter aircraft
    enhancements. PB17 funds 54 Air Force combat-coded fighter squadrons in
    the base budget and one squadron supporting the European Reassurance
    Initiative in the OCO budget (a total of six more squadrons than the
    PB16 plan for fiscal year 2017). The Department of the Navy will
    procure additional F-35C (+10), F-35B (+3), and F/A-18E/F (+14) over
    PB16 levels. The Department of the Navy will also complete its planned
    buy of 109 P-8A by fiscal year 2019.
    Cyber
        State actors will remain the most capable threats to computer
    network operations. Non-state actors--VEOs, ideological hackers, and
    cybercriminals-have demonstrated high-level network intrusion skills
    against the U.S. Government and private entities and will continue to
    develop sophisticated tools to achieve their objectives. Developing and
    growing the Cyber mission force will require a long-term concerted
    effort. PB17 invests in both quantity and quality of cyber
    capabilities. It funds $6.78 in fiscal year 2017 (a 13 percent
    increase) and approximately $34 billion across the FYDP in cyber
    posture and capabilities--including investments in strategic cyber
    deterrence, cyber security, and offensive cyber.
    Space Acquisition
        PB17 makes significant investment in space posture and capability.
    We are funding $7 billion in fiscal year 2017 and approximately $38
    billion across the FYDP, including space situational awareness, space
    launch capabilities, and command & control of critical space
    architecture. Other budget items will harden follow-on communications
    and warning satellites, accelerate GPS replacement to assure targeting
    accuracy and ability to resist jamming, and add security features to
    prevent exploitation and increase overall system resilience, safety,
    and stability.
    Airborne ISR
        There is an ever-increasing demand for ISR assets to inform and
    enable our current and future warfighting efforts; PB17 invests in
    aircraft procurement and ISR support infrastructure. This is an area
    where we must increase both capacity and capability in the coming
    years. Continued shortfalls will stress the force to meet current
    requirements and do not provide any surge capacity to address near-peer
    challengers or overlapping contingency operations.
        The Navy is reducing planned Unmanned Carrier Launched Airborne
    Surveillance and Strike program capabilities in order to deliver a low-
    end, permissive-environment tanking and surveillance capability (saving
    approximately $680M across the FYDP). The Air Force projects no
    significant change from PB16, maintaining its plan for 60 M Q-9 Combat
    Air Patrols and JSTARs Recapitalization.
    Power Projection
        PB17 addresses critical power projection capabilities and related
    assets required to operate in non-permissive environments stemming from
    adversary advances in A2/AD. PB17 leverages ongoing initiatives to
    improve survivability of critical assets and enhance offensive strike
    capability. It invests in hypersonic vehicle concepts, flight
    demonstrations, infrastructure, and advanced conventional warheads. It
    also funds improvement in critical base and missile defenses through
    expedient shelters and multispectral camouflage. Finally, it increases
    the survivability in the undersea domain by investing in Maritime
    Strike Tactical Tomahawk capability, Unmanned Undersea Vehicle
    capabilities, additional Virginia Payload Modules, and Acoustic
    Superiority Program upgrades on Ohio- and Virginia-class submarines.
    Shipbuilding
        Joint Force shipbuilding investment is on track to meet fleet goals
    in PB17. The Navy continues to grow the size of the fleet toward the
    goal of 308 ships to meet warfighting and posture requirements. PB17
    continues procurement of 10 DDG-51 Flight III destroyers across the
    FYDP but reduces planned Littoral Combat Ship procurement from 52 to
    40. It also invests in undersea capabilities as described previously.
    Munitions
        PB17 invests in rebuilding depleted stocks of precision guided
    munitions and in future critical munitions capabilities and
    enhancements. Specifically, the budget includes $1.8 billion for
    precision guided munition replenishment due to usage during ongoing
    operations. Looking toward the future, the Navy is maximizing
    production of SM-6 missiles while maintaining required levels of other
    advanced munitions. It is also beginning development of follow-on
    torpedoes and modernizing Tactical Tomahawk to enhance maritime strike
    capability. The Air Force will continue with last year's plan to
    convert unguided bombs into all-weather smart weapons. The Marine Corps
    and the Army are funding RDT&E to support fiscal year 2020 development
    of area effects munitions compliant with the Departmental cluster
    munitions policy. Finally, the Army plan procures an additional 80 Army
    Tactical Missile System (ATACMS) Service Life Extension Program
    missiles, which bridges the capacity gap until the Army can develop and
    procure improved capability ATACMS.
    Nuclear Enterprise Sustainment and Recapitalization
        Because nuclear deterrence is the highest priority of the
    Department of Defense, PB17 enhances investment in all three legs of
    our aging nuclear triad. Within the nuclear enterprise, the budget
    funds $19 billion in fiscal year 2017 and approximately $108 billion
    across the FYDP, adding $9.8 billion (an increase of 10 percent) to
    sustain and recapitalize the nuclear triad and strategic command,
    control, and communication systems. It invests in legacy strategic
    bomber modernization, ground-based strategic deterrence, incremental
    funding of the first ship of the Ohio-class replacement program, long-
    range strike bomber, long-range standoff cruise missile, and the
    security helicopter replacement.
    Counterterrorism
        The fiscal year 2017 budget request includes approximately $13.
    billion to support counterterrorism efforts in South Asia
    (Afghanistan), the Middle East (the Levant), East Africa (Djibouti),
    and an enhanced presence in North/West Africa. These capabilities are
    essential to implementing a new framework to counter terrorism,
    particularly against ISIL, that more effectively synchronizes counter-
    VEO efforts within the Department and across the Government.
                            people and institutions
    Talent and Leadership
        Beyond budgets and technology, the All-Volunteer Force remains our
    greatest asset and true warfighting competitive advantage. The future
    operating environment will place new demands on leaders at all levels.
    Our leaders must have the training, education, and experience to meet
    those demands. We are undertaking a series of significant changes to
    the personnel systems which have previously underpinned the Joint
    Force: military pay and compensation modifications, retirement reforms,
    talent management initiatives, and diversity integration efforts. These
    changes aim to make the Joint Force an inclusive, more agile, and
    stronger force by leveraging the talents of all qualified citizens to
    meet the challenges of the future. The Services are responsible to
    assess and execute these changes; not all will be easy. However, we are
    committed to preserving standards, unit readiness, and cohesion, and we
    will steadfastly adhere to our principles of dignity and respect for
    all servicemembers over the continuum of their service and beyond.
    End strength
        Our end strength is driven by strategy but is also constrained by
    current fiscal realities. PB17 projects the force end strength
    consistent with the 2014 QDR forecasts. However, the emergence of ISIL
    and Russian revanchism has changed the strategic environment since the
    QDR was published. Force availability shortfalls hamper our ability to
    rapidly respond to multiple, overlapping contingencies. End strength
    reductions below the current plan must be carefully weighed against the
    end states sought by the Department.
        Active Duty Service end strengths in the proposed PB17 remain
    relatively constant across the FYDP (less than 0.7 percent overall
    reduction by fiscal year 2021). The Active Component will be reduced by
    9,800 personnel across the Services by fiscal year 2021, with most of
    that reduction coming in the Army by fiscal year 2018. Reserve
    Component end strength will see negligible decreases. Specifically, the
    Army will maintain end strength and capacity to meet operational
    requirements, and build a rotationally focused and surge-ready 980,000
    Total Army (450,000 Active Component), consistent with the 2014 QDR.
    Both the Navy and Marine Corps will maintain Active Component end
    strength numbers at 323,000 and l 82,000, respectively. The Air Force
    will maintain Active Component end strength at 317,000.
                                vii. conclusion
        PB17 reflects difficult choices made in the context of today's
    security challenges and fiscal constraints. Our budget submission
    balances investment in the high-end capabilities needed to counter
    major power competitors, the capacity to meet current operational
    demands and potential contingencies, and the need to rebuild read ness
    after an extended period of war. However, to accommodate a constrained
    topline, PB17 defers near-term modernization which will only exacerbate
    a coming bow wave of strategic recapitalization and other procurement
    requirements. More broadly, the cumulative effect of topline reductions
    over the past several years has limited the flexibility and resiliency
    of the Joint Force, and looking ahead I am concerned that the demand
    for future capabilities and capacity will outpace the resources
    available, forcing even more difficult decisions to match strategy and
    resources. I am grateful to Congress for your continued support, and I
    look forward to working with you to ensure the United States maintains
    the most capable fighting force in the world--and to ensure we never
    have to send American men and women into a fair fight.

        Chairman McCain. Secretary McCord, do you have any
    statement?
        Mr. McCord. I do not, Mr. Chairman.
        Chairman McCain. Well, thank you. I thank the witnesses.
        Mr. Secretary, I appreciate your comments about the Iranian
    behavior and their subsequent behavior exploiting this
    humiliation of American servicemembers. What action have you
    recommended that we take in response to this?
        Secretary Carter. Well, we're--everything we're doing in
    the Gulf, Chairman, including all of the actions that are
    funded in this budget, which include tens of thousands of
    Americans in the region--we want that--our ballistic missile
    defenses in the region--we want that----
        Chairman McCain. I see, but all of these things are planned
    and in the budget. I wonder if you had planned on any specific
    action that the Iranians would know is a result of our--
    humiliation of our servicemembers.
        Secretary Carter. Well, I've made it quite clear that----
        Chairman McCain. You've made it quite clear that you're
    outraged and all that, but what specifically have you
    recommended to do in response to that?
        Secretary Carter. We're continuing to take all of the
    actions that we need to----
        Chairman McCain. What--obviously, the--the specific action
    in response to the Iranian outrage.
        Secretary Carter. At the time of the incident, we prepared
    to protect our people. It turns out they were released in time.
    We later had the opportunity to see them being filmed in the
    way they were. It made very clear that that's the kind of
    behavior we wouldn't want to engage in.
        Chairman, you want to add anything?
        Chairman McCain. Is stability in Afghanistan and the region
    in our national interest, particularly in light of the
    testimony of General Campbell and General Nicholson that the
    situation in Afghanistan is deteriorating?
        Secretary Carter. I'll start there and then ask the
    Chairman to chime in.
        Chairman McCain. I'll ask--fine.
        Secretary Carter. The--well, the situation in Afghanistan
    is very important to us. We have--the Afghans had a tough fight
    this last fighting season. They're going to have a tough season
    this time. It's important that we--not just we, but the rest of
    our coalition, stay with them, not just this year, in 2016, but
    in 2017 and so forth. We're continually assessing and adjusting
    how we give support to the Afghan Security Forces----
        Chairman McCain. Do you--but, you don't disagree with
    General Nicholson and General Campbell--I guess I'll ask
    General Dunford--that the situation is deteriorating in
    Afghanistan? Do you agree with that?
        General Dunford. Chairman, I listened to their testimony. I
    think they provided an accurate assessment of the situation in
    Afghanistan.
        Chairman McCain. Do you consider the Taliban to be a threat
    to Afghanistan's stability?
        General Dunford. I do, Chairman.
        Chairman McCain. Then, why do U.S. Forces not have the
    authority, other than self-defense, to target Taliban fighters
    in support of our Afghan partners?
        General Dunford. Chairman, right now----
        Chairman McCain. The threat to our stability and the
    situation is deteriorating, and yet we were--still don't give
    the authority of American forces to--other than self-defense--
    to target Taliban fighters.
        General Dunford. Right now, Chairman, our authorities are
    focused on supporting the Afghan forces in their fight against
    the Taliban.
        Chairman McCain. So, even though the situation is
    deteriorating, even though they continue their attacks, even
    though--then we still do not give the U.S. Forces the authority
    to target Taliban fighters unless they are directly attacking
    the United States.
        General Dunford. At this time, that's correct, Chairman.
        Chairman McCain. Does that make sense to you?
        General Dunford. Chairman, we're in the process of
    reviewing the lessons learned from 2015. We have some
    recommendations made by General Campbell. We----
        Chairman McCain. We're well into 2016, and right now the
    plan is to cut the force from 9,800, drop down to 5,500 by the
    end of this year. Here we are, in March.
        General Dunford. Chairman, where I was going was, we have
    recommendations from General Campbell for changes made by--
    made--to make in 2016 as a result of lessons learned in 2015.
    This week, we conducted a video teleconference, Secretary
    Carter and I with General Nicholson, who's on the ground in
    Afghanistan right now, to get his thoughts. We're in the
    process of making recommendations to the President for changes
    that might be made to make us more effective in supporting
    Afghan forces in 2016 and making them more successful.
        Chairman McCain. Including the force levels?
        General Dunford. A full range, to include capabilities,
    that's correct, Chairman.
        Chairman McCain. Last year, in the 2016 Future Years
    Defense Program, where you indicated that you needed an
    additional $37 billion above the BCA caps in 2016, the then-
    Chairman of the Joint Chiefs of Staff said we're at the lower
    ragged edge of manageable risk. Now you're saying that it seems
    to be okay, even though the Army had to cut 24 UH-60 Black Hawk
    helicopters, the Air Force had to cut 5 F-35s and 45 over the
    next 4 years, the Air Force--the Navy plans to lay up an
    additional 5 cruisers, the Marine Corps plans to cut 77 joint
    light tactical vehicles and $1.3 billion in military
    construction, et cetera, et cetera. All of those cuts are being
    made, as opposed to what you asked for last year.
        So, now you're saying that we can--and, by the way, we've
    seen this bow-waves movie before. When you cut F-35s, when you
    cut the Black Hawks, when you cut them, you increase the costs,
    because the original plans are at optimum cost. So, now you're
    satisfied with the level, which is $17 billion less than last
    year, even though your predecessor said we were on the lower
    ragged edge of manageable risk with the amount we had last
    year, which was $17 billion more. It's hard for us to
    understand, General.
        General Dunford. Chairman, to be clear, what I've said is
    that the budget this year is sufficient to execute the
    strategy. There is associated risk in that, and I've provided a
    classified risk assessment to the Secretary. You'll see that
    some of the investments that we made this year are designed to
    address that risk.
        My most significant concern, frankly, is the bow wave of
    modernization that has been deferred that we're going to start
    to see in fiscal year 2019, 2020, 2021, and 2022. So, by no
    means have I said that the resource level for the Department as
    we look out over the next few years is adequate. What I simply
    said was that this year's fiscal year 2017 budget is sufficient
    to meet the strategy.
        Chairman McCain. So, it's okay with you to cut 24 Black
    Hawks, 5 F-35s, 45 over the next 4 years, Marine Corps cut 77
    joint light tactical vehicles, $1.3 billion in military
    construction, which last year was told to this committee that
    you needed.
        General Dunford. Chairman, that's not what I said. I didn't
    say it was okay to do those things. What I said was, with
    regard to this budget, we have made the best decisions that we
    can within the top-line that we were given from Congress. So,
    what I'm comfortable with is that we have made the right
    priorities. I'm not comfortable that we have addressed all the
    requirements.
        Chairman McCain. Senator Reed.
        Senator Reed. Well, thank you very much, Mr. Chairman.
        Thank you, gentlemen, for your testimony.
        One of the key issues that the committee is focused on and
    you're focused on is readiness. General Dunford, readiness is a
    function of not only resources, but time. Can you explain, or
    at least--I think the question is, Within the constraints you
    face, which are significant, you have tried to maintain and
    improve readiness, but that won't happen just with more money.
    That'll take time.
        General Dunford. Senator, thank you.
        That's right. From my perspective, there's three
    components. There's the money, there's the time, and then
    there's operational tempo. The operational tempo has maintained
    at a very high level, even as the force has drawn down from its
    peak, 3 or 4 years ago. As a result of sequestration, and
    particularly in 2013, we laid off a lot of engineers, we laid
    off a lot of artisans. We had a backlog of maintenance. That's
    going to take time to recover from that backlog of maintenance.
    In some cases, we deferred modernization issues, equipment, and
    so forth, that'll have an impact on readiness. Then, being able
    to recover, from a training perspective, requires an
    operational tempo that's much more sustainable than the one we
    have right now. So, from my perspective, that's why it's going
    to take--and I think you've heard from the Service Chiefs--in
    probably the near term, one of the services will be ready in
    about 3 or 4 years; and the Air Force, at the outside, I think
    has identified 2024 before it fully recovers. In a--and much of
    that is a function of aircraft maintenance and readiness.
        Senator Reed. But, in the context of this budget, the
    resources that you have available, the dollars, for readiness
    is sufficient at least to continue the improvement in readiness
    that you must achieve. Is that your estimate?
        General Dunford. Senator, the Secretary prioritized the
    readiness, particularly the readiness of those forces that will
    deploy. We have bought as much readiness as we can in fiscal
    year 2017. Many of the issues that we have with regard to
    readiness can't be addressed with additional resources this
    year. Again, they'll take time.
        Senator Reed. Thank you.
        Mr. Secretary or Mr. McCord, with respect to procurement,
    my understanding, but please correct me, is that you've done
    all you can to maintain multiyear contracting for systems,
    which essentially keeps us in the ball game, if you will, but
    that if we do not fix the sequestration problem next year, this
    fragile structure will sort of fall apart. But, we are still
    maintaining the cost-efficient multiyear contracting----
        Secretary Carter. We are.
        Senator Reed.--and we're not cutting back on those deals.
        Secretary Carter. No, we are. This gets to the point the
    Chairman raised about, How are we--how did we accommodate the
    difference between what we planned last year and what we got in
    the Bipartisan Budget Agreement. That--what I described as a
    net of 11 billion of our almost 600 billion. How did we
    accommodate that? As the Chairman said--and I was very
    insistent upon this, as was the Chairman--we protected
    readiness. So, the principal impact came in a number of
    modernization programs, to include aircraft, shipbuilding, a
    number of minor modernization programs. That's what we did.
    It's all out there, and I'm sure you'll be reviewing it.
        What we didn't do was not fund the service readiness
    recovery plans, where--as they try to move back to full-
    spectrum readiness from where they've been after the Iraq and
    Afghanistan wars. That's what we need in all of the services,
    is full-spectrum. Making up some of the maintenance backlog,
    that particularly affects Marine Corps aviation. We did not
    change any of our end-strength goals. We did not change
    military compensation to make this difference. We didn't
    terminate, to your point, any major programs, any multiyear
    contracts. We didn't RIF [reduction-in-force] any employees. We
    didn't have to do any of that, but we did have to make
    adjustments. They're there for you to see.
        Are we happy making those adjustments? No, but that's what
    we needed to do to accommodate the Bipartisan Budget Agreement.
    Now, if the Bipartisan Budget Agreement were to fall apart, as
    everyone has said, that is our biggest strategic danger,
    because that will affect, in the future years, our ability to
    recover full-spectrum readiness, it will affect all those
    things that we did not have to affect this year. But, that's
    how we adjusted to the Bipartisan Budget Agreement.
        Senator Reed. Just a final point. Is--the concurrence or
    the opinion that has been expressed by, I think, everyone here
    about other need to end sequestration before 2018 is critical,
    paramount, has to be done.
        Secretary Carter. That is the greatest strategic risk to
    the Department of Defense, is the reversion to sequestration. I
    very much hope we can avoid that.
        Senator Reed. Thank you, Mr. Chairman.
        Chairman McCain. Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        I'm not going to ask a question about Gitmo. This is a
    budget hearing, but it's one that you should both be aware that
    the--there are two groups of people at this table up here. One
    is the hardliners, who feel it's just absurd to even think
    about giving up the resources that we have there, and
    particularly in light of the fact that we have a recidivism
    rate of, what, 30 percent or so. Others are going to be talking
    about--asking questions about that, so I'll let them take the
    time to do that. But, that'll be one of the considerations you
    have.
        You know, it's easy to kind of get--I'm not saying that
    we're hearing glowing reports right now, but we do hear all the
    time, as you said, Secretary Carter, we have the best-equipped,
    the best-trained, and all of that. That sounds good. That's the
    good side. But, there's a bad side, too. We're not where we
    normally should be and have been in the past. Have you--we've
    had probably more hearings, in the years that I've been on both
    the House and the Senate Armed Services Committee, this year
    than we've ever had before. I think I--I think that's the right
    thing to do. People are going to have to wake up and know the
    problems that we have.
        Now, when we--before this committee, Lieutenant General
    Nicholson said the security situation in Afghanistan is
    deteriorating. I think we probably agree with that. Last week,
    General Austin, before this committee, the--he's the CENTCOM
    [U.S. Central Command] Commander--in response to Senator
    McCain's question, he testified to this committee, just last
    week, that it may be time to reconsider the plan to reduce
    America's military forces in Afghanistan.
        General Dunford, is he right?
        General Dunford. Senator, thank you.
        As a matter of fact, we're in the process right now of
    reviewing----
        Senator Inhofe. Of reconsidering.
        General Dunford. Absolutely. It's a constant process,
    Senator. The Secretary and I have spent a fair amount of time
    on it, just this week, with General Nicholson, and we spent
    some time with General Campbell before he left. We're in the
    process of bundling together some recommendations to bring
    forth to the President.
        Senator Inhofe. You know, we hear dates all the time about
    when something's going to be decided. Now, let--isn't it better
    idea to let conditions on the ground determine what and when
    we're going to--changes we're going to make?
        General Dunford. Senator, I think that's exactly what we
    did in the fall when a decision was made to keep 9,800 through
    2016. So, I agree with that.
        Senator Inhofe. Okay. The two quotes that I gave from
    General Austin and General Nicholson, have you discussed with
    them specifically about the force-structure requirements?
        General Dunford. We have, Senator.
        Senator Inhofe. Okay. Have you presented any of the
    recommendations to the President?
        General Dunford. We have not yet, Senator.
        Senator Inhofe. All right. Are----
        General Dunford. We're still in the process of deliberating
    that, between the Secretary and I. We had a video
    teleconference with General Nicholson this week to make sure
    that we get the latest from him. He's now had a chance to--in
    both his predeployment site survey as well as being on the
    ground now since taking command, he's had a chance to make a
    personal assessment. It was important to both the Secretary and
    I that we heard from General Nicholson before we went--move
    forward.
        Senator Inhofe. Okay. Let me include one more thing that I
    want to get in this committee. Because we've had a lot of
    people testifying, the very best that we have. I have a great
    deal of respect for all of them, and they are very blunt about
    the problems that we have. Admiral Gortney, NORTHCOM [U.S.
    Northern Command] commander, he testified to this committee,
    just last week, that North Korea's recent nuclear test and
    satellite launch demonstrate that Kim Jung Un, which we know is
    mentally deranged, his commitment to developing strategic
    capabilities as well as his disregard for the U.N. Security
    resolutions, we all, I think, agree with that. Admiral Harris
    said--the PACOM [U.S. Pacific Command] Commander--he testified
    to this committee that Chinese coercion, artificial island
    construction, militarization in the South China Sea threaten
    the most fundamental aspect of global prosperity, freedom of
    navigation, and their forces are opening at a higher tempo, in
    more places, with greater sophistication than ever before. Do
    you--the two of you agree with that?
        Secretary Carter. I certainly do, Senator. This is, by the
    way, why we need to remain vigilant with respect to North Korea
    and its ballistic missile activities and other activities. I
    mentioned ``fight tonight.'' This is why we need the budget
    that we're asking for, and why we've got to avoid sequestration
    in the future. These are all serious matters.
        Senator Inhofe. Well, all serious matters. I contend that
    we're in the most threatened position that we've ever been in
    as a Nation. I look back wistfully at the days of the Cold War.
    I mean, right now, we have people like--mentally deranged
    people might have a capability of wiping out an American city.
    So, that's a serious thing.
        I would only leave you with a quote that both of you heard
    last week from Congressman Frelinghuysen, when he read you a
    quote made by Winston Churchill 70 years ago. This is the
    quote. He said, ``What--from what I have in''--particularly
    keeping in mind of what Putin has been doing in the Ukraine and
    other places, disregarding the threat that we would pose to
    him--he said, 70 years ago, ``From what I have seen of our
    Russian friends and allies during the war, I am convinced that
    there is nothing they admire so much as strength, and there's
    nothing for which they have less respect for than weakness,
    especially military weakness.'' I want you guys to keep that in
    mind as you're developing this budget.
        Secretary Carter. Will do.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman McCain. Senator Gillibrand.
        Senator Gillibrand. Thank you, Mr. Chairman.
        Thanks, to all of you, for your service and for this
    hearing.
        I want to talk briefly about cyber. Cyberattacks against
    the Homeland are already a menacing threat to U.S.
    infrastructure, businesses, and defense. In the case of a
    severe domestic attack, DOD's unified commands will be
    responsible for coordinating a response in support of the
    Department of Homeland Security. However, CYBERCOM [U.S. Cyber
    Command] has reported a projected shortfall in its manning
    goals for fiscal year 2018, and there are concerns that DOD
    cyberoperators, both Active and Reserve, may not be able to
    seamlessly operate under the current patchwork of relevant
    authorities. How would you assess current coordination and
    interoperability between NORTHCOM, STRATCOM [U.S. Strategic
    Command], and Homeland Security? What could be done
    legislatively to complement those relationships? Can you
    describe the level of involvement the National Guard cyber
    operators might play in the event of a major domestic
    cyberattack? Do you believe they are adequately trained,
    equipped, and funded to meet that expectation? Finally, do you
    believe each responsible agency with cyber mandate, defense or
    otherwise, currently has the authorities it needs to coordinate
    an effective response domestically?
        Secretary Carter. Thank you, Senator.
        Let me take the part about the Guard first, if I may. It--I
    was out in Washington State a couple of weeks ago, where there
    is a terrific National Guard unit working on exactly what
    you're talking about; that is, defending the Nation and also
    defending our DOD networks, upon which we're so dependent, from
    cyberattack. These are people who--whose day job is to be the
    cyber defenders for some of our most important IT companies and
    tech companies. So, they're at the highest skill level that the
    private sector has. They're making their skills available to
    their country through the National Guard. So, this is a
    tremendous strength, among many, of the National Guard, the
    ability to bring us--to us a talent that we would otherwise
    have difficulty attracting and retaining.
        To get to your first part of your question, nevertheless,
    we do try to attract and retain, and we have some success in
    that regard. That's what we're doing as we build out the 133
    cyber mission teams for CYBERCOM. CYBERCOM does work, not only
    with our combatant commanders on wartime needs, including, by
    the way, joining the fight against ISIL and disrupting ISIL,
    blacking out ISIL, but also defending the country. Now, we do
    do that, as you suggest, in connection with Homeland Security,
    in connection with law enforcement. All that's perfectly
    appropriate. I--there are some legislative acts that have
    enabled us better in that regard. It's possible that we could
    do still better in that regard.
        With respect to CYBERCOM's own authorities, I will tell you
    that we adjust them continuously. Just this week, actually, I'm
    talking to Admiral Rogers about some of his authorities and
    what we can do to expand those authorities. So, it's a very
    actively moving----
        Senator Gillibrand. So, could you submit a letter to me or
    this committee if there's additional authorities you feel you
    need----
        Secretary Carter. Will do.
        Senator Gillibrand.--so we can work on that?
        With regard to military sexual assault, you're aware that,
    every year, I've been asking for files from the four major
    bases, and this year I added the four major trading bases, so I
    could just get a snapshot in time of, How do these cases go?
    What do they actually look like once they're filed and once
    they're taken to court? What we find is that more than half of
    the victims are civilians, which isn't entirely captured by our
    survey--spouses and civilians, not fully captured. The second
    thing I learned was that there's a 50 percent dropoff rate;
    once someone actually files a complaint, about 50 percent do
    not continue with their complaint during the course of the
    year, which is a huge problem. One of the things that this
    committee's done is, we are going to put in place a defense
    advisory committee on investigations, prosecution, and defense
    of sexual assaults. That's supposed to be an independent
    civilian review board that looks at this, designated by the
    President. It's very important to me that the executive
    director of this committee is independent, so that they can
    actually give us advice. I would like your commitment that you
    will look at the staffing of that individual. I'm hoping that
    you will chose a civilian to be the executive director, and one
    with prosecutorial experience; specifically, experience in
    sexual violence prosecutions, which are among the hardest to
    ever end in a conviction.
        Secretary Carter. Well, I--first of all, I thank you for
    your leadership in this issue. It's a really important issue.
    Of course we'll work with the committee on this--in this, and I
    promise you that, as in other matters. I'll just say very
    clearly to you how much I appreciate your leadership on this
    issue, because this is unacceptable in our military, because
    our military is about honor and it's about trust. Sexual
    assault violates honor and trust. So, we can't have any of it.
    The more we learn, the more we--as you say, there are other
    dimensions to it. Civilians, retaliation, which is another
    thing that you have rightly stressed, we need to pay attention
    to. So, this is something that we cannot stop learning about
    and doing better about. In this respect, I promise to continue
    to work with you.
        Senator Gillibrand. Thank you.
        General Dunford, because I'm out of time, I'm going to
    submit for the record a specific question about combat
    integration that I would love your response on.
        General Dunford. Thank you, Senator.
        Senator Gillibrand. Thank you so much.
        Senator Gillibrand. Thank you, Mr. Chairman.
        Chairman McCain. Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Secretary Carter, I'd like you to talk more about the third
    offset initiative. Specifically, what is new about it? Is it
    new money? Is it a new way of using that money? As you know, we
    spend tens of billions of dollars every single year researching
    and developing technologies. That is well in excess of our
    adversaries. This committee's heard a lot about how our
    technological edge is eroding. So, I'm wondering, if that level
    of investment, and specifically the way we are using it, wasn't
    sustaining our technological advantage, what about the offset
    initiative is going to ensure that that avoids a similar fate?
        Secretary Carter. Well, thank you, Senator.
        Our efforts are about both new money and new ways of using
    that money. The new money, we are asking for in this budget,
    notwithstanding the $11 billion that we absorbed. We didn't
    take that in our RDT&E [research, development, test, and
    evaluation]. We are increasing research, development, test, and
    engineering, relative to last year. Science and technology,
    which is part of that, also. But, we are doing it in new ways.
    I'll give you a couple of examples of that--two very important
    examples.
        One is reaching out to the high-tech industry that does not
    have a tradition of working with the Department of Defense.
    When I started out in this business, long ago, it was--all the
    major technologically intensive companies in America worked
    with the Defense Department. It was part of the legacy of World
    War II and the Cold War. I'm trying to, and we are trying, in
    the third offset, to rekindle those relationships with the
    high-tech industry. We find them willing, patriotic, eager to
    help serve. We have to do it in a way that's compatible with
    their business and technology models. We're doing that.
        Secondly, we have some innovative new parts of our
    Department. One I've called attention to is the Strategic
    Capabilities Office, which is specifically looking at, and has
    already made major progress in, highly innovative things, like
    electronic warfare drones. They're--that's the place where the
    idea of giving the SM-6 missile anti-ship capability came from,
    taking an old system, giving it a brand new capability. So,
    we're trying to back the innovators in our Department as well
    as connect with the best parts of innovative American society.
    Because, next to our people, our technology is what makes us
    great, and we get our technology because we're part of the most
    innovative country in the world.
        Senator Fischer. So, you would say that the process for
    developing these technologies--would you say that it has not
    been working in the past, and that's one of the main focuses,
    then, of the offset, is to not only work within the Department,
    but also to reach outside the Department, and not necessarily
    looking at specific programs, but having a more open,
    innovative mind----
        Secretary Carter. It is----
        Senator Fischer.--on this, then?
        Secretary Carter. Certainly, that's what it comes down to.
    Both our traditional programs, we need to make them move along
    faster, make them more agile, do a better job of incorporating
    technology in them, and reaching out to the innovative part of
    our society and trying to get--getting them interested in these
    vitally important national security problems, and working with
    us, as has been the tradition in America for decades and
    decades.
        Senator Fischer. Right. You know innovation is very risky.
    So, when we're looking at putting more money into the programs,
    I think all of us realize that losses are going to occur. We're
    not going to see a success rate with every program that you're
    trying for. There will be no results in some areas.
        Secretary Carter. That's correct. If you----
        Senator Fischer. We're not----
        Secretary Carter.--don't take risks----
        Senator Fischer. But, we're not in a risk-tolerant
    environment. How do you address that?
        Secretary Carter. Well, it's--that's a problem. We want our
    innovators to take risk. Taking risk, by definition, means that
    sometimes things won't go the way you'd hoped when you're
    exploring a technological frontier, when you're testing a
    weapon system. We have to be tolerant of risk as--provided that
    risk was taken advisedly, in the interests of making a leap
    ahead in technology. We have to do that. If we're too risk-
    averse, then we're always going to be behind the technological
    curve, and not up with or above the technological curve. Our
    enemies take risks. No question--our potential enemies take--
    they take those risks. We need to take those risks also.
        Senator Fischer. Thank you, sir.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Kaine.
        Senator Kaine. Thank you, Mr. Chair.
        Thanks, to all of you, for your testimony.
        General Dunford, you, in an interchange with the Chair
    about, you know, how you look at PB17 [President's Budget
    request for fiscal year 2017] and whether it does all you might
    want to do, I think you said, quote, ``Our budget is based on
    the top-line that Congress gave us.'' As I look at your written
    testimony--I'll just read it--``To accommodate a constrained
    top-line, PB17 defers near-term modernization, which will only
    exacerbate a coming bow wave of strategic recapitalization and
    other procurement requirements. More broadly, the cumulative
    effect of top-line reductions over the past several years has
    limited the flexibility and resiliency of the joint force, and,
    looking ahead, I'm concerned that the demand for future
    capabilities and capacity will outpace the resources available,
    forcing even more difficult decisions to match strategy and
    resources.''
        The constraint that we're talking about with respect to
    these top-lines is the 2011 sequester BCA caps, correct?
        General Dunford. That's correct, Senator. In--and I think,
    particularly, as I recall, fiscal year 2013 was particularly
    devastating----
        Senator Kaine. Right.
        General Dunford.--to our ability to plan and execute.
        Senator Kaine. We had an opportunity to turn off sequester
    before it went into effect on March 1, 2013, and we chose not
    to turn it off, and then that has created downstream
    challenging consequences.
        So, the real issue, I think, for us, if we put national
    security first, has got to be, What do we do about that
    constraint? Now, what we've done is, we've done two 2-year
    budget deals in a row that have averted some of the sequester
    cuts and provided some relief from the BCA caps. But, in each
    instance, when we did that, we also pushed the budget caps out
    an additional 2 years. So, you are facing the reality of--it's
    like an automatic snap-back sanction in these budget caps. If
    Congress were to not agree on a budget--and we've got a history
    of not agreeing on stuff over time--we will snap back to a
    punishing sanction against our own Nation's ability to defend
    ourselves. We've now pushed that out significantly into the
    future, into the late 2020s. That's the risk that you're
    talking about. The risk of falling back into sequester and
    punishing our national security is the significant concern that
    we're grappling with.
        General Dunford. Senator, that's exactly right. But, even
    if we avert sequester, we have now accumulated bills that will
    all come----
        Senator Kaine. Yeah.
        General Dunford.--due simultaneous. As I alluded to in my
    opening statement, the modernization of the nuclear enterprise
    will come now at the very same time that we'll start to recover
    from some of the deferred modernization over the last several
    years. So, even at the originally projected level of funding
    that the Department asked for, I would assess that probably in
    the late teens and early 2020s, again, we'll hit this bow wave
    of modernization that'll make it very difficult to balance
    readiness, force structure, infrastructure, and modernization.
    That's the balance that we try to have. The more out of balance
    we have become over the last few years, the more difficult it
    will be to achieve balance in the out years.
        Senator Kaine. There are some who, I think, have--I've
    heard argue that we don't--you know, we don't need to worry
    that much about sequester and the BCA caps, because what we can
    do is, we can just plus-up the OCO [overseas contingency
    operations] accounts as we kind of approach the budgetary
    challenges each year to try to deal with these issues.
        Now, from my way of thinking, that can be some short-term,
    temporary relief. But, OCO, which should have a particular role
    in a defense budget, obviously--but, OCO is not money that you
    can really count on. You can't count on it for following years.
    You could get OCO money in a year, but you would still face the
    sequester coming back, you're not sure whether you can count on
    OCO money the following year. Wouldn't you agree with me that
    sort of relying upon successive annual battles about OCO
    funding is not near the same as providing you with the kind of
    certainty that you need to have?
        General Dunford. Senator, we need three things. We need
    predictability. We need the right level of resources. We need
    those resources to be in the right areas. We need all three of
    those. I couldn't agree with you more.
        Senator Kaine. Well, my hope is, as we are talking about
    the NDAA [National Defense Authorization Act] this year, is
    that we will really grapple with this sort of snap-back
    sanction that we're imposing on ourself, which, if it ever--if
    we ever fell into it--I mean, again, I hope we're always going
    to be able to reach agreements, but we've now pushed this
    sequester and the BCA caps out for quite some time, and if
    somebody decides to hold up the process or we just can't reach
    an agreement for a good-faith reason, we are just--built this
    self-punishment into our mechanism. I hope part of what we
    might try to do in the NDAA this year is just agree, look, we
    are not required to continue a sequester that was put in place
    with budget caps in the summer of 2011, pre-ISIL, pre-Russia
    into the Ukraine, pre-North Korea cyberattacks, you know, pre-
    Ebola, pre-Zika. We don't have to live by a 2011 reality in
    2016. I--and if anyone will see this and the importance of it
    in Congress, it's going to be the Armed Services Committees in
    both houses. We should be at the forefront of this. I know the
    Chairman has made this an important priority, and will continue
    to do that.
        Thank you very much.
        Chairman McCain. Senator Wicker.
        Senator Wicker. Thank you.
        I'm glad Senator Kaine brought this up, because it's
    exactly what I wanted to start with. The Chair has made this a
    priority.
        Let me just ask you, Secretary Carter and General Dunford,
    looking back several years ago, when sequester was headed our
    way but we really didn't think it was a reality,--I would ask
    people in your chair, other people, Are you planning for
    sequester? Their answer was, ``No, we're not planning for it.
    It was never intended. We were sure you ladies and gentlemen
    will fix it. It's unthinkable that we would do this.'' Of
    course, the unthinkable happened, and we had to deal with it.
        Now, you--we've dealt with it once, and that was bad
    enough. But, tell us about how going there a second time would
    be a whole new problem. General Dunford, did I--and I'll let
    you go first--did I hear you say, if we avoid sequester this
    time, we still don't have enough money to take care of the
    national defense needs that you have to take care of? Is that
    what you're saying?
        General Dunford. Senator, it is. What I'm saying is, even
    at a level of funding that avoids sequestration, we have a bow
    wave of modernization that's, in part, a result of the last 3
    or 4 years of the budget, and also a result of that bow wave
    for the nuclear enterprise that I alluded to. So, when you look
    at deferred modernization, the modernization that we would do
    in a normal course of events, plus the nuclear enterprise all
    coming due at or about the same time, my assessment is that we
    would be--we will be challenged even if we are at above
    sequestration level of funding. With regard to the other 100
    billion, I would just simply say--and Senator Kaine has listed
    the things that have all changed since the defense strategic
    guidance was written in 2012--my assessment is that if we are
    confronted with----
        Senator Wicker. So, let's reiterate those. Because I've----
        General Dunford. Well, I--it's very simple.
        Senator Wicker.--interrupted your train of thought. But,
    we're talking Russia, we're talking ISIL----
        General Dunford. I'm talking Russia, I'm talking ISIL, I'm
    talking the behavior of North Korea, I'm talking increased
    malign influence by Iran, and I'm talking about the activity in
    China, which concerns us, in terms of maintaining a competitive
    advantage. Their investment over time in their defense
    capabilities and some of their behavior in the Pacific also
    concern me from a competitive-advantage perspective. So, I
    would say there have been profound changes in each of the 5
    challenge areas identified by the Secretary that should inform
    future budgets.
        Senator Wicker. Okay.
        Secretary Carter, are--is there some room in your shop
    where we are planning for this disastrous eventuality if we're
    not able to reach an agreement and if the law of the land,
    which is sequestration, again, kicks in?
        Secretary Carter. Well, let--first of all, let me associate
    myself with everything that Chairman Dunford said. It's exactly
    right.
        With respect to your question, Senator, sadly, the
    Department did learn what it was like to feel sequester. I'll--
    I can say what some of the effects are, and you'll immediately
    see why we're so concerned about it kicking back in the future.
    Uncertainty and turbulence cause us to do things inefficiently
    managerially. So, like issuing short-term contracts, turning
    things on and off. The strategy that the Chairman was just
    referring to, and the 5 major threats we face, those aren't 1-
    year things. We can't budget and program 1 year at a time,
    herky-jerky fashion and meet those. It's unfair to our people
    for them to have budgetary uncertainty. They look here, they
    look to Washington, and they wonder what's going on and what is
    their future. I'm concerned about the picture it paints in the
    world when we do this to ourselves, to our friends and also our
    potential foes. So, we do know what the consequences are. We
    did go through it in recent years. It has very deleterious
    effects on how we manage ourselves and how we protect
    ourselves.
        The last thing I'd like to say is also to associate myself
    with something the Chairman said particularly with respect to
    the nuclear enterprise. We see bills out there for the--to keep
    safe, secure, and reliable nuclear arsenal, just to pick one
    very big item, which will include the Ohio replacement-class
    submarine, ICBM modernization--we go down that road--and other
    things. That money is going to have to be provided for us to
    have that. That's a bedrock capability. So, averting
    sequestration, absolutely necessary, but, on top of that, we're
    going to need the funding that the country needs in future
    years to defend ourselves and protect our people.
        Senator Wicker. Well, thank you. We rely on you to tell us
    what you need. Let's speak it out loudly and clearly from both
    sides of this table, and make it clear that what is at stake is
    nothing less than the national security of Americans.
        Thank you, all three.
        Chairman McCain. Senator Blumenthal.
        Senator Blumenthal. Thanks, Mr. Chairman.
        We often remark, in this committee, to thank the witnesses
    for their service to our Nation. Truly, we have three
    individuals this morning who have served our country over many
    years with extraordinary and unique distinction. So, we thank--
    I thank you for all of your service to our Nation.
        Secretary Carter, you noted, in your testimony, that we do
    not have the luxury of choosing between strategic challenges
    that our Nation faces. Certainly one of those challenges is
    undersea warfare. As you know, our attack submarine force is
    projected to fall below the minimum desirable, 48 boats, by
    2025. It may go as low as 41 by 2029. Our submarines are among
    our most versatile, stealthy, and strong forces available to
    defend and also to conduct offensive operations. Considering
    the gap that we are approaching in submarine capabilities,
    wouldn't it be wise to consider building three submarines a
    year, two Virginia-class along with the Ohio replacement
    program? Would you support such a move?
        Secretary Carter. Senator, thanks.
        First of all, with respect to your general point about the
    critical importance of undersea dominance, that's an area where
    our military excels over all others. It's a critical area that
    we are targeting in this critical budget to keep and extend
    that advantage. It involves submarine construction. It
    involves, as I mentioned, the Virginia payload module, some
    other things, like undersea--unmanned undersea vehicles that--
    some of which I can talk about, some of which I can't--and a
    host of other undersea capabilities. So, that's a major thrust
    of this budget.
        With respect to submarine-building numbers, we have laid
    into the budget this year, as we planned, and we've--we
    sustained that, we stuck with that--our two submarines per year
    through the FYDP [Future Years Defense Program]. Your question
    is, Will we, as we get to the point of the Ohio-class
    replacement in the future, want to add submarine shipbuilding
    capability and ships per year? Yes. That gets back to the point
    about having the money, when we begin the Ohio replacement, to
    keep a safe, secure, and reliable deterrent. We can't have that
    at the expense of our general-purpose Navy. That's a point
    we've all been making. That's going to require additional
    funding.
        Senator Blumenthal. So, if the shipbuilding capacity is
    there to do it, you would favor going that route, of three
    submarines a year, if necessary, to meet that gap.
        Secretary Carter. We're--yes, we're going to need to build
    the Ohio-class replacement submarine without shorting the rest
    of our undersea dominance.
        Senator Blumenthal. Secretary Carter, thank you.
        Earlier in the week, I think you met with Israeli's Defense
    Minister and others in the military establishment there. Can
    you commit to us that you will ensure that Israel maintains its
    qualitative military edge? Can you update us as to when the
    negotiations on the Memorandum of Understanding will be done?
        Secretary Carter. I obviously have that commitment. That's
    something that my good friend and colleague Israeli Defense
    Minister Yaalon and I discussed. We will do that.
        With respect to the MOU [memorandum of understanding],
    that's something that the President and the Prime Minister
    discussed, so it's not something that the two Defense Ministers
    decide. However, in our conversations, which are frequent,
    the--Minister Yaalon and I do discuss what the Israelis need,
    now and going forward. I--we use that to inform those
    discussions about--over the MOU and the amount of help that we
    give to the Israelis to defend themselves in what is a very
    dangerous region.
        Senator Blumenthal. Finally, I have long been concerned, as
    many of my colleagues have been, about the Iran ballistic
    missile program, its continuing testing. I led a letter to
    President Obama, with a number of my colleagues, calling for
    immediate enforcement of sanctions against Iran. The Department
    of Treasury, following the letter, did indeed enforce sanctions
    against 11 entities and individuals supporting Iran's missile
    program. Clearly, more must be done to deter Iran from
    continued aggressive pursuit of this program. General Votel and
    General Austin, literally within the past week or so, testified
    to this committee about the need for increased sanctions. Do
    you agree?
        Secretary Carter. I do. That's not a responsibility of the
    Department. But, a responsibility of the Department that we
    very much fulfill, and I know you discussed with them, is our
    defensive commitments with respect to Iranian ballistic
    missiles, both for our forces in the region and our friends and
    allies, who include Israel, but there are others, as well.
    That's why we have the missile defense and other capabilities
    in the Gulf, and why we need to keep them strong. I did discuss
    those also with Defense Minister Yaalon, including the help we
    give to the Israelis with respect to Iron Dome and David's
    Sling and Arrow, which are their three tiers of their own
    territorial defense against ballistic missiles.
        Senator Blumenthal. Thank you very much.
        Thanks, Mr. Chairman.
        Senator Reed [presiding]. On behalf of Chairman McCain,
    Senator Sessions, please.
        Senator Sessions. Thank you very much--I won't say would-be
    Chairman, but actual Chairman, I suppose, for a second. The man
    who would be Chairman.
        [Laughter.]
        Senator Sessions. Well, it's a political world we're living
    in.
        General Dunford, when you have a--when we look at the
    Middle East--we've had a number of witnesses testify here over
    recent months about it. I have come to the conclusion that
    there's just going to be a lot of violence for a long time.
    There won't be one victory that would make us safe. I've talked
    with our Democrat colleagues, and, from their comments in the
    committee meetings, it seems to me that we do need, and can
    maybe even agree upon, a strategy that could be bipartisan,
    that could extend beyond elections, that maybe the whole world
    would be able to support on how we confront this rising tide of
    violence and extremism. Do you think that's possible? How close
    are we to achieving something like that?
        General Dunford. Senator, I do think it's possible. I think
    we've done a lot of work, certainly internal to the Department,
    to take a long-term view of the Middle East and how to deal
    with the challenges inside of the Middle East. I couldn't agree
    more. You know, we can't--no more than we can develop a budget
    year-to-year and expect to be successful can we develop a
    strategy year-to-year and make lurching changes and expect to
    be successful. So, I think that a basic thesis, Can we get a
    bipartisan strategy and an approach to the Middle East that
    will carry out what we have assessed to be a generational
    conflict?--I fully concur with that.
        Senator Sessions. So, you assess it as a generational
    conflict, meaning more than--20 years or more.
        General Dunford. Senator, I think if you look at the
    underlying conditions that have led to violent extremism, I
    can't imagine addressing those in anything less than that
    period of time. When you look at the economic issues, the
    social issues, the political issues, the educational issues,
    those are all things that will take a long period of time. My
    assessment is that violent extremism, in some form, will exist
    until those conditions across the Middle East are addressed.
        Senator Sessions. Secretary Carter, do you agree with that?
        Secretary Carter. I do. I'd go even further than that. I
    mean, if--first, what can't be tolerated in a generational way
    is ISIL. That's why we're so intent upon accelerating the
    defeat of ISIL and--but, to the Chairman's point and to your
    point, Senator, that isn't going to automatically create a
    Middle East that is free of extremism. It's not going to create
    a world that's free of terrorism, because the trends in
    technology put more and more destructive power in the hands of
    smaller and smaller groups. So, we recognize--and it's part of
    our approach to our future defense--that both nonstate and
    state actors need to figure in the investment portfolio of the
    defense of this country, going forward. Both of those are
    featured in our long-term budget. Even though we expect and
    need to defeat ISIL in the short term, we're making investments
    to protect ourselves against nonstate actors for the more
    distant future. I think we have to.
        Senator Sessions. Well, I tend to agree with that. We need
    to focus on who needs to be confronted, militarily, and
    defeated as soon as possible. Certainly, ISIL is number one on
    that list. Would you agree?
        Secretary Carter. Absolutely.
        Senator Sessions. At the same time, we have allies in the
    region, we have allies who oppose some of these forces we
    oppose. We have some people in the region that would support
    people that we oppose. So, it's a very complex region, is it
    not? We have to be--and we need as many allies as we can have.
    Some of this fighting needs to be done by other people than us
    over the decade or generation to come. Would you agree with
    that?
        Secretary Carter. I completely agree. I'll just add to
    that. I was in Brussels a few weeks ago. I brought together all
    the Defense Ministers of all the countries that are part of the
    counter-ISIL coalition. Essentially, my message was, exactly as
    you say, we're willing to lead this, we're willing to do a lot,
    because we're powerful, but we need others to get in the game.
    Particularly, we need those in the region to play their part.
    Additionally, we need, and we're finding, more partners on the
    ground, because, both in Syria and Iraq, it's not only
    necessary to defeat ISIL, but it's necessary to sustain the
    defeat. Only those who live in the region can sustain that
    defeat. So, we can help them, we can lead them, but they need
    to do their part. I emphasized to them that we are going to
    defeat ISIL, and we'll remember who played their role, and who
    didn't.
        Senator Sessions. Well, thank you.
        I guess my time's up. I would just thank my colleagues that
    I--that have expressed concerns about this overall policy of
    the United States. I believe we could get there. I believe we
    can achieve a policy that defends the legitimate interests of
    the United States in bipartisan way, and that can be sustained,
    no matter who gets elected President in the years to come. I
    think that's important, because a great nation can't be flip-
    flopping around on commitments around the globe.
        Thank you all.
        Senator Reed. On behalf of Chairman McCain, Senator
    Donnelly, please.
        Senator Donnelly. Thank you, Mr. Chairman.
        Thank the witnesses for being here.
        Secretary Carter, we're still losing over 400
    servicemembers each year to suicide. We were able to get in the
    fiscal year 2015 NDAA a requirement for--under the Jacob Sexton
    Act, that every servicemember receive a person-to-person mental
    health assessment every year. Can you provide me with an update
    on the status of the Sexton Act's implementation and when the
    Department will roll out those annual mental health
    examinations?
        Secretary Carter. Thanks, Senator. Thanks for your interest
    in this issue, which is an important part of the welfare of our
    folks. It is something that we've become increasingly attentive
    to. I'll get back to you on the specifics of the
    implementation, that program.
        [The information referred to can be found with the printed
    Questions for the Record at the end of this printing.]
        Secretary Carter. The thing I do know and want to say is
    that this is being reflected in our healthcare investments. As
    you know, we spend about $50 billion a year, out of the 600-or-
    so----
        Senator Donnelly. Right.
        Secretary Carter.--billion we're requesting for you, on
    healthcare. Over the last few years, we have increased greatly
    the amount directed at mental health, to provide our folks with
    resilience, which is what--the program you're talking about, so
    that they are not as----
        Senator Donnelly. Right.
        Secretary Carter.--vulnerable and susceptible to the kinds
    of things that might drive them to such an extreme act, and
    also that we're treating people who already have reached the
    point where they have that kind of impulse. I'll get back to
    you with the specifics, but----
        Senator Donnelly. Great.
        Secretary Carter.--but it's very important.
        Senator Donnelly. To continue to remove the stigma from----
        Secretary Carter. That, too.
        Senator Donnelly.--trying to get help.
        Secretary Carter. Mental--we want people to seek mental
    health treatment when they need it, and we want everyone who's
    not seeking it to look sympathetically upon that, like getting
    any other kind of medical----
        Senator Donnelly. Great.
        Secretary Carter.--treatment.
        Senator Donnelly. Thank you.
        Mr. Secretary, I know how busy you are and the challenges
    we face around the globe. One part of trying to solve those
    problems are our National Labs. As you know, in Indiana, we
    have Crane Naval Warfare Center. We had talked about you
    possibly coming to visit, just a morning, or a late afternoon,
    or a late evening, or a midmorning at 3:00-in-the-morning
    visit, so you can get an understanding of the strengths and
    challenges. When do you think we can make that happen?
        Secretary Carter. I look--are you--will you come with me?
        Senator Donnelly. Yes.
        Secretary Carter. Okay.
        Senator Donnelly. Even at 3:00 in the morning.
        Secretary Carter. It's a deal. I love visiting all of our
    folks. There's nothing better than going out and getting among
    the people who serve this Department. In this case, it'll be
    laboratory scientists, but, whether they're troops or
    scientists or folks in industry, they're all part of what makes
    our military great. We'll have a wonderful time, I promise.
        Senator Donnelly. Thank you, sir. I appreciate it.
        General Dunford, when you see what has just happened with
    Vladimir Putin, how do you judge that? What do you think he is
    doing? How will that affect things in Syria?
        General Dunford. Senator, it--honestly, it's too early to
    tell what he's doing. I think those who have tried to predict
    Vladimir Putin's behavior have been universally proven wrong.
    What I would say that--is this, though, that, when Putin went
    into Syria, he said his express purpose was to go down and
    address ISIL. ISIL is not addressed. What I think it does do
    is, it makes it clear that his original intent was not what he
    said it was, which was to go after ISIL, but it was obviously
    to support the regime. I think what it also does is, for those
    who question whether the United States is the most reliable
    partner in the region, or not, I would just say, for the
    record, we're still there.
        Senator Donnelly. Right.
        Let me ask you and then the Secretary. How do we get to
    Raqqa? The next question, obviously, is when? There's no exact
    date on that. But, if you could give us an idea of how we get
    this done and how we eliminate ISIS presence on the ground,
    because it creates a danger to us.
        General Dunford. Senator, we're--you know, one thing I
    would say is, we're already isolating Raqqa right now, and made
    significant progress over the last couple of months in limiting
    the freedom of movement between Raqqa and Mosul, cut that line
    of communication between Iraq and Syria. We've isolated Raqqa
    to the north with Syrian Democratic Forces who seized an area
    called Shaddadi, which, again, further cut the lines of
    communication. We have grown the capability and capacity of the
    indigenous forces that were supporting in Syria quite a bit. In
    fact, had I testified a month ago, I would have told you that
    we had about 2,500 Arabs inside of the Syrian Democratic
    Forces. Today I can tell you we have 5,000 that are currently
    planning another operation that will further isolate Raqqa.
        Senator Donnelly. Do you see--just as an aside, not to
    interrupt you--that number continuing to grow significantly?
        General Dunford. Senator, I do. I think that's--my
    projection in the future is based on what's now recently
    happened. The more success we have--and we've always said
    that--the more success we have, we'll have what the Secretary
    described as a snowball effect, where people now are more
    willing to join us because they see the level of support that
    we're providing, and, more importantly, the level of success
    that these forces are having.
        Secretary Carter. That's exactly right, Senator. We're--
    what we described in December is transpiring; namely, the SDF
    is growing in size, the Arab component of that. They're on the
    move. They've taken Shaddadi. You're right, Raqqa is a key
    target, because that's what ISIL calls its capital. We need to
    take that away from them and make it clear that a state based
    upon the ideology of ISIL is not tolerable. We are, in addition
    to backing those forces, pressuring Raqqa in lots of other
    ways--from the air, but other ways, as well.
        I want to raise something while we're on this, which is, we
    have--which is very important--in order for us to win, we need
    to constantly revise and adjust and take advantage of
    opportunities. We're trying to take advantage of opportunity
    right now, the Syrian Arab Coalition. In that connection, if I
    may, I need to plead for your help in releasing some of the
    funds that are allocated to precisely that purpose. It's not
    just about this committee, but we have--we made a request for
    those funds, and we got four different answers from four
    different committees. I know that's how the system works, but
    it's really tough to wage a campaign under those circumstances.
        Senator Donnelly. It's----
        Secretary Carter. So, if I can plead for--as we try to be
    agile, if we--I can plead for some agility in responding to our
    funding requests----
        Senator Donnelly. It's----
        Secretary Carter.--I'm very grateful to----
        Senator Donnelly.--it's timely urgent right now.
        Secretary Carter. It is time urgent.
        Senator Donnelly. Okay. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain [presiding]. Senator Ayotte.
        Senator Ayotte. Thank you, Chairman.
        I want to thank all of you for being here and for your
    leadership, service to our country.
        I wanted to ask--New Hampshire is facing a terrible
    epidemic of heroin and Fentanyl that is coming over the
    southern border, and it's killing people in our States.
    Recently the Senate passed what's called the Comprehensive
    Addiction and Recovery Act to deal with the prevention and
    treatment side and some support for our first responders. But,
    we know from prior testimony, both from our NORTHCOM and
    Southern Com commanders, that the networks that are being used
    to traffic the drugs into our country also are networks that
    can be used to, essentially, traffic anything.
        I wanted to ask both you, Secretary Carter and General
    Dunford, What can we do to get SOUTHCOM and NORTHCOM the
    resources they need to tamp down on these networks that not
    only are killing people in our country, but also can be used
    networks to traffic other dangerous things into our country,
    including used by terrorist networks?
        Secretary Carter. Well, I'll start, and then I particularly
    want the Chairman to comment, because he was just in the
    region, so he's--fresh insight there. But, the basic story is,
    as you say, in--while we do everything here back home to try to
    protect ourselves from this scourge, we've got to try to
    interdict the chains of supply. Our forces, in SOUTHCOM
    especially, but also NORTHCOM, are a part of that. One of the
    reasons why I'm so committed to working with you up here on the
    Goldwater-Nichols revisit effort that the Chairman and this
    committee have spearheaded and I am doing also in the
    Department and want to do with you, is because that is an area
    where--your point, which is allocating resources among COCOMs
    in an agile, effective, and optimal way. That's where, from my
    point of view, I would like to strengthen the role of the Joint
    Chiefs of Staff and the Chairman. Because different COCOMs see
    different things in their regions. They're all deeply expert in
    their own regions. But, somebody needs to put it all together
    and give me advice about that, how to synchronize all those
    forces. I look to the Chairman and the Joint Staff for that.
    I'd like to get to--for them to have more capability and
    authority to do so. I hope that's part of our effort.
        With that, let me turn it over to the Chairman, who just
    happened to be in the region last week.
        General Dunford. Senator, I did--as the Secretary said, I
    spent last week on this issue. I visited Southern Command,
    visited our Joint Interagency Task Force, and then I went down
    to Colombia. On the bright side, what I was encouraged by is,
    the amount of information that we have, the amount of
    intelligence we have today far exceeds what we used to have. If
    you look at the Joint Interagency Task Force alone, 15
    different countries, now, sharing information intelligence.
        But, what I found is that what we know far exceeds our
    ability to act on it, from an interdiction perspective. So, I
    saw exactly what you're alluding to, which was a shortfall of
    the resources necessary to interdict. I came back with a much
    better appreciation of that. Frankly, what I've asked our team
    to do is to try to look--given all the challenges that we have,
    and given all the competition for resources, I'm still not
    convinced that we can't find some innovative ways to address
    the interdiction. At least, if we took action on just the
    intelligence and the information that's----
        Senator Ayotte. Right.
        General Dunford.--currently available----
        Senator Ayotte. Right.
        General Dunford.--through the Joint Interagency Task
    Force--and the other thing, Senator, even in the--we have Joint
    Task Force Bravo. I think you're familiar with them. So, while
    we've always had, really, a pretty good understanding of what's
    going on in the air and the sea, and increasingly better today,
    again, because of both the Interagency and the international
    cooperation, what I also found was, our ability to see what's
    going on over land is also much greater than it was.
        What you're alluding to is--I do think--and I came back
    with this--you know, frankly, as something as a priority for me
    and the staff last week, coincidentally, was to come back and
    say, okay, we have all this information intelligence. I
    understand the competition for resources, but we have an
    imperative to actually do something about this. Frankly--I
    think you know it, because you've looked at the issue--we--what
    I've seen the studies say is that about 40 percent of
    interdiction is kind of where you need to be. In other words,
    there's other things you have to do, from prevention to
    treatment and so forth----
        Senator Ayotte. Right.
        General Dunford.--to deal with the issue. But, if you get
    the 40 percent interdiction, that's kind of the contribution
    you can make at the interdiction level. We're probably half of
    that, or below.
        Senator Ayotte. Or less.
        General Dunford. My priority--and I'll come to the
    Secretary with some recommendations--is to try to get us as
    close to that 40 percent as we can. Again, if nothing else, to
    try to get us to the point where we're acting in interdicting
    based on the intelligence and information that we have today.
        So, again, not a solution to the problem, but encouraged by
    what we know. Now we've got to do something about it. Of
    course, it's not just a DOD issue. The Coast Guard plays a huge
    role in that.
        Senator Ayotte. Right.
        General Dunford. Department of Homeland Security and so
    forth.
        Senator Ayotte. Well, I appreciate hearing you say, General
    Dunford, you think it should be a priority, based on your
    visit, because I remember also, when General Kelly was
    Commander of SOUTHCOM, he had talked to me at length about
    this, about--that we had the information, and we could see this
    stuff coming over. We just needed the additional resources to
    interdict it.
        I really appreciate your putting a focus on this, because
    we are--you know, we need to do the work on the prevention and
    treatment. We're focusing on that. But, the interdiction would
    be very significant, because it's so cheap on our streets right
    now, and that will help drive up the cost. We know that these
    networks are used to traffic--used by terrorists and others,
    too. So, it's important for our Homeland security, as well.
        General Dunford. Mr. Chairman, if I could, one follow-up.
    The other thing that I came back with is, you know, kind of an
    imperative to keep our partnership capacity-building efforts in
    the region going, and funding those adequately, as well,
    because, you know, clearly, we can't do it all ourselves. We
    don't want to do it all ourselves. The investment that we make
    in the ability of others to support the interdiction effort, I
    think is also an important part of this.
        Senator Ayotte. Great. Thank you.
        Chairman McCain. Senator King.
        Senator King. Thank you, Mr. Chairman.
        First, I'd like to associate myself with the questions and
    comments of Senator Sessions. I think the idea of developing a
    long-range strategy for dealing with the Middle East and
    violent jihadism is a--is an important project. We can't just
    ad hoc it all the time. This should be comprehensive, it should
    involve the Muslim world, the Arab countries, and other
    countries. So, I commend the Senator for bringing that up.
        I'd like to go back to the budget and pull back a bit.
    We're facing a series of challenges. One is a huge debt, now
    approaching $19 trillion, that we're passing on to our
    children, that I think is utterly irresponsible. The second is
    what I call the ``interest timebomb.'' Right now, we're in a
    Never Never Land of low interest rates that's very unusual. If
    interest rates return to 5 percent, kind of average over many
    years, just interest on that national debt will be almost equal
    to the entire discretionary budget today, $950 billion, way
    more than the entire defense budget. Just the increase from 2
    percent to 5 percent would almost equal the defense budget.
    That's money that's got to be paid, and that's an impending
    disaster out there.
        The third fact is that all of our discussions here today
    and in the other committees about the nondefense discretionary
    budget, the total of what we're talking about is a little over
    20 percent of the total Federal budget. Fifty percent is
    mandatory expenditures, which is being driven largely by
    demographics--we're all getting older--and healthcare expenses.
    Then another 25 to almost 30 percent is tax expenditures, which
    are rarely discussed, but which now exceed the entire revenues
    of the discretionary budget, over a trillion dollars a year.
    So, we're trying to solve a huge problem, looking at only one
    piece of it. It's as if you had a big problem in your family
    budget, and you said, ``We're going to solve this whole problem
    just by focusing on our electric bill.'' That's where we are.
    If you trim the lines out, we're already at the lowest point in
    70 years in defense spending as a percentage of GDP. We're at
    the lowest point in 70 years as nondefense discretion. We're
    struggling within this box that was created in 2011 to try to
    solve a problem that we can't solve within that--within that--
    the space of that 21 percent of the overall Federal budget.
        So, it seems to me that you're doing a mighty job of
    working within the constraints, but if we don't go back and
    revisit the decisions of 2011, particularly in light of the
    reality of the world that we face today, we're facing a long-
    term catastrophe. I mean, you're a student of long-term Federal
    budget. Is this an accurate assessment, Mr. Secretary?
        Secretary Carter. It is. I--it's--the--if I say it again
    this year, I said it at--when I presented the budget last year,
    when I became Secretary of Defense--that's not something we can
    solve in Defense, but we observe it.
        Senator King. But, we're trying--we're being forced to try
    to. That's what bothers----
        Secretary Carter. You're exactly right. You--we're trying
    to solve an entire problem on the back of discretionary
    spending. It's not enough. It's not sustainable. Now, there
    are--all those other parts of the budget have to be in the
    picture. I understand that. I think that is what is necessary,
    to have everybody come together behind a budget future. What--
    one of the things that we're asking for here is stability and
    relief from those sequestration caps. I recognize----
        Senator King. Well, we've gotten to the point, around here,
    where 2 years sounds like stability. I mean, we're feeling
    great when we have a 2-year budget deal.
        Let me change the subject slightly. We've talked a lot
    about the bow wave and the modernization. We're talking about
    Ohio-class submarines, long-range strike bombers, missile
    upgrades. All of those are what I would call capital
    expenditures, in the sense that they are 30-, 40-year assets,
    and yet, in this strange world of Federal budgeting, they're
    treated as current expenditures. There's no way we're going to
    be able to handle those expenditures and do all the other
    things. Shouldn't we be thinking about them in a separate
    category? I believe there should be a capital Federal budget,
    assuming for a moment we could figure out what it is we own.
    But, we should have a capital budget for long-range
    investments, like a 40-year Ohio-class submarine, as opposed to
    trying to fund them out of current operating expenses. Is that
    something you'd consider?
        Secretary Carter. Well, certainly we try to think that way.
    As we put together budgets 1 year at a time, we prepare budgets
    5 years at a time, as you know, even though you only consider
    budgets 1 year at a time. So, we try to have that long-term
    perspective. I opened my testimony by saying we did, in this
    budget, take the long view. That's an important new thrust in
    this budget, is to look ahead 10, 20, 30 years from now.
        Now, in order to do that, you have to be confident that the
    reasonable resources will be available then. To the specific
    point about the Ohio-class replacement and the strategic forces
    recapitalization, for example, I've already made the point
    that, even with sequester relief, there's going to have to be
    additional----
        Senator King. Right. It just----
        Secretary Carter.--funds----
        Senator King. It just doesn't----
        Secretary Carter.--for that purpose, because it's so large
    a bill----
        Senator King. Right.
        Secretary Carter.--that we can't afford to have it squeeze
    out of our other submarine construction or other shipbuilding.
    We have to take that long-term perspective, I agree with you.
        Senator King. Good.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Cotton.
        Senator Cotton. Thank you.
        I want to continue along the same vein of questioning here.
        General Dunford, anytime your friends in the Navy come to
    testify about their top priorities, we get a little stoplight
    chart based on different budget scenarios. No matter the budget
    scenario, the sea-based nuclear deterrent is always green. Most
    other things might be yellow or red. Can you tell us why that
    is?
        General Dunford. That reflects the priority of the
    Department to provide an effective and safe nuclear deterrent,
    survivable nuclear deterrent, which is why that's green. It
    really does address the most important requirement that we have
    in the Department, which is to prevent a nuclear war against
    the United States.
        Senator Cotton. Do you know what percentage of the
    Department's overall budget is spent on our nuclear deterrent--
    not just sea-based, but all legs of the triad, as well as the
    infrastructure?
        General Dunford. Senator, I don't know the percentage that
    we spend on that.
        Senator Cotton. Secretary Carter, you look like you know.
        Secretary Carter. It is, it's about $20 billion a year. It
    depends on what you include in that, but it's a couple of tens
    of billions of dollars. It's not an enormous part of our
    budget, but it is a critical part of our budget.
        Senator Cotton. That's a relatively small--4 or 5 percent.
        Secretary Carter. It is. Now, that doesn't count the things
    that Senator King is talking about, the bills that will come in
    the future to keep it that way. But, you're--just the--what
    we're paying in this year for our nuclear deterrent is that.
        Senator Cotton. I ask because of the sizable bills coming
    due to modernize all legs of the triad, as well as the
    infrastructure. I sometimes hear people say, you know, why do
    we spend so much money on weapons we never use? My response
    would be, first, we don't spend that much money on them, in the
    context of the defense budget. Second, we use our nuclear
    weapons every single day.
        There is a sea-based deterrence fund that was created last
    year, I believe, in anticipation of the large expense of the
    Ohio-class replacement submarine. Obviously, we also need to
    upgrade our bomber. That's why we have the B-21 program. There
    are also land-based and infrastructure modernization that is
    needed. Rather than having merely a sea-based fund, should we
    perhaps have a nuclear deterrence fund?
        Secretary Carter. I think that may make sense, certainly
    for whatever we decide to do with respect to the ICBM force,
    both as--regard missiles and their land basing. The B-21
    bomber, also one could put in that category. I just want to
    emphasize, we want the B-21 bomber for the nuclear mission and
    non-nuclear mission. It'll be capable of both. Like our current
    bomber force, we'll use it for both.
        Senator Cotton. Why would you have a sea-based deterrence
    fund alone, and not a broader nuclear deterrence fund?
        Secretary Carter. I'm agreeing with you that----
        Senator Cotton. Okay.
        Secretary Carter.--I think a broader nuclear deterrent fund
    may be appropriate.
        Senator Cotton. I mean, recognize that the B-21, like the
    B-2 and other aircraft, have dual capabilities, but the
    foundational capability across all of these systems is the
    nuclear deterrent. I'm not sure we should have any of these
    deterrent funds, but, if we do decide that we want to treat our
    nuclear triad in a special kind of way, then I think we should
    probably do all three legs of the triad.
        Secretary Carter, I want to turn to the South China Sea.
    You said, 2 weeks ago, that, ``China must not pursue
    militarization in the South China Sea. Specific actions will
    have specific consequences.'' What specific actions are you
    referring to?
        Secretary Carter. The specific actions of China are actions
    to press territorial claims, not through international legal
    mechanisms and peaceful mechanisms, but through militarization.
    That's what the Chinese have been doing in the South China Sea.
    They're not the only ones, but they're, by far and away, the
    largest militarizers of features in that region. The kinds of
    actions we are taking are--and I'll give you some examples of--
    --
        Senator Cotton. My next question would be, What are the
    specific consequences?
        Secretary Carter.--we can go through them more in another
    setting, but, just to give you some examples. In addition to
    our own force posture in the region, which, as you know, we've
    been strengthening for--as part of the rebalance for several
    years--we're doing some extra strengthening of that this year.
    It's detailed in our budget statement. Particularly has to do
    with increasing the lethality of our platforms out there and
    their technological capability. But, in addition, one of the
    other effects that China's behavior is having is, it is driving
    many of our partners and allies to want to do more with us,
    give us more access. We will have that in the Philippines.
    We're doing more with Vietnam, much more with Japan, Australia,
    India. Not only are we reacting, but the countries in the
    region are reacting, too. Our relationships with them,
    accordingly, are blossoming. We're doing much, much more.
        Senator Cotton. Yes. Obviously, our relationships are
    getting much stronger in northeast and southeast Asia because
    of China's actions. But, in the end, I think some kind of
    genuine action on our part is going to be necessary; otherwise,
    they will present us with a fait accompli in the South China
    Sea.
        My time expired. Thank you all. Happy Saint Patrick's Day.
        Secretary Carter. Same to you.
        Senator Shaheen. Mr. Chairman, I'm going to defer to
    Senator Manchin, because he has to leave. So, I will give my
    slot. If you will come back to me after the next turn, I
    appreciate that.
        Chairman McCain. Senator Manchin.
        Senator Manchin. Senator Shaheen, thank you so much.
        Thank you all for your service, and thanks for being here.
        Let me just say, either to Secretary Carter, General
    Dunford, or whatever, I'm concerned about the--Russia's
    recently announced withdrawal from--the military forces from
    Syria, saying that they've fulfilled their mission. Putin
    communicating with President Obama on the Russian military
    force withdrawal and the next steps required to fully implement
    a cease-fire, with a goal of advancing political negotiations
    on a resolution of the conflict in Syria. Then I just have,
    on--today, I see where the Syrian Kurds plan to declare a
    federal region in northern Syria territory. I guess I would--
    asking, Do you anticipate a change in the U.S. military-force
    role in Syria, based on Russia's military withdrawal? Is Russia
    claiming success? Has it strengthened their--basically, their
    swagger, if you will, the political clout in that area?
        Secretary Carter. Well, as I said before, Russia came in
    wrongheadedly, because they said they were going to fight ISIL,
    and they didn't. Instead----
        Senator Manchin. Correct.
        Secretary Carter.--they supported Assad, which prolonged
    the civil war, fueled the civil war.
        Senator Manchin. Correct.
        Secretary Carter. So, their effect has been the opposite of
    what they stated, and certainly the opposite of what is needed.
    It hasn't had an effect on our prosecution, to get to your--
    what we're doing in Syria, of our counter-ISIL campaign. It has
    had the effect, in my judgment, of prolonging the Syrian civil
    war.
        Now, maybe Russia can do what it should do, which is use
    its influence over the Assad regime to promote the transition.
    That's what Geneva's about. To get to the question about the
    Kurds, that's exactly the kind of thing that's being discussed
    in Geneva. But, the Russian contribution has not been positive.
    We're watching its withdrawal. I don't know to--how far that
    will go. But, the Russian effect was not what they said it was
    going to be, and it was, as I've said, wrongheaded.
        Senator Manchin. But, I'm saying that, still, they're--the
    Kurds, the Syrian Kurds establishing an area, or claiming an
    area, is not met with--it's being met with resistance from
    Assad and his regime, correct?
        Secretary Carter. That is correct.
        Senator Manchin. You're thinking Russia can negotiate that?
        Secretary Carter. No, I don't know that Russia--I--we and
    others in the region, including the Turks, will have a major
    role in Geneva about deciding the manner of participation of
    the Kurds. I'd--so, Russia will play a role in those talks, but
    we have an important role to play, as well.
        I will say, with respect to the Syrian Kurds, that they
    have proven to be excellent partners of ours on the ground in
    fighting ISIL. So, we're grateful for that. We intend to
    continue to do that, recognizing the complexities of their role
    in the region overall.
        Senator Manchin. General Dunford, your posture--the
    statements--describes five strategic challenges: Russia, China,
    North Korea, Iran, and the violent extremists, of course, of
    ISIS. I guess I would ask, in your assessment, the greatest
    threat we're facing from that lineup.
        General Dunford. Senator, first, I guess I'd say we don't
    have the luxury of racking and stacking. We have to address
    each of them in----
        Senator Manchin. Right.
        General Dunford.--their own way. What I've said in the past
    in testimony, and I guess I would restate today, is, the one
    that has the greatest capability and poses the greatest threat
    to the United States is Russia, because of its capabilities--
    its nuclear capability, its cyber capability, and clearly
    because of some of the things we've seen in its leadership's
    behavior over the last couple of years.
        Senator Manchin. What do you make of the kidnapping of the
    young student in North Korea?
        General Dunford. You know, I've watched that over the last
    couple of days, and, you know, you can't help but feel for both
    him and the family, but I think it's just a reflection of the
    absolutely irresponsible leadership in North Korea, and it
    exposes the regime. To those who may not have appreciated what
    the regime is--that behavior was certainly not a surprise to
    me, in terms of North Korean regime behavior, and I think that
    probably many other people who maybe weren't as attentive to it
    have now seen what North Korea is all about.
        Senator Manchin. Why do we have Americans still traveling
    in that area? I mean, why would they even be in the country?
        General Dunford. I--you know, I--Senator, that's----
        Senator Manchin. That was a religious, I believe, was it
    not? A religious----
        General Dunford. It was a religious group. What I heard
    this morning is that we probably had some 15,000 people go over
    to North Korea as tourists over the last several years, and 13
    of them have been apprehended. That was a statistic from the
    news. But, this is clearly not something that the Department of
    Defense is involved with, and I can assure you that we don't
    have members of the Department of Defense visiting North Korea.
        Senator Manchin. Secretary Carter.
        Secretary Carter. The only thing I want to add, if I could,
    because it's timely, in view of North Korea's threats about
    provocations, including missile launches, that we stand alert
    with our missile defense forces, with our allies, the Japanese
    and the South Koreans. That's a daily task, all sorts of
    missile defenses as well as our deterrent forces on the DMZ
    [demilitarized zone] and in South Korea.
        I used the phrase ``fight tonight,'' and that's their
    slogan. Of course, nobody wants that to occur, but the way to
    make sure it doesn't occur is for us to be ready each and every
    night. They're some of our most highly ready and capable
    forces.
        Senator Manchin. Thank you all. My time is up.
        Senator Reed [presiding]. On behalf of Chairman McCain,
    Senator Ernst, please.
        Senator Ernst. Thank you, Senator Reed.
        Thank you, gentlemen, for being here today.
        Yesterday, I joined a bipartisan group of lawmakers to
    advocate for some incredible women who really do deserve to be
    honored. They are the Women Airforce Service Pilots, otherwise
    known as WASPs. Secretary, you know where I'm going with this.
    It is a travesty that these women, who are pioneers in military
    aviation, had the honor of having their ashes inurned at
    Arlington National Cemetery revoked last year during the same
    year that, historically, you opened up positions that had been
    previously closed in combat to women. So, I would like to see
    that addressed. The Pentagon should do the right thing and
    honor these women by restoring their rights to have their ashes
    inurned at the National Cemetery. It's my understanding that a
    waiver can be done for these women to do so. So, I would
    encourage you to do that. I'd like to see that action taken.
    They are part of America's Greatest Generation, as well.
        So, Secretary Carter and General Dunford, I will submit a
    record--or a question for the record, and would love to have a
    forthcoming response from you on this issue. It is something
    that we are very passionate about in making sure that women are
    honored, as well.
        Senator Ernst. So, first, Secretary Carter, I do continue
    to remain concerned about the lack of capacity and capability
    provided to EUCOM [U.S. European Command] in order for it to
    perform its critical mission of defending our Nation and our
    allies. Especially as we look at Russian aggression. We've
    heard a number of members speak on that today.
        General Breedlove has come before our committee multiple
    times stressing the need to enhance our capacity and capability
    for EUCOM to match the threat of both Russian aggression and
    transnational terrorism. So, specifically, one area which he
    raised--this is a top concern of his, and I do share it--it's
    the lack of support for force protection of our servicemembers,
    of DOD civilians, and their family members. Considering
    terrorists have displayed the capability to plan, stage, and
    execute attacks in western Europe and in recent bombings in
    Turkey, I would just urge you to take immediate action to
    increase our force protection capabilities in the EUCOM AOR
    [area of responsibility].
        So, with that, there is a request to quadruple funding for
    the European Reassurance Initiative [ERI] in fiscal year 2017.
    Specifically, Secretary and General Dunford, how will you build
    capacity and capability to enhance our force protection in that
    area and EUCOM's warfighting functions to better counter
    Russia's aggressions as well as transnational terrorism?
        Secretary Carter. Thank you, Senator.
        First, I look forward to answering the question on the very
    first----
        Senator Ernst. Thank you. I appreciate it.
        Secretary Carter.--issue. Thank you for that.
        Secondly, both the issues you raise with respect to Europe
    are serious ones that we're adjusting to, and I'll say how.
        With respect to Russia and the potential for Russian
    aggression, outright aggression or the kind of Little Green Men
    hybrid warfare phenomenon that we saw, that's what--why we're
    quadrupling the European Reassurance Initiative. To what it
    pays for, it pays for the rotational presence of forces in
    Europe, including in border states--states, that is, that
    border Russia. It provides for increased pre-positioning of
    heavy equipment there and also in Germany and elsewhere. It
    provides for doing more exercising and so forth with the Baltic
    states, with Poland, with Romania, and so forth, and for
    equipment sets there that our troops fall in on. So, the
    European Reassurance Initiative, which this year, you're right,
    we're asking $3.4 billion--it's in our budget--it's extremely
    important. Basically, we're adjusting to a fact that we haven't
    had to face for a quarter century, as I said in my statement,
    namely that we have a Russia that is threatening to--western
    Europe, and we need a new playbook that goes with that. I
    regret to say that, but there it is. That's what the European
    Reassurance Initiative is about.
        Now, separately, you're right, in that this is something
    that General Breedlove and I and General Dunford watch very
    closely, is the protection of our people. That's a paramount
    concern to us everywhere, is force protection. Everywhere
    overseas, but Europe, also. We watch that very carefully, and
    we're making--taking steps to work with our host countries to
    increase the protection. We're taking steps, ourselves, with
    our own people, procedural and technical steps. We can go into
    them with you in another setting. But, it's extremely
    important. Our people are protecting us. We owe them
    protection, as well.
        Let me ask the Chairman if he wants to add anything on
    either of those.
        General Dunford. The only thing--the exercises, Senator--I
    mean, it's not only the capabilities we bring, and, of course,
    it's posturing the forces. We pre-position forces for
    responsiveness. It's the exercises to assure our allies and
    partners on a day-to-day basis. But, a number of those
    exercises are also designed to build the capacity of our
    European partners, too, so that, collectively----
        Senator Ernst. Military to military.
        General Dunford.--the 28 nations of NATO can be prepared to
    deal with the Russian threat. I would say that, if we fully
    leveraged the political, the economic, and the military
    capabilities of the 28 nations in NATO, it wouldn't be a fair
    fight, which is exactly what we wouldn't want it to be.
        Senator Ernst. Exactly.
        Thank you, gentlemen, very much.
        Thank you, Mr. Chair.
        Senator Reed. Thank you.
        On behalf of the Chairman, let me recognize Senator
    Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Thank you all for your testimony today, and for your
    service.
        I want to follow up on Senator's questions about the
    European Reassurance Initiative, because, as I'm sure you're
    both aware, Europe is probably facing more challenges today
    than it has at any time since the end of World War II. The
    European Reassurance Initiative is very important in letting
    them know how committed we are to the peace and security of
    Europe. I was pleased to see that the President's Budget
    increased funding for the ERI. Can you talk a little bit more
    about what the risks are if we don't support additional funding
    for the Reassurance Initiative? Tell me if you share General
    Breedlove's view that--I don't think I'm misquoting him, but,
    when he was before this committee, he talked about the need to
    put more of our troops in Europe.
        Secretary Carter. Well, the effect of not funding the
    European Reassurance Initiative would be, physically, that we
    wouldn't have the funds to put equipment--position equipment
    there. That's equipment that then forces could fall into in a
    crisis to reinforce the forces that--it's always been our
    strategy in Europe, and it would be now, that the--we would
    have forces there already, but we would fall in with a much
    greater force--in fact, the full weight, the full might of the
    U.S. military behind NATO, in the event of a crisis. But, we
    need the equipment there, and we need our forces to be familiar
    with the terrain, which is why rotational training is so
    important. We need them to know how to work with their allies.
    We need--how to--them to be able to do all the logistics that
    allow a force to flow quickly. That's the kind of thing that
    General Breedlove needs to be able to exercise and prepare for.
    That's our approach, and we need the money in the ERI. That's
    physically what it does. Politically----
        Senator Shaheen. Let me----
        Secretary Carter.--it's also important, because----
        Senator Shaheen. Yes.
        Secretary Carter.--the reassurance is important. The allies
    want to know that we're there with them and that we see what
    they see in the behavior of Russia. We do. We want to match our
    behavior to theirs. Their concern is growing, as well. We're
    asking them to do more at the same time we're doing more.
        Senator Shaheen. I had a chance to visit some of the NATO
    exercises last summer in Latvia, and it was very impressive.
    You could see that--the synergy that existed because there were
    a number of countries coming together to work together and to
    work out the bugs of any future challenges we might face.
        Let me switch topics, here, to the issue of energy. I had
    the opportunity, at the readiness hearing this week, to talk to
    the--to ask all of the Vice Chiefs of each of the branches
    about the move towards more energy efficiency and alternative
    sources of energy within our military, and the perception that
    some people have that this is being done because people are
    being forced to do it, as opposed to because there's--part of
    our military imperative to improve our strategic readiness,
    that we have other energy sources that we can count on so that
    we're not so dependent on fossil fuels, as we have been in the
    past. Can I ask you all if you can speak to that, why you think
    this is an important strategic move as we look at our national
    security?
        Secretary Carter. Well, it is important to our overall
    national security. Energy security is. We play a part in that.
    But, everything we do needs to make sense for defense as well
    as play a part in the overall national energy strategy. But--
    so, things we do to increase the energy efficiency of engines,
    develop new engines, very important for our air forces, but
    also will have a consequence for the--a good consequence for
    the economy, generally. We--for--spend money in order to save
    money on facilities, making them more energy efficient. We have
    a large existing base of buildings, installations, and so
    forth. We work on making them more energy efficient. We do that
    for the very reason that it frees up more money in the future
    that we can invest in real military capability. See, everything
    we do in the energy sphere has to make sense as a military
    investment. At the same time, these things are beneficial for
    the Nation's overall energy strategy. We do try to align them
    with the Department of Energy and the overall strategy so that
    we're not doing something that somebody else is already doing,
    and that we're benefiting from what other people are doing, and
    they're benefiting from what we're doing. But, it has to make
    military sense for us.
        Senator Shaheen. General Dunford, could you speak to the
    readiness benefit of our being able to take advantage of some
    of these new technologies?
        General Dunford. Senator, I could. You know, from my
    perspective, there's a couple of things about this. One is, if
    you save money in base operating expenses, that money is
    available for something else--read readiness. Then there's also
    an operational flexibility aspect of this, as well. The less
    reliant you are on fuel, the more operationally flexible you
    are. That is not only at the level of aircraft and ships and
    some of the bigger programs that we talk about a lot, but it's
    also--if you just look at the load of an individual infantryman
    in batteries, as an example. So, some of the initiatives, we've
    had to lighten the load. If you look at the weight that our
    young men and women are carrying right now, it prohibits--it's
    prohibitive. We've spent a lot of time trying to reduce the
    load of the individual soldier, sailor, airman, and marine. One
    of the ways we've been able to do that is simply by renewable
    energy sources that reduces the weight that they carry in
    batteries, alone, which is one of the biggest things that an
    infantryman has to carry.
        So, you know, again, I think, from a readiness perspective,
    you save money with fuel, you're able to reinvest that money.
    Then, from an operational flexibility perspective, again, both
    at the platform level and the individual servicemember level,
    there's a lot of utility to that. But, as the Secretary says,
    it's got to make sense.
        Senator Shaheen. Sure.
        Thank you all.
        Thank you, Mr. Chairman.
        Senator Reed. On behalf of Chairman McCain, Senator Graham,
    please.
        Senator Graham. Thank you.
        Thank you all very much.
        The Freedom Caucus, I think, in the House----
        Do you want to go?
        The Freedom Caucus in the House, I think, has taken a
    position that the House budget should go back to sequestration
    levels for this year. General Dunford, what would your response
    to that position be?
        General Dunford. My immediate response, Senator, would be,
    we will have to revise the defense strategy if we go back to
    sequestration. We will not be able to do what we need to do
    right now. When I say to revise the strategy, it's important to
    emphasize, we'll have to revise the ends of our strategy,
    because we will not be able to protect our interests in the
    same way that's articulated right now in our national security
    strategy and our defense strategy.
        Senator Graham. What effect would that have on our national
    security?
        General Dunford. It would cause us to expose the Nation to
    risk from those five challenges that the Secretary and I have
    spoken about today.
        Senator Graham. Would you say significant risk?
        General Dunford. I would say significant risk.
        Senator Graham. It would actually put our freedom at risk.
        General Dunford. It would absolutely affect it.
        Senator Graham. Okay. I sent you a letter, and you've given
    me a very timely response, and I appreciate it, General
    Dunford, about--some have suggested that we intentionally
    target civilians in the war on terror, and that we go back to
    using waterboarding or maybe even more aggressive interrogation
    techniques. You've given me a good response, which I'll share
    with the public later. But, I forgot to ask one question. What
    effect, if any, would this have on the warfighter if we started
    telling our men and women in uniform to intentionally target
    civilian noncombatants and engage in techniques such as
    waterboarding or more extreme forms of interrogation?
        General Dunford. Well, Senator, what I've said publicly
    before is that, you know, our men and women--and we ought to be
    proud of it--when they go to war, they go to war with the
    values of our Nation. Those kind of activities that you've
    described, they're inconsistent with the values of our Nation.
    Quite frankly, I think it would have an adverse effect--as many
    adverse effects it would have, one of them would be on the
    morale of the force.
        Senator Graham. Yeah.
        General Dunford. Frankly, they would--you would--what
    you're suggesting are things that actually aren't legal for
    them to do anyway.
        Senator Graham. Well, I don't think I've ever met a tougher
    guy than you, and I think it would hurt your morale if you were
    ordered to kill innocents, noncombatants.
        So, Raqqa. Do you see Raqqa falling this year, taken away
    from ISIL?
        General Dunford. Senator, we're focused right now on
    isolating Raqqa, limiting the enemy's freedom of movement. I
    can't put a timeline on when Raqqa will fall. I can tell you
    that we're working very closely with indigenous forces on the
    ground to isolate and then subsequently----
        Senator Graham. Do you agree with me the likelihood of
    Raqqa falling between now and the election is pretty remote?
        General Dunford. Senator, again, I haven't put a timeline
    on it.
        Senator Graham. Okay. When it came to liberating Fallujah,
    how many U.S. soldiers or military personnel were involved?
        General Dunford. Senator, we had 14,000 U.S. personnel that
    were involved immediately in the operations around Fallujah,
    but obviously many more in the surrounds that had a isolation
    effect.
        Senator Graham. If they haven't been there, would the
    outcome have been different?
        General Dunford. If the----
        Senator Graham. If we were not using military--American
    military personnel to deal with Fallujah.
        General Dunford. Well, at that time, Senator, we did not
    have capable indigenous forces. There was not an alternative to
    United States Forces in Fallujah.
        Senator Graham. Compare the indigenous forces in Syria
    today with indigenous forces that existed at the battle of
    Fallujah. Are they more capable in Syria than they were in
    Iraq?
        General Dunford. Today, the Syrian--I would assess the
    Syrian Democratic Forces, based on their performance at
    Shaddadi and other recent operations, are more capable,
    relative to the threat that exists in Syria, than what we had
    in Iraq back in 2004----
        Senator Graham. Are they----
        General Dunford.--and 2005.
        Senator Graham.--more capable of taking Raqqa than the
    Iraqis were at taking Fallujah?
        General Dunford. In 2004 and 2005, I would assess yes.
        Senator Graham. Okay. How many Arabs are in the Syrian
    Democratic Forces?
        General Dunford. Right now, we have about 10 to 15,000
    Syrian Democratic Forces, of which 5,000 are Arabs, and there's
    an estimated 20 to 30,000 additional reserve Syrian Democratic
    Forces.
        Senator Graham. Is it your testimony that the people we're
    training inside of Syria are capable of taking Raqqa back from
    ISIL and holding it?
        General Dunford. At this time, Senator, no, but that we
    intend on growing their capabilities over time. I would qualify
    that by saying that they're also going to require some support
    from the coalition.
        Senator Graham. Okay.
        Iran. Post-agreement, is Iran becoming a better actor in
    the region, or their behavior gotten worse, post-nuclear
    agreement?
        General Dunford. Senator, Iran was a malign influence in
    the region prior to the agreement. Iran remains a malign
    influence today.
        Senator Graham. Do you think Mosul will be in the hands of
    ISIL by the end of this year?
        General Dunford. Senator, I don't--similar to Raqqa, I
    wouldn't put a timeline on when we would secure Mosul. But,
    again, I would emphasize that operations against Mosul are
    ongoing----
        Senator Graham. Is taking going to be more difficult than
    what we had to do in Fallujah in 2004 and '05?
        General Dunford. Significantly more difficult, based on the
    population and the size of the enemy.
        Senator Graham. So, if you take Mosul without 14,000
    American military members, does that make it even more
    significantly different?
        General Dunford. Senator, it really is a correlation-of-
    forces issue. Right now, we've identified over 12 brigades of
    Iraqi Security Forces, additional Peshmerga forces, and we're
    in the process of generating effective Sunni forces. So, the
    idea is that we'll isolate Mosul until the conditions are set
    for those forces to be successful in securing Mosul.
        Senator Graham. Finally, between 2016 and 2021, the next 5-
    year window, we've talked about what's happened since 2011 to
    now. Generally speaking, do our national security threats--do
    they maintain at this level, go up, or go down? What can
    America expect in the next 5 years, in terms of threats? What
    kind of budget should we have?
        General Dunford. I think--I would assess, based on the
    trajectory we see today, I don't see our security challenges
    decreasing over the next 5 years, Senator, for sure.
        Senator Graham. Agree with that, Mr. Secretary?
        Secretary Carter. I do.
        Senator Graham. Thank you.
        Senator Reed. On behalf of Chairman McCain, Senator Nelson.
        Senator Nelson. Mr. Secretary, would you give us your
    advice for that period of time, 2018 to 2022, of being able to
    put our payloads into space? I'm mainly talking about DOD and
    intel payloads, in addition to NASA [National Aeronautics Space
    Administration] payloads and commercial payloads. Would you
    give us your advice on the question of whether or not we should
    continue to be able to have access to the RD-180 engine, which
    is the engine in the first stage of the Atlas V rocket?
        Secretary Carter. I----
        Senator Nelson. Until we develop the new one.
        Secretary Carter. I can, Senator. It is reflected in our
    budget. I know that there are different points of view on how
    to approach this problem. I think everybody agrees we have to
    have assured access to space, so we have to have a way to
    launch our national security payloads into space. Our country's
    security depends on that.
        One way to do that, which is reflected in our budget, is to
    continue to use the Atlas booster, including a limited but
    continuing number of RD-180 engines, not withstanding the fact
    that we don't like the fact that they're made in Russia and we
    buy them from Russia. That's the approach we recommend, because
    it is less expensive.
        The alternative, which I understand, but we don't recommend
    in this budget because it costs more, would be, essentially, to
    use the Delta as a replacement, which is more expensive than is
    required. If we're forced to do that, it ends up giving us a
    bill of a billion dollars, maybe more, which is not a bill we
    would like to pay. So, it's that simple. We'll get to space. We
    have to, because our security depends upon it. We are
    recommending to you a less expensive way but which does,
    however, cause us to have to hold our nose insofar as the
    procurement of the RD-180 engine is concerned. I recognize that
    there's a difference of opinion there, but that's my advice.
        Senator Nelson. Can--in your opinion and what you've been
    advised, can they ramp up the production of enough of the Delta
    IVs to get all of your payloads into space, even though it's
    going to cost more?
        Secretary Carter. My understanding is that, yes, that
    alternative is available--technically available. Obviously,
    it's much more expensive, which is the reason for the--not
    recommending it.
        Senator Nelson. It's more expensive also because the RD-180
    has to be used on the Atlas V for a number of the NASA
    payloads, including the Americans on the new Boeing Starliner,
    which is the spacecraft that will take us to and from the
    International Space Station, along with what we expect the
    Falcon 9 and its spacecraft, Dragon, but also all of the
    commercial payloads. So, if you shut down part of that
    production until we get the new replacement engine and new
    replacement rocket--because you just can't take a new engine
    and plug it into the Atlas V--it's going to cost everybody
    more, including the commercial sector.
        Secretary Carter. I can't speak for NASA or for them, but
    you're right, the Delta route is more expensive than the Atlas
    route. It is available. The--and we've made our recommendation.
    Where we'd like to go in the future, and where we're headed in
    the future, is a competitive provision of launchers--that's
    really important, for both cost and quality reasons--and to
    have two or more competitors from whom we buy launch services.
    I don't buy their--the pieces of the rocket, or develop them.
    They do that, and they provide us launch services. That's an
    efficient and competitive way. That's the route we're going to.
    But, I realize that there is a difference of opinion about how
    we get to that destination. We've made our recommendation in
    our budget submission.
        Senator Nelson. Fortunately, that competition has started,
    because the Falcon 9, SpaceX, has been a very viable
    competitor. In fact, that competition has brought the cost of
    the Atlas V down. There's a good example of competition that,
    in fact, is working.
        Let me just conclude by--any comment on our aging nuclear
    triad and the need for the long-range strike capability.
        Secretary Carter. Yes, just to reinforce that the nuclear
    deterrent of this country is--it's not in the headlines every
    day, thank goodness, but it's not in the headlines because it's
    there, it's the bedrock of our--it's a bedrock capability for
    our--of our security. We need it for the indefinite future. We
    intend to have it for the indefinite future. We're going to
    need to spend the money required to have that.
        Of particular concern, I would single out the Ohio-class
    replacement submarine, just to take one example, but a big
    example, because the Trident submarines are going to age out.
    They're effective but old submarines. They'll be replaced by
    the Ohio-class replacement. That's a key survivable part of our
    nuclear deterrent. We have to have it.
        You mentioned the bombers. That's one of the reasons why
    we're seeking to start, and have started, the long-range
    striker bomber, or B-21 bomber, program. Making sure that we
    have a safe, secure, and reliable nuclear deterrent for the
    future is a bedrock responsibility of the Department. We'll
    need the funding to do that. We have plans to do that.
        Senator Reed. On behalf of the Chairman, Senator Sullivan,
    please.
        Senator Sullivan. Thank you, Mr. Chairman.
        Thank you, gentlemen, for your service and your testimony
    here today.
        I particularly appreciate both of you outlining the five
    strategic threats. I think that's very clear. I think the
    American people need to hear that. I think Senator Graham's
    comments about--or his question about how you think those are
    going to continue is also very important testimony.
        You know, those threats in the--and how to counter them,
    include the aggression of Russia, which, as you know, Mr.
    Secretary, General Dunford, is not only Europe, but in the
    Arctic; the ability to ``fight tonight'' with regard to North
    Korea, as you mentioned; the ability to continually rebalance
    our Asia-Pacific force posture in light of our challenges there
    with China. In light of those serious threats, you may have
    seen that General Milley recently decided to reverse the Army's
    earlier decision, made last year, to disband the 425, which, as
    you know, Mr. Secretary, is the only airborne BCT [brigade
    combat team] in the Asia-Pacific, the strategic reserve that's
    very--that would be very involved in any kind of conflict in
    Korea, the only Arctic BCT that's trained to fight in mountains
    and extreme cold weather. I've raised this issue a number of
    times in the committee over the last year. Recently, several
    combatant commanders mentioned that they were supportive
    specifically of what General Milley is trying to do, just given
    how critical these forces are.
        So, Mr. Secretary, do you support the Army's recommendation
    to more effectively posture its forces to best meet the
    national security threats that you outlined in your testimony,
    particularly as it relates to the 425 and what General Milley
    mentioned, I think, a couple of weeks ago?
        Secretary Carter. Well, Senator, for--thank you very much
    for your interest in this. I--and I had the opportunity, which
    I appreciate, the other day to discuss this with you.
        Senator Sullivan. Yes, sir.
        Secretary Carter. Thank you for your leadership with
    respect to the overall rebalance and also for your State's
    hosting of forces that are so critical to so many scenarios of
    possible risk to the United States, as you already said.
        With respect to 425, I looked into that after our
    conversation. I've spoken to General Milley. If he makes that
    recommendation to me, I want you to know I'm going to approve
    that.
        Senator Sullivan. Thank you.
        Secretary Carter. I think that that is an important part of
    our force posture in the Pacific. I appreciate your calling my
    attention to it.
        Senator Sullivan. Thank you. I appreciate that, as well.
        Let me get back to the rebalance issue that you mentioned.
    You know, a lot of us met with you last year in Shangri-la. I
    think was a--as we--you and I have talked about, at the Defense
    Ministers meeting out there, an important demonstration of U.S.
    legislative, executive bipartisan support for that important
    strategy. I think a number of us are planning on going again,
    so I think doing that again would be important to show a strong
    across-the-board American resolve.
        Secretary Carter. Thank you.
        Senator Sullivan. With regard to the implementation of the
    strategy that you laid out in your speech last year, which I
    thought was a very strong speech, you know, we've been asking--
    a number of us have written the President, have been
    encouraging--make sure we do--we implement this policy on a
    routine basis--now I'm talking about the South China Sea and
    our FONOPS [freedom of navigation operations] there--not only
    on a routine basis with--but also with allies. But, I'd like
    you to comment on--and both you and General Dunford--on the
    opportunities that what's going on out there presents to the
    United States, from a strategic perspective. More specifically,
    as you know, Mr. Secretary--and you see it every time you go
    out to the region--many, many countries, because of what China
    is actually doing in the South China Sea--many countries are
    very much being more interested in working with us and drawing
    closer to the United States. Are there strategic opportunities
    that we should be looking at, in terms of possible new basing,
    new training opportunities with the Marines in the Asia-
    Pacific, clarifying strategic relationships--I think there's a
    number of questions of what our strategic obligations are with
    regard to, say, a country like the Philippines, looking at the
    next challenges--I know that there's some concern on this
    committee about the Scarborough Shoal--but, what are the
    opportunities that we have? Because they seem to me--yeah, we
    have challenges there, but there's also, I think, enormous
    strategic opportunities. Could you and General Dunford talk to
    those? Particularly, you know, the idea of new basing
    arrangements, the idea of new training arrangements. I think
    that there's a lot we could be doing, and I'd like to hear both
    of your views on that.
        Secretary Carter. Well, you're absolutely right. I'll
    start, and then I'll ask the Chairman to chime in, as well.
        There are opportunities. They are presenting themselves
    because countries in the region recognize that their region has
    had peace and stability for 70 years, and that is what has
    given them all the opportunity to rise. All the Asian miracles,
    beginning with Japan, South Korea, Taiwan, Southeast Asia,
    today India and, yes, China--all of that has occurred in an
    atmosphere of peace and stability, which they know we have
    played a pivotal part in. There is a greater demand for
    partnership with us. Whether you talk about basing--we are
    discussing with Philippines right now. You may know that their
    court passed an important milestone recently, which allows--
    will allow us to do much more with the Philippines. We're doing
    more--and General Dunford had a key role in this--with
    Australia, particularly our marine rotations in Australia.
    Vietnam--who'd have thought, decades ago, Vietnam--we're doing
    more with Vietnam. We thank you, because the--we have the
    Maritime Security Initiative funding, which originated in
    discussions with you, Senator, and other members of the
    committee. We're grateful for that. We're using that funding.
    So--and the Japanese, as you probably know, are--have adjusted
    and amended their practices. They're looking to do more with
    us--joint patrolling, exercising, and so forth. India--I'll be
    in India in a short while, continuing to strengthen our
    relationship with that--an incredibly important country of a
    billion people and essential geography and a very capable
    military that wants to partner with us, as well.
        So, we do all this in order to keep going the system that
    has brought prosperity to Asia. We're not seeking to have
    conflict with China. It's not against anybody. It's part of
    keeping that system of security intact. We intend to do it.
    That's what the rebalance is about. But, the good news, as you
    say, is that it--we're popular there. People----
        Senator Sullivan. Yeah
        Secretary Carter.--want to work with us.
        Let me turn it over to the Chairman.
        General Dunford. Senator, I guess I'd emphasize what you
    and the Secretary have alluded to. I've made two trips to the
    region since I've been in my current assignment. I would tell
    you that the desire for people to develop stronger bilateral
    relationships with the United States has probably never been
    greater. Frankly, with our partners, particularly those with
    whom we have a treaty obligation, our relationship has probably
    haven't--never been deeper.
        But, when you talk about opportunities, the one thing that
    we haven't necessarily had in the past, a--multilateral
    relationships and interoperability associated with conducting
    everything from humanitarian assistance operations to other
    operations that may be required in the region, or that
    multilateralism, in and of itself, serving as a deterrent to
    those who might want to be destabilizing in the region. So,
    there is an opportunity. From those relationships then comes
    the one issue we haven't talked about in great detail, is
    opportunities for training. Because----
        Senator Sullivan. Right.
        General Dunford.--in the Pacific, you know, joint training
    is required to maintain readiness. We're always looking for
    opportunities to identify training areas where we can maintain
    readiness even as we conduct the exercises and engagements with
    our partners. I think the willingness of our partners to afford
    us the opportunity to train in their countries, continue to
    maintain proficiency with live fire, aviation capabilities,
    those kinds of things, I think will only increase in the
    future. There's a number of places where we're in contact--
    Secretary's staff is in contact with a number of countries to
    enhance our training opportunities and, as the Secretary spoke
    about, our actual basing opportunities in the region.
        So, I would agree with you. I think a view of the common
    challenges in the Pacific has brought us together in a very
    positive way and has created all the opportunities you've
    alluded to.
        Senator Sullivan. Great. Thank you.
        Thank you, Mr. Chairman.
        Senator Reed. Thank you very much.
        On behalf of Chairman McCain, Senator Lee, please.
        Senator Lee. Thank you, Mr. Chairman.
        Thanks, to all of you, for being here.
        Secretary Carter, on December 3rd, just a few months ago,
    you announced that the military branches would be opening all
    military occupational specialties, or MOSs, to servicemembers,
    regardless of gender, on the basis of various provisions in
    several iterations of the National Defense Authorization Act,
    on the basis of committee hearings and formal briefings with
    members and staff. At the time of your decision, you were
    certainly aware of Congress's interest in being closely
    consulted on the matter. Nevertheless, in your announcement and
    in subsequent briefings with Members of Congress, you failed to
    discuss the legal and practical implications this decision
    could have on the Selective Service in America. Would--so, my
    concern is that it seems the Department may have made a policy
    decision and left up to Congress and the courts to deal with
    the difficult legal ramifications.
        So, I'd like to know, what assessments, Mr. Secretary, has
    the Department of Defense made to examine how opening all MOSs
    to female servicemembers will affect the Selective Service Act.
    What assessments have you made to examine how requiring
    American women to register for the draft or, alternatively,
    ending the Selective Service altogether, would affect military
    readiness, recruitment, retention, and morale?
        Secretary Carter. Well, thank you, Senator. Thank you for
    that question.
        Let me just begin at the beginning. Why did we do this in
    the first place? The reason to open up all MOSs to females is
    to make sure that we're able to access what is, after all, 50
    percent of the population----
        Senator Lee. Right. Understand, I'm----
        Secretary Carter.--for force effectiveness----
        Senator Lee.--I'm not expressing concern about that----
        Secretary Carter. Understand.
        Senator Lee.--on the merits of that when I'm talking about
    its implications for the Selective Service.
        Secretary Carter. I do understand. So, that is the action
    we took. As far as informing the Congress is concerned, we have
    the implementation plans for that, including everything that is
    required by law in order for us to do what we need to do.
        Separately is the Selective Service system, which is not
    administered by us and is governed by statute. So, you will
    have a voice in any implications for that. My own belief about
    that is twofold. First, it stands to reason that you'll
    reconsider the Selective Service system and its treatment of
    females, in view of the Department of Defense's policies and
    practices with respect to women as well as men.
        But, the second thing I'd like to say about--and--about the
    Selective Service system and the draft, generally, is this. We
    want to pick our people. We don't want people forced to serve
    us, and we don't want all the people that are--young people
    that are in our country. We pick very carefully. In fact, only
    about--a little bit more than two-thirds of young Americans
    even meet our basic qualifications. Many of them are, I'm sad
    to say, obese or have other health issues. A third of them
    haven't graduated from high school, and we want high school
    graduates. About 10 percent of them have criminal records that
    make it impossible for us to want them. So, we don't want a
    draft. We don't want people chosen for us. We want to pick
    people. That's what the All-Volunteer Force is about. That's
    why the All-Volunteer Force is so excellent. That's why we're
    constantly trying to make sure we keep up with labor markets
    and generational trends and so forth, so that we continue to
    pick and have access to the very best people.
        Look at the magnificent people we have now in uniform. I
    need to make sure that tomorrow and 10 years from now and 20
    years from now, we're also able to attract the very best. But,
    now, and then, we want to pick. We don't have--want to have
    people picked for us; we want to pick, ourselves.
        Senator Lee. Right. Thank you. I appreciate that. I
    appreciate the sentiment that I think I understand you
    expressing, which is that any change to the universe of persons
    subject to the Selective Service registration requirement needs
    to be made by Congress, with input from the American people,
    rather than administratively or by the courts.
        Secretary Carter. It's set in law.
        Senator Lee. In the--in a long-ranging interview published
    with The Atlantic, President Obama has expressed his disdain
    for security freeriders when it comes to allies in Europe and
    parts of the Middle East. However, your fiscal year 2017 budget
    calls for a quadrupling of the European Reassurance Initiative,
    and robust OCO funding for activities in the Middle East. So,
    how do you, and how does the administration, how does President
    Obama, reconcile the concerns that President Obama has
    expressed about some of our allies who are not taking steps to
    increase their defense spending or who are potentially abusing
    their relationship with us, their alliance with us, for their
    own benefit without making corresponding increases to their
    investment in defense spending?
        Secretary Carter. Well, I'll just say, as Secretary of
    Defense, I think America needs to lead. I'm happy to have us
    lead. We have, by far and away, more capability than anybody
    else. But, we need others to join us and get in the game. You
    mentioned Europe. We have been urging, very insistently,
    Europeans to spend more on their own defense. Some are doing
    what they're supposed to do. I'd, for example, commend the
    United Kingdom, which has recently increased its percentage of
    GDP [gross domestic product] and has agreed to stay at what all
    the NATO countries agreed, which is a minimum of 2 percent.
    They're not all there yet. Then, as you go around the world
    with respect to others, allies in the Gulf and so forth, we are
    looking for people to join us. There, the counter-ISIL
    coalition, the effort to deter Iranian aggression, that's
    something we need our security partners to do with us. So,
    we're prepared to lead. We're willing to lead. But, I think
    it's fair to turn to our partners and say, ``We need you to
    join us.''
        Now, my role in that is very specifically--and the
    Chairman's, as well--to describe for our--let's take the
    counter-ISIL coalition--what it is we need. So, ``Here's what
    we need. We need some more ISR [intelligence, surveillance, and
    reconnaissance] help from you. We need some Special Forces from
    you. We need''--and this is important--``reconstruction funding
    for places like Ramadi. So, if you don't have any forces, or
    you don't want to put your forces there, you can open your
    wallet. That's needed.'' We try to give them choices for how
    they can make a contribution, and lead them in that direction.
    But, we need people to follow.
        I--it's an important part of my job--and I know the
    Chairman does this well--to talk to our counterparts and say,
    ``We need everybody in the game if we're going to have a
    peaceful world. We share this world together. We share this
    future together. You've got to get in the game.''
        Let me ask the Chairman if he wants to----
        General Dunford. No, I'd just emphasize what the Secretary
    said. I think a key part of our responsibility is on a day-to-
    day basis. I recently went to the region and met with 30 of the
    chiefs of defense from our coalition partners to encourage
    their participation. But, one of the things we do very hard is
    work on where they can make a contribution, and then encourage
    them to actually do that. I mean, I'd--that's an ongoing
    process. We're--are we satisfied with where we are? Never.
        Senator Lee. Thank you, General Dunford. Thank you,
    Secretary Carter.
        Senator Reed. Thank you.
        Gentlemen, thank you for your testimony. Thank you for your
    service.
        On behalf of Chairman McCain, let me declare the hearing
    adjourned.
        [Whereupon, at 12:20 p.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator John McCain
        1. Senator McCain. Secretary Carter, you state that the funding
    shortfall from the fiscal year 2017 budget request and the fiscal year
    2017 topline submitted in the fiscal year 2016 Future Years Defense
    Program, a difference amounting to approximately $17 billion for
    national defense, was mitigated by favorable economic assumptions, such
    as the price of fuel. Where these favorable economic assumptions also
    applied to the fiscal year 2017 Future Years Defense Program, thus
    fiscal year 2018 through fiscal year 2021?
        Secretary Carter. Yes, we used the rate of change for inflation and
    fuel published by the Administration for the fiscal year 2017 through
    fiscal year 2021 program.

        2. Senator McCain. Secretary Carter, if favorable economic
    assumptions, relative to last year's budget request, was used for the
    fiscal year 2017 budget and Future Years Defense Program (FYDP), than
    the fiscal year 2017 FYDP figures should be lower than the fiscal year
    2016 FYDP budget levels. However, per page 5 of Chapter 1 of the fiscal
    year 2017 Defense Budget Overview, with the exception to fiscal year
    2021, the FYDP figures are practically identical. What specific items
    were you able to fund in the fiscal year 2017 FYDP that were not
    included in last year's FYDP? Why were these items not included in last
    year's FYDP? How do these items impact the Department's ability to
    execute the defense strategy, relative to last year's budget request?
        Secretary Carter. The Future Years Defense Program (FYDP) economic
    assumptions savings have contributed to the Department's ability to
    provide funding for several emergent programs:

          The fiscal year 2017 budget invests $18 billion over the
    FYDP to help spur research, develop, test, evaluate, and procure 3rd
    Offset Strategy capabilities our military will need to deter and if
    necessary fight and win high-end conflicts in the future. The 3rd
    Offset Strategy is based on the premise that advances in artificial
    intelligence and autonomy will allow the Joint Force to develop and
    operate advanced joint, collaborative human-machine battle networks
    that synchronize simultaneous operations in space, air, sea, undersea,
    ground, and cyber domains.
          To ensure enough fighter squadrons are ready to deploy to
    meet high overseas demand, the Air Force will transition the A-10 fleet
    two years later than previously planned, enabling a larger near-term
    force and investment in legacy capabilities.
          The fiscal year 2017 budget supports the Army's Aviation
    Restructure Initiative by providing $1.1 billion for 52 Apache
    helicopters, and $1.0 billion for 36 Black Hawk helicopters in fiscal
    year 2017.
          For the nuclear enterprise, while many systems remain
    effective, we are entering a period when multiple weapon systems
    require significant modernization. This drives an increase in the
    funding required over the FYDP and beyond.
          The Ohio Replacement Program is allocated $13.2 billion
    for development and initial construction over the FYDP.
          The budget allocates $108 million over the FYDP to
    implement the Joint Interagency Combined Space Operations Center, which
    will better align joint operations in space across the U.S. Government.
          The Department has assumed responsibility for
    development, design, security and operation of the background
    investigations information technology systems for the National
    Background Investigations Bureau. This will ensure cybersecurity is
    embedded throughout the process, thereby strengthening protection of
    federal employees' and contractors' personal information.
          The Department also utilized the economic assumption
    savings to restore previously planned savings for proposed force
    structure changes, health care reform, and other efficiency initiatives
    that Congress has denied.

        The fiscal year 2017 funding is constrained by the Bipartisan
    Budget Act of 2015, but this budget reshapes the Department in order to
    address current and future operational challenges. The Department's
    fiscal year 2017 budget and FYDP retains major elements of planned
    force structure; invests in the future; emphasizes lethality and
    capability over size; pursues innovative ``offset'' capabilities and
    processes; and enables the Joint Force to operate across all domains
    including cyber. However, increased and predictable funding is needed
    over the FYDP to sustain this investment in the future and maintain
    U.S. superiority.

        3. Senator McCain. Secretary Carter, in your statement you state
    ``last fall's budget deal set the size of our budget, and with this
    degree of certainty we focused on changing its shape in fundamental
    ways--making choices and tradeoffs to adjust to a new strategic era,
    and seize opportunities for the future.'' However, this year's budget
    request seems to promote a very similar force structure and program
    requirements as previous budgets. In fact, this year's budget still
    seeks to meet the requirements and strategy as laid out in the Defense
    Strategic Guidance and the 2014 Quadrennial Defense Review. The target
    endstrength of the Total Army and Marine Corps has not changed. The
    total ship requirement has also not changed. The size and shape of the
    major Air Force procurement programs have also not changed. Thus, in
    what ways did the Department change the shape of the budget from
    previous years?
        Secretary Carter. The fiscal year (FY) 2017 budget request strikes
    a prudent balance among the modernization of the Joint Force, its size,
    and its readiness, and continues to keep faith with servicemembers and
    their families. The President's Budget (PB) 2017 reflects a defense
    program that effectively balances the need to meet today's persistent
    operational demand and to build our readiness and capabilities for
    full-spectrum warfare. The PB 2017 funding levels will allow the joint
    force to respond to steady state demand requirements, fulfill strategic
    obligations, and support the Services' readiness recovery plans. To
    continue to provide a strong package of pay and benefits for both
    military and civilians and ensure the Department remains competitive
    for the best talent, the budget proposes a 1.6 percent basic pay
    increase for 2017.
        Today's security environment is dramatically different from the one
    the Department has been engaged with for the last 25 years, and it
    requires new ways of thinking and new ways of acting. The following
    major changes to the PB 2017 reflect today's security environment:

          The PB 2017 funds intelligence, surveillance and
    reconnaissance (ISR) support for counterterrorism (CT) that will build
    to 90 total combat air patrols for combatant commands.
          The budget quadruples last year's request for the
    European Reassurance Initiative (ERI) to $3.4 billion in fiscal year
    2017 to reassure our NATO allies and deter Russian aggression. This
    funding supports prepositioning additional combat equipment, conducting
    additional training exercises, and enabling a continuous brigade-size
    rotation which will ensure we have three Army brigade combat teams in
    Europe at all times.
          In response to increased threats, the Department is
    strengthening cyber defenses and increasing options available in case
    of a cyber-attack. The PB funds $6.7 billion in fiscal year 2017 for
    defensive and offensive cyberspace operations, capabilities, and cyber
    strategy.
          The Department is focusing efforts to reduce management
    headquarters from the fiscal year 2014 level by 25 percent by fiscal
    year 2020.
          The Department is modernizing the TRICARE health plan to
    balance the needs of beneficiaries with requirements to maintain
    military medical readiness by incentivizing care at the military
    treatment facilities through lower fees and copays, as well as
    improving access to military care (e.g., timely medical appointments).
          The Department is assuming responsibility ?for
    development, design, security and operation of the background
    investigations information technology systems for the National
    Background Investigations Bureau. This will ensure cybersecurity is
    embedded throughout the process, thereby strengthening protection of
    federal employees' and contractors' personal information.
          The PB 2017 will help provide our Army, Marine Corps, and
    special operations forces with greater lethality to ensure ground
    forces can deter and, if necessary, fight and win a full-spectrum
    conflict.
          The fiscal year 2017 budget builds upon investments in
    last year's budget to help secure U.S. access to space and address
    space as an operational domain.
          The fiscal year 2017 budget invests $18 billion over the
    FYDP to help spur research, develop, test, evaluate, and procure 3rd
    Offset Strategy capabilities our military will need to deter and if
    necessary fight and win high-end conflicts in the future. The 3rd
    Offset Strategy is based on the premise that advances in artificial
    intelligence and autonomy will allow the Joint Force to develop and
    operate advanced joint, collaborative human-machine battle networks
    that synchronize simultaneous operations in space, air, sea, undersea,
    ground, and cyber domains.
          To ensure enough fighter squadrons are ready to deploy to
    meet high overseas demand, the Air Force will transition the A-10 fleet
    two years later than previously planned, enabling a larger near-term
    force and investment in legacy capabilities.
          For the nuclear enterprise, while many of our systems
    remain effective, we are entering a period when multiple weapon systems
    require significant modernization. This drives an increase in the
    funding required over the FYDP and beyond.

        The fiscal year 2017 funding is constrained by the Bipartisan
    Budget Act of 2015, but this budget reshapes the Department in order to
    address current and future operational challenges. The Department's
    fiscal year 2017 budget retains major elements of our planned force
    structure; invests in the future; emphasizes lethality and capability
    over size; pursues innovative ``offset'' capabilities and processes;
    and enables the Joint Force to operate across all domains including
    cyber. However, increased and predictable funding is needed over the
    FYDP to sustain this investment in the future and maintain U.S.
    superiority.
                                   __________
                  Questions Submitted by Senator James Inhofe
                              threats vs resources
        4. Senator Inhofe. Secretary Carter and General Dunford, how would
    you assess the future operations tempo of each of our services based on
    the assessment that former SecDef Gates made about aggressors,
    terrorists, revanchists, and expansionists half a world away are always
    interested in us?
        Secretary Carter. For the foreseeable future, the United States
    will continue to face the priority challenges from China, Russia, Iran,
    North Korea, and an enduring counter-terrorism campaign. Operations
    tempo to address these challenges will likely remain high, whether
    through continued operations such as the counter-Islamic State in Iraq
    and the Levant (ISIL) effort, or due to rotations and deployments to
    reassure allies and partners in key regions.
        The fiscal year (FY) 2017 budget reflects the strategic shift in
    resourcing the Department is undertaking--in the direction of, and in
    preparation for, the threats we see on the horizon from a reemergence
    of great power competition. In particular, in this budget the
    Department emphasizes investments to respond to the concerning coercive
    actions and military modernization agendas of China and Russia.
        The fiscal year 2017 budget submission focuses on a balanced set of
    investments in capabilities, capacity, readiness, and overall surge
    ability of the force to deter and, if necessary, prevail in future
    conflicts. The Department believes that in order to deter such
    conflict, U.S. Forces must have, and be seen to have, the ability to
    dominate and prevail against potential adversaries. The Department's
    modernization priorities for conventional forces, as well as for
    upgrading the U.S. nuclear deterrent, are the foundation for this
    deterrent ability.
        The Department also will not neglect the forces and skills required
    to continue our counter-terrorism efforts worldwide. The emergence of
    ISIL, recent terror attacks, and our continuing efforts in Afghanistan
    and Iraq are strong reminders that the United States and our global
    partners will need to continue to wage an enduring counter-terrorism
    campaign for the foreseeable future.
        General Dunford. The United States is now confronted with
    simultaneous challenges. The Department has identified five strategic
    challenges--Russia, China, North Korea, Iran, and Violent Extremist
    Organizations--all of whom that present transregional, multi-domain,
    and multi-functional threats. To meet these challenges the Joint Force
    will sustain a high level of operations tempo well into the future--
    particularly regarding our high demand, low density capabilities (e.g.
    ISR, Integrated Air and Missile Defense). Sustaining this operational
    tempo over time will degrade our full spectrum readiness and undermine
    our long-term force modernization efforts.

        5. Senator Inhofe. General Dunford, would you agree with the
    statement regarding our current state of operations `we have more
    mission than money, manpower and time'?
        General Dunford. The Joint Force is facing simultaneous challenges
    from Russia, China, Iran, North Korea, and violent extremism. Meeting
    these challenges is straining the force, especially low density, high
    value assets, and degrading both our readiness and capacity for
    unexpected contingencies. Although the fiscal year 2017 budget is
    sufficient to meet the strategy, I am concerned that current resource
    levels for the Department, even absent sequestration, are insufficient
    to meet the impending bow-wave of deferred modernization starting in
    2019.

        6. Senator Inhofe. General Dunford, would you agree that budget
    constraints have forced each service to prioritize near-term readiness
    at expense of capacity, capability, modernization, and infrastructure?
        General Dunford. To the extent possible within the resources
    provided by the 2015
    Bipartisan Budget Act, we have balanced three major areas: investment
    in high-end capabilities, the capability and capacity to meet current
    operational demands, and the need to rebuild readiness after an
    extended period of war. Although the fiscal year 2017 budget is
    sufficient to meet the strategy, I am concerned that current resource
    levels for the Department, even absent sequestration, are insufficient
    to meet the impending bow-wave of deferred modernization starting in
    2019.

        7. Senator Inhofe. General Dunford, is the current defense budget
    sufficient to simultaneously rebuild the readiness of each of the
    services and modernize the force for the future while continuing
    current operations around the globe?
        General Dunford. Our budget invests in the capabilities needed to
    maintain an advantage over adversaries and to transition the Joint
    Force to full-spectrum readiness. However, this process remains slow
    and fragile due to current operational demands. We are closely managing
    how the force is employed to meet current demands. The fiscal year 2017
    budget balances investment in high-end capabilities, the capability and
    capacity to meet current operational demands, and the need to rebuild
    readiness and is sufficient to meet the strategy. However, I am
    concerned that current resource levels for the Department, even absent
    sequestration, are insufficient to meet the impending bow-wave of
    deferred modernization starting in 2019.
                         force structure and readiness
        8. Senator Inhofe. All, what is our capacity today to provide
    additional ``surge'' forces to respond to a major contingency?
        Secretary Carter and Secretary McCord. Recognizing the limits of
    the current resource-constrained environment, the Department maintains
    the capacity to surge forces by managing four levers: planning, force
    management, readiness, and global posture.
        In the planning realm, the Department reviews the combatant
    command's campaign plans to achieve prioritized near-term objectives
    while balancing risks globally with service readiness recovery. These
    steady-state plans create the conditions that protect our interests,
    deter our adversaries, and enhance partner capacity. The Department
    also reviews and maintains resource-informed contingency plans that
    enable the combatant commands to respond to a wide-array of
    contingencies. These plans leverage postured forces and force
    employment options that provide the President and Secretary with a
    range of response options that secure U.S. interests and achieve
    strategic end-states.
        Through force management, the Department adjudicates and
    prioritizes global resource demands and distributes forces accordingly.
    To meet these demands, the Services have developed and are constantly
    assessing their force-generation models and sustainment processes.
        Finally, the Department's broader push for posture over presence
    preserves the means through which commands and services can surge into
    a given theater while managing risk globally and preserving non-
    deployed readiness.
        Together, these four complementary lines of effort are rebalancing
    the Department's ability to surge to a contingency, manage readiness,
    and maintain the imperative to remain globally engaged.
        General Dunford. We have the total capacity to execute the strategy
    outlined in the 2014 QDR. However, our sustained high operational tempo
    is eroding readiness and extending the timeline by which forces can be
    made available to address unexpected contingencies or fulfill combatant
    commanders' requests.

        9. Senator Inhofe. All, given the current and projected threat
    environment and the increased demands being placed on our force
    structure, do you believe each of our services sized to meet increased
    operational requirements? If not, what is the right force structure
    size for each of your services?
        Secretary Carter. and Secretary McCord. Yes, the flexibility
    provided by last fall's budget deal allowed us to maintain the
    Department's desired targets across the Future Years Defense Program
    (FYDP) for end-strength and active-reserve mix for our ground forces.
    Without the budget deal, sequestration likely would have forced further
    reductions. Our current force structure allows us to execute our
    defense strategy with manageable risk, even as it does require us to
    accept elevated risk in some areas.
        The current force is sized to today's threat environment. The
    Department plans to stabilize the total ground force end-strength by
    the end of fiscal year 2018 with an Army of 450,000 active-duty
    soldiers, 335,000 soldiers in the Army National Guard, and 195,000
    soldiers in the Army Reserve--comprising 56 total Army brigade combat
    teams and associated enablers--and a Marine Corps of 182,000 active-
    duty Marines and 38,500 Marine reservists. The fiscal year 2017 budget
    request will grow the size, and importantly the capability, of the
    Navy's battle fleet--providing for 380,900 active-duty and reserve
    sailors in fiscal year 2017, and an increase from 280 ships at the end
    of fiscal year 2016 to 308 ships at the end of the FYDP. The budget
    also supports an Air Force of 491,700 active-duty, reserve, and
    National Guard airmen--maintaining 55 tactical fighter squadrons over
    the next five years, and providing sufficient manpower to address high
    operating tempo and shortfalls in maintenance specialists for both
    tactical fighters and remotely-piloted aircraft.
        Future Joint Force requirements derive from the Department's five
    ongoing strategic challenges: Russia, China, North Korea, Iran, and
    terrorism. These challenges are the pacing threats that will inform,
    over the FYDP and beyond, the Department's force-sizing planning and
    programming processes.
        General Dunford. The Services are currently able to provide forces
    to support the strategy outlined in the 2014 QDR. However, resource
    constraints and increased day-to-day requirements are eroding readiness
    and extending the timeline by which forces can be made available to
    fulfill combatant commanders' requests and respond to emerging
    requirements. We will continue to closely monitor the security
    environment to ensure force retains the capacity, capability, and
    readiness to defend the nation against future challenges.

        10. Senator Inhofe. All, what is the impact of delaying
    modernization on our ability to conduct full spectrum operations?
        Secretary Carter. and Secretary McCord. The fiscal year 2017 budget
    reflects the strategic shift in resourcing the Department is
    undertaking--in the direction of, and in preparation for, the threats
    we see on the horizon from a reemergence of great power competition. In
    particular, in this budget the Department emphasizes the concerning
    coercive actions and military modernization agendas of China and
    Russia, who continue to advance military systems that seek to undermine
    the advantages that U.S. Forces have enjoyed for decades in gaining
    access to key regions. They are developing and fielding a range of
    anti-access/area denial capabilities, including long-range air-, sea-,
    and land-based missiles, advanced submarines, torpedoes, mines, and
    cyber and space capabilities.
        Major delays in the Department's efforts to modernize U.S. Forces
    for full-spectrum operations--including to contend with these more
    high-end threats in contested environments--could jeopardize the Joint
    Force's future ability to deter conflicts with Russia and China. The
    fiscal year 2017 budget submission focuses on a balanced set of
    investments in capabilities, capacity, readiness, and overall surge
    ability of the force to deter, and if necessary, prevail in conflicts
    adversaries may choose to initiate through future, aggressive behavior
    to achieve political ends. The Department believes that in order to
    deter such conflict, U.S. Forces must have, and be seen to have, the
    ability to dominate a conflict, should one arise. The Department's
    modernization priorities for conventional forces, as well as for
    upgrading the U.S. nuclear deterrent, are the foundation for this
    deterrent ability.
        To maintain and expand current U.S. military advantages and remain
    competitive into the future, particularly after a 15-year period in
    which the Joint Force was principally focused on protracted
    counterinsurgency and stability operations and took risk in capability
    investments, the Department has to pursue modernization efforts now.
    The fiscal year 2017 budget emphasizes the development and fielding of
    a wide range of U.S. capabilities to modernize the force, particularly
    against counter anti-access/area denial threats, including investments
    in: our posture in Europe; modernized fighter and attack aircraft;
    lethality in our undersea force; aggressive research and development
    efforts; and a range of cross-domain capabilities which strengthen
    power projection, including cyber, space, precision-guided munitions,
    stealth, and electronic warfare.
        General Dunford. Over the last fifteen years we have focused on
    providing our warfighters the support needed to win in the field. This
    resulted in deliberate decisions to delay investments in some force
    modernization. Continuing this delay will adversely affect readiness,
    degrading our competitive advantage, and impacting our capacity. Taken
    together, over time these impacts will undermine our capability to
    conduct full spectrum operations. Although the fiscal year 2017 budget
    is sufficient to meet the strategy, I am concerned that current
    resource levels for the Department, even absent sequestration, are
    insufficient to meet the impending bow-wave of deferred modernization
    starting in 2019.

        11. Senator Inhofe. All, have we created a procurement `bow wave'--
    pushing out and flattening procurement of critical modernization
    programs, all with growing budget demand, because they will not fit
    into the current budget topline?
        Secretary Carter and Secretary McCord. The fiscal year 2017 budget
    request strikes a prudent balance among the modernization of the Joint
    Force, its size, and its readiness, and continues to keep faith with
    servicemembers and their families. The fiscal year 2017 funding is
    constrained by the Bipartisan Budget Act (BBA) of 2015, but this budget
    reshapes the Department in order to address current and future
    operational challenges. The Department's fiscal year 2017 budget
    retains major elements of planned force structure; invests in the
    future; emphasizes lethality and capability over size; pursues
    innovative ``offset'' capabilities and processes; and enables the Joint
    Force to operate across all domains including cyber.
        To underwrite this ability in the Joint Force, the Department's
    budget must prioritize capability investments and recovery of the
    force's readiness while controlling internal cost growth that threatens
    to erode combat power. It must also develop and maintain a posture of
    Continental U.S.-based and forward forces that prioritizes deterrence,
    surge for responsiveness to crises, and the ability to prevail in
    conflict. Finally, the Department must prioritize investments in and
    preparation for emerging 21st century threats, including those related
    to the space and cyberspace, the nuclear enterprise, and power
    projection in highly contested environments. This focus means
    sustaining robust investments in science, technology, research, and
    development in areas most critical to future conflict, including where
    there is the greatest potential for game-changing advances. It also
    requires reforms to headquarters, force structure, health care, and
    infrastructure so that the needed investment in priorities is possible.
    Lastly, increased and predictable funding is needed over the Future
    Years Defense Program to sustain this investment in the future and
    maintain U.S. superiority.
        General Dunford. Yes, due to lower than planned toplines, we have
    deferred modernization in favor of near-term readiness and force
    structure. Although the fiscal year 2017 budget is sufficient to meet
    the strategy, I am concerned that current resource levels for the
    Department, even absent sequestration, are insufficient to meet the
    impending bow-wave of deferred modernization starting in 2019.
                                   deterrence
        12. Senator Inhofe. Secretary Carter, do you believe the United
    States is effectively deterring potential adversaries given the
    statements above?
        Secretary Carter. Yes, I believe the United States is effectively
    deterring potential adversaries from directly threatening the United
    States and our allies. However, we must remain vigilant against the
    risk that some states may turn to increasingly ambiguous and
    unconventional threats to our interests. Such approaches necessitate a
    whole-of-government response when the military instrument is not the
    appropriate solution.

        13. Senator Inhofe. Secretary Carter, what do you think the
    perception of Russia, China, North Korea and Iran on the United States'
    capability and willingness to deter their aggressive actions is?
        Secretary Carter. [Deleted.]

        14. Senator Inhofe. Secretary Carter, what is the impact our
    ability to deter by drawing red lines or making statements about taking
    action but failing to follow through?
        Secretary Carter. The Department of Defense is committed to the
    defense of the United States and of our allies. All instruments of
    national power underwrite this commitment and contribute to deterrence
    and extended deterrence. These instruments include our military forces
    generally, our forward presence in key areas around the world, and our
    deep defense cooperation with U.S. allies and partners. It would be a
    grave miscalculation for any nation to doubt our resolve and threaten
    U.S. and allied vital interests.
                                   __________
                  Questions Submitted by Senator Roger Wicker
                               russian aggression
        Senator Wicker. Russia's aggression in recent years has led many to
    believe that the Kremlin is trying to rebuild the Soviet empire.
    Domestically, President Vladimir Putin has overseen an increasingly
    repressive and undemocratic regime, where opposition groups are
    punished and human rights are ignored.
        On the world stage, Putin has twice defied the sovereignty of
    neighboring states, invading Georgia in 2008 and Ukraine two years ago.
    He has spared no opportunity to rebuke America--either by defending
    Bashar al-Assad's regime in Syria or harboring U.S. fugitive Edward
    Snowden.
        I believe President Obama's misguided concessions and promises have
    helped enable Putin's ambitions. In 2009, he and then-Secretary of
    State Hillary Clinton pursued a fruitless ``reset'' in bilateral
    relations despite warnings from experts--and members of this
    committee--that Russia could not be trusted.
        Two years ago, the Department of Defense and Department of State
    confirmed that Russia had violated the Intermediate-Range Nuclear
    Forces or ``INF'' Treaty, a pivotal Cold War pact signed by President
    Reagan and Soviet leader Mikhail Gorbachev to limit both countries'
    arsenals. DOD officials have told the press that these violations
    occurred as late as 2008.
        It's abundantly clear to me that Putin will continue to test
    American and NATO resolve during the remaining year of the Obama
    Administration. I urge the two of you to offer bold and blunt counsel
    to the White House on the threats posed by the Russian Bear.

        15. Can you highlight to this committee the steps DOD is taking
    with its NATO Reassurance Initiative to send a clear message about our
    red-lines in Eastern Europe?
        Secretary Carter. Aggressive Russian actions against U.S. partners
    and interests continue on multiple fronts. Russia continues to occupy
    Crimea illegally and to support armed conflict in eastern Ukraine, and
    has routinely violated its international agreements, notably the
    Intermediate-Range Nuclear Forces (INF) and Conventional Armed Forces
    in Europe (CFE) Treaties, as well as the Budapest Memorandum. Russia
    has also intervened in Syria seemingly to prop up the failed Assad
    regime, leading to greater civilian suffering and diverting forces on
    the ground from fighting the Islamic State of Iraq and the Levant
    (ISIL). The United States has responded to these aggressive acts by
    reinvigorating cooperation with Allies and partners, supporting Ukraine
    in the face of such aggressive Russian actions, and investing in
    prudent defensive capabilities while adjusting the U.S. Force posture
    in Europe.
        The recent submission of the fiscal year 2017 budget significantly
    increases funding for the European Reassurance Initiative (ERI) to
    approximately $3.42 billion. This year's request deepens the United
    States' investment in Europe by funding more rotational U.S. Forces,
    increased training with our Allies and partners, enhanced the quantity
    of pre-positioned warfighting gear in countries bordering Russia, and
    improvements to the requisite supporting infrastructure. ERI is helping
    to enhance our military readiness and sharpen our focus on the
    expanding strategic challenges our European Allies and partners
    continue to face. It is a visible demonstration of the United States'
    resolve to support North Atlantic Treaty Organization (NATO) assurance
    measures, bolster the security and capacity of our regional partners,
    deter and respond to aggressive actions by regional actors, and respond
    to crises in the region. With Russia's continued aggressive actions in
    eastern Ukraine and elsewhere, this increased ERI request represents
    the U.S. firm commitment to the security and territorial integrity of
    our NATO Allies.
        General Dunford. U.S. is supporting Ukraine in the face of Russian
    aggression, and increasing investment in sensible defensive
    capabilities while adjusting our force posture in Europe. The fiscal
    year 2017 budget submission significantly increases funding for the
    European Reassurance Initiative (ERI) to approximately $3.42 billion.
    With this request, the United States' expands investment in Europe by
    funding additional rotational U.S. Forces which will enable increased
    training with our Allies and Partners, increase pre-positioned combat
    gear in theater, and improve necessary support infrastructure. It is a
    visible demonstration of the United States' determination to support
    NATO assurance measures, bolster the security and capacity of our
    regional partners, deter and respond to aggressive actions from
    regional actors, and respond to crises in the region. In response to
    Russia's continual aggression in Ukraine and elsewhere, this increased
    ERI request signifies our steadfast assurance to our NATO Allies
    security and territorial integrity.
                                   __________
                  Questions Submitted by Senator Kelly Ayotte
                      performance of the a-10 against isil
        16. Senator Ayotte. This week, the Air Force Vice Chief of Staff
    said that A-10s are performing ``superbly'' against ISIL. Secretary
    Carter, you recently said that the A-10 has been ``devastating ISIL
    from the air.'' Secretary Carter, what is making the A-10 so effective
    against ISIL?
        Secretary Carter. Since 26 November 2014, A-10s have executed
    approximately 12 percent of all C-ISIL air strikes, utilizing precision
    guided munitions, and occasionally, its onboard 30mm cannon. The A-10
    also provides capability to support personnel recovery and combat
    search and rescue missions for U.S. Central Command. The proximity of
    A-10 basing at Incirlik Air Base, Turkey enables extended on-station
    time while lessening the requirement for in-flight refueling.
                                   __________
                   Questions Submitted by Senator Joni Ernst
                            honoring women veterans
        17. Senator Ernst. Do you support reinstating Women Airforce
    Service Pilots (WASP) eligibility to have their remains inurned at
    Arlington National Cemetery?
        Secretary Carter. Yes, I honor the service and sacrifice of the
    women who served as WASPs during World War II. Today, these brave and
    patriotic women are recognized as ``active-duty designees'' and
    afforded veteran status. Although not presently eligible for interment
    or inurnment at Arlington National Cemetery, I support Congress
    amending the 1977 law expanding their benefits to include above-ground
    inurnment at Arlington National Cemetery.

        18. Senator Ernst. Do you have the authority to immediately
    reinstate WASPs eligibility to have their remains inurned at Arlington
    National Cemetery?
        Secretary Carter. No. As a general matter, I do not have the
    authority to immediately amend the codified rules on eligibility for
    interment and inurnment at Arlington National Cemetery, whether for the
    WASPs or any of the active-duty designees. Amending codified rules
    requires notice and public comment rulemaking--a process which takes
    considerable time. As such, I believe the most direct and expedient
    path to expanding the funeral benefits currently afforded active-duty
    designees is to amend the 1977 law as contemplated in the bill
    sponsored by Representative McSally and recently passed by the House. I
    would add that the Secretary of the Army already has the statutory
    authorization to consider an individual case-by-case exception to
    policy based on an individual's record of accomplishments and service.

        19. Senator Ernst. If you do not have the authority to immediately
    reinstate WASPs eligibility to have their remains inurned at Arlington
    National Cemetery, do you request legislative action which would
    immediately reinstate this eligibility?
        Secretary Carter. Yes. Expanding the benefits that Congress has
    already afforded active-duty designees is best accomplished by amending
    the 1977 law. I fully support such Congressional action provided the
    bill is drafted narrowly to reduce impacts on the finite capacity of
    Arlington National Cemetery to perform above-ground inurnments. Any
    bill passed by Congress and signed into law by the President would be
    immediately implemented.
                                   __________
                    Questions Submitted by Senator Mike Lee
                               selective service
        20. Senator Lee. Secretary Carter, what assessments has the
    Department of Defense conducted to examine how opening all MOS's to
    female service-members will affect the Selective Service Act, and what
    assessments have you made to examine how requiring American women to
    register for the draft, or ending Selective Service, would affect
    military readiness, recruitment, retention, and morale?
        Secretary Carter. The Department included its analysis of the legal
    implications of my decision to open all remaining closed occupations
    and positions with respect to the Military Selective Service Act as
    part of the December 3, 2015, notification package.
        Currently, the Selective Service System process provides a unique
    source on new, quality leads for each branch of Service to assist in
    its recruiting efforts. With over 2 million registrants per year, the
    Department realizes approximately 75,000-80,000 joint leads annually.
    With the current requirement to register with the Selective Service
    System, young males are compelled to think about the possibility of
    military service. No money, no legislation, and no marketing technique
    can replace this opportunity. Mandatory registration of females may
    provide similar benefits currently experienced through mandatory
    registration of males with the Selective Service System.
        There is merit in a thorough assessment of the issue of requiring
    American women to register for the draft, or ending Selective Service,
    to include a review of the statutes and policies surrounding the
    current registration process, though this should be part of a much
    broader national discussion, in which the Department stands ready to
    participate.
                             counter-isis campaign
        21. Senator Lee. Last week in the CENTCOM posture hearing, General
    Austin stated that, following the failure of its first attempt last
    year, the Department of Defense is seeking to recalibrate its efforts
    to train and equip a Syrian rebel force by focusing on training
    ``smaller numbers of people that we can train on specific skills.''
    Some of us were skeptical about this initiative from the outset, as we
    believed that the opposition forces in Syria were much more fragmented
    than was being assessed.
        General Dunford, while I have no doubt that the servicemembers
    involved in this initiative are the best qualified in the world to lead
    it and are giving the mission their best effort, the underlying causes
    that led to the failure of the first program are unlikely to disappear
    simply because we try to ``recalibrate'' our approach. If the
    Department of Defense insists that there has to be some sort of
    friendly force on the ground in Syria--a premise that is open to
    debate--why do we not see a push to have regional Sunni powers, such as
    Turkey and Saudi Arabia, assume the leading role in this initiative?
        General Dunford. We have explored the possibility of using Turkish
    and/or Saudi Arabian ground forces, however this option is unlikely to
    materialize in the foreseeable future. While both partners have proven
    to be significant contributors to the C-ISIL coalition, their efforts
    will likely remain focused on other areas. Moreover, tensions with both
    Russia and the Kurds leave little likelihood that Turkish ground forces
    in Syria are a viable option.

        22. Senator Lee. British Foreign Secretary Phillip Hammond in
    February stated [QUOTE] ``What we have seen over the last weeks is very
    disturbing evidence of coordination between Syrian Kurdish forces, the
    Syrian regime and the Russian Air Force which [is] making us distinctly
    uneasy about the Kurds' role in all of this.''
        Secretary Carter, can you confirm whether any of the Kurdish groups
    who have been receiving assistance or support from the United States
    are also working with the Russian Government and the Assad regime? Is
    there any evidence that the United States-backed Kurdish forces and
    United States-backed Sunni groups in Syria have ever engaged in
    hostilities against each other?
        Secretary Carter. [Deleted.]

        23. Senator Lee. On Monday, Russian President Putin announced that
    a significant portion of the Russian military will be withdrawing from
    Syria and that they had accomplished their strategic goals in the
    country. General Dunford, how much more difficult has Russia's
    involvement in the region made achieving the U.S. Government's stated
    goal of an inclusive government in Damascus? Do the Russians consider a
    partitioned Syria with President Assad left in power in the western
    part of the country a successful outcome for their strategic interests,
    and is that the direction toward which events on the ground are
    leading?
        General Dunford. I will defer to the State Department to
    characterize Russia's diplomatic objectives vis-a-vis Assad and whether
    they are conducive to a lasting peace. Russia's military actions
    suggest a desire to support Regime advances across Syria, including but
    not limited to the Alawi heartland, in a way which preserves and
    protects its strategic basing and military position.

        24. Senator Lee. Secretary Carter, how do you assess the
    effectiveness of other lines of effort being executed by U.S. agencies
    in the counter-ISIS effort, especially to disrupt the finances and
    weapons supplies of the terrorist group, and their efforts to bring
    fighters into and out of the warzone?
        Secretary Carter. The lines of effort in the counter-Islamic State
    of Iraq and the Levant (ISIL) campaign are all interconnected and work
    across the departments and agencies of the U.S. Government. Recent
    strikes against ISIL's finance-related leadership and infrastructure
    deprived the group of bureaucratic expertise and the raw materials
    needed to generate revenue and support its terrorist operations. The
    U.S. Government's combined efforts to weaken ISIL's war-making capacity
    and to retake significant swaths of ISIL-held territory in Iraq and
    Syria directly translate into fewer resources available for ISIL to
    conduct and sustain its operations. In addition, recent U.S. Government
    efforts have made it increasingly difficult for prospective foreign
    terrorist fighters to reach ISIL-controlled territory in Iraq and
    Syria. In many cases, particularly in regard to efforts focused outside
    Iraq and Syria, law enforcement partners of other countries have the
    lead. Examples of U.S. interagency-led initiatives include:
    watchlisting, border security initiatives, Treasury designations, and
    criminal prosecution. The Department of Defense contributes to U.S. and
    foreign partner efforts to disrupt the movement of personnel and
    material to, and within, ISIL-controlled territory through intelligence
    collection and information sharing, strikes within Iraq and Syria, and
    extensive collaboration with multiple partners to facilitate disruption
    operations.

        25. Senator Lee. Secretary Carter, what is the overall intention of
    the Counterterrorism Partnerships Fund (CPF) in the War on Terrorism,
    and in your assessment, since we are seeing more destabilization in the
    Middle East than ever before, is the Fund meeting the objectives that
    you have set out for it?
        Secretary Carter. Yes. The intent of the Counterterrorism
    Partnerships Fund (CTPF) is to build a network of capable partners to
    degrade and defeat terrorist threats to the United States, our Allies,
    and our partners across the U.S. Central Command and U.S. Africa
    Command areas of responsibility. The CTPF is used to support education,
    training, equipping, advisory efforts, exercises, intelligence
    cooperation, and military-to-military engagement in a comprehensive
    approach to building partner counterterrorism capacity. As a result of
    CTPF investments, our partners have conducted operations that have
    contained, disrupted, and degraded groups such as Boko Haram (in the
    Lake Chad Basin), al Shabaab (in East Africa), and al Qaeda in the
    Islamic Maghreb. In the Middle East, the CTPF has enabled Jordan and
    Lebanon to increase the security at their borders with Syria, thus
    limiting the Islamic State in Iraq and the Levant's destabilizing
    impact.
                              force of the future
        26. Senator Lee. Secretary Carter, the fiscal year 2017 budget
    request outlines several initiatives that are deemed to be part of
    building the ``force of the future.'' Is there a cumulative cost
    estimate of the financial impact of all these changes on the
    Department? I understand there is the longstanding argument of
    readiness versus retention, but what readiness sacrifices has the
    Department decided to make and for exactly what gains in retention?
    What evidence does the Department have to support this vigorous effort?
        Secretary Carter. The reforms captured in Force of the Future
    (FOTF) represent an investment in maintaining the strongest and most
    agile fighting force the world has ever known. Our people represent our
    best competitive advantage in warfare and FOTF examines how we can
    better attract and retain top talent in the Department of Defense
    (DOD). It is estimated that reforms approved to date will cost DOD
    approximately $834 million across the Future Years Defense Program
    (FYDP). All costs are being taken from existing DOD resources and
    additional unidentified savings may be garnered as the Department
    becomes more efficient as a result of better talent management. These
    are not zero-sum propositions. We can increase the investment we are
    making in our people and preserve vital readiness funding at the same
    time. The Military Departments were not asked to reduce readiness
    dollars in order to fund any of the FOTF initiatives, and most of the
    funding for fiscal year 2017 will come from funding lines within the
    Office of the Secretary of Defense.
        The FOTF initiatives with the most direct impact on readiness are
    enhanced maternity and parental leave. New mothers will receive 12
    weeks of maternity leave (down from 18 weeks for the Department of the
    Navy, up from 6 weeks for the other Services), and a legislative
    proposal has been offered to Congress to extend parental leave for
    spouses from 10 days to 14 days.
        Current productivity needs to be carefully weighed against the
    long-term readiness of the force, measured in human capital. Currently,
    women in the military have a 33 percent lower retention rate than men
    over the first 10 years of Service, constituting an unacceptable loss
    of talent and undermining our long-term readiness. Using the most
    conservative private sector return on investment figures, retention
    rates within the DOD would only have to improve between 2 percent and 3
    percent for the DOD to hit a ``break-even'' point for the new policy.
    Given the gross discrepancy in retention rates between men and women,
    there is ample reason to believe we can do better.
        The annual impact of the new maternity leave policy across the
    Department will be comparable to the loss of 630 full time equivalents,
    or a 0.05 percent increase in non-availability. Once parental and
    adoptive leave are added, the Joint Force expects a loss of 1,608 full
    time equivalents, or a 0.12 percent increase in non-availability.
        It's important to recognize that these impacts on unit readiness
    will be quite modest for three reasons. First, the extended leave will
    be spread across an active component force of 1.3 million people. The
    projected total increase in non-availability across the force is about
    0.12 percent. Second, the extended leave period is months shorter than
    the Services' non-deployability policies for mothers following
    pregnancy. In the event of a contingency, these units will have to
    deploy without these women regardless of changes to maternity leave
    policy. Third, the Services have personnel management flexibilities
    that enable them to mitigate unit-level impacts. The Navy's policy of
    reassigning pregnant women to shore duty, rather than deployable ships,
    is a Service-level example of flexibilities that are often exercised at
    much lower unit levels.

        27. Senator Lee. Secretary Carter, as has been brought up in this
    committee already this year, we are seeing significant disruption in
    the civilian workforce in highly skilled positions at military depots
    and maintenance facilities because of the time it takes to hire new
    employees. What is the Department doing, both short term and long term,
    to address this issue, and why is this not a higher priority in the
    Force of the Future plans as a pressing readiness concern?
        Secretary Carter. Recruiting and retaining the best talent in our
    civilian workforce is a key element of the Department's ability to
    build a strong future force and to maintain our superiority well into
    the 21st century. The Department has numerous human resources
    flexibilities at our disposal to attract, recruit, and retain a highly
    skilled and diverse workforce, and we continuously review our
    authorities to ensure the right workforce planning and development
    strategies and flexibilities are in place. We have developed tools and
    guidance for use by hiring managers, in consultation with Human
    Resource professionals, to ensure the effective use of these
    authorities to fill positions with the right candidates as quickly as
    possible. Force of the Future initiatives seek to leverage these
    processes, including steps to improve the hiring and on-boarding
    process, to recruit the best and brightest, and match talent and skill
    with mission requirements across the entire Department. To that end,
    modernizing personnel practices is a Force of the Future priority, and
    the Department will continue to study and pursue opportunities to
    streamline processes and reduce recruitment times.
                              range modernization
        28. Senator Lee. General Dunford, do you believe that it should be
    a priority for the services to be enhancing and protecting their test
    and training ranges from encroachment and environmental concerns in
    order for them to be ready for testing and training 5th generation
    weapons against emerging 21st Century threats? What readiness problems
    will be incurred by the services if our test and training ranges are
    not adequately prepared?
        General Dunford. Our test and training ranges are important
    national assets supporting weapon system development and readiness of
    the joint force. We will continue to preserve them to the best of our
    ability and modernize as fiscally prudent to ensure our systems are
    tested and our soldiers, sailors, marines and airmen are trained
    against emerging and realistic 21st century threats.
        However, our chief readiness problem is driven by several years of
    an unstable fiscal environment combined with an extraordinarily high
    operational tempo.
                            chinese naval aggression
        29. Senator Lee. Secretary Carter, our naval forces, under your
    orders, have conducted several freedom of navigation patrols through
    the South China Sea in international waters that are contested by the
    Chinese Government. As the Chinese Government has recently placed HQ-9
    Surface-to-Air Missiles on an island in the South China Sea, do you
    assess that our freedom of navigation exercises have been successful,
    or are the Chinese using them to justify further build-up?
        Secretary Carter. Since 1979, the U.S. Freedom of Navigation
    program has demonstrated non-acquiescence in excessive maritime claims
    by coastal states all around the world. The program includes both
    consultations and representation by U.S. diplomats and operational
    activities by U.S. military forces. Our operations in the South China
    Sea are routine, lawful, and consistent with the way we operate
    globally. The objectives of our recent Freedom of Navigation Operations
    in the South China Sea were to protect the rights, freedoms, and lawful
    uses of the sea and airspace guaranteed to all countries. These
    operations were successful in meeting those objectives and directly
    contributed to supporting and sustaining the principled, rules-based
    order in the Asia-Pacific region.
        China's recent military deployments to disputed features in the
    South China Sea, including the placement of surface-to-air missiles on
    Woody Island, are not connected to the conduct of U.S. Freedom of
    Navigation Operations. China continues to take unilateral actions in an
    attempt to advance its claims over disputed areas, thus increasing
    tensions in the region. We have discouraged China and all claimants
    from taking unilateral actions, and we continue to encourage China to
    clarify its claims in accordance with international law and to commit
    to resolving its disputes through the use of peaceful dispute
    settlement mechanisms, such as arbitration. China's actions are out of
    step with the aspirations of the region for peace and stability, as
    expressed in the U.S.-ASEAN Sunnylands Declaration of February 16,
    2016. We will continue to take a strong position in coordination with
    our allies and partners in the region to uphold the principles of
    international law, and to support unimpeded lawful commerce, freedom of
    navigation and overflight, and the peaceful resolution of disputes. We
    believe this rules-based order has been conducive to the peace and
    prosperity of the Asia-Pacific region.

        30. Senator Lee. Secretary Carter, what is the ultimate objective
    of China's naval activity in the South China Sea and the East China
    Sea? Are they looking to control or inhibit commercial access and
    activity in this region, or are they primarily focused on claiming
    natural resources from the sea and seabed?
        Secretary Carter. [Deleted.]
                                     yemen
        31. Senator Lee. General Dunford, when General Austin testified
    before this committee last week, he used the phrase ``tactical
    stalemate'' to describe the situation in Yemen. While we have been
    supporting Saudi forces through intelligence and other tactical means,
    we have yet to see any success in this tribal-war-turned-failed-state
    situation. General Austin also noted the United States would support
    re-establishing the legitimate government in Yemen. What kinds of
    resources would this require of the already-heavily engaged forces in
    this region?
        General Dunford. Presently, it is hard to accurately speculate what
    resources would be required to support a new Yemeni Government.
    However, military force alone cannot reestablish a legitimate
    government in Yemen. Long term peace will require a political
    resolution between the various competing actors inside Yemen.
                                  afghanistan
        32. Senator Lee. General Dunford, The funding request for
    operations in Afghanistan is based upon projected troop draw-down
    levels. As you know, there has been discussion of a residual U.S. Force
    remaining longer than anticipated. If additional regional security
    concerns were to emerge in the future that demand more forces, or if
    the next president of the United States were to decide to leave more
    forces in Afghanistan longer, what would this do to the budget request
    and what the DOD had planned for? Would we be prepared for this? Would
    we need emergency funding?
        General Dunford. Our fiscal year 2017 budget request includes
    adequate funding to support our commitment to the mission in
    Afghanistan. Specifically, the request supports an average deployed
    troop strength of 6,217 based on the projected drawdown of forces from
    9,800 to 5,500 at the end of the first quarter. If additional regional
    security concerns emerge in the future that could be addressed with
    higher troop levels, we will be prepared to recommend appropriate
    military options and their associated incremental costs.
                                  healthcare:
        33. Senator Lee. Secretary Carter, with regard to the reform
    proposal included for TRICARE, it is my understanding that the
    Department intends to switch to a two-path healthcare option, with an
    HMO and PPO option. What is the impetus for deciding to shift to a two-
    path option at this time?
        Secretary Carter. While our proposal is not dramatically different
    from our current TRICARE offering that includes two main plans, TRICARE
    PRIME and TRICARE STANDARD/EXTRA, there are some important
    distinctions. The following are attributes and enhancements:

          Our proposal economically incentivizes use of the
    Military Treatment Facilities to a greater extent to make maximum use
    of existing capacity, reduce taxpayer costs, and provide the workload
    necessary to maintain the clinical skills of our medical providers.
          One of our two proposed plans, TRICARE Select, is the HMO
    option, and is very similar to TRICARE Prime with the exception of
    different co-pays for primary vs. specialty care.
          The second of our two proposed plans, TRICARE Choice,
    will transform TRICARE STANDARD/EXTRA into a modern PPO. Under Choice,
    the in-network care has fixed copays with no deductible. This is an
    important enhancement that means beneficiaries will know up front what
    their out of pocket costs will be. Beneficiaries will not be required
    to wait for the claim to be processed to find out how much they owe the
    provider.

        34. Senator Lee. Secretary Carter, I know the Military Compensation
    and Retirement Modernization Commission (MCRMC) has recommended
    establishing a new DOD health program that offers a selection of
    commercial insurance plans through OPM, similar to the Federal Employee
    Health Benefit Program. Considering that there are issues surrounding
    OPM and the DOD working effectively on joint activities, such as
    civilian hiring and securing personnel information, why would the DOD
    want to share this new healthcare system with OPM instead of
    establishing a system over which DOD has control?
        Secretary Carter. As you know, the Department of Defense non-
    concurred with the Military Compensation and Retirement Modernization
    Commission's (MCRMC) recommendation to commercialize the military
    health benefit. The reasons for our non-concurrence included a concern
    that we would drive care away from our Military Treatment Facilities
    which are important readiness training platforms for our providers.
    Based on our analysis, the MCRMC recommendation would have
    substantially increased costs for both the beneficiary and the
    Department. Given these substantial impediments to implementing the
    MCRMC's recommendations, we did not further analyze the viability of a
    relationship with Office of Personnel Managment.
                                  excess icbms
        35. Senator Lee. Secretary Carter, I have been in discussions with
    the Air Force about the potential of allowing the service under certain
    conditions to sell spare ICBM motors to private sector companies to be
    refurbished and used for commercial space launch. This would both save
    the Air Force funding in storing these ICBMs and allow them to make
    money in selling them off. Would the Department of Defense be
    supportive of this policy change?
        Secretary Carter. The Department believes it is appropriate to
    consider leveraging the considerable investment that the American
    taxpayer has made in developing, manufacturing, and maintaining these
    motors. However, in doing so, we must not put the small launch market
    at risk. We should study the issue carefully to determine if the
    engines could be sold to commercial industry at a reasonable price and
    in reasonable numbers that do not provide an unfair competitive
    advantage to the recipient. Selling excess motors would recoup some of
    the investment that the taxpayers have made, rather than waiting until
    the motors become unusable and have to be destroyed.
        The Department absolutely understands and values the health of our
    launch industrial base, and we are encouraged by the industry's
    innovation and investment. We want to encourage this vibrant market,
    and any policy proposal to make the intercontinental ballistic missile
    engines available should take the long-term health of the small launch
    segment into account.
                       counter-terrorism weapons systems
        36. Senator Lee. Secretary Carter, the United States is engaged in
    equipping and financing the sale of highly-technological, fourth and
    fifth generation fixed and rotary winged aircraft to Middle Eastern
    partners for counter-terrorism efforts. While they are able to execute
    the missions assigned to them, such missions could also be accomplished
    by low-cost, low-maintenance aircraft, especially against adversaries
    that do not have advanced surface-to-air capabilities. For example, the
    UAE has a contract for modified Air-Tractor 802 airplanes outfitted for
    low-intensity conflict usage. How is the Department of Defense and our
    partner nations working to find lower-cost equipment solutions for low-
    intensity conflicts and special forces use where higher-end weaponry
    may not be necessary?
        Secretary Carter. Title 10 train-and-equip authorities, such as
    section 2282, allow the Department to tailor programs uniquely designed
    for counter-terrorism purposes. The Department works with interagency
    counterparts to develop programs to equip partners with the proper
    systems tailored for the level of threat and the capacity of the
    partner to absorb, employ, and sustain new capabilities. Through this
    process, and with Secretary of State concurrence, the Department has
    funded numerous low-cost, low-tech solutions in the U.S. Central
    Command and U.S. Africa Command regions, such equipping partners with
    Air-Tractor 802, Cessna C208, and UH-1 Huey II aircraft and the Raven
    and Scan Eagle unmanned aerial systems.
                                   __________
                Questions Submitted by Senator Claire McCaskill
                              headquarters reform
        Senator McCaskill. There is ongoing discussion on reducing
    headquarters size and right shaping it for the future. The Armed
    Services Committee has received testimony that the current construct of
    staff for the Office of the Secretary of Defense and a parallel Joint
    Staff creates, in some instances, unnecessary duplication of work.

        37. Secretary Carter, have you identified overlap in the duties and
    responsibilities of the OSD and the Joint staff?
        Secretary Carter. We have identified a number of areas of potential
    overlap. For example, both the Office of the Secretary of Defense (OSD)
    and the Joint Staff have intelligence offices. Both OSD and the Joint
    Staff have logistics offices. Both OSD and the Joint Staff have offices
    working on military personnel issues. Both OSD and the Joint Staff have
    regionally-focused offices to address policy and plans in critical
    areas of the world.
        These areas of potential overlap are not necessarily inappropriate:
    we need capability on both the civilian and the military side to ensure
    that we can preserve both civilian control over the military and the
    ability of our senior offices to provide objective military advice. If
    our OSD and Joint Staff offices work together as they should, this
    binocular vision can produce better advice for senior leaders.
        What concerns me is that in some cases our civilian and military
    offices may not appropriately coordinate their efforts, so that we
    could have two staffs performing the same work and creating redundant
    work products. In that case, the work of the two offices would be not
    only potentially overlapping, but actually redundant. In an era of
    tight budgets, we can't afford that.

        38. Senator McCaskill. Secretary Carter, if you have identified
    overlap, do you assess that it is creating unnecessary duplication of
    effort?
        Secretary Carter. The Department is currently reviewing areas of
    potential overlap to determine whether they are creating unnecessary
    duplication of effort.

        39. Senator McCaskill. General Dunford, have you identified overlap
    in the duties and responsibilities of the OSD and the Joint staff?
        General Dunford. Currently, work is underway to determine which
    overlaps add value to Department processes and which overlaps are
    redundant.

        40. Senator McCaskill. General Dunford, if you have identified
    overlap, do you assess that it is creating unnecessary duplication of
    effort?
        General Dunford. The short answer is yes, both within the Joint
    Staff and between the Joint Staff and OSD. However, determining the
    added value is challenging. The ideal way forward is to rationalize and
    reduce staffing through a multi-year, sustained and methodical review
    of processes, organization, and functions within each community of
    interest.
                             syria train and equip
        41. Senator McCaskill. General Dunford, during General Austin's
    testimony on March 8th he discussed a new effort to train and equip
    Syrian forces. The method he described was a ``train-the-trainer''
    model designed to train volunteers and get them back into the fight
    more quickly. What safeguards will be in place to ensure that we will
    be training and equipping individuals whose interests align with ours?
        General Dunford. We identify groups of individuals who share a
    common goal of combating ISIL and focus on selecting groups whose
    regions are threatened by ISIL. In selecting personnel to receive
    training, we utilize vetting procedures that include background checks,
    social media checks, and physical searches. Coupled with this vetting,
    U.S., Coalition, and host nation partners monitor the equipment we
    provide to prevent its misuse or diversion from its intended purpose.
                                   __________
                 Questions Submitted by Senator Jeanne Shaheen
                             regenerative medicine
        42. Senator Shaheen. I noted with interest the recent Manufacturing
    Innovation Institute request for information (RFI) from the Air Force
    Research Laboratory (AFRL). I have been a strong supporter of
    strengthening advanced manufacturing in New Hampshire and around the
    country and applaud this step in support of the President's
    manufacturing initiatives. While there are several possible focus areas
    noted in the RFI, Bioengineering for Regenerative Medicine looks
    especially promising. It's an area where there is significant
    discussion among research universities and R&D companies in my state
    and I would encourage you to explore this topic fully. Secretary
    Carter, what are your thoughts this topic and what is the selection
    process for these Manufacturing Institutes?
        Secretary Carter. Bioengineering for Regenerative Medicine is also
    an area of interest for the Department. The Department is currently
    reviewing information collected from the request for information (RFI)
    and recent workshops held on the areas of interest listed in the RFI.
    This information will be used to select the technology areas for future
    DOD-led Manufacturing Innovation Institutes.
                              nanotube technology
        43. Senator Shaheen. Secretary Carter, you have been a strong
    supporter of utilizing advanced technology to ensure our military
    maintains its superiority over our adversaries. For example, in 2010,
    you signed a presidential memorandum citing carbon nanotubes as a
    national security priority. Do you still believe the development of
    carbon nanotubes is priority?
        Secretary Carter. Yes, the development of carbon nanotubes is still
    a priority for the Department. The Department has invested $25 million
    in Defense Production Act Title III funding over the last six years to
    develop an economically viable, technologically competitive capability
    in this area.

        44. Senator Shaheen. Secretary Carter, how is DOD leveraging DPA
    Title III funds and the Manufacturing Technology Program to develop
    carbon nanotube technology and support the industrial base?
        Secretary Carter. A recent Defense Production Act Title III (DPA
    Title III) project established the infrastructure for the world's first
    industrial scale manufacturing facility producing carbon nanotube (CNT)
    yarn, sheet, tape, and slurry materials. This facility is also
    producing CNT Electro-Static Discharge/Electro-Magnetic Interference
    shielding, which has achieved a Technology Readiness Level (TRL) of 8/9
    for spacecraft, while CNT heaters, data cables, and enhanced soft and
    hard ceramic armor have all achieved TRL 6.
        DPA Title III funding of $24.76 million for this project was
    augmented by $9.21 million of contractor's cost share. The contract was
    completed in February 2016. Based on the performance of current CNT
    materials developed through this DPA Title III investment, the Air
    Force Manufacturing Technology Program has decided to invest $4.1
    million in a project to enhance the performance of commercial quantity
    CNT for next-generation wiring applications in Space and Naval
    applications.
                              intermission program
        45. Senator Shaheen. Secretary Carter, the career intermission
    program gives more flexibility for servicemembers to take a sabbatical-
    type leave of absence. Do you think programs like this help retain more
    servicemembers?
        Secretary Carter. Yes. The Career Intermission Pilot Program has
    been a useful tool for retention, as it affords our servicemembers more
    flexibility to pursue personal or professional growth outside their
    military service while providing a mechanism for their seamless return
    to Active Duty. Allowing our servicemembers the opportunity to take a
    sabbatical-type leave of absence for personal reasons assists the
    Department in retaining personnel with valuable experience and training
    that might otherwise be lost by permanent separation. Since the pilot
    program was authorized in 2009, there have been several common reasons
    for servicemembers requesting to participate. These have included:
    completing their education, starting a family, aligning tours with a
    military spouse, and caring for family members.

        46. Senator Shaheen. Secretary Carter, do you support making the
    career intermission program permanent?
        Secretary Carter. Yes, I do support making the Career Intermission
    Pilot Program a permanent program. By allowing our servicemembers the
    opportunity to take an intermission from service during their careers,
    with a guaranteed return to Active Duty, both the Services and the
    members benefit. The servicemembers are able to tend to personal needs
    or desires and our Services have another tool that may be used to
    retain servicemembers in whom we have invested valuable training and
    who have tremendous experience.
                                   __________
               Questions Submitted by Senator Kirsten Gillibrand
                               combat integration
        47. Senator Gillibrand. Secretary Carter, I strongly support your
    decision to open all military positions, including combat arms, to any
    individual capable of meeting the occupational standard. Regardless of
    gender, we want the right people in the right positions, and to ensure
    they are successful once in these positions. You recently approved the
    services' and SOCOM's implementation plans. Are you confident the
    implementation plans the services submitted to you are adequate to the
    task?
        Secretary Carter. Yes, the Services' and Special Operations
    Command's implementation plans clearly demonstrate a commitment to the
    monitoring, assessment, and in-stride adjustments that will enable
    sustainable success.

        48. Senator Gillibrand. Secretary Carter, what kind of oversight do
    you plan to do to ensure that the plans are successful?
        Secretary Carter. The Deputy Secretary of Defense and Vice Chairman
    of the Joint Chiefs of Staff are co-chairing an Implementation Work
    Group to oversee implementation and ensure the Services and Special
    Operations Command continue to communicate and share best practices, as
    they have over the past three years since rescission of the 1994 Direct
    Ground Combat Definition and Assignment Rule. Additionally, the
    Services and Special Operations Command will submit annual
    implementation assessments through the Chairman of the Joint Chiefs of
    Staff and the Under Secretary of Defense for Personnel and Readiness
    detailing how each is addressing my implementation tenets.

        49. Senator Gillibrand. Secretary Carter, how will you work toward
    maximizing success of their plans, and have you set milestones?
        Secretary Carter. On March 9, 2016, I approved the implementation
    plans submitted by the Services and Special Operations Command in
    January 2016, following a thorough review by the Implementation Work
    Group, co-chaired by the Deputy Secretary of Defense and Vice Chairman
    of the Joint Chiefs of Staff. Each of the Services and Special
    Operations Command established internal milestones to monitor and
    measure implementation, and each will provide an annual assessment to
    me addressing my seven implementation tenets.

        50. Senator Gillibrand. General Dunford, are you encountering
    negative perceptions of full integration at the tactical levels of
    command, and if so, what forms of education and training are you
    implementing to address them?
        General Dunford. Training and educating the forces are a Service
    responsibility and I am confident the Services are moving forward with
    full integration.

        51. Senator Gillibrand. Secretary Carter, are the services
    developing tests at the recruit stage to better predict outcomes for
    entry level applicants seeking accession into ground combat arms?
        Secretary Carter. Yes, the Services are working to improve the
    match between entry-level applicants for enlistment and job
    requirements. Currently, the Services use the Armed Services Vocational
    Aptitude Battery (ASVAB) to identify those individuals with the
    cognitive skills and aptitudes to be successful in entry-level military
    training on the job. The ASVAB has been proven to be a robust predictor
    of training and job performance, but not as good for predicting non-
    cognitive aspects of performance (e.g., motivation, attrition), which
    are better predicted by temperament or personality measures. The
    Services are now developing instruments to measure personality traits
    that predict attrition, such as the Army's Tailored Adaptive
    Personality Assessment System. The Navy is also developing a non-
    cognitive instrument to improve the match between a sailor's
    personality traits and interests with job requirements. Additionally,
    the Services are developing physical predictor and screening tests for
    physically demanding military occupational specialties. For example,
    the Army's Occupational Physical Assessment Test and the Marine Corps'
    Ground Combat Arms Initial Strength Test will allow the Army and Marine
    Corps to select servicemembers who are capable of performing tasks
    associated with physically demanding military occupational specialties.

        52. Senator Gillibrand. General Dunford, the special operations
    community broke ground years ago with creatively-designed, pre-
    selection orientation courses that better predict and ensure candidate
    success and reduce rates of injury, all prior to accession into the
    field; is there a lesson the services can draw from these courses in
    identifying and preparing the most-qualified servicewomen for combat
    arms?
        General Dunford. The benefits of these practices are not gender
    specific, and Services will leverage appropriate resources, to include
    those lessons from the SOF community, to successfully integrate
    servicewomen into combat arms.
        Supporting Information: The focus of SOF pre-selection orientation
    courses is to improve the success rate of candidates in specialized
    training programs. SOF Service Components have identified specific
    courses of study and physical training regimens that better prepare
    candidates for their specific training requirements. During the
    recruiting process, the Services also administer screening tests to
    assess the potential of recruits to meet the physical requirements of
    basic and technical training. Both SOF and Service screening reduces
    the rate of injury and increases the probability that a recruit will
    complete training.

        53. Senator Gillibrand. Secretary Carter, how can we ensure long-
    term job satisfaction and retention of servicewomen in these roles?
        Secretary Carter. The Department agrees that long-term job
    satisfaction and retention are key components of the All-Volunteer
    Force; however, we do not make a distinction with respect to men or
    women. Our aim is retain the highest quality servicemembers regardless
    of their gender.
        The Department does not prescribe specific policies for the
    Services to follow in promoting job satisfaction and retaining their
    personnel. Each Service has its own retention policies and each offers
    many challenging, yet rewarding assignments for its members.
        The Services all seek to provide a positive climate for their
    members and use a variety of tools to encourage retention. Common
    retention options include selective retention bonuses, duty station
    preferences, assignment preferences, and additional education
    opportunities. These tools vary, whether they are used often depends on
    what motivates the individual servicemember's decision to remain in
    uniform.

        54. Senator Gillibrand. General Dunford, before he retired, then
    SOUTHCOM Commander General John Kelly raised concerns that lowering
    standards was the only way to ensure that women became infantry, SEALs
    or Rangers in ``real numbers.'' That position has been vehemently
    contested by the Service Chiefs of the Army, Navy, and Air Force, as
    well as the commander of SOCOM, yet General Kelly's comments represent
    prevalent views in combat units, particularly in the Marine Corps. How
    do you as Chairman plan to ensure that integration is successful?
        General Dunford. All standards have been validated as gender-
    neutral and operationally relevant. There are no plans to lower any
    standards. The Services and Special Operations Command will submit
    annual assessments regarding full implementation of their progress
    through my office to the Secretary of Defense.

        55. Senator Gillibrand. General Dunford, how do you plan to deal
    with these views?
        General Dunford. We must ensure our Armed Forces are trained and
    ready to meet mission requirements. As Chairman of the Joint Chiefs of
    Staff, I will continue to consult with the Joint Chiefs and provide my
    best military advice to the Secretary.

        56. Senator Gillibrand. General Dunford, do you plan to allow the
    lowering of standards?
        General Dunford. The Service Chiefs have repeatedly stated that
    they have no plans to lower standards.

        57. Senator Gillibrand. General Dunford, a 2015 RAND study titled
    Implications of Integrating Women into the Marine Corps Infantry,
    commissioned by the Marine Corps itself, identified integrated training
    as an important step to integrating women into combat positions.
    Despite this study, I understand the Marine Corps will continue to
    train men and women separately at the Recruit Depots at Parris Island
    and San Diego, and Officer Candidate classes at Quantico. I also
    understand the Marine Corps integration plan includes assigning women
    to combat units in cohorts rather than as individually-assigned
    personnel. Are there any plans to fully integrate all levels of
    training? Why or why not?
        General Dunford. Training and educating the forces is a Service
    responsibility. They've submitted their plans to the Secretary of
    Defense, and his 9 March 2016 memo approved their plans and gave them
    the go-ahead to begin integration. I know it is the Secretary's intent
    that the Services will continuously learn from their experiences and
    adjust the plans when appropriate to ensure we have the most combat-
    ready forces to defend our nation.

        58. Senator Gillibrand. General Dunford, what size would those
    cohorts be, and what will you do if only one woman passes an MOS
    school?
        General Dunford. This is a Service issue, and I have forwarded your
    question for Service response.

        59. Senator Gillibrand. General Dunford, the positions opened to
    female airmen and sailors represented only a minority of the Air
    Force's and Navy's occupational specialties, and for the most part were
    concentrated within those services' special operations components.
    Therefore, this will be a less substantial change for the majority of
    sailors and airmen compared to other servicemembers. How do you think
    those services' experiences might differ during the execution phases of
    their respective implementation plans from the Army and Marine Corps,
    which have much higher proportions of ground combat arms?
        General Dunford. It is the Secretary's intent that the Services
    continuously learn from their experiences and adjust the plans when
    appropriate to ensure we have the most combat-ready forces to defend
    our nation.

        60. Senator Gillibrand. General Dunford, what lessons, if any, can
    the Marine Corps and Army learn from the experiences of the Navy and
    Air Force?
        General Dunford. It is too early in the integration process to draw
    conclusions. The Services will continue to share information and best
    practices as they execute their plans.
                                military museums
        61. Senator Gillibrand. Secretary Carter, in April 2014, the
    Department of Defense released its fiscal year 2013 Report to Congress
    on Operation and Financial Support for Military Museums. This report
    stated that DOD spent $91.1 million in fiscal year 2013 on 87 museums.
    The report was then discontinued. How much did DOD spend on museums in
    fiscal year 2014, fiscal year 2015, and fiscal year 2016?
        Secretary Carter. In fiscal years 2014 and 2015, the Department of
    Defense (DOD) invested approximately $103.5 million and approximately
    $119.0 million respectively, in appropriated funds for 83 military
    museums. For fiscal year 2016, the Department plans to expend
    approximately $92 million in appropriated funds for 82 military
    museums.
        The variances in appropriated funding allocated to support the
    museums from fiscal year 2013 to fiscal year 2016 are due to
    construction cost, divesting museums, an improved management approach,
    or through the consolidation of museums across the military Services.

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      FY 2013 # of      FY 2014 # of      FY 2015 # of      FY 2016 # of
                                                                        Museums /         Museums /         Museums /         Museums /       Funding Delta
                          Military Component                         Funding Totals    Funding Totals    Funding Totals    Funding Totals     (FY 2013 & FY
                                                                           (M)               (M)               (M)               (M)            2016) (M)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Army..........................................................       56 / $36.6        57 / $47.1        57 / $64.1        56 / $34.1             -$2.5
    Navy..........................................................       11 / $16.3         9 / $18.4         9 / $12.8         9 / $14.1             -$2.2
    Marine Corps..................................................        5 / $14.6         5 / $17.9         5 / $20.0         5 / $22.4              $7.8
    Air Force.....................................................       13 / $17.2        12 / $20.1        12 / $22.1        12 / $21.4              $4.2
    Total # of Museums............................................               85                83                83                82
    Appropriated Funding..........................................            $84.7            $103.5            $119.0             $92.0
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        While DOD no longer routinely reports these figures, these
    estimates are based on appropriated funds that the Military Services
    and Agencies invest in military museums.

        62. Senator Gillibrand. Secretary Carter, to what extent do these
    museums supported by DOD focus on women servicemembers and issues
    related to women in service?
        Secretary Carter. The Department of Defense (DOD) is committed to
    focusing on women in service by telling the story of and accurately
    reflecting the significant contributions of women servicemembers
    through our military museums. Some of the military museums fully
    integrate the impact and reach of women servicemembers into their
    exhibits on campaigns and military history, while other military
    museums have focused exhibits, tours, and educational outreach efforts
    dedicated to women in service.
        Notably, military museums have proactively created large and
    extensive collections of artifacts, exhibits, and programs that
    document and teach our servicemembers and the American public about the
    critical contribution women and women servicemembers have made to our
    military and the nation. Whether it is the dedicated Women's Museum at
    Fort Lee, traveling exhibits each March that celebrate women's history
    month, or special lectures, galleries, symposia, artifacts, and exhibit
    narrations by and for women servicemembers across the military museum
    portfolio, the DOD depends on and is extremely proud of our women
    servicemembers. Highlighting women servicemembers and issues central to
    their success and challenges is at the very core of our military
    museum's missions.
        Army: The Army has 56 museums and all of them contain historical
    content relating to women in service or women who have supported the
    Army throughout its 241 year history. The U.S. Army Women's Museum,
    located at Fort Lee, Virginia, is the only museum of its kind in the
    world dedicated to telling the story of women's contributions to the
    Army. Of all the military Services, the Army is the only one to have
    such a museum. Nevertheless, because the history of women in all
    branches of the Armed Forces overlaps, the museum has supported the
    Navy, Coast Guard, Air Force and other nations' efforts to share the
    story of military women.
        Navy: The Navy has 9 museums and all of them provide exhibits
    showcasing the roles and contributions of women in naval services. Of
    the Navy's 9 museums, 6 have dedicated exhibits showcasing women in
    service. All of the Navy's museums display a six-panel ``Women in the
    Navy'' exhibit each March in conjunction with Women's History Month.
    Additionally, all Navy museums regularly host military ceremonies for
    female servicemembers, including promotions, retirements and changes-
    of-command.
        Marine Corps: There is no single exhibition that highlights gender
    differences within the Marine Corps; instead, the topic is included
    throughout the galleries. The National Museum of the Marine Corps and
    the command museums integrate the story of female Marines throughout
    its galleries, starting with WWI.
        Air Force: The National Museum of the United States Air Force and
    11 field museums hold historically significant items for preservation
    and study to tell the Air Force story. These museums discuss women as
    part of the diversity of the Air Force, its operation, culture, and
    overall experience.
                                   __________
                  Questions Submitted by Senator Joe Donnelly
                                 mental health
        63. Senator Donnelly. Secretary Carter, please provide an update on
    implementation of section 701 of the Carl Levin and Howard P. ``Buck''
    McKeon National Defense Authorization Act for Fiscal Year 2015 (P.L.
    113-291).
        Secretary Carter. The Department of Defense (DOD) provides person-
    to-person Mental Health Assessments (MHA) for each servicemember
    deployed in connection with a contingency operation, as required in
    section 1074(m) of title 10, United States Code and in accordance with
    DOD Instruction (DODI) 6490.12, ``Mental Health Assessments for Service
    Members Deployed in Connection with a Contingency Operation.'' DODI
    6490.12 is being amended to incorporate the requirement to conduct a
    MHA once during each 180-day period during which a member is deployed
    (in-theater MHA) until January 1, 2019. This policy is expected to be
    published by July 2016.
        The Department is integrating the annual MHA requirement into the
    Periodic Health Assessment (PHA) process in an effort to standardize
    these assessments across the military components. This requirement has
    been integrated into the DODI for PHAs. The policy is estimated to be
    published by July 2016.
                             nuclear modernization
        64. Senator Donnelly. Secretary McCord, many have raised concerns
    about the ``bow wave'' of cost we are facing in nuclear modernization
    efforts. As you look at the FYDP and years beyond, do you believe that
    these plans are manageable?
        Secretary McCord. With proper financial management planning, the
    DOD should be able to handle the modernization of strategic platform,
    while at the same time safeguard the requirement for non-nuclear
    related modernization costs. This is not to imply that it will not be a
    fiscal challenge. The collective annual costs of acquiring the
    replacement for the entire nuclear triad, the Ohio-class ballistic
    missile submarine, the Minuteman III Intercontinental Ballistic Missile
    and a new strategic bomber for the Air Force will be in the billions of
    dollars, and will present the Department with a unique task. Previous
    modernization of America's strategic nuclear deterrence enterprise were
    accomplished by topline increases to avoid having to make drastic
    reductions to our conventional forces, and such increases would be
    prudent again.
        For the time period covered in the current fiscal year 2017
    President's Budget Future Year Defense Program, we believe that the
    costs of all nuclear enterprise modernization costs have been
    accommodated, without adversely impacting the funding for non-nuclear
    defense programs. As for follow-on fiscal years (beyond fiscal year
    fiscal year 2021), the DOD is fully aware of the funding challenges,
    and is already exploring options to mitigate production costs, by
    investing in innovative strategies to lower future costs for these
    programs.

        65. Senator Donnelly. Secretary McCord, the heaviest cost burden
    for our nuclear modernization efforts will fall on future
    administrations. What are you doing now to set the Department up for
    success in the future?
        Secretary McCord. Both the Navy and the Air Force are actively
    looking at developmental and production efficiencies that would lead to
    lower costs. We expect the total cost of nuclear modernization to be in
    the range of $350 to $450 billion. Although this still presents an
    enormous affordability challenge for DOD, we believe it must be funded.
    Previous modernizations of America's strategic deterrent and nuclear
    security enterprise were accomplished by topline increases to avoid
    having to make drastic reductions to conventional forces, and it would
    be prudent to do so again. I hope DOD can work with Congress to
    minimize the risk to our national defense.

        66. Senator Donnelly. Secretary McCord, where do you see the
    biggest risks in nuclear modernization from a budget perspective?
        Secretary McCord. From a DOD perspective, the most significant
    challenge will be coping with the synergy of developing and procuring
    several separate strategic platform and weapon systems concurrently in
    the coming decade. The prospect of acquiring a replacement for the
    Ohio-class ballistic missile submarine, a replacement for the Minuteman
    III Intercontinental Ballistic Missile, the Air Force new strategic
    bomber, and a new nuclear armed Air Launch Cruise Missile, while at the
    same instance supporting the operational deployment of legacy strategic
    systems will be demanding and difficult if not properly managed, which
    could adversely affect the funding for other national security
    activities.
        Also, while the budget demand for the Ohio Replacement Program
    (ORP); Long Range Standoff (LRSO) cruise missile; B-21 long range
    strike bomber; and the Ground Based Strategic Deterrent (GBSD) program
    are well known, there are several other systems in development, all in
    the same mission area that also mature in the next 10 years. Those
    include the B61 nuclear gravity bomb Tail Kit Assembly (B61 TKA);
    modifications and modernization of the Navy's Trident II (D5)
    Submarine-Launched Ballistic Missile and Air Force Minuteman III
    modernization projects.
        Collectively, these critical nuclear enterprise requirements could
    overwhelm the budget for other non-nuclear modernization programs.
    Especially in the time period between fiscal year 2023 and fiscal year
    2028, when several of the strategic platforms will reach rate
    production.
                       conventional prompt global strike
        67. Senator Donnelly. Secretary Carter, hypersonics are addressed
    as a high priority in your fiscal year 2017 budget request. Why?
        Secretary Carter. Hypersonics have potential to add a new dimension
    to U.S. military capabilities that are vital to maintaining military
    superiority in the future. Hypersonic vehicles and weapons could answer
    warfighter needs with technology innovation that offers promising
    capabilities to rapidly engage time-sensitive, high-value targets in
    anti-access/area denial environments.
        The Department is also aware of international investments in
    hypersonic technologies. It is important for the United States to
    understand the challenges with and advantages of this transformational
    technology.

        68. Senator Donnelly. Secretary Carter, do you view conventional
    prompt global strike as an important element of our hypersonic research
    and development efforts?
        Secretary Carter. Yes, the technology developed and tested as part
    of the Department's Conventional Prompt Strike (CPS) program has
    resulted in a much greater understanding of the extreme flight regimes
    and capabilities we may eventually deploy. The CPS National team has
    achieved numerous technological advances. A successful flight
    experiment in 2011 demonstrated the ability to fly a hypersonic glide
    body at hypersonic speeds over long distances, arriving at the intended
    destination. Future planned flight experiments will continue this
    technology maturation.
        Hypersonic weapons could provide new strategic approaches to
    preventing and winning conflicts against advanced threats, specifically
    time-critical, high-value targets in anti-access/area denial
    environments. The CPS effort is poised to achieve an acquisition
    milestone decision by the end of 2020, consistent with the fiscal year
    2016 National Defense Authorization Act.

        69. Senator Donnelly. Secretary Carter, what is your perspective on
    conventional prompt global strike transitioning to a program of record
    and the ideal timing for that transition?
        Secretary Carter. The Department is encouraged by efforts to date,
    in particular the successful hypersonic glide flight test in 2011.
    Continued Conventional Prompt Strike (CPS) research and development is
    promising and may enable a transition to a program of record by the end
    of 2020, consistent with the fiscal year 2016 National Defense
    Authorization Act.
        A decision to transition to a program of record will be based on a
    number of factors, including technology maturation, adversary
    capabilities, and a careful assessment of how CPS fits with other U.S.
    kinetic and non-kinetic capabilities. The current development program,
    with its upcoming flight tests, will further reduce technical risk,
    help determine deployment options, and position the Department well for
    a milestone decision and transition to a program of record no later
    than 2020.
                                   nswc crane
        70. Senator Donnelly. Secretary Carter, following up on your
    commitment to visit Naval Surface Warfare Center Crane, please provide
    preferred dates for the visit. I look forward to hosting you in
    Indiana.
        Secretary Carter. It is my understanding our staffs are working to
    coordinate a date for such a visit and I look forward to making it to
    Indiana and NSWC Crane in the future.
                                   __________
                  Questions Submitted by Senator Mazie Hirono
                             asia pacific-rebalance
        71. Senator Hirono. Secretary Carter, as the department continues
    to rebalance our military forces in the Asia-Pacific and Middle East,
    there are clearly new challenges in terms of available resources. How
    does the fiscal year 2017 budget proposal affect the rebalance and our
    military readiness in the Pacific region?
        Secretary Carter. The fiscal year 2017 President's Budget
    submission further operationalizes the rebalance to the Asia-Pacific.
    The United States seeks to preserve peace and stability, and maintain
    our strategic advantage in an area that is critically important to
    America's political, economic, and security interests. The rebalance
    will continue the Department's efforts to advance a geographically
    distributed, operationally resilient, and politically sustainable
    posture in the region. We continue to resource the forward presence of
    some of our most advanced capabilities in and around the region,
    including F-22 stealth fighter jets, P-8A Poseidon maritime
    surveillance aircraft, and our newest surface warfare ships. The
    Department also continues to resource the implementation of key posture
    initiatives in places like Guam, the Northern Marianas, and Australia;
    modernize our existing footprint in Korea and Japan; and strengthen
    existing partnerships and develop new ones, from India to Vietnam. Key
    contributions from partners like Singapore augment our investments and
    enable us to further realize our initiatives in the region.
        The Department is pursuing these initiatives in the context of
    broader efforts to support and strengthen a regional security
    architecture that benefits everyone--from modernizing alliances and
    building the capabilities of friends and allies who want to do more in
    the region, to bolstering our ties with the Association of Southeast
    Asian Nations. The budget fully supports the five-year, $425 million
    Southeast Asia Maritime Security Initiative.
        More long-term, the budget also invests heavily in the Joint
    Force's ability to deter and, if necessary, win a high-end conventional
    conflict in a contested environment that a potential adversary may
    choose to start, across all warfighting domains (air, land, sea, space,
    and cyberspace). China is among our most stressing competitors, as it
    continues to advance anti-access and other systems that seek to
    threaten U.S. military advantages in specific areas. In this context,
    the budget funds the development and fielding of a range of U.S.
    capabilities and new technologies to counter the growing military
    capabilities of competitors like China. These include investments in:
    procurement and modernization of strike fighter and attack aircraft;
    lethality in the platforms and payloads of our undersea force; new
    passive and active defenses to support a resilient posture; aggressive
    research and development efforts; and a range of cross-domain
    capabilities which strengthen Joint Force power projection, including
    in precision-guided munitions, stealth, electronic warfare, and assured
    operations in the cyber and space domains.
                                missile defense
        72. Senator Hirono. Secretary Carter, North Korea has recently
    fired test missiles into the Sea of Japan and was purported to have
    tested a nuclear weapon. While sanctions are important, we must remain
    vigilant and prepared as the country continues these provocative
    actions. Secretary Carter, given these actions and the likely
    improvement of the North Korean missile capability what is the
    Department doing in terms of protecting allies close to the situation
    such as Japan and Korea? As for protecting the United States, what is
    the department doing in terms of protecting against missile threats to
    Hawaii?
        Secretary Carter. The United States maintains an array of forward-
    deployed missile defense capabilities in both the Republic of Korea and
    Japan in addition to indigenous capabilities currently fielded by each
    of these nations for their own self-defense. Additionally, the United
    States continues to work with both nations to grow and adapt each
    alliance's defensive capabilities through continued Foreign Military
    Sales; bilateral and multilateral exercises; and a trilateral
    information-sharing arrangement between the United States, Japan, and
    the Republic of Korea. Further, the ground-based interceptors, deployed
    in Alaska and California, provide defensive coverage of Hawaii against
    the limited North Korean long-range missile threat. The total number of
    operational interceptors deployed in the United States is being
    increased from 30 to 44 to ensure that the United States remains
    protected against intercontinental ballistic missile threats. The
    United States and our allies are postured to defend against the limited
    North Korean ballistic missile threat.
                                     cyber
        73. Senator Hirono. General Dunford, you mentioned that Russia and
    China are actively challenging us in our cyber capabilities. North
    Korea and Iran, while not as big of a threat, also have cyber
    capabilities that are potentially harmful to us. Furthermore, in past
    hearings, the message has been that our adversaries are closing the
    technology gap and now have access to many of the capabilities that
    gave us the edge in the past. I realize that the current fiscal
    environment spurs the Department of Defense to focus on our immediate
    need for readiness, but it is also important that we do not lose our
    edge. The fiscal year 2017 budget funds $6.78 billion in fiscal year
    2017, which you stated is a 13 percent increase from last year. Do you
    feel that this funding will be adequate in enabling us to continue to
    maintain our edge? Can you please discuss the importance of maintaining
    our cyber capabilities and how this budget supports this need?
        General Dunford. [Deleted.]
                                     energy
        74. Senator Hirono. Secretary Carter, the national security of our
    country is greatly dependent on the implantation of energy security
    efforts. By decreasing our energy footprint, we enable our forces to
    more efficient and lessen our dependence on fuel. Can you please
    provide an update on how the fiscal year 2017 budget reflects the
    efforts of our country to reduce consumption, use alternative clean
    sources and increase U.S. energy security?
        Secretary Carter. The fiscal year 2017 President's Budget includes
    a $2.5 billion investment to increase our warfighters' capability
    through more energy efficient weapons systems, a reduction in energy
    consumption on our installations and in theater, and the use of
    alternative sources of energy to reduce operational burden--this
    increases U.S. military operational effectiveness and readiness.
        For instance, the Improved Turbine Engine Program will reduce fuel
    use in our UH-60 and AH-64 helicopters by 13 to 25 percent, and enable
    increased range, endurance, and performance in high altitude/high
    temperature conditions. At sea, the installation of Hybrid Electric
    Drive propulsion on board our DDG-51 class destroyers may extend time-
    on-station by up to 2.5 days. The Air Force's pursuit of adaptive
    engine technology will increase range and endurance of fighter aircraft
    and decrease the supporting requirement for tanker aircraft by
    achieving 25 percent greater fuel efficiency. Likewise, the Army's
    pursuit of tactical micro-grids and more efficient power generation
    will reduce the burden of resupplying contingency bases distributed
    across contested operating environments.
        The Department also is developing and fielding alternative, non-
    fossil fuel sources of energy that support increased warfighting
    capabilities. For example, the Marine Corps is fielding portable
    tactical solar systems, which, in conjunction with thermally improved
    shelters and more efficient environmental control systems, can reduce
    the frequency and risks of resupplying small contingency bases.
        The Department has made great progress towards improving the energy
    efficiency of its installations. With an annual energy cost of
    approximately $4 billion, installation energy is the single largest
    operating cost of our installations. To reduce this cost, the
    Department is pursuing energy efficiencies through building
    improvements, new construction, and third party investments. Since
    fiscal year 2009, we have reduced the energy consumed on our military
    bases by about 10 percent, avoiding over $1.2 billion in new energy
    costs. In addition to using appropriated funding for energy
    conservation and efficiency initiatives, the Department is continuing
    to take advantage of third-party financing tools through energy
    performance-based contracts to implement renewable technology and
    energy efficiency improvements in our existing buildings.
        The Department has also made great progress in deploying Renewable
    Energy (RE) and is using it for everything from powering remote special
    operations to air conditioning and lighting at our installations. We
    are on track to meet our RE facility energy goal of 3 gigawatts and 25
    percent by fiscal year 2025--approximately 262 new RE projects came
    online during fiscal year 2015, collectively representing 58 megawatts
    of new renewable capacity, that are cost-effective utility scale
    projects and, when feasible, include energy resilience capability
    (i.e., are micro-grid ready).
                              balancing resources
        75. Senator Hirono. Secretary Carter, in this fiscal environment
    you have to make hard choices between force structure, modernization,
    and readiness. Do you believe that this budget reflects the best
    balance between these three components? Which area suffered the most?
    What can we do in the future to ensure that we are adequately
    fulfilling the needs of each component?
        Secretary Carter. Yes, given the current funding constraints the
    Department has assumed some risk in fiscal year 2017 modernization;
    however, increased and predictable funding is needed over the Future
    Years Defense Program (FYDP) to sustain our investments in the future
    and maintain U.S. superiority. The fiscal year 2017 budget request
    strikes a prudent balance among the modernization of the Joint Force,
    its size, and its readiness, and continues to keep faith with
    servicemembers and their families. The fiscal year 2017 funding is
    constrained by the Bipartisan Budget Act (BBA) of 2015, but this budget
    reshapes the Department in order to address current and future
    operational challenges. The Department's fiscal year 2017 budget
    retains major elements of our planned force structure; invests in the
    future; emphasizes lethality and capability over size; pursues
    innovative ``offset'' capabilities and processes; and enables the Joint
    Force to operate across all domains including cyber. The Congress needs
    to eliminate the funding caps in order to ensure we are adequately
    fulfilling the needs of each Component.
                                 modernization
        76. Senator Hirono. Secretary Carter, the current fiscal
    environment forces the services to balance readiness and modernization.
    When modernization efforts slip to the right, equipment is forced to
    perform beyond the service life expectation and we risk the
    repercussions of an aging fleet. Do you believe that the budget
    adequately focuses on the need for modernization? What areas are you
    most concerned about?
        Secretary Carter. The Department has assumed some risk in fiscal
    year 2017 modernization due to fiscal constraints; however, increased
    and predictable funding is needed over the Future Years Defense Program
    (FYDP) to sustain our investments in the future and to maintain U.S.
    superiority. The fiscal year 2017 budget request strikes a prudent
    balance among the modernization of the Joint Force, its size, and its
    readiness, and continues to keep faith with servicemembers and their
    families. The fiscal year 2017 funding is constrained by the Bipartisan
    Budget Act (BBA) of 2015, but this budget reshapes the Department in
    order to address current and future operational challenges. The
    Department's fiscal year 2017 budget retains major elements of our
    planned force structure; invests in the future; emphasizes lethality
    and capability over size; pursues innovative ``offset'' capabilities
    and processes; and enables the Joint Force to operate across all
    domains including cyber.
        The Department's greatest responsibility is to win the nation's
    wars. The Department will continue to invest in the most capable,
    ready, and efficient force that can project power globally for full-
    spectrum operations against a range of threats. The fiscal year 2017
    budget request supports the following major modernization efforts:

          Provides the Army, Marine Corps, and special operations
    forces with greater lethality to ensure ground forces can deter and, if
    necessary, fight and win a full-spectrum conflict.
          Provides stability in Navy shipbuilding while buttressing
    aviation and weapons to address emerging challenges. The fiscal year
    2017 budget request supports the construction funding for 38 ships
    across the FYDP and supports steady production of destroyers and
    submarines; 10 destroyers and 9 submarines are constructed through
    fiscal year 2021 to support a fleet size of 308 ships.
          Includes funding in the FYDP shipbuilding construction
    program for the Ohio Replacement Program Advanced Procurement beginning
    in fiscal year 2017; 1 LHA amphibious assault ship replacement; 4 T-
    AO(X) fleet oilers, and continued funding for the refueling and
    overhaul of the USS George Washington (CVN 73).
          Funds 2 littoral combat ships and continues to finance
    the detailed design and construction of the second Ford-class carrier
    and provides for the procurement of carrier-based aircraft to address a
    looming strike-fighter shortage in the 2020s, and it bolsters funding
    for some of the Navy's most capable weapons to provide a powerful
    deterrent to potential aggressors.
          Supports the Marine Corps efforts to actively modernize
    and prepare for future challenges, as demonstrated by its Joint Strike
    Fighter program achieving initial operating capability last year, and
    increase this momentum with new technologies to enable its mission set.
          Maintain an Air Force with global power projection
    capabilities and modernizing next generation Air Force combat
    equipment--to include fighters, bombers, and munitions--particularly
    against increasingly sophisticated air defense systems, while
    sustaining the health of the combat fleet.

        I am most concerned with ensuring that U.S. Forces be the best
    trained warfighters with the most technologically advanced equipment
    available to ensure the security of the United States and its allies.
                          veterans' transition program
        77. Senator Hirono. Secretary Carter, the need for improvement in
    enhancing veterans' transition programs continues to be an important
    issue. I'm sure you agree that supporting our servicemembers during
    their transition into civilian life should remain a top priority for
    the Department. Please comment on how the fiscal year 2017 budget
    supports this area and could you provide any updates on the joint
    collaboration efforts between DOD and VA?
        Secretary Carter. Supporting servicemembers during their transition
    into civilian life remains a top priority for the Department.
        The proposed fiscal year 2017 budget supports the Department's
    current efforts to improve servicemember transition. It sustains
    programs that educate and credential servicemembers as well as those
    that improve transition preparedness of servicemembers throughout their
    military careers.
        The proposed fiscal year 2017 budget also funds efforts that
    inspire future generations to serve. These efforts include funding: to
    enact a modern military retirement system; sustain programs dedicated
    to supporting financial readiness and ending veteran homelessness; and
    improve job skills training, credentialing and license portability,
    particularly for dislocated workers, transitioning servicemembers,
    veterans, and military spouses.
        Collaboration between the Department of Defense (DOD) and the
    Department of Veterans Affairs (VA) regarding transition is strong. DOD
    relies heavily on the VA to provide resources and services to
    transitioning servicemembers who either do not meet the Career
    Readiness Standards or are determined to need further transition
    support. The Department partners closely with the VA through the
    Transition Assistance Program (TAP) Executive Council and Senior
    Steering Group to monitor the execution, assessment, and modification
    of TAP. Additionally, the Department continues to collaborate with VA
    through many programs to ensure the flow of medical and health-related
    information to allow for a continuum of care. Furthermore, the
    Department, working with the VA and the Department of Labor, continues
    to directly engage states regarding the elimination of barriers for
    servicemembers and veterans to receive civilian licenses.
        The Department appreciates Congress's efforts to support
    servicemembers in their transition into civilian life, particularly
    through the encouragement of constituent businesses and organizations
    to educate, certify, and employ our transitioning servicemembers.
                 dod-va electronic health record collaboration
        78. Senator Hirono. Secretary Carter, in the 2008 National Defense
    Authorization Act, the Department of Defense and the Department of
    Veterans Affairs were directed to implement ``fully interoperable''
    electronic health records. Seven years later, the Government
    Accountability Program placed VA Electronic Health Records on its high
    risk list for mismanagement, waste, cost overruns and in most need of
    transformation. One of the problems cited by GAO was the continued lack
    of interoperability between DOD and VA Health Records, which inhibit
    VA's ability to provide timely, quality health care to our nation's
    veterans. This is a problem that GAO has reported on for more than a
    decade, and a problem that is necessary to address in order to ensure a
    continuum of care for veterans. Recently, DOD and VA have both
    announced plans to upgrade their existing software system. DOD has
    announced that it will spend 4.3 billion to upgrade the Armed Forces
    Longitudinal Application, while VA is continuing to update VistA. Can
    you please provide an update and comment on this issue?
        Secretary Carter. Our servicemembers, veterans, retirees, and their
    families deserve nothing less than the best possible health care and
    services that the Department of Defense (DOD) and Department of
    Veterans Affairs (VA) can provide. Our mission is to fundamentally and
    positively impact the health outcomes of active duty military,
    veterans, and eligible beneficiaries. To this end, DOD is committed to
    two equally important objectives: improving data interoperability with
    both VA and our private sector healthcare partners, and successfully
    transitioning to a state-of-the-market electronic health record that is
    interoperable with VA and the commercial healthcare systems used by our
    TRICARE network providers. Ultimately, this means that up-to-date and
    comprehensive health care information is available whenever and
    wherever it is needed to facilitate decisions.
        We have made significant progress in achieving both of these
    objectives. Today, DOD and VA share a significant amount of health
    data--more than any other two major health systems. DOD and VA
    clinicians are currently able to use their existing software
    applications to view records of more than 7.4 million shared patients
    who have received care from both Departments. This data is available
    today in near real time, and the number of records viewable by both
    Departments continues to increase. Both Departments' health care
    providers and VA claims adjudicators successfully access data through
    our current systems nearly a quarter of a million times per week.
        This process involves two of the world's largest health care
    providers, with hundreds of thousands of users, and millions of data
    elements. This requires strong communication, collaboration, and
    technical leadership. A tangible product of this work can be seen in
    the Joint Legacy Viewer (JLV), which provides an integrated display of
    DOD, VA, and TRICARE network provider data for clinicians and other
    users. For DOD clinicians, JLV is embedded directly into the Armed
    Forces Health Longitudinal Technology Application (AHLTA), allowing any
    registered user to easily view a comprehensive picture of a
    beneficiary's health record, regardless of whether the data resides in
    AHLTA, Veterans Health Information Systems and Technology Architecture
    (VistA), or a TRICARE network provider's EHR. JLV has received
    considerable praise from both DOD and VA users, with many commenting on
    its ability to save time in clinical interactions and to allow benefits
    adjudicators to cross-reference retiree records with the more
    comprehensive medical record in JLV. Because of this positive feedback,
    DOD and VA have sought to rapidly expand access to JLV. Originally
    developed as a pilot program with 275 users at nine sites in 2014, JLV
    has now been fielded to nearly every DOD medical facility, all VA
    medical centers, and every Veterans Benefits Administration regional
    site, supporting over 100,000 registered users.
        In November 2015, DOD formally issued a letter to Congress
    certifying that we had met the requirement of interoperability in the
    fiscal year 2014 National Defense Authorization Act (NDAA) by mapping
    all data in DOD's AHLTA outpatient electronic health records (EHR)
    system to existing national standards. Based on the recommendations of
    DOD and VA functional representatives, DOD also integrated data from
    other DOD health IT systems, including inpatient, theater, and
    pharmacy. Once VA finalized its efforts, we delivered to Congress a
    joint certification letter on April 8, 2016 (see enclosed).
        On a parallel path, DOD's modernization effort is well underway. In
    July 2015, the competitive contract for a new EHR was awarded to a team
    led by Leidos that includes 34 other partners. At the core of this
    modernization will be Cerner's EHR, one of the most widely used and
    trusted EHR systems on the market today, used in nearly 18,000
    facilities worldwide. Henry Schein, an industry-leading capability,
    will support the dental component of the new EHR. In addition to
    utilizing the Cerner and Henry Schein suite of solutions, this new EHR
    system will continue to provide industry leading interoperability with
    the VA, other federal agencies, and the private sector by using
    federally recognized Office of the National Coordinator standards. In
    accordance with the fiscal year 2014 NDAA, deployment is scheduled to
    start later this year at the initial operational capability sites in
    Washington State representing all three services.
        DOD and VA remain in mutual agreement that interoperability with
    each other and our private sector care partners remains a priority.
    This broader interoperability is not dependent on a single system. This
    strategy makes sense for both Departments and provides the most
    effective approach moving forward to care for servicemembers, veterans,
    retirees, and their families. The effort continues to have direct
    senior-level oversight from both Departments as well as rigorous
    oversight from the Congress.
                                   __________
                 Questions Submitted by Senator Martin Heinrich
                                  third offset
        79. Senator Heinrich. Congress authorized the ``Third Offset''
    initiative last year to accelerate the fielding of systems that would
    help counter the technological gains of our adversaries. There was a
    significant amount of bipartisan support in congress when it voted in
    favor of the NDAA and later wrote a $100 million check for the effort.
    As part of our legislative responsibility to appropriate dollars and
    direct how they are spent, the defense committees instructed that up to
    half of the funds be spent on the promising area of Directed Energy.
    Yet, we are hearing reports that none of these funds is being spent on
    Directed Energy. Is this specific funding being spent, and will be
    spent, on Directed Energy as intended by Congress and is so, how much?
        Secretary Carter. The Department appreciates the congressional
    appropriation of $100 million from the fiscal year 2016 Omnibus
    Appropriations Act to support the Third Offset Strategy to accelerate
    systems that would help counter the technological gains of our
    adversaries. The Department is currently vetting internal proposals
    that are responsive to the Third Offset initiative, which include
    directed energy program proposals.

        80. Senator Heinrich. Can you please look further into this, make
    appropriate changes where necessary, and keep this committee informed
    of those decisions?
        Secretary Carter. Yes, I will ensure the committee is apprised of
    the Department's plans to execute the funds within the Technology
    Offset congressional add.
                                   encryption
        81. Senator Heinrich. I read with interest the remarks you recently
    made during your visit to California, when you said that, ``data
    security is an absolute necessity for [the military],'' and that, ``I'm
    not a believer in back doors or a single technical approach to what is
    a complex problem.'' I strongly agree with you. Robust encryption is
    central to securing the financial transactions, health data, and
    personal safety of all U.S. citizens. I'd like to get your view on our
    adversaries' cyber capabilities, and the threat they pose to our
    national interests. Do state-sponsored cyber actors in other countries
    have offensive tools and capabilities that rival that of the United
    States in cyberspace?
        Secretary Carter. [Deleted.]

        82. Senator Heinrich. To what extent do these foreign cyber actors
    pose a significant threat not just to the personal data and safety of
    U.S. citizens, but also to the security and reliability of U.S.
    critical infrastructure?
        Secretary Carter. [Deleted.]

        83. Senator Heinrich. If you knew your adversary required all
    internet service providers and app developers to build decryption tools
    for their software and hardware, would U.S. Cybercommand consider that
    a key vulnerability to target in preparing the battlefield and in war-
    planning?
        Secretary Carter. Any effort to weaken or bypass encryption
    represents a vulnerability that could be used to exploit a target.
    Strong encryption is good for U.S. national security, which is the
    reason I have been opposed to a single technical approach to commercial
    encryption that would give the Government unfettered access to data.
        General Dunford. Adversary use of decryption tools could be a
    vulnerability depending on the cyber actor and the software being
    employed. The vulnerability's magnitude depends on the nature of
    software being employed and complexity of the cyber domain.
                                    ukraine
        84. Russia has said it is removing the main part of its forces from
    Syria, after having largely taken the winter off from fighting in
    Ukraine. What are your thoughts on Russia's next moves in Eastern
    Europe?
        Secretary Carter. [Deleted.]
        General Dunford. The conflict in Ukraine will continue to simmer as
    Russia attempts to pressure and leverage Ukraine's current political
    crisis. We expect Russia to exploit opportunities to sustain
    instability in Ukraine.

        85. What are we doing to better monitor the situation in Ukraine
    and provide strategic warning should Russia decide to reengage its
    forces there?
        Secretary Carter. [Deleted.]
        General Dunford. [Deleted.]
                          european security initiative
        86. Senator Heinrich. I was pleased to see the budget request year
    quadruples the European Security Initiative to $3.4 billion. I was also
    glad to see we will be deploying several thousand additional troops to
    Europe, and providing for the first time a more permanent presence in
    the Baltics. However, this troop deployment won't actually happen until
    2017. What kind of force presence do we have in place today, and is it
    enough to reassure our allies that the United States will defend them
    against Russian aggression?
        Secretary Carter. There are approximately 62,000 active duty U.S.
    military personnel stationed in 12 countries across Europe. This
    presence is comprised of components from all of America's military
    services who organize, train, and equip ready forces to provide timely
    regional security. Their missions range from joint and combined multi-
    national operations to engagement activities with Allied and partner
    nations, while also supporting missions of U.S. Africa Command, U.S.
    Transportation Command, the North Atlantic Treaty Organization (NATO),
    and others.
        Additionally, there is an existing rotational presence of U.S.
    Forces and armored equipment in Eastern Europe to include the Baltics.
    The proposed activities in the fiscal year 2017 European Reassurance
    Initiative (ERI) request will increase and enhance that rotation to a
    persistent presence of armored forces in Eastern Europe that will
    deploy with modernized equipment. U.S. presence activities have been
    effective in assuring NATO members of U.S. commitment to their security
    and territorial integrity, with the activities in the fiscal year 2017
    ERI request continuing those assurance efforts while also funding
    deterrence measures to enable a rapid response to threats made by
    aggressive regional actors.
        General Dunford. Currently, a US-based Armored Brigade Combat Team
    rotates to Europe for approximately six months per year. During the
    time it is in Europe, the Brigade supports Operation Atlantic Resolve
    (OAR), including forward deployments in the Baltics, Poland, Romania,
    Bulgaria, as well as other training events and exercises across Europe.
    During periods when the US-based armored unit is not in Europe, one of
    the two Europe-based brigade combat teams deploys a battalion to the
    Baltics and Poland, and the 12th Combat Aviation Brigade maintains a
    forward deployed helicopter detachment in the Baltics. Although we
    believe the current measures have reassured our Allies, our enhanced
    posture will bolster deterrence and improve operational effectiveness.
    We are in near-constant contact with our allies, and they repeatedly
    emphasize that they deeply appreciate the persistent rotational
    presence of U.S. Forces to Eastern Europe for the last two years, and
    they are confident of U.S. commitment to their security.

        87. Senator Heinrich. Is this presence sufficient to deter Russia
    from further efforts to annex its neighbors?
        Secretary Carter. The European Reassurance Initiative (ERI) is part
    of a comprehensive approach to address U.S. security priorities in
    Europe. ERI funds have been used to supplement U.S. Force presence in
    Europe through funding the rotational presence of U.S. Forces and
    armored equipment in Eastern Europe. The fiscal year 2017 ERI request
    will increase and enhance that rotation to a persistent presence of
    armored forces in Eastern Europe that will deploy with modernized
    equipment. In addition to funding these force rotations to assure
    allies, the fiscal year 2017 ERI request will also fund deterrence
    measures that will increase responsiveness and readiness by pre-
    positioning ammunition, fuel, and equipment and by improving
    infrastructure to enhance our ability to provide a rapid response
    against threats made by aggressive regional actors.
        When taken in sum, these activities are a visible demonstration of
    the United States' resolve to support North Atlantic Treaty
    Organization assurance measures, bolster the security and capacity of
    our regional partners, deter and respond to aggressive actions from
    regional actors, and respond to crises in the region.
        General Dunford. Our growing forward presence and unambiguous
    commitment to Article 5 of the North Atlantic Treat is deterring Russia
    from further aggression in Europe. We also continue work with NATO
    Allies to increase their presence in front line states, while enhancing
    NATO defense plans and non-military components.
        The fiscal year 2017 ERI budget request includes two flagship
    initiatives that, if funded by Congress, will improve the U.S.
    deterrence posture. Those initiatives will allow continuous, rotational
    presence of a U.S.-based Armored Brigade Combat Team (ABCT) in Central
    and Eastern Europe, and the Army Pre-positioned Stock consisting of the
    equipment for a Division Headquarters, an Armored Brigade Combat Team,
    and a Fires Brigade. These activities reaffirm the U.S. commitment to
    NATO's collective defense under Article 5 of the North Atlantic Treaty,
    and to deter Russian aggression.
                             isil global coalition
        88. Senator Heinrich. You recently met in Brussels with 27 other
    countries' defense ministries involved in the military coalition to
    defeat ISIL. This coalition included partners like Saudi Arabia and the
    UAE. What kind of new commitments from these countries are you getting,
    and how do you plan to keep these countries engaged and participating
    in the coalition?
        Secretary Carter. The countries that attended the Defense
    Ministerial in Brussels pledged new commitments to the military
    campaign in various forms. These include: providing additional trainers
    and advisors, increasing airstrikes and expanding air operations into
    Syria, providing additional equipment and weapons, supporting mobility
    and logistics, providing intelligence, surveillance, and reconnaissance
    (ISR) and airborne command and control (C2), supporting police
    training, and providing medical support, among others. The granularity
    of numbers of the country of origin for a large number of commitments
    are classified, however, some of the contributions publicly announced
    include:

          Canada: increasing train, advise, and assist personnel,
    and adding medical personnel
          Denmark: seeking parliamentary approval of air strikes
    into Syria
          Italy: increasing personnel recovery assets and
    leadership and providing security forces for Mosul Dam repairs
          The Netherlands: extending its air operations into Syria
    and intensifying training of Iraqi Security Forces (ISF) including
    Peshmerga
          Saudi Arabia: recommitted to the air campaign and began
    strikes
          UAE: recommitting to the air campaign
          UK: Increasing strike aircraft, authorizing Syria
    operations, and providing additional personnel

        The Department of Defense (DOD) continues to engage partners
    through a series of upcoming meetings and through detailed tracking and
    coordinating efforts. DOD tailors its bilateral and multilateral
    engagements closely to encourage partners to contribute more, and it
    tracks the status of partner nation contributions very closely. In
    addition to my regularly scheduled bilateral engagements, I will
    participate in three multilateral conferences with my counterparts
    through June 2016, including the U.S.-Gulf Cooperation Council (GCC)
    Defense Ministerial that I am hosting on April 20-21, 2016, where I
    will engage our Gulf Partners on a myriad of topics, including the
    counter-ISIL fight.
                   funding shortfalls impacting troop morale
        89. Senator Heinrich. General Dunford, every fiscal decision has
    the potential to impact servicemembers. Sequestration's negative impact
    on troop morale has repeatedly been raised, not only in relation to the
    quality of life and needs of servicemembers and families, but also in
    regards to the unpredictability of resources and training. Could you
    discuss the impact on troop morale if the DOD is funded below the
    requested levels? Could you also discuss its impact on servicemembers
    and their families?
        General Dunford. We have an amazingly resilient and committed All-
    Volunteer Force. However, the uncertainty created by sequestration
    added significant stress to that Force. Continued reductions in funding
    constrain our resources and create additional uncertainty. This will
    lead to insufficient training and equipment, possible further end
    strength reductions, and uncertainty in future pay and benefits. The
    culminating adverse impacts on job certainty, readiness, and retention
    weigh heavily on our All-Volunteer Force and their families.
                            impact of increased risk
        90. Senator Heinrich. General Dunford, budget reductions inevitably
    reduce the military's margin of error in dealing with risk and a
    smaller force strains our ability to simultaneously respond to more
    than one contingency operation. You stated that our country's top five
    challenges are China, Russia, North Korea, Iran, and the Islamic State.
    The United States is being forced to respond to these challenges in two
    different parts of the world. Do you believe this fiscal year 2017
    budget supports adequate operations needed in both the Asia-Pacific and
    in the Middle East? In what areas will the DOD have to accept increased
    risk? How will the various combatant commanders adjust for these risks?
        General Dunford. Our budget invests in the capabilities needed to
    maintain an advantage over adversaries and to transition the Joint
    Force to full-spectrum readiness. However, this process remains slow
    and fragile due to current operational demands. We are closely managing
    how the force is employed in all operations to meet current demands.
    The fiscal year 2017 budget balances investment in high-end
    capabilities, the capability and capacity to meet current operational
    demands, and the need to rebuild readiness and is sufficient to meet
    the strategy. However, I am concerned that current resource levels for
    the Department, even absent sequestration, are insufficient to meet the
    impending bow-wave of deferred modernization starting in 2019. To
    adjust for the risks, the Department has a process to allow combatant
    commanders the ability to identify Capability Gaps that inform
    priorities for future resourcing decisions.
                                  auditability
        91. Senator Heinrich. Mr. McCord, what is the current status on the
    DOD's ability to reach full auditability? Is the Department still on
    track for meeting the goal of having financial statements audit-ready
    department-wide by 30 September 2017?
        Secretary McCord. Significant progress has been made in the last
    five years in preparing the Military Departments, the defense agencies,
    and other defense organizations to be ready for annual financial
    audits. Last year, each Military Department began an independent audit
    of its
        fiscal year 2015 current-year appropriations, and most of the
    larger defense organizations completed a mock audit. Current audits
    cover 90 percent of the Department's $673 billion in current-year
    budgetary resources and 78 percent of total budgetary resources. Work
    to prepare the remaining statements is intensifying. This is a great
    achievement given the magnitude and complexity of the Department.
        The culture, business processes, and systems that have been in use
    for many years ably support the DOD mission, but are not so well suited
    for a financial audit. Accordingly, we remain fully committed to making
    the necessary improvements in our business processes and systems, as
    well as the reliability of our data, so that we can begin an audit of
    DOD's financial statements by September 30, 2017. We have a credible
    plan addressing these critical capabilities that is being monitored by
    the Assistant Deputy Chief Management Officer and me. In line with
    these plans, each component reports its progress every 60 days in
    fixing known problems, such as balancing our checkbook with Treasury,
    and in preparing other areas, such as completing inventories and
    valuation of assets.
        Further, the Services have reported to the Deputy Secretary of
    Defense (DSD) that they would be ready for an audit by September 30,
    2017. The DSD has reiterated to senior leaders across the Department
    that audit is a top priority.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             TUESDAY, APRIL 5, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                               U.S. CYBER COMMAND

        The committee met, pursuant to notice, at 9:33 a.m. in Room
    SH-216, Hart Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis,
    Graham, Reed, Nelson, McCaskill, Manchin, Shaheen, Gillibrand,
    Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Good morning. Committee meets today to
    receive testimony from Admiral Michael Rogers, USN, the
    Commander of U.S. Cyber Command, Director of the National
    Security Agency, and Chief of the Central Security Service.
        A lot of titles, Admiral. That's good. Thank you for your
    many years of distinguished service and for appearing before
    this committee today.
        Threats to our national security in cyberspace continue to
    grow in speed and severity. New attacks appear in the headlines
    on an increasingly frequent basis as nation-states, criminal
    organizations, and terrorists seek to leverage technology to
    steal, coerce, and deter. When you appeared before this
    committee in September, Admiral Rogers, you noted that we,
    quote, ``have peer competitors in cyberspace'' and that some of
    them have, quote, ``already hinted that they hold the power to
    cripple our infrastructure and set back our standard of living
    if they choose.''
        Since that hearing, Russia has demonstrated the ability to
    cut power to hundreds of thousands of people in central and
    western Ukraine. This attack, the first confirmed successful
    cyberattack on a large-scale power grid, is terribly
    significant, as it demonstrates a sophisticated use of
    cyberweapons as a destabilizing capability and an effective
    deterrence tool. With Russia, China, and other potential
    adversaries developing capabilities intended to deter us along
    with our friends and allies, we must develop not only an
    effective deterrence policy, but also the capabilities
    necessary to deter any nation seeking to exploit or coerce the
    United States through cyberspace.
        After significant urging by this committee, I believe the
    Defense Department is--recognized this need, and important
    progress has been made at Cyber Command. But, there's still a
    lot of work to do. For the most part, the services appear to be
    on track to meet the goal for the development of a 6,200-person
    cyberforce, but unless we see dramatic changes in future
    budgets, I'm concerned that these well-trained forces will lack
    the tools required to protect, deter, and respond to malicious
    cyberbehavior. In short, unless the services begin to
    prioritize and deliver the cyberweapon systems necessary to
    fight in cyberspace, we're headed down the path to a hollow
    cyberforce. Just as it would be unacceptable to send a soldier
    to battle without a rifle, it's unacceptable to deprive our
    cyberforces the basic tools they need to execute their
    missions. Some service budgets omitted funding for even the
    most basic tools, like those necessary for cyberprotection
    teams to assess and triage compromised networks. This is
    unacceptable, and I look forward to hearing your assessment,
    Admiral Rogers, of the Military Service's commitment to
    equipping the cyberforce. I also look forward to hearing
    whether the new acquisition authorities we provided Cyber
    Command in the fiscal year 2016 NDAA will help address some of
    these service-induced shortfalls.
        While I'm encouraged by some of the progress of the
    Department of Defense in Cyber Command, I remain concerned that
    the administration's cyberpolicy, as a whole, remains detached
    from reality. For years, our enemies have been setting the
    norms of behavior in cyberspace while the White House sat idly
    by, hoping the problem will fix itself. In December, the
    administration provided its response, nearly a year and a half
    late, to this committee's requirement for a cyberdeterrence
    policy. The response reflected a troubling lack of seriousness
    and focus, as it simply reiterated many of the same
    pronouncements from years past that have failed to provide any
    deterrent value or decrease the vulnerability of our Nation in
    cyberspace. I applaud the recent efforts of the Justice
    Department to name and shame Iran for its cyberattacks against
    our critical infrastructure and financial sector. But, again, I
    remain puzzled as why it took nearly 5 years after Iran began
    attacking U.S. banks for the administration to begin doing so.
    That kind of indecisiveness is antithetical to deterrence, and
    our Nation simply cannot afford it.
        Let me close by thanking you, Admiral Rogers, for your
    leadership at Cyber Command. You've always been very candid and
    forthcoming before this committee, and we appreciate that very
    much. We're finally beginning to field the cybercapabilities we
    need for the future. As we confront the challenges ahead, this
    committee remains committed to doing everything we can to
    provide you and the men and women you lead with the tools
    necessary to defend our Nation in cyberspace. I look forward to
    your testimony.
        Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman.
        I, too, would like to welcome Admiral Rogers back to the
    committee--thank you, sir--and to express my gratitude to you
    and--but also to the men and women that you lead, the military
    and civilians who work to secure the department of networks,
    support the combatant commands in cyberspace, and defend the
    Nation against major cyberattacks.
        Cyber Command is at another set of crossroads. The
    committee received testimony last fall from multiple witnesses
    recommending elevation of Cyber Command to a full unified
    command. I understand that elevation has been discussed by the
    Joint Chiefs, and that the Secretary is considering this
    recommendation as part of the Goldwater-Nichols reform effort.
    I would like to hear, Admiral, in your testimony and your
    comments, your views on the readiness of the Command for
    elevation and on the related issue of sustaining the dual-hat
    arrangement under which the commander of Cyber Command also
    serves as the Director of the National Security Agency.
        Six years after Cyber Command was established, the Military
    Services are just now presenting trained military cyberunits to
    command. A little more than half of the planned units have
    reached initial operational capability. This is a major
    milestone, but trained individuals are only one part of
    military readiness. The other pieces are unit-level training
    and proficiency and equipping the forces. The Defense
    Department is only at the beginning phase of building a unit-
    level training environment. There are shortages and capability
    shortfalls in the toolkits available for the Cyber Protection
    Teams, and the Department has not yet developed a plan for or
    selected a service executive agent to acquire foundational
    situational awareness and command-and-control systems for our
    cyberforces. I look forward to a status report from you, sir,
    about the pace of progress in these areas.
        There are other foundational challenges. The Department has
    deployed, and is in the process of acquiring, additional
    capable cybersecurity centers at all layers of its networks,
    from the large perimeter gateways to the millions of individual
    computers spread across the globe. Cyber Command has dozens of
    Cyber Protection Teams assigned to defend key segments of our
    networks, while the Military Services and the Defense
    Information Systems Agency have their own computer network
    defense organizations. A major task now is to integrate these
    centers and organizations under joint operational concepts to
    enable real teamwork. Admiral, again, I will be interested in
    your thoughts on this very difficult issue.
        I am pleased that Cyber Command is joining the initiative
    to leverage the innovation of the commercial informational
    technology industry for both cybersecurity and its other
    missions. To keep pace with a rapidly changing threat, it makes
    sense to partner with an industry that innovates at the same
    pace. Admiral, I'm interested in hearing how you plan to apply
    the acquisition authorities the committee granted to Cyber
    Command in last year's Defense Authorization Act to working
    with the information technology sector, in particular.
        Finally, Mr. Chairman, I would note that Admiral Rogers, in
    his prepared statement for the hearing today, quoted the
    Director of National Intelligence to the effect that China is
    still engaged in economic theft in cyberspace and that, quote,
    ``Whether China's commitment of last September moderates its
    economic espionage remains to be seen.'' It is obviously a very
    serious matter if China does not live up to President Xi's
    pledge to President Obama. Again, I would be interested in your
    comments, sir, on this issue.
        Thank you for your service. I look forward to your
    testimony.
        Chairman McCain. Admiral Rogers, welcome back.

     STATEMENT OF ADMIRAL MICHAEL S. ROGERS, USN, COMMANDER, U.S.
       CYBER COMMAND; DIRECTOR, NATIONAL SECURITY AGENCY; CHIEF,
                       CENTRAL SECURITY SERVICES

        Admiral Rogers. Thank you, sir. Good to be back.
        Chairman McCain, Ranking Member Reed, and distinguished
    members of the committee, I am pleased to appear before you
    today to discuss the opportunities and challenges facing U.S.
    Cyber Command. I'd like to thank you for convening this forum.
        It's an honor to represent the individuals of this fine
    organization, and I'm grateful for, and humbled by, the
    opportunity to lead this impressive team. I'm confident you'd
    be extremely proud of the men and women of U.S. Cyber Command
    if you saw their commitment to mission and hard-earned
    successes on a daily basis, as I am fortunate to do.
        While my written statement goes into greater detail, I'd
    like to briefly highlight the challenges we face in today's
    environment and also some of the initiatives that the Command
    is pursuing to meet those challenges.
        Over the last year, we've seen an increase of cyberspace
    operations by state and nonstate actors. We've seen a wide
    range of malicious cyberactivities aimed against both
    government and private-sector targets. At U.S. Cyber Command,
    we focus on actors that pose a threat to our national interests
    through cyberspace. Nations still represent the gravest threats
    to our Nation's cybersecurity, but we continue to watch closely
    for signs of nonstate actors making significant improvements in
    their cybercapabilities.
        Malicious actors use cyberspace to steal intellectual
    property and citizens' personal information; and criminals'
    increasing use of ransomware to extort companies is a worrisome
    trend. Malicious actors have also intruded into networks,
    ranking from the Joint Staff's unclassified network to networks
    controlling our Nation's critical infrastructure. These threat
    actors are using cyberspace, I believe, to shape potential
    future operations, with a view to limiting our options in the
    event of a crisis. Despite this challenging environment, U.S.
    Cyber Command continues to make progress as it emphasizes
    shifts to operationally--operationalizing the Command and
    sustaining its capabilities.
        Over the past year, we've continued building the capability
    and capacity of Cyber Command while operating at an increased
    tempo. We continue to make progress in building the cyber
    mission force of the 133 teams that will be built and fully
    operational by 30 September 2018. Today, we have 27 teams that
    are fully operational and 68 that have attained initial
    operational capability. It's important to note that even teams
    that are not fully operational are contributing to our
    cyberspace efforts, with nearly 100 teams conducting cyberspace
    operations today. For example, the Command continues to support
    U.S. Central Command's ongoing efforts to degrade, dismantle,
    and ultimately defeat ISIL [Islamic State of Iraq and Syria].
    Last year, we noted we had just established the Joint Force
    Headquarters DOD [Department of Defense] Information Networks.
    Today, I can probably report the JFHQ DODIN, as we call it, has
    made great strides towards its goal of leading the day-to-day
    security and defense of the Department's data and networks.
    Also, as the DOD expands the joint information environment, we
    will have significantly more confidence in the overall security
    and resilience of our systems. Our operations to defend DOD
    networks and the Nation's critical infrastructure proceed in
    conjunction with a host of Federal, industry, and international
    partners.
        Recognizing that DOD is just one component of the whole-of-
    nation's cyber team, U.S. Cyber Command's own annual exercises,
    CYBERFLAG and CYBERGUARD, offer unmatched realism as we train
    with Federal, State, industry, and international partners.
    Additionally, Cyber Mission Teams and Joint Cyber Headquarters
    are regular participants in the annual exercises of all the
    combatant commands. While our training is improving, we need a
    persistent training environment, which the Department is
    continuing to develop, to gain necessary operational skills and
    to sustain readiness across our force.
        I'm excited by the innovation, cultural shift, and focus on
    long-term strategy that is emerging in the Command and the DOD.
    In the last year, we've established a Point of Partnership
    Program in Silicon Valley to link Command personnel to some of
    the most innovative minds working in cyberspace. Our program is
    aligned and colocated with the Department's Defense Innovation
    Unit Experimental, or DIUX, and we are building on the synergy
    among all DOD elements under the DIUX umbrella.
        Last September, the Department identified the need to
    transform DOD's cybersecurity culture by improving individual
    performance and accountability. The Secretary and Chairman
    approved the DOD Cyber Security Culture and Compliance
    Initiative to address those concerns. Cyber Command was
    identified as the mission lead for this initiative, and is
    working closely with the Joint Staff and OSD to build the
    requisite capacity and structure. Cyber Command is also
    actively contributing to the implementation of the new DOD
    cyber strategy. The strategy, released in April of 2015,
    provides a detailed plan to guide the development of DOD's
    cyberforces and strengthen DOD's cyberdefense and
    cyberdeterrence posture. The pervasive nature of cyberspace
    throughout all facets of life and across geographic boundaries,
    coupled with a growing cyberthreat, makes deterrence in
    cyberspace a challenge, but evermore important. A proactive
    strategy is required that offers deterrent options to the
    President and Secretary of Defense, to include integrated
    cyberspace operations to deter adversaries from action and to
    control escalation.
        To help with all of this, we requested and received
    enhanced acquisition and manpower authorities. I thank Congress
    and the President for the authorizations granted to Cyber
    Command in the fiscal year 2016 NDAA. This represents a
    significant augmentation of our ability to provide capabilities
    to our Cyber Mission Teams as well as our ability to attract
    and retain a skilled cyber workforce. We are currently studying
    how to best implement those provisions, and laying the
    groundwork needed to put them into effect while, in parallel,
    evolving a formalized synchronization framework to optimize the
    employment of our Cyber Mission Force.
        With that, thank you again, Mr. Chairman and members of the
    committee, for convening this forum and inviting me to speak.
        [The prepared statement of Admiral Rogers follows:]

                Prepared Statement by Admiral Michael S. Rogers
        Thank you, Chairman McCain, Ranking Member Reed, and Members of the
    Committee. I am pleased to appear before you today to talk about the
    opportunities and challenges facing U.S. Cyber Command (USCYBERCOM). I
    am honored to represent the men and women of this strong team in their
    work to secure Department of Defense networks and defend the interests
    and security of our nation, in cyberspace. I know you would be as proud
    of them as I am if you could see their commitment and successes on a
    daily basis as I do. We at USCYBERCOM welcome this opportunity to tell
    you how we are shifting from a focus on building the Command to an
    emphasis on operationalizing, sustaining, and expanding its
    capabilities.
        By way of context, USCYBERCOM is a sub-unified command of U.S.
    Strategic Command (USSTRATCOM). Though USSTRATCOM is headquartered in
    Nebraska, we are located nearby in Maryland, where we share a corner of
    Fort Meade with the National Security Agency (NSA), which I also
    direct. Our Congressionally appropriated budget for fiscal year 2016
    amounts to $466 million (that's $259 million for our Headquarters and
    $207 million for Cyber Mission Forces support). We have 963 billets for
    full-time employees, both military and civilian, working in
    USCYBERCOM's headquarters, plus another 409 contract employees. Our
    military contingents represent every one of the Armed Services, both
    Active and Reserve, and they include Coast Guardsmen as well.
    USCYBERCOM comprises a headquarters organization and seven components:
    the Cyber National Mission Force, the Joint Force Headquarters-DOD
    Information Networks, plus joint force headquarters and growing forces
    at Army Cyber Command/Second Army, Marine Forces Cyberspace Command,
    Fleet Cyber Command/Tenth Fleet, and Air Forces Cyber/24th Air Force.
    Our seventh partner, though not a component, is U.S. Coast Guard Cyber.
    USCYBERCOM manpower reflects a true total force effort encompassing a
    robust Active component along with both Guard and Reserve forces being
    fully integrated at all echelons from the highest levels of our
    USCYBERCOM headquarters to our Cyber Mission Forces. Our service
    components are leading our integration efforts and building surge
    capacity, and they are doing an outstanding job. While USCYBERCOM
    resides with NSA, the two organizations are distinct entities with
    separate missions, authorities, and resource streams. Neither is an arm
    of the other, and both perform vital tasks on behalf of our nation.
                     current threats and potential threats
        USCYBERCOM's mission goes well beyond defending DOD's networks and
    systems against cyber threats and cyber responses to those threats.
    Since I spoke to you last year USCYBERCOM has seen an intensification
    of cyberspace operations by a range of state and non-state actors. A
    year ago I mentioned North Korea's brazen cyber operations to impair
    and intimidate Sony Pictures Entertainment. We have seen no repetition
    of such destructive assaults against targets in the United States. On
    the other hand, we have seen a wide range of malicious cyber
    activities, aimed against American targets and victims elsewhere around
    the world, and thus we are by no means sanguine about the overall
    trends in cyberspace.
        In a public forum it can be difficult to explain the nuance and
    depth of the threats that we at USCYBERCOM see on a daily basis. We
    must, however, because Congress, the federal government, industry,
    allies, and the general public should understand the ability and
    determination of malicious cyber actors. Literally every American who
    has connected to a network has been affected, directly or indirectly,
    by cyber crime. By this point millions of us have had personal
    information stolen, or seen our accounts or credit compromised. Even if
    we have so far avoided such problems, however, we all pay higher prices
    for our computers and software, our Internet service, and the goods we
    buy as a result of cyber-enabled theft. That burden weighs on the
    entire economy, costing jobs and dampening growth. Just as all our
    citizens have benefitted from the increased productivity and speed that
    cyber commerce facilitates, all likewise pay the costs of cyber crime.
    This multi-faceted problem is the context for what follows.
        At USCYBERCOM, as in the Department of Defense writ large, we focus
    on foreign state and non-state actors who would harm our national
    interests in cyberspace. Criminal activity remains the largest segment
    of cyber activity of concern, but nations in many ways still represent
    the gravest threats, as they alone can bring to bear the skills, the
    resources, and the patience to sustain sophisticated campaigns to
    penetrate and compromise some of the world's best-guarded networks. If
    they can gain access to those networks, moreover, they can manipulate
    information or software, destroy data, harm the computers that host
    those data, and even impair the functioning of systems that those
    computers control. We remain vigilant in preparing for future threats,
    as cyber attacks could cause catastrophic damage to portions of our
    power grid, communications networks, and vital services. Damaging
    attacks have already occurred in Europe. Just before Christmas,
    malicious actors launched coordinated cyber-attacks on Ukraine's power
    grid, causing outages and damaging electricity control systems. If
    directed at the critical infrastructure that supports our nation's
    military, cyber attacks could hamper our forces, interfering with
    deployments, command and control, and supply functions, in addition to
    the broader impact such events could have across our society.
        The states that we watch most closely in cyberspace remain Russia,
    China, Iran, and North Korea. Russia has very capable cyber operators
    who can and do work with speed, precision, and stealth. Russia is also
    home to a substantial segment of the world's most sophisticated cyber
    criminals, who have found victims all over the world. We believe there
    is some overlap between the state-sponsored and criminal elements in
    cyberspace, which is of concern because Russian actions have posed
    challenges to the international order.
        China's leaders pledged in September 2015 to refrain from
    sponsoring cyber-enabled theft of trade secrets for commercial gain.
    Nonetheless, cyber operations from China are still targeting and
    exploiting U.S. government, defense industry, academic, and private
    computer networks. As Director of National Intelligence James Clapper
    testified last month, ``China continues cyber espionage against the
    United States. Whether China's commitment of last September moderates
    its economic espionage remains to be seen.''
        Iran and North Korea represent lesser but still serious challenges
    to U.S. interests. Although both states have been more restrained in
    this last year in terms of cyber activity directed against us, they
    remain quite active and are steadily improving their capabilities,
    which often hide in the overall worldwide noise of cybercrime. Both of
    these nations have encouraged malicious cyber activity against the
    United States and their neighbors, but they currently devote the bulk
    of their resources and effort to working against their neighbors.
        The so-called Islamic State in Iraq and the Levant (ISIL) is also a
    concern, though their organic capabilities to conduct malicious cyber
    activities so far remain limited and their main effort in cyberspace
    appears to be propaganda, recruiting, radicalization, and fundraising.
    ISIL has sought repeatedly to reach over our forces in the Middle East
    and carry the conflict into America itself. For instance, ISIL-
    affiliated cyber operators last spring posted the personal information
    of more than one hundred American service personnel, many of whom were
    here in the continental United States. Not only did the hackers for
    ISIL publicize the personal details on these Americans, but ISIL also
    called for jihad against them, urging followers in the United States to
    assassinate them and their family members. While there is no direct
    link between this ISIL posting of personal information on
    servicemembers and the recent extremist attacks in the U.S. and Europe,
    ISIL wants its followers on the Internet to take inspiration from such
    attacks.
        In general all these various actors mount a range of cyber
    activities to support their interests in: a) fostering a nationalist
    vision of economic competition; b) intimidating emigre groups and
    neighbors whom they view as competitors; and c) deterring any perceived
    threats from other states, including ours. They steal from our
    corporations, and we learned last year that certain actors also stole
    the personal information of more than 21 million Americans that was
    stored in systems maintained by the Office of Personnel Management.
    Another group of hackers was responsible for an intrusion into an
    unclassified network maintained by our Joint Staff. Finally, we have
    seen cyber actors from more than one nation exploring the networks of
    our nation's critical infrastructure--and can potentially return at a
    time of their choosing. Collectively these actors make our government,
    our institutions, and our people spend far more on defense than the
    actors themselves spend on their efforts to penetrate our systems.
        Some of these threat actors are seeking to shape us, narrowing our
    options in international affairs to limit our choices in the event of a
    crisis. As a result of these developments, we at USCYBERCOM are
    thinking more strategically about shifting our response planning from
    fighting a war to also providing decision makers with options to deter
    and forestall a conflict before it begins. These new options would be
    in addition to capabilities that help our combatant commanders succeed
    in their missions if and when conflict erupts and the joint forces
    receive an ``execute order'' to commence kinetic as well as cyberspace
    operations. All of this work must be seen in the context of the
    Department's evolution of thinking toward what senior leaders call the
    ``Third Offset'' and its promise for deterring conventional as well as
    nuclear war. USCYBERCOM stands ready to help develop and deploy the new
    cyber capabilities entailed in the Third Offset, particularly hardened
    command and control networks and autonomous countermeasures to cyber
    attacks. Finally, our efforts are also proceeding in tandem with a
    heightened collaboration across the federal departments, agencies, and
    industry aimed at increasing the costs (to adversaries) of malicious
    cyber activities.
                             progress and prospects
        Let me give you some details on how we are responding to the trends
    noted above. Over the last year we continued constructing USCYBERCOM
    while operating it at an ever-faster tempo. We have begun to transition
    from the ``building the force'' mode to a ``readiness'' mode. Our
    operations kept us busy defending the Department's networks and systems
    while supporting the missions of the combatant commands, especially
    U.S. Central Command (USCENTCOM), assisting other U.S. government
    entities (as authorized and upon the request of the relevant agency),
    and building capabilities to defend the nation against significant
    cyberspace attacks.
        Progress in Building the Cyber Mission Force. To understand where
    we are today it is necessary to glance back at how far we have come.
    The Department of Defense concluded several years ago that defending
    the nation in cyberspace requires a military capability, operating
    according to traditional military principles of organization for
    sustained expertise and accountability at a scale that lets us perform
    multiple missions simultaneously. When we started to build that
    capability in early 2013, we had no cyber mission force, no ability to
    generate or train such an entity, and scant ability to respond at scale
    to defensive requirements or requirements from combatant commanders.
    Now we have 123 teams of a target total of 133; those teams comprise
    4,990 people and will build to 6,187 when we finish. In terms of
    progress, we have 27 teams that are fully operational capable today,
    and 68 that have attained initial operating capability.
        The application of military capability at scale is what the Cyber
    Mission Force (CMF) gives us in USCYBERCOM and in the Department as a
    whole. Our Combat Mission Teams (CMTs) operate with the combatant
    commands to support their missions, while National Mission Teams (NMTs)
    help defend the nation's critical infrastructure from malicious cyber
    activity of significant consequence. We have Cyber Protection Teams
    (CPTs) to defend DOD Information Networks alongside local Computer
    Network Defense Service Providers (CNDSPs). Each of them complements
    the efforts of the others. I should emphasize that Cyber Mission Force
    teams can and do contribute to our nation's cyberspace efforts even
    before they reach full operational capability. Elements of teams that
    are still ``under construction'' are already assisting the combatant
    commands and our partner departments and agencies. Cyber Protection
    Teams, for instance, played important roles in defending the Joint
    Staff's unclassified systems after an intrusion last summer, and in
    remediating the vulnerabilities that the intruders had utilized.
        Those Cyber Mission Force teams give USCYBERCOM the capacity to
    operate on a full-time, global basis on behalf of the combatant
    commands. The Combat Mission Teams help combatant commanders accomplish
    their respective missions to guard U.S. interests and project our
    nation's power when authorized to deter those who would threaten our
    security--the teams help ensure that we have the ability to enable our
    combatant commanders to defeat emerging threats. Such assistance occurs
    daily, for instance, in the fight against ISIL, as Secretary Carter
    recently explained in his remarks in California. Although I cannot
    address the particulars in this setting, USCYBERCOM is executing orders
    to make it more difficult for ISIL to plan or conduct attacks against
    the U.S. or our allies from their bases in Iraq and Syria to keep our
    Service men and women safer as they conduct kinetic operations to
    degrade, dismantle, and ultimately destroy ISIL. The nation and every
    combatant commander can now call on CMF teams to bring cyberspace
    effects in support of their operations. Additional Combat Mission Teams
    under the functional commands (U.S. Strategic Command, U.S.
    Transportation Command, and U.S. Special Operations Command) bring
    still more resources to supplement those of the regional commands.
        At USCYBERCOM, moreover, we control additional teams under the
    Cyber National Mission Force (CNMF) that can help defend America's
    critical infrastructure against malicious cyber activity of significant
    consequence. The CNMF comprise National Mission Teams, National Support
    Teams, and National Cyber Protection Teams to conduct full-spectrum
    cyberspace operations to deter, disrupt, and defeat adversary cyber
    actors.
        DODIN Operations and Defense: At USCYBERCOM we have extended the
    same principles (unity of effort and command for sustained effort at
    scale) to the operation and defense of DOD information systems. Last
    year I noted that we had just established the Joint Force Headquarters
    (JFHQ-DODIN) and dual-hatted the Director of the Defense Information
    Systems Agency to command it. Today I can proudly report that JFHQ-
    DODIN has made great strides toward its goal of leading the day-to-day
    defense of the Department's data and networks. As a functional
    component command of USCYBERCOM located at DISA, JFHQ-DODIN directs an
    aggressive and agile network defense. The Department of Defense as a
    whole is working to harden and defend its networks and systems, with
    USCYBERCOM providing the operational vision and directing the defense,
    and the DOD Chief Information Officer (CIO), working with NSA, DISA and
    the Military Services, providing the technical standards and
    implementation policy. DOD CIO is measuring the cyber security status
    of the whole department, and for particular missions through the new
    CIO cybersecurity scorecard, which is provided to the Secretary each
    month. The Secretary recently announced another initiative as well,
    linked to broader Administration efforts to strengthen the nation's
    cybersecurity under the Cyber National Action Plan--a ``bug bounty'' to
    encourage private-sector experts (i.e., trusted hackers) to probe our
    systems for vulnerabilities. The goal of all of these measures is to
    minimize the adversary's ability to attack our systems and networks,
    and to detect, diagnose, contain, and eject an adversary should an
    attack occur.
        Our operations to defend DOD networks and the nation's critical
    infrastructure proceed in conjunction with a host of federal, industry,
    and international partners (about whom I shall say more in a moment).
    Defending America in cyberspace is a whole-of-government, indeed a
    whole-of-nation, endeavor. No single agency or department has the
    authority, information, or wisdom to accomplish this mission alone,
    which is why USCYBERCOM and NSA recently updated our understandings
    with the Department of Homeland Security in a cyber action plan to
    chart our collaboration. The entire federal government, however, cannot
    do the job without the active participation and cooperation of the
    private sector. Here I compliment Congress for recently passing the
    Cybersecurity Information Sharing Act, which should enable industry to
    increase its sharing of threat information with the federal government
    (and vice versa) without fear of losing competitive advantage or
    risking additional legal liability. This is a key element in the
    government's efforts to improve the cybersecurity of critical
    infrastructure--and to frustrate adversary attempts to bend American
    foreign policy to their liking or even to harm Americans.
        We seek to build the Command's capabilities (especially the Cyber
    Mission Force) with deliberate speed, and progress continues to
    accelerate as we learn and improve at building our teams. We remain
    committed to achieving full operational capability for the entire CMF
    by the end of fiscal year 2018. Our ability to do this is shaped in no
    small part by consistent funding throughout the remainder of the CMF
    build. The key to the CMF's utility to the Department and the nation is
    the proficiency of its personnel. We do our best to give our people the
    infrastructure, tools, and support they require, but military cyber
    operations, despite their high degree of automation, place a premium on
    insight, intuition, and judgment.
        Training. Cyber operators are being trained to operate mission
    effectiveness (for the Department and for the nation), and they must
    operate in a manner that respects and protects the civil liberties and
    privacy of American citizens. Developing a training program for cyber
    operators resembles the challenge that DOD faces in training pilots and
    aircrew to operate some of the world's most advanced aircraft,
    maintaining their skills on the latest aircraft systems, and sustaining
    their numbers to ensure a constant sufficiency of motivated and
    technically excellent personnel. Creating such a ``pipeline'' in the
    U.S. military's (and other countries') air components took many years,
    so I am hardly surprised by the persistence and complexity of the
    challenges that we at USCYBERCOM confront in constructing the training
    and personnel pipeline for the Cyber Mission Force.
        Sustainment. Training the force does not automatically bring it to
    peak proficiency. Teams must learn to operate against live opposition,
    and our commanders and seniors must develop an understanding of how
    cyber operations unfold so they have a better idea of what to expect
    and what can be achieved. USCYBERCOM has been providing some insights
    by employing teams in the recent series of real-world operations, such
    as in dealing with intrusions in DOD systems and the networks of other
    federal entities. Cyber Mission Teams are now regular participants in
    the annual exercises of the geographic and functional combatant
    commands, even though the demand for CMF participation outstrips our
    capacity to provide teams to all the exercise organizers who request
    them. USCYBERCOM's own annual exercises, CYBER FLAG and CYBER GUARD,
    offer a certain degree of realism, assembling federal, state, industry,
    and international partners to practice cyber defense and offense
    against a wily opposition force. The realism they offer is limited,
    however, in part because they operate on simulated networks that do not
    come close to approximating the scale and complexity of the Internet.
    We can do better, which is why the Department is building for us an
    advanced Persistent Training Environment to exercise our teams, and
    though it is not yet complete it has already been used and found very
    helpful.
        Capabilities. Our teams require specialized tools, infrastructures,
    and capabilities to perform their missions. The work of improving our
    ability to operate in cyberspace begins in our own DOD systems; our
    networks are continually being probed and frequently attacked, so we
    are learning to combine the insights we gain from these events with our
    knowledge of cybersecurity to achieve situational awareness and an
    intuitive feel for what is coming next. In addition, USCYBERCOM has
    partners that possess very useful capabilities and skills, so we are
    constantly seeking to expand our knowledge of what is under development
    in the Services, national labs, agencies, as well as key foreign
    partners.
        Innovation. Secretary Carter spoke in California recently about the
    importance of innovation for DOD. We heartily agree, which is why our
    outreach to academia and to industry is expanding as well. In the last
    year we established a lean but motivated ``Point of Partnership'' in
    Silicon Valley to link Command personnel to some of the most innovative
    minds on earth. This new unit will help industry understand how to
    interact with USCYBERCOM--both how we work and where to plug in so we
    can work difficult, and mutual, problems together. It will also help
    USCYBERCOM scout technology trends, build trust, and develop mechanisms
    and pilot projects to facilitate the movement of the nation's cyber
    workforce across the public-private boundary. Our Point of Partnership
    is aligned and co-located with the Department's new Defense Innovation
    Unit-Experimental (DIUx), and we are hoping for synergy among all the
    DOD elements under the DIUx umbrella. Another of our efforts in this
    area is an ongoing set of initiatives and projects to bolster the
    security of hardware and software in DOD weapons systems. We are
    learning a great deal from this effort.
        Culture. Innovation, technical upgrades, and cyber organizational
    changes are ongoing and necessary but by themselves are insufficient to
    help us fully defend our networks, systems, and information. Last
    September, the Department identified the need to transform DOD
    cybersecurity culture by improving individual performance and
    accountability as called for in the DOD Cyber Strategy. The Secretary
    and Chairman approved the DOD Cybersecurity Culture and Compliance
    Initiative (DC3I) to initiate a shift in the Department's cybersecurity
    norms. This initiative seeks to instill principles of operational
    excellence, personal responsibility, and individual accountability into
    all who provide or use cyber capability to accomplish a mission. The
    Department already inculcates a culture of responsibility and
    accountability in every DOD affiliate, both uniformed and civilian, who
    is authorized to handle a firearm. Our reliance on networks and data
    systems to accomplish our missions demands all DOD personnel understand
    their individual responsibilities to protect the Department of Defense
    Information Networks and act with similar discipline and diligence
    everytime they use Department systems. Instituting meaningful and
    lasting cultural change DOD-wide will require a long-term commitment by
    the Department. USCYBERCOM was identified as the mission lead for this
    initiative and is working closely with Joint Staff and the Office of
    the Secretary of Defense to build the capacity and structure to
    increase cybersecurity and promote mission assurance through improved
    human performance in cyberspace.
        DOD Cyber Strategy. Another USCYBERCOM function is to help the
    Department's leadership to reflect and act on the full range of issues
    pertaining to the cyber field Many such issues fall outside our
    Command's mission set, strictly speaking, but still have relevance to
    how the United States can and should regard cybersecurity for the
    nation and cyberspace capabilities as an instrument of national power.
    We are called upon for contributions on matters such as the
    implementation of the new DOD Cyber Strategy, or the defense of
    personally identifying information of DOD personnel and affiliates in
    sensitive databases, because of our level of expertise on cyber
    matters. Senior leaders at the Command are leading teams or serving on
    all of the teams charged with implementing the DOD Cyber Strategy's
    many initiatives, particularly the ``lines of effort'' regarding the
    training and proficiency of cyber personnel as well as the integration
    of cyber effects in DOD and cross-agency planning efforts. We at
    USCYBERCOM, of course, consult constantly our network of partners
    across the U.S. government to learn more. Typically a combatant
    command, let alone a sub-unified command, is not staffed to play such a
    role for the Department, but cyberspace is a dynamic environment with a
    host of complicated and consequential issues, and DOD has not yet had
    time to build up the broad and deep reserve of institutional knowledge
    that it possesses on other matters.
        Authorities. I thank Congress and the President again for the
    acquisition authorities granted to USCYBERCOM in the National Defense
    Authorization Act for Fiscal Year 2016. Together with new manpower
    flexibility these presage a significant augmentation of our role of
    bringing capabilities to our cyber mission teams and network defenders,
    as well as our ability to keep our DOD cyber workforce proficient. We
    are studying how best to implement that Act's provisions--such as the
    role of a new Command Acquisition Executive and the scope of cyber
    operations-peculiar equipment and capabilities--and laying the
    groundwork needed to put its provisions into effect after the
    Department drafts its implementation plan.
        DOD has extensive sharing arrangements already with some of our
    closest allies and partners, who support our operational planning and
    capabilities development. These arrangements are not unlimited, but
    they have improved our situational awareness and helped us in the
    maturation of USCYBERCOM, and we have a process for managing the
    relationships and extending collaboration in new areas as needed. Other
    nations engaged in the fight against violent extremists and in planning
    for contingencies involving potential adversaries have also expressed
    their desire to partner with us. We are more limited in what we can do
    with them.
        Let me head toward a conclusion by reflecting on how we can take
    advantage of the new authorities and changes discussed above in
    building a cyber force that is even more capable in the future. As we
    learn how to conduct operations to defend our nation in cyberspace, our
    experiences are convincing me that we across the Department may need to
    think again about what a 21st century military organization is. When we
    created USCYBERCOM we did so with the understanding that our basic
    principles and values remain sound; our Command was constructed to
    apply time-honored lessons about the need for clear and unified
    authorities, for consistent performance at scale, for sustainability,
    and for a capacity to synchronize a wide range of activities under the
    rule of law. I marvel at this nation's ability to assemble such
    resources and operate them in such a powerful manner, and I also marvel
    at the commitment and skill of our people--Active Duty and civilians
    alike--who answered the call to service in this new domain. Terrorists
    can harm us but they have no chance of defeating such a force as long
    as we remain true to our national values. Nevertheless, terrorism is
    not the only threat we face. Other states will one day build cyber
    forces as capable as ours and they may attain comparable capabilities,
    just as the Soviets achieved rough nuclear parity with us in the Cold
    War. Military power in cyberspace is already something of a misnomer;
    cyber forces do not square off against each other and fight pitched
    battles like armies or fleets. Indeed, cyberspace is unlike the natural
    domains in many ways, and thus certain metaphors and analogies from the
    natural domains might just confuse matters and impair judgment. Our new
    cyber military force is virtually always a partner, as it rarely, if
    ever, acts alone. Instead, it can constitute the center of gravity for
    joint and combined, whole-of-government operations that defend the
    United States and serve the interests of the nation, and its people,
    and our allies. The President's International Strategy for Cyberspace
    clearly articulates our policy to exhaust other options short of
    military force if possible, but it also emphasizes our nation's
    inherent right of self-defense in cyberspace and all other domains. To
    exercise that right, our nation must understand how others might use
    force against us, and to do so we must know how force works in
    cyberspace, and why our nation must be able at times to depend on
    military capabilities that act as a nucleus of national power in this
    domain.
                                   conclusion
        Thank you again, Mr. Chairman, Ranking Member Reed, and Members of
    the Committee, for inviting me to speak to you today. I greatly
    appreciate the support that you and this Committee have provided to
    USCYBERCOM, and I am also grateful for the stability that you and your
    colleagues in Congress have provided to our resource base over the next
    couple years as we complete the Cyber Mission Force build and shift our
    focus to sustained operations. We look to your counsel as we partner
    with the federal government, industry, allies, and the whole gamut of
    stakeholders who seek to preserve cyberspace as a free, reliable, and
    secure domain for exchange, commerce, culture, and progress. Our nation
    determined some years back that preserving freedom and security in
    cyberspace will inevitably mean an operational role for the U.S.
    military in this domain. We at USCYBERCOM strive every day to provide
    the sort of military capabilities and options that our leadership
    requires to secure and defend DOD information systems and to protect
    and further the nation's interests, not only in cyberspace but in all
    domains where our national security is challenged. I hope you will
    agree that our people at USCYBERCOM--while their work is not done--have
    already delivered handsomely on the early promise that you saw and
    supported. They take pride in their accomplishments, but they do not
    rest on them. With them, I look forward to tackling our current and
    future challenges together with you and our mission partners across the
    government. I am happy to take your questions.

        Chairman McCain. Well, thank you, Admiral Rogers.
        General Dempsey was asked about our ability to address
    challenges to this country, and he basically--he stated that we
    have significant advantages in every major challenge, except
    one, and that was cyber. Do you agree with General Dempsey's
    comment, about a year ago?
        Admiral Rogers. I do. The phrase I use internally with him
    is, ``Cyber is one area we have to acknowledge that we have
    peer competitors who have every bit as much capacity and
    capability as we do.''
        Chairman McCain. That, I would say to my fellow members of
    the committee, emphasizes our need to address this issue in a
    comprehensive fashion. So, after we finish the defense bill, I
    would--I will spend a great deal--this committee will spend a
    great deal of its time on this issue, since the threat is as
    Admiral Rogers just stated.
        You stated, last year in a House hearing, there's still
    uncertainty about how we would characterize what is offensive
    and what is authorized. Again, that boils down, ultimately, to
    a policy decision. To date, we have tended to do that on a
    case-by-case basis. In other words, do we preempt? Do--if we
    respond, how do we respond? All of those, it seems to me, are
    policy decisions that have not been made. Is that correct?
        Admiral Rogers. I guess, Chairman, the way I would describe
    it is, we clearly still are focused more on an event-by-event
    particular circumstance. I think, in the longrun, where clearly
    I think we all want to try to get to is something much more
    broadly defined and well understood.
        Chairman McCain. That you understand, when you detect a--an
    attack or as to exact--or detect a probable attack--I'm--so,
    right now, you are acting on a case-by-case basis.
        Admiral Rogers. Sir.
        Chairman McCain. Does Russia have the capability to inflict
    serious harm to our critical infrastructure?
        Admiral Rogers. Yes.
        Chairman McCain. Does China have the same capability?
        Admiral Rogers. Some measure of the same capability, yes.
        Chairman McCain. How has China's behavior evolved since the
    OPM breach?
        Admiral Rogers. We continue to see them engage in activity
    directed against U.S. companies. The questions I think that we
    still need to ask is, Is that activity then, in turn, shared
    with the Chinese private industry? We certainly acknowledge
    that states engage in the use of cyber as a tool to gain access
    and knowledge. The question or issue we've always had with the
    Chinese is, what--while we understand we do that for nations to
    generate insight, using that then to generate economic
    advantage is not something that's acceptable to the U.S.
        Chairman McCain. Do you agree that the lack of deterrence
    or repercussions for malicious cyberbehavior emboldens those
    seeking to exploit the U.S. through cyber?
        Admiral Rogers. Yes.
        Chairman McCain. Admiral, we are looking carefully at a
    consolidation of command, here, as far as your responsibilities
    are concerned. I believe that the Secretary of Defense will
    also support such a move, so I will be recommending to the
    committee that we include that consolidation in the defense
    authorization bill as we mark up. I think my friend Senator
    Reed also agrees with that.
        Would you agree that probably the issue of cyberwarfare is
    the least understood by all of our leadership, including in
    government, executive and legislative branch?
        Admiral Rogers. It's a--it's certainly among the least
    understood. I think that's a fair----
        Chairman McCain. Is part of this problem is that this
    challenge is rapidly evolving?
        Admiral Rogers. I think that's--that's clearly an aspect of
    it, the speed and the rate of change, as well as the
    complexity. It can be intimidating. I'd be the first to
    acknowledge that many people find this a very intimidating
    mission area.
        Chairman McCain. If you had a recommendation for this
    committee and Congress as to your significant two or three
    priorities, what would you recommend?
        Admiral Rogers. In terms of----
        Chairman McCain. Of action----
        Admiral Rogers.--cyber, overall?
        Chairman McCain.--action that you'd like to see the
    Congress and the executive branch take.
        Admiral Rogers. I think we clearly need a focus on
    ensuring, number one, that we've got our defensive house in
    order and that we're able to defend our systems as well as our
    networks. We need to think beyond just networks, into our
    individual----
        Chairman McCain. Which----
        Admiral Rogers.--combat and weapon----
        Chairman McCain.--which, to me, means a policy, but please
    go ahead.
        Admiral Rogers. Secondly, we need to continue to generate
    the complete spectrum of capabilities to provide options for
    our policymakers, as well as our operational commanders, so,
    when we have these issues, we've got a series of capabilities
    that we can say, ``Here are some capabilities that we can
    choose from.''
        Lastly, I think we've just got to--the other point I'd try
    to make is, we've got to figure out how to bridge across not
    just the DOD, but the entire U.S. Government, with the private
    sector about how we're going to look at this problem set in an
    integrated national way.
        Chairman McCain. Would you also agree that sequestration
    could threaten you with a hollow force after you have recruited
    and--some of the brightest minds in America to help you?
        Admiral Rogers. Oh, very much so. I would highlight, in
    fiscal year 2013, when we shut down the government, I can
    remember going--I was in a different job at the time, but still
    I was doing--leading the Navy's cyber effort. As much of my
    workforce said, ``So, explain to me, Admiral, why we should
    stay with you, if this is what we're going to have to deal with
    on an aperiodic basis, being told we're going to be furloughed,
    we're not going to get paid.'' I can remember telling them, in
    2013, ``Please stay with us. This--I hope this is a one-time
    thing.''
        Chairman McCain. But, sequestration means further hampering
    of----
        Admiral Rogers. It means further--because everything is--
    our ability to meet the timelines that we've been given have
    been predicated on the sustaining of the budgets. If we go to
    sequestered levels, I will not be capable of generating that
    capability in a timely way that right now we're on the hook to
    do.
        Chairman McCain. Senator Reed.
        Senator Reed. Well, thank you, Mr. Chairman.
        One of the issues that has been discussed, and I mentioned
    in my opening statement, is raising Cyber Command to a full
    unified command. I also noted, and you acknowledged, that only
    half of Cyber Command's uniformed cyber mission forces are
    initially capable--IOP--IOC [initial operating capability], I
    should say. Some critical elements, such as persistent training
    environment, a uniform platform doesn't exist. Are you, in your
    mind, mature enough to be a full unified command now? Or----
        Admiral Rogers. Yes.
        Senator Reed. What would that advantage give you? Or what
    would that decision give you?
        Admiral Rogers. So, generally when we think about what
    tends to drive should something be elevated to a combatant
    command--broadly across the Department, we tend to focus on the
    imperatives of unity of command, unity of effort, and is it
    either--in this case, it would be a functional, not
    geographic----
        Senator Reed. Right.
        Admiral Rogers.--and, in this case, does the function rise
    to a global level, and is it of sufficient priority to merit
    coordination across the entire Department?
        The other issue, I would argue, is one of speed. All of
    those argue--and again, I'm--I just am one input. I realize
    this is a much broader decision than just Admiral Rogers, and
    there's many opinions that will be factored in. My input to the
    process has been, the combatant commander designation would
    allow us to be faster, which would generate better mission
    outcomes. I would also argue that the Department's processes of
    budget, prioritization, strategy, policy, are all generally
    structured to enable direct combatant commander input into
    those processes. That's what they're optimized for. I believe
    that cyber needs to be a part of that direct process.
        Senator Reed. The other aspect, obviously, is the
    relationship with NSA [National Security Agency]. There are
    several options. One is to have separate commanders, one is to
    have one commander with a dual hat. Or one option, or
    additional option, is to, at least at a future time, have the
    option to divide the dual-hat arrangement. Can you comment on
    that issue?
        Admiral Rogers. So, my recommendation has been, for right
    now, you need to leave them dual-hatted. Part of that is the
    very premise that we built Cyber Command, when we created it
    six years ago, where we said to ourselves, ``We are going to
    maximize the investments that the Nation had already made in
    NSA, in terms of infrastructure and capability.'' So, because
    of that, we didn't have a huge military construction program,
    for example, for Cyber Command, and put these cyber mission
    forces, the 6200, in different structures. We said we were
    going to take NSA's existing space as a vehicle to do that. So,
    my input has been, for right now, based on the very model we
    created Cyber Command, where we really, in many ways, very
    tightly aligned these two organizations, that, at the current
    time, it would be difficult--not impossible--first to
    acknowledge that--it would be difficult or less than optimal,
    in my opinion, to try to separate them now. But, what I have
    also argued is, but we need to continue to assess that decision
    over time. You need to make it a conditions-based assessment as
    to, At some point in the future, does it make more sense to do
    that?
        Senator Reed. Part of that is the fact that if you are a
    unified command, you will be developing alternatives to NSA
    capabilities----
        Admiral Rogers. Yes.
        Senator Reed.--exclusive to Cyber Command, so that, at some
    point, you could have an infrastructure that looks remarkably
    like NSA, and these synergies you're talking about now aren't
    operational----
        Admiral Rogers. As important, right. Yes, sir.
        Senator Reed. One of the issues is that, as a--you depend
    upon the services to provide you a great deal of resources. In
    fact, it is really, I think, interesting to note that only half
    of these identified units are, at least initially, capable, and
    that there's--doesn't seem to be an intense training effort
    that's standardized and in place right now. What can you do--
    what can we do to accelerate these units, in terms of their
    maturity and their training environment?
        Admiral Rogers. So, if I could, Senator, I'm going to
    respectfully disagree.
        Senator Reed. That's quite all right. You don't even--well,
    you have to be respectful.
        [Laughter.]
        Admiral Rogers. Remember, we started this build process in
    fiscal year 2013. We said that we would finish it by the end of
    fiscal year 2018, full capability and ready to fight in a high-
    ----
        Senator Reed. Right.
        Admiral Rogers.---demand environment. We're pretty much on
    track, as I have said publicly. If you look right now--in fact,
    in the last two months, I've actually managed to increase
    timeliness since the last assessment I did in February, where I
    publicly had said, based on the data as of the 1st of February,
    I believe that we'll meet IOC for 91 percent of the teams on
    time, and that we will meet FOC [Full Operational Capability]
    for 93 percent of the teams on time. In the two months since
    then, we're up--I managed to work with the services, and, for
    IOC, we're up to about 95 percent of the force; and, for FOC,
    we're at about 93--we're still at 93 percent of the force. So,
    my only point is, I'm not critical of the services, in terms of
    their generating the force. I think they're making a very good
    effort, and it's on track. It's not perfect, but it's not--on
    track.
        They've also been very willing--when I've said, ``What we
    need to do is ensure that we have one integrated joint category
    to how we work cyber,'' so there's got to be one structure, one
    training standard--every service has agreed to adhere to that.
    So, in that regard, I'm also very comfortable what the services
    are doing.
        What I think the challenge for us as I look over the next
    few years is, we initially focused on those mission teams and
    the men and women and their training. What experience is
    teaching is--not unlike other domains, is--and as you both, the
    Chair and Ranking Member, said in your opening statements,
    that's not enough. What we're fighting now is, it's the other
    things that really help enable--we've got to focus more on.
        Senator Reed. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        Admiral Rogers, in December of last year, you published an
    article saying, ``A challenge for the military cyber
    workforce,'' and you discussed, as you did in your written
    statement today, that--the importance of growing and developing
    and maintaining this force. When you talked about--well, I
    guess it was the Chairman, in his statement--the 123 teams,
    where you are right now, and aiming to 133, what comprises a
    cyber team?
        Admiral Rogers. They come in several different types. There
    is what we call Combatant Command Mission Teams. Those are
    aligned with combatant commanders. They are generally designed
    to create offensive capability, if you were--will.
        Senator Inhofe. Yeah.
        Admiral Rogers. There are Cyber Protection--those are
    about--and that team, CCMTs, Combatant Commander Mission
    Teams----
        Senator Inhofe. Yeah.
        Admiral Rogers.--there are about 65 individuals on a team.
    If you look at Cyber Protection Teams, slightly different
    mission, so different structure, different focus--they're at
    about 39 individuals per team. Each of those two teams, the
    Combatant Commander Mission Team, the Cyber Protection Team----
        Senator Inhofe. Okay.
        Admiral Rogers.--has a small subset of about 23
    individuals, what we call Support Teams.
        Senator Inhofe. Well----
        Admiral Rogers. So, that just gives you a sense for the----
        Senator Inhofe. Sure.
        Admiral Rogers.--range; anywhere from----
        Senator Inhofe. Sure.
        Admiral Rogers.--20 to 60----
        Senator Inhofe. That's--when you add all that together,
    that's when you come up with the 6,187.
        Admiral Rogers. Yes, sir.
        Senator Inhofe. As was brought out in the Chairman's
    statement, you really have to know--well, first of all, you're
    drawing from institutions that are training these people. This
    is new. This is----
        Admiral Rogers. Right.
        Senator Inhofe. This is brand new to a lot of people,
    including a lot of people at this table. I know that, in my
    State of Oklahoma, the University of Tulsa has really made
    great progress. In fact, your predecessor was out there and
    working with them. I understand, from Senator Rounds, that a
    similar thing is happening in South Dakota. So, you've got
    these kids out there, they're learning this, they're choosing--
    they're determining what they're going to do for a career.
        Now, I think it's a good question when you say--when we ask
    the question, ``Can we really depend on sustaining, in this
    environment that we're in right now, this--these teams--this
    number or this workforce, so that individuals out there will--
    would be aiming their talents toward helping us in your''--
    because there's going to be a lot of competition for these
    kids. How confident are you that we're going to be able to
    maintain the level necessary to attract good people?
        Admiral Rogers. So, experience to date says we're doing a
    good job in that regard, both for our ability to recruit and
    retain. What tends to drive that to date, our experience
    suggests, is the desire of men and women, whether they're
    civilian or in uniform, to be part of something bigger than
    themselves, to do something that matters, and to do something
    on a cutting edge. That, if you will, is really what powers the
    men and women of the teams.
        Senator Inhofe. Yeah.
        Admiral Rogers. I'm always talking to the--my fellow
    leaders about, ``So, what are the advance indicators that we
    should be looking at that would tell us if that trend is
    changing?'' There are a couple skillsets within the mission
    force, that I've mentioned separately previously, that I may,
    in fact, come back to the committee with to say, ``Look, there
    may be some additional measures here--flexibility to hire''----
        Senator Inhofe. That would be a good thing to do for the
    record, to come back, because I'm running out of time here, and
    I'd----
        Admiral Rogers. Sir.
        Senator Inhofe.--a couple of other things I wanted to get
    to. I agree with you, when you say that the states that we
    watch most closely in cyberspace remain Russia, China, Iran,
    and North Korea. At the same time, I notice that the--there is
    an effort--and this came when our FBI Director, James Comey,
    was in contact with these people--that they've--they were--
    China is trying to develop a closer relationship with us, when,
    in fact, they're the ones that we're going to be watching.
    You're not entertaining any kind of a close relationship with
    them that might impair that----
        Admiral Rogers. No, sir.
        Senator Inhofe.--area. Okay, good.
        Yesterday, in the--an article came out on the GAO
    [Government Accountability Office] report that says the
    Pentagon doesn't know who's in charge for responding to a
    massive cyberattack. They go on to talk about the Northern
    Command. They talk about what we are doing. They're talking
    about Homeland Security. You're familiar with this report that
    came out yesterday?
        Admiral Rogers. No, I'm not.
        Senator Inhofe. Oh.
        Admiral Rogers. But, I'm familiar with the broad premise.
        Senator Inhofe. Well, okay. Well, the conclusion of the
    report--and I'll just read this, and--it says, ``We believe
    that, by issuing or updating guidance that clarifies roles and
    responsibilities of relevant DOD officials, DOD will be in a
    better position to plan for and support civil authorities in a
    cyberincident.'' This is a GAO report, so I--I'd suggest that
    you look at that and see if we have reached that--their
    conclusion so far.
        Admiral Rogers. Sir.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman McCain. Senator Manchin.
        Senator Manchin. Thank you, Mr. Chairman.
        Thank you, Admiral, for being here and for the work you do.
    I appreciate it very much.
        We face a wide range of cyberthreats from terrorist groups,
    like the ISIS criminal hackers and spies and all the
    underlying. In nearly every briefing about our national
    security, I've asked about the issues of cybersecurity and
    protecting our power grids. It's a very important issue to me
    and the amount of power that our little State produces for this
    country. In the short term, which cyberthreat is most dangerous
    to the United States? I guess it may--our grid, our food
    supply, our water supply? What is most vulnerable that we
    should be working on?
        Admiral Rogers. Power and basic infrastructure, something
    that always concerns me, because the potential impact on the
    Nation is very significant, should we have significant issues
    there. I'd also argue--one sector that I worry about a little
    bit is--you look at the amount of personally identifiable
    information that is resident out there in a lot of various--
    healthcare is a good example, where the amount of data that we
    have all provided to the medical world that is available out
    there on all of us and our families--that worries me, about,
    you know--and that's reflected--and you look at OPM, you look
    at the Anthem health insurance, large data concentrations are
    now increasingly becoming an attractive target. Because of the
    power of big data analytics, massive amounts of data that, 10
    years ago, we would have said to ourselves, ``No one could ever
    really comb through that to generate insights or find anything.
    It's just too large.'' You sure don't have those conversations
    anymore.
        Senator Manchin. I mean, we talk about cyber, and we keep
    talking about, basically, our corporate--you know, corporate
    hacking, if you will, for proprietary reasons. Then you look at
    the military hacking that goes on for our defense reasons, but
    then you look at just the everyday life----
        Admiral Rogers. Right.
        Senator Manchin.--that we've come to expect that could be
    probably disrupted with quite an alarming----
        Admiral Rogers. Yes, sir.
        Senator Manchin.--alarming concerns.
        The other thing I'll--in your testimony, you mentioned that
    the Guard and Reserve forces are being assigned to all levels
    of U.S. Cyber Command and the cyber mission forces. Can you
    elaborate on what the Reserve component--specifically, the
    National Guard--bring to the table for the cyber mission?
        Admiral Rogers. Well, you're able--through our Guard and
    Reserve teammates, you're able to access a set of manpower that
    potentially is using these same skillsets in their day-to-day
    work in the private sector. You're able to also access, at
    times, a very different perspective, which works out very well,
    which is one reason why, as we were creating this cyber
    construct for the Department, we were adamant, from the
    beginning, it needed to be viewed as a total force, that if we
    were just going to make this an Active-only component, I was
    not going to optimize the full range of capabilities that are
    out there. You've seen, in the last six months in particular,
    the Guard and Reserve capability starting to come online and
    flesh out, as well.
        Senator Manchin. The thing I'm--that I'm saying is, I've--
    the National Guard in West Virginia, we don't----
        Admiral Rogers. Right.
        Senator Manchin.--have a base, and our Guard is everything
    to us. Being a former Governor, I understand the importance of
    our Guard. But, we've been so active as, basically, in
    aggressive recruiting, and some of our best and brightest and
    youngest people are coming into the Guard for all the
    opportunities, especially educational.
        Admiral Rogers. Right.
        Senator Manchin. It's an area where they can designate and
    pinpoint for you to bring in some of these really sharp young
    talents that could help us in defending ourself, cyber. I
    didn't know if you all look at that.
        Admiral Rogers. Which is--the Guard is doing now.
        Senator Manchin. They're--and you all are in--okay.
        Admiral Rogers. Well, Senator Grassley and I spend a lot of
    time talking about, How do we do this in an integrated way?
        Senator Manchin. Again--well, the other thing--in your
    testimony, you state that ISIS main cyber effort is focused on
    propaganda, recruiting, and radicalization of others. Can you
    elaborate further on this disturbing statement and how have
    they been successful?
        Admiral Rogers. They've harnessed the power of the
    information arena to promulgate their ideology on a global
    basis, to recruit on a global basis, to generate revenue and to
    move money, as well as coordinate some level of activity on a
    large, dispersed basis. The challenge I look for, or that
    concerns me when I look at the future, is, What happens if the
    nonstate actor--ISIL being one example--starts to view cyber as
    a weapon system? That would really be a troubling development
    on----
        Senator Manchin. In a very simplistic way--people ask, Why
    can't we shut down that part of the Internet? Why can't we
    interrupt ISIS's ability to go on social media and attract? Why
    are we not able to infiltrate that more?
        Admiral Rogers. I mean, I would--the idea that you're just
    going to shut down the Internet, given its construction and
    complexity, is just not----
        Senator Manchin. I've had people ask me----
        Admiral Rogers.--right--going to be realistic.
        Senator Manchin.--``Can't you just stop it from that area
    of the world where all the problems are coming from, whether it
    be in the Syria or in parts of Iraq or Iran, things that we
    might have some input and control over?'' It's not possible?
        Admiral Rogers. It's just not that simple. I wish I could
    say that there's a part of the Internet that is only used by a
    specific set of users, but there are all sorts----
        Senator Manchin. I'm just trying to----
        Admiral Rogers.--users out there.
        Senator Manchin.--find an answer. But, I think----
        Admiral Rogers. Yes, sir.
        Senator Manchin.--that question is asked quite a bit----
        Admiral Rogers. Not like that.
        Senator Manchin.--``Just shut her down, like turning off
    your telephone.'' But, it doesn't work that way.
        Thank you for your service.
        Admiral Rogers. Sir.
        Senator Manchin. Any way this committee can help, I'm sure
    we'll be there for you.
        Admiral Rogers. Thanks, Senator.
        Chairman McCain. Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman.
        Admiral Rogers----
        Admiral Rogers. Sir.
        Senator Sessions.--thank you for your service. You're, I
    believe, the right person at a very challenging time, here in
    the middle of some decisions that have to be made by the United
    States sooner rather than later.
        Our Congress passed--well, Carl Levin was Chairman then--we
    passed a requirement that the Defense Department evaluate the
    vulnerability of our systems and to issue a report to how to
    defend those. That time passed, but we've issued another
    legislation last year that said, ``The Secretary of Defense
    shall, in accordance with the plan, complete an evaluation of
    the cyber vulnerabilities of each major weapon system of the
    Department of Defense not later than December 31st, 2019.'' So,
    we've given an additional date there. But, ``Not later than 180
    days after the date of this enactment''--which I believe would
    be about May this year, ``the Department--the Secretary of
    Defense shall submit to the congressional defense committees
    the plan of the Secretary for the evaluation of major weapon
    systems, including an identification of each system to be
    evaluated, an estimate of the funding required, and priority
    among the evaluations.'' Are you familiar with that? Are we
    in--on track to--is the Defense Department on track to complete
    that initial report?
        Admiral Rogers. I am familiar with it. I'm sorry, I am not
    in the weapon acquisition business, so I'm not the best
    informed as to the current status. I know the effort is
    ongoing, because we, U.S. Cyber Command, are part of that
    broader effort, partnering with AT&L. I--if I could just take
    that one for the record, sir. I apologize----
        Senator Sessions. Well, if you would, because this has been
    going on some time. So, on a bipartisan basis, Congress
    recognized, several years ago, that our weapon systems--it
    started out for space, missiles, and antimissile systems being
    evaluated, and then we realized large segments of our defense
    capability are vulnerable, and we've had a broader report. I
    believe it is important for the Secretary to complete this on
    time, if not sooner. I would hope that you would look at that.
        Admiral Rogers. Sir.
        [The information referred to follows:]

        The Department of Defense, to include Service Components,
    USCYBERCOM and other organizations are working in conjunction to
    provide a complete response to the fiscal year 2016 NDAA (section
    1647), cyber vulnerabilities of each major weapons system report. Any
    particular details in reference to the report would need to be directed
    to the DOD CIO office.

        Senator Sessions. In light of Chairman McCain's questions
    and Senator Inhofe's questions, I would refer to this GAO
    report that just came out. The first line of this article is,
    quote, ``The Pentagon does not have a clear chain of command
    for responding to massive cyberattack on domestic targets in
    the United States, according to the Federal Government's
    principal watchdog, GAO.'' Does that concern you?
        Admiral Rogers. First of all, I haven't read the report,
    sir, so I'm not informed as to its specifics. I mean, I would
    argue, hey, I'm always concerned about a clear chain of command
    and a clear articulation of responsibilities.
        Senator Sessions. Well, it lists a number of things that do
    appear to be unclear in how we respond. The Chairman asked you,
    When do we--aren't we going to need to develop a policy for how
    to respond to attacks, and what we might do in response, and
    how to ratchet up responses relevant----
        Admiral Rogers. Right.
        Senator Sessions.--to the threats that we face? So, I hope
    that you would look at that.
        With regard to the worldwide situation, there's commercial
    and economic and private companies that are a big part of the
    entire network of cyber worldwide. Many of those impact our
    allies, our friends. Many of those could--many companies could
    be based in countries that are not friendly to us and would
    like to penetrate our systems. Are you concerned that all of
    our allies--Asia, Europe--need to be aware of this danger? Are
    we working to make sure that segments of those systems aren't
    purchased or impacted by entities that could be hostile to our
    joint interests?
        Admiral Rogers. So, I share your concern about supply-chain
    vulnerability, the phrase we use to----
        Senator Sessions. That's a good----
        Admiral Rogers.--describe the----
        Senator Sessions.--word.
        Admiral Rogers.--to describe that----
        Senator Sessions. Supply-chain vulnerability, okay.
        Admiral Rogers.--is--and it is growing in probability, if
    you will, given the nature of the economic world we're living
    in now. We have a process within the U.S. Government to address
    these issues from major purchases, companies, national security
    priorities. We have a specific process in place for some
    components of DOD infrastructure, like the nuclear world, for
    example. But, if you look at its proliferation of the issue
    generally across both our allies and ourselves, this is an
    issue that's only going to get tougher, not easier.
        Senator Sessions. Could be going on for decades, it seems
    to me. Do we need to meet with our allies to develop a unified
    policy to protect our joint systems?
        Admiral Rogers. It is a discussion we have with our allies,
    and it's much--as you said, this goes across the commercial
    sector, DOD, government, writ large. It's out there for all of
    us.
        Senator Sessions. Well, I thank you for your leadership.
    There will be a lot of challenges like that in the months----
        Admiral Rogers. Sir.
        Senator Sessions.--to come. You're at the focal point of a
    critical issue, and I hope you'll not hesitate to lead and tell
    us----
        Admiral Rogers. Sir.
        Senator Sessions.--what we need to do to help you.
        Admiral Rogers. Roger that.
        Chairman McCain. Senator King.
        Senator King. Thank you, Mr. Chairman.
        Admiral Rogers, I need some clarification of what your
    responsibilities are in Cyber Command. Are you responsible for
    protecting this country from cyberattacks on private networks
    and corporations, or is it simply government networks?
        Admiral Rogers. So, DOD has a responsibility to defend
    critical infrastructure against events of significant cyber
    consequence.
        Senator King. So, critical infrastructure, that--for
    example, in Maine, in May, we had three urgent-care centers
    that were hacked. We had Maine General Health, which is one of
    our major healthcare--they were hacked. Is that part of your--
    what's the definition of ``critical infrastructure''?
        Admiral Rogers. No, there are 16 segments that the Federal
    Government has identified as having significant implications
    for the Nation's security. But, the second component, I would
    argue, of the definition I gave you of the mission is not just
    the sector that was attacked, so to speak, but also the
    magnitude of the event. In DOD, we use the phrase ``significant
    cyber consequence.'' The concern being that the Department of
    Defense is not resourced, nor is it currently tasked with,
    defending every single computer structure within the United
    States. We try to identify, Where can our finite resources be
    best applied? They're focused on those 16 segments that have
    been designated as critical to the Nation's infrastructure, and
    then tripped in those circumstances in which the actions
    against one of those 16 segments reaches ``significant cyber
    consequence.''
        Senator King. But, in terms of national defense, we're
    being--it's death by a thousand cuts. I mean, we're being
    hacked every day in----
        Admiral Rogers. Sir.
        Senator King.--insurance companies, businesses. Some of it
    is cyber espionage, as you point out, but some of it is just--
    some of it's criminal----
        Admiral Rogers. Criminal.
        Senator King.--but it seems to me we need to be thinking
    about who is responsible. I mean, I understand you don't call
    out the Army if there's a criminal in one town. You have local
    police. But, there's a gap, here. Do you see what I'm saying?
        Admiral Rogers. Yes, sir.
        Senator King. There's a gap in our defenses, because we
    really don't have the infrastructure of the State police or the
    local police that would protect local interests when they're
    being attacked. You have the expertise. There--we have to work
    out something as between Cyber Command and local law
    enforcement, if you will, to protect us from these repeated and
    continuous and escalating attacks.
        Admiral Rogers. Although, if I could, I'd urge us to think
    more broadly than just Cyber Command. I think the challenge is,
    How do we harness the capacity and capability that is resident
    within our government structure, teamed with the capabilities
    that are resident in the private sector? It's much bigger than
    just----
        Senator King. Right.
        Admiral Rogers.--don't get me wrong, we're definitely a
    part of this, but I always urge people--we have got to think
    much more broadly than----
        Senator King. Well, I think----
        Admiral Rogers.--just the DOD.
        Senator King.--that's a good way to articulate it.
        Don't--we keep talking, in these hearings. When are we
    going to have a well-developed and articulated cyberdeterrence
    strategy? I emphasize--in my notes, I underlined the word
    ``articulated.'' It's not deterrence if it's not articulated.
    But, we need definition of, What is an act of war? What is a
    proportional response? What is a mutually-assured-destruction
    situation? This--it seems to me that--is this in the works? If
    so, when?
        Admiral Rogers. I mean, sir, I don't have a date for you.
    That's well beyond the mission set of U.S. Cyber Command. I am
    part of those discussions. I'm the first to acknowledge that. I
    try to provide an input and just be one voice as to what I
    think is the direction, broadly, that we need to go. I
    apologize, Senator, I don't have a specific date or timeline
    for you.
        Senator King. But, it just seems to me that, as a matter of
    policy, that we really need--this needs to happen. We've been
    talking about this as long as I've been on this committee, and
    we aren't there yet. Something terrible is going to happen, and
    a lot of people are going to say, ``Well, why didn't we have a
    policy? Why don't we have a deterrent policy?''
        Admiral Rogers. Yes, sir.
        Senator King. So, I would urge you, with counsels of the
    administration, to push for a sense of urgency on this
    question, because if we--if all we do is defense, and there's
    no deterrence, ultimately we're going to lose that battle.
        Admiral Rogers. Yes, sir. It's a losing strategy.
        Senator King. A final point. I know that you talked about
    this earlier. I--I'm finding it harder and harder to justify
    your holding two jobs, given the complexity--I mean, this
    arrangement was created in 2009, which, in technological terms,
    is a century ago. I just can't--I mean, I understand the
    relationship between NSA and Cyber Command, but, particularly
    if we move in the direction, which I think we are, of setting
    up Cyber Command as its own independent combatant command, to
    have the same person trying to run those two agencies, I just
    think is impractical and almost impossible.
        Admiral Rogers. I've been doing it for two years, to date.
        Senator King. You've been doing it very well.
        Admiral Rogers. So, what I--as I said in my initial
    comment, I agree that it's something we need to continue to
    assess. I agree that, in the long run, the, probably, best
    course of action is to ultimately put both organizations in a
    position where they're capable of executing their mission in a
    complementary and aligned way, but in a more separate way. But,
    the reality is, we're just not ready to do that today, I
    believe. Now, don't get me wrong. If I am ordered or directed,
    I get paid to make things happen, and I will execute it to the
    best of my ability.
        Senator King. But, I take it you agree that we should
    move--Cyber Command should be its own combatant command.
        Admiral Rogers. I do, sir.
        Senator King. Yes, sir. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Subject to the will of the entire
    committee, that would be my intention. Senator Reed and I would
    propose that on the defense authorization bill. Right, Jack?
        Senator Reed. I think so, sir. I think that's something
    we're going to consider. But, I think it's valuable to have
    Admiral Rogers' comments today and to consider them as we go
    forward.
        Chairman McCain. Thank you.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman. I look forward to
    the discussion on raising Cyber to its own combatant command,
    and I look forward to our discussions, as a committee, on the
    importance of cybersecurity for this country.
        Admiral Rogers, in your prepared statement, you mentioned
    the cyberattack on Ukraine's power grid, and you also note that
    you have seen cyberactors for more than one nation exploring
    the networks of our Nation's critical infrastructure. Do you
    believe that our national mission teams possess the necessary
    skills relating to industrial controls and SCADA [Supervisory
    Control and Data Acquisition] systems to be able to stop or to
    recover from an attack on our power grid?
        Admiral Rogers. We have the skills. The challenge for us,
    at the moment, is one of capacity. What I mean by that is, in
    the two years I've been in command, I have yet to run into a
    situation where we didn't have the skillset to apply against
    the problem. But, the challenge at the moment, because we're
    still in the midst of that build, is, sometimes that skillset
    is embodied in an incredibly small number of people. If we had
    multiple events simultaneously, for example, that gets to be--
    under the--where we are right now, you snap the chalk today, so
    to speak, capacity really is the greater concern to me than
    capability, if you will, if that makes sense.
        Senator Fischer. Well, I understand your demands on the
    force to exceed that capacity, but, as you add those
    capabilities, how are you going to prioritize the duties and
    the responsibilities that you're going to have? How do you plan
    to prioritize placing that--building competency with our
    industrial control system? Is that going to be something you're
    going to focus on in the near term, or is it going to take a
    backseat to maybe some of the other areas that you're looking
    at for the cyber mission forces?
        Admiral Rogers. So, it's something we're doing right now. I
    would also highlight that the very construct of the force, by
    creating a separate section of the force that is focused purely
    on defending critical infrastructure--it was designed to
    account for that. How do you make sure you prioritize this
    capability and ensure that at least an element of the force
    that we are building is focused like a laser on the defend-the-
    critical-infrastructure mission set? It's a carved-out,
    separate entity. It's the national mission force, we call it.
    General Nakasone is the--my component commander doing that.
        Senator Fischer. Do you have a plan to work with services,
    then, on building that----
        Admiral Rogers. Oh, yes, ma'am.
        Senator Fischer. Is it near completion? You heard Senator
    King ask about policy. We've been asking about policy for a
    long time. We don't have a policy, but--so, if we don't have a
    policy, how are we going to develop plans?
        Admiral Rogers. Well, my--remind people is--look, even as
    we're trying to get to the broader issues that you have all
    raised, much of which is outside the immediate mission set of
    Cyber Command, hey, look, our mission is: generate capacity and
    capability to ensure that we're ready to go as those broader
    issues are being addressed. So, we're trying to deal with the
    deterrence piece by generating the capabilities that we think
    would be part of that deterrence discussion, by generating the
    defensive capabilities that we think would be part of that
    deterrent discussion. I don't want to wait for everything to
    fall in place that--we just can't afford to do it that way, as
    perfect as it would be, in some ways. But----
        Senator Fischer. I agree with you, there--we don't have
    time to wait.
        Admiral Rogers. Yes, ma'am.
        Senator Fischer. When we look at the Department, what level
    of communication do you have with different communities within
    the Department--say, the--with regards to acquisition or
    installations--to ensure that the items we purchase or the
    facilities that we're building are able to take those threats
    that we're looking at from cyber into account?
        Admiral Rogers. I would tell you the acquisition piece is
    one of the areas that we still need a lot of work. It's not
    because people aren't working hard. But, I've always been
    struck by the analogy, we would never buy a ship, a tank, an
    aircraft with the--without the operational vision driving
    exactly how we designed it, built it, structured it. For much
    of our networks and infrastructure, that has not historically
    been our model. We just built those. We bought those--we
    focused on efficiency and price. We didn't really focus on
    operational impact, and we really didn't think, at the time,
    that we'd be dealing with a world in which intruders--foreign
    actors, nonstate actors--would be using those systems as access
    points to materially degrade our ability to execute our
    missions as a department. We just didn't anticipate that,
    decades ago. That's the world we're in now. We're trying to
    overcome----
        Senator Fischer. Well, it's----
        Admiral Rogers.--literally----
        Senator Fischer.--it's happened in private industry.
        Admiral Rogers. Right, decades of investment we're trying
    to overcome.
        Senator Fischer. Do you--last question--do you have any
    knowledge if our adversaries have targeted any infrastructure
    on our military bases?
        Admiral Rogers. Yes.
        Senator Fischer. Thank you very much.
        Admiral Rogers. Yes, ma'am.
        Chairman McCain. Senator Blumenthal.
        Senator Blumenthal. Thanks, Mr. Chairman.
        Thank you, Admiral Rogers, for your extraordinary and
    distinguished service in so many roles over so many years.
        I want to focus on the challenges of recruiting young
    people in an age where the best and the brightest who have
    knowledge in this area have so many opportunities, many of them
    highly paid and challenging in their professional issues. Young
    Americans are entering the workforce with computer technology
    that has been part of their entire lives, not so much for us of
    a certain age, but for them, yes. I wonder if you could tell us
    how successful you and the, obviously, incomparably important
    forces under your command have been in recruiting and
    maintaining talent in this time, and what we can do to help.
        Admiral Rogers. I'm very comfortable with where we are on
    the uniformed side. The same things that lead a young man or
    woman in our Nation to decide they want to pick up a rifle and
    take on that challenge leads men and women to decide they want
    to put on a uniform and pick up a keyboard. That has not been
    the biggest challenge. The area that I've told the team we
    probably need to take a greater look at is on the civilian side
    of this, because we have got--our vision is, you've got to
    create a workforce that is both Active and Reserve military as
    well as civilian component to it so we get that breadth of
    expertise that you've referenced.
        While we're meeting our targets right now on the civilian
    side, as I've said, there's a couple skillsets already where I
    think I'm going to have to come back to the committee to say,
    ``Look, I could--probably need some help here with--can I come
    up with some different processes or options that would make
    things more attractive to, particularly, some very high-end,
    very small number of skillsets that I don't have huge numbers
    of, but they're incredibly valuable for us?'' That's one area
    where I'm thinking I'm probably going to have to come back. I
    have to work this with the Department first, but my experience
    is telling me, ``You know, Mike, we need to step back and take
    a look at this piece of it.''
        Senator Blumenthal. Is there sufficient--are there
    sufficient resources devoted to research, the personnel
    available to supervise that research, and, in effect, planning
    for the future?
        Admiral Rogers. Right. I mean, there's--I'm not going to
    pretend for 1 minute that you have all the people and all the
    money and--that you would like. It's--I would argue--
    characterize it as reasonable right now. It's not a major
    issue, in the sense that, as a commander, I've said to myself,
    ``Wow, we've got a significant deficiency here that will impact
    our ability to execute the missions.'' I haven't seen that.
        Senator Blumenthal. I know that you indicated earlier that
    you haven't read the GAO report.
        Admiral Rogers. Right. Right.
        Senator Blumenthal. But, I wonder, focusing on the local
    capability, and particularly on the private sector, the
    infrastructure segment that you mentioned earlier in some of
    your conversations with my colleagues--transportation,
    financial, electric--how well are they doing in protecting
    themselves?
        Admiral Rogers. I would--if you look across the 16 segments
    in the private sector that have been designated as critical
    infrastructure, in terms of impact on the Nation's security, I
    would argue some are a little--some are ahead of others. I'd
    probably put--financial, for example, not surprising, in the
    sense that--has access to more resources than some, has come to
    the conclusion that cyber potentially calls into question their
    very business model, since it's built on the idea of trust and
    the ability to move funds globally simultaneously through these
    transactions, if you will, that we all believe in and trust. On
    the other hand, there are some industries--I--and, in their
    defense, I look at them, and they're quick to remind me, ``Hey,
    remember, our business model is different. We're a regulated
    industry.'' For example, ``In order to generate resources to
    apply to increase our cyberdefense, our cybercapabilities, the
    only way for us to do that is raise rates. For example, most
    consumers, not really enthusiastic about that. Most regulatory
    bodies not necessarily overly enthusiastic about that at the
    moment.''
        Senator Blumenthal. Those regulated industries would be
    electricity----
        Admiral Rogers. Right. Power is an example.
        Senator Blumenthal. Yeah.
        Admiral Rogers. There's a couple of others that fall into
    that.
        Senator Blumenthal. Are there unregulated industries that
    are also in need of improvement that you would put at the
    bottom of that list of readiness?
        Admiral Rogers. There are some. I've--think I've publicly
    previously talked about--healthcare, for example, is one of the
    16 segments I look at, and I--that's an area probably that
    needs a broader top-to-bottom look, although I'm the first to
    acknowledge it's really outside my immediate mission area, and
    I don't bore into it every day. But, as I look at where I'm--
    potentially we're going to be tasked to provide our
    capabilities to partner with, it's an area that I pay attention
    to.
        Senator Blumenthal. Thank you very much.
        Admiral Rogers. Sir.
        Senator Blumenthal. Thank you, Mr. Chairman.
        Chairman McCain. Senator Rounds.
        Senator Rounds. Thank you, Mr. Chairman.
        Admiral Rogers, first of all, thank you for your service.
        I find it interesting that, as you work your way through
    this, you're in a brand new area and you're trying to determine
    how to respond and how to protect. It seems that when you lay
    this out--and you say, like, you have 16 different segments
    within the realm that you're responding to. Fair to say that
    they break out into either information or data systems and
    operating systems, in terms of the way that we look at what the
    data is or the different systems that we're looking at as being
    vulnerable at----
        Admiral Rogers. Right.
        Senator Rounds.--at a data system being the collection of
    information on individuals and operating systems being those
    systems perhaps necessary for the infrastructure within our
    country? A fair way to break out?
        Admiral Rogers. I guess that's fair. To be honest, Senator,
    I've never really thought of it that way. Not that that's a bad
    way.
        Senator Rounds. The----
        Admiral Rogers. I just haven't----
        Senator Rounds. Well, the reason that I ask is, it would
    seem that, while information systems would contain material,
    information that would be of a private nature, perhaps, trade
    secrets that may very well be information on an individual,
    such as the information that we lost at the Federal level when
    our Federal systems were hacked. At the same time, we have an
    operating system out there for the utilities. We have operating
    systems out there for dams. We have operating systems for
    nuclear power plants. Clearly, in those areas, if someone with
    intent could get into an operating system, they could do
    significant amount of damage, perhaps bodily injury, as well.
        Admiral Rogers. Yes.
        Senator Rounds. Fair to----
        Admiral Rogers. Yes.
        Senator Rounds.--look at it?
        Based upon that, when you look at your role and the role of
    Cyber Command, do you see this as protecting--do you see them
    different, in terms of how you protect, or do you see your role
    different with operating systems versus data and information-
    collection systems?
        Admiral Rogers. So, our protection scheme, if you will, is
    based on two different pieces of strategy. The first component
    of our strategy is--our intent is to go into foreign space to
    stop the attack before it ever reaches those systems. The
    second component of our strategy is to apply defensive
    capability working directly with each of the individual
    elements, if you will, to say, ``If that fails, we'd also like
    to work with you on how you might shore up your systems and
    your vulnerability.''
        The other point I want to make sure I articulate--and I
    probably should have done a better job this morning--is, as a
    reminder, U.S. Cyber Command and DOD, writ large, provide our
    cyber capabilities in the defense of critical infrastructure in
    the private sector in partnership and in support of DHS. DHS
    has overall responsibility in the Federal Government for the
    provision of government support to the private sector when it
    comes to cyber. I'd--I don't want people thinking, ``Well, it's
    just Cyber Command and just the private sector.'' There's a
    broader set of players out there that we integrate with and we
    support as we execute the mission.
        Senator Rounds. An attack in either case would be done in
    milliseconds, fair to say? So, unless we have the system in
    place and we know whether or not we are there to respond or to
    correct, to protect, in advance, we don't know whether or not
    we're going to be able to do it in time. At that point, then we
    simply respond afterwards. Would you say that, today, we have
    systems in place to appropriately protect--for lack of a better
    term, I'm going to call, the operating systems and the
    information systems that we have--do you feel that the
    protocols are there? I'm going back to what Senator King was--
    --
        Admiral Rogers. Right.
        Senator Rounds.--alluding to earlier. I--I'm not sure that
    we have the definitions prepared yet to allow you to respond
    immediately, within milliseconds, unless we talk about it and
    we lay it out. Is it there today?
        Admiral Rogers. So, across the board, with every single
    component in the private sector, no, it's not.
        The other point I would make is, cyber is no different than
    other domains, in the sense that the importance of intelligence
    to provide us insight as to what is likely to be coming at us
    gives us the knowledge and insight, the warning, if you will,
    to anticipate and act in advance. It's every bit as true for
    the CENTCOM [Central Command] commander as it is for me in
    Cyber Command. Warning continues to be critical for both of us.
        Senator Rounds. Today, if our forces were aware of an
    attack on them, they have the ability to respond. But, if it
    was property or entities that are within the United States, do
    you have the ability to respond today if it is not a military
    but a civilian or a civil target?
        Admiral Rogers. So, is there a process? Yes. Is it
    something that I can do automatically, instantaneously? No.
        Senator Rounds. Then, it--in that case, then it would have
    to happen first, then, because, for all practical purposes, the
    attack will be instantaneous.
        Admiral Rogers. Or we have to get the warning in advance,
    that importance of intelligence. It----
        Senator Rounds. But, even if you get the warning in
    advance, in terms of--it would have to be enough time for you
    to get out and to have a political discussion, for all
    practical purposes, about whether or not you can respond----
        Admiral Rogers. Again, it would depend by the scenario,
    because there are some elements where we've got mechanisms in
    place for the application of capability, and it's just a
    process, if you will, as opposed to a broad----
        Senator Rounds. But, not one that----
        Admiral Rogers.--political decision.
        Senator Rounds.--could be done in milliseconds.
        Admiral Rogers. But--right, no. I'm not going to pretend
    for 1 minute that it's something you're going to do in
    milliseconds.
        Senator Rounds. Thank you. Thank you, sir.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman.
        Thank you, Admiral, for being here.
        Admiral Rogers. Senator.
        Senator McCaskill. Let me start with your acquisition
    personnel. Some of the saddest stories of waste have been in
    the acquisition of IT within the military--frankly, within
    government. A lot of that has had to do with, you know, knowing
    what you need to buy, when you need to buy it, and when legacy
    systems need to be scrapped, and how nimble can you be with
    off-the-shelf--I'm not sure the military has been a great
    example of that flexibility and the ability to move with the
    technology. So, I think these acquisition personnel are pretty
    important. Do you have the ten in place that are supposed--that
    we authorized in order for you to make the wisest acquisition
    decisions possible, in light of a history littered with serious
    mistakes and lots of--billions and billions of dollars wasted?
        Admiral Rogers. Well, first, just a reminder. Remember,
    Cyber Command, I operate and defend; I don't buy. You have been
    kind enough--the committee and the Congress has been kind
    enough to provide, if you will, an initial capability to do us.
    We're in the process of hiring those ten individuals that you
    have authorized. I am very mindful of--as I remind the team,
    ``It is about generating outcomes, guys. That's why we're
    granted this authority, and that's what we need to be mindful
    of. I'm not interested in spending money for the sake of
    spending money. It's about generating capabilities that
    directly impact our mission in a material way.''
        Senator McCaskill. Well, I would be interested in how you
    are acquiring, with more detail, if you----
        Admiral Rogers. Yes, ma'am.
        Senator McCaskill.--would provide it--how you are finding
    the right acquisition personnel, and how competitive are we in
    finding the right acquisition personnel? Because, in many ways,
    I think that's the key to the kingdom. If we're going to have
    the capabilities in this space, it--a lot of it is, you know,
    people being trained, but a lot of it is also----
        Admiral Rogers. Oh, yes, ma'am.
        Senator McCaskill.--the underlying----
        Admiral Rogers. You have to buy the right----
        Senator McCaskill.--the capabilities.
        Admiral Rogers.--capabilities.
        Senator McCaskill. I just--I'm really worried about getting
    the right people----
        Admiral Rogers. Yes, ma'am.
        Senator McCaskill.--making those decisions. So, I would
    like to stay updated in that progress.
        Senator McCaskill. What kind of coordination is--your
    command have at this point with our NATO [North Atlantic Treaty
    Organization] allies, with Israel, with our Arab allies? I'm
    particularly interested in any coordination and cooperation you
    have with NGA [Naitonal Geospatial-Intelligence Agency].
        Admiral Rogers. So, I'm not going to publicly, in----
        Senator McCaskill. Obviously.
        Admiral Rogers.--unclassified forum, go into the specifics.
    I would only tell you, we partner with--we have a handful of
    nations right now we have a very direct, very real relationship
    with, with respect to capabilities, real-world operations. I
    won't go into the specifics of the who.
        One of the challenges I find is, cyber, like any other
    mission area, we have got to prioritize. So, when I look at
    foreign partnerships, I ask, Where is the greatest return for
    us, as a Department, as the DOD, and where is the greatest
    return for us, U.S. Cyber Command, in terms of the ability to
    execute our mission? We've got to--I spend almost as much time
    with a discussion with the team about what we're not going to
    do as what I discuss what we are going to do, because I always
    remind them, particularly since we're still in the midst of
    building this capability out, ``Prioritization, prioritization,
    prioritization, guys.'' We can't do everything. We've
    identified an initial set of foreign partners, if you will.
    Those partnerships today are generating capability that we're
    actually using today.
        Senator McCaskill. Great. Maybe in a classified setting, I
    could get more information.
        Admiral Rogers. Yes, ma'am.
        Senator McCaskill. What is the ratio of civilian versus
    military within the Command at this point?
        Admiral Rogers. It's about--we're trying to build to about
    80 percent military, 20 percent civilian. If you looked at it
    today as a snapshot, it's probably, off the top of my head, 70/
    30--70 percent military, 30 percent civilian.
        Senator McCaskill. What about contractors? What is the
    ratio on contractors? What is your goal on contractors? Because
    this could be an area--and, of course----
        Admiral Rogers. Right.
        Senator McCaskill.--you know, underlying that is a concern
    about the actual screening of contractors. What is your ratio
    now of contractors to DOD, and what do you want it to be, going
    forward?
        Admiral Rogers. We probably, right now--apologize, I'm
    trying to do the math in my head--it's probably about 25
    percent--we have an--over and above the government, civilian,
    and military--we have an additional 25--off the top of my head,
    we have about an additional 25 percent in the contractor base.
        Senator McCaskill. It--and is that where you would like to
    be, going forward? Do you see more reliance on contractors,
    going forward?
        Admiral Rogers. I'm a little bit leery of over-becoming
    reliant on contractors. Why? Because I try to remind people,
    cyber is a domain in which we conduct a wide range of military
    operations. In accordance with the Law of Armed Conflict, those
    operations need to be conducted by military personnel. So, I'm
    not trying to minimize the role of contractors. I just try to
    remind the team, ``It's not one-size-fits-all, so we've got to
    step back and ask ourselves what's the right allocation.'' I'm
    pretty comfortable right now. I wouldn't argue that it's among
    my highest priorities, in terms of increasing the ratio of
    contractors. I'd argue, right now, probably priority number
    one, manpower-wise, as I've said, is the civilian piece. I'm
    very comfortable with--we're tracking and we're going the right
    way in the uniformed piece. The civilian area is where I know
    I'll be paying more attention to in the coming year.
        Senator McCaskill. Thank you, Admiral.
        Admiral Rogers. Yes, ma'am.
        Chairman McCain. Senator Graham.
        Senator Graham. Thank you for your fine work, Admiral. Can
    you hear me?
        Admiral Rogers. Yes, sir.
        Senator Graham. Okay. What are the threats, nation-state-
    wise, in terms of who we're most threatened by?
        Admiral Rogers. I would argue Russia and, again, the--
    probably, in terms--if you look at capability, the other four
    that we have publicly acknowledged we pay great attention to:
    China, Iran, North Korea--and then the nonstate actors, the
    other category where I look, that could be a game-changer, were
    the--some of the dynamics to change.
        Senator Graham. On the terrorism side, could you give us
    the top couple of terrorist organizations you're worried about?
        Admiral Rogers. It's not that I don't know it. In an
    unclassified forum, I----
        Senator Graham. Okay, we won't go down that road.
        Admiral Rogers. If I could. Thank you, sir.
        Senator Graham. On the criminal side, what areas of
    criminality do you worry the most about? What countries?
        Admiral Rogers. I would argue, right now, Russia probably
    has the most active criminal element, with the most--with the
    greatest capability.
        Senator Graham. Do you think the Russian government's doing
    anything constructive, in terms of regulating their criminal
    activity in cyber?
        Admiral Rogers. I would only say it doesn't appear to be
    getting much better.
        Senator Graham. What about Iran? Has Iran gotten better in
    the last year, in terms of their cyber activity?
        Admiral Rogers. Yes.
        Senator Graham. Are they less threatening?
        Admiral Rogers. I apologize, I'm not sure----
        Senator Graham. Are they less threatening or just more
    capable?
        Admiral Rogers. I'd argue they're increasing their
    investment, they're increasing their level of capability. We
    have not seen the same level of activity from them that we have
    seen historically in the past. I have seen some of that same
    activity directed at other nations and other groups around the
    world.
        Senator Graham. They're improving their capability?
        Admiral Rogers. Yes, sir.
        Senator Graham. Do we know if any of the money they're
    getting from the Iranian nuclear deal is going into their cyber
    upgrades?
        Admiral Rogers. I don't know for a fact.
        Senator Graham. Okay. Is it fair for the country to
    establish, as a policy, cyber dominance over enemies, that we
    want to be the--have a dominance in this area of warfare?
        Admiral Rogers. I mean, I want to think--I would argue we
    want to have the same level of capability in supremacy in cyber
    as we have articulated that we want in every other----
        Senator Graham. Okay. Well, that's----
        Admiral Rogers.--domain----
        Senator Graham. I think that's a good goal----
        Admiral Rogers.--for our Nation.
        Senator Graham.--so let's march down that path. I associate
    myself with Senator King about what we need to do as a Nation.
        Admiral Rogers. Sir.
        Senator Graham. The Navy. The difference between the
    Chinese navy, the Russian navy, and the American Navy is pretty
    wide?
        Admiral Rogers. Yes, sir.
        Senator Graham. In the cyber arena, how close is it?
        Admiral Rogers. I have publicly stated before, the
    Russians, I would consider in cyber, a peer competitor. China,
    not in the same place, but rapidly attempting to get there.
        Senator Graham. So, the gap between the dominance we have
    on the seas in cyber is not nearly----
        Admiral Rogers. Not nearly the same.
        Senator Graham. Okay. When it comes to Iran, when you
    compare their air force to our Air Force, what's the gap?
        Admiral Rogers. Oh, significant.
        Senator Graham. Okay. In the cyber arena, less significant?
        Admiral Rogers. Less significant, but it's still an area of
    significant advantage for us, right now.
        Senator Graham. Are the Iranians trying to close it?
        Admiral Rogers. Oh, they are.
        Senator Graham. Okay. So, from a NATO point of view, you're
    familiar with Article 5, an attack against----
        Admiral Rogers. Sir.
        Senator Graham.--one is an attack against all. Is there any
    such concept in the cyber arena?
        Admiral Rogers. You've heard NATO publicly talk about the
    fact that they believe Article 5 applies to all domains of
    warfare.
        Senator Graham. Do they have any rules of engagement that
    would identify what a cyberattack is?
        Admiral Rogers. They're probably in the same arena we are:
    still trying to work our way through that.
        Senator Graham. When do you think we'll arrive at a
    conclusion to Senator King's question?
        Admiral Rogers. Boy, I don't know. The----
        Senator Graham. What's the biggest impediment to us getting
    there? Is it the Congress? Is it the----
        Admiral Rogers. No.
        Senator Graham.--DOD?
        Admiral Rogers. It's as much, in some ways, as--and again,
    this is just Mike Rogers' opinion--it's as much, in some ways,
    from my perspective, as, ``Well, this is just an intellectual
    exercise. It--this is something we can afford to''----
        Senator Graham. The Department----
        Admiral Rogers.--``to push down''----
        Senator Graham.--of Homeland Security is responsible,
    basically, for protecting us in the financial/service/power
    arena, our civilian targets.
        Admiral Rogers. Sir.
        Senator Graham. You're responsible for protecting the
    military infrastructure.
        Admiral Rogers. We provide support to that commercial----
        Senator Graham. That's right.
        Admiral Rogers.--infrastructure, if requested.
        Senator Graham. But, you're also responsible for going on
    offense. The----
        Admiral Rogers. Yes, sir.
        Senator Graham.--DHS [Department of Homeland Security] is
    not going to attack a foreign nation. You would.
        Admiral Rogers. Yes, sir.
        Senator Graham. So, how could we, as a Nation, given the
    threats that we face in the cyber arena, not really have a good
    answer as to, What's the impediments to creating rules of
    engagement?
        Admiral Rogers. I apologize, sir. You really need to speak
    to the policy side.
        Senator Graham. Yeah, but you're an operator.
        Admiral Rogers. Yes, sir.
        Senator Graham. So, who do you talk to about, ``Hey, guys,
    let's see if we can get there''?
        Admiral Rogers. So, I'd--the Secretary of Defense or the
    Office of the Secretary of Defense.
        Senator Graham. How do they respond?
        Admiral Rogers. I think, intellectually, we all realize
    that that's what we need to do. It's generating that consensus,
    I think----
        Senator Graham. Is there anything Congress is not doing
    that you would like us to do to help resolve this issue?
        Admiral Rogers. No, I can't argue that it's something that
    Congress has failed to do. I don't see that.
        Senator Graham. Thank you.
        Admiral Rogers. Sir.
        Chairman McCain. Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        Admiral, I know that you talked a little about cyber teams
    in response to our--to earlier questions. I think the idea to
    leverage our outstanding National Guard capabilities and
    capacity in establishing many of these cyber teams is a good
    idea. As you and your colleagues look to establish additional
    cyber units in the future--and while I'm sure you are looking
    at this region, meaning the Pacific region, I ask that you look
    closely at the needs of the Asia-Pacific region. In Hawaii, for
    example, as you well know, we have PACOM [Pacific Command], NSA
    Hawaii, various component commands, and other agency regional
    officers that are--offices that are likely targets for
    cybercriminals and--you know, as we focus on the rebalance to
    the Asia-Pacific, obvious. I wanted to get to a question.
        Last September, the U.S. and China did agree that neither
    government would support or conduct cyber-enabled theft of
    intellectual property. Now that we are six months down the
    road, would you say that China is living up to this agreement?
        Admiral Rogers. Well----
        Senator Hirono. I don't know how specific the agreement
    was, frankly, but, you know, it seemed like a good idea for the
    two countries to enter into that kind of a dialogue and
    discussion. But, really, what is happening with regard to that
    agreement?
        Admiral Rogers. So, if I could, what the agreement said
    would--was, neither nation would engage in that activity for
    the purpose of gaining economic advantage for their private
    sector. We continue to see Chinese activity in this regard. The
    million-dollar question is, Is that activity for governmental
    purposes or is it being then passed from the government to the
    private sector? It--from my mind, the jury is still out in that
    regard. Its activity level is somewhat lower than prior to
    September of 2015.
        Senator Hirono. But, is there any way that we can determine
    whether China is engaging in such activity? Really, are there
    any parameters? Is there anything that we measure to determine
    whether these--this agreement is being adhered to?
        Admiral Rogers. Yes, ma'am. In an unclassified forum, I'm
    not going to get into the specifics of how we go about doing
    that, but yes, ma'am.
        Senator Hirono. So, one of the areas of--thank you. Maybe
    in another context, we can get to some of those questions. With
    regard to our ability to support a--our cyber capabilities,
    training and retention, really important. In that regard, STEM
    [Science, Technology, Engineering and Mathematics] education is
    critical. Can you just talk a little bit more about what you
    are doing to--any collaborations, partnerships you are doing
    with universities or community colleges to train a workforce
    for us?
        Admiral Rogers. So, let's just take Hawaii as an example.
    Today, as a matter of fact, in Kunia, the adjutant general for
    the Guard in Hawaii is meeting in the Kunia complex with U.S.
    Cyber Command, NSA, and elements from across the island on Oahu
    to try to look at--to include the academic sector--How do we
    generate a more capable workforce both to meet Guard
    requirements as well as to meet Cyber Command, NSA, and other
    elements? How can we partner more effectively in aligning that
    capability to deal with issues of common interest to us; in
    this case, on Oahu, specifically, and the State of Hawaii, in--
    more broadly? You see that same--Hawaii is an area where we
    probably are--have gone further than others, but you can see
    that same type of activity for U.S. Cyber Command right now
    with what we are doing with a handful of universities across
    the United States, from the West Coast--Carnegie Mellon--there
    are some West Coast universities, Tulsa, you heard, one--
    there's, I want to say, something on the order of 60 to 100
    right now, between NSA and Cyber Command. This is one area
    where NSA and Cyber Command tend to partner together a lot.
        Senator Hirono. Obviously, that needs to continue, because
    our cyber capability is something that is going to be an
    ongoing----
        Admiral Rogers. Right.
        Senator Hirono.--effort.
        You mentioned the importance of the private sector in a
    whole-of-government plus, you know, outside-of-government
    approach to cybersecurity needs. So, how do you envision the
    private sector's role?
        Admiral Rogers. So, what we've tried to do at Cyber Command
    is--what I think the private sector brings is technical
    innovation, intellectual innovation, if you will--just broad
    knowledge of capabilities--and alternative ways to look at
    problems, if you will. Those are, at a macro level, the three
    things--when I look at the private sector, I say, ``Wow, you
    really could add value for us in that regard.''
        What we've done to date is, we've created what we call the
    Point of Partnership in Silicon Valley, where I've placed a
    very small element on the ground. The part that's interesting
    to me is, I did not want U.S. Cyber Command people out there.
    Instead what I wanted was one individual who's a U.S. Cyber
    Command individual, and then I wanted to harness the power of
    Reserve individuals who are currently in the ecosystem in the
    Valley, working in their day-to-day jobs. We've just started
    that since last summer. That's starting to work out very well
    for us. It gives us a chance to get a sense for what technical
    innovation is going on out there. We approach them with
    different problem sets and say, ``Hey, here's an issue we're
    still trying to work our way through. How are you handling
    this? Or would you give us some suggestions on how we might
    deal with it?'' I'm trying to see if we can replicate that
    model that we currently have in place in Silicon Valley in
    other areas. I'm looking at the East Coast next, kind of as an
    example of that, probably somewhere in the Greater Boston Metro
    area next.
        Senator Hirono. So, it sounds like more of an informal kind
    of arrangement right now, and maybe, going forward, you would
    want to maybe institutionalize----
        Admiral Rogers. Right.
        Senator Hirono.--this kind of collaboration with the
    private sector.
        Admiral Rogers. Yes, ma'am.
        Senator Hirono. Thank you, Mr. Chairman.
        Chairman McCain. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chairman.
        Admiral Rogers, I don't envy you with the job that you
    have, the complexity and then the additional challenges that we
    have, as the Chairman has said, about sequestration, things
    that are on the horizon that you have to worry about.
        The--you know, and in listening to the discussion, I think
    one thing that's very important is, we're never going to have
    the perfect weapon. This is not--you know, absent the United
    States coming up with a game-changing offensive or defensive
    capability of the scale of the Manhattan Project, you can't
    possibly get inside the decision cycles of the state actors,
    organized crime, terrorists, and other people. If--and when you
    think about decision cycles in this realm, you think about--
    every single day, you get new malware, viruses, other
    technology added to your PC to deal with new threats that
    didn't exist a day or two or a week before. So, I'm trying to
    get my head around how you really even segregate your scope of
    responsibility, which is largely, you know, the vulnerabilities
    of, say, the DOD or with--however you would----
        Admiral Rogers. Right.
        Senator Tillis.--like to define your scope, ability, and
    how you differentiate that from the broader private-sector
    threat. I mean, you've got 28 million small businesses. You
    have close to 19,000 businesses with 500 employers or more. You
    have distributed public-sector infrastructure, whether it's
    electric, water, gas. If--and the concern that I have is, what
    we have right now are the equivalent of guerrilla sniper fire
    or mortar attacks. We haven't seen--and I think that we will
    see someday--a nation-state or organized crime or terrorist
    organization literally be in a position to execute a multi-
    pillar attack that, if they're smart--and they are--what they
    will do is something to disrupt you, and then disrupt your
    ability to react to it by attacking the private sector, which
    is also integral to your supply chain.
        So, you know, how are we looking at this on a global basis
    and understanding that, as they continue to increase their
    abilities, they're going to figure out a way, on a multi-pillar
    basis, to go after communications infrastructure, a supply-
    chain infrastructure, healthcare, electric, whatever public
    infrastructure may be vulnerable--how do we actually get these
    things to coalesce, versus finding out we create--we get a good
    job--we do a good job in DOD, we create the Maginot Line, and
    they just go around it and disrupt you from a different
    direction?
        Admiral Rogers. So, you have very succinctly articulated
    much of the problem set and the challenges of how you operate
    in this environment, because the--these arbitrary boundaries
    that we traditionally consider, ``Well, this is a DOD function
    and this is a private function, this is an inherently
    government''--cyber just blurs these lines. So, even as I focus
    on the DOD mission, it's one reason why I've argued we have got
    to think so much more broadly about this problem set.
        Now, within the DOD arena, it's one of the reasons why, for
    example, if you look at our exercise in training regime that
    we've put in place, we try to do that, not just within the DOD,
    but across a breadth of the private sector. CYBERGUARD is our
    annual exercise. It'll be in June of this year. We pick a
    different segment, if you will, every year. We're going to do
    the power segment in this year's exercise. I think it's
    something like 20 different corporations will be exercising
    with us--the Guard, State, local----
        Senator Tillis. Well, that's--you know, that's what I'm
    getting to. It's almost as if your military exercises have to
    involve all of these players----
        Admiral Rogers. Sure.
        Senator Tillis.--so that they have a better understanding
    of their vulnerabilities and the nature of the attack that
    would occur in cyber.
        The other question that I had is, To what extent are we
    looking at State and local governments as a way to at least--in
    North Carolina, I served in the legislature, and we were
    talking about what we could do to work on cyberthreats. I saw
    it also as an economic advantage. If States became particularly
    good at grid-hardening or at securing the physical presences
    and cyberthreats within their State borders, they actually
    create an economic advantage for people to set up business in--
    --
        Admiral Rogers. Right.
        Senator Tillis.--those States. So, to what extent are we
    trying to lead and help make this problem a little less
    difficult at the Federal level by making sure that the States
    and local governments are stepping up their game as a part of
    the effort?
        Admiral Rogers. So, it's one of the reasons why there's a
    big Guard component to this effort, to ensure we can also try
    to address the State and local aspects of this.
        Senator Tillis. Thank--I have a million different
    questions. I think----
        Admiral Rogers. Sure.
        Senator Tillis.--what I'll probably do is see if I can
    schedule some time----
        Admiral Rogers. Oh, yes, sir.
        Senator Tillis.--in my office to go over a number of other
    ones. We may have to do some in a secured setting.
        Thank you very much.
        Chairman McCain. Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        One of the issues is, in fact, sort of the services being
    able, within their resources, to fully develop the units that
    they will detach to, essentially, or provide for your
    operational control, since you won't have your organic units.
    Can you give an assessment of sort of where we are--where they
    are, in terms of doing that, across the services?
        Admiral Rogers. So, that really goes to the heart of
    readiness, if you will. One of the--so, in September, when I
    was with you, one of the things I said then, during that
    session, was that I thought one of the reasons why 16 was going
    to be such a big game-changer was, I thought we'd get more
    involved in the total breadth of capability sets, which we are.
    Then, the other reason was because we needed to shift from a
    focus on IOC and FOC, the generation of capability, to actual
    readiness, ``Okay, guys, are we actually ready to employ
    this?'' So, we have spent the last six months working our way
    through, How do you define readiness in the cyber arena, down
    to the individual team level so that I, as a commander, have an
    awareness of what the true capabilities of the force is, and,
    using the same mechanisms that we use to assess readiness
    across the DOD, I can provide policymakers and decisionmakers a
    true picture of, ``This is just--here is what this force is
    really capable of doing.''
        We've just started doing that. I've gone through two
    strawmen so far with the team. We're going to do a third and
    final one this summer. Then, by the end of the summer, in
    September, I will start providing to the DOD, on a quarterly
    basis, by team, ``Here's where we are in terms of true
    readiness.''
        Chairman McCain. Is the nightmare scenario that one of
    these nations acquires the capability to shut down satellites?
        Admiral Rogers. I mean, that is a--there's two scenarios
    that really concern me. One is the physical shutdown and
    interdiction of capability. The other scenario that I----
        Chairman McCain. But, explain the first one.
        Admiral Rogers. If you were to shut down--look at it from--
    first, from a narrow DOD perspective--because much of what we
    rely on for our enablers as a Department are commercial
    infrastructure--power, our ability to move force, for example.
    If you were able to try to take that away or materially impact
    the ability to manage an air traffic control system, to manage
    the overhead structure and the flow of communications or data,
    for example, that would materially impact DOD's ability to
    execute its mission, let alone the broader economic impact for
    us as a Nation.
        The other concern I have is, to date, most penetrations of
    systems that we've seen by actors have either been to steal
    data or to do reconnaissance. What happens if the purpose of
    the intrusion becomes to manipulate the data? You can no longer
    believe what you are seeing. Think about the implications of
    that, if you couldn't trust the military picture that you are
    looking--that you're using to base decisions on, and let alone
    the broader economic impacts for us as a Nation.
        Chairman McCain. Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Thank you----
        Admiral Rogers. Senator.
        Senator Shaheen.--Admiral, for being here and for the job
    that you're doing every day to protect the country.
        I wanted to, first, start with a statement you made
    earlier, I think, to a question from Senator McCain about, Does
    Russia have the capacity to inflict serious harm to our
    infrastructure? You said yes. Do we have capacity to inflict
    serious harm to Russia's infrastructure?
        Admiral Rogers. In an unclassified hearing, I'd rather not
    get into that, if I could, ma'am. I don't----
        Senator Shaheen. But, I--let me put it in the context of--I
    assume there is some mutual deterrence that goes on when we're
    talking about some state actors.
        Admiral Rogers. Again, it's a lot more complicated than
    just a yes or a no.
        Senator Shaheen. Okay. Well, I hope that we will be able to
    ask that question in a----
        Admiral Rogers. Yes, ma'am.
        Senator Shaheen.--classified setting.
        I had the opportunity, over the last 2 weeks, to visit
    Estonia, which is, as you know, one of the most wired
    countries----
        Admiral Rogers. Right.
        Senator Shaheen.--in the world, and also the--probably the
    first victim of a cyberattack by a nation-state, by Russia. I
    had the opportunity to visit the Cyber Center that's been
    accredited by NATO and to hear them talk about how they think
    about cyber issues. Can you talk a little bit about how
    CYBERCOM works with our NATO allies?
        Admiral Rogers. So, I've been in Tallinn, myself. I've been
    to the Center. I was just in Brussels, for example, in
    December, and I--as U.S. Cyber Command, I addressed the North
    Atlantic Council, you know, as one of the member nations. I was
    asked to talk to the leadership of the alliance about
    implications of cyber and how might the--just one voice, I'm
    the first to acknowledge that--how might the alliance work its
    way forward as we're trying to deal with the cyber arena. Cyber
    Command, I tried to partner both with the alliance as a whole
    as well as specific member nations on specific issues within
    the alliance. What I suggested to NATO is, I think the real key
    is, you've got to get the defensive house together, number one,
    and then, secondly----
        Senator Shaheen. Explain a little more what you mean when
    you say that.
        Admiral Rogers. Much like we've seen on the U.S. side, I've
    said, ``Look, I see NATO is spending a lot of time--and it's a
    good thing--focused on defense of NATO's fixed
    infrastructure,'' but I also remind them that I think there's
    value in spending time thinking about--for example, as NATO is
    creating additional capability of different, additional force
    constructs to be able to apply traditional capability in a much
    faster way. I've also been part of discussions where I remind
    them, ``Even as you're generating that additional force, that
    additional capability, you need to be thinking about, What are
    the cyber vulnerabilities and the cyber defense implications of
    that? Because we can spend a lot of money on generating new
    capability, but if it's got inherent vulnerabilities that
    quickly negate its ability to actually be used, that's not a
    good situation for the alliance or for us. We're dealing with
    the same challenges. I've had those discussions with the
    alliance, writ large.
        Senator Shaheen. How do we increase their participation in
    training exercises like CYBERFLAG?
        Admiral Rogers. So, for CYBERFLAG, for example, we have
    some NATO nations that participate in CYBERFLAG, which is U.S.
    Cyber Command's largest exercise. I won't say we have all 28
    member nations at CYBERFLAG. We--over time, you'll see more and
    more nations participating. One of the things I've talked to
    NATO about, although we haven't yet fleshed out the how, is,
    How might we go about taking a look at a cyber exercise or
    training regime? I'd be the first to admit, this is just a
    preliminary discussion. But, when I was there in December, I
    said, ``Hey, look, I think this is something we need to be
    thinking about.''
        Senator Shaheen. One of the things that I was really
    interested in, in Estonia, was hearing about their Estonian
    Defense League.
        Admiral Rogers. The Defense League.
        Senator Shaheen. You were talking about--earlier in your
    testimony, about the effort to take advantage of the expertise
    in the private sector to help us as we're looking at cyber
    issues. I was very interested. One of the things I heard was
    that the reality is, we can't completely prevent a cyberattack.
    What we've really got to do is be prepared to respond to that
    attack in the way that is most effective and most--and fastest.
    They were talking about their Defense League as one way that
    they are able to do that. Is that something that--recognizing
    that we're probably not talking about--is--but, is that what
    you're looking at when you're talking about the teams that are
    being set up to help respond?
        Admiral Rogers. It's a little different, in the sense that
    the idea behind the Cyber League for Estonia is, you have
    private citizens----
        Senator Shaheen. Right.
        Admiral Rogers.--who volunteer--on a voluntary basis----
        Senator Shaheen. Right.
        Admiral Rogers.--will apply themselves at specific problem
    sets as they emerge, kind of after hours, after work, on their
    own time. That's kind of the model for the Cyber League in
    Estonia. They use that to augment their government and----
        Senator Shaheen. Right.
        Admiral Rogers.--private-sector capabilities.
        On the U.S. side, for us in the DOD, that Cyber League, I
    would argue, is a cross, for us in our structures, between the
    digital service arena that DOD is creating as well as the kind
    of Guard construct, although the difference is, when the
    Estonians do it, you're doing it purely on your own time,
    purely as assistance, not as a uniformed member of the Guard
    and Reserve, so to speak. So, it--it's not exactly the same,
    but the thought process that----
        Senator Shaheen. Right.
        Admiral Rogers.--the idea of trying to tap that is similar.
        Senator Shaheen. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ayotte.
        Senator Ayotte. Thank you, Chairman.
        I want to thank you, Admiral Rogers, for your service----
        Admiral Rogers. Senator.
        Senator Ayotte.--to the country.
        I wanted to just ask you a basic question. You have
    substantial responsibility in your position. What keeps you up
    at night? What are the thing--what is--you're most worried
    about that we need to understand?
        Admiral Rogers. Well, let me be bit of a smartass and say,
    based on the workload, I have no problem sleeping.
        [Laughter.]
        Admiral Rogers. But, secondly, there's three things,
    generally, I highlight. Number one is actions taken against
    critical infrastructure in the United States, damage or
    manipulation. Number two, what happens when actors start to no
    longer just enter systems to do reconnaissance or to steal, but
    actually to manipulate or change data so that we no longer can
    believe what we're seeing? The third and final thing in the
    cyber arena is, What happens when nonstate actors start to use
    cyber as a weapon system and they want to use it as a vehicle
    to inflict pain and--against the United States and others?
        Senator Ayotte. To the third point you just made about
    nonstate actors using cyber as a weapon system, how grave of a
    threat is that to us, currently?
        Admiral Rogers. I would argue that it is not--you know,
    it's one of these, you say it and then tomorrow something will
    change. But, today what I would tell you is, I have not seen
    groups yet make huge investments in this, but I worry that it's
    a matter of time, because it wouldn't take long. One of the
    challenges of cyber--in addition, we've previously talked today
    about how it doesn't recognize boundaries. It doesn't take
    billions of dollars of investment. It doesn't take decades of
    time. It doesn't take a dedicated workforce of tens of
    thousands of people, like you see most nation-states deal with.
    The problem is that cyber is the great equalizer in some ways.
        Senator Ayotte. What are the greatest risks, to the extent
    you can describe them here, to our critical infrastructure, the
    first issue that you----
        Admiral Rogers. I just worry--in that regard, what I worry
    is--based on the accesses and the activity that I've seen of
    some nation-state actors out there, what happens if they decide
    that they want to, for some period of time, disrupt the things
    we take for granted, the ability to always have power, pumps--
    --
        Senator Ayotte. Power system----
        Admiral Rogers. Power systems.
        Senator Ayotte.--financial system.
        Admiral Rogers. To move money. I mean, if you take a look
    at the scenario in the Ukraine on the 22nd of December, imagine
    had a scenario like that unfolded in the United States. I'm not
    going to argue that someone's capable of making the United
    States totally go dark, but I would argue there's capability
    there to cause significant impact and damage.
        Senator Ayotte. That's why you discussed, in your opening
    testimony, the need for the coordination between government,
    private----
        Admiral Rogers. Yes, ma'am.
        Senator Ayotte.--sector, and across the whole of
    government.
        Admiral Rogers. Right.
        Senator Ayotte. I wanted to ask you--the law that was
    changed by Congress, in terms of the NSA, the holding of
    information----
        Admiral Rogers. Oh, the----
        Senator Ayotte.--the USA Freedom Act----
        Admiral Rogers.--USA Freedom Act. Yes, ma'am.
        Senator Ayotte.--can you give us an update on what is
    happening with that, and whether that's working, and any
    concerns you have? I think it's an important question----
        Admiral Rogers. Right.
        Senator Ayotte.--for us to check back in with you on.
        Admiral Rogers. Yes, ma'am. So, if I could, in an unclass
    hearing, I'm not going to go into great detail. What I would
    say is, and what I've said to the intelligence oversight
    committees, we have been able to comply with the Act, and to do
    it on time. There has been some level of slowness, but that--in
    terms of difference from the old system and the new system--but
    that----
        Senator Ayotte. Terms of how quickly you can get
    information?
        Admiral Rogers.--that's--right, that's--that time duration
    is minutes or hours, it's not days or weeks. So, it hasn't yet
    gotten to the point where I've felt I've needed to come back to
    the Congress or the administration and say, ``Look, I'm seeing
    a significant material impact on our ability to generate timely
    insights.'' Because I made that commitment. I said if I saw
    that, then I believe I owe it to the Nation to make that point.
    I have not seen that yet.
        Senator Ayotte. But, there's no doubt that it's taking
    longer, in some ways.
        Admiral Rogers. In some ways, it takes longer.
        Senator Ayotte. Well, I think it is important for you to
    come to us with that, because, you know, given that minutes and
    hours can make a difference----
        Admiral Rogers. Yes, ma'am.
        Senator Ayotte.--when it comes to terrorist attacks, and
    preventing them, and taking action, I think this is really
    important for all of us to understand, given the world that we
    are living in.
        I wanted to ask you a final question about the JCPOA, or
    the Iran deal.
        Admiral Rogers. Yeah, the Iran----
        Senator Ayotte. In there, there's a provision that said
    that the U.S. must cooperate with Tehran through training and
    workshops to strengthen Iran's ability to protect against
    sabotage of its nuclear program. Admiral Rogers, from a cyber
    perspective, has the U.S. helped Tehran strengthen its ability
    to protect against sabotage of its nuclear program----
        Admiral Rogers. Ma'am, I can't speak----
        Senator Ayotte.--this agreement?
        Admiral Rogers.--I cannot speak for the U.S. Government as
    a whole. I can tell you U.S. Cyber Command has not participated
    in any such effort.
        Senator Ayotte. Okay. Thank you.
        Admiral Rogers. Yes, ma'am.
        Chairman McCain. Senator Kaine.
        Senator Kaine. Thank you, Mr. Chair.
        Thank you, Admiral Rogers.
        Admiral Rogers. Senator.
        Senator Kaine. I have missed some of the discussion. I
    don't want to be needlessly repetitive, but I met--I want to go
    back to an interchange that you had with the Chair in the
    opening questions that he asked--I met recently with a senior
    military leader, who kind of tried to, basically, summarize his
    sense of things, and he said, ``We have O-plans, but no
    strategy.'' I've been thinking about that. I think, in your
    back-and-forth with the Chair, you talked about--and I think
    others may have asked you about this a little bit--this notion
    that we are kind of reacting case-by-case to cyberattacks, and
    kind of deciding, in each instance, what we want to do. But,
    the development of a broader doctrine, whether it's, you know,
    what will a deterrence policy be that we might communicate, how
    do we view a cyberattack under Article 5 of NATO, in terms of
    triggering a collective self-defense--the collective defense
    obligation--that we're assessing those things, but we're kind
    of not at the endpoint of answering a lot of those questions.
    Could you talk to us about the kind of doctrinal development
    process and--in working on these questions, they're so
    important. What might we expect from the Pentagon, from Cyber
    Command, in our interaction--in our oversight--in terms of the
    development of doctrines that have greater clarity and that
    aren't just kind of pragmatically reacting?
        Admiral Rogers. Right. So, you'll see, in the DOD cyber
    strategy--for example, we've got a broad overarching framework
    for the Department about how we are going to both develop
    capability and then employ it. We're part--Cyber Command is
    part of the broader dialogue within the Department about, How
    do we align the capabilities of the force with the world that
    we're seeing today? One of the arguments that we've made over
    the course of the last six months is, we need to take an
    element of the cyber capability we're generating and focus it
    very much in the deterrence piece. How do we shape, potentially
    drive, opponent choices and behavior before we get to the
    crisis scenario? We're in the early stages of that, but I'm
    very heartened by the fact that we now have broad agreement
    that that's an important part of our strategy, and we need to
    be doing that. So, we're just starting the early stages of that
    journey.
        The Department participates in the broader dialogue within
    the U.S. Government as to about how--from a national policy
    perspective, how are we going to move forward in addressing
    some of the issues that you have all raised today? Meanwhile,
    for me, as U.S. Cyber Command, what I remind our team is, ``We
    know that capability is going to be part of that deterrence
    strategy, both offense and defense. Guys, that's what we get
    paid to do. We have got to focus on generating that capability
    today.'' So, we can't wait for this broader discussion to
    complete itself. That's just a losing strategy for us. So,
    that's kind of been, if you will, the focus for U.S. Cyber
    Command, at the operational level that I and the team really
    focus at.
        Senator Kaine. Let me ask you another question. I think
    Senator Shaheen may have asked this before I came into the
    room, with respect to NATO. But, another item that's very
    common in this committee as we talk--look at the postures of
    other commands, is joint training exercises. India does more
    joint training with the United States than any other nation. We
    have marines deployed throughout Africa in these Special
    Purpose MAGTFs, doing training of African militaries. What is
    our posture, vis-a-vis sort of partners, in the cyber area, in
    the training that we do together, in the development of----
        Admiral Rogers. Right.
        Senator Kaine.--you know, joint resiliency strategies?
        Admiral Rogers. So, we do some level of training with key
    allies. One of the challenges for us, quite frankly, is, How do
    you maximize capacity? So, it's all about prioritization. You
    cannot do everything you would like to do with every nation
    that you would like to do it. So, part of our strategy is, How
    do you focus the greatest return? What are the nations that you
    want to start with? So, we have done that.
        The other challenge I find is--and this is part of an
    ongoing internal discussion for us--based on where we are in
    the journey right now, I can't do so much with the external
    world that it negatively impacts our internal ability within
    the Department to generate. Because, unlike some mission sets,
    where we literally have decades of infrastructure, capability,
    capacity, and experience, we don't have that in the cyber
    arena. So, the same force and capability I'm using to help
    train and partner with foreign counterparts, I'm still building
    every day. So, that's part of the challenge for us right now. I
    don't think it'll be as much an issue in the future as that
    capacity fully comes online, but we're not there yet.
        Senator Kaine. We trained aviators out of other service
    branches, and then we created an Air Force Academy in 1954 and
    decided, okay, we're going to, you know, train aviators at--not
    that we don't train aviators in the other service branches. I
    think----
        Admiral Rogers. Right.
        Senator Kaine.--Senator McCain may have had some training
    somewhere in his past. But, we created an Air Force, you know,
    after World War II. I've wondered about whether the cyber
    domain would eventually become so significant that there may be
    the need to consider creating a dedicated Cyber Academy, much
    like the Air Force was created in the '50s. Now the question
    is, you can train cyber folks everywhere and have them
    percolate throughout the service branches, or you can focus on
    a particular cyber expertise, and then those folks could go
    into the different service branches. Have--has there been any
    discussion or thought about that?
        Admiral Rogers. I mean, it's been a discussion. My input to
    that discussion has been, I'm not, right now, based on my
    experience and what I see, a proponent of that approach.
    Because my concern is, to maximize effectiveness in cyber, you
    need to understand how it fits in a broader context. I watch,
    at times, when I deal with elements in our own workforce who
    are incredibly technically savvy, incredibly smart about other
    eaches of the mission, and yet, when I try to remind them,
    ``Remember, we're applying this as part of a broader strategy
    and a broader context''--when you don't understand that broader
    context, you're just not--in my experience, you're not as
    effective. That's my concern about that approach. It'll start
    to really make us very, very----
        Senator Kaine. Siloed.
        Admiral Rogers.--narrow and siloed. I'm just concerned
    about the potential implications of that.
        Senator Kaine. Great. Thank you.
        Thanks, Mr. Chair.
        Chairman McCain. Senator Cotton.
        Senator Cotton. Admiral Rogers, thank you for appearing
    again before----
        Admiral Rogers. Sir.
        Senator Cotton.--the committee.
        If I heard you correctly, you testified to Senator Ayotte
    that your three main fears were threats to our critical
    infrastructure, the ability to manipulate systems such that we
    might not have faith in their operations, and, third, nonstate
    actors using cyber as a weapon against the United States. Is
    that an accurate----
        Admiral Rogers. Yes, sir.
        Senator Cotton. Yeah. Are----
        Admiral Rogers. Yes, sir.
        Senator Cotton. Are either the Islamic State or al Qaeda
    able to do any of those three things at this point?
        Admiral Rogers. I haven't seen them yet, but my concern is,
    that's now.
        Senator Cotton. So, the Islamic State has a reputation for
    being very effective online. Can--what we infer, then, is
    online recruiting and propaganda is a distinct skillset from
    the use of cyber as a weapon----
        Admiral Rogers. Yes, sir.
        Senator Cotton.--against things like electrical power grids
    and so forth.
        Admiral Rogers. Yes, sir.
        Senator Cotton. How hard would it be for a nonstate actor,
    like the Islamic State or al Qaeda, to develop that skillset?
    Is it nothing more than recruiting the right person?
        Admiral Rogers. It would not be difficult. It's about
    recruiting the right people with the right focus, but it would
    not--it's certainly not beyond their ability if they decide--I
    believe it's not beyond their ability if they made that
    decision.
        Senator Cotton. When we think about other potential
    nonstate actors, are those--do those groups that have that
    capability or are approaching the capability tend to be
    associated with state actors?
        Admiral Rogers. In some cases, yes, but not in all. Not in
    all.
        Senator Cotton. Okay.
        I want to turn now to the ongoing debate about encryption.
    I think data security and cybersecurity is obviously critical
    in the modern world. Most people in this room probably have a
    smartphone in their pocket. Even my 70-year-old father finally
    turned in his flip phone and got a smartphone recently. We keep
    emails, text messages, phone calls, financial information,
    health information, and many other sensitive data----
        Chairman McCain. He's ahead of Senator Graham.
        [Laughter.]
        Senator Cotton.--on our phones. So, I think data in
    cybersecurity is essential. I also think physical security is
    essential.
        Admiral Rogers. Right.
        Senator Cotton. I'd hate to see Americans get blown to
    pieces because we had an imbalanced priority of cybersecurity
    over physical security. How do we strike that balance as a
    society?
        Admiral Rogers. I--my first comment would be, I don't think
    it's either/or.
        Senator Cotton. I don't either. There has to be some kind
    of----
        Admiral Rogers.--my argument would be, we don't serve
    either viewpoint particularly well when we cast this as,
    ``Well, it's all or nothing, it's either/or.'' My view is, over
    time, we have been able to integrate ground-changing technology
    in the course of our Nation, and to do it in a way that enables
    the Nation, under the right circumstances, with the right level
    of control, to be able to access that. For me, my starting
    position is, What is it that is different about this that would
    preclude that from applying here? I just don't personally see
    that, even as I acknowledge there's no one simple answer,
    there's probably no one silver bullet. It's not going to be a
    one-size-fits-all. But, I look at the innovation and the can-do
    approach that we have as a Nation to this, and I'm thinking we
    can't--we can solve this.
        Senator Cotton. Like, for instance, a decades-old law known
    as the Communications Assistance for Law Enforcement Act----
        Admiral Rogers. Act.
        Senator Cotton.--which tells telecom companies of any size
    that if they want to construct a telephone system in this
    country, it has to be susceptible to a wiretap, pursuant to a
    court order, if a court finds probable cause to order a wiretap
    against a terror suspect or a human trafficker or a drug dealer
    or so forth. Similarly, we all expect privacy in our bank
    accounts, but banks, obviously, must maintain systems in which
    they turn over bank account information, subject to a court
    order, against, say, a potential money launderer. Is there any
    reason our society should treat data and tech companies
    differently from how we treat telephone companies and banks?
        Admiral Rogers. I mean, that's clearly a much broader issue
    than Cyber Command. I won't get into the good or bad, so to
    speak, but I--like you, I'd just say, ``Look, we've got
    frameworks in other areas. Why can't we apply that here?''
        Senator Cotton. Okay.
        These questions have been about the larger debate about
    encryption, going forward, the way smartphones are designed,
    the way messaging systems are designed. There was a case
    recently, involving Apple and the FBI and the San Bernardino
    shooter, in which the FBI requested Apple's assistance to
    override a feature of an iPhone, Apple refused, the FBI
    apparently found a third party capable of doing so and has
    withdrawn that case. Should Americans be alarmed at this kind
    of vulnerability in a--such a widely used device?
        Admiral Rogers. The way I would phrase it is, vulnerability
    is an inherent nature of the technical world that we live in
    today. If your desire is to live in a world without
    vulnerability, I would say that is probably highly unlikely.
        Senator Cotton. Do you know if we have shared that
    vulnerability with Apple--the United States----
        Admiral Rogers. As U.S. Cyber Command, I--sir, I apologize,
    I don't know.
        Senator Cotton. Thank you.
        Chairman McCain. Admiral, one other point. We know for a
    fact that Baghdadi is sending young men into the refugee flow
    to commit acts of terror wherever they can locate. Is it true,
    or very likely, that they also know of a Web site to come up
    on, secure, so that they can communicate back with Baghdadi and
    his tech----
        Admiral Rogers. Yes.
        Chairman McCain. So, right now--there was a media report
    that 400 young men had been sent into the refugee flow. I would
    assume, then, that at least some of them have--are armed with a
    Web site to come up on once they get to a preferred destination
    so that they can coordinate acts of terrorism.
        Admiral Rogers. A Web site or an encrypted app. Yes, that's
    probably likely.
        Chairman McCain. That's a bit concerning, isn't it?
        Admiral Rogers. Yes, sir.
        Chairman McCain. So, what should we be doing to counter
    that?
        Admiral Rogers. So, I----
        Chairman McCain. Besides take out ISIS.
        Admiral Rogers. I think we need a broader national dialogue
    about, What are we comfortable with? It's not either/or.
    Because we have got to have security, and we've got to have
    safety and privacy. At the moment, we're in a dialogue that
    seems to paint it as, well, it's one or the other. I--as the
    dialogue we just had with Senator Cotton, I don't see it that
    way.
        Chairman McCain. We know of a direct threat of an attack in
    Europe or the United States and a technical capability to
    enhance their ability to commit this act of terrors.
        Admiral Rogers. Yes, sir.
        Chairman McCain. Isn't that a pretty tough--so, we need a
    national conversation? Do we need more hearings? Do we need to
    urge the administration to come up with a policy? What are our
    options, here?
        Admiral Rogers. Well, the worst-case scenario, to me, is,
    we don't have this dialogue and then we have a major event. In
    the aftermath of a major event, we decide to do something that
    perhaps, in the breadth of time, we step back and ask
    ourselves, How did we ever get here?
        Chairman McCain. I don't think there's any doubt that's a
    likely scenario.
        Admiral Rogers. That is what I hope it doesn't come to.
    But, to date, for a variety of reasons, we just have unable--
    been unable to achieve that kind of consensus. But, we have got
    to figure out how we're going to do this. You don't want a law
    enforcement--I believe you don't want a law enforcement
    individual or an intelligence individual dictating this, just
    as I don't believe you want the private sector, a company,
    dictating this. This is too important, from my perspective.
        Chairman McCain. I don't--we--is awareness of this threat
    important to--for the American people to know how serious this
    threat is?
        Admiral Rogers. Yes.
        Chairman McCain. Senator King.
        Senator King. Mr. Chairman, it--hearing this dialogue and
    the discussion you have just been having, it strikes me it
    underlines the foolishness of continuing to be governed by
    budget decisions made six years ago, when this threat was
    nothing like the magnitude that it is today. Here we are,
    dealing with a major new threat and trying to fit it within--to
    shoehorn it within a budget structure that was--that clearly
    did not take account of the fact that we've got a major new
    threat, and a serious one, that we're facing that's going to
    take resources to confront. It just--I just can't help but make
    that point, that it underlines the fact that we're trying to--
    we're governed by decisions made at a time when circumstances
    were very different than they are today.
        Chairman McCain. Well, I thank Senator King. But, Admiral
    Rogers has already made it clear, I think, in this testimony,
    that sequestration will prevent him from carrying out
    completely the missions that he's been tasked with.
        Is that correct, Admiral?
        Admiral Rogers. Yes, sir. My greatest concern, if you went
    to sequestration, would be the impact on the workforce,
    particularly the civilians, who would argue, ``So, is this what
    I want to be aligned with?'' That concern--I can replace
    equipment. It takes us years to replace people.
        Chairman McCain. There is a real likelihood that, if we
    continue the sequestration, that you will have to--you will not
    be able to continue to employ these outstanding and highly
    selected individuals.
        Admiral Rogers. Yes.
        Chairman McCain. You know, sometimes, Admiral, I do not
    want the American people to see what goes on at these hearings.
    The old line about laws and sausages. But, I certainly wish the
    American people could hear and see your statements that you're
    making today rather than, as you just indicated, an attack, and
    then we always overreact, that that's just what democracies are
    all about.
        I thank you for your good work, but I also want to thank
    you for your straightforward answers to questions that were
    posed by the members of this committee. We thank you.
        Hearing is adjourned.
        [Whereupon, at 11:32 a.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]
                  Questions Submitted by Senator Jeff Sessions
                       u.s. cyber vulnerabilities report
        1. Senator Sessions. Admiral Rogers, what is the status of the
    Department of Defense report that was directed in the fiscal year 2016
    NDAA on the cyber vulnerabilities of each major weapons system?
        Admiral Rogers. The Department of Defense, to include Service
    Components, USCYBERCOM and other organizations are working in
    conjunction to provide a complete response to the fiscal year 2016 NDAA
    (section 1647), cyber vulnerabilities of each major weapons system
    report. Any particular details in reference to the report would need to
    be directed to the DOD CIO office.
                                   __________
                  Questions Submitted by Senator Kelly Ayotte
                                 national guard
        2. Senator Ayotte. What is the role of the National Guard in the
    Cyber National Mission Force (CNMF)?
        Admiral Rogers. Guard and Reserve forces are an integral part of
    the Cyber Mission Force total force solution and are providing trained
    and ready personnel and teams in support of current operations as well
    as on-demand surge capacity. USCYBERCOM continues to work with the
    Services to ensure National Guard and Reserve personnel are fully
    integrated at all echelons from the highest levels of our USCYBERCOM
    headquarters to our Cyber Mission Forces. Of the 64 assigned team
    members for the 24 National Mission Team (24 NMT), 12 billets will be
    Air National Guard members.
        Additionally, USCYBERCOM, through the Services, looks to leverage
    the National Guard and Reserve and their unique authorities and
    civilian skills in achieving its Defend the Nation mission. The Reserve
    Components, being community based, have insight into local, state, and
    regional emergency operations, and can be enabled to provide an
    immediate local response to help shape the incident response during
    national level events.
              support to civil authorities during cyber incidents
        Senator Ayotte. The Government Accountability Office (GAO)
    published a new report this month regarding the roles and
    responsibilities for defense support of civil authorities during cyber
    incidents. GAO found that the Department of Defense (DOD) has developed
    overarching guidance, but has not clearly defined roles and
    responsibilities for cyber incidents.
        According to GAO, ``DOD officials stated that the department had
    not yet determined the approach it would take to support a civil
    authority in a cyber incident and, as of January 2016, DOD had not
    begun efforts to issue or update guidance and did not have an estimate
    on when the guidance will be finalized.''

        3. What is your response to this GAO report?
        Admiral Rogers. I agree with the GAO report findings that DOD has
    not clearly defined the roles and responsibilities or determined an
    approach for support to civil authority for cyber incidents. The DOD is
    well accustomed to providing Defense of Civil Authorities (DSCA)
    support to Federal, state, tribal and local authorities in a variety of
    missions during catastrophic natural or man-made events. However, our
    society's increasing dependence on information technology and the
    availability of cyberspace should also compel us to expand missions to
    include DSCA support within the cyber domain. The basic DSCA guidance
    detailed in DOD 3025.18 provides an overall framework for DSCA
    operations. Within this general guidance, we believe that the DOD will
    be able to respond to a wide variety of events, which could include
    appropriate DSCA activities in cyberspace. However, more specific
    guidance regarding DSCA in cyberspace would be beneficial.
        The growing pains associated with understanding how to provide
    domestic cyber support will subside as experience is gained in this new
    mission space. That is one of the objectives of the USCYBERCOM
    sponsored CYBER GUARD exercise series. These exercises bring Federal,
    DOD, State and Industry stakeholders together to better understand how
    DSCA will occur in cyberspace.

        4. Senator Ayotte. What must be done to clarify DOD roles and
    responsibilities when it comes to supporting civil authorities during
    cyber incidents?
        Admiral Rogers. Recently, USCYBERCOM, the Joint Staff, the Office
    of Secretary of Defense and U.S. Northern Command held staff talks to
    rationalize and/or harmonize the Cyber Incident Coordination Policy
    with the National Incident Response Framework. Incident response in
    cyberspace should not be materially different than that of any other
    domains. Additionally, the command will continue to explore roles and
    responsibilities for supporting civil authorities in response to cyber
    incidents during the annual CYBER GUARD exercise series. CYBER GUARD
    brings together DOD, federal, state, and industry stakeholders to
    better understand Defense Support of Civil Authorities in cyberspace to
    include how cyber incident response fits in with a broader DOD response
    effort.

        5. Senator Ayotte. What role do you see the National Guard playing
    in support for civil authorities during cyber incidents?
        Admiral Rogers. The National Guard is, and will always be, a key
    enabler in support for civil authorities during all domestic response
    actions. The National Guard has unique state-based structures and
    authorities that provide great flexibility and application at the state
    and local level to respond to varying types of incidents, cyber
    included. The National Guard Cyber Protection Teams implemented to
    date, provide the States with a joint trained capacity that could be
    utilized by their respective Governors, as first responders during a
    cyber-event. For example, these teams, given their State level
    affiliations, could work directly with the Joint Terrorism Task Force
    and cyber forces the FBI has, and with DHS to provide additional
    technical capacity for resilience and recovery at the Federal, State
    and Local levels.
                                   __________
                    Questions Submitted by Senator Jack Reed
                         cyber operations against isis
        6. Senator Reed. At the end of February, 2016, Secretary Carter
    announced that we would be using cyber capabilities offensively against
    ISIS. He said that our goal would be to, quote, ``Black these guys out.
    Make them doubt their communications, make it impossible for them to
    dominate and tyrannize the population in the territory they are and
    just whack away with this as we are whacking away with everything else.
    We have to put an end to this fast.''
        Please provide your assessment of the effectiveness and impact of
    each of the lines of effort that Cyber Command is pursuing, alone or in
    partnership with other commands, pursuant to the Secretary's direction.
        Admiral Rogers. [Deleted.]
                                   __________
                   Questions Submitted by Senator Bill Nelson
          u.s. cyber command reliance on the national security agency
        7. Senator Nelson. Admiral Rogers: There is a concern that U.S.
    Cyber Command's Cyber Mission Force (CMF) might still be too reliant on
    the National Security Agency (NSA) for tools, infrastructure, and
    training, and too reliant on signals intelligence (SIGINT) for military
    operations in cyberspace. Do you share that concern, and what steps
    have been taken over the last year to address it?
        Admiral Rogers. I do not share that concern. The CMF is still
    evolving and building and the partnership between U.S. Cyber Command
    and NSA is a positive one. At this stage of maturity in our force
    build, I see the relationship with NSA as enabling the operations of
    U.S. Cyber Command. The leadership, headquarters commands, and CMF
    across the entire CMF are identifying requirements as they conduct
    operations and take away lessons learned from exercises that inform the
    future cyber force. I have incorporated some of these issues into
    formal requirements, such as Unified Platform and Persistent Training
    Environment as described in the President's Budget Request for fiscal
    year 2017. Additionally, the Department recognized the need to provide
    an operating environment for the CMF separate from and in addition to
    use of NSA tools and infrastructure. The tools and infrastructure
    (i.e., access, payload, platforms) needed to conduct military
    operations are described in the fiscal year 2017 President's Budget
    Request. The support provided by NSA continues to be essential to the
    execution of cyber operations by the CMF and prudent given the still-
    evolving nature of cyber requirements and the resource environment we
    are operating in.
                                   __________
                 Questions Submitted by Senator Martin Heinrich
                            ics at dod installations
        8. Senator Heinrich. Admiral Rogers--A couple months ago at an open
    hearing before the Senate Intelligence Committee, we discussed the
    vulnerabilities of electrical generation and water and wastewater
    systems across civilian infrastructure. I'd like to follow-up on that
    and ask about the security of our infrastructure at military bases.
    What steps has Cyber Command taken in the last couple of years to
    secure Industrial Control Systems (ICS) at military installations, and
    does this issue continue to be a top priority for you?
        Admiral Rogers. Yes, working toward securing Industrial Control
    Systems (ICS) at military installations is a new focus area and we are
    developing capabilities at U.S. Cyber Command. We have improved our
    ability to detect adversarial presence, increased resiliency within DOD
    control system networks, and aligned cyber mission forces with critical
    infrastructure and key resources. In June 2015 DOD CIO's Terry
    Halvorsen and AT&L's Frank Kendall and myself co-signed the ``DOD
    Cybersecurity Campaign Memo,'' outlining the requirement to establish a
    working group with the chief focus on cyber securing ICS in weapons,
    logistics, medical systems and installations. In December 2015 we
    completed the development, test, evaluation, and refinement of the
    Advanced Cyber Industrial Control System (ACI) Tactics Techniques and
    Procedures (TTP) for DOD ICS. It was specifically designed to enable
    managers of ICS networks Detect, Mitigate, and Recover from nation-
    state-level cyber-attacks. Collaborating with the Services and CIO, we
    have enabled ICS owners and operators access to dozens of government
    and commercial best practices and standardized process via a DOD
    knowledge service portal. This summer DOD will publish cybersecurity
    criteria for planning, design, construction, and modernization of
    facility-related ICS (will apply to MILCON). Lastly, over the past year
    we have conducted several assessments at various locations and can
    share the results in a classified forum.

        9. Senator Heinrich. Two 4-star Navy admirals recently sent a
    letter to the Secretary of Defense asking that more attention be paid
    to ICS security across military infrastructure, and called for clear
    ownership policies and additional investments in detection tools and
    processes. Admiral, how is Cyber Command working with other DOD
    components to secure these systems, and do you believe sufficient
    resources have been made available to address the problem?
        Admiral Rogers. U.S. Cyber Command is working with the DOD Chief
    Information Officer and Service Components to increase ICS security at
    military installations, and partnering with the Department of Homeland
    Security to secure DOD Industrial Control Systems dependent on civilian
    infrastructure. Concerning resources, we are currently reviewing our
    policies, processes, and capabilities for securing DOD Industrial
    Control Systems in order to establish priorities, align resources, and
    identify additional resources as needed.

        10. Senator Heinrich. In your opinion, should there be a defense-
    wide effort to secure these systems, or is it better to observe a
    distributed authority approach and leave efforts to each of the
    Services?
        Admiral Rogers. DOD Chief Information Officer, Office of Secretary
    of Defense, Acquisitions, Technology and Logistics (AT&L), Joint Staff,
    and USCYBERCOM are leading a DOD-wide approach to enforce compliance
    with cybersecurity requirements mandated by U.S. law, DOD policy, and
    USCYBERCOM orders. These defense-wide efforts are driven by plans and
    policies that help synchronize service and combatant commanders'
    understanding and compliance with current and future security
    requirements and support the Planning, Programming, Budgeting and
    Execution (PPBE) process to meet national, strategic, and operational
    requirements. This approach will monitor and assess the Services'
    implementation of cybersecurity plans and policies to verify the
    overall health of DOD ICS systems. Ultimately, these efforts seek to
    integrate ICS security into existing DOD cybersecurity processes for
    Information Technology (IT) systems.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            THURSDAY, APRIL 7, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                     POSTURE OF THE DEPARTMENT OF THE ARMY

        The committee met, pursuant to notice, at 9:30 a.m. in Room
    SD-G50, Dirksen Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee Members Present: Senators McCain, Inhofe, Wicker,
    Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Lee,
    Graham, Reed, McCaskill, Manchin, Shaheen, Gillibrand,
    Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. Well, good morning.
        The Senate Armed Services Committee meets this morning to
    receive testimony on the posture of the United States Army in
    review of the defense authorization request for fiscal year
    2017 and the future years defense program.
        I am pleased to welcome Acting Secretary, much too young,
    Patrick Murphy, and Army Chief of Staff, General Mark Milley. I
    thank you both for your years of distinguished service and your
    continued leadership of our Army.
        Fifteen years of war have tested our Army, but time and
    time again, our soldiers have met that test and proved their
    commitment, courage, and determination. It is the duty of this
    committee and this Congress to do our utmost to provide them
    the support they need and deserve. That starts by recognizing
    that our Army is still at war. At this moment, 186,000 soldiers
    are deployed in 140 locations around the globe. They are
    fighting terrorists and training our partners in Afghanistan
    and supporting the fight against ISIL, all the while defending
    South Korea and reassuring our allies in Eastern Europe. The
    demands on our soldiers only continue to increase as the
    threats to our Nation grow more diverse, more complex, and more
    severe.
        But despite the stark and urgent realities of the threats
    to our Nation and the risk they pose to our soldiers, the
    President continues to ask the Army to do more with less. He
    has done so once again with his defense budget request. The
    President should have requested a defense budget that reflects
    the scale and scope of the national security threats we face
    and the growing demands they impose on our soldiers. Instead,
    he chose to request the lowest level of defense spending
    authorized by last year's budget agreement and submit a defense
    budget that is actually less in real dollars than last year, a
    budget that will force our Army to confront growing threats and
    increasing operational demands with shrinking and less-ready
    forces and aging equipment.
        By the end of the next fiscal year, the Army will be cut
    down to 450,000 Active Duty soldiers, down from a wartime peak
    of 570,000. These budget-driven--I repeat budget-driven--force
    reductions were decided before the rise of ISIL or the
    Russians? invasions of Ukraine. Ignoring these strategic facts
    on the ground, the budget request continues down the path to an
    Army of 450,000 soldiers, an Army that General H.R. McMaster,
    an individual known to all of us as one of the wisest soldiers,
    testified earlier this week, quote, the risk of being too small
    risks being too small to secure the Nation.
        We should be very clear that when we minimize our Army, we
    maximize the risk to our soldiers, the risk that in a crisis
    they will be forced to enter a fight too few in number and
    without the training and equipment they need to win. That risk
    will only grow worse if mindless sequestration cuts are allowed
    to return and the Army shrinks further to 420,000 soldiers.
        As our Army shrinks, readiness suffers. Just over one-third
    of the Army's brigade combat teams are ready for deployment and
    decisive operations. Indeed, just two--just two--of the Army's
    60 brigade combat teams are at full combat readiness. The Army
    has no plan to return to full spectrum readiness until 2021 at
    the very earliest.
        As the National Commission on the Future of the United
    States Army made clear in its recently published report, both
    the mission and the force are at risk.
        Meanwhile, the Army is woefully behind on modernization,
    and as a result, America's capability advantage in ground and
    airborne combat weapon systems is not nearly as great as it
    once was. Decades of under-investment and acquisition
    malpractice have left us with an Army that is not in balance,
    an Army that lacks both the adequate capacity and the key
    capabilities to win decisively.
        As Vice Chief of Staff of the Army General Daniel Allyn
    recently testified, the Army can no longer afford the most
    modern equipment and we risk falling behind near peers in
    critical capabilities. Indeed, the Army currently has no major
    ground combat vehicle development program underway and will
    continue to rely on the increasingly obsolete Bradley fighting
    vehicle and Abrams tanks for most of the rest of this century.
        As General McMaster phrased it earlier this week, the Army
    is, quote, outranged and outgunned by many potential
    adversaries.
        Confronted with the most diverse and complex national array
    of national security threats since the end of World War II, the
    Army urgently needs to restore readiness, halt misguided end
    strength reductions, and invest in modernization. Instead, this
    budget request is another empty promise to buy readiness today
    by reducing end strength and modernization for tomorrow.
    Mortgaging the future of our Army places an unnecessary and
    dangerous burden on our soldiers, and I believe it is the
    urgent task of this committee to do all we can to chart a
    better course.
        I look forward to the testimony of our witnesses today and
    their recommendations as to how we build the Army the Nation
    needs and provide our soldiers with the support they deserve.
        I would like now to call on a former Army person for his
    remarks.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman. Thank you
    for calling this important hearing.
        Let me welcome Secretary Murphy and General Milley. Thank
    you for your distinguished service to the Nation.
        As the chairman indicated, we are reviewing the Army's
    proposals for the fiscal year 2017 budget request, and they are
    absolutely critical. We are facing extraordinary challenges,
    and the chairman has outlined them very eloquently and very
    precisely. We have to rebuild readiness. We have to modernize
    the force. Also in this light, I think another message is, with
    all respect to Secretary Murphy, getting not an ``acting''
    Secretary but a permanent Secretary. I hope we could move Mr.
    Fanning's nomination as quickly as possible.
        The President's fiscal year 2017 budget submission for the
    Department of the Army includes $148.1 billion in total
    funding, of which $125.1 billion is the base budget and $23
    billion for overseas operations in the OCO account.
        While the budget request complies with the funding levels
    included in the Bipartisan Budget Act of 2015, the Army's top
    line is essentially flat as compared to the fiscal year 2016
    enacted levels. As the committee considers the Army's funding
    request, we must always be mindful of the risks facing our
    country and our national security challenges. In fact, it is
    highly unlikely that demand for Army forces will diminish any
    time in the near future. Currently, as the chairman indicated,
    190,000 soldiers across the Active and Reserve components and
    Active forces are serving in 140 countries. While we continue
    to field the most capable fighting force in the world, 15 years
    of sustained military operations focused almost exclusively on
    counterterrorism and counterinsurgency has taken a toll on the
    readiness of our soldiers. Today less than one-quarter of our
    Nation's Army is ready to perform their core wartime missions
    and some critical combat enabling units are in far worse shape.
    In addition, the evolving threat facing our Nation impacts
    readiness as the Army needs to train and fight a near peer
    competitor in a full spectrum environment.
        Unfortunately, while additional funding is important, it is
    not the sole solution to restoring readiness levels. It will
    take both time to rebuild strategic depth and relief from high
    operational tempo.
        I applaud the Army for making readiness their number one
    priority in this year's budget request. General Milley, I look
    forward to your thoughts on the Army's progress in rebuilding
    readiness within the timelines the Army has set and what
    additional resources may be needed.
        While readiness is vital, we cannot neglect investments in
    the modernization of military platforms and equipment. Building
    and maintaining readiness levels requires that our forces have
    access to equipment that is properly sustained and upgraded.
    The Army's fiscal year 2017 budget request--$22.6 billion for
    modernization efforts that includes $15 billion for procurement
    and $7.5 billion for research, development, test and
    evaluation--is a start. I would like to know if our witnesses
    feel confident that this funding for modernization is adequate
    and will not adversely impact the future readiness of our
    aviation units particularly or add substantial cost.
        Related to the Army's acquisition processes, this committee
    made important changes in acquisition and procurement policies
    in the fiscal year 2016 National Defense Authorization Act,
    including giving the Service Chiefs significant
    responsibilities. I would appreciate the Chief's and the
    Secretary's comments on how these procedures are being worked
    into the system.
        The men and women in uniform in our military and also our
    civilian workforce remain a priority for our committee. We need
    to ensure the pay and benefits remain competitive in order to
    attract and retain the very best for military and government
    service. The committee also understands, however, that military
    and civilian personnel costs comprise nearly one-half of the
    Department's budget. Again, your insights as to how we can
    control those costs would be very much appreciated.
        Finally, as I have stated and as the chairman emphatically
    stated, the Budget Control Act is ineffective and shortsighted.
    I believe, in a bipartisan fashion, that we have to repeal the
    BCA, establish a more reasonable limit on discretionary
    spending in an equitable manner that meets our domestic and
    defense needs, and then move forward.
        Again, I would like to thank the witnesses and the
    chairman.
        Chairman McCain. Thank you.
        Secretary Murphy?

     STATEMENT OF HONORABLE PATRICK J. MURPHY, ACTING SECRETARY OF
                                THE ARMY

        Mr. Murphy. Thank you, Mr. Chairman. Thank you, Senator
    Reed and members of this committee, for allowing me to be here
    to talk about your Army.
        It is my 12th week on the job as Acting Secretary of the
    Army. It is truly an honor to be back on the Army team. I have
    traveled to see our soldiers, our civilians and their families
    in Kentucky, Missouri, Texas, and Kansas and also to Iraq and
    Afghanistan. The selfless service and dedication of our team
    should inspire us all. We are tasked with the solemn
    responsibility to fight and win our Nation's wars and to keep
    our families safe here at home.
        Our Army must produce ready units today to deter and to
    defeat our Nation's enemies, defend the Homeland, project
    power, and win decisively. By ``ready,'' we mean units that are
    fully manned, trained for combat, fully equipped according to
    the designed structure, and led by competent leaders.
        We must also be ready for our future fights by investing in
    modernization and research and development. We do not want our
    soldiers to have a fair fight. They must have the technical and
    tactical advantage over our enemies.
        With our $125.1 billion base budget request, our Army will
    focus its efforts on rebuilding readiness for large-scale,
    high-end ground combat today. We do so because ignoring
    readiness shortfalls puts our Nation at greatest risk for the
    following reasons.
        First, readiness wins wars. Our Army has never been the
    largest in the world, and at times we have not been the best
    equipped. But since World War II, we have recognized that ready
    soldiers properly manned, trained, equipped, and led can beat
    larger or more determined forces. Whether confronting the
    barbaric acts of ISIS or the desperation of North Korea, our
    Army must be prepared to execute and to win. We train like we
    fight and our Army must be ready to fight tonight.
        Next, readiness deters our most dangerous threats and
    assures our allies. We are reminded with alarming frequency
    that great power conflicts are not dead. Today they manifest
    themselves on a regional basis. Both Russia and China are
    challenging America's willingness and ability to enforce
    international standards of conduct. A ready Army provides
    America the strength to deter such actions and reassure our
    partners throughout the world.
        Readiness also makes future training less costly.
    Continuous operations since 2001 have left our force proficient
    in stability and counterterrorism operations. But our future
    command sergeants major and brigade commanders have not had the
    critical combat training experiences as junior leaders trained
    for high-end ground combat. Investing in readiness today builds
    the foundation necessary for long-term readiness.
        Finally, readiness prepares our force for potential future
    conflicts. We cannot fight the last fight. Our Army must be
    prepared to face the high-end and advanced combat power of an
    aggressive Russia or, more likely, Russian aggression employed
    by surrogate actors.
        This budget dedicates resources to develop solutions for
    this, to allow our force to develop new concepts informed by
    the recommendations of the National Commission on the Future of
    the Army. Our formations must first be ready to execute against
    current and emerging threats.
        The choice, though, to invest in near-term readiness does
    come with risk. Smaller modernization investments risk our
    ability to fight and win in the future. We have no new
    modernization programs this decade. Smaller investments in end
    strength risk our ability to conduct multiple operations for
    sustained periods of time. In short, we are mortgaging our
    future readiness because we have to ensure in today's success
    against emerging threats. That is why initiatives like BRAC
    [Base Realignment and Closure] in 2019 are needed to be
    implemented now. Let us manage your investment, and this will
    result in $500 million a year in savings and a return on your
    investment within five years.
        Lastly, while we thank Congress for the Bipartisan Budget
    Act of 2015, which does provide short-term relief and 2 years
    of predictable funding, we request your support for the
    enactment of our budget as proposed. We request your support
    for continued funding at levels that are calibrated toward
    national threats and our interests. We request your continued
    support for our soldiers, civilians, and their families so that
    our military and our Army will continue to be the most capable
    fighting force in the world and will win in decisive battles
    and keep our families safe here at home.
        Thank you.
        [The joint prepared statement of Mr. Murphy and General
    Milley follows:]

    Joint Prepared Statement by the Honorable Patrick J. Murphy and General
                                 Mark A. Milley
        We would like to thank the committee for their continued support of
    the United States Army and the American Soldier. Humbled to be
    entrusted with the care of our soldiers, civilians, and their families,
    we look forward to working with Congress to ensure our Army remains
    unmatched in the world.
                                  introduction
        The United States Army is the most formidable ground combat force
    on earth. America's Army has convincingly demonstrated its competence
    and effectiveness in diverse missions overseas and in the Homeland.
    Today, these missions include: fighting terrorists around the world;
    training Afghan and Iraqi Army forces; peacekeeping in the Sinai
    Peninsula and Kosovo; missile defense in the Persian Gulf; security
    assistance in Africa and South America; deterrence in Europe, the
    Republic of Korea, and Kuwait; rapid deployment global contingency
    forces; and response forces for the Homeland. Additionally, we maintain
    12,000 miles of U.S. waterways; respond to hurricanes, floods, and
    severe snowstorms; patrol our Southwest border; and assist with the
    response to the outbreak of pandemic diseases. In support of these U.S.
    Geographic Combatant Command missions, the Army has approximately
    190,000 soldiers deployed to 140 countries. Largely due to deliberate
    investments in soldier training, equipping, and leader development,
    today's Army continues to excel at these diverse and enduring missions.
    However, we cannot become complacent, remain static, and look to the
    past or present to be a guarantor of future victory. To sustain this
    high performance and remain prepared for potential contingencies, the
    Army must make the most of the resources entrusted to us by the
    American people. This ultimately requires a balance of competing
    requirements--readiness, end strength, and modernization--to ensure
    America's Army remains ready to fight and win both today and in the
    future.
        Throughout history, successful armies anticipated the future,
    adapted, and capitalized upon opportunities. Today, the Army faces a
    rapidly changing security environment that requires the Army to make
    difficult decisions in order to remain an effective instrument of the
    Nation's military power. An Army ready for combat is the most effective
    tool to continually assure allies and deter or defeat adversaries.
    However, given the past three years of reduced funding coupled with the
    uncertainty of future funding, the Army risks going to war with
    insufficient readiness to win decisively. Therefore, the Army's number
    one priority is readiness.
        Increasing Army readiness provides additional options for the
    President, Secretary of Defense, and Congress to successfully implement
    American foreign and security policy. In this budget, the Army will
    focus investments on readiness, key modernization programs, and soldier
    quality of life to sustain the world's greatest Army. Our benchmark of
    success is to: sustain and improve our capabilities to prevent
    conflict; shape the environment by building partner capacity; win the
    current war against terrorists in Iraq, Afghanistan, and elsewhere; and
    prepare ourselves to win the next war decisively.
        A ready Army is a manned, trained, equipped, and well-led force
    that can conduct Joint missions to deter and defeat a wide range of
    state and non-state actors. No American soldier should ever go to
    combat unready for the brutal and unforgiving environment of ground
    combat--that is the contract we must ensure is rock solid between the
    American people and the American Army. Therefore, this budget requests
    Congressional support to fund readiness and end strength, provide our
    soldiers with modern equipment, and ensure adequate soldier quality of
    life.
                      adapting to new strategic realities
        The global security environment is increasingly uncertain and
    complex. Opportunities to create a less dangerous world through
    diplomacy, economic stability, collective security, and national
    example exist, but military strength is both a complementary and
    foundational element of National power in a dangerous world. Each
    element is necessary in combination with the others; however, each
    alone is insufficient to win a war or maintain a peace. The conditions
    of diplomatic success, for example, are more likely if military options
    are credible, real, and perceived as unacceptable to an adversary.
    Therefore, for the Nation to advance its enduring national interests,
    our Joint force as a whole, and the Army in particular--in terms of
    capacity and capability--must remain strong.
        In Europe, Russia continues to act aggressively. While we cannot
    predict Russia's next move, its record of aggression in multiple
    domains throughout the last decade--Georgia in 2008 and Ukraine (both
    eastern and Crimea) in 2014--clearly illustrates the need to be
    prepared to deter or defeat further Russian aggression. Russian acts of
    aggression are a direct threat to the national security of the United
    States and our NATO allies. Accordingly, in this budget we ask for your
    support to modify the Army's posture in Europe, including more
    rotational forces, prepositioned equipment, and increased operational
    use of the Army National Guard and Army Reserve.
        Throughout the Middle East and South Asia, radical terrorism
    threatens regional order. The Islamic State of Iraq and the Levant, al
    Qaeda, and other transnational terrorist groups present a significant
    threat and must be destroyed. The Islamic State of Iraq and the Levant
    is the most lethal and destabilizing terrorist group in modern history.
    There are more members of radical Islamic terrorist groups operating in
    Iraq, Syria, Egypt, Saudi Arabia, Libya, Algeria, Morocco, and
    elsewhere than ever before. Their ability to seize and hold territory
    and spread their ideology through social media is a significant
    challenge. They also have demonstrated both capability and intent for
    global reach into Europe, Asia, and the United States Homeland.
    Additionally, although the imminent threat of Iran's nuclear weapons
    development has reduced, Iran remains a supporter of various terrorist
    groups and is a considerable threat to stability in the Middle East and
    United States interests. Destroying the Islamic State of Iraq and the
    Levant and other radical terrorist groups will take considerable time.
    It is a necessary commitment and we ask Congress for continued
    resources to sustain our efforts in the Middle East and South Asia for
    the long term.
        Strategically in Asia and the Pacific, there are complex systemic
    challenges from unresolved territorial disputes, economic and
    demographic change, a little noticed ongoing arms race, a perceptible
    rise in nationalism, and a lack of multilateral collective security
    regimes in Northeast Asia. China is not currently an enemy, but their
    rapid military modernization and activities in the South China Sea are
    warning signs that cause concern. China continues to militarize
    territorial claims in the South China Sea and impede freedom of
    navigation in the Asia-Pacific region. The Army, in support of naval,
    air, and diplomatic efforts, will play a significant role in
    maintaining peaceful relations with a rising China. Meanwhile, North
    Korean nuclear and missile developments, in combination with routine
    acts of provocation in the Demilitarized Zone, continue to pose an
    imminent threat to regional security in Northeast Asia. The Army's
    assigned and rotational forces in the Republic of Korea, Japan, and
    throughout the Asia-Pacific region today provide a deterrent and
    contingency response capability that strengthens defense relationships
    and builds increased capacity with our allies. We must sustain and
    improve that capability to execute our national strategy to rebalance
    to the Asia-Pacific. In short, the conditions for potential conflict in
    Asia, as in Europe, are of considerable concern and our Army has an
    important role to prevent conflict and if conflict occurs, then to win
    as part of the Joint force.
        Politically, socially, economically, and demographically, Africa's
    potential for positive growth is significant. Realizing this potential
    depends on African governments' ability to provide security and
    stability for their people against terrorist groups such as the Boko
    Haram, al Shabaab, and al Qaeda in the Islamic Maghreb as well as the
    Islamic State of Iraq and the Levant in Libya. Army forces partner with
    ministries of defense to develop and shape the environment and
    establish strategic frameworks that employ forces, build professional
    military institutions, and partner with European Allies to achieve
    shared strategic objectives.
        In Central and South America, criminal gang and drug trafficking
    activities have wrought devastating consequences in many of our partner
    nations, degrading their civilian police and justice systems,
    corrupting their institutions, and contributing to a breakdown in
    citizen safety. Our annual multinational training exercises with our
    partners promote regional cooperation and enhance readiness of partner
    nation military forces. To date, we have active partnerships with
    defense and security forces from 26 nations in the Caribbean, Central
    America, and South America.
        Today, state and non-state actors are destabilizing major regions
    of the world by combining conventional and irregular warfare with
    terrorism. Acts of aggression also occur through surrogates, cyber and
    electronic systems, organized criminal activity, and economic coercion.
    These groups mobilize people, resources, and sophisticated modern
    weapons in unconventional ways that enable hostile actors to be more
    agile than traditional militaries. Since these advantages are low cost,
    it is likely this form of conflict will persist well into the future
    and our Army must adapt.
        The U.S. Army, as the principal land force of a global power, does
    not have the luxury of preparing to fight only one type of enemy, at
    one time, in one place. We cannot forecast precisely when and where the
    next contingency that requires Army forces will arise. However, history
    indicates that the next contingency will likely require a commitment of
    conventional and unconventional forces to conduct operations of
    significant scale and duration to achieve strategic objectives. If a
    major crisis occurred today, the Army would likely deploy all
    uncommitted forces--from all components--into combat on very short
    notice. Therefore, the readiness of the Army is key to the security of
    the Nation. Unfortunately, less than one-third of Army forces are at
    acceptable readiness levels to conduct sustained ground combat in a
    full spectrum environment against a highly lethal hybrid threat or
    near-peer adversary. The risk of deploying unready forces into combat
    is higher U.S. casualty rates and increased risk to mission success. To
    mitigate this risk, the Army will continue to prioritize readiness to
    reverse declines from the past 15 years of continuous combat and
    reduced resources. We welcome continued Congressional support in this
    effort.
                      the foundation of america's defense
        Fundamentally, America's Army protects the Nation by winning wars
    as part of the Joint Force. As the Nation's principal land force, the
    Army organizes, trains, and equips forces for prompt and sustained
    campaign-level ground combat. The Army is necessary to defeat enemy
    forces, control terrain, secure populations, consolidate gains,
    preserve joint force freedom of action, and establish conditions for
    lasting peace. To do the core tasks globally against a wide range of
    threats, the Army must have both capability and capacity properly
    balanced. Although important, it is not just the size of the Army that
    matters, but rather the right mix of capacity, readiness, skill,
    superior equipment, and talented soldiers, which in combination, are
    the key to ground combat power and decision in warfare.
        Today's Army maintains significant forces stationed and rotating
    overseas that provide a visible and credible deterrent. However, should
    war occur, we must terminate the conflict on terms favorable to the
    United States--this requires significant ready forces and the
    operational use of the Army National Guard and Army Reserve. Only the
    Army provides the President and the Secretary of Defense the ability to
    rapidly deploy ground forces, ranging in decisive ground capabilities
    from Humanitarian Assistance and Countering Terrorism to high-end
    decisive operations. Moreover, the Army conducts these operations in
    unilateral, bilateral, or coalition environments across the range of
    conflict from unconventional warfare to major combat operations. In the
    end, the deployment of the American Army is the ultimate display of
    American resolve to assure allies and deter enemies.
        While the Army fights alongside the Navy, Air Force, Marines, Coast
    Guard, and our allies, the Nation also relies on a ready Army to
    provide unique capabilities for the Nation's defense. Unique to the
    Army is the ability to conduct sustained land campaigns in order to
    destroy or defeat an enemy, defend critical assets, protect
    populations, and seize positions of strategic advantage. Additionally,
    as the foundation of the Joint Force, the Army provides critical
    capabilities--command and control, communications, intelligence,
    logistics, and special operations--in support of Joint operations. In
    short, a ready Army enables the Nation to deploy ground forces in
    sufficient scale and duration to prevent conflict, shape outcomes,
    create multiple options for resolving crises, and if necessary, win
    decisively in war.
                             ready to fight tonight
        The Army's primary focus on counterinsurgency for the last decade
    shaped a generation of Army leaders with invaluable skills and
    experiences. Nonetheless, this expertise comes at a cost. Today, most
    leaders of combat formations have limited experience with combined arms
    operations against enemy conventional or hybrid forces. Moreover, the
    current operational tempo and changing security environment continues
    to place significant demands on Army forces, stressing our ability to
    rebuild and retain combined arms proficiency. The Army currently
    provides 40 percent of planned forces committed to global operations
    and over 60 percent of forces for emerging demands from combatant
    commanders.
        The four components of readiness--manning, training, equipping, and
    leader development--describe how the Army prioritizes its efforts to
    provide trained and ready forces ready to fight and win our Nation's
    wars. Even though investing in readiness takes time and is expensive,
    the result ensures that our soldiers remain the world's premier combat
    land force.
        The first component of readiness, manning, is about people--the
    core of our Army and keystone to innovation, versatility, and combat
    capabilities. Unlike other Services that derive power from advanced
    platforms, the collective strength of the Army is people. America's
    Army must recruit resilient, fit people of character and develop them
    into quality soldiers. After recruitment, the Army develops men and
    women into competent officers, non-commissioned officers, and soldiers
    who possess combat skills and values essential to the profession of
    arms. Unfortunately, in order to meet Regular Army end strength
    reduction requirements, the Army has involuntary separated thousands of
    mid-career soldiers. While numbers are not the only factor, end
    strength reductions below the current plan will reduce our capability
    to support the National Military Strategy. Additionally, manning
    requires an appropriate mix of forces across the Army--Regular Army,
    Army National Guard, and the Army Reserve--to accomplish our National
    military objectives. To support Joint Force commitments worldwide over
    the last 15 years, the Army increased its operational use of the Army
    National Guard and the Army Reserve. We will continue this trend as we
    draw down the Regular Army. With the support of Congress, we can
    maintain the appropriate force mix capable of conducting sustained land
    combat operations worldwide with increased operational use of the Army
    National Guard and Army Reserve.
        To win on the battlefield, the Army must sufficiently resource
    training--the second component of readiness--to provide sufficient
    combat ready units in a timely manner. Building readiness from the
    individual soldier to collective units across multiple echelons is time
    intensive. Moreover, a ready unit is not only prepared in the
    classroom; it is prepared by conducting rigorous and repetitive
    training under intense pressure and realistic battlefield conditions.
    Training at the highest level, the kind the Army conducts at combat
    training centers, brings all elements of the force together to practice
    firing, maneuver, and leader decisions against a skilled and determined
    enemy in all environmental conditions. In fiscal year 2016 and fiscal
    year 2017, the Army has programmed 19 combat training center rotations,
    giving soldiers and leaders intensive combined arms maneuver
    experiences in anticipation of future combat. Key to success of the
    combat training center exercises is preparing at home station. Both
    combat training center exercises and home station training have
    declined in the past 15 years. Ultimately, training is the most
    essential aspect of readiness and we must rapidly improve this area.
    Therefore, we request funding for training that will enable our
    soldiers to succeed.
        A trained army requires modern equipment to win--the third
    component of readiness. An unintended consequence of the current fiscal
    environment is that the Army has not equipped and sustained the force
    with the most modern equipment and risks falling behind near-peers.
    Instead, funding constraints forced the Army to selectively modernize
    equipment to counter our adversary's most significant technological
    advances. While we are deliberately choosing to delay several
    modernization efforts, we request Congressional support of our
    prioritized modernization programs to ensure the Army retains the
    necessary capabilities to deter and if necessary, defeat an act of
    aggression by a near-peer.
        The fourth component of Army readiness is leader development. As
    stated in the 2015 National Military Strategy, ``Military and civilian
    professionals are our decisive advantage.'' The Army is committed to
    build leaders of character who are technically and tactically
    proficient, adaptive, innovative, and agile. It takes time to develop
    soldiers who can successfully lead, train, and equip a unit for combat.
    Leader development starts with a framework of formal training coupled
    with professional education and operational assignments. Professional
    Military Education serves as the principal way leaders combine
    experiences gained during operational assignments with current and
    emerging doctrinal methods in preparation for combat. As such, we have
    re-established the requirement to have our leaders complete military
    education prior to promotion. Ultimately, predictable funding provides
    the facilities and faculty that develop Army leaders who provide the
    Nation an advantage that neither technology nor weapons can replace.
        The deliberate decision to prioritize readiness while reducing end
    strength and decreasing funding for modernization places the Army in a
    readiness paradox: devoting resources to today's readiness invariably
    decreases investments for future readiness. While the Army prefers
    investments for current and future readiness, the security environment
    of today demands readiness for global operations and contingencies. We
    request the support of Congress to fund Army readiness at sufficient
    levels to meet current demands, build readiness for contingencies, and
    understand the mid and long term risks.
                          strengthening army readiness
        Before the Army can significantly increase readiness, there must be
    an infrastructure to support Army manning, training, equipping, and
    leader development. Army readiness occurs on Army installations--where
    soldiers live, work, and train. Installations provide the platform
    where the Army focuses on its fundamental task--readiness. The Army
    maintains 154 permanent Army installations, and over 1100 community-
    based Army National Guard and Army Reserve Centers worldwide.
    Regrettably, we estimate an annual burden of spending at least $500M/
    year on excess or underutilized facilities. In short, smaller
    investments in Army installations without the ability to reduce excess
    infrastructure jeopardizes our ability to ensure long-term readiness.
    To continue the efficient use of resources, the Army requests
    Congressional authority to consolidate or close excess infrastructure.
        As we spend taxpayer's dollars, the Army makes every effort to
    achieve the most efficient use of resources and demonstrate
    accountability. The Army is conducting a 25 percent headquarters
    personnel reduction to minimize the impact of our end strength
    reductions to our combat formations. These headquarters personnel
    reductions and future reductions will reduce authorizations for
    soldiers and civilians at a comparable rate.
        The Army is also reviewing the recommendations of the National
    Commission of the Future of the Army. After a thorough assessment, we
    intend to implement recommendations that increase Army readiness,
    consistent with statute, policy, and available resources.
    Implementation of any recommendation will include the coordinated
    efforts of the Army's three components: the Regular Army, the Army
    National Guard, and the Army Reserve. The Army may request the support
    of Congress to reprogram funding and, if needed, request additional
    funds to implement the commission's recommendations.
        In addition to the recommendations of the National Commission of
    the Future of the Army, the size and mix of Army forces relates to the
    capabilities required in the 2015 National Military Strategy. To
    respond to global contingencies or domestic emergencies, the Army has
    37 multicomponent units--units that have members of the Regular Army,
    Army National Guard, and the Army Reserve. Multicomponent units
    strengthen Army readiness by training together today and if needed,
    fighting together tomorrow.
        The Army has excelled in providing trained and ready forces for
    combatant commanders across a wide array of missions for the past 15
    years of war. This creates the impression we are ready for any
    conflict. In fact, only one-third of Army forces are at acceptable
    combat readiness levels, a byproduct of near continuous deployments
    into Iraq and Afghanistan. To address this readiness shortfall, the
    Army has redesigned our force generation model to focus on Sustainable
    Readiness: a process that will not only meet combatant commander
    demands, but will sustain unit readiness in anticipation of the next
    mission. This process synchronizes manning, equipping, training and
    mission assignments in such a way to minimize readiness loss and
    accelerate restoration of leader and unit proficiency. Designed for all
    three components and all types of units, our objective within current
    budget projections is to achieve two-thirds combat readiness for global
    contingencies by 2023. But, we will do everything possible to
    accelerate our progress to mitigate the window of strategic risk.
                        modernization: equipped to fight
        While rebalancing readiness and modernization in the mid-term, from
    2020 to 2029, the Army will not have the resources to equip and sustain
    the entire force with the most modern equipment. Informed by the Army
    Warfighting experiments, the Army will invest in programs with the
    highest operational return and we build new only by exception. We will
    delay procurement of our next generation platforms and accept risk to
    mission in the mid-term. The Army Equipment Modernization Strategy
    focuses on the five capability areas of Aviation, the Network,
    Integrated Air Missile Defense, Combat Vehicles, and Emerging Threats.
        The Army will resource the first capability area, Aviation, to
    provide greater combat capability at a lower cost than proposed
    alternatives. Key to the success of this initiative is the divestment
    of the Army's oldest aircraft fleets and distributing its modernized
    aircraft between the components. The Army will upgrade the UH-60 Black
    Hawk fleet and invest in the AH-64 Apache. These helicopters provide
    the capability to conduct close combat, mobile strike, armed
    reconnaissance, and the full range of support to Joint operations.
    Though aviation modernization is a priority, reduced funding caused the
    Army to decelerate fleet modernization by procuring fewer UH-60 Black
    Hawks and AH-64 Apaches in fiscal year 2017.
        Second, the Army must maintain a robust Network that is not
    vulnerable to cyber-attacks. This network provides the ability for the
    Joint Force to assess reliable information on adversaries, the terrain,
    and friendly forces. This information provides a decisive advantage by
    enabling the Joint Force commander to make accurate and timely
    decisions, ultimately, hastening the defeat of an adversary. Key
    investments supporting the network are the Warfighter Information
    Network-Tactical; assured position, navigation, and timing;
    communications security; and defensive and offensive cyberspace
    operations.
        The Army will invest in the third capability area, Integrated Air
    Missile Defense, to defeat a large portfolio of threats, ranging from
    micro unmanned aerial vehicles and mortars to cruise missiles and
    medium range ballistic missiles. The Army will support this priority by
    investing in an Integrated Air and Missile Defense Battle Command
    System, an Indirect Fire Protection Capability, and the Patriot missile
    system.
        Army improvements to Combat Vehicles ensure that the Army's fourth
    modernization capability area provides future Army maneuver forces an
    advantage over the enemy in the conduct of expeditionary maneuver, air-
    ground reconnaissance, and joint combined arms maneuver. Specifically,
    the Army will invest in the Ground Mobility Vehicle, Stryker lethality
    upgrades, Mobile Protected Firepower, and the Armored Multi-Purpose
    Vehicle.
        Finally, the Army will address Emerging Threats by investing in
    mature technologies with the greatest potential for future use. The
    Army will invest in innovative technologies that focus on protecting
    mission critical systems from cyber-attacks. To this end, the Army will
    invest in innovative technologies focused on active protection systems
    (both ground and air), aircraft survivability, future vertical lift,
    directed energy weapons, cyber, and integrated electronic warfare.
        The Army modernization strategy reflects those areas in which the
    Army will focus its limited investments for future Army readiness.
    However, our implementation of the strategy will fall short if we delay
    investment in next generation platforms. We request the support of
    Congress to provide flexibility in current procurement methods and to
    fund these five capability areas--Aviation, the Network, Integrated Air
    Missile Defense, Combat Vehicles, and Emerging Threats--to provide the
    equipment the Army requires to fight and win our Nation's wars.
        We support the ongoing Congressional efforts to streamline
    redundant and unnecessary barriers in the acquisition process. Our
    adversaries are rapidly leveraging available technology; our
    acquisition process must be agile enough to keep pace. Aligning
    responsibilities with authorities only improves the acquisition
    process. The Army remains committed to ensuring that we make the right
    acquisition decisions and that we improve the acquisition process to
    maintain a technological advantage over adversaries and provide
    requisite capabilities to soldiers.
             soldiers, civilians, and families: our greatest asset
        The Army's collective strength originates from the quality citizens
    we recruit from communities across America and place into our
    formations. We build readiness by training and developing American
    citizens into ethical and competent soldiers who are mentally and
    physically fit to withstand the intense rigors of ground combat.
    Additionally, the families of our soldiers make sacrifices for the
    Nation that contribute to Army readiness and play an important part in
    achieving mission success. As a result of the dedication and sacrifices
    of soldiers and their families, the Army is committed to providing the
    best possible care, support, and services.
        The Army is committed to improve access of behavioral health
    services. Beginning in 2012, the Army transformed its behavioral health
    care to place providers within combat brigades. These embedded
    behavioral health teams improve soldier readiness by providing care
    closer to the point of need. However, the Army only has 1,789 of the
    2,090 behavioral health providers required to deliver clinical care.
    The Army will continue to use all available incentives and authorities
    to hire these high demand professionals to ensure we provide our
    soldiers immediate access to the best possible care.
        The Army provides an inclusive environment that provides every
    soldier and civilian equal opportunities to advance to the level of
    their ability regardless of their racial background, sexual
    orientation, or gender. This year, the Army removed legacy gender-based
    entry barriers from the most physically and mentally demanding
    leadership school the Army offers--the United States Army Ranger
    School. To date, three female soldiers have graduated the United States
    Army Ranger School. We increasingly recognize that we derive strength
    from our diversity, varying perspectives, and differing qualities of
    our people. The Army welcomes the increased opportunities to bring new
    ideas and expanded capabilities to the mission.
        The Army does not tolerate sexual assault or sexual harassment. We
    are committed to identifying and implementing all proven methods to
    eliminate sexual harassment and sexual assault. As an example, the
    United States Army Cadet Command shared sexual harassment and sexual
    assault prevention best practices with universities and organizations
    nationwide. Currently, Cadet Command has 232 Army Reserve Officers
    Training Corps programs that have signed partnership charters with
    their colleges or universities. These cadets actively participate in
    education and awareness training on campuses that include programs such
    as ``Take Back the Night'' and ``Stomp Out Sexual Assault.'' Cadets
    also serve as peer mentors, bystander intervention trainers, and sexual
    assault prevention advocates.
        Prevention is the primary objective of the Army Sexual Harassment/
    Assault Response and Prevention (SHARP) program. However, when an
    incident does occur, the Army initiates a professional investigation to
    hold the offender accountable while providing best-in-class support and
    protection to the survivor. Additionally, the Army performs assessments
    of SHARP program strategies to measure effectiveness. To increase
    effectiveness, the U.S. Army Medical Command ensures that every
    Military Treatment Facility operating a 24/7 Emergency Room has a
    trained and qualified Sexual Assault Medical Forensic Examiner. Our
    enduring commitment to the SHARP program strives to eliminate sexual
    assault and sexual harassment, strengthen trust within our formations,
    and ensure our soldiers are combat ready.
        Another program committed to keeping the faith and improving
    quality of life is the Soldier For Life Program. The Soldier For Life
    program connects Army, governmental, and community efforts to build
    relationships that facilitate successful reintegration of our soldiers
    and their families into communities across America. Currently, the
    Soldier For Life program offers support to 9.5 million Army veterans
    and soldiers. Moreover, the Army plans to support the transition of
    374,000 soldiers in the next three years. In 2015, veteran unemployment
    in the United States was at a seven-year low and employers hired
    veterans at higher rates than non-veterans. Additionally, the Army
    distribution of fiscal year 2015 unemployment compensation for former
    servicemembers was down 25 percent, $81.8 million, from fiscal year
    2014. The Army seeks to continue the positive trends for Army soldiers,
    family members, and veterans in 2015. Ultimately, this program provides
    a connection between the soldiers and the American people.
        The Army's most valuable asset is its people; therefore, the well-
    being of soldiers, civilians, and their family members, both on and
    off-duty remains critical to the success of the Army. Taking care of
    soldiers is an obligation of every Army leader. The Army focuses on
    improving personal readiness and increasing personal accountability.
    Programs like ``Not in My Squad,'' first championed by Sergeant Major
    of the Army Daniel Dailey, empower Army leaders to instill Army values
    in their soldiers and enforce Army standards. Our soldiers and
    civilians want to be part of a team that fosters greatness. It is
    through personal conduct and proactive leadership that we seek to
    improve on a culture of trust that motivates and guides the conduct of
    soldiers. The American people expect and continue to deserve an Army of
    trusted professionals.
                           the army's budget request
        The Army requires sustained, long term, and predictable funding. We
    thank Congress for the Bipartisan Budget Act of 2015, which provides
    short-term relief and two years of predictable funding. However,
    funding levels are not keeping pace with the reality of the strategic
    environment and global threats. Moreover, while the current budget
    provides predictability, it does so at funding levels less than
    envisioned by the President last year. In short, the fiscal year 2017
    Army Budget base request of $125.1 billion is $1.4 billion less than
    the fiscal year 2016 enacted budget of $126.5 billion. As a result, the
    Army will fully fund readiness, reduce funding for modernization and
    infrastructure maintenance, and continue programmed end strength
    reductions.
        Our major goals in this budget request are to: improve readiness by
    fully manning in combat units, increase combat power, streamline
    headquarters, improve command and control, and conduct realistic
    combined arms training. The Army will also modernize in five capability
    areas: Aviation, the Network, Integrated Air Missile Defense, Combat
    Vehicles, and Emerging Threats. Additionally, the Army will ensure the
    recruitment and retention of high quality soldiers of character and
    competence. The fiscal year 2017 budget also provides adequate funding
    so that we can provide soldiers, civilians, and their families the best
    possible quality of life. Absent additional legislation, the Budget
    Control Act funding levels will return in fiscal year 2018. This
    continued fiscal unpredictability beyond fiscal year 2017 is one of the
    Army's single greatest challenges and inhibits our ability to generate
    readiness. This will force the Army to continue to reduce end strength
    and delay modernization, decreasing Army capability and capacity--a
    risk our Nation should not accept.
                                   conclusion
        The Army's fiscal year 2017 budget prioritizes readiness while
    reducing our end strength and delaying modernization. Prioritizing Army
    readiness ensures the Joint Force has the capability to deter, and when
    required, fight and win wars in defense of the United States and its
    national interests. To fulfil this obligation to the Nation, the Army
    requires predictable and sufficient funding to build readiness,
    maintain Army installations, modernize equipment, and provide soldier
    compensation commensurate with their service and sacrifice.
        The Nation's resources available for defense are limited, but the
    uncertainties of today require a ready force capable of responding to
    protect our national interests. An investment in readiness is the
    primary means that allows the Army to meet the demands of our combatant
    commanders and maintain the capacity to respond to contingencies
    worldwide. By building readiness, the Army provides the Joint Force the
    ability to respond to unforeseeable threats, decisively defeat our
    enemies, and advance the Nation's national security interests. As a
    result of our current fiscal uncertainty, the Army prioritizes today's
    readiness and accepts risk in modernization, infrastructure
    maintenance, and sustained end strength in the mid and long term. We
    request the support of Congress to fund Army readiness at sufficient
    levels to meet current demands, build readiness for contingencies, and
    understand the mid and long term risks. Ultimately, the American people
    will judge us by one standard: that the Army is ready when called upon
    to fight and win our Nation's wars.

        Chairman McCain. General Milley?

    STATEMENT OF GENERAL MARK A. MILLEY, USA, CHIEF OF STAFF OF THE
                                  ARMY

        General Milley. Thank you, Chairman McCain and Ranking
    Member Reed and other distinguished members of the committee
    for the opportunity to appear before you today to discuss our
    Army. Thank you for your consistent support and commitment to
    our soldiers, our civilians, and our families.
        The United States Army, as I mentioned six months ago when
    I took this job, must remain the most capable, versatile, and
    lethal ground force valued by our friends and most importantly
    feared by our enemies.
        This mission in my view has one common thread, and that
    thread is readiness. A ready Army is manned, trained, equipped,
    and well led as the foundation of the joint force in order to
    conduct missions to deter and if deterrence fails, to defeat a
    wide range of state and non-state actors today, tomorrow, and
    into the future.
        As mentioned by the chairman, 15 years of continuous
    counterinsurgency operations, combined with recent reduced and
    unpredictable budgets, has created a gap in our proficiency to
    conduct combined arms operations against enemy conventional or
    hybrid forces resulting in an Army today that is less than
    ready to fight and win against emerging threats. America is a
    global power, and our Army must be capable of meeting a wide
    variety of threats under varying conditions anywhere on earth.
    Our challenge today is to sustain the counterterrorism/
    counterinsurgency capabilities that we have developed to a high
    degree of proficiency over the last 15 years while
    simultaneously rebuilding the capability to win in ground
    combat against higher-end threats such as Russia, China, North
    Korea, and Iran. We can wish away these cases, but we would be
    very foolish as a Nation to do so.
        This budget prioritizes readiness because the global
    security environment is increasingly uncertain and complex.
    Today in the Middle East, South Asia, and Africa, we see
    radical terrorism and the malign influence of Iran threatening
    the regional order. Destroying ISIS [Islamic State in Iraq and
    Syria] is the top operational priority of the President of the
    United States. The Army conventional and special operations
    forces are both playing a key part in that effort.
        In Europe, a revanchist Russia has modernized its military,
    invaded several sovereign countries since 2008, and continues
    to act aggressively towards its neighbors using multiple means
    of Russian national power. The Army will play an increasing
    role in deterring or, if necessary, defeating an aggressive
    Russia.
        In Asia and the Pacific, there are complex systemic
    challenges with a rising China that is increasingly assertive
    militarily, especially in the South China Sea, and a very
    provocative North Korea. Both situations are creating
    conditions for potential conflict. Again, the United States
    Army is key to assuring our allies in Asia and deterring
    conflict or defeating the enemy if conflict occurs.
        While none of us in this room or anywhere else can forecast
    precisely when and where the next contingency will arise, it is
    my professional military view that if any contingency happens,
    it will likely require a significant commitment of Army ground
    forces because war is ultimately an act of politics requiring
    one side to impose its political will on the other. While wars
    often start from the air or the sea, wars ultimately end when
    political will is imposed on the ground. If one or more
    possible unforeseen contingencies happen, then the United
    States Army currently risks not having ready forces available
    to provide flexible options to our national leadership, and if
    committed, we risk not being able to accomplish the strategic
    tasks at hand in an acceptable amount of time. Most
    importantly, we risk incurring significantly increased U.S.
    casualties.
        In sum, we risk the ability to conduct ground operations of
    sufficient scale and ample duration to achieve strategic
    objectives or win decisively at an acceptable cost against the
    highly lethal hybrid threat or near peer adversary in the
    unforgiving environment of ground combat.
        The Army is currently committed to winning our fight
    against radical terrorists and deterring conflict in other
    parts of the globe. Right now as we speak, the Army provides 46
    percent of all of the combatant commanders' demands around the
    globe and 64 percent of all emerging combatant commander
    demand. As pointed out by both the ranking member and the
    chairman, almost 190,000 American soldiers are currently
    deployed in over 140 countries globally.
        To sustain current operations and to mitigate the risks of
    deploying an unready force into the future, the Army will
    continue to prioritize and fully fund readiness over end
    strength, modernization, and infrastructure. This is not an
    easy choice, and we recognize the risk to the future. While the
    Army prefers our investment for both current and future
    readiness, the security environment of today and the near
    future drive investment into current readiness for global
    operations and potential contingencies.
        Specifically, we ask your support to fully man and equip
    our combat formations and conduct realistic combined arms
    combat training at both home station and our combat training
    centers. We ask your support for our modernization in five key
    limited areas: aviation, command and control network,
    integrated air missile defense, combat vehicles, and the
    emerging threats programs. Finally, we ask and appreciate your
    continued support for our soldiers and their families to
    recruit and retain high quality soldiers of character and
    competence.
        We request your support for the fiscal year 2017 budget and
    we thank you for the Bipartisan Budget Act of 2015, which did
    provide some short-term relief and two years of predictable
    funding.
        With your support, we will fund readiness at sufficient
    levels to meet our current demand, and we will build readiness
    for contingencies for the future.
        Thank you for your continued support, and I look forward to
    your questions.
        Chairman McCain. Well, thank you, General.
        I have read yours and Secretary Murphy's written testimony,
    which I think is excellent. It is not often that I quote from
    it, but in reference to the Budget Control Act, you state this
    continued fiscal unpredictability beyond fiscal year 2017 is
    one of the Army's single greatest challenges and inhibits our
    ability to generate readiness. I think that is pretty
    straightforward.
        Then it goes on to say this will force the Army to continue
    to reduce end strength and delay modernization, decreasing Army
    capability and capacity, a risk our Nation should not accept.
    Those are pretty strong words. I thank you for them.
        I am often a critic of the administration's policies, but
    that sentence can be laid at the doorstep of the Congress of
    the United States of America and our failure to stop this
    mindless meat axe reduction in our capabilities to defend this
    Nation. I thank you for the straightforward comments on that
    issue. If--God forbid--a crisis arises, part of the
    responsibility for our inability to act as efficiently and
    rapidly as possible will lay at the doorstep of the Congress of
    the United States of America which, by the way, is a majority
    of my party.
        General Milley, in your statement, you made it very clear,
    but let me just--are we at high military risk?
        General Milley. Senator, yes. I wrote a formal risk
    assessment, which you know is classified, through the Chairman
    and to the Secretary of Defense. I characterized this at this
    current state at high military risk.
        Chairman McCain. High military risk is a very strong
    statement, and I am sure you thought long and hard before you
    made it.
        Could we not substantiate that high military risk by
    pointing out that two of the brigade combat teams are at
    category one--the BCTs [Brigade Combat Teams]--and
    approximately--is it one-third that category one or two? Is
    that correct? Two-thirds of our BCTs would require some
    additional training, equipment, whatever before they would be
    ready to fight? Is that the correct interpretation of that
    classification?
        General Milley. Yes, Senator. In short, yes. I would say
    even those that are--the couple that are at the highest level--
    we could deploy them immediately. In fact, one of them is
    forward deployed already. The others, even the ones on the
    second, third, and all the rest of them--they are going to
    require something in terms of training to get them ready. But
    roughly speaking, one-third across the board of our combat
    formations, our combat support, and our combat service support
    are in a readiness status that is ready to go.
        Chairman McCain. It would require, depending on the unit,
    some length of time to make them ready to get into category one
    or two.
        General Milley. That is correct.
        Chairman McCain. Two-thirds are not ready to defend this
    Nation immediately in time of crisis.
        General Milley. That is correct. They would require some
    amount of time to bring them up to a satisfactory readiness
    status to deploy into combat.
        Chairman McCain. You pointed out at the beginning--and so
    did I--the 186,000 soldiers in 140 locations around the globe.
    Can we maintain that if we continue to reduce the end strength
    of the Army down to 420,000, taking into consideration we are
    an All-Volunteer Force?
        General Milley. To my knowledge, 420,000 is only under
    sequestration. This budget takes it to 450,000. But even at
    450,000 for the Active force--and some of those forces deployed
    overseas are National Guard and Reserve. A 980,000 total Army
    is stretched to execute the global commitments. The real issue
    is if a contingency arises, and then some really tough choices
    are going to have to get made.
        Chairman McCain. Any sane observer of what is going on in
    the world would surmise, as we incrementally increase our
    particularly Army special forces deployments, that the
    requirements, at least in the short term or short and medium
    term, is going to require more deployments, more training, more
    equipment in order to counter the rising threats that we see
    that Secretary Murphy outlined in this opening statement. Is
    that true?
        General Milley. I think that is a correct assessment. Yes,
    Senator.
        Chairman McCain. Which is why you have come to the
    conclusion that we are at, quote, high military risk.
        General Milley. That is correct. On the high military risk,
    to be clear, we have sufficient capacity and capability and
    readiness to fight counterinsurgency and counterterrorism. High
    military risk refers specifically to what I see as emerging
    threats and potential for great power conflict, and I am
    specifically talking about the time it takes to execute the
    tasks. High risk would say we would not be able to accomplish
    all the tasks in the time necessary and the cost in terms of
    casualties. Combined, that equals my risk assessment.
        Chairman McCain. Well, I thank both you and Secretary
    Murphy for your very forthright testimony before the committee
    today. I think it is extremely helpful.
        Senator Manchin?
        Senator Manchin. Thank you, Mr. Chairman.
        I thank both of you for your service and appreciate you
    being here.
        In the past few days, General Milley, I have had a chance
    to talk with some of your general officers and came away with
    two big concerns: the reduction of the size of our Army and
    budget predictability--more so than I have ever been. I have
    been shaking my head at sequestration for years now. It is a
    foolish way to set budgets. It was a penalty that we put on
    ourselves because we never thought we would ever go there, that
    we would ever be dysfunctional or become in political discord
    the way we are and could not come together to prevent that from
    happening. But it did and we have got to move on.
        So, General Milley, what I would ask--could you walk me
    through specifically how the sequestration has forced the Army
    to reduce its size to the most critical level that I think we
    have ever faced right now with all the threats that we are
    facing?
        General Milley. I think there are a couple of points to be
    made. One is the unpredictability, the year-to-year budgeting.
    In reality because we go with continuing resolutions, it really
    ends up being about a 9-month cycle vice 12-month. The
    unpredictability, the short-term nature of it does not allow
    for longer-term planning projection and some certainty for
    equipment, for example, with industry or for training plans for
    units and so and so. That is a big deal, is the uncertainty.
        The second piece of it is just the magnitude of the cuts.
    Since 2008, the Army has had about a 74 percent or 75 percent
    cut in the modernization account at large and about a 50
    percent cut in R&D [Research & Development] at large. You know,
    less than 10 years. That is a significant cut.
        If we think 10 years ahead and look 10 years behind, if
    that trend continues, that is not good. What we are focusing on
    is today's readiness. A 20- and 21- and 22-year-olds, etcetera
    that are in the Army today--we are focusing on them being ready
    to deploy and to conduct combat operations because that is
    necessary. But if you are 10 years old today, I am worried
    about the 10-year-old who is going to be the soldier 10 years
    from now. That is a bigger risk that we are taking, but we are
    compelled into that risk based on the top line that we are
    given.
        Senator Manchin. We are time-limited right now, but we are
    going to 980,000, I guess, troop strength.
        General Milley. That is correct.
        Senator Manchin. For everything I heard from all of your
    front-line generals basically is there is no way that we can
    meet the imminent threat that we have around the world with
    980,000 people.
        General Milley. It is high risk.
        Senator Manchin. If you confirm that at high risk, what
    would it take for us not to be at high risk? These are
    artificial caps and all this other bull crap that we are
    dealing with.
        General Milley. I have got a series of studies that are
    ongoing. If we operate under the current National Security
    Strategy, the current Defense Planning Guidance, in order to
    reduce to significant risk or moderate risk, it would take,
    roughly speaking, about a 1.2 million person----
        Senator Manchin. We are over 200,000 troops short.
        General Milley. Right. At $1 billion for every 10,000
    soldiers, that money is not there. We are going to make the
    most efficient and effective use of the Army that we have.
        Senator Manchin. Secretary Murphy, if I may. I have a lot
    of concerns regarding the level of contract support. We have
    talked about that and I have never gotten a good handle on it.
    I think I have always heard it has been two for one. For every
    one soldier we have in uniform, we have two people backing that
    person up, roughly.
        My question to you, are the long-term savings that some of
    your bean counters tell us that by having a contractor, there
    is long-term savings that provide substantial--or is the number
    of contractors driven by the arbitrary troop force caps that
    prevent us from deploying the soldiers to do these jobs? Are
    they telling us it is long-term savings here, and with these
    caps here, the only way you are getting around the caps is by
    having more contractors on the back end to do jobs that
    soldiers in uniform should be doing?
        Mr. Murphy. Senator Manchin, after 9/11, when I deployed a
    couple months later, we went from our gate guards and our
    security forces at our compound in Tuzla, Bosnia from our
    soldiers to private contractors.
        Senator Manchin. Because of the caps?
        Mr. Murphy. I am not trying to be disrespectful. They were
    not at the level of readiness. But that is what we have been
    doing for 15 years, Senator. Again, I am not saying that is
    right. I have the numbers. We have cut civilians 46,000, 16
    percent civilians and contractors, 16 percent. That is 46,000
    of them. I am looking at this. The most lethal----
        Senator Manchin. How many troops have we cut over the same
    period of time?
        Mr. Murphy. Well, we cut 150,000. 13 percent in soldiers,
    16 percent in civilians and contractors. I am trying to balance
    this, Senator. You know, we talked about the cuts.
        Senator Manchin. Are you making decisions based on the caps
    that we have? Somebody has put caps in there for some reason
    because we did not want people in uniform, for whatever reason,
    which I cannot understand and cannot explain to the good people
    of West Virginia why you do not want people in uniform who we
    count on and are trained properly to do the job.
        Mr. Murphy. When I was where you were five years ago in
    Congress on the Armed Services Committee, we did not even know
    how many contractors we had. I have my arms around it now. We
    are getting after it, and we are making sure that it makes the
    most fiscal sense but sense mostly for national security.
        Senator Manchin. Very quickly. My time is running out.
        If I could say this, if we go to the 1.2 million, if
    somehow we had the resolve to do what we need to do here to
    meet the imminent threats we have, do we have proportionally
    contractors--we have to go up also in contractors. Will that
    1.2 million be able to do some of the jobs that contractors are
    doing now?
        Mr. Murphy. I would say that some of our soldiers will do
    more of the jobs, but our soldiers are geared for brigade
    combat teams to win.
        Senator Manchin. Thank you. My time is up.
        Chairman McCain. Mr. Secretary, we eagerly look forward to
    the day when you can tell us how many contractors are employed
    in the Department of Defense, and it will be one of the most
    wonderful days of my political career.
        Senator Fischer
        Senator Fischer. Thank you, Mr. Chairman.
        General, this committee has held a number of hearings about
    the future of warfare and what new technologies are going to be
    required. This is something that the Secretary and the Deputy
    Secretary have discussed at length as well. We have heard some
    very bold predictions about incorporating robotic systems on
    the battlefield as soon as the next 10 years. Do you think we
    are going to see a real revolution in the role of unmanned
    systems on the battlefield in the next 10 years? Do you think
    that is a goal that we should be working towards in the view of
    other near-term requirements that you are facing?
        General Milley. Thank you, Senator.
        I think ``revolution'' might be too strong a word. But I do
    see a very, very significant increased use of robotic, both
    manually controlled and autonomous, in ground warfare over the
    coming years. I do not see some sort of revolution like we are
    going to go from the horse to the tank or the musket to the
    rifle. But I do see the introduction at about the 10-year mark
    or so of really widespread use of robotics in ground warfare.
    We are already seeing it in air platforms and we are seeing it
    in naval platforms. The ground warfare is a much complex
    environment, dirty environment, but I do anticipate that we are
    going to refine the use of robots significantly and there will
    be a large use of them in ground combat by--call it--2030.
        Senator Fischer. As service secretary, what role do you
    have in the third offset initiative? We have heard that we will
    be exploring some new operational concepts and capabilities for
    ground combat. Is that something that the Army is leading on?
        Mr. Murphy. Senator, I would say with the third offset, we
    need to lead from the front. We are talking about leap-ahead
    technologies. When you look back at the second offset, we are
    talking about precision munitions. We are talking about GPS
    [Global Positioning System]. When I was in Iraq, we did most of
    our operations at night because we had night vision goggles.
    Again, this is the technology. When I say we do not want a fair
    fight, we want our soldiers at a technical and tactical
    advantage. When you talk about the leap-ahead technology, the
    third offset, I do think it is robotics. I think robotics,
    cyber, electronic warfare--the gains that we need to make there
    because, by the way, ma'am, our peer competitors are investing
    in those things too, and we cannot be outmanned and outgunned.
    We need to make sure that we have the technical and tactical
    advantage. I am definitely part of that within the Army and
    within the Department of Defense.
        General Milley. May I make a comment, ma'am?
        Senator Fischer. Yes, certainly.
        General Milley. I think for the next 5 to 10 years, for
    ground warfare you will see evolutions and you will see
    acceleration of some of these technologies brought in, but they
    will be episodic. I think 10 years and beyond, though, I do see
    a very significant transformation of ground warfare, the
    character of war, not the nature of war. That would include
    robotics, cyber, lasers, railguns, very advanced information
    technologies, miniaturization, 3D printing. All of these
    technologies that are emerging in the commercial world I think
    will end up having military application just past a decade from
    now. I think we, the Army, going back to risking the future,
    need to invest in the R&D and the modernization of that or we
    are going to find the qualitative overmatch gap between the
    United States and adversaries closed. We are already seeing
    that gap closing today.
        Senator Fischer. When we talk about the third offset, many
    times we focus on the stuff. We focus on the new technologies
    that are out there, and we hear about the robotics. We hear
    about the lasers. I would like to know how much input both of
    you would have when it comes to setting goals and missions and
    then trying to figure out what technologies are out there or
    what needs to be designed in order to meet those goals instead
    of reacting to the technology that is there. How do you view
    that?
        General Milley. I mean, it is an iterative, interactive
    process, number one. But number two, say 25, 30, 40 years ago,
    much innovation was done by the Department of Defense in terms
    of technology. Today most technological innovation is actually
    being done by the commercial world. It is important that we
    have linkages into the commercial sector, Silicon Valley, 128
    up in Boston, the Triangle, and down in Texas. It is all these
    innovative centers. We need to keep in touch with them closely,
    and we do have a lot of input not just personally but also
    through the organization of the Army. We do have a lot of input
    into it. There is a lot of technological advances out there.
        There are a couple of challenges. One is what does the year
    2025, 2030, 2040, 2050 look like demographically, politically,
    economically, socially, et cetera but also technologically.
    Those are some big questions. Once we can figure that out--and
    we are working hard at that--then we can drive the ways in
    which we desire to fight. Once you figure that out, then you
    can figure out the equipment, the organizations, the training
    plans, et cetera to create that organization. But we first have
    to define what exactly is that world going to look like, at
    least as best we can. We will not get it exactly right, but we
    want to get it more right than the enemy.
        Senator Fischer. Thank you, General. I wish you good luck
    in trying to figure that out and meet those goals for the
    future. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Reed?
        Senator Reed. Thank you very much, Mr. Chairman.
        Gentlemen, thank you for your testimony again.
        You have put the focus on readiness, which I think is
    appropriate. If additional resources could be freed up in this
    process, General Milley, where would you focus in terms of more
    emphasis on readiness?
        General Milley. A couple of key places, Senator. Thank you.
    One would be aviation flight hours. I think that is important.
    We dropped aviation flight hours from about 14, 15, which is
    really a requirement per month, down to about 10. We bumped it
    back up to 12, but we probably need some more. That would be
    one area.
        Secondly and very importantly is home station training. We
    all of the units, all the brigade combat teams to go either the
    joint readiness training center, the national training center,
    or the training center in Germany. Key to success at one of
    those big ticket training centers is the home station
    preparatory training prior to going, all the gunneries, the
    field training exercise, et cetera. That has been underfunded
    over the past years. If we can get home station training up to
    a level, then the units will come out of the CTCs [Combat
    Training Centers] at a much higher level in combined arms
    training.
        I would put it probably in aviation flight hours and in the
    home station training.
        Lastly, the third to last would be if we did have
    additional monies, I would probably put it towards additional
    CTC training for the National Guard. The National Guard is
    going to be very, very important because of the capacity issue
    of the regular Army to deal with the current day-to-day but
    also the contingency operation. We need to increase--in short
    order, we need to increase the readiness of the Army National
    Guard's combat formations.
        Senator Reed. This year, I believe you have two scheduled
    rotations to the training centers for National Guard brigades.
        General Milley. That is correct, Senator. We are trying to
    increase it to four.
        Senator Reed. A related issue in terms of the emphasis on
    flying hours and readiness, et cetera, particularly in Army
    aviation, the procurement and the acquisition process--are you
    at a point now where you could jeopardize long-term aviation
    programs, or do you still have a little bit of head space?
        General Milley. I think we are approaching the margin. It
    is very tight right now. What we have done is we have had to
    stretch out aviation modernization in order to reach some of
    that for readiness. Aviation is about, roughly speaking, 20
    percent or so--25 percent of the operating budget. We have
    stretched out aviation modernization to take those monies and
    put it into readiness.
        Senator Reed. One of the points I think that you have made
    in your comments is that the emphasis on training at home
    station, which means the units have to be at home essentially.
    It is the time element. It is the dwell element rather than the
    deploy element.
        General Milley. That is correct.
        Senator Reed. If we were to, not in terms of a major
    contingency, but in terms of the current situation, begin to
    increase our footprint in places around the world, the dilemma
    would be that would rob you of the time and the available
    troops to get ready for the next big battle. Is that a fair
    statement?
        General Milley. Sort of, Senator, in that some of these
    overseas exercises actually improve your readiness.
        Senator Reed. I am not talking about exercises. I am
    talking about a commitment in terms of a kinetic situation.
        General Milley. An operational commitment? Yes, that would
    consume readiness. That is correct.
        Senator Reed. That is the dilemma because we always have to
    be prepared to do that, and if it happens, then we will do it.
    But we have to understand the cost not only short term but long
    term is that we fall further behind in the readiness.
        General Milley. That is correct.
        Senator Reed. The point that has been made very, very
    powerfully by the chairman and myself is that sequestration has
    to be eliminated because this year might be manageable. Next
    year, if sequestration is imposed, it becomes frankly
    impossible and you would have to come up here and tell us that
    you probably could not perform your mission. Is that fair?
        General Milley. I think if sequestration were imposed and
    went to those levels, that we could not perform the missions
    assigned to us under the current strategy. Most important to
    me, as a commissioned officer, and I think important to this
    committee is we would risk American lives if we were committed
    into combat.
        Senator Reed. Well, again, thank you, sir, for your
    service. Thank you, Mr. Secretary, for your service.
        Thank you, Mr. Chairman, for this hearing.
        Chairman McCain. Senator Cotton?
        Senator Cotton. Thank you.
        Thank you, gentlemen, for appearing before us.
        General Milley, I would like to return to the priorities
    you just laid out for Senator Reed. If I heard them right, it
    was more aviation hours and more home station training for
    regular Army units and, finally, more CTC training time for
    National Guard.
        General Milley. Those would be three of the areas. There
    are other areas, but those would be three. That is correct.
        Senator Cotton. Those are the priorities you would spend if
    you got the first extra dollar in your budget, or are those
    limited just to your priorities for more readiness?
        General Milley. Those are readiness dollars.
        Senator Cotton. You had mentioned earlier about the
    soldiers we are sending to fight today and your priority for
    readiness, which you have said repeatedly during your tenure as
    the Chief. America's moms and dads, whose soldiers are serving
    in your Army, at 25 is an enlisted E-5 or a 1st lieutenant, can
    be assured that you would never send one of their sons or
    daughters into combat unready to fight.
        General Milley. That is correct.
        Senator Cotton. But that has a cost in modernization. Moms
    and dads around America, whose 15-year-old son and daughter
    aspire to be in the Army one day, have to be more concerned
    about the qualitative overmatch and capabilities of the future
    Army. Is that correct?
        General Milley. I think that is also correct, Senator.
        Senator Cotton. There is some discussion within the
    Congress about mandating a certain end strength of the Army at
    a higher level than 450,000. I think that would be a good idea.
    I would like to see it much higher than that. Could you talk
    about the consequences if this Congress does, in fact, mandate
    a certain end strength without increasing your budget numbers?
        General Milley. I think if we were mandated to go to a
    higher size, more soldiers, bigger end strength, and we did not
    have the dollars, I personally think that would be disastrous
    for both the Nation and the Army in that we would have to, at
    the end of the day, mortgage more modernization of the future.
    We would have to take down installations, quality of life
    programs. There are all kinds of things that would have to
    happen. At the end of the day, I think we would risk literally
    having a hollow Army. We do not have a hollow Army today, but
    many on this committee remember the days when we did and when
    people did not train and units were not filled up at
    appropriate levels of manning strength and there were no spare
    parts. All of those things would start happening if we
    increased the size of the force without the appropriate amount
    of money to maintain its readiness.
        Senator Cotton. Because a mandatory end strength without a
    budget to match would mean they do not have the money to train,
    to be equipped, go to CTCs, and so forth. However, you also
    mentioned the greater risk for modernization. I assume that is
    because if the Army mandated a certain end strength because of
    your bedrock commitment to send our sons and daughters overseas
    fully equipped, fully trained, fully manned, you would take
    even more money out of modernization.
        General Milley. That is exactly right. The three levels are
    end strength, readiness, and modernization accounts. We would
    have to take down--if end strength went up, then the first one
    out the door is modernization, and I certainly do not recommend
    that. If there were a mandated increase in the size of the
    Army, for whatever reason, then I would strongly urge that that
    happen with the money appropriate for the pay and compensation,
    for the readiness, et cetera. Absent that, I think it would be
    a big mistake.
        Senator Cotton. Thank you. I certainly support a much
    higher end strength than we are on the path to have. I also
    think it would be deeply inadvisable not to match that with a
    concomitant budget increase.
        Turning to modernization, because of the risk we are facing
    there, you were speaking with Senator Fischer about some of the
    commercial technology that we have seen. Could you talk a
    little bit about your new acquisition authorities and your
    desire to use more commercial, off-the-shelf technology. You
    famously said in the Army's handgun program, that if you had--
    was it $34 million--you could go to Cabela's and buy 17,000
    handguns for the Army or something like that? You see it across
    other domains as well with the global response force desire for
    enhanced mobility or DCGS [Distributed Common Ground System]
    versus commercial technology.
        General Milley. I think the proposals that are out there
    now on the acquisition reform are absolutely moving in the
    right direction. I welcome that. I embrace it. I do not claim
    that I know everything there is to know about acquisition by a
    long shot. But I think empowering the chiefs to really take
    greater responsibility and with that, of course, comes
    accountability--and I welcome that as well. We should get into
    it. Roll our sleeves up, get after it and get the right
    equipment to the warfighters in a faster amount of time at a
    reasonable cost to the taxpayer. The pistol was just one
    example, but I am bumping into these things all over the place
    in a wide variety of programs.
        There have been an awful lot of sessions going on in the
    Army over the last, I guess, 6-8 weeks now. I am probably not
    on a lot of people's Christmas card list, but that is all okay.
    Our desire is to make sure our soldiers are taken care of.
        Senator Cotton. I cannot imagine that. Maybe they just want
    to bring you home for Thanksgiving.
        General Milley. That must be it.
        Senator Cotton. Well, I imagine you will continue to bump
    up against that unlike some of your counterparts who cannot go
    to Cabela's and buy a next generation fighter or bomber or a
    ballistic missile submarine. There are, of course, a lot of
    modernization opportunities in the Army that use commercial
    technology, and I know you are committed to that. Thank you.
        My time has expired.
        General Milley. Thank you, Senator.
        Chairman McCain. Fortunately, members of this committee are
    without controversy.
        Senator Shaheen?
        Senator Shaheen. Thank you.
        Thank you both for being here this morning and for your
    service.
        I want to begin by adding my support to those on the
    committee who believe that we need to deal with sequestration
    and that it poses an imminent threat to our national security
    and to a lot of other things with respect to our future.
        But I want to follow up on the conversation you were having
    with Senator Fischer, General Milley, talking about the
    importance of innovation, technological innovation, to our
    future. When we were having hearings on the future of our
    military, one of the things we heard is that as you pointed
    out, there has been a dramatic decrease in support for R&D on
    the part of the Department of Defense, and that the one program
    that has consistently provided the kind of innovation that DOD
    needs is the Small Business Innovation Research program. I
    wonder if you could just speak to the importance of that for
    providing the new technologies that the Army is looking for.
        General Milley. I think it is a great program and I fully
    support it. I think small business--not in all cases, but
    oftentimes small entrepreneurs are the most innovative partly
    because of survival techniques, I guess, in business. But they
    tend to be very adaptive, agile, and innovative. Supporting
    those initiatives in order to take advantage and leverage
    emerging technologies is something that I fully support.
        Senator Shaheen. Great. Well, hopefully we can get this
    reauthorized for next year without the kind of challenges we
    had the last time we tried to get it reauthorized.
        I had the opportunity recently to meet in Brussels with
    officials from Europe and from particularly Eastern Europe and
    the Baltics. They were very pleased to see our proposal to
    increase the European Reassurance Initiative fourfold. You both
    mentioned in your testimony the threat from Russia.
        One concern that they asked me about that I could not
    answer was why the decision seems to have been made to
    preposition the equipment, to do the rotational more in Western
    Europe than in Eastern Europe on the front lines. How do we
    explain the decision to do that?
        General Milley. First of all, I would defer an
    authoritative, definitive answer to General Breedlove because
    he is the one who determines where that equipment goes and so
    on and so forth.
        But there are a couple of issues here, not the least of
    which are political negotiations with foreign governments as to
    where it goes, where you base it, and building the
    infrastructure to support it and so on and so forth.
        What we are going to do is the initial tranche--the unit
    will bring its equipment. The rotational units will bring their
    equipment rather than have it prepositioned initially. Then you
    will see in 2017 and 2018 we will have a prepositioned
    divisional set of equipment in Europe.
        There are advantages and disadvantages to prepositioning
    and/or bringing it with you. Both are valued.
        The advantage of deploying with your equipment is to
    exercise the strategic deployment systems of the Navy and the
    Air Force, along with the Army, in order to long haul heavy
    equipment for heavy brigades. The prepositioned equipment--
    obviously, the big advantage there is the speed. A combination
    of both actually is what would be required in time of crisis.
        But the positioning of that equipment physically inside
    Europe, I would like to defer that logic and rationale to
    General Breedlove, if that is okay.
        Senator Shaheen. It is. I have had the opportunity to ask
    him about it. But it sounded to me like you are saying that the
    locations are based not just on their military effectiveness
    but politics have also been part of those decisions.
        General Milley. I mean, sure. There are political
    negotiations, you know, diplomatic negotiations between
    countries that have to occur before we get that locked in.
        Senator Shaheen. One of the things that, obviously, our
    continued readiness depends on is the effectiveness of our
    Guard and Reserve. I was pleased to see that this budget
    included two military construction projects in New Hampshire
    that are very important. Right now, we rank 51st out of 54 in
    terms of the condition of our facilities and armories. Can
    you--I do not know. Maybe this is appropriate for you,
    Secretary Murphy--talk about how we ensure that the National
    Guard has the resources that it needs to be ready whenever we
    expect them to deploy?
        Mr. Murphy. Yes, Senator. The National Guard--we are a
    total force. We are not three different forces. We are one
    Army, one team.
        Senator Shaheen. Sorry to interrupt, but sometimes the
    resources do not always seem like we are a total force and one
    team.
        Mr. Murphy. Ma'am, all I can tell you is that when you look
    at MILCON [Military Construction] to the $1 billion budget, 10
    percent went to--again, the MILCON, which is part of the
    budget--it has been the lowest it has been in 24 years. But
    when you dive down in the numbers like I have, you know,
    Hooksett, $11 million; Rochester, $8.9 million because we are
    one team. There is a different leadership because we were
    asking a whole heck of a lot like we have the last 15 years and
    the next 10 years. There are not two different teams. We are
    one team. We are getting after it and we are giving them the
    resources they need to make sure that they do not have a fair
    fight and they have the resources in MILCON.
        But my other comment, ma'am. I mean, we have mortgaged
    modernization. I know time has run out, but I can expand on it
    later if you would like me to.
        Senator Shaheen. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Wicker?
        Senator Wicker. Thank you, Mr. Chairman.
        General Milley, earlier this week, Lieutenant General
    McMaster testified before the Airland Subcommittee. Our
    chairman has already alluded to this in his opening statement.
    But his quote is exactly as follows. We are outranged and
    outgunned by many potential adversaries. He also said our Army
    in the future risks being too small to secure the Nation.
        Now, do you agree with his statement in whole or in part?
        General Milley. In part. H.R. [Herbert Raymond] is one--I
    love him like a brother.
        To say ``many'' is probably an overstatement. But to say
    that the gap is closing, the capability gap is closing between
    major great power adversaries and the United States in terms of
    ground forces, absolutely true. I think that was the intent of
    what he was trying to say.
        In terms of size of the force, yes, I agree with his
    comment on size of the force. But outranged, outgunned on the
    ground, I think it is a mixed bag.
        Senator Wicker. Are we outranged by any potential adversary
    at this point?
        General Milley. Yes.
        Senator Wicker. Which ones would that be?
        General Milley. I would have to say the ones in Europe,
    Russia on the ground.
        Senator Wicker. Would you tell the committee what it means
    to be outranged by Russia?
        General Milley. Well, with either direct or indirect fire
    systems, the ground-based systems, tanks, artillery, those
    sorts of things. I would have to get you the actual range of
    all these weapons. It is not overly dramatic, but it is the
    combination of systems. We do not like it. We do not want it.
    But, yes, technically outranged, outgunned on the ground, I
    think that is factually correct.
        Senator Wicker. Outranged and outgunned would have the same
    definition as far as you are concerned. We are outranged and
    outgunned by Russia to some extent at this point.
        General Milley. That is correct.
        Senator Wicker. Now, what does that mean for our Nation's
    security?
        General Milley. Well, again, it depends on what we want to
    do relative to--in Europe, for example. The fundamental task
    there is to deter, maintain cohesion of the alliance, assure
    our allies, and deter further Russian aggression. If we got
    into a conflict with Russia, then I think that it would place
    U.S. soldiers? lives at significant risk.
        Senator Wicker. What specifically should we do? What steps
    should this committee and this Congress take to reverse these
    trends and maintain the Army's supremacy over our adversaries?
        General Milley. I think there are a couple of things. One,
    I think in terms of the capability of the force, a subset and
    the most important one is what is emphasized in this budget is
    readiness. That has to be sustained.
        What is readiness? It is manning, making sure that we have
    got enough people to man the organizations at appropriate
    levels of strength.
        Senator Wicker. We are okay there.
        General Milley. It depends on the unit. We have a lot of
    non-availables in the force, for example, right now. It depends
    on the given unit. Right now, ideally you would want a unit to
    be well above 90 percent before you sent them off to combat.
    That is not necessarily the truth. Then when you get the
    availability of the force, you start peeling this back unit by
    unit, you will find that the foxhole strength, the number of
    troops that a given battalion or brigade that deploy to, say,
    NTC or JRTC [Joint Readiness Training Center] is not
    necessarily what you might have expected just from the paper
    numbers. Manning is an important piece. That is the end
    strength.
        The equipping piece is critical, things like spare parts.
    First of all, do they have the right and most modern equipment?
    Secondly, does the equipment work? That is a work in progress.
        More or less, manning and equipping is not too bad.
    Training is the long pole in the tent. Then there is more to
    it. It is leadership, cohesion, and good order and discipline
    and trust of the force. All of those in combination equal
    readiness. I would say that the number one thing, at least near
    term, would be readiness.
        But then in addition to that, because we have to look past
    lunchtime here, in addition to readiness, we have got to
    reinvest in our modernization and R&D over time. That is what
    H.R. was getting at. If we continue to attrit that, as we have
    over the last eight years--8 to 10 years or so--if we continue
    to attrit that, then that will result in a bad outcome 5 to 10
    years from now. I think those are the two things I would offer
    to you, Senator.
        Senator Wicker. Thank you very much. Perhaps you can
    elaborate on that.
        I do need to ask you about the light utility helicopter.
    You recently published an unfunded requirement for 17 Lakotas
    in fiscal year 2017. Of course, I was relieved to hear that.
    But can you elaborate on how these 17 Lakotas in your EUFR
    would be utilized and what risk would occur if you do not
    receive those 17 Lakotas?
        General Milley. Yes. Those 17 are specifically tied to the
    National Commission's recommendation, which we owe you a
    response to their recommendations. They have got 63
    recommendations. A lot of them have to do with aviation.
        The 17 Lakotas are specifically tied to their
    recommendations, and they would be utilized at Fort Rucker to
    free up Apaches to go to the Guard. They would specifically be
    utilized to train new helicopter pilots. As you know, the
    Lakota is not a combat aircraft. We have divested it, stopped
    procuring it. It does have great utility for things like
    training areas, using them as op forward to simulate enemy
    aircraft, using them as a medevac aircraft, use it to train
    pilots, and so on and so forth. But it is a not a combat
    aircraft. We have chosen to divest ourselves of it. But the 17
    are in there specifically to use as training aircraft at Fort
    Rucker, and it is linked directly to the National Commission's
    recommendations.
        Senator Wicker. They will free up combat----
        General Milley. They will free up combat aircraft that we
    could then transfer to the National Guard to execute the other
    parts of the commission's recommendation.
        Senator Wicker. Thank you, sir.
        Chairman McCain. General, would you add retention to that
    list?
        General Milley. Yes. Retention, recruiting talent. I
    mentioned the modernization piece, but the readiness piece is
    the most important piece. But absolutely to the list is
    retention.
        Chairman McCain. Senator King?
        Senator King. Thank you, Mr. Chairman.
        First, I want to associate myself with your comments in the
    opening statement and perhaps put a bit of context. We had a
    meeting in the Budget Committee yesterday talking about overall
    budget issues. I think what a lot of people do not realize is
    that the expenditures for defense and non-defense discretionary
    as a percentage of GDP [Gross Domestic Product] have fallen
    dramatically in the last 50 years and dramatically in the last
    25 years to the point where defense as a percentage of GDP is
    now the lowest it has been in 70 years, 3.3 percent. In 1965,
    it was about nine percent. It has fallen almost by two-thirds.
    We always focus on the numbers, which are very big, but as a
    percentage of our economy we are, as I say, at one of the
    lowest levels since World War II.
        Secondly, the budget numbers that we are now working with
    were established in 2011 before Syria, ISIS, Ukraine, Russia's
    militarization of the Arctic, China's race to military
    modernization, North Korea's nuclear capacity, cyber,
    encryption, and of course, on the domestic side, something like
    what we have seen in the last few years in the heroin epidemic.
        In other words, we have locked ourselves into a
    straightjacket of financing that does not allow us to deal with
    current realities. It is absolutely beyond comprehension that
    we should do this, particularly given the sacred responsibility
    in the preamble to the Constitution to provide for the common
    defense. That is the most fundamental responsibility of any
    government to keep its people safe. We are knowingly just
    blindly going through this process of trying to continually
    meet these new challenges that were established since these
    numbers were set up as the limits and fit the response of this
    country into a continually shrinking package. It is
    irresponsible and we have to start talking about the larger
    picture.
        To move beyond budgets, during the break, I spent some time
    in Poland and Ukraine. They are talking about a new kind of
    war, and I want to ask you, General Milley, about a new
    strategy and a new doctrine. They are talking about hybrid war,
    what happened in Ukraine, not a frontal attack, not sending in
    the Russian army, not sending tanks across the border, but
    using some indigenous Russian language speakers, some troops
    but not in uniform necessarily, a new kind of incursion, which
    clearly is a possibility in the Baltics, which are NATO [North
    Atlantic Treaty Organization] allies.
        General Milley, what is your thinking? We need to have a
    new strategy to deal with this. This is probably what the next
    conflict might look like.
        General Milley. Well, it is clear that in the Russian case,
    they are using a new doctrine that was developed, I guess it
    was, 2005, 2006, 2007, 2008 time frame by General Gerasimov and
    others. They have various names for it, indirect war, hybrid
    war, et cetera.
        What they are trying to do, I think, is to advance their
    interests at levels below direct armed conflict with the United
    States.
        Senator King. How do we respond?
        General Milley. I think one thing is the indigenous peoples
    of that region, the frontline states, if you will. The Baltics
    is an example. They want to be able to defend themselves and we
    should take actions and authorities and appropriate resources
    and help them to defend themselves because they are NATO
    Article 5 members. That is I think fundamental.
        Secondly, I think a lot of training exercises. I think what
    is embedded in the ERI [European Reassurance Initiative]
    relative to the Army piece--this is very, very important. We
    need to send a very strong message to the Russians. I think we
    are doing that by prepositioning equipment, rotating heavy
    forces, in this case an armored brigade, and conducting well
    over 40 exercises in Europe to let our allies know we are there
    and to let our enemies know that we are there.
        Senator King. I was surprised to learn over there that one
    of the ways we are really getting hammered is by a very
    effective propaganda and disinformation campaign on behalf of
    the Russians.
        General Milley. Correct.
        Senator King. It drives me crazy that the country that
    invented Hollywood and Facebook is losing the information war.
    We have got to do that better. They are laying the groundwork
    for this kind of hybrid war by a disinformation and propaganda
    campaign that is creating the rich soil in which a hybrid war
    can take place.
        General Milley. They are using all means of national power.
    They are using information. They are using the cyber domain.
    They are using space capabilities, as well as ground special
    operations, naval, et cetera. They are acting very aggressively
    relative to their neighbors and they are using all of those
    techniques, many of which are not necessarily new. There are
    new systems to deliver those techniques.
        Senator King. But we put the USIA out of business in 1997.
    We have got to get back into the business of communications, it
    seems to me.
        General Milley. That is right. That is correct, Senator.
        Senator King. I am out of time, but I want to commend you
    for the comments you made about procurement. We have got to
    start talking about 80 percent solutions, not perfect weapons
    and commercial, off-the-shelf. I think quite often--I mean, the
    old saying is the best is the enemy of the good. We need more
    timely and more affordable development of systems that use
    commercial, already available, already developed, already R&D'd
    equipment to the maximum extent feasible. We cannot keep going
    for these very perfect weapon systems that everybody has a
    piece of. I think your role as a chief in this process is very
    important.
        Thank you very much, Mr. Chairman.
        General Milley. Thank you, Senator.
        Chairman McCain. Senator Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman.
        I want to thank both you gentlemen for a couple things. As
    the chairman mentioned, General Milley, your forthright
    testimony--it is very much appreciated on these what are
    clearly difficult issues.
        Secretary Murphy and General Milley, you know, the
    commitments you had made earlier about coming up, taking a look
    at some of the issues in Alaska, and kept you word on that,
    made an independent judgment after a very thorough review--I
    appreciate that as well.
        I also want to let you know that I think it is safe to say
    on this committee we are working--not that you are not doing a
    great job there, Secretary Murphy, but we are also recognizing
    the importance and quality of Mr. Fanning in terms of what he
    represents for the Army. I think a number of us are committed
    to working on that issue.
        General Milley, I want to go back to your statement in your
    testimony, which I think is a really big deal. It is kind of a
    warning bell. But when a Service Chief of the most important
    ground force for the most important military in the world talks
    about high military risk, that is a pretty remarkable
    statement. I certainly hope that Members of Congress will
    recognize what a remarkable statement it is.
        At what point does that become unacceptable risk? There was
    a subcommittee hearing recently with a number of the senior
    members of the military. Whose call is that? Is that our call
    as oversight and policymakers? Is that your call? Is that
    Secretary Carter's call, the chairman's, the President's? But,
    you know, we use ``high risk,'' but at what point is that
    unacceptable for where we are? Are we looking at another Task
    Force Smith situation that I know the Army and many other
    historians look at with a lot of trepidation.
        General Milley. Thanks, Senator.
        My job is to provide my best military estimate of what the
    risk is. It is our civilian leadership to determine whether
    that risk is acceptable to the Nation or not.
        Senator Sullivan. Just for the record, I believe when you
    are saying high military risk, which not many Service Chiefs in
    my recollection make that statement, it is a pretty important
    and significant statement. I certainly believe it is
    unacceptable risk for the country and, as you mentioned, for
    our troops.
        General Milley. Again, it is up to this body here, the
        United States Congress. It is up to the President. It is up
    to my civilian leadership to determine whether it is acceptable
    to the Nation. I think it is high military risk.
        Senator Sullivan. Well, thank you again for your forthright
    testimony on that. I know that is not an easy statement to
    make.
        I want to go back to Senator Manchin's question, which I
    thought was a very good one. He asked you, well, then at what
    level forces would we need to actually bring that risk down to
    something that is medium or low risk. He talked in terms of the
    overall number. I want to actually ask the question more
    specifically with regard to the Active force.
        Just so I am clear, the high risk assessment is that our
    number of 450,000 Active Duty soldiers--is that correct?
        General Milley. The high risk assessment is based on the
    total Army not just the Active. I based it off the 980,000
    because--and again, it is based on the contingencies of these
    higher end threats. The National Guard and the United States
    Army Reserve are going to play a fundamental role if in fact
    one of those contingencies were to happen. I based my risk on
    the total Army, not just the regular Army.
        Senator Sullivan. Have you looked at the 450,000 number and
    what will we need to get to a number on the Active force that
    would bring down that risk? I think again a number of us on
    this committee, bipartisan, believe the 450,000 number is too
    small.
        General Milley. Well, I did. You know, we have got a
    variety of studies that we did to determine the size of the
    force relative to the National Military Strategy and the
    Defense Planning Guidance. That answers the question of, you
    know, for what, what do you need the Army for. Well, you need
    it to do these tasks. We did that. We did the mission analysis.
    We did the associated force structure requirements. It is my
    estimate about a 1.2 million-man total Army would be required.
    Again, the money is not there.
        Senator Sullivan. Do you have that broken down?
        General Milley. We do. We have broken down with Active,
    Guard, and Reserve. The Active piece of that comes out at just
    a little more than 500,000 or so.
        But it is not just numbers, of course. I know you know
    this, but it is not just numbers. It is the readiness of that
    force. It is the technological capability of that force. It is
    how that force plays into the joint force. It is how we fight.
    It is the doctrine. It is the sum total of all of those things.
        We tend to laser-focus on size. I think that is critical,
    capacity, size. I think that is fundamental to the whole piece.
    But there are other factors to calculate beyond just the
    numbers of troops, and I think it is important to consider
    that.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Heinrich?
        Senator Heinrich, Secretary Murphy and General Milley, I
    think from the hearing today, it is clear that we all agree you
    are rightly prioritizing the readiness of our men and women in
    uniform. But it is also very clear that because of the budget
    box that we have put the Army in, that we are not modernizing
    at a level necessary to stay ahead of our adversaries the way
    that we have in the past.
        I am a big believer in directed energy. It is where I
    started my career. I have seen not only what is possible but
    what is capable today. I believe it should be a fundamental
    piece of the Department's third offset strategy.
        If we are trying to truly develop a future weapon system
    that changes the nature of warfare as we the in the past, just
    like, Secretary, you talked about with the advantages of night
    vision goggles, GPS, we have to invest in the technologies that
    will give us a qualitative technological advantage to ensure
    that we have an unfair fight with the enemy.
        Unfortunately, this committee was informed that none of the
    funding provided last year by Congress for the tech offset
    initiative is going towards directed energy despite a clear
    direction from Congress to do so. I will just give one example.
    The Army's high energy LMD [laser mobile demonstrator], has
    already proven capable of destroying 90 incoming mortar rounds
    and UAVs with its 10 kilowatt laser, and there is a lot more to
    come.
        I want to ask you why there is not more emphasis on
    directed energy and what is the Army's plan to deliver an
    operational directed energy system in an environment where I
    think it is always too easy to invest in more R&D and the next
    big, fancy thing that is perfect, like Senator King mentioned,
    when we could be developing and fielding programs today.
        Mr. Murphy. Senator, part of the acquisition--and if I
    could just make one mention about White Sands real quickly, if
    that is okay.
        Senator Heinrich, Absolutely. That was kind of my next
    question.
        Mr. Murphy. It is not directed energy because I just want
    to make sure. It is on the top of my head.
        You all have the largest solar field in America in the
    Army, and that gives us a savings of $2 million. But when you
    talk about modernization, you talk about directed energy, et
    cetera, and modernization programs, when we talk about science,
    technology, and modernization, you have to follow the money.
    When I left Congress six years ago, the budget of the Army was
    $243 billion. We have had a 39 percent cut. We are asking--
    including OCO [Overseas Contingency's Operations] then and now,
    what we are asking is the 125 base and 148, including OCO. But
    when you talk about modernization, we are asking for $25
    billion in this budget. It was $46 billion 6 years ago, fiscal
    year 2011. Again, you have to make these----
        Senator Heinrich, Mr. Secretary, I think we all recognize
    the stresses that you are under. I think more specifically what
    I am saying is given the money that was directed by this
    committee last year to look at third offset and to utilize
    those specific funds to look at the future of warfighting and
    how we maintain that qualitative edge, why not more emphasis on
    directed energy within that specifically?
        General Milley. Let me pile on here. Again, hard choices.
    We have chosen to take the R&D type monies and put them into
    some other areas. We are putting money into directed energy, by
    the way. But I think you are talking about in terms of scale
    and proportion that is less than some of the other areas.
        One of the reasons is because some of our sister services--
    we operate as a joint force--are doing a lot of work on
    directed energy. We do not want to duplicate their work. We
    want to let them pump their money into it and see what comes
    out of directed energy weapon systems. Then we will modify that
    research for application in ground warfare. We can leverage the
    work of some of our other services, Senator.
        Senator Heinrich, I want to thank both of you for your
    leadership in strengthening the Army's integrated air missile
    defense and certainly in announcing an air defense detachment
    at White Sands. We are all very excited about that. The
    increasing proliferation of missile systems by our adversaries
    means that we have to enhance our training and our expertise to
    better protect men and women deployed around the world, as well
    as our Homeland.
        Can you just talk a little bit about the sophisticated
    missile threats that are emerging, what the Army is facing
    today, and what steps are being taken to counter that threat?
        General Milley. The countries that I mentioned in my
    opening statement, specifically Russia, China, North Korea, and
    Iran, all have increasingly--very sophisticated now and
    increasingly more sophisticated tiered integrated air defense
    systems that are very complex, very lethal, and very robust, to
    the point where U.S. fixed wing air from the U.S. Air Force or
    Navy assets or rotary wing air from Army and Marine helicopters
    are at risk. These are terrestrial-based integrated air defense
    systems in combination with the adversaries' fixed wing air
    defense systems. It is a growing, increasingly growing
    capability. You have heard about, I believe, from the Air Force
    and Navy many times about the anti-access/area denial threats.
    Those are real and they are in place today, and they are
    growing in capability.
        Senator Heinrich, Thank you, Chairman.
        Chairman McCain. Senator Lee?
        Senator Lee. Thank you, Mr. Chairman.
        Thanks to both of you for being here. Thanks to your
    sacrifice and your commitment on behalf of our Nation's
    security.
        The National Commission on the Future of the Army
    recommended in its report earlier this year that the Army
    maintain four battalions of age 64 Apache helicopters in the
    Army National Guard under the aviation restructuring
    initiative. I would just like to know from either or both of
    you what has been the Army's assessment of this recommendation
    and how does the Army plan to react to it, respond to it?
        General Milley. Thanks, Senator.
        Under the direction of the Acting Secretary of the Army,
    what we have done is a very rigorous study of the 63
    recommendations. Right now, more or less about 50 or so we
    think are achievable at relatively little or no cost or we have
    already started doing them. There is one that we absolutely
    disagree with. We recommend no. Then there are about nine--I
    think it is nine others or 10 others--that do incur some or
    significant cost in terms of dollars, and we are analyzing
    that. The one you mentioned is one of those. We are analyzing
    that.
        What we promised the Secretary of Defense is we would give
    him a written report on our recommendations on which ones we
    think are good to do, and of those, how would we pay for them,
    how would we execute, implement those recommendations. The
    Congress commissioned the commissioners, and that report will
    come to you after, of course, we submit it to the Secretary of
    Defense. We expect to do that to the Secretary of Defense on
    the 15th of April. I guess whatever that is--next week. That
    report also will be not only signed by the Secretary and I it
    will be signed by Frank Grass. It will be signed by Tim Kadavy
    and it will be signed by Jeff Talley, the heads of our National
    Guard and Reserve. A lot of meetings with all the stakeholders
    involved so we can come to what we think is our consolidated
    position.
        Thanks for that question. It is a really important priority
    that we are doing right now, is working through that
    commission.
        Senator Lee. Well, thank you. I look forward to reviewing
    that when we get it hopefully sometime next week.
        Can you tell me--if the Army does decide to maintain Apache
    capability within the National Guard, can you tell me how the
    Army would determine where these units would be assigned and
    what metrics might be used to review the current Apache
    battalions within the National Guard?
        General Milley. It would be Tim Kadavy and Frank Grass
    would analyze needs of the Guard units, look at how they are
    involved in various war plans or operational plans, and where
    they stack in the deck of readiness and responsiveness to the
    speed at which that unit has to respond, and then what Active
    unit they might integrated into once mobilized. All those
    factors would be at play. Lieutenant General Kadavy, who is the
    head of the Guard Bureau--he would make that recommendation to
    the Secretary and I and Frank Grass, and then we would approve
    or disapprove or modify that recommendation.
        Senator Lee. Thank you.
        Following the Chattanooga attacks last year, my office
    received a lot of calls, emails, letters, and communications of
    every sort from constituents having connections to all of the
    branches of the military. These constituents were expressing
    concerns about force protection at domestic bases and at
    international bases, especially for their families at soft
    targets outside the bases.
        Tell me what has the Army done to improve force protection
    in the United States and at bases in Europe and the Middle East
    where they are sort of targets for attacks, and what other
    options are being considered, including the possibility of
    allowing soldiers to carry personal firearms on the base in
    order to protect themselves.
        General Milley. I will defer to the Secretary on the policy
    pieces of that, but I have been involved in that issue for
    quite some time.
        With respect to posts, camps, and stations that are small,
    isolated, they are outside/inside communities such as
    recruiting stations, such as Chattanooga, the assessments are
    done by the local commanders. The Secretary--actually it was
    previous Secretary McHugh authorized the commanders to go ahead
    and conduct their assessment and make a determination whether
    it was appropriate or not appropriate to arm them. He delegated
    the authority in the assessment to the commanders, which is
    appropriate. Commanders should make those decisions because one
    size will not fit all. It will depend on locality, risk, and so
    on.
        But some of the constraints on it: people have to be
    trained. It must be a government-owned weapon. You cannot carry
    privately owned weapons, et cetera. That is out there.
        Secondly is on the larger camps and installations, a Fort
    Hood or Fort Bragg or Fort Lewis, for example, in terms of
    carrying privately owned weapons on military bases, concealed
    privately owned weapons, that is not authorized. That is a DOD
    policy. I do not recommend that it be changed. We have adequate
    law enforcement on those bases to respond. If you take the Fort
    Hood incident number two, the one where I was the commander of
    3rd Corps, those police responded within 8 minutes, and that
    guy was dead. That is pretty quick. A lot of people died in the
    process of that, but that was a very fast evolving event, and I
    am not convinced from what I know that carrying privately owned
    weapons would have stopped that individual. I have been around
    guns all my life. I know how to use them. Arming our people on
    our military bases and allowing them to carry concealed
    privately owned weapons--I do not recommend that as a course of
    action.
        Senator Lee. Thank you, General.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Donnelly?
        Senator Donnelly. Thank you, Mr. Chairman.
        Secretary Murphy, General Milley, thanks for your service
    and for your leadership.
        I was in Iraq last week to meet with General McFarland, to
    visit Al Assad out in Anbar province where we are training
    Iraqi security forces. I met with a number of our soldiers
    deployed in the fight. As you well know, they are a tremendous
    credit to our country and to the Army.
        I also want to note that it is my understanding that the
    Army is the first service to meet the annual mental health
    assessment requirement set out by the Jacob Sexton Act across
    every component, and we thank you for leading the way in this
    effort.
        Recently there is a report issued by Indiana University.
    Researchers at IU [Indiana University] have been able to use
    certain blood biomarkers, in combination with at-base
    questionnaires, to predict suicidal ideation with 82 percent
    accuracy and suicide-related hospitalization with 78 percent
    accuracy. If you would, I would like you, Mr. Secretary, to
    take a look at this report and let me know how we can be
    applying research like this to better identify soldiers who
    might be at risk. Can you take the time to do that, sir?
        Mr. Murphy. Yes, Senator. You have my commitment.
        Senator Donnelly. Thank you very much.
        In testimony today, you stated that the Army only has about
    1,800 of the 2,100 behavioral health providers necessary for
    adequate care. Two things. I think one is better education
    incentives can enable us to fund more care providers, will help
    boost recruitment and retention. The other is utilizing non-
    physician provider types, nurse practitioners, physician
    assistants, licensed mental health counselors to help fill the
    gap.
        Do you support these tools, and do you have any other plans
    to address that gap that you have between 1,800 and 2,100?
        Mr. Murphy. I do, Senator. We appreciate your leadership on
    this. There is no doubt we have to get after it.
        I would say--I did not mention it--but the embedded
    behavioral health teams--they have been a great success in
    that. It is members of their own team in a brigade area where
    they are out there. There are 60 teams right now. But that
    really has been a game-changer, Senator, when you talk about
    getting rid of the stigma of mental health because it is a
    readiness issue.
        But in regards to when you look at other things--you know,
    when I was in Fort Hood, they could not hire certain folks
    because they did not have the certain licensing. We are looking
    at that, and there is potential that if they have their masters
    degree but not a license that maybe they can be supplemented to
    break that because if they do not have a license, what I found,
    those same people go to TRICARE and we farm out to TRICARE and
    TRICARE can have those people, but we cannot hire those people.
        Again, those things, you know, when I travel and I ask
    those tough questions to make sure that we could get these
    numbers up because, as you know, last year was 301 suicides. I
    write condolence notes every week to fallen soldiers, including
    the ones that are committed, and to their families and to their
    children. My first week in this job, three months, you know, we
    had lost 10 folks in my first week. It is something that weighs
    on all of us as leaders, but I think the Army is really leading
    the way and getting after it. But there is much more we can do,
    and I look forward to looking at that Indiana University report
    and looking at some of the criteria and certifications.
        Senator Donnelly. This is to both of you, whoever wants to
    answer.
        In my home State of Indiana, Crane Army Ammo--and this is
    in regards to demil technology. They partnered with researchers
    at Purdue to try to improve the technology that is used for
    demil. As they have done this kind of thing, I am interested to
    know if you have ideas on how we can boost the efficiency of
    our demil operations. For example, we are spending a
    significant sum transporting munitions from storage to demil
    locations. Can we take a look at maximizing proximity of demil
    operations to demil asset storage locations? I know that is a
    little bit technical, but are those the kind of things that we
    can be doing to help look at saving money as we move forward?
        General Milley. Right now, Senator, we mostly store, as you
    know, which comes in at--I forget what the exact numbers are,
    but I think it is something like $2 million versus $20 million
    to demil.
        From a technical standpoint, I will have to get back with
    the team and get some detail and get back to you and I will
    provide that to the Secretary so he can get back to you.
        Senator Donnelly. Thank you.
        I am running out of time. So, General, I just wanted to ask
    you, while I was in Iraq, it seems we are moving ISIS out of
    town after town at the present time. Things are moving in the
    right direction. The big action that is going to be taking
    place, as we look ahead, is Mosul. I was wondering in your
    conversations with General McFarland, with other people in the
    theater there, how you think that is shaping up as we look
    forward.
        General Milley. I took this job in August. I have served
    multiple tours over there. Went over in September, did an
    assessment. In September, I thought we were losing. I was
    absolutely convinced of it. The enemy had strategic momentum
    September of last year.
        Went back in December, and in between I have read the
    reports and have been in frequent contact and meetings and so
    on and so forth with the commanders.
        You are correct. Things are moving in the right direction.
    There is progress, but progress is not yet winning. No one
    should think that this thing is over. It is not. There is a lot
    of work to be done. It is true the Iraqis have taken Ramadi,
    and they are currently engaged in the battle of Hit and
    conditions are being set for the assault on Mosul. There are
    also significant efforts being done up in the northern areas,
    and the lines of communication have been cut between Mosul and
    Raqqa. Our basic strategy shifted in October, and we are seeing
    the results of that today with significant losses in enemy
    personnel, key leaders, increased pressure on their finances
    and loss of territory, and they are under a lot of pressure. We
    are doing that intentionally, multiple dilemmas, multiple
    problems, all simultaneous, and we are hitting them in a lot of
    ways.
        All that is to the good, but that is not exactly winning
    yet. The caliphate has to be destroyed. ISIS has to be
    destroyed, and they have also chosen to displace some of their
    forces into Libya and elsewhere and they have counterattacked
    into Europe. This is a tough fight and it is by no means over
    yet, and no one should be dancing in the end zone yet. There is
    a long way to go here.
        Senator Donnelly. I met with a number of the Sunni tribal
    leaders, and one of the things they said was if I saw you, to
    thank you for the cooperation and the assistance of the U.S.
    Army. Thank you, sir.
        General Milley. Thank you, Senator.
        Senator Donnelly. Thank you, Mr. Chairman.
        Chairman McCain. Senator Tillis?
        Senator Tillis. Thank you, Mr. Chair.
        General Milley, my colleague here, Senator Sullivan, and I
    were talking about how much we appreciate your candor and
    giving us the information we need to be instructed in the job
    that we have to do.
        I want to go back to acquisition reform, either for you,
    Mr. Secretary, or General Milley. You know, we made several
    recommendations in the fiscal year 2016 NDAA [National Defense
    Authorization Act] that was focused on improving cost, schedule
    execution, and performance.
        One question I would have is did you agree with or do you
    think that some of the things in the NDAA have actually been
    helpful, if some have and some have not, and then give me some
    specific examples of how it is changing your execution. General
    Milley, we will start with you.
        General Milley. Thus far, Senator, I think it has been
    helpful. Number one, it changed the tone. That is important. It
    changes people's views and attitudes, and I think that is not
    unimportant to clearly and unambiguously insert and pin the
    rose on someone's chest and hold them accountable, that being
    the Chief of Staff of the respective service. That also alerts
    a lot of people as to there are some new rules in town sort of
    thing.
        Secondly, I think for the Army, we have instituted a new
    process, really a revitalized process of the Army Requirements
    Oversight Council. It is unambiguous within the Army itself
    that the Vice Chief of the Army Dan Allyn or myself will be
    personally approving and are approving the requirements for
    every single program that the United States Army puts money
    against.
        In addition to that, we have made that a commander-centric
    program because the United States military operates off
    commanders. It is not staff-centric. It is commander-centric,
    and commanders will be held accountable. It is the commanders
    that are going to generate requirements and commanders that
    approve requirements.
        Then I think one key thing I think that was in the
    legislation that is important is the role of the Chief of Staff
    in milestone B authorities. I think that was really good and we
    appreciate that.
        We have made some other recommendations in writing. I would
    ask you to take those into consideration for enactment.
        Thank you.
        Mr. Murphy. Senator, I would say that there is no doubt
    that we are getting after it with acquisition reform, which is
    critically important. It is making our system more leaner and
    more responsive and decreasing the amount of time it takes to
    put these weapons or these systems back into the warfighters'
    hands. I think the frequency from when you start from one
    milestone to the next and the next, the next has improved about
    33 percent, but it needs to improve much more greatly than
    that.
        Senator Tillis. General Milley, some of the key acquisition
    programs, the joint light tactical vehicle, the Stryker
    lethality upgrades, and the distributed common ground system--
    do you consider them to be some of the key programs that we
    have to focus on for modernization, and can you explain why?
        General Milley. Yes, they are. The JLTV [Joint Light
    Tactical Vehicle], the joint light tactical vehicle, mobility
    piece is very important because once light forces are on the
    ground and they have been moved strategically by air or sea,
    for example, what we want to make sure is that they have
    increased mobility to move around the tactical battlefield.
    That is a key system for that.
        As you know, the HUMVEE [High Mobility Multipurpose Wheeled
    Vehicle] fleet has been around for a while. Our wheeled ground
    mobility is going to be split about 50/50, about 50,000
    HUMVEEs, about 50,000 JLTVs over time. That is an important
    system.
        The Stryker lethality. When H.R. McMaster--and I am sorry
    Senator Wicker is not here, but when H.R. McMaster talked about
    being outgunned and outranged, in direct fire weapons, for
    example, the Stryker just cannot match a tank no matter which
    way you cut it. It is a good vehicle. It is a great vehicle,
    but it is not going to go toe to toe with any tank. That is
    what General Breedlove has. He has a Stryker regiment over
    there and a paratroop regiment. He has got light infantry, foot
    infantry, and Strykers and very little else over there. That is
    why we are rotating in an armored brigade. Stryker lethality is
    going to up-gun that particular weapon systems and that is
    critical and it is important to deterrence.
        On the DCGS, I am taking a hard look at DCGS, and I am
    keenly aware of all the various controversies. My rough
    assessment is that DCGS is performing reasonably well--the
    increment two is going to be online here in a couple years--
    performing reasonably well at kind echelons above brigade. But
    when we get into the tactical level, we have to move it around
    and jump it from place to place, an ease of use for young
    soldiers, that there is a very high density of training
    requirement, et cetera.
        There may be some other options out there. I am not sure,
    but taking a hard look at that whole piece on the DCGS. I have
    got personal experience with it. A very, very good system. At
    the strategic level, operational level, your ability to pull
    down national intel assets, et cetera. But when it gets down to
    the tactical level, more difficult to work with, not quite as
    fast, and difficult to jump from location to location on a
    mobile battlefield. We are taking a look at that. But those are
    important systems, yes.
        Senator Tillis. Thank you.
        Actually just in a final comment, I share Senator
    Sullivan's concerns about--well, first, we appreciate your
    being clear on what the risk is and what we need to be mindful
    of. What I think we also need to do--and this comes from a
    CODEL [Congressional Delegation] that I was on in the Middle
    East. On the way back, we met with a group of marines who in an
    almost matter-of-fact way said that this capability that we
    have to cover threats in the region may be cut in half next
    year because of other competing priorities. In a matter-of-fact
    way like they had to do it because of the pressures that they
    are having on budget and limited resources.
        I think that we need to understand this particular case. I
    am going to follow up in a private setting. We need to do a
    better job--I told them give us that ghost of Christmas future.
    Give us a real meaningful idea of what your risk is going to
    look like if we are not successful. I know the chairman hopes
    to be successful with ending sequestration, but we also need to
    recognize that it is a high threat that we may have to deal
    with. If we do, what does that look like? If we are already
    concerned with where we are, where do we go from here?
        With the chair's indulgence, Secretary, you can----
        Mr. Murphy. If I could just real quick, Senator. I would
    say we know what the numbers are going to be if sequestration,
    which is grave--we are already testifying today that this is
    minimally adequate right now, but if you would go back to
    sequestration, if the Congress of the United States does this,
    we are down on the Active Duty side at 420,000, and that is not
    acceptable.
        Chairman McCain. Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        General Milley, as the rebalance to the Asia-Pacific takes
    shape, while we do not stop training for the types of
    environments that we face in Iraq and Afghanistan, we also look
    to enhance our soldiers, sailors, airmen, and marines to
    perform in the Asia-Pacific. One of these environments that
    must be--that we have to be able to handle is the jungle
    environment. Our last official schools to perform jungle
    training were closed decades ago, there is an opportunity for
    our troops and our allies to learn how to perform in this
    environment, and this would be at the jungle operations
    training course at Schofield Barracks in Hawaii.
        Can you talk a bit about the importance of this kind of
    training for our soldiers' readiness, as well as the ability to
    train members of other branches of our armed services as well
    as those of our allies?
        General Milley. Thank you, Senator.
        Environmental training is very important. As I mentioned in
    my opening statement, the United States Army has to be prepared
    to deploy anywhere on earth. There are many, many places that
    have jungles or heavily forested areas.
        We did close our jungle school years ago, and General
    Flynn, commander of the 25th Division, and General Fuller, the
    previous commander, set up the jungle school out in Hawaii out
    in the Kiukas. It is a good school. It is a great school in
    fact, but it is mostly locally used right now. But I think we
    can expand the usage of that to other forces so they can get
    some environmental training.
        We do winter warfare training in Alaska. We do urbanized
    training at the training centers, and we do rural training at
    most installations, and we do jungle training in Hawaii. It is
    a critical thing. Environmental training is important to keep
    soldiers up to speed so we can operate in any particular
    environment.
        Senator Hirono. Is there any effort or any move to expand
    or strengthen the jungle training school's facilities?
        General Milley. He is operating the jungle school right now
    out of his own budget. I am taking a look at it. I did ask
    them--it is funny you asked because I asked him about, I guess
    it was, a month or two ago. I said send me the full POI
    [Program of Instruction]. I want to see the program of
    instruction. I want to see the program of instruction that you
    are using out there because I am considering anointing it as an
    official Army school as opposed to just a local 25th Division
    school. There are some things that come with that for soldiers,
    and you get awarded a little certificate and so on and so
    forth. It is all good.
        But baseline premise of what you are saying, though, is
    absolutely accurate. It is environmental training to be able to
    operate in any part of the world, and we support that. I am
    looking actually at expanding that.
        Senator Hirono. Thank you.
        Also, General, turning to the utilization of our National
    Guard, they are an important aspect of our total force. I am
    pleased to see your confidence in their abilities and support
    for the associate units pilot program happening this summer, of
    which the 3rd and 2nd Brigades of the 25th Infantry Division at
    Schofield Barracks in Hawaii will be a part.
        This pilot program will match one Reserve unit with an
    Active Duty counterpart unit which could lead to more formal
    training, coordination, improved readiness, guidance, and
    closer coordination.
        Can you comment on this pilot program and discuss the
    attributes of this kind of coordination and work with the
    National Guard?
        General Milley. Thanks, Senator.
        The purpose is to increase readiness and increase the
    cohesion and the bonding of the total Army. Just saying ``total
    Army,'' just saying we are all one team, et cetera is only so
    many words unless we walk the walk. We used to have a round out
    program years ago. It is sort of a revised version of that.
        The benefits of it are that the Guard is exposed to the
    regular Army. Equally important is the regular Army is exposed
    to the Guard. We break down whatever barriers there may be,
    internal Army cultural barriers. Then secondly is that each
    leverages the other's skills to improve the readiness of the
    force. Those are the fundamental big benefits of doing this.
        But importantly from a national strategic standpoint, if
    that regular Army unit goes and if we succeed in the pilot
    program and we get it all wired in the next couple years, if
    there is a contingency, then those Guard units--it would be my
    intent anyway that those Guard units would be alerted,
    marshaled, and mobilized and they would deploy with those
    Active units. We would in fact have one Army not only in
    training but in deployment.
        Senator Hirono. I commend you for those efforts because we
    can talk about one Army and all of that, but you actually have
    to provide those opportunities for them to interact and to work
    together in the kind of cohesive way that you are talking
    about.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ernst?
        Senator Ernst. Thank you, Mr. Chair.
        Secretary Murphy and General Milley, I want to thank you
    for being a very active and cohesive team, and you are really
    making strides. I will follow up with what Senator Hirono said.
    I appreciate your efforts with the National Guard, of course,
    and I think that we have a great relationship there, one team,
    one fight. Thank you very much for that.
        General Milley, I am going to follow up on some concerns
    that Senator Tillis gave about the vehicle program for our
    infantry fighters and the rotation that you mentioned for the
    armored BCTs through Europe.
        I am concerned about rotating those units through Europe
    instead of permanently standing one up in that region. I am
    just not certain that that will show the commitment that we
    need to have for our allies in that region, as well as
    projecting that strength to Russia as well. I am just very
    concerned about that.
        As you know, the National Commission on the Future of the
    Army included forward-stationing an armored BCT in Europe. That
    was one of the recommendations, and I agree with that
    recommendation.
        General Milley, do you believe that rotating an armored
    brigade in Europe is the optimum course of action to reassure
    our allies and defeat Russian aggression rather than having one
    permanently positioned?
        General Milley. There are advantages and disadvantages to
    both, Senator. I personally actually favor rotation, and here
    is why.
        When we permanently station--first of all, the
    infrastructure has been torn down over the years. But it would
    be pretty costly to rebuild some of that stuff for families and
    PXs and commissaries and schools and all that stuff to
    permanently station a forward force.
        But also important is that when a unit rotates, they have a
    sole focus, which is to train and be prepared to close with and
    destroy the enemy. There are no families. Your family is not
    with you. You are focused. You are mission-focused. I think
    that in terms of readiness and your ability to deter, assure,
    and if necessary defeat, I actually think rotation is a better
    way of doing it.
        Then in terms of strategic effect to deter, the idea of
    permanent presence is that the armored brigade would be
    permanent. The plan is to go heel to toe. The effect of
    permanency is being achieved without the costs of permanency.
    We are going to deploy an armored brigade for nine months, and
    right on their heel comes the next armored brigade and then the
    next armored brigade and then the next armored brigade. There
    is never a gap between that armored brigade in this rotation
    cycle that we have set up.
        The effect of a permanent armored brigade for General
    Breedlove will be achieved, and the disadvantages of forward-
    stationing, costs, et cetera are not going to be incurred. The
    advantages of rotation, battle focus, mission focus--that does
    get achieved. I personally think the advantages of rotation
    outweigh the disadvantages.
        Senator Ernst. That is a great explanation and I appreciate
    that feedback.
        I am going to go back to something we have discussed many
    times over and that is the modular handgun program. I would
    love to have you visit a little bit more about this. It really
    has turned into quite a boondoggle. Just to work on this issue
    has turned into something more than it really should be. I do
    appreciate your high level of motivation and attention to the
    issue.
        We just want to make sure that we are getting the program
    right and that we are streamlining this so that we can get a
    better pistol in the hands of our soldiers. If that is what is
    needed, that is what we need to do.
        Can you give me an update on your efforts and where we
    stand in this process right now?
        General Milley. I think you got a little bit of an update
    or some members of the committee got a little update the other
    day from General Murray, General Anderson, General McMaster, et
    cetera, and they described the various levels of pain that
    folks have been going through.
        But it is all good and we are going to deliver. Then we are
    going to make it right for the soldiers and the taxpayer and
    make sure that we get a new handgun. I do believe there is a
    requirement for a new handgun. I think the 9 millimeter Beretta
    has run its course, and it is more expensive to replace it or
    to buy new ones or to repair it than it is actually to purchase
    a new weapon.
        I do think the system has been very frustrating in the
    sense of lots of paperwork, lots of bureaucracy, ridiculous
    amounts of time, 2 years of testing, $17 million to do a test
    and so on and so forth.
        We are ripping all that apart. We are just ripping all that
    apart, and we are going to make it better. In short order here,
    I think pretty soon, measured in weeks not years, we will have
    some decisions. We will be moving forward, and we will be able
    to provide the joint force, all the services--we are the lead
    for the handgun. We will be able to provide the joint force
    with an acceptable quality handgun that will work and it will
    do what we need it to do in combat.
        Senator Ernst. Thank you. Thank you both very much for your
    service and attention. I appreciate your candor, General
    Milley. Thank you.
        Thank you, Mr. Chair.
        Chairman McCain. Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        I want to thank Senator Kaine for yielding to me.
        Just a couple of questions pursuing the line of inquiry
    that Senator Donnelly began on mental health, the 1,700 of
    2,000, roughly, that are needed in terms of psychiatric
    personnel. Is there a plan to fill those positions, and what is
    being done to do so?
        Mr. Murphy. Senator, we are getting after it on this issue,
    and we need to as an Army because it is all about our people
    and our soldiers. It is our soldiers, civilians, and their
    families as well. When I gave you the number, as I did earlier,
    that there were 301 suicides, that is the total force. That is
    our whole family.
        We are looking at things like levels of certification. Do
    you really need a masters degree? Could you have different
    things that otherwise--because we got to fill the ranks. We are
    not just competing out there in the market within the Army. It
    is other sources of government. It is private industry that are
    making these investments as well and trying to get these
    recruiters. We are trying to help make this push that we need
    these young Americans to go out there, get their degrees, get
    their certifications, get this profession so we could use them
    and bring them within our ranks.
        But as I said earlier, there is no doubt that a game-
    changer for the Army has been our embedded behavioral health
    teams. We have 60 of these teams where it is breaking down the
    stigma that these professional mental health providers are in
    the brigade areas.
        Senator Blumenthal. I understand that and I commend you on
    it. As you know, the VA [Veterans Affairs] has a very active
    recruitment effort using scholarship assistance and loan
    repayment incentives. I wonder whether the Army is doing the
    same.
        Mr. Murphy. We are looking at everything, Senator, and we
    will continue to work with you and your office to do just that.
        Senator Blumenthal. I think what is necessary is a plan
    with specifics, and I understand that great progress has been
    made. But I think you would agree that more has to be done. I
    would welcome your working with us and thank you very much.
        General, have you received complaints about the EOTech
    sight? It was a subject of a recent report in the ``Washington
    Post.'' I am wondering whether any of the men and women under
    your command have raised questions or concerns about it.
        General Milley. Senator, I am going to have to dig into
    that. Obviously, there is something out there or you would not
    be asking. So, no, personally I have not. That is not ringing a
    bell, but I will dig into that.
        Senator Blumenthal. I would appreciate your doing that and
    getting back to us.
        General Milley. You called that complaints at the Equal
    Opportunity----
        Senator Blumenthal. No. It is a sight used on rifles.
        General Milley. Oh, rifle sights.
        Senator Blumenthal. Made by a company named EOTech.
        General Milley. No, I am not aware of that. I thought you
    were talking about something else. I am not aware of that.
        Senator Blumenthal. Sorry to confuse you.
        General Milley. Yes, weapon sights. Now you are talking
    guns, so I am good. No, I have not, but I will look into it and
    get back to you. I will find out about the EOTech sight. I got
    it.
        Senator Blumenthal. I would appreciate it. You can look for
    reference to the ``Washington Post'' of I believe this week.
    There was a story on the front page about the discrepancies and
    issues that have arisen with respect to this.
        General Milley. I will do that. I just made a note.
        Senator Blumenthal. Affecting primarily the Army and the
    Marine Corps.
        General Milley. Yes, sir. Got it. We will do that.
        Senator Blumenthal. Thank you, Mr. Chairman.
        Chairman McCain. I take it, Secretary Murphy, that you are
    taking great effort to implement the Clay Hunt Suicide
    Prevention Act.
        Mr. Murphy. No doubt. Yes, Senator.
        Chairman McCain. I hope that is an outline for--I hope that
    members of this committee are aware that we passed unanimously
    the Suicide Prevention Act, which calls for most of the things
    that we are concerned about. It is not perfect, but I am sure
    that many of those provisions agreed to unanimously are being
    implemented.
        Mr. Murphy. That is correct, Chairman, and we are getting
    after it. We have made great strides in personnel over doubling
    these teams.
        Chairman McCain. Maybe you could tell some of the members
    of the committee, if questioned, when you get a chance to talk
    about giving them a report on the progress that has been made.
    Maybe you could just send a letter to all of us so we can know
    what measures are being taken. Thank you.
        Senator Kaine?
        Senator Blumenthal. That would be very helpful. Thank you,
    Mr. Chairman.
        Senator Kaine. Thank you, Mr. Chairman.
        Thank you to the witnesses.
        I want to also associate myself with the comments of the
    chair with respect to the effects of sequestration and the need
    for us to find a better solution.
        A compliment and a question. The compliment. Earlier this
    week, the Army made a decision. There had been an earlier
    temporary decision, but earlier this week--I actually think it
    might have been Thursday or Friday of last--a decision to allow
    an Army captain, Paul Singh, who is a Sikh, to wear both the
    beard and the turban that is a foundational part of his
    religion as he serves. He is a combat veteran with an
    Afghanistan tour. This is something that Senator Gillibrand and
    I have been writing letters to DOD about for a couple of years.
    I wanted to just commend you on that.
        I am very passionate about this issue. Maybe just being
    Virginia biased, the statute of religious freedom that Thomas
    Jefferson authored that became the basis for the First
    Amendment that basically says in our country, you can worship
    or not and you will not be preferred or punished for how you
    worship and you can freely exercise your faith was one of only
    two ideas that was unique to the American Constitution. The
    rest of it was a great borrowing job, but freedom of religious
    exercise and interestingly enough that war should be started by
    Congress, not the President were the only two things that were
    unique to our Constitution. It is very foundational.
        I know that there are issues of how you balance people's
    religious practices with you can wear a helmet or a gas mask,
    and you want people to be who they are without proselytizing.
    Those are all challenging questions. But particularly in the
    world we are living in today and in the war of today, sadly in
    the future, this is becoming more and more important.
        All over the world, we see violence and even war that is
    driven by sectarian tensions whether it is Hindus and Muslims
    in Myanmar, whether it is ISIL's [Islamic State of Iraq and the
    Levant] atrocities against religious minorities like Yazidis or
    Christians or other groups they do not agree with, whether it
    is--I said Buddhists and Muslims in Myanmar--Hindus and Muslims
    in areas of India and elsewhere.
        You also see, even when there is not war, rifts within
    armed services. You know, one of the reasons that the Iraq
    military many cited as having been very ineffective against the
    initial wave of attacks by ISIL was because of deep sectarian
    tensions between Sunnis and Shias within the Iraqi military
    that renders it less effective.
        One of the virtues that the United States plays generally
    and in our military is demonstrating that people can live and
    work and go to school together with different religious faiths
    and we can make it work.
        I was on a CODEL that Senator Gillibrand led in early
    January in Israel and Turkey. It was interesting. In both
    nations, leaders said to us, wow, what is with the anti-Muslim
    rhetoric that we are seeing in your political space right now.
    As we dug into it a little bit, what they sort of disclosed is,
    hey, we live in a neighborhood of the world that has a lot of
    sectarian tensions, but we do not always want to be that way.
    But for us to get better, we have to have an example. The U.S.
    has been our example of a place where people of different
    faiths could freely be who they are, but we could make it work
    together.
        The decision to allow one Sikh for the first time in
    history of the Army to wear a turban and beard might seem like
    a small thing, but it is actually about a deeply critical
    American value that sadly is really wanting and needed in the
    world today.
        I certainly would encourage the Army and the DOD generally
    to look at this policy. The defense minister of one of our
    greatest allies, Canada, is a vet who has been deployed
    multiple times in Afghanistan. He is a Sikh who has been able
    to wear his beard and turban in the service. We have got a lot
    of Sikhs who are in and a lot of Sikhs who would want to be in
    the military. I would hope that we would recognize that as not
    only true to our values but also as something where we could
    hold up an example in the world in a way that is really needed
    right now.
        The question that I have is about the European Reassurance
    Initiative, and it is a little bit about sequester politics and
    the readiness issues. The tug of war is in putting the budget
    together.
        We have got all these readiness gaps, and at the same time,
    the proposal is to quadruple the investment in the European
    Reassurance Initiative and to take it up to $3.4 billion. I
    just would be curious as you talk about hard choices, how do
    you trade off the need to do this dramatic increase in the ERI
    with the fact that we are still short in some of the readiness
    investments that we need to make.
        General Milley. Senator, the ERI is really important, and
    it trades off what tradeoffs DOD made to make that happen in
    other accounts. You know, those are priorities set by the
    Secretary of Defense.
        But I can tell you that the ERI is really important because
    the deterrence of Russia from further aggression is a critical
    national security priority. They have been aggressive since
    2008. That behavior needs to change. This is only one of many
    other initiatives that are being done and actions that are
    being done by the U.S. Government across all domains and by a
    whole of government approach. But this is important.
        Deterrence happens because an aggressor perceives that the
    cost of further aggression is going to exceed the benefit of
    aggression. By putting a division's worth of equipment and
    rotating an armored brigade there, it will be clear, we think,
    that cost of further aggression, especially into NATO allies
    like the Baltics or Poland, will come with a very high cost
    relative to the United States of America.
        Senator Kaine. Thank you very much.
        Thanks, Mr. Chair.
        Senator Reed. On behalf of the chairman, Senator McCaskill
    please.
        Senator McCaskill. Thank you.
        Secretary Murphy, as you are aware, the Army has been
    investigating concerns regarding the Guard recruiting and
    assistance program for years. In 2012, a preliminary report of
    the Assistant Secretary of the Army for Financial Management
    found that all expenditures made through the RAP [recruiting
    assistance program] program, a total of almost $400 million,
    violated ADA [the Anti-Deficiency Act].
        At the time, the Army anticipated that a final report on
    the matter would be released by October 2014.
        In late December, trying to be patient, I penned a letter
    to your predecessor, Secretary McHugh, and asked for a status
    update on this report.
        I need a date, Secretary Murphy. I cannot understand. There
    is no way this report is not finished. I cannot understand what
    this stall is about. All it does is just incredibly irritate me
    that we are this non-responsive in how we fix problems if we
    are not willing to be forthcoming when we find problems,
    dealing with the way that our military has spent almost $400
    million.
        Mr. Murphy. Senator, I have been straight with you since
    the beginning that I will always be honest and straightforward
    with you. I will get you an answer within a week on where it
    is. I have been here for 12 weeks as Acting Secretary of the
    Army. I have said what is going with that, and it is said it is
    coming, it is coming. I will get you an exact date.
        Senator McCaskill. I do not want you to camp out. But it is
    coming, it is coming. It has been since October of 2014 that it
    was supposed to be here. I need that report or I need a date
    when that report is going to be produced.
        Mr. Murphy. You will have that date within a week.
        Senator McCaskill. Thank you.
        Mr. Murphy. Just for the record, I have also taken
    responsibility on the enterprise marketing and that program.
    Mistakes like that will never happen again.
        Senator McCaskill. Thank you.
        Mr. Murphy. You are welcome.
        Senator McCaskill. General Milley, I had the pleasure of a
    briefing from Colonel Eichoff, the Command for U.S. Air Defense
    in Europe, last week. I believe she is the first woman to hold
    that position. I was very impressed and proud and just wanted
    to convey that.
        I was taken aback when she talked about some of the
    European Reassurance components that are in the budget, that
    they are all in OCO. You know, there are not very many members
    left here, but this is like one of these embarrassing things
    that we are doing. Is there any rational reason why our
    strength of equipment and troops in Europe would not belong in
    the regular budget of the military? Have we gone past the
    Rubicon? Is there now everything we can stick in OCO, we stick
    in OCO because of the unwillingness of Congress to step up to
    its responsibility as it relates to sequestration?
        General Milley. Senator, I will not comment. I do not even
    know the techniques of whether it is right or wrong or
    indifferent. What I care about as a member of the Joint Chiefs
    of Staff, as the Chief of Staff of the United States Army and
    provide best military advice is to deter Russia from further
    aggression. Where that money comes from, whether it is OCO or
    base budget, is frankly somewhat less concerning to me.
        What is important to me is that we get a division's worth
    of equipment and other capabilities over there to help Colonel
    Eichoff, General Breedlove, General Hodges, to deter aggression
    from Russia.
        Senator McCaskill. You and I could not agree more on that.
    I think most Members of Congress would agree on that. I just
    think this artifice we are using, this rouse that we are
    performing on the American public that somehow if we put it in
    OCO, it does not count as us spending money is damaging long
    term for the military. We ought to step up. You all step up to
    our responsibility every day. We ought to step up to our
    responsibility and fund our military in a way that is
    forthright, transparent. That sends an important message to the
    world. Us playing this game that pretending that because it is
    in this fund, we do not have to pay for it is I think beneath
    the honor and respect that we should show the military. I just
    wanted to get that on the record.
        General Milley. I would second your motion, Senator.
        Senator McCaskill. First, I want to thank both of you
    before I ask this question about your trips to Fort Leonard
    Wood. I know, General Milley, you went, and I know, Secretary
    Murphy, you were just recently there. I am sorry I could not be
    there at the same time. I do not need to convince either of you
    of the importance of that institution as it relates to the
    generating force, say nothing of the other capabilities,
    engineering capabilities and military police capabilities and
    the other joint operations that are so important at Fort
    Leonard Wood.
        But I know as we try to get women into our military in all
    roles, women in the generating force are very important because
    they are in fact very visible to women that might be
    considering a career in the armed services.
        I wanted to ask is there any plan in place to get the
    proper leadership at these training facilities as it relates to
    gender as we try to encourage more women to say please take me,
    I am willing to give my life for my country?
        General Milley. Yes. We try to encourage that throughout
    the force. As you know, we have got--the infantry and armor
    have been recently opened up. One principle of that program
    that we are going to implement, one of the first principles is
    to put leaders, female infantry leaders in those units first.
        Not specific to Leonard Wood, but we are going to graduate
    now coming up in the May-June time frame from both West Point
    and ROTC--I think it is 44 women have volunteered to be
    infantry lieutenants. If they meet all the appropriate
    standards, then they will go through the various infantry
    schools, BOLIC [basic officer leadership course], at Fort
    Benning. Then they will graduate in the fall. Then they will do
    their follow-on training that is normal for infantry such as
    Ranger school. If they continue to meet all those standards,
    then they will be assigned to infantry units sometime about
    this time next year. January, February, March, April time
    frame, you will start seeing infantry female, infantry in
    armor, officers, noncommissioned officers and junior soldiers
    in those combat units.
        The idea of starting with leaders is a fundamental first
    principle, and there is no doubt in my mind that we want to
    take advantage of 50 percent of the world's population or the
    American population and maximize their talent to increase our
    readiness.
        Senator McCaskill. Thank you so much. Thank you both for
    your service and the hard work you are doing. Very appreciated.
        Mr. Murphy. Senator, can I just mention real quick? When I
    was at the Sapper school graduation, we had three females of
    the 33 that graduated. Secondly, Army Lieutenant Colonel Lynn
    Ray, first battalion commander, combat engineer commander. That
    is--again, as the Chief mentioned, we have instructed and
    initiated a leaders first program at these units where you have
    two women per company at the leadership level before we send
    the lower ranks.
        Senator McCaskill. You all know how tough Sapper is, and
    the fact that we have been putting women through Sapper for a
    number of years--we can learn a lot about how to prepare women
    for some of the toughest jobs in the military by what they have
    done with Sapper. Thank you for that, Secretary Murphy.
        Senator Reed. On behalf of the chairman, let me recognize
    Senator Gillibrand.
        Senator Gillibrand. Thank you.
        I am going to continue with the line of questioning of
    Senator McCaskill.
        Before he retired, then-SOUTHCOM Commander General John
    Kelly raised concerns that lowering standards was the only way
    to ensure that women became infantry SEALs and Rangers in real
    numbers. That position has been vehemently contested by you and
    your fellow Service Chiefs, as well as the commander of SOCOM
    until recently General Votel. Yet, General Kelly's comments
    represent prevalent views in combat units.
        Do you plan to allow the lowering of standards and how do
    you both plan to deal with these views from the leadership in
    junior personnel levels?
        General Milley. Absolutely not. Standards are standards.
    Those standards are developed through years upon years of
    blood-soaked lessons learned from combat. They are neither male
    nor female. They are combat standards, and they are related to
    combat. If you meet the standard for combat, then you pass go,
    collect $200, and move on your way. If you do not, then you do
    something else in life. Those standards are inviolable. They
    are based on combat, and we would place unit discipline,
    cohesion, and ultimately effectiveness at risk if we compromise
    those standards. We must guard against that. All of us, Members
    of Congress, members of the executive branch, members of the
    uniformed military, et cetera must guard against the lowering
    of standards.
        General Kelly and General Votel, their comments exactly
    right in the sense of raising the flag, a warning flag, that
    this initiative in the infantry and armored and special forces
    has the potential to lower standards. The rest of us must be
    the guardians of those standards. We must not allow the
    lowering of standards. Those are related to combat. If we do
    that, we are actually putting at risk the unit and the women
    that would go into those services and potentially putting at
    risk the lives of their teammates as well. Standards are
    inviolable. They must not and will not be lowered.
        Senator Gillibrand. How do you deal with the views of
    personnel that you are lowering standards, that the mission of
    all these women--clearly you have lowered standards? How do you
    reinforce that these women are properly trained, are ready and
    have met everything and will do a great job?
        General Milley. I think there are a couple of things. One
    is, first, do not lower the standard and then ensure that you
    educate people that they understand the standards have never
    been lowered. You know, Ranger school. I have heard a lot of
    comments about Ranger school, you know, the three women, one of
    whom was a mother of two, that graduated Ranger school. The
    standards were lowered. I said really. I said why do you not
    rock up and start walking 12 miles with 35 pounds on your back?
    Why do you not climb the hills of Dahlonega? Why do you not run
    the swamps of Florida? Those standards have not changed. Those
    swamps have not changed. Those hills have not changed. 12 miles
    is still 12 miles. It is still a 5-mile and 40-minute run.
    Those standards have not been changed. They met those
    standards.
        Part of it is education and leadership, making sure that we
    have everyone understand the standards. But the key principle
    of do not lower those standards, that is inviolable. We cannot
    allow that.
        Mr. Murphy. Senator, I would just agree that it is a
    leadership for our Army, that we could not be more clear that
    we--first of all, women do not want those standards to be
    lowered. When they went to Ranger school, they were not asking
    for it to be lowered. They know they could meet the standard.
    They met the standard, and that is why they are Rangers. We are
    a standards-based Army. We could not be more clear from the
    top, and it is emanating throughout the force.
        Senator Gillibrand. But I just hope you have their back
    when they do pass through these requirements because if they
    are getting feedback that they are still not good enough, that
    is problematic, especially since you did not lower the
    standards. Right?
        General Milley. I have huge confidence, male or female, if
    they meet the standard, they will be mutually respected by
    their fellow peers and soldiers. I have no doubt in my mind.
        Senator Gillibrand. I do have a doubt in mind that they
    will not be respected. What I am asking you to do is to be
    vigilant that these women who do pass and do meet the standards
    are then respected for meeting the standards because you did
    not lower the standards. I just cannot tolerate this notion
    that after these women have been through hell and proven their
    mettle, that they are still discounted when given their
    mission.
        General Milley. There will not be.
        Senator Gillibrand. Okay.
        General Milley. If they meet the standard, they will not be
    discounted.
        Senator Gillibrand. Good luck. I give you many blessings on
    that.
        I would like to shift to cyber. Last year, the Army
    National Guard announced the establishment of 10 cyber
    protection teams, including one in New York and New Jersey
    National Guards. This was a huge step forward for our national
    security, and these teams, each located deliberately within
    nine of the country's 10 FEMA regions, can serve both Federal
    and State purposes, including bolstering civilian authorities
    in case of domestic response to cyber attack. New York has
    already experienced the hacking of a small dam, and we are
    constantly alerted to the threats of cyber attacks to America's
    financial hub.
        Absolutely no funding in the Army's fiscal year 2017 budget
    request was set aside for these new units, and months after the
    announcement, we are still left wondering how they will be
    supported. I am concerned these teams have not been given a
    mission by the Army. Unlike the Air Guard Captains they are not
    designated to the cyber mission forces. The Army has not funded
    them, and it is not clear when they might get trained.
        General Milley, since becoming Chief of the Army, you have
    made it a priority to talk about one Army and to look for ways
    to take advantage of the benefits of the different components.
    How do you envision we can we use the National Guard CPTs to
    address cyber threats, and do you know why there is no money
    allocated for these CPTs in the budget? Can you tell us when we
    might expect to see Army Guard's cyber protection teams fully
    operational?
        General Milley. There are 41, I think it is--21 and 10--for
    the regular Army, split up with offensive and defensive
    capabilities, and then there are 10 in the Guard, as you noted,
    and I think there are 10 or 11 in the United States Army
    Reserve.
        They are coming online at various paces. By 2018, all of
    these teams across the total Army should be trained. I will not
    say it is super-long, but there is a process that we have to go
    through of vetting or identifying and selecting and vetting
    because of the higher-order skills involved in cyber war. That
    goes up front to recruit them and then organize and train and
    equip these teams.
        I will go back and double check, but I think by 2018 all of
    these teams are online and at least have initial operating
    capability. I will get you a better answer with a definitive
    date, if you do not mind, but I think it is 2018.
        Senator Gillibrand. Thank you both for your service.
        Chairman McCain. I am afraid that General Sullivan has
    another question.
        Senator Sullivan. Thank you, Mr. Chairman. Just a few to
    follow up.
        Very quickly on lowering the standards, General, just to be
    clear, that is a joint responsibility. Right? Senator
    Gillibrand's questions are about the military leadership, but
    you also do not want Congress to mandate lower standards.
    Correct?
        General Milley. I do not want anybody to lower standards,
    regardless of where they are.
        Senator Sullivan. You know, General, you have been very
    focused on this issue of the tooth-to-tail ratio in the Army.
    This committee has been looking at that. I know you have been
    looking at that. Are we there yet? Are we at a satisfactory
    point in terms of what you believe is the proper balance
    between combat forces and tail forces? Whose responsibility is
    that? Is that something that you can work out through your
    authorities as the Chief, or is that something you need
    additional support from the Congress on? Because I think it is
    a critical issue, and I commend you for focusing on it so much.
        General Milley. Senator, you are always looking at tooth-
    to-tail to make sure you got the right balance in the force
    structure, et cetera.
        I think we have some room to improve particularly in
    headquarters. I think our headquarters--they played a very
    important function, and today is different than it was, say, 50
    or 60 years ago, advances in technology and information, et
    cetera, et cetera. But my own observation is I think our
    headquarters remain still a little bit bigger than what needs
    to be for combat.
        For example, if you were to deploy a brigade or a division,
    say, the on-the-ground footprint of that headquarters is very
    large. In today's environment and in tomorrow's environment,
    increasingly in tomorrow's environment, if you have a large
    footprint, you are emanating a variety of electronic signals
    from radios and all these computers and everything else that we
    have. Given the electronic warfare capabilities, the
    acquisition and the capabilities of some of our adversaries--
    Russia, for example--we have seen in the Ukraine they can
    acquire the electronic signal very quickly. They will fly
    unmanned aerial vehicles over there, acquire the target, and
    they will amass artillery on you. You will be dead.
        What do we have to do? We need to pare down our
    headquarters--this is just one example--to very small, nimble,
    mobile capabilities that can, in fact, survive what we think is
    the lethal environment that we would see in the future. That
    could mean increases in reach-back, for example, where much of
    your headquarters footprint and the processing of intelligence
    information, the processing of friendly unit situations is done
    at home station at a garrison or at a base here in the United
    States. Given today's technologies and the electronic pipes
    that are out there today, we can push a lot of that information
    forward rather than put an 800- or 1,000-man headquarters on
    some tactical battlefield in the future with nothing but a big
    target.
        We are taking a hard look at that. There is definitely some
    streamlining that needs to be done to reduce the tooth-to-tail
    because in my professional opinion, especially in the potential
    future contingencies we are looking at, large tails are going
    to result in significant amounts of casualties and potentially
    battlefield losses or loss of a battle, a campaign, or even a
    war.
        Senator Sullivan. Well, I think you have the support of
    this committee on your focus on that, and please let us know if
    there is statutory authority that you need additionally to what
    was in the NDAA last year that the chairman led on the issue of
    headquarters.
        Let me ask one final question. You know, there is a lot of
    discussion on the end strength. You know, when the Chairman and
    Secretary Carter were testifying, and in your testimony there
    is this focus on the conventional challenges, Russia, North
    Korea, Iran, China, ISIS, other terrorist groups. I think there
    is this notion--and I would like you to talk about it a little
    bit--that a lot of what we can defend ourselves with, because
    there are certainly capable forces, is our special forces. They
    get a lot of press. They do a lot. They are all over the world.
    They are incredibly capable.
        But I think it is also very important to recognize that on
    certain of these threats, in fact, almost all the ones that are
    listed right here, it is the conventional forces that are what
    we need the most.
        Can you talk a little bit about the difference in their
    capabilities and how important it is to have airborne brigade
    combat teams that can drop out of the sky 5,000 soldiers, in
    addition to the special forces? Because I think sometimes there
    is so much focus on the SF forces, that we lose the focus on
    how important our conventional forces are.
        General Milley. Senator, I think there are several myths of
    war, so to speak, that are prevalent in various communities.
    One of those key myths I think is that you can win wars from
    afar, from standoff distances, et cetera. Another key myth is
    that special forces can do it all. As a proud member of special
    forces, special forces cannot do it all.
        It depends on what you are trying to do. If you are
    involved in a war, if you are using the language of war and you
    are defining yourself as at war, then you need to apply all of
    the synergistic effects of the entire joint force in time and
    space to impose your political will. That is a lot more than
    special forces. That is everything from all the domains of
    space, cyber, naval, air, marines, special operations forces,
    and conventional ground forces, all of that converging in time
    and space to rip the shreds out of an enemy if you are at war.
        You can do lots of other things. You may not define
    yourself at war, but you just want to impose cost or you want
    to attrit or you want to deter or you want to punish. Those
    things can be done in a variety of ways. You can do that from
    just standoff weapon systems or perhaps just special forces.
        But the idea that special forces can do it all is not true,
    and the professionals in special forces will be the first to
    tell you.
        One of the fundamental roles of conventional ground forces,
    whether Army or Marine, is to seize and control territory and
    deny that same territory to enemy forces. Special forces does
    not seize and control territory. They never were designed to do
    that. But if you want to impose your will on an enemy, that is
    one of the key tasks that is likely going to have to get done
    if you define yourself in a state of war.
        Thanks for the question, but it is a myth out there. It is
    very prevalent. Special forces has huge talents, love it to
    death, and they can do a lot of things. But winning wars in and
    of themselves, not capable.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Some of us think that that myth has been
    adopted into a Pentagon strategy to defeat ISIS.
        General, we will be doing more on this tooth-to-tail issue
    because it is not only the size of the staffs and bureaucracies
    but in many cases, it is absolute duplication of effort.
    Different branches of the Defense Department have staffs that
    are all doing the same thing, and that is one of the aspects of
    reform that we will be acting on in this year's NDAA.
        Secretary Murphy, to each member of the committee, if you
    would send a letter describing what actions are being taken on
    this whole issue of mental health, suicide, I would appreciate
    it. Obviously, from what you have heard today, there is
    significant interest in the issue, as there is amongst the
    American people. We have to work on this suicide rate not only
    of Active Duty personnel, but we also know that 8,000 veterans
    a year are committing suicide as well. That has to be one of
    our highest priorities.
        We thank you for your very forthright testimony. I think
    this has been a very beneficial hearing, and I thank you.
        Senator Reed?
        Senator Reed. I just second those comments, Mr. Chairman,
    and thank the witnesses for their service and their testimony.
    Thank you, Mr. Chairman.
        Chairman McCain. You are still too young, Mr. Murphy.
        [Laughter.]
        The Chairman. The committee stands adjourned.
        [Whereupon, at 11:56 a.m., the hearing was adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            TUESDAY, APRIL 26, 2016

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                       F-35 JOINT STRIKE FIGHTER PROGRAM

        The committee met, pursuant to notice, at 10:04 a.m., in
    Room SD-G50, Dirksen Senate Office Building, Senator John
    McCain (chairman) presiding.
        Committee members present: Senators McCain, Inhofe,
    Sessions, Wicker, Ayotte, Fischer, Cotton, Rounds, Ernst,
    Tillis, Sullivan, Lee, Reed, McCaskill, Manchin, Shaheen,
    Gillibrand, Blumenthal, Donnelly, Hirono, Kaine, and King.

                OPENING STATEMENT OF SENATOR JOHN McCAIN

        Chairman McCain. The committee meets today to consider the
    status of the F-35 Joint Strike Fighter program as we review
    the fiscal year 2017 budget request.
        I welcome our witnesses, Under Secretary of Defense for
    Acquisition, Technology and Logistics Frank Kendall; director
    of Operational Tests and Evaluation, Dr. Michael Gilmore;
    program executive officer for the F-35, Lieutenant General
    Christopher Bogdan; and director of Acquisition and Sourcing
    Management for the Government Accountability Office, Michael
    Sullivan.
        The F-35 Joint Strike Fighter program is the largest and
    most expensive acquisition program in Department of Defense
    history. The full capabilities this aircraft will eventually
    provide are critical to America's national security, our
    ability to deter our potential adversaries around the globe,
    and, if necessary, respond with overwhelming force to any
    future conflicts that may require military intervention.
        At the same time, the F-35 program's record of performance
    has been both a scandal and a tragedy with respect to cost,
    schedule, and performance. It is a textbook example of why this
    committee has placed such a high priority on reforming the
    broken defense acquisition system.
        The F-35 schedule for development has now stretched to more
    than 15 years. Costs have more than doubled from original
    estimates. Aircraft deliveries amount to no more than a mere
    trickle relative to the original promises of the program.
        The original F-35 delivery schedule promised 1,013 F-35s of
    all variants would be delivered by the end of fiscal year 2016.
    In reality, we will have 179. Because the Air Force, Marines,
    and Navy were all counting on the F-35s that never appeared,
    combat aircraft and strike fighter capacity shortfalls in all
    three services have reached critical levels, severely impacting
    readiness and ultimately limiting the Department's ability to
    meet the requirements of the defense strategy.
        In the Department's fiscal year 2017 budget request, dozens
    more aircraft are being deferred from the future years defense
    plan, resulting in a situation where the last F-35 will be
    delivered in 2040.
        I cannot fathom how this strategy makes any sense,
    purchasing combat aircraft with a 40-year-old design in light
    of all the testimony this committee has received about how our
    potential adversaries are rapidly catching up with and, in some
    cases, matching America's military technological advantages.
        Those F-35 aircraft being delivered are not being delivered
    as promised. They have problems with maintenance, diagnostic
    software, radar instability, sensor fusion shortfalls, fuel
    system problems, structural cracks from service-life testing,
    engine reliability deficits, limitations on the crew escape
    system that caused pilot weight restrictions, and potential
    cyber vulnerabilities. This list is as troubling as it is long.
        At long last, we are approaching the end of the long
    nightmare known as ``concurrency,'' the ill-advised,
    simultaneous development, testing, and production of a complex
    and technologically challenging weapons system that the
    Department estimates will end up costing the American taxpayers
    $1.8 billion.
        But many questions remain, such as the total number of
    these aircraft the Nation should buy or can even afford, the
    cost of future upgrades to keep these aircraft relevant in the
    face of an ever-evolving threat, and the management and
    administration of a so-called joint program that General Bogdan
    himself has admitted consists of aircraft that have only 20
    percent to 25 percent commonality across the three variants as
    compared to the original goal of 70 percent to 90 percent.
        The F-35A, F-35B, and F-35C are essentially three distinct
    aircraft with significantly different missions and capability
    requirements. The illusion of jointness perpetuated by the
    structure of the F-35 joint program stifles the proper
    alignment of responsibility and accountability this program so
    desperately needs.
        There are also questions as to when the system development
    and demonstration phase, or SDD, will actually be completed so
    that initial operational tests and evaluation can begin.
    Originally scheduled to conclude in 2017, we have every
    indication that schedule pressures will likely extend SDD well
    into fiscal year 2018.
        I am very concerned the Department may attempt to take
    shortcuts by deferring mission capability content into later
    block upgrades and, by doing so, shortchange the warfighter
    once again by delaying necessary capabilities.
        The F-35 was designed to replace multiple aircraft of all
    three services, the A-10, the F-16, the F-18, and the Harrier.
    That is why the operational testing and evaluation must be of
    such high fidelity.
        There can be no question in the minds of the American
    people that their gigantic investment in this program will pay
    off with greatly improved capabilities that far surpass the
    mission capabilities of all these individual combat aircraft.
    The Congress will not likely allow any more of these legacy
    aircraft to be retired from service until there is no doubt the
    F-35 can adequately replace them. Nor is the Congress likely to
    entertain a ``block buy'' or other multiyear procurement scheme
    until the initial operational test and evaluation is completed
    and a positive milestone decision is made to commence full-rate
    production, both of which I understand are scheduled to occur
    in fiscal year 2019.
        The Department appears to be considering managing the F-35
    follow-on modernization, which is estimated to cost over $8
    billion for the first block upgrade within the overall F-35
    program. This is incredible given the Department's dismal track
    record on these upgrade programs as the F-22A modernization and
    upgrade debacle showed.
        I have seen no evidence that DOD's processes have improved
    to a level that would remove the need for a separate major
    defense acquisition program that would enable close scrutiny by
    Congress. Moreover, I expect the Department to use fixed-price
    contracts for the F-35 modernization effort in order to protect
    taxpayers.
        Despite this programs many stumbles, there are some
    positive signs for the F-35. The Marines declared initial
    operational capability, or IOC [Initial Operating Capability],
    last July in Yuma, Arizona, and are preparing for their first
    F-35B overseas deployment next year.
        Air Force personnel at Hill Air Force Base in Utah who fly
    and maintain the aircraft are preparing for Air Force IOC this
    fall. They report that the latest lots of F-35As are flying
    very well with a significant jump in reliability in warfighting
    capability as compared to earlier aircraft.
        General Bogdan has steadily pushed down aircraft
    procurement unit costs; reliability metrics are on the rise;
    and each lot of aircraft deliveries possess increasingly
    effective warfighting capabilities.
        All of this is a testament to hard work of military and
    civilian personnel inside this program today. They are doing
    their best to overcome misguided decisions taken long ago, and
    they are having success in important areas.
        However, there is a lot of development left to complete in
    this program, and with it comes the potential for more
    problems, schedule delays, and increased costs. This committee
    will remain steadfast in its oversight responsibilities to
    ensure our warfighters get the capabilities they need on time
    and at reasonable cost.
        Since a quorum is now present, I ask the committee to
    consider a list of 920 pending military nominations. Included
    in this list are the nominations of General Vincent K. Brooks,
    USA, to be commander of United Nations Command, Combined Forces
    Command, U.S. Forces Korea; General Curtis M. Scaparrotti, USA,
    to be Commander of U.S. European Command and Supreme Allied
    Commander Europe; and General Lori J. Robinson, USAF, to be
    Commander, U.S. Northern Command, Commander North America
    Aerospace Defense Command.
        All these nominations have been before the committee the
    required length of time.
        Is there a motion to favorably report these 920?
        Senator Reed. So moved.
        Chairman McCain. Is there a second?
        Senator Ayotte. Second.
        Chairman McCain. All in favor, say aye.
        The motion carries.
        Senator Reed?

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman.
        Let me join you in welcoming the witnesses today. We are
    grateful for your service. Thank you very much, gentlemen.
        Today, we will seek a better understanding of the progress
    the Department is making in fielding the Joint Strike Fighter;
    what actions the Department has taken to ameliorate problems
    with the program; what is the best judgment available of how
    effective these actions will be in preventing problems with the
    program, including additional cost overruns and delays.
        Overall, the production program has been delivering on
    expected cost reductions on aircraft lots. However, we still
    have to complete the system development and demonstration, SDD
    [System Development & Demonstration], program that is expected
    to deliver complete warfighting capability of each of three
    variants of the F-35. We may not have seen all the potential
    schedule changes in SDD, since not all the program difficulties
    are behind us.
        Quoting from Dr. Gilmore's prepared testimony, ``Although
    the Marine Corps has declared initial operational capability,
    IOC, and the Air Force plans to do so later this calendar year,
    the F-35 system remains immature and provides limited combat
    capability, with the officially planned start of initial
    operational test and evaluation, IOT&E [Initial Operational
    Test & Evaluation], just over 1 year away.''
        Dr. Gilmore also says assesses that the F-35 program will
    not be ready for IOT&E until calendar year 2018 at the soonest,
    and these assessments are of concern.
        Several years ago, we required the Department to estimate
    the dates for initial operating capability, IOC, of the three
    variants to the F-35. The Marine Corps declared IOC last year
    in July. The Air Force is scheduled to declare IOC later this
    year. The Navy is scheduled to clear IOC in 2018.
        The Marine Corps IOC was based on a version of the program
    software called the Block 2B. The Air Force's declaration of
    IOC will be based on the Block 3i software. The Navy's
    declaration of IOC will be based on the Block 3F software
    version.
        Until recently, in order to support the IOC dates, the
    program office has been working on versions of both Blocks 3i
    and 3F of the software simultaneously. The Block 3F software
    depends on having a stable baseline for the Block 3i software.
        With the contractor team working on multiple releases of
    software, correcting deficiencies and achieving software
    stability has proved elusive. Working on the two software
    packages simultaneously was intended to save time, but that
    time was lost when the project had to be redone because of
    mistakes stemming from concurrency.
        Within the past year, the program executive officer halted
    work on the Block 3F software until the problems with the Block
    3i software could be sorted out. We need to understand what
    effect this altered approach may have on the overall program
    schedule.
        Beyond that, we are planning for sizable upgrades in F-35
    capability through spiral development efforts to the Block 4
    program. The Block 4 program will likely be a multibillion-
    dollar effort. We want to make sure that we do not repeat past
    mistakes.
        Beyond the SDD program, there is an even larger issue of
    the cost to sustain the F-35 once we have bought it. These
    estimates were at one point as large as $1 trillion. We need to
    understand what the Department is doing to reduce these
    potential costs. If we do nothing, we run the risk of allowing
    increased costs to sustain and support the F-35 to reduce the
    funds available for investment in the future force.
        This committee has been a strong supporter of the JSF
    program from the beginning. However, we must continue our
    vigilance on cost so there is a proper balance between F-35 and
    other important DOD acquisitions.
        Thank you very much for calling the hearing, Mr. Chairman.
        Chairman McCain. Thank you.
        I welcome the witnesses.
        Secretary Kendall?

     STATEMENT OF HONORABLE FRANK KENDALL III, UNDER SECRETARY OF
           DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS

        Mr. Kendall. Thank you, Chairman McCain. Chairman McCain,
    Ranking Member Reed, members of the committee, I am happy to be
    here today with Lieutenant General Bogdan, the program
    executive officer for the F-35 program, as well as with Dr.
    Gilmore and Mr. Sullivan, to discuss the status of the program
    and the President's Budget request for fiscal year 2017.
        In my opening comments, I would like to discuss my own
    involvement with the F-35. Lieutenant General Bogdan will
    provide more detail on the current state of the program.
        My first exposure to the F-35 was in the fall of 2009, as I
    was awaiting confirmation to be the Principal Deputy Under
    Secretary for AT&L. I was briefed by a member of Dr. Gilmore's
    staff, and my reaction at the time was one of surprise at the
    extremely long period of low-rate initial production,
    approximately 10 years, and at the very high amount of
    concurrency in the program, as you mentioned, Mr. Chairman,
    concurrency being the overlap in this case between development
    and production. It was one of the highest and, therefore, most
    risky that I had ever seen.
        Production was started in 2007, well before the stability
    of the design could be confirmed through testing. I later
    called the decision to start production so early acquisition
    malpractice, a phrase which seems to have stuck.
        In early 2010, also before I was confirmed, the program
    manager was replaced. The new program manager was Admiral David
    Venlet, a very seasoned and competent professional. At that
    time, the F-35 went through a Nunn-McCurdy review, as a result
    of the cost increases. As a result of the review, the program
    was rebaselined under Admiral Venlet to the baseline that it is
    operating against now and has ever since.
        In 2010, my predecessor, Dr. Carter, ended the use of cost-
    plus contracts for production, starting with Lot 4.
        In the fall of 2011, I became the Acting Under Secretary.
    One of my early decisions was to bring Lieutenant General
    Bogdan in to replace Vice Admiral Venlet.
        Lieutenant General Bogdan has proven to be highly competent
    and professional program executive officer.
        In the fall 2011, based on an early operational assessment
    report from Dr. Gilmore's office, I commissioned an independent
    review of the technical status of the program focused on the
    design stability of the program. At that time, the extent of
    the open design issues and the risk of high concurrency costs
    for retrofitting aircraft that had already been produced with
    fixes that were found later led me to seriously consider
    halting production. Based on several considerations, I made the
    decision to hold production constant at 30 aircraft per year
    for the next 2 years, and to assess progress before increasing
    production at that point.
        Under Lieutenant General Bogdan's leadership, the program
    has made steady progress for the past 4 years. Cost and
    development have remained within the baseline. Production costs
    have steadily decreased, beating the independent cost estimate
    each year. The cost of sustainment has also been reduced by
    approximately 10 percent since the program was rebaselined.
        There have been a few months of schedule slip primarily due
    to software complexity.
        While I do continue to monitor progress monthly and conduct
    annual program deep-dive reviews, the F-35 is no longer a
    program that keeps me up at night. There are some design issues
    that still need to be resolved. The test program is about 90
    percent complete, and I do expect additional discovery, but I
    will be surprised if a major design problem surfaces at this
    point.
        Our task now is to complete the test program, achieve IOC
    for the Air Force later this year and the Navy in 2018,
    complete OT&E, and support our many partners and foreign sales
    customers as they become operational over the next few years.
        We also need to move forward with the follow-on
    development. I appreciate this committee's support for
    authorizing and funding that important work.
        The F-35 is a game-changing, state-of-the-art weapons
    system. But our potential adversaries are not standing still.
    Threat advances in areas like integrated air defense systems,
    air-to-air weapons, and electronic warfare must be continuously
    countered. We must continuously improve the weapons system to
    keep pace with emerging threats.
        I thank the committee for its support and look forward to
    your questions.
        Chairman McCain. Thank you.
        General Bogdan?

     STATEMENT OF LIEUTENANT GENERAL CHRISTOPHER C. BOGDAN, USAF,
                   PROGRAM EXECUTIVE OFFICER FOR THE
                    F-35 LIGHTNING II JOINT PROGRAM

        General Bogdan. Thank you, sir. Chairman McCain, Ranking
    Member Reed, distinguished members of the committee, thank you
    for the opportunity here today to discuss the F-35 Lightning II
    program.
        My purpose here today is to provide you an honest, balanced
    assessment of where the program stands today. That means I will
    tell you the good, the bad, and the ugly about the program, and
    tell you what my team is doing to reduce costs, improve F-35
    performance, and meet our scheduled commitments.
        The F-35 Lightning II is of vital importance to the
    security of the United States. As the program executive officer
    and program director, I am committed to delivering an
    affordable, reliable, and sustainable fifth-generation weapons
    system to our warfighters and those of our international
    partners and foreign military sales customers.
        Overall, the F-35 program is executing well across the
    entire spectrum of acquisition to include development and
    design, flight test, production fielding, base standup,
    maintenance and support, and building a global sustainment
    enterprise.
        The program is at a pivot point. It is now rapidly
    changing, growing, and accelerating. We will be finishing our
    development program in late 2017 and begin a transition to a
    leaner, more efficient follow-on modernization program. We will
    see production grow from delivering 45 aircraft in 2015 to
    delivering over 100 airplanes in 2018, and up to 145 by 2020.
        Additionally, in the next four years, we will continue the
    standup of 17 new operating F-35 bases all over the world. We
    are also accelerating the creation of our heavy maintenance and
    repair capability and supply chain in the Pacific, European,
    and North American regions, creating a truly global sustainment
    capability.
        However, the program is not without risks and challenges,
    as these come with any program of this size and complexity. But
    I am confident the current risks and issues we face can be
    resolved, and we will be able to overcome future problems and
    deliver the F-35's full combat capability.
        I have often said that the mark of a good program is not
    that it has no problems but rather that it discovers problems,
    implements solutions, improves the weapons systems, and at the
    same time keeps the program on track. I believe we have been
    doing that for a number of years now.
        Let me highlight a few of our recent accomplishments.
        Last year, we began U.S. Air Force and partner pilot
    training at Luke Air Force Base in Arizona where a blend of
    U.S. and partner F-35 instructor pilots are helping to train
    U.S. Air Force and other partner pilots. The Air Force is now
    receiving F-35As at Hill Air Force Base in Utah, and training
    is underway to ready its first combat-coded F-35 squadron to be
    operational later this year.
        Also, the United States Marine Corps is successfully flying
    and deploying to austere sites for training, and dropping and
    shooting live weapons with the F-35B today.
        In addition, industry committed to and then successfully
    delivered 45 airplanes last year, including the first aircraft
    produced in the Italian assembly facility in Cameri, Italy.
    From a production perspective, we have delivered a total of 176
    of our test, operational, and training aircraft to date.
        On the cost front, the price of purchasing F-35s continues
    to decline lot after lot, a trend I believe will continue for
    many years. I expect the cost of an F-35A with an engine and
    fee in then-year dollars to be less than $85 million in fiscal
    year 2019.
        As I said before, the program is changing, growing, and
    accelerating, but it is not without its issues, risks, and
    challenges. Let me highlight some of these areas and what we
    are doing about them.
        On the technical front, we have a number of risks I would
    like to mention. At the top of my list are both aircraft
    software and our maintenance system known as the Autonomic
    Logistics Information System [ALIS]. We have seen stability
    issues with our Block 3 software. However, we believe we have
    identified the root cause of these problems and have tested
    solutions in the lab and in flight test, and are now completing
    our flight tests with these solutions.
        Our initial indications of this flight testing was
    positive, and we see software stability improved to two to
    three times better than what we have seen in the past. By the
    end of this month, I am encouraged that we will have an enough
    data to consider this problem an issue closed.
        We have also experienced schedule issues with the
    development of our next version of ALIS, version 2.0.2. I am
    prepared to discuss this issue as well as topics such as our
    egress system, U.S. Air Force IOC, initial operational test,
    and recent U.S. Air Force and U.S. Marine Corps deployments,
    and the status of our partners and FMS customers during the
    questions and answers.
        In summary, the F-35 program is moving forward, sometimes
    slower than I would like, but moving forward and making
    progress nonetheless. We are nearing the completion of
    development and flight test in 2017. We are ramping up
    production, standing up new bases, and growing a global
    sustainment enterprise. We have also stabilized and reduced the
    major costs on this program.
        As with any big, complex program, new discoveries,
    challenges, and obstacles will occur. The F-35 is still in
    development, and this is a time when challenges and discoveries
    are expected. However, we believe the combined government and
    industry team has the ability to resolve our current issues and
    any future discoveries.
        I intend to continue leading this program with integrity,
    discipline, transparency, and accountability. It is my
    intention to complete this program within the resources and
    time I have been given, and I intend on holding my team and
    myself accountable for the outcomes on this program.
        We never forget that someday your sons and daughters, your
    grandsons or granddaughters, will take an F-35 into harm's way
    to defend our freedom. Delivering them the best possible
    weapons system is a responsibility I and my team take very
    seriously.
        Thank you again for the opportunity to discuss the program.
    I look forward to your questions.
        [The joint prepared statement of Mr. Kendall and General
    Bogdan follows:]

     Joint Prepared Statement by the Honorable Frank Kendall and Lt. Gen.
                             Christopher C. Bogdan
                                i. introduction
        Chairman McCain, Ranking Member Reed and distinguished Members of
    the Committee, thank you for the opportunity to appear before you today
    to discuss the F-35 Lightning II.
        The F-35 Lightning II is the Department of Defense`s largest
    acquisition program, matched by its importance to our Nation's
    security. The F-35 will form the backbone of U.S. air combat
    superiority for decades to come, replacing or complementing the legacy
    tactical fighter fleets of the Air Force, Navy, and Marine Corps with a
    dominant, multirole, fifth-generation aircraft, capable of projecting
    U.S. power and deterring potential adversaries. For our International
    Partners and Foreign Military Sales (FMS) customers who are
    participating in the program, the F-35 will become a linchpin for
    future coalition operations and will help to close a crucial capability
    gap that will enhance the strength of our security alliances.
    Accordingly, delivering this transformational capability to front-line
    forces as soon as possible remains a top priority.
        Our overall assessment is that the program is making solid progress
    across the board and shows improvement each day while continuing to
    manage emerging issues and mitigate programmatic risks. We are
    confident the F-35 team can overcome these challenges and deliver on
    our commitments. In this testimony, we will present a detailed update
    on the progress that has been made over the past year, providing a
    balanced assessment of the current status of the program, highlighting
    both the accomplishments and the setbacks, as well as articulating
    where we believe risks remain.
                              ii. accomplishments
        The F-35 program is executing well across the entire spectrum of
    acquisition activities, to include development and design, flight test,
    production, fielding and base stand-up, sustainment of fielded
    aircraft, and building a global sustainment enterprise. In February
    2016, the F-35 reached 50,000 flight hours, including approximately
    26,000 for the F-35A, 18,000 for the F-35B and almost 6,000 hours for
    the F-35C. We are pleased to report many accomplishments by the F-35
    team during the past year. Of note, we have seen declaration of Initial
    Operational Capability (IOC) for the F-35B by the U.S. Marine Corps
    (USMC) last summer, providing our combatant commanders with a 5th
    generation strike fighter capable of operations from expeditionary
    airstrips and sea-based carriers, the delivery of the first ten F-35A
    aircraft to Hill Air Force Base (AFB) in Utah in preparation for the
    U.S. Air Force's (USAF) declaration of IOC later this year, and
    delivery of Block 3F software to flight test in support of U.S. Navy
    (USN) F-35C IOC in 2018. The F-35 team remains committed to sustaining
    and expanding these fielded capabilities.
        Accomplishments in flight testing over the past year include:
          Completion of F-35B Block 2B operational assessment
    aboard the USS WASP and successful completion of the second round of
    sea trials with the F-35C aboard the USS Dwight D. Eisenhower (CVN 69).
          Completion of five sea trials with the F-35B and F-35C.
          Steady progression of the developmental test program with
    a focus on wrapping up testing of the Block 3i software this Spring.
    This last iteration of Block 3i software will give the F-35A the combat
    capability required for USAF IOC.
          Completion of F-35A high angle of attack and performance
    testing and continued flight envelope expansion for all aircraft
    variants. F-35B and F-35C high angle of attack flight testing will
    complete by the end of 2016.
          For the F-35A, performance of a series of successful AIM-
    9X air-to-air missile launches and airborne test firings of its
    internal GAU-22 internally-mounted 25-millimeter cannon. Air-to-Ground
    accuracy testing of the GAU-22 is expected to commence later this year
    and complete in summer 2017.
          Successful completion of the first operational fleet
    weapons drops for the USMC and USAF, and completion of all Block 3i
    weapons delivery accuracy events.
                                iii. development
        Steady progress continues toward completion of the F-35 System
    Development and Demonstration (SDD) phase in the Fall of 2017. A year
    ago, the program was nearing completion of Block 2 software development
    and was closing in on completing all flight testing necessary to field
    our initial warfighting capability, also known as Block 2B. We are now
    in the same position for our next increment, Block 3i. We should
    complete all 3i testing this Spring and convert fielded aircraft with
    earlier versions of Block 3i to the latest version starting this
    summer.
        The final block of F-35 development program capability, known as
    Block 3F, provides a fully capable F-35 aircraft and marks the
    completion of the SDD program. Block 3F Mission Systems software is
    currently undergoing Developmental Test (DT), and many of the
    deficiencies discovered in Blocks 2B and 3i software will be corrected
    in Block 3F. However, since both 2B and 3i testing took longer than
    originally planned, the program estimates there is a risk to completing
    Block 3F on time--it is now projected to be about four months late and
    will be delivered in late Fall of 2017. This delay is an improvement
    over our projection from one year ago, and it is not expected to impact
    USN IOC for the F-35C in 2018 or the other U.S. and coalition partners'
    operational milestones. The stability issues we discovered in both
    Block 3i and 3F software have been thoroughly analyzed and the root
    causes of these problems are now known. We have incorporated numerous
    fixes based on this analysis; and, as of April 13, 2016, we had flown
    29 sorties and 75 hours with the new improved software. The results
    have been promising with both pilots and engineers seeing a marked
    improvement in stability. The newest version of software has shown 2 to
    3 times greater stability than previous versions, and we are confident
    that this particular set of issues has now been resolved to the Program
    and Warfighter's satisfaction. We can now proceed with the testing of
    the final version of software, Block 3F.
        Looking beyond the SDD program, the ensuing effort, known as
    Follow-on Modernization, will be the means to deliver improved
    capabilities to the weapon system to ensure its relevance against
    advanced and emerging threats. The program anticipates the Joint
    Requirements Oversight Council will approve the Follow-on Modernization
    / Block 4 Capabilities Development Document this summer. Work continues
    with the U.S. services and International Partners to ensure the
    Modernization Program will be ``right-sized'' for affordability and
    sustainability. We awarded the initial Planning and Systems Engineering
    contract in June 2015, and execution remains on track to conduct a
    comprehensive System Requirements Review this Fall. Two additional
    contract actions are planned in the near term. The first will allow for
    the decomposition of system level requirements through a rigorous
    systems engineering effort, and the second will continue that work
    through Preliminary Design Review planned in Spring 2018 and will
    support a Defense Acquisition Executive decision point to move forward
    with the Block 4 development program in mid-2018.
        From a cost and programming perspective, the Department and the F-
    35 Joint Program Office (JPO) are fully committed to complete
    transparency when it comes to reporting progress on the Follow-on
    Modernization program. We view the modernization effort as a
    continuation of the existing F-35 program, one that continues to be the
    Department's most closely managed acquisition program. The existing
    oversight mechanisms, management structure, and decision processes are
    more than adequate to continue to manage the modernization program. We
    will award a separate modernization contract that tracks full cost,
    schedule and earned value management reporting metrics. The
    modernization budget already has separate program elements and budget
    lines and we are working with the Office of the Director, Cost
    Assessment and Program Evaluation (CAPE) and Congressional Defense
    Committees to devise the format and frequency of reporting progress on
    the modernization effort. We also plan for a CAPE independent cost
    estimate that assesses the effort required to execute the modernization
    effort.
        F-35A Dual Capable Aircraft (DCA) continues to be aligned with and
    included in the Block 4 Follow-on Modernization effort. In mid-2015, we
    conducted a series of test flights to assess the vibration, acoustic,
    and thermal environments of the F-35A weapons bay with the B61-12
    weapon. Nuclear Certification planning efforts have been initiated as
    part of the Block 4 contracting activity in anticipation of beginning
    B61-12 integration on the F-35A in 2018.
        Commensurately, we have begun to ``right size'' the DT fleet of
    aircraft in preparation for Follow-on Modernization. As part of this
    process, the services and program office are working together to
    determine the correct mix of capacity and capabilities to allow us to
    operate a flight test fleet that is representative of the Warfighter's
    fleet. This will provide the needed capability at a lower cost,
    allowing the services to put more resources toward capability
    enhancements.
        Although solid progress is being made--we are now 90 percent
    complete with all of SDD--F-35 development is not without technical
    discoveries and deficiencies, which are expected for a system that has
    not completed development.
        On August 27, 2015, the U.S. Services and International Partners
    restricted pilots weighing less than 136 pounds from operating the F-35
    after safe escape tests indicated the potential for increased risk of
    injury to this pilot population. Currently, no F-35 pilots are impacted
    by this restriction. The restriction is focused on this population, as
    lighter pilots are assessed to have lower neck strength and are
    therefore more susceptible to injury as a result of neck loading
    observed during testing.
        There are three technical solutions that, when in place, will
    reduce the risk of neck injury to all pilots and will eliminate the
    restriction to any pilot population. All three of these solutions have
    now been verified through testing, and will be ready to incorporate
    into production aircraft and retrofit to delivered aircraft by the end
    of 2016. These solutions include a head support panel between the
    parachute risers that prevents neck over-extension; a pilot-selectable
    weight switch, which adds a very slight delay in the opening of the
    main parachute, thus reducing opening shock loads; and, a lighter F-35
    helmet. This lighter helmet is also expected to field by the end of
    2016 in line with the seat time frame. Once these three measures are in
    place, we can remove the weight restriction and pilots weighing less
    than 136 pounds will be safely able to fly the F-35. These improvements
    will make the F-35 ejection seat and escape system the safest we have
    today, and will also implement an escape system that provides
    protection for the widest weight and size range of pilots--from 103
    pounds to 245 pounds, and from the smallest to largest-sized pilots--of
    any ejection system ever built.
        Another deficiency the Program is resolving involves the Ground
    Data Security Assembly Receptacle (GDR), which is part of the Off-board
    Mission Planning system and is used to encrypt and decrypt the mission
    and maintenance data carried on the Portable Memory Device to and from
    the airplane by the pilot. In 2015, the program faced significant
    challenges with the pilot debrief timeline, because the GDR required
    approximately 1.5 hours to download a 1.5 hour flight--far too long. We
    have now developed an improved GDR that will decrease the timeline to
    download mission data. When these units are fielded, the mission
    download time for a 1.5 hour flight will be reduced to approximately 20
    minutes. Qualification and integration tests are now underway. We will
    deliver the new GDR in the summer of 2016 with the first ten units
    delivered to Hill AFB in Utah in support of USAF IOC. Further GDR
    deliveries to backfill other units will begin in the Fall of 2016.
        In September 2013, during F-35B full-scale durability testing, we
    experienced a significant bulkhead crack at 9,056 Equivalent Flight
    Hours (EFH). The root causes have been established and redesign efforts
    for the bulkhead is well underway. A laser shock peening process is
    being developed to address specific locations requiring additional
    material improvement to meet full life. The qualification of this
    process is progressing satisfactorily and is expected to be available
    for both production and retrofit of fielded aircraft by the end of
    2017.
        The F-35B durability test restarted in February 2015 and progressed
    to 11,915 EFH by August 2015. At that time, cracking had developed at
    previously identified short life locations and required repair. That
    repair work is complete, and testing resumed February 29, 2016. The
    test completed 12,000 EFH and is currently completing Level 1
    inspections. The F-35B durability test is expected to complete its
    second life of durability testing sometime in the Fall of 2016.
        In October 2015, the F-35C test article experienced cracking in the
    wing front spars at 13,731 EFH. The root cause has been established and
    the redesign effort for the spars has begun. Standard redesign
    techniques, such as local material thickening and cold-working are
    expected to be used to achieve full intended life. This finding does
    not affect the F-35A or B variant spars because the F-35C spars are
    designed differently to account for the aircraft's larger wings. In
    addition, at 13,931 EFH additional cracking was found in the left side
    of a main fuselage bulkhead. While under investigation a similar,
    though smaller crack was also found on the right side of the same
    bulkhead. This new cracking is under investigation and analysis in
    ongoing. There is no near-term airworthiness concern for fielded or
    test aircraft due to either case of cracking because these aircraft can
    fly for approximately 10 years or more before these structural issues
    require repair. The F-35C is expected to complete its second life of
    durability testing in late 2016.
        The F-35 Program Office is making progress in resolving two
    technical issues involving the fuel system: fuel tank overpressure at
    elevated g-loading and fuel tank inerting for lightning protection. The
    technical solution for the fuel overpressure has been designed, tested
    and is in the process of being fielded for the F-35A and F-35B
    variants. The F-35C design solution is also complete and testing will
    complete in the Spring of 2016. This will allow all F-35 variants to
    reach their full structural capability. Additionally, the F-35 team
    recently qualified the improved fuel tank inerting system, and the
    operational restriction to avoid lightning in-flight was lifted for the
    F-35A and F-35B in late 2015. The fuel systems' differences among the
    three aircraft variants require additional measures to qualify the new
    inerting system for F-35C. The F-35C will be corrected with a hardware
    change to commence in the summer of 2016. Implementation of both
    overpressure and lightning corrective actions will provide full g-
    envelope and full lightning protection for all three variants prior to
    SDD completion and is expected to meet all IOC requirements.
       iv. cost, schedule, and performance metrics and production status:
        Affordability remains our top priority. We continue to make it
    clear to the program management team and the F-35 industrial base that
    the development phase must complete within the time and funding
    allocated, we must continue to drive cost out of aircraft production,
    and explore all measures to reduce life-cycle costs. To that end, the
    program has engaged in a multi-pronged approach to reduce costs across
    production, operations, and sustainment. The government/industry team
    is reducing aircraft production costs through ``blueprint for
    affordability'' initiatives and reducing F135 engine costs via ongoing
    engine ``war on cost'' strategies. These efforts include up-front
    contractor investment on cost reduction initiatives, mutually agreed
    upon by the government and contractor team. This arrangement motivates
    the contractors to accrue savings as quickly as possible in order to
    recoup their investment, and it benefits the government in realized
    cost savings at the time of contract award.
        The price of F-35s continues to decline steadily with each
    production Lot. For example, the price (including airframe, engine, and
    contractor fee) of a Low Rate Initial Production (LRIP) Lot 8 aircraft
    was approximately 3.6 percent less than an LRIP Lot 7 aircraft, and an
    LRIP Lot 7 aircraft was 4.2 percent lower than an LRIP Lot 6 aircraft.
    LRIP Lots 9 and 10 contract negotiations are nearing completion, and
    LRIP 9 contract award is anticipated in the near future. We plan to
    award LRIP 10 when the Secretary of the Air Force certifies that F-35As
    delivered during fiscal year 2018 will be full Block 3F capable. The
    goal is to reduce the flyaway cost of the USAF F-35A to less than $85
    million dollars by 2019, which is anticipated to commensurately
    decrease the cost to the Marine Corps F-35B and Navy F-35C variants.
        Program costs, as reported in the December 2015 Selected
    Acquisition Report (SAR) reflect improvements in affordability. RDT&E
    costs remained stable with a slight increase representing a zero sum
    re-phasing between Service Procurement accounts and RDT&E. The estimate
    for procuring F-35 aircraft over the life of the program decreased by
    $7.5 billion (BY12$) and $12.5 billion (TY$). Life cycle Operations and
    Support (O&S) costs increased by $10.5 billion (TY$), less than 1
    percent, due primarily to revised assumptions by the Services that
    added approximately 1.6 million flight hours and a 6-year extension
    (from 2064 to 2070) to the life of the program. The changes to these
    estimating assumptions overshadowed cost reductions in annual
    sustainment costs and cost per flight hour of 2-4 percent, the result
    of improved maintainability and sustainability as the weapons system
    matures, the design stabilizes, and the maintenance of the aircraft
    becomes more efficient and effective.
        The program met its 2015 production goal of delivering 45 aircraft
    and projects to deliver 53 aircraft in calendar year 2016, with 48 of
    those aircraft produced in Fort Worth, Texas and another five produced
    in the Italian Final Assembly and Check Out facility at Cameri, Italy.
    As of mid-April 2016, a total of 176 aircraft have been delivered to
    our test, operational and training sites. The delivery schedule for
    aircraft also continues to improve. LRIP Lot 6 aircraft averaged 68
    manufacturing days behind contracted delivery dates, and LRIP Lot 7
    aircraft have improved to an average of 30 manufacturing days behind
    contract dates. We expect to see continued improvement with LRIP Lot 8
    deliveries and project future aircraft to be delivered by the contract
    delivery date by early 2017. We continue to work with both Lockheed
    Martin and Pratt & Whitney to prepare the program for the production
    ramp increase projected over the next few years.
        The F-35 enterprise is exploring the possibility of entering into a
    Block Buy Contract (BBC) for LRIP Lots 12-14 (fiscal year 2018-2020). A
    BBC would achieve significant program cost savings by allowing the
    contractors to utilize Economic Order Quantity (EOQ) purchases,
    enabling suppliers to maximize production economies of scale through
    batch orders. To substantiate the potential savings of a BBC concept,
    the F-35 Program Office contracted with RAND Project Air Force to
    conduct an independent assessment. RAND's assessment, delivered in
    March 2016, indicated that savings on the order of $2.5 to $3.0 billion
    can be achieved by providing a total of 4 percent EOQ funding to
    selected suppliers. The Department of Defense plans to consider
    beginning the Block Buy in Lot 13 rather than Lot 12. However, we are
    considering an option to allow the F-35 Partners and FMS customers to
    begin a BBC in Lot 12, followed by U.S. participation in Lots 13 and
    14. This option will still result in significant cost savings although
    less than the amount stated above. RAND's study has been extended to
    assess the savings associated with this option, with results due in May
    2016.
        Overall, we believe the risk of entering into a BBC in Lot 12
    (fiscal year 2018) to the F-35 International Partners and FMS customers
    is low. By the time it is necessary to commit to a Block Buy, we will
    have completed durability testing for all three variants, reached 98
    percent completed of all hardware qualification, completion of the
    majority of 3F software and weapons delivery testing, and have stable
    and mature production processes.
        Earlier this year, the program reached agreement with Pratt &
    Whitney on lots 9 and 10 of F135 propulsion systems and awarded lot 9
    earlier this month. The F-35A/C propulsion system costs were reduced by
    3.4 percent from the previously negotiated LRIP Lot 8 price to the
    negotiated LRIP Lot 10 price. The F-35B propulsion system costs
    (including lift systems) were reduced 6.4 percent from the previously
    negotiated LRIP Lot 8 price to the LRIP Lot 10 price. For calendar year
    2015, all F135 production deliveries met contract requirements.
    However, recurring manufacturing quality issues have created issues
    with delivered engines. Recent quality escapes on turbine blades and
    electronic control systems resulted in maintenance activity to remove
    suspect hardware from the operational fleet prior to delivery. Even
    with these events, Pratt & Whitney still met its timeline for the
    Lockheed production line. Pratt & Whitney has taken action to improve
    quality surveillance within its manufacturing processes and is
    executing a rigorous quality program with its suppliers. Additionally,
    the program office manufacturing quality experts have engaged both
    Lockheed and Pratt & Whitney to ensure quality improvement processes
    are in place to meet production ramp requirements. We are also
    continuing to conduct Readiness Reviews throughout the supply base to
    ensure the production ramp will be achievable and smooth.
                                 v. sustainment
        During 2015, the program began delivering F-35As to Hill AFB in
    support of the USAF's first operational F-35 wing. The program has also
    started F-35B pilot training at Marine Corps Air Station Beaufort in
    South Carolina. As of mid-April 2016, there are 156 operational (fleet
    and operational test) and 20 DT F-35s in the inventory operating at
    eight different sites. Together, the entire fleet has logged more than
    50,000 flight hours since our first flight in 2006. F-35A deliveries to
    Eglin AFB in Florida are complete; and the program continues deliveries
    to Luke AFB in Arizona, which is the main training base for the USAF
    and Partners, including Australia's and Norway's first two F-35As. In
    the next four years, we will add another seventeen operating bases to
    the F-35 enterprise across all three regions of North America, the
    Pacific and Europe.
        As additional aircraft come off the production line, the program is
    working to ensure sites across the globe are ready to accept the F-35.
    Since January 2015, the program has sent out 51 site activation teams
    supporting detailed planning at 25 different locations around the
    globe. These sites include stand up of F-35 capability for six of the
    Partner Nations, all three of the foreign military sales customers, and
    additional sites for USAF, USMC and USN. Planning commenced in 2015 for
    base standups in Norway, the Netherlands, Turkey, United Kingdom,
    Israel, Japan and Korea. The site activation highlight for 2015 was the
    successful preparation and arrival of the F-35 at Hill AFB, forming the
    foundation for a projected 2016 USAF IOC.
        Aircraft availability rates continue to be a focus area for the
    program and various program initiatives are now showing a positive
    trend in this area. A disciplined Reliability & Maintainability
    program, improved maintenance procedures and manuals, continued
    improvement in the Autonomic Logistics Information System (ALIS),
    better forecasting of spares requirements, improved repair turnaround
    times from suppliers, and incorporation of aircraft design improvements
    have resulted in gains in mission capability rates and aircraft
    availability rates. Today, across the fleet, we are seeing 55 to 60
    percent availability rates with units performing at 63 percent mission
    capability. These reliability and maintainability metrics compare
    favorably to a year ago when fleet availability was averaging below 50
    percent.
        Last year the program provided information regarding its efforts
    toward the establishment of the Global Sustainment posture across
    Europe, Asia-Pacific, and North America. In 2015, the program made
    progress in standing up regional Maintenance, Repair, Overhaul, and
    Upgrade (MRO&U) capabilities for airframes and engines in the European
    and Pacific regions. These initial MRO&U capabilities will support
    overseas F-35 airframe and engine heavy-level maintenance for all
    customers, including the U.S. Services, and will continue to provide
    the best-value to the enterprise. Italy will provide initial airframe
    MRO&U capability in the European region in 2018. Turkey will provide
    engine heavy maintenance in the European region in 2018, with the
    Netherlands and Norway providing additional capability a few years
    later. F-35 airframe MRO&U capability in the Pacific region will be
    provided by Australia in 2018 and then by Japan. Australia will also be
    providing initial engine heavy maintenance, followed by Japan about
    five years later.
        In 2015 the program also kicked-off initial planning efforts for
    expansion of component repair into the European and Pacific regions.
    Efforts began to identify ``best value'' repair sources in each region
    for approximately 18 key depot-level repairable items. International
    Partners and their respective industries will be requested to propose
    component groupings, which leverage their strongest industrial
    competencies to deliver optimum repair capability at the best cost to
    the global sustainment solution.
        The program will continue this process in 2016 and 2017 with the
    Department of Defense assigning to our Partners and FMS customers
    repair capabilities such as wheels and brakes, electrical and hydraulic
    systems, maintenance of support equipment, and warehousing for the
    global supply chain. These same capabilities either currently exist or
    are being developed at the U.S. Services' continental United States
    (CONUS) depots in accordance with current U.S. law.
                             vi. risk & challenges
        Although improving, the Program is not without risks and
    challenges. Currently, our most significant technical concerns are the
    development and integration of mission systems software and the
    development and improvement of ALIS.
        The F-35 aircraft has approximately eight million lines of code,
    with another 16 million lines of code on the off-board systems. This is
    an order of magnitude greater than any other aircraft in the world and
    represents a complex and often frustrating element in the program.
    Several years ago the program instilled discipline in the way software
    is developed, lab tested, flight tested, measured and controlled. This
    has produced much better and more predictable results over the past two
    years. However, both the fielded Block 3i software and the 3F software
    in flight test were not as stable as they need to be to support our
    Warfighters. We have experienced instability in the sensors leading it
    to shut off and ``reboot'' in flight. We believe we have identified the
    root cause of these stability problems to be the timing of software
    messages from the sensors to the main F-35 fusion computer, and we have
    tested solutions in the lab environment. As of April 13, 2016, we had
    flown 29 sorties and 75 hours with the new software containing the
    stability improvements. Thus far, we have seen an improvement in the
    software's stability with a meantime between stability problems
    improving from once every four hours to greater than 10 hours. We are
    cautiously optimistic that these fixes will resolve the current
    stability problems, but are waiting to see how the software performs in
    an operational test environment. We have three Operational Test (OT)
    jets flying with the new software and expect 50 hours of additional OT
    testing by April 29th. At that time we will have enough data to
    consider whether the software stability issue can be closed. If the
    fixes are successful, we will add them to a new version of 3i software
    and field that in time for USAF IOC. We will also incorporate the fixes
    in the 3F software we are developing and flight testing. To ensure we
    completely understand these issues the program office has also launched
    an in-depth look at this issue in the form of a software stability
    ``Red Team.'' This team, made up of a group of experts from the Navy
    and Air Force, has started in-depth analysis of all reported issues and
    is working to develop recommendations to ensure the F-35 software is
    robust and resilient into the future.
        The final software version, Block 3F, has the most software risk
    facing the program for a number of reasons. First, 3F testing started
    later than planned because we had to spend more time fixing Block 2B
    and 3i software. Second, 3F has the same stability issues as Block 3i
    as described above. Third, Block 3F software must receive information
    from other external air and ground operational sources and fuse this
    with F-35 information, giving the pilot a more complete and accurate
    picture of the battlespace. Additionally, the remaining flight loads,
    buffet, and weapons delivery accuracy flight testing needs to be
    accomplished. We estimate there is about four months of risk to the
    planned schedule, projecting full 3F capability to the Warfighters in
    the late Fall of 2017.
        The next version of ALIS, version 2.0.2, which includes new
    capabilities to support USAF IOC, also has some schedule risk. This
    version of ALIS combines the management of F135 engine maintenance
    within ALIS and tracks all the life-limited parts on each and every F-
    35 aircraft. The development of these capabilities is proving to be
    difficult because they require integration with Lockheed Martin's and
    Pratt & Whitney's Enterprise Resource Planning systems, or the ``back
    end'' of ALIS. We anticipate that this latest version of ALIS (2.0.2)
    is approximately 60 days behind schedule.
        We are also working closely with the Joint Operational Test Team to
    finalize the F-35 fiscal year 2016 Cyber Test Plan. This testing is
    scheduled to begin this month and will perform end-to-end Vulnerability
    and Adversarial Testing on ALIS and the F-35 Air Vehicle. Hundreds of
    penetration and cyber security tests have already been accomplished on
    the system, enabling us to connect the F-35 systems to the DOD Global
    Information Grid (DOD and Services networks).
        We have also instituted an ALIS initiative aimed at fixing prior
    deficiencies and rapidly fielding them to the Warfighter. As we
    continue to develop new capabilities, the Program has set up a parallel
    effort--known as ``Service Packs''--to fix many of the deficiencies the
    maintainers in the field have brought to our attention. These
    deficiencies usually result in workarounds and add workload to our
    maintainers' already demanding responsibilities. Service Packs are
    developed, tested and fielded on a much quicker timeline than our
    larger increments of ALIS. We fielded the first Service Pack in
    January, and feedback from the field has been encouraging. We will
    continue to rapidly field Service Packs to improve the usability of
    ALIS for our maintainers, the next of which will be fielded in the next
    few months.
        One final comment concerning risks and issues on the program deals
    with the recent report issued by the Director of Operational Test and
    Evaluation (DOT&E). This report is factually accurate and was written
    entirely based on information that came from the F-35 Program Office--
    there is no information in the report that was not already known by the
    Program Office, the U.S. Services, and our Partners. While not
    highlighted by the DOT&E report, among the 14 issues cited in the
    report, the F-35 Program fully concurs with nine of them and partially
    concurs with the other five. The F-35 Program has a dedicated effort
    underway to resolve or otherwise mitigate them.
                       vii. delivering combat capability
        Following the declaration of IOC in June of 2015, the USMC has
    continued to train and exercise its combat capable F-35B aircraft. At
    the beginning of December 2015, Marine Fighter Attack Squadron 121
    deployed eight F-35Bs to Twenty-nine Palms in California for Exercise
    Steel Knight. The team executed 32 sorties in support of the combined
    arms live-fire exercise, taking an important step toward integrating
    the F-35B into the Marine Corps Combined Arms Team and demonstrating
    their capability to execute close air support and strike missions from
    an austere operating site.
        The USAF also showed its increasing capabilities with the F-35A,
    executing a deployment of six Operational Test aircraft from the 31st
    Test and Evaluation Squadron at Edwards AFB, California to Mountain
    Home AFB, Idaho. The squadron executed 54 sorties over 12 days of
    flying as part of a joint training exercise with U.S. Navy Seals, F-
    15Es, A-10s, and Apache and Blackhawk helicopters, delivering 10 GBU-31
    and 20 GBU-12 precision guided inert munitions. This is the first time
    the F-35A has deployed to and operated from a base with no organic F-35
    support or presence.
        An F-35 Lightning II Joint Program Office top priority is meeting
    USAF IOC at Hill AFB, Utah with Block 3i capabilities between August
    and December 2016. Hill's active-duty 388th Fighter Wing and Reserve
    419th Fighter Wing will be the first USAF combat-coded units to fly and
    maintain the Lightning II. In support of meeting the USAF's IOC date,
    Hill AFB has already received its initial F-35As and is now training
    with them, including the first weapons employment from an operational
    F-35A.
        The USN has set August 2018 as its IOC objective date with the F-
    35C. In support of meeting the USN IOC, sea trials will continue this
    year and culminate in the third and final DT period afloat. This test
    is expected to last approximately 21 days and will test and certify the
    remaining embarked launch and recovery environmental envelopes,
    including those with various ordnance and fuel load combinations
    expected in fleet use. The test will also complete all initial
    shipboard flight deck and hangar deck supportability procedures and
    processes, paving the way to Operational Test and Fleet use.
                viii. international partner and fms participants
        International participation on the program with eight Partners and
    three FMS customers remains solid. The program has now delivered the
    first Royal Norwegian Air Force F-35 to Luke AFB expanding the
    International Partner pilot training currently ongoing there. The first
    Italian Air Force F-35A was also delivered from the production facility
    in Cameri, Italy, and then subsequently completed the first F-35 trans-
    Atlantic flight in February, landing at Naval Air Station, Patuxent
    River in Maryland. After completion of some program testing, this
    aircraft will also join the pilot training effort at Luke AFB. F-35A
    has also conducted aerial refueling flight testing with a Royal
    Australian Air Force KC-30A tanker and completed aerial refueling
    flight testing and certification with an Italian Air Force KC-767
    tanker. Most recently we completed aerial refueling flight testing with
    a Dutch KC-10.
        In 2015, as part of initial site planning, we commenced standup of
    maintenance capabilities in Norway, Netherlands, Turkey, United
    Kingdom, Israel, Japan and Korea. Also, the Japanese Final Assembly and
    Check Out assembly facility is now complete with both Electronic Mate
    Assembly Stations tools installed and accepted. Construction and
    installation activities remain on schedule, and the major components
    are now being shipped. The first Japanese F-35A is scheduled to rollout
    of the facility in November 2016.
        We anticipate that Denmark will make its final decision on its
    fighter replacement late Spring 2016. Additionally, although Canada has
    indicated that it will conduct a new fighter replacement competition,
    it still remains a full partner in the F-35 program. We continue to
    provide the Canadian government with the most up-to-date and accurate
    information to aid them in its future selection process.
        The Government Accounting Office (GAO) conducted two focused F-35
    reports in 2015--one on the overall program and the other on
    sustainment. Both reports were completed with the F-35 program's full
    cooperation and unfettered access to information. The GAO annual F-35
    program report had a single recommendation to establish the Follow-on
    Modernization program as a Major Defense Acquisition Program. DOD non-
    concurred with the recommendation and contends that the modernization
    effort is a continuation of the baseline program and that the existing
    oversight mechanisms, management structure, and decision processes are
    more than adequate to continue to manage the modernization program. The
    GAO had four recommendations on ALIS in the sustainment report. DOD
    concurred with all four recommendations and in many of the areas, the
    program has already initiated appropriate action.
                                 ix. conclusion
        In summary, the F-35 program is making solid progress across all
    areas including development, flight test, production, maintenance, and
    stand-up of the global sustainment enterprise. As with any big and
    complex program, new discoveries, challenges and obstacles will occur.
    While nearing completion, the F-35 is still in development, and
    technical challenges are to be expected. However, we believe the
    combined government-industry team has the ability to resolve current
    issues and future discoveries. The team's commitment to overcoming
    these challenges is unwavering and we will maximize the F-35's full
    capability for the Warfighter.
        We will continue executing with integrity, discipline, transparency
    and accountability, holding ourselves accountable for the outcomes on
    this program. The team recognizes the responsibility the program has
    been given to provide the pillar of the U.S. and allied fighter
    capability with the F-35 for generations to come, a responsibility we
    take very seriously.
        Thank you again for this opportunity to discuss the F-35 program.
    We look forward to answering any questions you have.

        Chairman McCain. Thank you.
        Dr. Gilmore?

           STATEMENT OF HONORABLE J. MICHAEL GILMORE, Ph.D.,
      DIRECTOR OF OPERATIONAL TEST AND EVALUATION, DEPARTMENT OF
                                DEFENSE

        Dr. Gilmore. Mr. Chairman, Senator Reed, members of the
    committee, I will focus my remarks on readiness for initial
    operational test and evaluation, and achievement of full combat
    capability.
        My estimate is the program will not be ready to begin
    operational test and evaluation until mid-calendar year 2018 at
    the earliest. That is about a 1-year delay relative to the
    program's objective date and 6 months relative to the threshold
    date.
        There are a number of reasons that that is my assessment.
    The most complex mission system testing remains, as does
    verification of fixes to a number of significant problems. In-
    flight stability of mission systems with the new Technical
    Refresh 2 processor has been poor, but there is recent
    indication of significant progress in achieving stability,
    although those stability issues while they were being fixed led
    to delays in Block 3F development, which provides full combat
    capability. Nonetheless, there is good news on the stability
    front.
        Significant ground startup instabilities persist, however.
    Inadequate fusion of sensor information from sensors on a
    single aircraft, as well as among a four-ship of aircraft,
    resulted in cluttered and confusing displays and are still a
    problem. Four-ships will be frequently used in combat to enable
    key multi-ship sensor applications that are necessary to deal
    with the increasingly complex and stressing integrated air
    defense systems potential adversaries began fielding in the
    middle of the last decade.
        Shortfalls in electronic warfare and electronic attack,
    geolocation, electronic countermeasures persist. There are
    shortfalls in the performance of the distributed aperture
    system, including missile warning and situational awareness;
    long aerial refueling times up to two to three times those of
    legacy aircraft; lack of viable moving target capability, which
    is crucial for successful conduct of close-air support and
    other missions; lack of display to pilots of failures in
    critical mission systems components, which is unacceptable in
    combat; and there are other issues that are classified.
        Regarding mission systems, the program has now changed its
    approach, as has been discussed, from executing parallel
    schedule-driven software releases to a serial capability-based
    approach, which does take longer. But that approach has been
    validated in the recent achievement of improved stability with
    the TR2 processor. That approach, the new approach, allows the
    extra time needed to actually fix problems and, as I mentioned,
    has been validated by the progress recently seen.
        Stealth aircraft are not invisible. Mission systems
    infusion must work in some reasonable sense of that word. They
    do not have to be perfect, but they have to, in some sense of
    the word, work to prevail in combat against the modern, very
    capable, and mobile integrated air defense systems potential
    adversaries have been fielding since the middle of the last
    decade. The ability to prevail against these threats is a key
    rationale for this $400 billion program.
        To continue with other reasons that there may be a delay in
    operational testing, time is needed to complete and certify
    full weapons usage throughout the full flight envelope. The
    most recent test community estimates are October 2017 for F-
    35A, February 2018 for F-35C, and May 2018 for F-35B. These
    estimates assume an increase in the rate at which weapons tests
    are accomplished that may be a challenge to achieve.
        As has been mentioned, there are problems that continue
    with the Autonomic Logistics Information System, or ALIS, which
    remains immature, requiring problematic and resource-intensive
    workarounds not acceptable in combat. Under the program's
    current schedule, the final version of ALIS 3.0, the full
    capability production version required for IOT&E and full
    combat capability, will not be released until the first quarter
    of calendar year 2018. But this schedule could be delayed by
    the ongoing problems with ALIS version 2.0.2, which attempts to
    integrate the engine data and incorporate other functionality
    and fixes.
        Concurrency-driven extensive modifications would be
    required. The early lot aircraft that originally had been
    bought for IOT&E when IOT&E was planned to begin in 2013. The
    current unmitigated schedule for accomplishing those
    modifications, including those for the gun, which is turning
    out to be very problematic on all variants, extends into the
    third quarter of 2019. The program is working on a multipronged
    approach to pull those modifications to the left. That includes
    taking production aircraft slated for operational use and
    taking hardware from recently fielded aircraft, and a
    definitive decision on that approach is needed now.
        There are inadequacies that remain in U.S. reprogramming
    laboratory that are precluding the ability to generate combat-
    effective mission data files, enabling aircraft to deal with
    the air defense threats I mentioned. They are only going to
    worsen in the future.
        The current schedule shows USRL hardware upgrades required
    to handle current threats extend into calendar year 2020. The
    program can and has delivered mission data files, but they are
    not optimized or fully tested to handle the current threat
    because of the hardware and software deficiencies in the USRL.
        The program's optimistic schedule for delivery of a
    validated but probably inadequate MDF to support IOT&E is the
    first quarter 2018. But this assumes USRL receives the
    functional lab version of Block 3 this month, which may be
    problematic.
        For all these reasons, delays to IOT&E and full combat
    capability are likely. I want to remind everyone that IOT&E
    will constitute the most realistic and stressing test of JSF
    that will be performed. Therefore, discovery of new,
    significant deficiencies during IOT&E, as was the case with F-
    22, is pretty much assured.
        Thank you.
        [The prepared statement of Dr. Gilmore follows:]

                    Prepared Statement by J. Michael Gilmore
        Good afternoon, Mr. Chairman, Ranking Member Reed, my testimony
    today discusses the status of the F-35 program using my fiscal year
    2015 Annual Report as the basis. There are a few updates since the
    report was released in January 2016, which I will highlight today.
        Overall, the program is at a critical time. Although the Marine
    Corps has declared Initial Operational Capability (IOC) and the Air
    Force plans to do so later this calendar year (CY), the F-35 system
    remains immature and provides limited combat capability, with the
    officially planned start of Initial Operational Test and Evaluation
    (IOT&E) just over one year away. Over the past year, flight test teams
    continued to accomplish test flights at the planned rate, and a new
    version of software capability, Block 3i, was fielded. However, there
    are still many unresolved significant deficiencies, the program
    continues to fall behind the planned software block development and
    testing goals, and sustainment of the fielded aircraft is very
    burdensome. (The latter is not a surprise, since, as the Program
    Executive Officer has noted, F-35 remains under development
    notwithstanding the Services' declarations of IOC.) The program is
    working to resolve the many issues it confronts, and has recently made
    some progress addressing problems with the stability of Block 3i
    mission systems, but my assessment is that the F-35 program will not be
    ready for IOT&E until CY18 at the soonest. Because aircraft continue to
    be produced in substantial quantities (all of which will require some
    level of modifications and retrofits before being used in combat),
    IOT&E must be conducted as soon as possible to evaluate F-35 combat
    effectiveness under the most realistic combat conditions that can be
    obtained. Over 300 aircraft are planned to be built by the end of
    fiscal year 2017 when IOT&E is currently scheduled to begin.
        Test Flights and Software Development. Before operational testing,
    developmental test teams fly sorties under very specific conditions to
    examine the system's performance. This year, those teams executed very
    closely to the planned sortie production rate throughout the year, as
    has been the case in previous years. It will be important to ensure the
    government flight test centers and the associated ranges and facilities
    at Edwards Air Force Base (AFB) and Patuxent River Naval Air Station
    (NAS) remain sufficiently resourced to overcome the remaining test
    challenges, which are significant. However, sortie production does not
    necessarily mean that planned test points were completed successfully,
    the system under test functioned as designed, the data collected were
    usable to sign off contract specification compliance, or that the
    system will actually be effective and suitable in combat.
        In fact, the program did not accomplish the amount of test points
    planned in several flight test venues, and the program continued to add
    testing via ``growth points'' while deleting many mission systems test
    points as no-longer-required. This continues to be the case, as the
    program recently deleted Block 3F test points and added test points to
    address Block 3i deficiencies in mission systems performance and
    stability. Because of a change by the program in defining growth in
    test points, the amount of this re-defined growth was less during the
    last year than in previous years.
        Regarding mission systems test progress over the past year, the
    program focused on culminating Block 2B development and testing in
    order to provide a fleet release enabling the Marine Corps F-35B Joint
    Strike Fighter (JSF) declaration of IOC, while transitioning
    development and flight test resources to Block 3i and Block 3F.
        The program terminated Block 2B development in May 2015, and the
    Marine Corps declared IOC in July 2015, despite many known deficiencies
    and, as expected, with limited combat capability. Block 3i
    developmental flight testing restarted for the third time in March
    2015, after two earlier attempts in May and September 2014. As
    mentioned in my annual report, Block 3i began with re-hosting the
    immature Block 2B software and capabilities into new avionics
    processors. Although the program originally intended that Block 3i
    would not introduce new capabilities and would not inherit technical
    problems from earlier blocks, both of these things occurred. The
    combination of re-hosted immature software and new processors resulted
    in avionics stability problems that were significantly worse than Block
    2B. Despite the problems with avionics stability, sensor fusion, and
    other inherited issues from Block 2B, the program terminated Block 3i
    developmental flight testing in October 2015, and released Block 3i
    software to the fielded units. This decision was made, despite the
    unresolved Block 3i deficiencies, in an attempt to meet the program's
    unrealistic schedule for completing development and flight testing of
    Block 3F mission systems.
        The Air Force insisted on fixes for five of the most severe
    deficiencies inherited from Block 2B as a prerequisite to use the final
    Block 3i capability in the Air Force IOC aircraft; Air Force IOC is
    currently planned for August 2016 (objective) through December 2016
    (threshold). However, as the program attempted to concurrently develop
    and test Block 3i and Block 3F software, the latter of which began
    flight testing in March 2015, the immaturity and instability of the
    Block 3i mission systems software continued to manifest problems in
    flight testing. In February 2016, when the latest version of Block 3F
    software--version 3FR5--was delivered to flight test, it was so
    unstable that productive flight testing could not be accomplished.
    Consequently, the program elected to reload a previous version of Block
    3F software--version 3FR4--on the mission systems flight test aircraft,
    to allow limited testing to proceed. The program then converted its
    developmental labs back to the Block 3i configuration in another
    attempt to address key unresolved software deficiencies, including the
    avionics instabilities troubling both Block 3i and Block 3F. This
    decision by the program to return to the Block 3i configuration and
    address the poor mission systems performance should be commended. It
    has caused some near-term delays, but it is a necessary step to ensure
    the Air Force has adequate Block 3i software for IOC and that the
    additional full set of combat capabilities planned in Block 3F can be
    effectively tested with a stable baseline of software and eventually
    fielded to operational units. The program recently loaded all the
    mission systems test aircraft with a new build of Block 3i software--
    version 3iR6.21 -- which started flight testing on March 25. The
    program is in the process of completing Block 3iR6.21 flight testing,
    which includes 4-ship test missions, to evaluate performance prior to
    providing this software to the fielded units. The avionics stability of
    Block 3iR6.21 during these recent test missions appears to have
    improved compared to previous versions, however incidences of start-up
    and in-flight instability were still observed. Although analyses of the
    test data are still on-going, test reports indicate that inflight
    stability has potentially improved to be comparable with the fielded
    version of Block 2B while the significant initial startup problems
    continue to be a challenge. During the first 30 flights with Block
    3iR6.21, which accumulated 75.6 hours of flight time, no less than 27
    power cycles were required to get all systems functioning between
    initial startup and takeoff. These power cycles varied in degree--from
    ``cold iron'' resets, where the aircraft had to be shut down and then
    restarted, to component or battery power recycling. The extent to which
    the initial startup sequence has improved--or not--compared to earlier
    versions of Block 3i software is not known, as the program does not
    track startup events in the same manner as flight instability events.
    The status of the other ``must fix'' deficiencies is unknown at the
    time of this testimony.
        Delivering and testing the numerous new and advanced capabilities
    planned to be in Block 3F mission systems, which are specified in the
    program's Operational Requirements Document (ORD), presents significant
    challenges for remaining development and flight test. Before the
    program's decision to pause Block 3F developmental flight testing and
    rework Block 3i software, test progress was limited as flight testing
    had only accomplished approximately 20 percent of the Block 3F baseline
    test points by the end of March 2016. This is because many of the test
    points, including the more complex weapons delivery accuracy events,
    could not be flown until stable, functioning Block 3F software was
    available. While the new Block 3iR6.21 software was in flight testing,
    the program finished developing and testing an updated version of Block
    3FR5 in the lab, released it to the test centers, and started loading
    it on the mission systems aircraft to resume Block 3F flight testing in
    mid-April. Because of the reworking of Block 3i software and the added
    capability being incorporated in the remaining Block 3F software, it is
    incorrect to assume that the difficult testing is behind the program.
    In fact, the most stressing missions systems testing remains to be
    completed, since the final Block 3F capabilities are both complex and
    important to the F-35's viability. A relatively recent example of the
    problems with an earlier version of Block 3F software was an attempted
    four-ship Electronic Warfare ``Super Scenario'' mission that resulted
    in only two aircraft arriving at the range because the other two
    aircraft ground aborted due to avionics stability problems during
    startup. Also, when the aircraft operated in a dense and realistic
    electromagnetic environment, the current avionics problems caused poor
    detection and fusion performance, which is exacerbated in multi-ship F-
    35 formations. Due to the large amount of difficult flight testing
    remaining, it is likely there will be discoveries of additional
    significant deficiencies that will need to be rectified before IOT&E.
        United States Reprogramming Laboratory (USRL). Significant,
    correctable deficiencies exist in the U.S. Reprogramming Laboratory
    (USRL) that will preclude development and adequate testing of effective
    mission data loads for Block 3F. Despite a $45 million budget provided
    to the Program Office in fiscal year 2013, the required equipment was
    not ordered in time and the USRL is still not configured properly to
    build and optimize Block 3F Mission Data Files (MDFs). The program
    still has not designed, contracted for, and ordered all of the required
    equipment--a process that will take at least two years for some of the
    complex equipment--after which significant time for installation and
    check-out will be required. The estimate of earliest completion, with
    the required signal generators and other upgrades to properly test
    Block 3F mission data loads, is late 2019, which is after the planned
    IOT&E of Block 3F. As I explain in my annual report, the corrections to
    the USRL are needed to provide the F-35 with the ability to succeed
    against the modern threats that are the key rationale for pursuing this
    $400 centsllion program. If the situation with the USRL is not
    rectified, U.S. F-35 forces will be at substantial risk of failure if
    used in combat against these threats. Further, I note that the
    laboratory being built to provide MDFs to the partner nations will be
    more capable than the USRL is when we are preparing for IOT&E.
    Therefore, the full set of required upgrades for the USRL should be
    pursued immediately, without further delay.
        Cybersecurity testing. The limited and incomplete F-35
    cybersecurity testing accomplished to date has nonetheless revealed
    deficiencies that cannot be ignored. Multiple tests are scheduled for
    spring 2016 and some are on-going at this time; however, the JSF
    Program Office (JPO) and contractor are still reluctant to allow
    testing of the actual, operational Autonomic Logistics Operating Unit
    (ALOU) including its many connections, fearing the testing might
    disrupt its operations. Even though the program is providing alternate
    systems for ALOU testing in the near term, which is better than
    foregoing all testing, it must allow full, end-to-end, cooperative and
    adversarial cyber tests on every level and component of the operational
    Autonomic Logistics Information System (ALIS). The program must also
    designate an aircraft and provide the authority to test it, as soon as
    possible, a process the Program Office has been hesitant to do to date.
    Cybersecurity testing on the next increment of ALIS--version 2.0.2--is
    planned for this fall, but may need to be delayed because the program
    has not been able to resolve some key deficiencies and complete content
    development and fielding as scheduled.
        IOT&E readiness and adequacy. IOT&E will be the first rigorous and
    operationally representative evaluation of the combat capability of the
    F-35. Unlike previous developmental testing, IOT&E will examine the
    completed, fully operational aircraft to ensure it is capable of
    prevailing in combat against realistic threats. However, the slow rate
    of maturation of required combat capabilities renders the current
    schedule to complete development and enter IOT&E by August 2017
    unrealistic. Essential systems are not becoming stable and viable
    enough quickly enough to successfully begin testing at that time. Based
    on the historical performance of the program and the large amount of
    testing that remains, my estimate for completion of developmental
    flight test is no earlier than January 2018. For these reasons, the
    test organizations' capacity should be maintained at current levels,
    and not reduced in a counter-productive effort to meet unrealistic
    budget targets. Several other significant obstacles remain to be
    overcome before IOT&E can begin, including the following:
          Weapons integration. A significant amount of weapons
    integration developmental testing remains in order to integrate and
    qualify for operational use of the full suite of Block 3F weapons,
    including the gun. Since my annual report, nothing has changed my
    estimate that the program must complete weapons employment test events
    at a pace three times faster than it has previously been able to do. In
    fact, most mission systems Weapons Delivery Accuracy (WDA) testing has
    been on hold for months while awaiting a version of Block 3F with the
    required capabilities and maturity to complete these important and
    difficult tests. Eliminating or failing to execute some of the
    remaining planned developmental WDA test events will only result in
    deferring them to be done later by the operational test squadrons,
    which will likely delay identification and correction of significant
    new discoveries and, therefore, increase the risk of delays to IOT&E.
    The developmental WDA test events are critical in preparing for IOT&E
    and the Block 3F weapons events are much more complex than previous
    testing for Block 2B and Block 3i. For example, critical air-to-air and
    air-to-ground gun accuracy testing still has not occurred because test
    aircraft have not received the required gun modifications, which are
    expected in late summer 2016. Whether the F-35, the first modern
    fighter without a heads-up display, can accurately employ the gun in
    realistic air-to-air and air-to-ground situations, with the Generation
    III Helmet Mounted Display System, remains to be seen until this
    testing can be conducted.
          Modification of aircraft. One of numerous penalties
    associated with highly-concurrent F-35 development and production is
    that all the early operational aircraft now need many significant,
    time-consuming, and costly modifications. The 18 U.S. aircraft (6 each
    of F-35A/B/C) required for IOT&E need to be representative of the
    configuration of the weapons system that will be bought at full
    production rates, which is Lot 9 or Lot 10 and later; recall that the
    operational test aircraft were purchased in early production lots (Lot
    3 through 5), when the program planned IOT&E to occur in 2013. The
    program and the Services need to decide whether to pursue all of the
    modifications needed to those early-lot aircraft prior to IOT&E, or to
    equip later production aircraft, requiring few or no modifications,
    with the necessary instrumentation for IOT&E. Other than continued new
    discoveries of structural deficiencies which may cause further
    modifications and delays, nothing substantive has occurred since my
    annual report to change my estimate that if the former course is
    pursued, the aircraft designated for IOT&E will not be ready before
    April 2019. This is despite ongoing efforts by the program to
    accelerate the modification schedule. An example of a recent discovery
    of a structural deficiency is overloads that are occurring while
    carrying external AIM-9X missiles that may require a structural
    modification to the wings of some F-35 variants. The program is also
    pursuing other options for mitigating some of the other modification
    delays, including taking some of the new Block 3i processor sets from
    the production line to modify some of the IOT&E aircraft. However, the
    program apparently does not have enough new processor sets to provide
    even two sets without significantly affecting the production line and
    delaying aircraft deliveries. This situation is indicative of poor
    management of the production and modification plans since the
    requirement for modifying the operational test aircraft has been known
    for many years. The program and Services are also considering swapping
    new Block 3i processors from other delivered aircraft with the
    operational test aircraft that are currently configured with Block 2B
    hardware. The primary problem with staying on the course of completing
    modifications of the older aircraft is that the production line and the
    depots--where earlier lot aircraft are being modified--compete for the
    same materiel. Of course, this issue affects not only the IOT&E
    aircraft, but all of the aircraft produced before at least Lot 9 as
    well. Also, since the program and Services still have not agreed on a
    plan for modifications, it is still not clear if a schedule with the
    required modifications, including the gun and follow-up radar signature
    testing, is even executable prior to IOT&E due to the demand on
    available parts and depot capacity. A decision is needed now on the
    approach to be taken, so I have asked the program to brief me on their
    plan to either complete the required modifications or provide
    instrumented production-representative operational test aircraft prior
    to IOT&E by June 2016.
          Mission data. I already addressed earlier in my statement
    the problems with the USRL with respect to the need for upgrades in
    order to be able to produce mission data loads for Block 3F IOT&E.
    Again, this is a significant problem for the program, and the processes
    involved in completing the Block 3F laboratory upgrades need to be
    accelerated, or IOT&E could be delayed well into 2019, with the combat
    capability of the F-35 remaining deficient. Besides programming the
    mission data loads, the laboratory is also used as a test venue for
    optimizing the performance of scan schedules within the data loads.
    These schedules control the time-sharing of the radar and the
    electronic support systems to ensure threat signals are detected, geo-
    located, and correctly identified for battlespace awareness. Such
    testing takes time in the laboratory and should be completed prior to,
    and refined after, testing on the open-air ranges. Failure to properly
    develop, test and optimize these data loads could adversely impact F-35
    mission capability during IOT&E or, worse yet, in combat.
          Sustainment. In my annual report I provided details on
    operational suitability. I highlight here, with respect to IOT&E
    readiness, that if the program is only able to achieve and sustain its
    goal of 60 percent aircraft availability, the length of IOT&E will
    increase significantly because a combat-ready availability of 80
    percent is planned and needed to efficiently accomplish the open-air
    mission trials with the number of aircraft planned for IOT&E.
    Improvements in reliability and maintainability, along with significant
    improvements to the ALIS, are all needed. The program has worked and
    achieved better performance in these areas over the past two years, but
    progress is still too slow if the program is to be ready for IOT&E in
    less than two years. Of course, this is not only an issue for IOT&E
    execution, but also for the fielded operational units.
          Operator preparedness. In addition to having production
    representative aircraft, effective mission data, and improved
    sustainment, the units that will execute the operational test trials
    need viable tactics and enough time to become proficient by training to
    them. For example, the pilots will need time to adapt to and train with
    the new lightweight Generation III Helmet Mounted Display System that
    will begin testing later this year. The operational test team has
    always planned for this training to occur; however, the program
    continues to believe that this can be done concurrently with
    development. Concurrent development and training for test has been
    tried in other programs, and is fraught with difficulty and failure.
          Test range improvements. I have been working within the
    Office of the Secretary of Defense and with the Service staffs for the
    past five years to improve the test venues for operational testing of
    F-35 and other platforms, in particular the open-air test resources.
    These efforts have resulted in putting improvements on track for F-35
    IOT&E to be able to include already fielded advanced threats that
    previously were not going to be available for testing and training.
    However, resistance and bureaucratic delays to adequately integrating
    these assets have made progress difficult, despite the decision having
    been made by the Secretary of Defense to ensure a full and complete
    test capability that is no less than that available with older threat
    systems. I will continue to work to bring the needed level of
    integration to fruition, and appreciate the support provided so far.
          IOT&E plans. IOT&E will include trials in various mission
    areas, specifically Close Air Support (CAS), Surface Attack,
    Suppression/Destruction of Enemy Air Defenses (SEAD/DEAD), Air Warfare
    (both offensive and defensive), and Aerial Reconnaissance. The IOT&E
    will also include tests that compare the ability of the F-35 to
    accomplish CAS, Combat Search and Rescue and related missions--such as
    Forward Air Controller (Airborne)--with the A-10, plus Suppression of
    Enemy Air Defenses (SEAD)/Destruction of Enemy Air Defenses (DEAD)
    missions with that of the F-16, and Surface Attack missions with that
    of the F/A-18. These comparison test trials are essential to
    understanding the new capabilities expected from the F-35 program,
    relative to the legacy systems it is designed to replace. The trials
    will be designed to answer the question, ``Is the new system as good as
    or better at accomplishing the mission than the legacy system under the
    same conditions and in the same environment?'' Comparison testing is
    not new with the JSF. Of note, the F-22 completed comparison testing
    with the F-15 during its IOT&E. Typically, many variables are present
    during operational testing that cannot be controlled, especially in
    force-on-force exercises. Areas where commonality in the variables can
    be sought among trials to enable valid comparisons include: the type of
    mission; the size, organization, and capability of the enemy force; the
    terrain (or environment) where the test is conducted; the size,
    organization, and capability of the supporting blue forces; and time
    available to accomplish the mission. These comparison test trials will
    be designed as ``matched pairs'' where the F-35 aircraft will fly the
    mission trial and then the comparison aircraft will fly the same
    mission trial, under the same operational conditions, with pilots
    making best use of the differing capabilities and tactics for employing
    each aircraft.
        Block 2B Capabilities Fielded. As mentioned in my annual report, if
    used in combat, the Block 2B F-35 will need support from command and
    control elements to avoid threats, assist in target acquisition, and
    control weapon employment for the limited weapons carriage available
    (i.e., two bombs and two air-to-air missiles). Block 2B deficiencies in
    fusion, electronic warfare, and weapons employment result in ambiguous
    threat displays, limited ability to respond to threats, and a
    requirement for off-board sources to provide accurate coordinates for
    precision attack. Since Block 2B F-35 aircraft are limited to two air-
    to-air missiles, they will require other support if operations are
    contested by enemy fighter aircraft. The program deferred deficiencies
    and weapons delivery accuracy test events from Block 2B to Block 3i and
    Block 3F, a necessary move in order to transition the testing
    enterprise to support Block 3i flight testing and Block 3F development,
    both of which began later than planned in the program's integrated
    master schedule. The program fielded new software for the ALIS during
    2015. These versions included new functions, improved interfaces, and
    fixes for some of the deficiencies in the earlier ALIS versions. The
    program also fielded a new version of the Standard Operating Unit (SOU)
    which is more modular and easier to deploy. However, many critical
    deficiencies remain which require maintenance personnel to use
    workarounds to address the unresolved problems. For example,
    transferring aircraft data between SOUs, which is needed to support
    deployments, does not function seamlessly within ALIS--as it was
    designed--but often requires manual updating or corrections to data
    files after a transfer has occurred. The program's failure to integrate
    propulsion data into ALIS, a feature which was originally planned to be
    included in version 1.0.3 but is now scheduled for a two-phased release
    in ALIS 2.0.2 and ALIS 3.0, causes field units to rely heavily on
    contractor support and maintenance applications entirely separate from
    ALIS to complete post flight maintenance actions. This process adds
    time to the maintenance timeline for preparing aircraft for subsequent
    flights. Other ALIS functions, such as customer support, have failed to
    improve as planned. Supply functions that should be autonomic, such as
    identifying where to send failed parts for repair and routing
    replacement parts to operating units, are manual and labor intensive,
    contributing to supply delays. Training programs for ALIS are immature
    and require maintenance personnel to learn ALIS processes in the
    fielded locations. In addition, the process for creating and receiving
    action requests, needed for resolving maintenance issues when technical
    data are insufficient or not clear, is lengthy and burdensome. Lack of
    standardization of supply procedures across the F-35 enterprise also
    impacts aircraft availability. For example, prioritization of
    requisitions that are not designated as ``most critical'' has led to
    lower priority customers receiving needed spare parts first and has
    resulted in the low levels of F-35B engine and module sparing currently
    available. The Marine Corps has found that the Level of Repair Analysis
    (LORA) study conducted by the Program Office has not led to a path
    forward to achieve repair capabilities at the unit or intermediate
    levels that would support expeditionary warfare. They have also found
    that program guidance is overly restrictive in designating when to make
    repairs to the outer mold line and air vehicle structure based on
    damage limits and tolerances. In general, these repairs are done at the
    depot level, but small repairs can be done at the unit level, although
    the guidance on how to do so is lacking. Instead, unit maintenance
    personnel must generate action requests for assistance or
    clarification, a process which slows down the necessary repair actions.
        Marine Corps units have noted that their aircraft have a range of
    configurations as they are from different production lots and each has
    undergone some level of required modification. This increases the
    variability in which spare parts are acceptable on each aircraft.
    Accurately tracking aircraft configurations is manually intensive and
    is a potential safety issue since ALIS parts management functions may
    allow de-modification of aircraft by permitting installation of parts
    that are no longer acceptable after an aircraft has completed
    modifications.
        The Marine Corps conducted a deployment demonstration to the USS
    WASP in May 2015, which provided lessons learned and highlighted
    limitations for conducting ship-borne operations. The Marines also
    conducted a deployment demonstration to the Strategic Expeditionary
    Landing Field near Marine Corps Air Station (MCAS) Twentynine Palms,
    California, in December 2015. Both deployments required extensive time
    to transfer data to the deployed ALIS and ensure files were formatted
    correctly to support operations. In addition, low aircraft availability
    rates resulted in less than planned sortie generation rates.
        The Air Force also conducted deployment demonstrations--one as a
    ``cross-ramp'' deployment of three F-35A aircraft across the ramp at
    Edwards AFB, California, in April and May 2015 and another with six F-
    35A aircraft to Mountain Home AFB, Idaho, in February 2016. Like the
    Marine Corps demonstrations, the cross-ramp deployment required
    extensive time to get ALIS set up and data files transferred from the
    operational unit. ALIS set up and data transfer during the Mountain
    Home deployment was more efficient than in other demonstration, being
    completed within four hours for each of the six aircraft. The Air Force
    attempted two alert launch procedures during the Mountain Home
    deployment, where multiple F-35A aircraft were preflighted and prepared
    for a rapid launch, but only one of the six aircraft was able to
    complete the alert launch sequence and successfully takeoff. Problems
    during start-up that required system or aircraft shut-downs and
    restarts -a symptom of immature systems and software--prevented the
    other alert launches from being completed.
        There are several issues affecting the F-35's CAS capabilities, as
    mentioned in my annual report. Both the Air Force, with the F-35A, and
    the Marine Corps, with the F-35B, have flown simulated CAS missions
    during training or in support of training exercises, with the aircraft
    in the Block 2B configuration. These training missions have shown that
    the Block 2B aircraft will need to make substantial use of voice
    communications to receive target information and clearance to conduct
    an attack. This is because of the combined effects of digital
    communications deficiencies, lack of infrared pointer capability,
    limited ability to detect infrared pointer indications by a controller
    (which may be improved in the Generation III Helmet Mounted Display
    System), and inability to confirm coordinates loaded to GPS-aided
    weapons. Many pilots consider the Electro-Optical Targeting System
    (EOTS) on the F-35 to be inferior to those currently on legacy systems,
    in terms of providing the pilot with an ability to discern target
    features and identify targets at tactical ranges, along with
    maintaining target identification and laser designation throughout the
    attack. Environmental effects, such as high humidity, often forced
    pilots to fly closer to the target than desired in order to discern
    target features and then engage for weapon employment, much closer than
    needed with legacy systems, potentially exposing them to threats around
    the target area or requiring delays to regain adequate spacing to set
    up an attack. When F-35 aircraft are employed at night in combat,
    pilots with the currently-fielded Generation II helmet will have no
    night vision capability from the helmet, due to the restriction on
    using the current limited night vision camera, which is planned to be
    subsequently upgraded after aircraft are retrofitted with Block 3i and
    pilots are equipped with the Generation III helmet, which is still in
    development and testing. In general, using Block 2B F-35 aircraft,
    pilots would operate much like early fourth generation aircraft using
    cockpit panel displays, with the Distributed Aperture System providing
    limited situational awareness of the horizon, and heads-up display
    symbology produced on the helmet.
        Fuel and weapons limitations also affect F-35 CAS performance. For
    example, a combat-loaded F-35B, assuming a 250-nautical mile ingress to
    a CAS area contact point, would have only approximately 25--40 minutes
    to coordinate with the controller, assess the tactical situation and
    execute an attack using its two air-to-surface weapons before needing
    to depart for fuel. By comparison, an Air Force A-10 would have
    approximately one hour (without external tanks) and one and one half
    hours (with external tanks) of time in the CAS area under the same
    conditions, but would be able to autonomously acquire and identify
    targets, while using datalink to receive and/or pass target and
    situational awareness information. Also, an A-10 would be able to
    employ at least four air-to-surface weapons, including a mixed load of
    ordnance and its internal gun, which provides flexibility in the CAS
    role. Although F-35 loiter time can be extended by air refueling,
    operational planners would have to provide sufficient tankers to make
    this happen, similar to current contingency operations. Recent
    exercises involving the use of F-35A and F-35B aircraft in limited CAS
    mission environments have shown that the fuel burn rate with internal
    weapons (two bombs and two air-to-air missiles) is 10 to 20 percent
    higher than the F-16, depending on variant, and about 50 to 70 percent
    higher than the A-10. This creates a burden on the air refueling
    resources if used to increase F-35 time on station. With additional
    external weapons, the fuel burn rate would be even higher due to the
    additional weight and drag. Also, the recent exercises were flown from
    medium altitudes, where fuel burn rates are less than at lower
    altitudes or during climbs back to altitude. Gun employment, which will
    be available with Block 3F aircraft and needed for the CAS mission
    environments, will likely increase fuel burn rates as the F-35 would
    accomplish gun strafing maneuvers at lower altitudes and then climb
    back to higher altitudes for subsequent CAS attacks. Of course, the F-
    35 is designed to do more missions than CAS, which is the primary
    mission for which the A-10 was designed. Also, the F-35 is designed to
    do these missions in a high-threat area.
        F-35 development is still not complete, but if the capabilities
    stated in the ORD are realized, Block 3F aircraft will have the ability
    to carry additional weapons externally, for an increased payload, as
    well as a gun. For example, a Block 3F F-35A aircraft could carry six
    Guided Bomb Unit (GBU)-12 laser-guided bombs (vice two in Block 2B)
    along with four air-to-air missiles (two Air Intercept Missile (AIM)-
    120C and two AIM-9X). The gun capabilities of the F-35 and A-10 are
    significantly different. The F-35 has a lightweight, 25-millimeter
    cannon, internally mounted on the F-35A with 182 rounds, and in an
    external pod with 220 rounds for the F-35B and F-35C, while the A-10
    has a 30-millimeter cannon with 1,150 rounds. Even though the A-10 gun
    has a higher rate of fire, the A-10 gun can fire for over 17 seconds
    versus approximately 4 seconds for the F-35, providing the capability
    for many more gun attacks. Also, while both guns have a similar muzzle
    velocity, the rounds fired by the A-10 are twice as heavy, providing
    twice the impact energy on the target. The F-35's fusion of information
    from onboard sensors and data from off-board sources (i.e., F-35
    aircraft in formation via the Multi-function Advanced Data Link (MADL)
    and other aircraft via Link 16), along with all-weather ground-moving
    target and synthetic aperture radar capability, are planned to be more
    capable in Block 3F and should provide better battlespace awareness
    than that being fielded with Block 2B and better capability in these
    aspects than an A-10. The extent that these capabilities improve combat
    capability over legacy systems will be evaluated during IOT&E.
        Mission planning time and the debriefing times for the F-35 with
    the current version of ALIS--which must account for the long download
    process for cockpit video--are much longer than those of legacy
    platforms and will affect operations when the F-35 unit is a member of
    composite air and surface forces, since planning timelines will have to
    be adjusted. The program plans to field an improved Ground Data
    Receptacle--which downloads maintenance and flight data files,
    including the cockpit video for mission debrief--later this year. Early
    end-to-end testing shows that transfer times have been cut in half,
    although the Program Office is working with the contractor to correct
    software deficiencies that are expected to improve transfer times by a
    factor of five--from the current times--once completed.
        Software--Block 3. As I explained above, Block 3i was intended to
    be a simple re-hosting of Block 2B mission systems software on new
    hardware and processors. However, Block 3i content also includes
    attempted fixes for five significant functional deficiencies related to
    mission systems identified by the Air Force as necessary for its IOC
    declaration. Four additional discoveries in Block 3i have since been
    identified as deficiencies in need of fixes. The final version of Block
    2B, version 2BS5.2, had 32.5 hours between stability events during
    flight testing, versus only 4.3 hours for Block 3iR6. Because Block 3i
    is the basis for the final new and challenging Block 3F capabilities,
    the program has rightly determined to focus on Block 3i problems in
    lieu of further Block 3F development. The program is currently flight
    testing another version of Block 3i software--version 3iR6.21--on its
    mission systems test aircraft at the Edwards test center. The initial
    test sorties with Block 3iR6.21 show improved stability in flight, with
    indications that the mean time between stability events is again
    comparable to the fielded version of Block 2B; but, as mentioned
    earlier, initial start-up continues to be challenging. Moreover, the
    estimates of mean time between stability events provided above are
    contractor-reported from developmental testing and almost certainly do
    not count all the events operational pilots would consider significant
    in combat. The status of the other ``must fix'' deficiencies is unknown
    at the time of this testimony. The Block 3i software instabilities,
    unresolved deficiencies, lab delays, and the potential for additional
    discoveries are adversely affecting Block 3i tactics development and
    the IOC Readiness Assessment, currently underway at Nellis AFB, and are
    likely to affect Air Force IOC. However, some of the Nellis aircraft
    have now loaded 3iR6.21 and they are also seeing improved avionics
    stability in flight. Nevertheless, the program continues to deliver
    Block 3i aircraft configured with the available software to fielded
    units and will continue to do so into next year.
        Success of Block 3F mission systems depends on the program
    resolving the problems with Block 3i. The stability and functionality
    problems in the initial versions of Block 3F, including those inherited
    from Block 3i and problems caused by new Block 3F capabilities, were so
    significant that the program could not continue flight test. As a
    result, the program recently announced a shift to capability-based
    software releases, rather than schedule-driven and overlapping
    releases. While this may cause further short-term delays to the
    program, I agree with the program's decision to shift to a serial
    process of testing and fixing software in the lab before releasing the
    next software version, and the recent improvements observed in Block 3i
    stability validate this serial approach. The program recently released
    an updated version of Block 3FR5 software to flight test in April and
    then Block 3FR6 later this summer. If the fixes to stability programmed
    into the latest Block 3i software continue to suppress the need for
    avionics resets in flight, mission systems testing and weapons releases
    can potentially resume in earnest and the test point completion rate
    will increase, which is essential given the significant amount of
    testing that remains.
        The program continues to carry a heavy load of technical debt in
    open and unresolved deficiencies. As of the end of March 2016, the
    program had 1,165 open, documented deficiencies, 151 of which were
    Category 1, defined as deficiencies which may cause death, severe
    injury, or severe illness; may cause loss of or major damage to a
    weapon system; critically restricts the combat readiness capabilities
    of the using organization; or result in a production line stoppage. Of
    the 151 Category 1 deficiencies, 128 were associated with the air
    vehicle and the remaining 23 were associated with the ALIS or support
    equipment. Furthermore, 95 of the 151 open Category 1 deficiencies were
    categorized as ``high severity'' by the program or Services. The
    Program Office, in cooperation with representatives from the Services,
    developmental test and operational test organizations, recently led a
    detailed review of the open deficiencies. This effort, which I applaud,
    assessed the effect of each deficiency with respect to both combat
    capability and IOT&E. The resulting list of critical deficiencies
    should be the top priority fixes for the program prior to finalizing
    Block 3F and conducting IOT&E.
        Mission Data. The problems in the USRL described earlier will not
    only adversely affect Block 3F combat capability; they are crippling
    the ability to produce effective mission data loads for today's fielded
    aircraft. The current tools and software in the lab are very difficult
    to work with, resulting in a lengthy, inefficient process to produce
    and test the mission data. Along with the decision to delay moving the
    lab equipment from the contractor facilities in Fort Worth, Texas,
    these inefficiencies created sufficient schedule pressure that the
    program and the Marine Corps directed the lab to truncate the planned
    testing of the Block 2B mission data so that an immature version could
    be fielded in mid-2015 to ``support'' Marine Corps IOC. The lab
    provided a Block 2B mission data load, but the risks of operating with
    these mission data are not understood, and will not be characterized
    until the full set of planned testing, including operational test
    flights with the mission data, are conducted later this year. Because
    the hardware in aircraft equipped with Block 3i cannot operate with the
    Block 2B mission data, Block 3i mission data must be developed and
    tested independently of, but concurrently with, the mission data for
    Block 2B. This creates an additional significant strain on the lab,
    which is already burdened with inefficient reprogramming tools. Block
    3i mission data will likely incur the same fate as Block 2B mission
    data, as inevitable schedule pressure to field immature mission data
    will drive product delivery despite incomplete optimization and
    testing. In any case, the risks in combat associated with operating
    with these early mission data versions will remain unknown until the
    planned lab and flight testing are complete.
        Escape System. The F-35's pilot escape system is immature; it
    requires modifications and additional testing if the Services are to be
    reasonably confident the system is safe for their intended pilot
    populations. The failures during sled tests last summer simulating
    controlled, low-speed ejections caused the program and Services to
    restrict pilots below 136 pounds bodyweight from flying the aircraft.
    Also, the risk to pilots weighing up to 165 pounds, while lower than
    the risk to lightweight pilots, is still considered ``serious'' by the
    program. Last year the program assessed the risk for this 136 to 165
    pound weight class, which accounts for approximately 27 percent of the
    pilot population. The program assessed the probability of death during
    an ejection in these conditions to be 23 percent and the probability of
    some level of injury resulting from neck extension to be 100 percent.
    However, the program and the Services decided to accept that risk and
    not restrict pilots in this weight category from flying. Subsequently,
    the program conducted ``proof of concept'' tests last fall for
    modifications to the escape system including a ``lightweight pilot''
    switch on the seat and a fabric head support panel between the
    parachute risers behind the pilot's head, intended to restrict the
    severe backward neck extension. The tests apparently showed that the
    lightweight pilot switch and head support panel prevented a neck load
    exceedance after parachute deployment and opening shock. However, these
    changes do not prevent the high loads on the pilot's neck earlier in
    the ejection sequence due to the rocket firing and wind blast. Full
    testing of these fixes using the new Generation III Light helmet and
    full range of mannequin weights across different airspeeds is expected
    to extend through this summer with flight clearance this fall and
    modification kits in 2017. The first of these tests with all the
    proposed fixes was recently completed on March 31st using a 103-pound
    manikin ejected from a rocket sled at 150 knots while wearing a Gen III
    Light helmet. The JPO assessed this test to be a success and therefore
    plans to continue the testing through this summer. Even if these fixes
    are successful, additional testing and analyses are also needed to
    determine the risk of pilots being harmed by pieces of the transparency
    from the canopy removal system during ejections (the canopy must be
    explosively shattered during ejection) in other than stable conditions
    (such as after battle damage or if out-of-control), referred to as
    ``off nominal'' conditions.
        Structural testing. Major findings are continuing in the durability
    test articles, particularly in the titanium bulkhead in the F-35C test
    article. Significant limitations to the life of the fielded F-35C
    aircraft can only be addressed with intrusive structural modifications
    prior to the expected full service life, and show again the high cost
    of concurrent production and development. In the past year, discoveries
    of unpredicted cracks continued to occur, and in some cases required
    pauses in testing to determine root causes and fixes. This occurred in
    all three variants. Currently, only the F-35A structural test article
    is being tested; it recently started the third lifetime test phase, or
    the third series of 8,000 equivalent flight hours of testing on March
    11, 2016. The F-35B test article is undergoing inspections at the mid-
    point of its second lifetime of testing. The F-35C test article
    restarted testing in mid-February but stopped three days later when
    strain gauges indicated cracking in a titanium bulkhead; it is expected
    to restart in May.
        ALIS. The program has developed a new version of the ALIS hardware,
    termed Standard Operating Unit version 2 (SOU v2), which possesses all
    of the functional capabilities included in the original version--SOU
    v1--but in a modularized, more deployable form. As I described earlier
    in my statement, in recent months, both the F-35A and F-35B have
    conducted deployment demonstrations in an effort to learn how to
    forward deploy with, and conduct flying operations using, the SOU v2.
    The Marine Corps and Air Force needed several days to successfully
    establish a new network in an austere expeditionary environment or to
    integrate ALIS into an existing network at a non-F-35 military
    installation before ALIS was able to support flying operations.
    Although the hardware for the SOU v2 was much more manageable to move
    and set up, the processes for connecting to the main Autonomic
    Logistics Operating Unit (ALOU) at Lockheed Martin facilities in Fort
    Worth took time, as did ensuring the data from home station units was
    transferred correctly to the deployed unit.
        These two Service-led deployment demonstrations showed that ALIS
    operations will require significant additional time to initiate beyond
    setting up hardware modules, since the details of a network
    configuration and data file structure vary among base operating
    locations. ALIS requires a secure facility to house hardware, including
    SOU modules, mission planning workstations, and receptacles for
    transferring data to and from aircraft storage devices, which must be
    connected to power and external communications and integrated into a
    network with data exchanges occurring at multiple levels of security.
    It is difficult to establish and configure a network in the precise
    manner that ALIS requires, so network personnel and ALIS administrators
    have needed several days to troubleshoot and implement workarounds to
    prepare ALIS for operations. Although Lockheed Martin has provided
    several techniques for transferring aircraft data from a main operating
    location SOU to a deployed SOU, data transfers have proven time
    consuming and have required high levels of support from Lockheed
    Martin. Also, relatively minor deviations in file structures relative
    to ALIS' specifications can cause the process to fail.
        The program plans to release another increment of ALIS software
    this year--version 2.0.2, with added capabilities to support Air Force
    IOC declaration. However, it is struggling to meet the current schedule
    to deliver the planned content. A recent Program Office schedule
    assessment shows delays from 60-90 days that will slip the ALIS 2.0.2
    installation at Hill AFB to at least October 2016, which does not align
    with the Air Force need date of 1 May for their planned IOC objective
    date of August 2016, but may support their planned IOC threshold date
    of December 2016. Cybersecurity testing of ALIS 2.0.2 is planned for
    this fall, but may need to slip or be accomplished using the earlier
    version of ALIS if the program cannot deliver version 2.0.2 it on time,
    adding associated risk to fielding systems and declaring IOC because
    adequate cybersecurity testing will not have been completed.
        Delays in completing development and fielding of ALIS 2.0.2 will
    likely compound the delay already realized for ALIS 3.0, the last
    planned increment of ALIS, which is needed for IOT&E but is currently
    not scheduled to be released until March 2018. Although the program is
    considering deferring content and capabilities to make up schedule, the
    full set of capabilities for ALIS 3.0 will be needed to comply with the
    program's requirements and therefore are required for IOT&E.
        Aircraft Reliability, Maintainability, and Availability. Although
    measurements of aircraft reliability, maintainability, and availability
    have shown some improvement over the last two years, sustainment relies
    heavily on contractor support, intense supply support to arrange the
    flow of spare parts, and workarounds by maintenance and operational
    personnel that will not be acceptable in combat. Measures of
    reliability and maintainability that have ORD requirement thresholds
    have improved since last year, but six of nine measures are still below
    program target values for the current stage of development; two are
    within 5 percent of their interim goal, and one--F-35B mean flight
    hours between maintenance events (unscheduled)--is above its target
    value. Aircraft availability improved slightly in CY15, reaching a
    fleet-wide average of 51 percent by the end of the year, but the trend
    was flat in the last few months and was well short of the program's
    goal of 60 percent availability that it had established for the end of
    CY14. The Marine Corps has recently described difficulties in
    completing pilot training requirements due to low aircraft availability
    with full functionality. For pilots to complete training tasks,
    aircraft must be nearly Fully Mission Capable (FMC), but low mission
    systems component reliability, software stability problems, and
    Prognostics & Health Management (PHM) limitations have contributed to
    limited aircraft ability to complete pilot training tasks. The FMC rate
    for the F-35 fleet has declined steadily since December 2014. Data from
    February 2016, the latest month available, show a fleet-wide FMC rate
    of 30 percent and an F-35B FMC rate of less than 14 percent. It is also
    important to understand that the program's metric goals are modest,
    particularly in aircraft availability, and do not represent the demands
    on the weapons system that will occur in combat. Making spare parts
    available more quickly than in the past to replace failed parts has
    been a significant factor in the improvement from 30 to 40 percent
    availability experienced two years ago. However, F-35 aircraft spent 21
    percent more time than intended down for maintenance in the last year,
    and waited for parts from supply 51 percent longer than the program
    targeted. At any given time, 10 to 20 percent of the aircraft were in a
    depot facility or depot status for major re-work or planned upgrades,
    and of the fleet that remained in the field, on average, only half were
    able to fly all missions of the limited capabilities provided by Block
    2B and Block 3i configuration.
        The program showed improvement in 11 of 12 reliability metrics by
    May 2015; however, as I depicted in my annual report, 8 of the metrics
    are still below the program interim goals for this point in
    development, and it is not clear that the program can achieve the
    necessary growth to reach the reliability requirements for the mature
    system, at 200,000 total fleet flight hours. Many components have
    demonstrated reliability much lower than predicted by the contractor,
    such as fiber channel switches, main and nose-wheel landing gear tires,
    the display management computer for the helmet, and signal processors.
    These low-reliability components drive down the overall system
    reliability and lead to long wait times for re-supply, which negatively
    affects aircraft availability.
        Maintainability metrics indicate flight line maintenance personnel
    are working extremely hard to keep up with the demands of unscheduled
    maintenance (e.g. trouble-shooting and fixing failures) and scheduled
    maintenance (e.g. inspections). Small improvements in maintainability
    metrics occurred in the past year, but the measures for all variants
    are far from the operational requirements. There are a few individual
    causes for long down times that may be addressed by the program, such
    as long cure times for low observable repairs, but many must be
    accepted as facts of life for the time being. Maintenance manuals and
    technical information must continue to be produced, verified, and
    validated for use by the military maintenance personnel so that they
    can learn how to generate combat missions in the most efficient manner.
    The current process requiring ``action requests'' to fill gaps in
    technical information, while improved, will not be acceptable for
    combat. F-35 maintainers must also dedicate a significant amount of
    time to scheduled maintenance, in addition to repairs. This accounts
    for over half of all maintenance time in the last year (from June 2014
    through July 2015), a result of fielding an aircraft with an immature
    structural design that must be inspected for evidence of wear and
    cracking, such as that which has been found in the structural static
    test articles.
        Fielded units, and the overall program, have a new challenge with
    managing multiple software and hardware configurations as aircraft
    emerge from depot and local modification processes. Modified aircraft
    include new parts and this should improve reliability metrics. However,
    managing multiple configurations requires continual, intense focus to
    ensure correct procedures and parts are used based on aircraft
    configuration and data elements tracked within ALIS.
        Deployment sustainment results. As I outlined earlier in my
    statement, Service-led deployments over the past year have revealed
    challenges to adequate suitability performance, and provided useful
    lessons for future operations. More detail is provided below.
        During the Cross Ramp Deployment Demonstration flying period at
    Edwards AFB during May 4--8, 2015, the operational test squadron flew
    20 of 22 planned missions. The squadron originally intended to deploy
    four F-35A aircraft and planned most fly-days with two aircraft flying
    two sorties apiece, but could only make three aircraft available to
    participate in the exercise. The ALIS data transfer problems forced the
    detachment to operate in an ALIS-offline mode until the morning of May
    7, which restricted aircraft maintenance to minimal, simple activities.
    The detachment was able to achieve a relatively high completion rate of
    planned sorties in spite of this largely because no mission systems
    were required for the flights, so failures in these components were
    left un-repaired. By the end of the deployment, one of three aircraft
    had to be towed back to the test squadron hangar because it was down
    for a flight system discrepancy that the detachment could not fix in
    time. The detachment also exposed problems with retaining spare part
    requisitions against aircraft when they are transferred between SOUs,
    and issues with keeping maintenance records intact when returning from
    ALIS-offline operations.
        The shipboard flying period of the USS WASP deployment
    demonstration from May 18--28, 2015, excluding the return flights from
    the ship to home base on May 29, was not intended to maximize aircraft
    utilization rates, but showed difficulties in achieving adequate
    availability to support planned flight schedules. The six deployed F-
    35B aircraft were mission capable for flight operations approximately
    55 percent of the time, which led to the detachment flying 61 of 78
    planned missions. The Marine Corps reports a higher number of sorties
    than missions, since each vertical landing constituted a sortie, while
    each post-flight engine shut down constituted a mission. Several
    missions were canceled for weather, or other operational reasons, but
    13 missions were canceled, apparently due to a lack of available
    aircraft. In order to consistently generate tactically relevant four-
    aircraft mission packages day after day, out of the normal complement
    of six F-35B aircraft onboard an L-class amphibious ship, the F-35B
    would likely have to achieve availability rates closer to 80 percent;
    although during the deployment demonstration, the detachment did
    generate a four-aircraft mission on one day. Fuel system reliability
    was particularly poor. This is more burdensome in the shipboard
    environment than at land bases, as fuel system maintenance in the
    hangar bay can restrict the ability to perform maintenance on other
    aircraft in the bay. Due to a fuel system problem that would have
    required an engine to be pulled, one aircraft was transferred on a one-
    time flight back to shore and swapped with an alternate aircraft, an
    option that would not exist in forward-deployed combat conditions.
    Aircraft availability and utilization varied widely among the seven
    different aircraft used in total on the deployment, with the top
    performing aircraft flying 20 missions, and the least performing
    aircraft flying only 2 missions, not including a one-time ferry flight
    to shore to be swapped. The ALIS data transfers also relied on combat-
    unacceptable workarounds, including using commercial Wi-Fi access to
    download aircraft files. Several factors limited the ability to draw
    more conclusions about shipboard integration of the F-35B from this
    deployment demonstration. These included the lack of the rest of the
    Air Combat Element (ACE) aircraft onboard ship except for the required
    Search and Rescue (SAR) helicopters; the use of developmental Support
    Equipment (SE), vice the production-representative SE the Marine
    operational squadron is now equipped with; and no employment of
    ordnance.
        The Marine Corps conducted an assessment of F-35B austere site
    deployed operations at Twentynine Palms, California, from December 8-
    16, 2015, with eight F-35B aircraft assigned. The Marines intended to
    fly four aircraft a day from an expeditionary landing field made of
    aluminum matting and with minimal permanent infrastructure,
    representing the type of temporary airfield that can be quickly built
    near the forward line of troops. The demonstration included the use of
    inert ordnance and production representative support equipment.
    Aircraft availability for this detachment was again in the 55 to 60
    percent range, which led to a significant number of missed flights on
    the planned flight schedule. The detachment flew 41 out of 79 planned
    missions; however, 22 of the 38 missions not flown were due to high
    crosswinds which made landing and taking off from the aluminum matting
    too risky. Overall, 16 missions were lost due to either lack of
    aircraft availability, difficulties in transferring and accepting
    aircraft data into the deployed ALIS, or ground aborts. Propulsion
    system maintenance was particularly burdensome. Two F-35B aircraft
    received foreign object damage to their engine fan stages, a result
    from operating in rugged conditions with jet wash likely blowing small
    rocks into aircraft intakes. This prevented those aircraft from further
    participation in flying activities until repairs were completed just
    prior to the ferry flights home. A contractor technician was called in
    from the East Coast and was able to repair the engine damage on site,
    as opposed to having to perform a full engine swap. A further engine
    system discrepancy required an aircraft swap around mid-way through the
    detachment. Routine flight operations, such as aircraft start-up and
    basic troubleshooting, also relied heavily on contractor maintenance.
        The Air Force sent a detachment of six F-35A operational test
    aircraft from Edwards AFB to Mountain Home AFB from February 8 to March
    2, 2016, to simulate a combat deployment of this variant in preparation
    for Air Force IOC later this year. This demonstration employed both
    inert and live ordnance in the CAS and Aerial Interdiction roles, in
    conjunction with legacy platforms. Results from this demonstration are
    still too preliminary to report on in full, although some early
    observations were made. The detachment discovered a major discrepancy
    in the technical data for loading free fall ordnance after a released
    bomb hit the weapons bay door and then impacted and gouged the
    horizontal stabilizer. The aircraft returned to base safely and was
    eventually repaired on station, and the detachment coordinated with
    Lockheed Martin to correct the appropriate ordnance loading
    instructions. The deployment also successfully transferred aircraft
    data files within the autonomic logistics infrastructure (i.e., using
    ALIS, the Central Point of Entry, and the ALOU); however, there were
    some difficulties in establishing ALIS on the host Air Force network on
    Mountain Home AFB. Finally, the relatively frequent requirement to
    shut-down and restart an aircraft on start-up before flying due to
    software instabilities in vehicle and mission systems hampered the
    detachment's ability to conduct alert launches.
        Key test range capability improvements are required for IOT&E, on
    which we have been working with the Office of the Secretary of Defense
    and Service staff for several years. In particular, these include the
    Air-to-Air Range Infrastructure-2 (AARI2) system, the instrumentation
    that allows the many engagements during complex test trials to be
    accurately assessed and shaped in real time; and the integration of the
    Electronic Warfare Infrastructure Improvement Program (EWIIP) emitters,
    that will simulate current, advanced threats on the range. For an
    adequate IOT&E, the integration of AARI2 with the F-35 should allow the
    F-35 Embedded Training modes to realistically emulate and display
    weapons employment data and threat indications to the pilot, and
    include the shot validation method that is being developed for this
    purpose. The planned schedule for AARI2 integration, however, does not
    align with the current plans for IOT&E and does not include these
    features. Therefore, the product may either be inadequate or late to
    need. The new EWIIP emitters, that will simulate current, advanced
    threats on the range, start arriving in fall of this year. However,
    until recently, Air Force integration plans fell short of what is
    needed for an adequate IOT&E, both in how the emitters are integrated
    with the range infrastructure and the degree of incorporation with the
    AARI2 battle-shaping instrumentation. We continue to work with the Air
    Force to correct these problems, and ensure we get the most of the
    investment made in these emitters. There is no alternative to
    correcting these problems if IOT&E is to provide a representative
    threat environment--an environment that has been in existence, and
    robustly so, in the real world for several years. Not properly
    incorporating these assets, in a realistic way, will result in a test
    of the F-35 only against decades-old threats, which do not represent
    the intended operational environment for this fifth-generation system.
    I assess the technical challenges to the integration requirements I
    mention here as relatively minor; this test concept is not new.
    Unfortunately, the issues seemed to stem primarily from cultural
    resistance to change and to the adoption of modern technology.
        Of all the issues mentioned earlier that threaten IOT&E spin-up and
    start, the most significant are the modifications needed for
    operational test aircraft, Block 3F completion (including flight test,
    weapons deliveries, and envelope release), and completion of ALIS 3.0.
    The program has an executable plan to pull completion of the
    modifications back from 2019 to 2018; however, the Services must commit
    to executing that plan, which has not yet occurred. The Block 3F
    schedule, even with significant improvements in software stability,
    deficiency resolution, and flight test rates, still appears to extend
    into 2018 before the capabilities will be ready and certified for
    IOT&E. Inadequately tested mission data and failure to provide the
    simulation environment will likely not delay the start of IOT&E, but
    will affect the results and adequacy of the test, respectively, and the
    former will likely limit significantly the ability of the F-35 to be
    used in combat against existing, modern, stressing threats. Therefore,
    despite recent progress with Block 3iR6.21 software stability, a mid-
    2018 start for IOT&E appears to be the earliest viable date based on
    when the modifications, full Block 3F capabilities (including envelope
    and weapons), and ALIS 3.0 will be ready. Based on the issues above
    that will not likely be resolved or ready until 2018 or later, I am
    concerned that the program may not have adequate resources to complete
    the required System Development and Demonstration activities prior to
    IOT&E.
        Block Buy. In my annual report, I raised several questions
    regarding the program's proposed ``block buy'' to combine three
    production lots comprising as many as 270 U.S. aircraft purchases to
    gain near-term savings. My understanding is that the program and the
    Services have decided to delay the consideration of the block buy for
    at least another year, possibly starting in fiscal year 2018.
    Nonetheless, in that case, all of the questions I pose in my annual
    report remain valid, since IOT&E will not start until fiscal year 2018,
    at the earliest, and will not be complete until later that year.
        Follow-on Modernization (FoM). The program's proposed ``F-35
    Modernization Planning Schedule'' is overly optimistic and does not
    properly align with the program's current software development
    schedule, which is also unrealistic. The program recently announced
    that the FoM development effort will require new processors--referred
    to as Technical Refresh 3, or TR3--with more capacity to permit the new
    capabilities to be hosted on the aircraft, at a cost of $700 million.
    This additional cost was not part of the planned Block 4 FoM program,
    so it is currently unfunded and the Services must program this into
    their fiscal year 2018 budget submissions. Also, there is a four-year
    gap between the final planned Block 3F software release in 2016 and
    fielding of the first proposed modernization increment, labeled Block
    4.1, in late 2020. The proposed schedule also does not depict any
    incremental software releases to correct open Block 3F deficiencies and
    new discoveries, likely to be found during the remaining developmental
    testing and IOT&E, prior to adding the proposed new Block 4.1
    modernization capabilities. Such a schedule greatly increases risk to
    development and testing of Block 4 due to the inevitably substantial
    number of deficiencies and untested fixes upon which the new Block 4
    capabilities will be added. Despite the significant ongoing challenges
    with F-35 development, including the certainty of additional discovery,
    the proposed modernization schedule is very aggressive; it finalizes
    the content of Blocks 4.1 and 4.2 in early 2016. Then, before or during
    IOT&E, the program would award contracts to start simultaneous
    development of Blocks 4.1 and 4.2 in 2018, well prior to completion of
    IOT&E and having a full understanding of the inevitable problems it
    will reveal. Also, the proposed Block 4 FoM plan and schedule do not
    clearly depict acquisition milestones, despite the complexity and
    substantial number of capabilities to be implemented and funding
    required.
        Even though the baseline F-35 System Development and Demonstration
    (SDD) program, including delivery of Block 3F capabilities and ALIS 3.0
    (and therefore IOT&E start), is clearly going to slip into 2018, the
    program still claims that SDD will end in 2017. In fact, the program
    has apparently asked the Services to provide additional bridge funding
    for test infrastructure in fiscal year 2018-2019, even though the DT
    activities extending into 2018 (and IOT&E into 2019) are clearly part
    of SDD and therefore should already be funded. Also, the program plans
    to significantly cut the test force in the 2018-2019 timeframe,
    precisely when the program should be developing and testing an
    incremental software update of Block 3F to correct critical
    deficiencies and new discoveries from IOT&E prior to adding the new
    Block 4.1 capabilities. Furthermore, the Block 4 FoM plan and schedule
    still do not allocate adequate schedule and resources (i.e., enough
    test aircraft and time) for developmental test (DT) and operational
    test and evaluation (OT&E) of each increment, consistent with the
    approach being used for F-22 follow-on development. The proposed Block
    4 FoM plan reduces test infrastructure from 18 DT aircraft and 1,768
    personnel to just 9 aircraft and approximately 600 personnel. The
    proposed Block 4 FoM plan also does not allocate enough time for test
    of the significant new capabilities including in each increment. For
    example, the F-22 Block 3.2B program planned approximately two years
    for DT flight test and one year of OT&E spin-up and flight test, versus
    approximately one year for DT flight test and six months for OT&E of F-
    35 Block 4.2, which has more new capabilities and weapons than F-22
    Block 3.2B. Also, the F-35 program claims the new F-35 Block 4
    software, which is designed to run on TR3 processors, will be backward-
    compatible to run in the hundreds of aircraft with TR2 processors.
    However, the program's current proposed Block 4 plan apparently does
    not include resources (funding, schedule or TR2-equipped test aircraft)
    to conduct the necessary developmental laboratory and flight testing
    followed by OT&E of the new Block 4 capabilities in aircraft equipped
    with the old TR2 avionics hardware. For these reasons, any proposed
    reductions in test infrastructure for Block 4 FoM should be reexamined
    due to the substantial number and complexity of new capabilities to be
    developed and fielded, multiple aircraft hardware configurations, need
    for regression testing, and inadequate time allocated for DT and OT&E
    for each increment.
        In summary, it is increasingly clear that the current plans being
    described by the program office for F-35 Block 4 Follow-on
    Modernization are not executable. The program, warfighters, partners
    and taxpayers would be better served by a realistic plan that is
    informed by, and properly addresses, the many lessons learned from the
    ongoing F-35 program, as well as from the ongoing F-22 upgrade program.
    The corrective actions I recommend include the following:
          Updating the Block 4 cost estimate and schedule to
    include the inevitably required additional costs and time to actually
    execute FoM (i.e., $700 million for TR3, test infrastructure bridge
    funding for fiscal year 2018-2019, the additional test resources for
    regression testing for Block 4.1 on TR2 processors, etc.);
          Rigorously justifying the need for the new open-
    architecture TR3 processors including the specifics of the shortfalls
    of the TR2 processors and the extent to which these shortfalls will
    affect Block 3F performance;
          Adding a software maintenance release in 2019 and
    slipping Block 4.1 development by a year to provide the time needed to
    correct the significant deficiencies that will inevitably emerge from
    IOT&E and remain from SDD;
          Re-structuring the content of the Block 4 increments to
    incorporate a realistic and lesser amount of content so development and
    testing will fit within the compressed two-year cycles driven by the
    planned aircraft production and delivery schedules;
          Adding the time and sustaining the test force needed to
    conduct adequate developmental and operational testing consistent with
    the complexity and number of new capabilities to be incorporated in
    each increment of Block 4.
        These changes to the program's current plans for Follow-on
    Modernization are essential for it to succeed rather than be set for
    failure from the outset.

        Chairman McCain. Mr. Sullivan, welcome.

     STATEMENT OF MICHAEL J. SULLIVAN, DIRECTOR OF ACQUISITION AND
                    SOURCING MANAGEMENT, GOVERNMENT
                         ACCOUNTABILITY OFFICE

        Mr. Sullivan. Thank you, Chairman McCain, Senator Reed,
    members of the committee. I have a written statement for the
    record, but I would like to just take this time to briefly
    highlight what we consider to be the most important challenges
    facing the program moving forward.
        In addition to my written statement, my report to this
    committee and others, which was issued on April 14, contains
    more details on the program's progress to date.
        First, although the program has managed costs very well
    since it is Nunn-McCurdy breach and subsequent rebaselining in
    2012, it still poses significant future affordability
    challenges for the Department and Congress. As the program
    begins procuring more aircraft, the Department is expected to
    spend on average about $13 billion per year over the next 22
    years, until all planned purchases are complete in 2040.
        These annual funding levels will present challenges as the
    program stacks its funding priorities against other large
    acquisitions, including the B-21 bomber, KC-46 tanker, the
    Ohio-class submarine replacement, the new carrier, and many
    more.
        Second, the Department now plans to add new capability
    known as Block 4 to the F-35 that is beyond its original
    baseline capability, and it is planning to manage that effort
    as part of the existing program, rather than establishing a
    separate business case and baseline for that effort. This has
    significant implications as far as Congress' ability to provide
    oversight and holding the program accountable.
        The new work has a projected cost of about $3 billion over
    just the next 6 years, and that price tag alone would qualify
    it as a major defense acquisition program in its own right. We
    believe it should be managed as such, with its own separate
    business case to allow for transparency and accountability.
        Third, the F-35 software development is nearing completion,
    but the program faces challenges in getting all of its
    development activity completed on time for operational testing,
    as we just heard Dr. Gilmore talk about. It has completed over
    80 percent of its developmental flight tests and is now working
    to close out flight testing of its final block of software,
    Block 3F. This final block is critical as it will provide the
    full warfighting capability to the aircraft.
        Program officials have estimated as much as a 3-month delay
    right now to completing Block 3F testing, and our own analysis
    indicates that it could be closer to 6 months. I think Dr.
    Gilmore's analysis, as he just stated, has it more than that.
    Getting that developmental testing done is critical, of course,
    to getting operational testing done and IOCing the aircraft.
        With regard to technical risk, the program has found fixes
    for earlier problems, problems such as the helmet display and
    the engine, and it is working now to find solutions for two
    other challenges, the ejection seat problem and the carrier
    variants wing structure. There are cracks in the wing
    structure.
        Perhaps the biggest outstanding technical risk for the
    program today, though, as has been discussed already, is the
    Autonomic Logistics Information System known as ALIS. As you
    know, ALIS is a complex system that supports operations,
    mission planning, supply chain management, maintenance, and
    many other processes.
        In our companion report also issued on April 14, we
    documented several issues with ALIS, most importantly
    concerning its inability to deploy right now and the lack of
    needed redundancy at this point that could result in
    operational and schedule risks in the future.
        Finally, manufacturing and production data continue to show
    a positive trend toward more efficient production, and that is
    good. The amount of labor hours to build each aircraft
    continues to go down. The engineering changes that are coming
    out of the test program have been reduced significantly. The
    contractor is now delivering aircraft on time or, in some
    cases, ahead of schedule.
        We continue to monitor the measures for aircraft and engine
    reliability and maintainability. While they still fall short of
    expectations, they continue to improve, and there is still time
    to achieve the program's required goals in that area.
        I will close with that, Mr. Chairman. I look forward to
    your questions.
        [The prepared statement of Mr. Sullivan follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman McCain. Thank you very much. I thank the
    witnesses.
        General Bogdan, how many military, government civilians,
    and full-time equivalent contractor positions are assigned to
    the Joint Program Office? What is the annual cost to operate
    the office?
        General Bogdan. Sir, today, if you include the test force
    at Pax River and the test force at Edwards Air Force Base,
    which are not necessarily part of my program office but I pay
    for them, just like I do support contractors, the number is
    about 2,590. The annual cost to operate the JPO is on the order
    of about $70 million a year. That includes pay for salaries.
    That includes leasing facilities and space, computers, IT,
    everything wrapped up.
        Chairman McCain. The information that I have is that it is
    nearly 3,000 and the cost is $300 million a year, but $70
    million a year to run an office of a program is pretty
    disturbing.
        Secretary Kendall, last year's NDAA included report
    language that directed the Secretary of Defense to either
    revalidate the F-35 total by a quantity of 2,443 for all
    variants or submit a new number by May 25, 2016. Does the
    Department intend on meeting this requirement on time?
        Mr. Kendall. Mr. Chairman, as far as I know, yes, we are.
        Chairman McCain. I was interested, Dr. Gilmore, you said
    that the IOC is likely to be delayed. Have you any idea how
    long that delay would be in the IOC?
        Dr. Gilmore. Are you speaking, Mr. Chairman, about the IOC
    for the Air Force with Block 3i?
        Chairman McCain. Yes.
        Dr. Gilmore. I think it is unlikely the Air Force will meet
    its objective date, which is mid-2016, but it could meet its
    threshold date, which is later in the fall.
        Chairman McCain. In this issue, Mr. Sullivan, of pursuing a
    block buy, can you provide any examples of a program pursuing a
    block buy or multiyear procurement strategy prior to a full-
    rate production decision?
        Mr. Sullivan. You are referring to the proposal right now
    to buy aircraft on a 3-year buy?
        Chairman McCain. Yes.
        Mr. Sullivan. I do not have any examples of that. The only
    example I know of a block buy situation is our usual multiyear
    procurements, which require a lot of criteria to show that the
    industrial base is stable, the design is stable, they are ready
    to produce. Usually, it comes much later in a production line.
        I do not think there is even any criteria for that kind of
    block buy.
        Chairman McCain. Dr. Gilmore, in your statement, you said
    the limited and incomplete F-35 cybersecurity testing
    accomplished to date has nonetheless revealed deficiencies that
    cannot be ignored. Can you elaborate on that?
        Dr. Gilmore. I would be happy to do so in the appropriate
    forum. It would require the discussion of classified
    information. We treat cyber vulnerabilities, the details of
    them, as classified. But they are significant, in my judgment.
        Chairman McCain. General Bogdan, Dr. Gilmore believes that
    there will be a delay in the IOC of the Air Force version. What
    is your response?
        General Bogdan. Sir, there are many things that the Air
    Force needs me to deliver to them before they can declare IOC.
    All of the things that are necessary for them to make that
    decision are on track for a 1 August 2016 declaration, with the
    exception of ALIS. I believe ALIS is approximately 60 days
    behind. Therefore, I would put ALIS delivery, which is a
    criteria for them, at about 1 October 2016, as opposed to 1
    August.
        They have until December, which is their threshold date, so
    I think they will meet their IOC criteria within that period,
    but not exactly on 1 August.
        Chairman McCain. The fiscal year 2016, General, limited
    funds for the procurement of F-35As until Secretary James
    certified that the F-35A aircraft delivered in 2018 will have
    the full combat capability with Block 3F hardware, software,
    and weapons carriage.
        Have you recommended or do you intend to recommend to
    Secretary James that she make the certification?
        General Bogdan. Yes, Senator. I am preparing the package
    now to forward to the Secretary of the Air Force with my
    recommendation that she make that certification. I needed a few
    pieces of information before I could feel confident asking her
    to certify. One of those pieces was that the software stability
    issues that were spoken about before were behind us. I believe
    they are now. Therefore, I believe that 3F will be delivered in
    fiscal year 2018, with the full capability, so I will forward
    the package to her now.
        Chairman McCain. Finally, Dr. Gilmore, given the size and
    cost of Block 4, would you believe it should be treated as a
    separate program for Nunn-McCurdy purposes or just as part of
    the F-35 program?
        Dr. Gilmore. Senator, I remind you that is not my decision.
    However, in taking a look at what I have seen in the current
    plans for Block 4, as I mentioned in my written statement, they
    need to be scrubbed, rigorously, in my view. Anything that will
    help in that rigorous scrub and bring clarity to desired
    performance and cost would be useful. I think that would be a
    good idea, but again, I hasten to say it is not my decision.
        Chairman McCain. Senator Reed?
        I thank the witnesses.
        Senator Reed. Mr. Chairman, with your permission, I would
    like to yield to Senator Donnelly. He has a pressing engagement
    elsewhere.
        Senator Donnelly. Thank you, Mr. Chairman.
        I want to thank the witnesses.
        Secretary Kendall, from 1996 to 2007, as the F-35 was under
    development, DOD supported an alternate engine program. The
    push for the F136 engine was controversial in later years, but
    I am interested to hear from you, and others who have thoughts
    on this, do you believe the alternate engine program was a
    smart strategy in those early R&D [Research & Development]
    years?
        Mr. Kendall. The question of the alternate engine, and I
    was in my position for the last couple years of that debate,
    was really a question of the economics associated with it.
    Basically, a decision was made that the economic case was not
    there to carry a second engine. That entailed taking some risk,
    of course, when you only rely on one. That has proven out.
        The engine of the F135 is performing. We are getting cost
    out of that, not as quickly nor as much as we would like, but
    we think that the strategy that we have embarked on is working.
        We are also funding some advanced development for follow-on
    engines. It is competitive development at this point. They
    could be cut into the production several years from now, if we
    can fund the EMD program for that. But affordability has been a
    major constraint on the program overall, including on the
    engines.
        Senator Donnelly. General Bogdan, I am particularly
    concerned about the performance of the F135, given that Pratt &
    Whitney was recently selected to build the engine for the B-21.
    I am concerned that looking back on the history of the F-35,
    the F-16, and others, there are performance issues, and I quote
    from the Department of Defense annual report, ``recurring
    manufacturing and quality issues'' that have been an issue with
    Pratt & Whitney for the F-35. Could you comment on that,
    please?
        General Bogdan. Yes, sir. The quality issues that you are
    talking about are primarily not at the Pratt & Whitney level.
    They are at their suppliers' level. Nonetheless, Pratt &
    Whitney is responsible for those suppliers.
        Over the last few years, we have improved our on-time
    delivery of engines significantly. But early on in the program,
    you are correct, sir, that we were seeing quality escapes and
    manufacturing issues with the lower tier suppliers. I think at
    this point in time, the manufacturing of the engine is much
    more mature than it was a few years ago.
        Relative to the performance of the engine, today, the F135
    engine has about 52,000 fleet hours on it, and it is
    maintaining about a 94 percent full mission capable rate. That
    is a very, very good number. In the endgame of the program, we
    were shooting for 95 percent, so here we are less than a
    quarter of a way through the full maturity of the airplane, and
    we are just about achieving that reliability we are looking
    for.
        However, that is not to say that there are not issues. We
    are dealing with the engine right now and changes we are making
    to make it more affordable, more producible, and increase the
    reliability.
        But from that perspective, I have been fairly happy with
    the performance of the F135.
        Senator Donnelly. Mr. Sullivan, they have said that their
    engines are well ahead of the 2020 requirements, but in your
    report last month, GAO [Government Accountability Office] wrote
    that the F-35A and F-35B engines are at about 55 percent and 63
    percent of where the program expected them to be. Can you
    explain the difference in that assessment, sir?
        Mr. Sullivan. I do not know that I can explain the cause of
    that, but we have found that the engine reliability and the
    measurements that we look at in terms of coming up a
    reliability growth curve for an engine during development,
    Pratt & Whitney has been pretty consistently below where they
    were expected to be, but I would say they have been improving
    in the last 2 or 3 years, in that respect. It seems like they
    are beginning to retire some of that risk.
        Senator Donnelly. This is to all the panelists. What is the
    top lesson you have learned through the F-35 acquisition
    process that can inform future major acquisitions across the
    services?
        Mr. Sullivan, I would like to start with you.
        Mr. Sullivan. I think, obviously, the first thing that we
    have learned with this is that you should not concurrently
    develop technology with a product, and you should not
    concurrently buy aircraft while you are still developing them.
    That is the number one thing.
        Senator Donnelly. Dr. Gilmore?
        Dr. Gilmore. The F-35 was an extreme example of optimistic
    if not ridiculous assumptions about how a program would play
    out.
        The decision to begin production before much of development
    had really been accomplished was a very bad one, as Mr. Kendall
    has discussed. But although an extreme example, it is not
    unprecedented because the Department is typically very
    optimistic about schedules and costs, which then sets up the
    program managers who are put in charge of these programs to
    look like failures from the outset, which is a terrible thing
    to do to them.
        Senator Donnelly. Thank you. I would love to hear the other
    two, but I am out of time.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Inhofe?
        Senator Inhofe. Thank you, Mr. Chairman.
        I think the question that I was going to ask may have been
    answered in the second sentence in your opening statement when
    you said the F-35 will form the backbone of the U.S. air combat
    superiority for decades to come.
        We keep hearing things to the contrary. You might remember
    when Secretary Hagel, just in February 2014, he said,
    ``American dominance in the seas, in the skies, and in space
    can no longer be taken for granted.'' General Frank Gorenc, the
    USAFE [United States Air Force in Europe] commander, said, just
    in September last year, this is his quote, ``The advantage that
    we had from the air I can honestly say is shrinking. This is
    not just a Pacific problem. It is as significant in Europe as
    it is anywhere else on the planet. I do not think it is
    controversial to say they have closed the gap in capability.''
        General Bogdan, do you agree with that?
        General Bogdan. Sir, I would agree with that. Our
    adversaries today are full speed ahead and accelerating the
    development of significant military capabilities to thwart
    ours, both in air-to-air and air-to-ground.
        I believe that F-35 is absolutely necessary now and in the
    future to give you and the Nation options to take an airplane
    and go anywhere on the face of the Earth at a time of our
    choosing and be survivable and hit a target. I do not believe
    there is any other airplane in the world that can do that
    today. However, the F-35 can do it and will do it for many
    years.
        Senator Inhofe. You are talking about some fifth generation
    aircraft from both Russia and China. You have the T-50 and then
    the Chinese have the J-20. I think they also have the J-31 or
    something like that, maybe lagging behind a little bit.
        Now, when you compare those, normally they talk about we
    are going to be stealthier; we are going to have better radar.
    Why don't you give us an idea of what the opposition is doing
    right now, and specifically in what areas that we are better?
        General Bogdan. Senator, I will try to do that without
    walking across the line of sensitive information or classified.
        One of the things that folks like to think about when they
    look at those adversary airplanes is that they look a lot like
    ours. That is a true statement. Much of the design of those
    airplanes came on the outer mold line from what we developed in
    our F-22s and F-35s.
        Senator Inhofe. I understand that. Yes.
        General Bogdan. What makes us better and special is what is
    on the inside of these airplanes. Our radar, our multi-sensor
    fusion, our ability to take information in the battlespace and
    provide it to the pilot in such a way that he knows everything
    that is going on 360 degrees around him----
        Senator Inhofe. Okay, that is good.
        General Bogdan.--and the weapons to employ that knowledge
    are what makes it different.
        Senator Inhofe. That is good.
        Recently, some pretty high individuals are talking about
    the fact on the F-22s, they are really using those a lot more
    than we anticipated. This is for anybody here. Yet in your
    presentation, you talk pretty specifically about the numbers of
    copies we are going to have, the As, the Bs, and the Cs.
        Most of us here on this side of the table remember we went
    through this thing with F-22s. Originally, it was going to be
    750, then it was going to be 380-some, then 187 ultimately. Now
    that is quite a deterioration from the original numbers.
        Is there a reason that you do not believe we are going to
    experience the same thing with the F-35?
        General Bogdan. Sir, I cannot assume in the future what the
    U.S. services will do. But what I will tell you is that the
    major difference between an F-22-type program and the F-35
    program are significant in that we have many FMS [Foreign
    Military Sales] and foreign partners who are also buying the
    airplane. If they continue to buy the airplane, the price will
    continue to come down. That stabilizes----
        Senator Inhofe. That is where you come up with the $85
    million ultimately, taking that into consideration.
        General Bogdan. Yes, sir.
        Senator Inhofe. One last thing, we were all a little
    disturbed two years ago when we thought we were going to have a
    B model at Farnborough and at the last minute we had to bag it.
    Of course, we did not have anything at France, in Paris. Are
    you pretty confident it is going to make the Farnborough this
    year?
        General Bogdan. Yes, sir. We are planning a deployment of
    five F-35s to Farnborough and RIAT [Royal International Air
    Tatoo], two A models and three B models, one of those being a
    U.K. airplane.
        Senator Inhofe. How many of those will be flying?
        General Bogdan. We will fly all of those airplanes at
    Farnborough and RIAT.
        Senator Inhofe. I look forward to it.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Reed?
        Senator Reed. Thank you very much, Mr. Chairman.
        Dr. Gilmore, I just want to clarify one your comments. You
    were talking about, I think, the difficulty of operating with
    four aircraft and, essentially, the multi-sensor fusion of the
    four aircraft operating together. That seems to be the
    preferred form of operation. Is that an accurate recollection?
        Dr. Gilmore. Yes. Four-ship will often be used because that
    will provide information from four aircraft that must be fused
    in order to provide the situational awareness that General
    Bogdan just mentioned is so critical to dealing with future
    threats and current threats.
        Senator Reed. There is a current difficulty in making those
    systems, even if they operate in a single aircraft, operate
    effectively together?
        Dr. Gilmore. Fusion has been a challenge to make work well.
    It will, based on what I have seen, continue to be a challenge.
    It is a very hard problem. It does not surprise me that it is
    turning out to be a hard problem, to make the fusion work well,
    because you get information from different sensors on the same
    aircraft as well as from different aircraft. You have to have
    software that then sorts through all that and says, ``Oh, this
    signal that I got from this sensor is from the same target as
    this sensor on another aircraft.'' That is a very hard physics
    problem. It is not a matter of just simply writing code for
    graphical user interface. It involves detailed understanding of
    physics, of the propagation of the signals, and so forth, and
    the errors in the signals.
        That is going to continue to be a challenge, and it will
    require a lot of iterative test-fix-test where you guess at
    solutions and then use subject-matter experts to guess at
    solutions, try to implement them, test them to see how they
    work. That is a time-consuming process.
        Senator Reed. Just a clarification, in the IOC status, do
    you really get into that multi-aircraft fusion issue? Or is
    that just simply the aircraft being able to fly?
        Dr. Gilmore. The Air Force is the one, just as the Marines
    did for their own initial operational capability, the Air Force
    sets the standards for determining what constitutes sufficient
    performance for IOC.
        I cannot remember the details of what the Air Force has
    said about fusion, but obviously the more fusion capability
    they have, the better. It will be limited because Block 3i
    provides the same basic capability that Block 2B did with the
    new processor, and there were fusion shortfalls in Block 2B
    that Block 3F is meant to surmount.
        Senator Reed. Thank you very much.
        Mr. Secretary, from your perspective, what do you think the
    most significant challenges are? I know General Bogdan talked
    about ALIS as a key issue in terms of resolution. Any others
    that you would identify, that you are focused on, and your
    approach to deal with them?
        Mr. Kendall. I think ALIS is the leading problem in terms
    of achieving IOC for the Air Force on time. The issue that was
    mentioned earlier on stability I think was a concern, but that
    seems to be getting under control.
        There are a number of concerns with just the pace of
    testing and how much has to be done. I know some steps General
    Bogdan is taking to alleviate some of that schedule pressure
    that he has.
        I think it is a suite of a lot of things that have to
    happen. At the end of the day, the Air Force will make the
    decision as to when they think it is ready to clear IOC.
        My experience with the Marine Corps, I think the Air Force
    will be exactly the same. They are not going to do that until
    they are comfortable with the product that they have.
        Senator Reed. One of the major issues, long term, is the
    sustainment cost of the aircraft, which seemed to be quite
    significant. Can you describe steps that you and General Bogdan
    are taking to lower those costs? We want to lower the cost of
    the platform, but we certainly would like to lower the cost
    long term of maintenance and operation.
        Mr. Kendall. So far, we have been able to take about 10
    percent out of the cost estimate at the time of the
    rebaselining in a variety of things to do that. We are looking
    at various ways to structure the business case, if you will,
    for the sustainment. That is a work that is still in progress.
    We do not want to remain in a sole-source environment for any
    more of that than we possibly have to. Introducing competition
    is a big part of it.
        We are looking for creative ways to work with our partners
    so that we do things together as opposed to separately, because
    there are cost efficiencies associated with that.
        General Bogdan I think probably has a very long list he
    could give you in addition to that.
        Senator Reed. Can you give me your top two or three,
    General, in my time?
        General Bogdan. Yes, sir. We started a fully funded
    reliability and maintainability program about two years ago,
    where we looked at each and every component on the F-35 to
    determine if it was maintaining its performance on the airplane
    at the pace at which we needed it. That has proven to be very
    cost-effective for us, so we are going after those pieces and
    parts on the airplane that are not performing well.
        We also have a cost war room, where we look at every idea
    that comes from the field on how to better maintain the
    airplane. A perfect example of that is the original concept for
    tires, wheels, and brakes on this airplane was to ship all that
    off to a contractor somewhere. The U.S. Air Force, the U.S.
    Navy, the U.S. Marine Corps have that capability today with
    their legacy systems at their bases, so we are moving all of
    that work to them. That reduces about 40 percent or 50 percent
    of the cost and the turn time of fixing things like that. We
    are going about systematically trying to get every piece of
    cost out of the program.
        Senator Reed. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ayotte?
        Senator Ayotte. Thank you, Chairman.
        General Bogdan, I wanted to ask you, recently, General
    Welsh came before our committee and said that the mission
    capability of the A-10 will not be replaced by the F-35, yet
    the Web site for the Joint Strike Fighter program says that the
    F-35 will replace the A-10. Can you answer this question for
    us? There is an inconsistency there, and I would like to know,
    is General Welsh right or is your Web site right?
        General Bogdan. Thank you for that question, ma'am.
        First, the force structure of the U.S. Air Force and its
    fighter inventory is well beyond my purview. I will not try to
    explain what General Welsh said or what the decision-making
    processes for the Air Force on replacing their fighter
    inventory.
        Senator Ayotte. But, General, I think this is an important
    question. If General Welsh comes before our committee and says
    the F-35A is not going to replace the A-10, and yet the Joint
    Strike Fighter Web site says that the F-35A will replace the A-
    10, it is pretty important as we think about the capabilities
    of the A-10.
        Secretary Kendall?
        Mr. Kendall. I cannot speak for certain for General Welsh,
    but I think what he was trying to say was that we will in
    fact--first of all, I think both statements are correct. We
    will, in fact, replace the----
        Senator Ayotte. Both statements cannot be correct.
        Mr. Kendall. Well, we will, in fact, replace the A-10s with
    F-35s. That is the plan. But the F-35 will not do close-air
    support mission the same way the A-10 does. It will do it very
    differently.
        The A-10 was designed to be low and slow and close to the
    targets that it was engaging, relatively speaking. We will not
    use the F-35 in the same way as the A-10. It will perform the
    mission very differently.
        Senator Ayotte. Let me ask, Dr. Gilmore, it is going to
    perform the mission very differently. Is it not important that
    we understand how the two compare? I would ask you, will there
    be comparison testing, not just with the A-10 but with other
    comparative airframes that the F-35 is going to replace? How
    will the operational testing, comparing the close-air support
    capabilities of the F-35A and A-10, be conducted?
        Dr. Gilmore. Senator, if I could just point out, I have
    here the operational requirements document for the F-35. On
    page two, it says the F-35A will rely primarily upon the F-22
    for air superiority and will assume the current F-16 role as
    the low end of the USAF high-low fighter mix strategy and the
    A-10 role.
        That is in the operational requirements document.
        Senator Ayotte. Okay. If it is going to perform the A-10
    role, it is a pretty darn important role to our men and women
    on the ground. What about the fly-off? How will that go down?
        Dr. Gilmore. We are going to do a comparative test of the
    ability of the F-35 to perform close-air support, combat search
    and rescue, and related missions, with the A-10. We are also
    going to do a comparison test as integral part of operational
    test and evaluation of the ability of F-35 to perform
    suppression and destruction of enemy air defenses with the F-16
    and F-18. This operational requirements document has numerous
    citations to the performance expected in F-35 in relationship
    to the aircraft it is going to replace, so that operational
    testing is entirely consistent with the operational
    requirements document.
        The comparison testing is also not unprecedented. There was
    comparison testing between the F-22 and the F-15, and there has
    been comparison testing as part of other operational tests,
    including things like tactical vehicles, like the Joint Light
    Tactical Vehicle and the Humvee.
        To me, comparison testing just makes common sense.
        Senator Ayotte. Of course.
        Dr. Gilmore. If you are spending a lot of money to get
    improved capability, that is the easiest way to demonstrate it,
    to do rigorous comparison tests.
        With regard to CAS [Close Air Support], we are going to do
    it under all the circumstances that we see CAS conducted,
    including under high-threat conditions in which we expect F-35
    will have an advantage, and other conditions requiring
    loitering on the target, low-altitude operations, and so forth,
    in which there are a lot of arguments that ensue about which
    aircraft might have the advantage, the A-10 or the F-35. But
    that is what the comparison test is meant to show us.
        Senator Ayotte. I think that is really important, so that
    we can understand the capability comparisons there.
        General Bogdan, I wanted to ask you, I had asked a question
    of General Welsh in March as to when you expect the SDB [Small
    Diameter Bomb] II to achieve demonstrated full-mission
    capability for the F-35A.
        General Bogdan. Ma'am, our program of record has the SDB I
    coming in, in the end of Block 3F, which is in the 2017
    timeframe. But SDB II, which is a much more enhanced capability
    for that precision weapon, is planned for the first increment
    of our Block 4. That is approximately in the 2021-2022
    timeframe.
        Senator Ayotte. I think that is an important issue as well
    because the SDB II provides F-35A an ability to kill multiple
    targets in adverse weather, which is something that, obviously,
    the A-10 has capability on. I hope that is taken into
    consideration as we look at this comparison.
        Dr. Gilmore. The comparison testing will be done with
    mobile targets and targets in close proximity to buildings and
    civilian structures, in particular with mobile targets.
        As I mentioned, right now, the mobile target capability of
    the F-35 is problematic, and how much it will be corrected as
    we get to Block 3F remains to be seen. SDB II in 2022 will
    provide a weapon that can actually follow the target.
        Before that, in 2020, laser JDAM [Joint Direct Attack
    Munition] also may help in that regard, but the current moving
    target capability is limited.
        Senator Ayotte. I know my time is up, but one of the things
    that continues to worry me is, under the Air Force plan, the A-
    10s are all retired by 2022. It seems to me that these are
    still important questions that remain, that very much matter to
    our men and women on the ground.
        Thank you.
        Chairman McCain. Senator Manchin?
        Senator Manchin. Thank you, Mr. Chairman.
        Thank all of you for your service.
        General Bogdan, the GAO report recommends an approach in
    which new development efforts are managed as separate
    acquisition programs. GAO recommended this type of separate
    acquisition program for the F-35 Block 4 follow-on
    modernization efforts. However, DOD has not concurred with the
    GAO recommendations and plans to include the F-35 Block 4
    follow-on modernization efforts under the existing cost-plus
    contracts.
        If DOD did not adopt GAO's recommendation, would that help
    eliminate cost-plus for the Block 4 phase of the program? Why
    would they not? I do not know why any of us do not pay
    attention to GAO, but why the Department of Defense does not
    makes no sense at all.
        General Bogdan. Sir, at a strategy level, I am going to
    defer to Mr. Kendall to answer that.
        Senator Manchin. Mr. Secretary, I am sorry.
        Mr. Kendall. Senator, I think we are talking about a
    distinction here that may not have a difference. The label MDAP
    [major defense acquisition program], brings with it a lot of
    statutory and mandatory oversight.
        Senator Manchin. Sure.
        Mr. Kendall. What we plan to do with Block 4 is ensure that
    it is accounted for separately, that we have an independent
    cost estimate, that we manage it very intensively, that there
    is full transparency and visibility into what we are doing.
        Senator Manchin. I am saying that----
        Mr. Kendall. All the things that I think are being asked
    for will be supplied. But if we add to that the label of a
    major defense acquisition program, that is going to bring a lot
    of additional bureaucracy and cost. I was hoping to avoid that.
        Senator Manchin. I agree. We do not want to put any more
    bureaucracy on top of you than you already have.
        But then I would ask, Mr. Sullivan, why would GAO make that
    report, if you thought it was going to throw more bureaucracy
    on top of it?
        Mr. Sullivan. We would not want to see any bureaucracy on
    top of that either. In fact, we did a report last year, we kind
    of call it our efficiency report. I know the Under Secretary is
    familiar with it, and agrees with a lot of it, I think.
        One of the things we are also attacking when we attack
    these kind of accountability questions is, let's reduce some of
    that bureaucracy that they have to deal with if they become an
    MDAP.
        But the reason we think it is important here is, number
    one, the dollars involved are such that, even according to
    current law, they meet the threshold for an MDAP program. The
    other thing is, on the F-22 program, we saw something very
    similar to this. When they decided to baseline new capabilities
    into the program, they did it under the existing program, and
    very quickly, a $2 billion estimate for development of those
    new capabilities became about $11 billion, and there was no
    accountability over it because it was in with the baseline
    program.
        Senator Manchin. First of all, I appreciate the job the GAO
    does. I really do.
        Mr. Sullivan. Thank you.
        Senator Manchin. I have to make apologies as to why we do
    not take your recommendations more seriously. You must have
    considered the bureaucracy versus the cost, as far as the
    contract versus cost-plus. It had to be significant savings.
        Mr. Sullivan. Yes. We sympathize with the desire to not
    have to go through so many reviews and so many offices and
    comments and everything else. We did the report on that, and it
    was eye-opening for us to see what they have to go through. But
    to me, they said if they had to go to a major defense
    acquisition program, it would cause a year's delay in getting
    that development effort going. I just do not understand why
    that would be the case. They are doing many of the things they
    would be required to do under MDAP anyway.
        Senator Manchin. Thank you. Let me go on.
        Yesterday, it was announced that we are sending 250 special
    operations forces to Syria. I understand that it costs us
    approximately $1 million to $1.5 million to train one special
    operator, equaling to roughly $375 million for the 250.
        General, you have indicated recently that the F-35
    currently costs $108 million per aircraft. I know it is going
    to come down to $85 million, you are hoping, by 2019.
        Conceptually, if we traded in 10 jets, just 10, we could
    increase the size of our special forces community by over 650.
    This is after General Milley came here and said we are about
    220,000 short of end-strength ground troops. We are looking for
    ways to make sure that we can meet the threats that we have.
        The F-35 pilot helmets alone cost $400,000. That is $10
    million for 2,500.
        As we look at the costs associated with F-35, and
    considering the current threats we are facing and how most of
    it is ground threats that we are facing and fighting, does it
    make sense to spend so much money on the F-35 while we
    currently depend so much more on our special ops forces around
    the world, since we have to make some choices?
        General Bogdan. Senator, what I will tell you is that the
    Department has many different kinds of choices they have to
    make and try to balance their requirements with the resources
    that they have.
        I will tell you that the F-35 is a long-term investment in
    the defense of this Nation. Our future adversaries are not
    sitting still. In the next 10, 20, 30 years, we may very well
    need the capabilities that the F-35 will provide us to maintain
    our leadership in the world. I consider the F-35 as an
    investment in the future.
        Senator Manchin. I appreciate that. My time is up, but I am
    saying we have 2,500 scheduled to be built, correct? Is that
    the number?
        General Bogdan. The U.S. services will build about 2,443,
    sir.
        Senator Manchin. For 10 less aircraft, we could put 650
    special ops people on the frontlines right now.
        General Bogdan. I believe your math is right, sir.
        Senator Manchin. Okay. Thank you, sir.
        Chairman McCain. Senator Fischer?
        Senator Fischer. Dr. Gilmore, in your prepared testimony,
    you state that cybersecurity testing has revealed deficiencies
    and that full testing of the logistics operating unit and the
    logistics information system has not been permitted.
        Can you give us an overview of the planned cybersecurity
    tests and whether, based on the deficiencies discovered so far,
    you believe the testing will be adequate?
        Dr. Gilmore. If we execute the plan that my office has been
    working on with the joint operational test team and the program
    office over the next couple years, that will be a very
    thorough, rigorous set of cybersecurity tests. The problems
    that we are running into, as you mentioned, are that the
    program is reluctant to let us test on the live systems for
    fear that we might damage them, and they had not made
    provisions for backup if the systems went down, although they
    are working on that now.
        Up to this point, and in the immediate future, we will have
    to test on surrogate systems and laboratory systems. The
    program office is making those available to us. That is
    certainly better than forgoing all testing, and we are learning
    from that, as was mentioned in my annual report and in my
    statement.
        But we need to do much more than that. We need to test on
    live systems. We are also going to have to find a way to do
    some sort of cybersecurity assessment of Lockheed's information
    systems because ALIS is plugged into the Lockheed corporate
    network.
        We are working through all of those issues. Over the next
    couple years, I expect that we will have done very adequate,
    rigorous, testing. But we are just at the beginning of it.
        Senator Fischer. General, how is the program office working
    to address these issues? The doctor mentioned some
    accommodations there, but there is still the need for live
    testing. How are you addressing all of this?
        General Bogdan. Yes, ma'am.
        What I will tell you today, ALIS, our logistics information
    system, is operating on the DOD networks. In order for me to be
    able to allowed to put that ALIS system on the DOD networks, it
    has gone through, over the last 3 or 4 years, vigorous
    cybersecurity testing and certification from agencies outside
    the JPO [Joint Program Office], to include the NSA [National
    Security Agency] and DISA [Defense Information System Agency].
        The idea that the ALIS system today is somehow untested is
    not an accurate statement. However, having said that, Dr.
    Gilmore is correct. I was hesitant last year to give the
    operational test community the authority to test end-to-end the
    operational system, because we did not have redundancy in part
    of the system. If the testing were to knock off that part of
    the system, I did not have a backup.
        We are building that backup today. As soon as that backup
    is in place, we will give the operational test community full
    authority to test the system as it operates in the field today.
    That should happen before the end of the year.
        Senator Fischer. Before the end of the year?
        General Bogdan. Before the end of the year, ma'am.
        Dr. Gilmore. I would like to comment, Senator, that we do
    cybersecurity testing as an integral part of operational
    testing of systems that have been through DIACAP [Department of
    Defense Information Assurance Certification and Accreditation
    Process] certifications and NSA certifications, and we get into
    them every time.
        I am not arguing against those certifications, which are
    specification-based kinds of assessments. They are certainly
    necessary, but they are hardly sufficient.
        Commercial organizations such as Microsoft have said in
    their advice, the advice they provide to their customers,
    assume that you have been penetrated and do continual red
    teaming, which is what we do in our operational tests.
        The certifications that the general talks about are
    certainly necessary, but they are hardly sufficient.
        Senator Fischer. Mr. Secretary, overall, what are the
    lessons learned from this process? What are we applying to
    other acquisitions? How is cybersecurity going to be included
    in the requirements process? Basically, what are we doing to
    integrate requirements for cybersecurity into the whole
    acquisitions process?
        Mr. Kendall. Cybersecurity is both a ubiquitous and
    basically an omnipresent problem. Our guidance to the
    acquisition work force basically is that you have to take
    cybersecurity into account throughout every phase of the
    product, development of product lifecycle, and every aspect of
    it.
        The Department is maturing its capabilities in this area,
    but I am in agreement with Dr. Gilmore on this, we still have a
    long way to go.
        Some of our older systems in the field were not designed
    with cybersecurity in mind. We have to go back and assess those
    and take corrective action on those. All of our systems like
    the F-35 that are in development, we have to integrate into the
    design process as we go, as well as into all of our business
    practices.
        It is a pervasive threat, and I worry particularly about
    loss of unclassified information, which is much easier to
    extract and attack. In a logistics system, that is a particular
    problem because you want to connect to the Internet somehow so
    you can order parts and so on.
        We are working this problem very, very hard. It is not
    going to be cheap to fix it, and it is not going to be quick to
    fix it, but we have to do so.
        Senator Fischer. Thank you, Mr. Chairman.
        Senator Reed. On behalf of the chairman, Senator Cotton,
    please?
        Senator Cotton. Thank you.
        I know that Senator Donnelly asked about lessons learned
    from the F-35 program and what we might take forward in other
    programs, given that some of the challenges of this program go
    back to some members' high school years. I think we only got
    through Mr. Sullivan and Dr. Gilmore, though. I would like to
    hear the answer to that question from Secretary Kendall and
    General Bogdan.
        Mr. Kendall. I was thinking, as my colleagues were
    answering, I think it is a combination of things. But at the
    end of the day, having a successful program depends on a
    handful of things, but they are all incredibly difficult and
    complicated. It starts with reasonable requirements. Then you
    have to have professional management that is empowered to do
    its job. You have to have adequate resources. You have to have
    a system that basically will support people doing the right
    thing.
        In our system, as I think others mentioned, there is a very
    strong bias that is sort of built into our incentive structure
    towards optimism. It is easier to get a program funded if it
    costs less. People want everything faster, and they want it
    cheaper, and they want it to be able to do more.
        Most of the problems I have seen in acquisitions stem from
    being in a hurry and being convinced, for whatever reason, that
    things will be cheaper, better, faster than they will actually
    be or that history would indicate they would be.
        My office was formed in 1986 because this problem was so
    pervasive. I think we have had, frankly, a mixed record of
    success. One of the things that I hope I have done over the
    last several years is to put in more realism and to structure
    programs with a more highly likelihood of success.
        A lot of the things that we to, like F-35, are incredibly
    complicated and difficult. Development is inherently very
    risky. When you create something that has never been created
    before, and you do it with cutting-edge technology, that is a
    process that inherently has a lot of unknowns in it, no matter
    how much risk reduction you do ahead of time.
        I think support for sound management, ensuring
    professionals are in place, resisting the tendency to spend the
    money just because it is in your budget and you are afraid you
    will lose it if you do not spend it, which is I think exactly
    what happened when we started production on the F-35, is
    something that has to be reinforced throughout the chain of
    command, starting with the Secretary of Defense.
        Senator Cotton. General Bogdan?
        General Bogdan. Thank you, Senator.
        I will not elaborate. The concurrency and the optimism
    piece are given. I will give you two other things, sir.
        When you set up a large acquisition program like this, you
    must ensure that the risk between industry and government is
    balanced appropriately. If the risk is all on the government,
    or if the risk is all on industry, you will get bad behaviors
    from both sides, so it is very, very important to make sure you
    have the incentive structures right and the risk balanced
    appropriately between the government and industry. We did not
    get that right at the early part of the F-35 program.
        Mr. Kendall, under his leadership, I have been trying to do
    that for a number of years now, and it has proven to be
    helpful.
        The second thing I would tell you that people do not talk
    about much is leadership continuity. If you have a very large
    program and very complex, like the F-35, it will do you no good
    to put leaders in place that are there for only 2 or 3 years.
    It takes them a year just to understand what is going on.
        I would tell you our bigger acquisition programs need
    stable leadership at the top for many, many years to help.
        Senator Cotton. Are you talking about uniformed leadership
    or civilian leadership?
        General Bogdan. Either one, sir. I believe government
    civilians and military personnel are both very capable
    acquisition leaders. You just have to leave them there in place
    for enough time to make a difference.
        Senator Cotton. To the extent it is uniformed leadership,
    is that an acquisition challenge or is that a personnel
    challenge?
        General Bogdan. It is both, sir. It is absolutely both. How
    do you provide the incentives for a military person to continue
    moving up in rank if you leave him in a job for 5 or 6 years?
    But that is sometimes what is necessary for very big, complex
    acquisition programs.
        Senator Cotton. I have heard from some of our partners
    overseas, and I do not mean just partners in the Joint Strike
    Fighter, but our security partners generally, when talking
    about acquiring certain weapons systems that, because they are
    small compared to the United States, they worry about being a
    plane with a country rather than a country with a plane.
        What is the risk that some of the partners in this program
    face in terms of the cost of this aircraft and the ability to
    acquire the number of aircraft needed to contribute
    meaningfully to the program? How many Joint Strike Fighters
    need a country acquire to have a meaningful contribution to
    their defense?
        General Bogdan. That is an interesting question, Senator. I
    think it really goes to what each country cares about in terms
    of its resources and what they care to defend.
        What I will tell you is that even our smallest nations on
    the F-35 program are looking at least two squadrons of F-35s.
    The idea that the partnership will be working together to
    sustain, maintain, and train the airplanes is a huge deal for
    them, because otherwise they could not afford a fifth-
    generation capability like they are today.
        Senator Cotton. Thank you.
        Senator Reed. On behalf of the chairman, Senator Rounds?
        Senator Rounds. Thank you, sir.
        Dr. Gilmore, I am concerned by your testimony that the
    Marine Corps found they were not able to achieve aircraft
    repair capabilities at the unit or intermediate levels that
    would support expeditionary warfare. Can you expand on this and
    give your assessment as to whether ALIS, or the Autonomic
    Logistics Information System, is mature enough to support the
    sustained operations with a land- or ship-based forward-
    deployed squadron of F-35s at this time?
        Dr. Gilmore. At this time, it is not sufficiently mature.
    There are a number of improvements that are planned, as the
    program moves forward to what is called ALIS 3.0, the fully
    capable version that is meant to be available for operational
    testing and full operational capability. If those improvements
    are realized, they will address a number of the issues that are
    mentioned in my testimony.
        But currently, there are immaturities in the system. There
    are lots of time-consuming workarounds that are required in
    order to keep aircraft flying. There is a heavy reliance on
    having contractors present.
        When we move forward to ALIS 3.0, the plan is to fix many
    of those problems. There is also a concern that I think General
    Bogdan alluded to when he was talking about tires that there is
    still too much reliance on sending parts back rather than
    repairing them closer to the frontlines.
        But again, the program is working on those issues, so we
    will see how well ALIS 3.0 does when we get to operational
    testing. My estimate will be in 2018.
        Senator Rounds. Lieutenant General Bogdan, can you comment
    on Dr. Gilmore's assertion that with the current number of
    aircraft planned for testing use, an 80 percent aircraft
    availability rate is needed to efficiently accomplish the
    integrated operational test and evaluation on schedule. What
    would you assess is the current aircraft availability rate?
    Does the JPO current projections estimate that the aircraft
    availability rate will be up to 80 percent by the time that
    IOT&E is scheduled to start? It seems as though right now you
    are not making that, and yet you are going to have more
    challenges between now and then to meet that.
        How are we going to meet the testing guidelines that are
    laid out in order to meet the deadlines that you have laid out?
    It does not appear as though it is possible. Can you comment on
    that and give us your thoughts, please?
        General Bogdan. Yes, sir. I am not quite sure where the 80
    percent comes from.
        Senator Rounds. Well, in order to have the number of
    aircraft, just for the number of hours and number of tests you
    have to do, you have to have 80 percent of them operational.
    You have not done that yet.
        General Bogdan. To finish IOT&E in a year, you are correct,
    sir. I do not believe we will, by the time IOT&E starts, get
    anywhere near 80 percent.
        Today, the fleet is hovering around 60 percent aircraft
    availability. The best we have seen so far are the U.S. Air
    Force airplanes at Hill Air Force Base. When they deployed to
    Mountain Home this winter, they achieved about a 72 percent
    aircraft availability rate.
        What we have seen is our newer airplanes are doing much
    better. But I will tell you it is very unlikely that we will
    get to 80 percent. What that means is IOT&E may take longer
    than we anticipated. That would be the major result of that.
        Senator Rounds. We talked a little bit, and I am going to
    follow up on Senator Ayotte's question a little bit,
    considering the A-10. As I look back to the information that
    has been provided for us, if you compare the two aircraft
    today, the A-10 time on-station is an hour to 1.5 hours; F-35B,
    and this is from what I can see the planned operational
    capabilities, of 25 minutes to 40 minutes on-station. With
    weapons, the A-10, 4 air-to-surface weapons; F-35B under the 2B
    software, 2 air-to-surface weapons, under the 3F, 6 air-to-
    surface weapons. The fuel burn under the F-35 A and B, 10
    percent to 20 percent than F-16, 50 percent to 70 percent
    higher than A-10, which would suggest that we are also going to
    need additional capabilities just to service them close by
    those areas.
        On the gun itself, the F-35, and this is the way it was
    designed in the first place, apparently, the F-35, apparently,
    was not designed with a gun in mind, a lightweight 25 mm
    cannon, 402 rounds total, or about a four-second burst; A-10, a
    30 mm cannon, 1,150 total rounds, 17 seconds, and an A-10 round
    is double the weight of that carried by the F-35.
        Clearly, when we talk about having a similar mission, we
    are talking about doing the job in completely different ways.
    Would that be a fair assessment?
        Dr. Gilmore?
        Dr. Gilmore. Yes, the F-35, when you talk about close-air
    support, it will do it much differently than the A-10. We are
    going to do those comparison tests, the ability to perform CAS,
    between the A-10 and the F-35 as an integral part of
    operational testing.
        We are not going to say that that F-35 has to perform CAS
    the same way the A-10 does. We are going to let the F-35 pilots
    take advantage of the systems on that aircraft, deal with some
    of the limitations you mentioned as well as they can, and see
    how well the missions are carried out in terms of the ability
    to strike targets in a timely manner, and accurately, and then
    report on that.
        There are numerous arguments about how well each aircraft
    will do under different circumstances and different threats.
    Clearly, the F-35 should have an advantage in higher threat
    environments than the A-10 does. The comparison testing and our
    report will illuminate all of that.
        Senator Rounds. Mr. Chair, I am out of time, but Secretary
    Kendall looks like he wants to respond. I think, in fairness,
    we ought to give him an opportunity.
        Mr. Kendall. Thank you, Mr. Chairman.
        I am a huge proponent and fan of the A-10. I am an Army
    officer. It was purposely designed to be a close-air support
    aircraft, and it was a very good design for that purpose. But
    if you estimate time to do air-to-air, it is hopeless. The F-35
    is designed as an aircraft that can do a variety of missions,
    air dominance, strike, and close-air support.
        It does close-air support differently. It does not have the
    features that you mentioned. Those are all real world numbers
    that I think you gave. But what is different now than the time
    the A-10 was conceived is the use of precision munitions and
    the ability of a wide variety of aircraft to put a munition
    like a small-diameter bomb exactly where they want it to go.
        The Air Force today does close-air support with B-1
    bombers, for example, something that traditionally would not
    have been possible. Times have changed.
        If we could afford it, I think everybody would like to keep
    the A-10 in the inventory because it is such a good special
    purpose aircraft for that one mission. But given the
    constraints we have on both the size of our force structure and
    the financial resources that we have, maintaining a one-mission
    aircraft in the Air Force was not something that could fit into
    the balance that we were trying to achieve.
        Senator Rounds. Thank you.
        Thank you, Mr. Chairman.
        Senator Reed. On behalf of Chairman McCain, Senator Lee,
    please?
        Senator Lee. Thank you, Mr. Chairman, for calling this
    hearing.
        Thanks to all of the witnesses for your testimony today.
        The Utah delegation has had the opportunity to witness
    firsthand the rollout of the F-35 in the Air Force as the 388th
    and the 419th fighter wings at Hill Air Force Base in Ogden,
    Utah, prepare to reach initial operating capacity, or IOC,
    later this year.
        We have also been able to see the development of the
    logistics and maintenance functions of the F-35A at the Ogden
    Air Logistics Complex, which has been so effective that they
    have been called to assist both the Marine Corps and the Navy
    in meeting the modernization goals for their respective
    variants of the F-35, and we are very proud of that.
        The men and women who are working to train on, test, and to
    keep these jets in the air are models of American ingenuity and
    hard work and patriotism and dedication at its very best. I
    hope this Congress will provide them with the resources that
    they very much need in order to continue succeeding in their
    mission.
        General Bogdan, one of the main obstacles for the F-35A
    reaching its IOC goals this year, of course, involves the
    continued development of ALIS, which is, of course, used to
    manage the logistics and supply chain for maintaining the F-35,
    not just now during the rollout, but throughout its lifetime.
        Can you tell me how is the Joint Program Office working
    with industry to ensure this capability is functional and fully
    integrated into this weapons platform in a timely and effective
    manner?
        General Bogdan. Thank you, Senator.
        The ALIS system right now that the Air Force needs at Hill
    Air Force Base is on track to be about 60 days later than we
    planned. The biggest issue we have right now is getting the
    maintenance and supply chain and configuration management of
    the engine, the F135, integrated into the ALIS system. That has
    proven to be more difficult than we had anticipated, because it
    requires both Lockheed Martin and Pratt & Whitney's backend ERP
    [enterprise resource planning] systems, to talk to each other
    and to connect with ALIS.
        We have worked with Lockheed Martin across the whole
    company as well as some of their teammates, and we have brought
    in some software experts from within DOD to try over the last
    few months to figure out where those difficulties lie. The good
    news there is we understand where the difficulties are. Now we
    just have to go and execute.
        Like I said, I think we are probably going to be about two
    months late getting that done, but I think we, from a technical
    standpoint, will be able to get it done.
        Senator Lee. Okay, that is good to know. It is good anytime
    you can at least contain a delay and look forward and conclude
    that you have a known quantity.
        Because of budget reductions and the inability to retire
    the A-10, the Air Force is concerned about a potential
    shortfall of experienced uniform maintainers to transition to
    F-35 units and keep those weapons safe and keep them
    functional.
        General Bogdan, has the Air Force been able to resolve this
    problem in the short term? What long-term complications do you
    see that might still exist for ensuring that a generation of
    maintainers is being trained to keep pace with the process of
    integrating the F-35 into the Air Force?
        General Bogdan. Yes, sir.
        In the short term, when the Air Force was faced last year
    with a shortage of maintainers for their IOC capability at Hill
    Air Force Base, they asked the program office to populate an
    entire squadron at Luke Air Force Base with contractor
    logistics support personnel. We did that. The 62nd squadron at
    Luke Air Force Base today on the flight line is maintained with
    approximately 110 contractors as opposed to blue suit
    maintainers. That gave the Air Force the flexibility to take
    those maintainers that would have been at Luke Air Force Base
    and transfer them to Hill Air Force Base for IOC.
        That is just a Band-Aid, though, and that is a short-term
    fix. In the long term, I believe the Air Force needs the
    ability to move maintainers around for the growing fleet of F-
    35s. We are committed to working with them to increase the
    throughput of maintainers through the schoolhouse and to work
    with our partners and to work with the Guard and Reserve in the
    Air Force who can provide some of that manpower.
        I will defer to the Air Force on those solutions, though,
    sir.
        Senator Lee. Let me ask you one more question as my time is
    expiring.
        Can you tell me, did the Department of Defense originally
    intend the F-35 to be a direct replacement for the A-10 in
    close-air support missions? Or was it designed to work with
    other Air Force and joint force systems to fulfill the
    Department's needs as far as close-air support goes? What is
    your assessment of how the services will be able to work
    together to meet close-air support needs through integrated and
    joint operations?
        General Bogdan. Sir, what I will tell you is, over time,
    the evolution of the way we conduct close-air support in the
    Department of Defense has evolved. It is no longer a single
    airplane out there talking to a ground controller and dropping
    a single weapon. It is a much more integrated fight. It is much
    more reliant on multi-platforms and multiple communication
    systems with both the ground and the air.
        Given that, the F-35 in the future, today and in the
    future, will have the capabilities to seamlessly integrate into
    that network to perform close-air support.
        Senator Lee. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Reed. Thank you, Senator Lee.
        The chairman is on his way back from the second vote. I am
    also told that Senator Blumenthal and Senator King are coming
    for questioning.
        But at this point, if I may, on behalf of the chairman,
    take a short recess, perhaps for just a few moments until the
    chairman returns. We will stand in recess until the chairman
    returns. Thank you.
        [Recess.]
        Senator Reed. Let me once again, on behalf of Chairman
    McCain, call the hearing to order and, at this time, recognize
    Senator King for his questions.
        Senator King?
        Senator King. Mr. Gilmore, one of the concerns that I have,
    and it has been touched on in this hearing, is the length of
    time this platform is expected to serve, roughly 20 years from
    now, 30-plus years from initial inception. I think back to any
    product I may have bought in 2004. I was originally thinking of
    Senator Graham's flip phone. I would not want to be flying that
    in 2040.
        Are we building upgradability into this airplane so that it
    can keep up with the times? In other words, is it designed with
    that in mind?
        Dr. Gilmore. That question is to me, Senator?
        Senator King. Yes, sir.
        Dr. Gilmore. Well, I will defer the details to General
    Bogdan. This aircraft is going to be much more upgradable than
    the F-22s was. But having said that, we have already identified
    the need for an upgrade from the now being installed Technical
    Refresh two processor, which provides additional capability
    relative to the processors that have been in the aircraft to
    this point. We have identified a need for an upgrade to that, a
    Technical Refresh 3 processor.
        In this program, moving from one processor to another is
    not nearly as arduous a problem as in the F-22, where there was
    a lot of software that was developed with features that were
    tied very specifically to the processors in order to maximize
    capability. But it is still not a trivial matter, as has been
    demonstrated recently by the stability problems that we now
    hope have been resolved with the Technical Refresh two
    processor.
        Upgradability is being built in, but that does not mean it
    is going to be trivial to execute.
        Senator King. General Bogdan? Quickly, because I have
    several of the questions. But what is your thought, are we
    going to be able to upgrade this airplane so that is not going
    to be obsolete in 2025?
        General Bogdan. I believe we will, sir. There are a few
    points I will make.
        One is, when we do replace the next version of the computer
    or the brains in the airplane, we are requiring open standards
    and modular open system architecture, which will allow for the
    incorporation of new sensors and new capabilities much easier.
        Second, when we first originally designed the airplane, we
    knew many of our partners and FMS customers would want to put
    unique weapons on the airplane, so we have created a system
    that will allow us to integrate multiple kinds of weapons on
    the airplane, not trivial, but in an easier way.
        From both those perspectives, I believe the airplane is
    adaptable and growable.
        The third is, many of the capabilities inherent in the
    airplane today that make it special are software-based.
    Therefore, in the future, as new capabilities come on, like
    electronic warfare and electronic attack, we will be able to
    upgrade the software in an easier way than you would the
    hardware.
        Senator King. I think this has to be an important part of
    our whole acquisition process as we are buying 40-year assets,
    the Ohio-class submarine, the B-21, on and on.
        Secretary Kendall, was the attempt at jointness in this
    project a mistake in retrospect?
        Mr. Kendall. It is a good question, Senator. I think the
    honest answer is I am not sure.
        I was present at the inception of F-35. It started out as a
    technology program that was instituted by one of my
    predecessors when I was on the staff.
        We are now thinking about the follow-on aircraft for the
    Navy and the Air Force. I do not think we are going to repeat
    this. First of all, I think the design parameters are going to
    be quite different for the follow-on aircraft for the two
    services. We did get some benefit from commonality, but there
    is very little commonality in the structure. I think we still
    could get some of those benefits without having to have a
    single program.
        Senator King. You could get benefits in terms of?
        Mr. Kendall. Common avionics, common sensor systems, and so
    on. I think those still could be achieved without having a
    common program, necessarily.
        I think you would have to make that decision kind of as
    your plans for modernization and acquisition became more real
    and material as to whether or not it paid off or not. I think
    it is astonishing to me, frankly, that we have been able to
    keep this program together for so long, keep the three services
    fully committed, and keep all of our international partners
    fully committed. We have two that are on the fence right now.
    But at this stage of the game, everybody is still in.
        Pulling all that off is not a small achievement. That is
    very hard to do. I think we have to think very carefully about
    that. The more complexity you have in a program, the more risk
    you have. I do not know that the savings are necessarily worth
    that complexity and the risk that goes with it.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Senator McCain. Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        I thank you all for your being here today and for your
    insights on this very challenging program. It is as complex as
    it is critical to our national defense, and we should expect on
    this committee, and the American public should anticipate, that
    a weapons platform of this complexity will also have bumps in
    the road in its development and research. I take it none of you
    would disagree with that basic preposition.
        Despite that bumpy road, at some point, the F-35 as a whole
    has already made significant advancements in a number of areas.
    In particular, the F135 program provides truly a fifth
    generational power capability to the fleet.
        Every low-rate initial production LRIP [Low Rate Initial
    Production] contract, as I understand it, for the F135 has been
    on or below cost. The recent announcement of the LRIP lots 9
    and 10 will bring the price down another 3.4 percent from the
    LRIP 8.
        To date, the F135 conventional takeoff and landing engine
    cost has been reduced by 47 percent since the initial flight
    test engines. The STOVL [Short Take Off and Vertical Landing]
    engine cost has been reduced by 34 percent in the same time
    period. These are real achievements.
        In addition, Pratt & Whitney has already identified
    technology improvement options that will increase the thrust,
    durability, and fuel efficiency that could ultimately save
    billions of dollars for this program.
        The F135 is meeting the key fiscal year 2020 milestones--
    again, my understanding--for mission capability and engine
    reliability.
        Are those facts accurately stated, so far as the panel
    knows?
        General Bogdan. Sir, they are very accurate.
        Senator Blumenthal. Thank you.
        All that said, I know that questions have been raised,
    General Bogdan, about the F135 performance. I take it from your
    testimony that quality has not been an issue, so far as the
    Pratt & Whitney supplier performance has been concerned?
        General Bogdan. Sir, 2 or 3 years ago, I would have told
    you that I was worried about that. I will tell you that Pratt &
    Whitney has done a good job of standing up a quality
    organization within Pratt & Whitney Military Engines that has
    dug down deep into their supply chain and helped improve that
    significantly.
        Senator Blumenthal. Thank you.
        Their supply chain, a lot of it is based in Connecticut. I
    can tell you from my experience in Connecticut that our
    suppliers and manufacturers have recognized the challenge we
    face for this century, literally. This weapons platform will be
    critical to our national defense throughout the century.
        We can look back and draw lessons, and we should, from the
    challenges that caused that improvement to take place, and
    maybe even the overall conceptual framework, as you suggested,
    Secretary Kendall. Should there have been more
    individualization of the platform for different services? But I
    can well recall that the conventional wisdom not so long ago
    was that the services ought to get together and collaborate and
    buy a single fighter. That was the wisdom du jour of
    contracting in its day, and now maybe lessons point in a
    different direction.
        I hope that we will learn lessons from this procurement
    experience, but I think there has to be a recognition that this
    weapons platform will do things that no fighter engine or
    platform has done in the past.
        Would you agree, Dr. Gilmore?
        Dr. Gilmore. The investment ranking is large, and the need
    that we have is large to deal with the threats that currently
    exist. If the F-35 does not succeed, we will be in a pickle.
        Senator Blumenthal. We have a common national interest in
    making sure it succeeds?
        Dr. Gilmore. Yes.
        Senator Blumenthal. Would you agree, Mr. Sullivan?
        Mr. Sullivan. Yes, I would. We definitely need to have this
    moving forward. This is the fifth generation.
        Senator Blumenthal. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Let me just say, in summary, it has been a
    scandal and the cost overruns have been disgraceful. This
    committee, in our authorization responsibilities, will take
    whatever actions we can to prevent a reoccurrence. It should
    not take 15 years and still not have an aircraft IOC, and with
    cost overrun after cost overrun.
        I guess my question, finally, Mr. Sullivan, do you think
    that we have learned the lessons and taken sufficient measures
    to prevent a reoccurrence? Or do we need to do some more?
        Mr. Sullivan. I think there is always room to do more. I do
    not think we have learned all the lessons yet. But I would say
    that if you go back 5 or 6 years, or go back to, say, 2010, we
    are not seeing as many F-35s or these big programs with
    requirements that are not achievable. I think we are learning
    some lessons that way.
        Some of that could be because of budget constraints. Some
    of it is from the work that Congress has done. Frankly, I think
    the Department has done a good job of trying to implement and
    drive down into the culture some better practices that talk
    about better buying power initiatives.
        We have a long way to go, though. I mean, there is still
    way too much cost growth on these programs. We are not using
    enough looking at requirements in an incremental way, using
    open systems, as Senator King was talking about. There are a
    lot of things that we can to do create more efficiencies.
        Senator McCain. Dr. Gilmore?
        Dr. Gilmore. I think Block 4 will be a good test of whether
    we have learned lessons. As mentioned in my written statement,
    I see a number of unrealistic assumptions with regard to Block
    4. I hope, as Secretary Kendall and General Bogdan take a look
    at how to structure that program, that they take a look at
    those issues. That will be a good test.
        Senator McCain. Secretary Kendall and General Bogdan, I
    hope you will pay attention to Dr. Gilmore's words,
    particularly given his responsibilities to the Department of
    Defense as well as to the Congress.
        I thank the witnesses. I believe that most of the takeaway
    from this is that we are making progress, that we have
    challenges that lie ahead, but there have been some significant
    improvements, as opposed to some years ago.
        I thank the witnesses for their hard work.
        This hearing is adjourned.
        [Whereupon, at 11:54 a.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator John McCain
                            f-35 variant commonality
        1. Senator McCain. General Bogdan, how does the lack of commonality
    between the three variants complicate the management of the F-35
    program?
        General Bogdan. In some ways the F-35 variants are quite common
    (cockpit configuration, software, pilot-vehicle displays, helmet) but
    in other areas--mostly systems design (fuels, weapons bay) and
    structurally (bulkheads, wings, tails, lift-fan-B-model)--they are
    different. Despite the differences in the airframes, the manufacturing
    processes and tooling are common. Learning curve efficiencies and
    lessons learned from production processes will benefit all three
    aircraft variants.
        The variant differences do cause some complexities, including the
    need to clear each aircraft variants' flight envelope separately,
    conduct structural/durability testing on all three variants separately,
    and obtain separate airworthiness. However, there are many areas where
    commonality has reduced complexity, saved money, and limited the work
    needed to field combat capability. These include mission systems
    software, development and testing, weapons clearances and accuracy
    testing, ejection seat development and testing, a significant portion
    of maintenance technical data, simulator development and manufacturing,
    and most pilot and maintenance training curriculum. Because these are
    common across the three variants, they have reduced complexity, cost,
    and work.
        From an organizational perspective, the F-35 Joint Program Office
    (JPO) is a single organization focused on the overall program--
    regardless of U.S. Service or International Partner. The JPO utilizes a
    single contracting, financial management, production management,
    security, engineering and legal office across all three variants. Our
    unified effort benefits from economies of scale through its contracts
    negotiations, test force, and global sustainment strategy.

        2. Senator McCain. General Bogdan, the original requirements for
    the F-35 called for 70-90 percent commonality between the three
    variants. You were recently quoted as saying in reality, they are 20-25
    percent common, mainly in their cockpits. In 2013, you were quoted as
    saying the F-35 program is really 3 aircraft programs running in
    parallel. Given the lack of commonality and the different requirements,
    priorities, and desires of the various customers, what benefits do you
    see as worthy enough to continue this program as a joint effort?
        General Bogdan. From an organizational perspective, the F-35 Joint
    Program Office (JPO) is a single organization focused on the overall
    program-regardless of US Service or International Partner. The JPO
    consolidates many actions including contracting, financial management,
    production management, security, engineering, testing and legal advice
    across all three variants. By consolidating these necessary program
    management functions, we gain the benefit of economies of scale, which
    makes the program more affordable and minimizes the amount of
    Government workload necessary to run the program. Continuing the
    program as a joint program will continue to benefit the US Services,
    International Partners and Foreign Military Sales customers in the
    areas of airframe and engine production contracts, spares procurement
    and supply, depot activities, and the Follow-on Modernization (FoM)
    program. We also believe it is in the tax payers' best interest to have
    one Government office speaking for and interacting with the F-35's
    airframe and engine contractors.
        Separating the Program may allow industry to uniquely charge the
    United States Air Force and United States Navy for work industry only
    does once. It may also cause significant variations in the manner in
    which global sustainment is delivered, significantly increasing the
    cost and complexity of the program.

        3. Senator McCain. Dr. Gilmore, how does the lack of commonality
    between the variants effect the operational testing of the F-35? Is the
    test community conducting, in effect, three separate testing plans?
        Dr. Gilmore. There is one operational test plan, but it is designed
    to have enough trials to be able to detect differences in operational
    effectiveness among the three F-35 variants. Differences among the
    variants in weapons carriage and loadouts, flight envelope (maximum
    ``g'' available and maximum airspeed) and fuel loads may cause
    dissimilarities in combat performance among the variants. The test
    design uses statistical techniques to ensure adequate coverage of all
    operational missions (for example, suppression/destruction of enemy air
    defenses or defensive counter-air) and the operational mission
    environment (for example, day vs. night or threat severity) for all F-
    35 variants without resorting to three separate tests of each variant
    for each mission and environment. The test designs were developed so
    that differences in performance between the variants could be detected
    and measured, independently (or nearly independently) of other factors
    in the operational space. Although each trial will be flown by a
    specific variant--i.e., ``mixed'' formations of multiple variants are
    not planned--there will be enough trials flown by each variant to
    ensure differences in combat effectiveness among the variants will be
    detected. While the test we are planning contains fewer trials than
    would three separate test plans for each variant, the test does contain
    more trials than would be required if all three variants were
    completely common and there was no expectation that performance
    differences among the variants existed.
                            the joint program office
        4. Senator McCain. The process the Joint Program Office has in
    place for determining what capability upgrades will be in which block
    increment, and when these capabilities are developed and procured,
    seems to be generally unsatisfying to all the services, and also the
    international partners. While the F-35 program has been filled with
    compromises, as many joint programs are, why would we continue in the
    future using a joint construct when there may be other alternative
    management structures to provide an F-35 customer with a particular
    capability when they actually need it?
        Secretary Kendall. Actually, I believe the U.S. Services and
    International Partners are generally satisfied with the process for
    determining capabilities and prioritizing and gating those capabilities
    into block increments. The majority of the capabilities planned for the
    initial block of Follow-on Modernization (FoM) are common capabilities
    that are agreed upon by the F-35 enterprise as requirements needed by
    all variants and all partners. In addition, there are multiple mandated
    capabilities that require integration to meet DOD requirements. The
    incorporation of unique Service and Partner capabilities is part of the
    process that has been vetted and agreed upon by the F-35 enterprise.
    Unique weapons and specific capabilities required by individual
    customers are being planned for integration in a process that factors
    in technology levels, required capacity, and need dates, much like the
    rest of the capabilities. Naturally, there are compromises involved,
    but not unlike any other single Service program that must factor in
    competing requirements. The FoM strategy is being structured with
    flexibility and agility in order to be able to meet the emergent
    requirements that will continue to come up in the future. In the case
    of the F-35, this joint and cooperative program will provide the United
    States and many of our allies with a 5th-generation strike fighter able
    to communicate, interoperate, and fight seamlessly across the spectrum
    of coalition warfare.

        5. Senator McCain. General Bogdan, how many people work for the
    Joint Program Office, including military, government civilians, and
    Full Time Equivalent (FTE) contractors?
        General Bogdan. At the time of the F-35 Lightning II hearing before
    the Senate Armed Services Committee on April 26, 2016, the F-35 Joint
    Program Office's records showed that there are over 2,500 professional
    men and women who go to work every day in support of the F-35 JPO and
    develop, test, procure, and support this world-class 5th-generation
    fighter for the U.S. Services, eight International Partners, and three
    Foreign Military Sales customers.
        The table below provides a breakdown of all F-35 JPO and Integrated
    Test Force (ITF) personnel, including military and Government
    civilians. Personnel are over multiple locations, including Arlington,
    Virginia, China Lake, California, Edwards Air Force Base (AFB),
    California, Eglin AFB, Florida, Fort Worth, Texas, Hill AFB, Utah,
    Jacksonville, Florida, Lakehurst, New Jersey, Marine Corps Air Station
    (MCAS) Beaufort, South Carolina, and MCAS Cherry Point, North Carolina.

    ----------------------------------------------------------------------------------------------------------------
                   FTEs                        Authorized                 Assigned                  % Filled
    ----------------------------------------------------------------------------------------------------------------
    USAF/USN/USMC Civilians...........                     1297                      1040                       80%
    USAF/USN/USMC Military............                      185                       153                       83%
    JPO Support Contractors...........                      518                       515                       99%
    International Partner Personnel...                      166                       166                      100%
    ITF Civilians.....................                      435                       381                       88%
    ITF Military......................                      203                       180                       89%
    ITF Support Contractors...........                      135                       132                       98%
    ----------------------------------------------------------------------------------------------------------------
        TOTAL JPO MANPOWER............                     2939                      2567                       87%
    ----------------------------------------------------------------------------------------------------------------

        It is important to note that the ITF personnel are the testers (693
    people), who are not considered part of the Program Office other than
    for cost and budget purposes. Any comparison of the size of the F-35
    JPO to other Navy or Air Force program offices should be made using the
    sum of Air Force/Navy/Marine Corps civilians, military, and support
    contractors (1708), not including International Partners or ITF
    personnel because that is the manner in which all other program offices
    in the Navy and Air Force measure and report their ``head count,'' or
    size. We included the International Partners and ITF personnel to be
    totally transparent.

        6. Senator McCain. General Bogdan, do you have responsibility to
    provide funding for the F-35? Who does?
        General Bogdan. The three United States Services (Air Force, Marine
    Corps, and Navy), eight International Partners, and three Foreign
    Military Sales (FMS) customers are responsible for providing the
    funding for the F-35 Program. As the Program Executive Officer (PEO), I
    manage and oversee the entire F-35 Program, to include the funds
    provided by the U.S. Services, Partner Nations, and FMS customers. The
    PEO's job is to deliver an affordable, reliable, and sustainable 5th-
    generation fighter to our Warfighters, International Partners, and FMS
    customers who are participating in the program.

        7. Senator McCain. General Bogdan, do you have responsibility for
    the requirements of the F-35? Who does?
        General Bogdan. The U.S. Services and International Partners are
    responsible for establishing F-35 requirements through a disciplined
    governance structure. Overall, the Program Executive Officer (PEO) is
    responsible for meeting those requirements by delivering an affordable,
    reliable, and sustainable 5th-generation weapon system to our
    Warfighters, International Partners, and Foreign Military Sales (FMS)
    customers.

        8. Senator McCain. Secretary Kendall, in your estimation, does the
    current management structure of the F-35 program optimally align
    responsibility and accountability in providing the services the
    capability and capacity they require, when they require it, at an
    acceptable cost? Why or why not?
        Secretary Kendall. Yes I do. The F-35 Program Charter (Revision 2)
    was approved by the Deputy Secretary of Defense in March 2015. It was
    co-signed by the Secretaries of the Navy and Air Force. The purpose of
    the F-35 Charter is to document the business arrangements, management
    structure, funding guidelines, personnel support, and lead Service
    responsibilities. The Program Charter is an example of the level of
    attention and oversight afforded to the F-35 Program. The current
    management structure, which is codified in the F-35 Charter, provides
    optimal responsibility and accountability for a very complex Joint and
    Cooperative Program. U.S. Service requirements and capability are
    reviewed extensively and thoroughly as part of the DOD Joint
    Capabilities Integration Development System. The Joint Staff reviews
    the program semi-annually and, with Service input and feedback,
    provides U.S. guidance and direction for the F-35 Enterprise
    requirements review and decision bodies.

        9. Senator McCain. Secretary Kendall, do you believe that with the
    enhanced authorities for the Service chiefs provided in the fiscal year
    2016 NDAA, the Services could satisfactorily execute effective, but
    separate, F-35 follow-on modernization programs for their respective
    variants, as well as act as lead organizations for the international
    partners that also fly those variants?
        Secretary Kendall. I do not. The F-35 Program is in the process of
    completing the System Development and Demonstration phase; preparing
    for Initial Operational Test and Evaluation; transitioning from single-
    year, production-based logistics and sustainment contracts to a longer-
    term, Global Sustainment Strategy (GSS) and performance-based logistics
    contracts; and stepping off on the Follow-on Modernization (FoM) effort
    that will keep the F-35 viable and pacing the evolving threat for the
    next decade and beyond. The last thing that the F-35 enterprise should
    do right now is to break up the F-35 Joint Program Office (JPO) into
    separate, Service-led, variant-based entities. The FoM effort is
    largely a common-requirements effort. In other words, the U.S. Services
    and Partners have voted and prioritized common, DOD-mandated
    requirements and capabilities for integration across all three
    variants. That common effort is best managed and executed under the
    current program and management structure. While there are Service and
    Partner-unique weapons and capabilities planned for the initial block
    of FoM, these will also benefit from the synergies gained from
    experience, planning, and management structure resident in the current
    JPO arrangement. A transition to individual, Service-led F-35 variant
    program offices may be advantageous at some time in the future;
    however, now is not that time. The Services and our International
    Partners are actively and aggressively involved in the management,
    oversight, and execution of the F-35 JPO, and retaining the current
    structure for the foreseeable future is the most prudent approach.
                system development and demonstration (sdd) phase
        10. Senator McCain. General Bogdan, when do you project the System
    Development and Demonstration (SDD) phase to complete?
        General Bogdan. The testing portion of the Systems Development and
    Demonstration (SDD) phase will be completed by the fall of 2017.
    Release to the field of full 3F capability for the A model should occur
    in the late 2017 timeframe, with the B and C model's capabilities
    release in the early 2018 timeframe. This added time between the end of
    testing and release of capability accounts for the time necessary for
    the engineering and airworthiness communities to analyze the test data
    and certify the safety and 3F capabilities for operational use. The
    administrative closeout of the actual SDD contract will require some
    time beyond 2018, but all development and testing will be completed
    during this closeout period.

        11. Senator McCain. Dr. Gilmore, when do you project the System
    Development and Demonstration (SDD) phase to complete?
        Dr. Gilmore. SDD will likely not be complete before March 2018, at
    the earliest. This assessment is based on the following assumptions:
          Block 3i mission systems testing is complete and will not
    need to restart
          Block 3i stability fixes have been successfully
    transferred to the Block 3F software
          Block 3F mission systems has restarted in earnest with
    all SDD aircraft
          The balance of approximately 4,200 Block 3F mission
    systems baseline test points (the number as of the beginning of May)
    will be completed by the test teams, without significant deletions by
    the program
          No additional discoveries which cause significant delays
    or unplanned software releases (beyond those currently planned) occur
    in Block 3F flight testing
          All planned weapon delivery accuracy (WDA) events--which
    includes 25 events with air-to-air missiles or bombs and 19 WDA events
    supporting gun tests with the embedded gun in the F-35A and with the
    podded gun for the F-35B and F-35C--are completed before the end of
    SDD. As of the end of April, none of these weapons delivery accuracy
    events had been completed and will likely not begin before August 2016,
    after a version of software is released to flight test that will
    support the start the of the WDA events. The latest Program Office
    schedule shows that the missile and bomb events are planned to start in
    June and be complete by the end of November 2016, a schedule that I
    consider to be unrealistic. The program has prioritized 16 of the 25
    bomb and missile events to be completed to support flight certification
    of weapons releases for Block 3F; however, all events, including the
    WDAs with the gun, must be completed to support end-to-end fire control
    characterization for all required weapons prior to the start of IOT&E.
    The program's ability to complete these events before March 2018 will
    depend on efficiencies in completing WDA events and data analyses that
    has not been seen in the past (i.e., during the Block 2B and Block 3i
    WDA events) and the maturity of mission systems software to support the
    find-fix-track-target-engage-assess kill chain for each of these events

        12. Senator McCain. General Bogdan, will you need additional
    funding beyond fiscal year 2017 to complete System Development and
    Demonstration (SDD)?
        General Bogdan. The fiscal year 2017 President's Budget includes
    the needed System Development and Demonstration (SDD) funding
    requirements beyond fiscal year 2017 to complete SDD.
                 initial operational test & evaluation (iot&e)
        13. Senator McCain. Dr. Gilmore, can you give us some perspective
    on what the historical rate of discrepancy discovery during IOT&E is
    for weapons platforms, and what that might look like for a system as
    complex as the F-35?
        Dr. Gilmore. Operational testing is designed to evaluate the
    mission capability of a system by exposing the system to the demands of
    an operational environment expected during combat. As such, IOT&E often
    leads to the discovery of problems not identified during development,
    or at least issues that were not fully characterized. Since 2011, I
    have documented in my annual reports many problems that were either
    identified during IOT&E, or were known prior to IOT&E but not addressed
    during development, of systems under DOT&E oversight. In 2014, DOT&E
    began to quantify the rates of problem discovery in all operational
    tests. In 2014 and 2015, approximately 40 percent of operational tests
    discovered new problems significant enough to negatively affect my
    assessment of the system, i.e., they contributed to my decision to call
    a system wholly or partially not effective, not suitable, or not
    survivable. If we add problems that were known but were not addressed
    during development, the percentage of operational tests in which
    significant problems are encountered climbs to 70 percent over the same
    period.
        For all systems, but for highly complex systems in particular, it
    is important for the program office to address known deficiencies
    during development, before commencing operational testing. In spite of
    a concerted effort by the F-22 program office to address deficiencies
    before IOT&E in 2004, testers identified 351 deficiencies in system or
    subsystem performance during IOT&E. As stated in my testimony, the F-35
    program had 1,165 open, documented deficiencies as of the end of March
    2016, 151 of which were Category 1--defined as deficiencies which may
    cause death, severe injury, or severe illness; may cause loss of or
    major damage to a weapon system; critically restrict the combat
    readiness capabilities of the using organization; or result in a
    production line stoppage. Of these 151 Category 1 deficiencies, 128
    were associated with the air vehicle and the remaining 23 were
    associated with the Autonomic Logistics Information System (ALIS) or
    support equipment. Furthermore, 95 of the 151 open Category 1
    deficiencies were categorized as ``high severity'' by the program or
    Services. The program continues to identify deficiencies at a rate of
    approximately 20 per month. During IOT&E, which will be the most
    realistic and stressing testing F-35 will undergo, the rate of
    discovery of deficiencies is likely to be greater than the current rate
    of 20 per month.
        New problems discovered in operational testing vary, in both type
    and severity, but tend to cluster into several categories. New
    suitability problems were typically caused by low reliability once
    placed in an operational environment, training and documentation
    issues, or usability problems that prevented operators from
    successfully employing a system in combat. New effectiveness issues
    primarily resulted from unexpectedly poor performance in a realistic
    operational environment or against a stressing threat. Survivability
    issues uncovered in operational testing in fiscal year 2015 were
    predominantly cybersecurity vulnerabilities. I expect the IOT&E for the
    F-35 will discover new problems in each of these categories, while also
    exposing the operational implications of known deficiencies in
    performance not corrected prior to the test.

        14. Senator McCain. General Bogdan, what is the program office's
    plan to ensure a successful start to IOT&E, including the plan to
    ensure sufficient test aircraft and appropriate simulators are
    supplied? How much is dependent on the services accepting and executing
    on your plan?
        General Bogdan. The F-35 Joint Program Office (JPO) has a plan in
    place to ensure delivery of sufficient test aircraft and simulators to
    begin Initial Operational Test and Evaluation (IOT&E). The aircraft
    requirement as specified in Revision 4 of the Test and Evaluation
    Master Plan (TEMP) called for 25 F-35s (6 instrumented aircraft from
    the United States Air Force, 6 instrumented aircraft from the United
    States Marine Corps, 6 instrumented aircraft from the United States
    Navy, 2 instrumented aircraft from the United Kingdom, 1 instrumented
    and 1 non-instrumented aircraft from the Netherlands, and 3 spare
    aircraft.)
        Instead of using all new Low Rate Initial Production (LRIP) Lot 9
    aircraft for IOT&E, the JPO worked with the JSF Operational Test Team,
    the Services, and International Partners to develop a course of action
    that reduced the number of required aircraft to 23 and modifies some
    earlier LRIP Lots 3, 4, and 5 aircraft to the Lot 9 configuration. This
    approach was fully vetted and accepted by the U.S. Services and
    International Partners. Additionally, the JPO worked with Lockheed
    Martin (LM) to give the IOT&E aircraft needing modifications priority.
        For simulators, the requirement is to have a Verification Simulator
    (VSim) available during IOT&E. To meet this requirement, the JPO is
    executing a development program to deliver a tactical simulation
    capability, formerly known as VSim, which will support IOT&E. This
    program is a combined LM and U.S. Government effort and is currently
    referred to as VSim/Joint Simulation Environment (JSE). LM is
    responsible for developing the aircraft simulation software model while
    the JSE team is responsible for developing the simulation environment
    and integrating all simulation models into that environment. The
    current VSim/JSE schedule is projecting availability in July 2018,
    which will be three months late to the IOT&E need date of April 2018;
    however, VSim/JSE capability will still provide utility as the full
    simulation capability will be delivered during the IOT&E period.
        The JPO anticipates all the TEMP requirements to begin IOT&E should
    be met by early 2018, which is about six months later than the original
    program plan put in place in 2013. There is an opportunity for an
    incremental or phased start of IOT&E earlier than 2018; however, this
    plan was not approved by Director, Operational Test and Evaluation.
                            follow-on modernization
        15. Senator McCain. General Bogdan, please explain the currently
    unfunded $700 million bill for the Technical Refresh #3 (TR3)
    processor? Why is this not included in the Follow-on Modernization
    budget? What other items are not included in the Follow-on
    Modernization budget?
        General Bogdan. The F-35 program initially projected the use of
    Diminishing Manufacturing Source funding, as required, to address
    hardware redesigns necessary for the treatment and/or replacement of
    multiple obsolescent parts. As threat analysis and requirements
    development efforts led to the identification of Follow-on
    Modernization (FoM) capability requirements and Block 4 content
    definitions, it became apparent that there were parallel and
    duplicative hardware changes and updates being forecast to meet both
    obsolescence and capability upgrade requirements. The most efficient
    and cost-effective solution was to consolidate hardware changes for
    obsolescence and Block 4 upgrades under a single comprehensive
    Technology Refresh #3 (TR3). The TR3 design will be competitively
    sourced and accomplished under the current fiscal year 2017 President's
    Budget. The full development, integration, and test/certification costs
    for TR3, following vendor down-select, are subject to POM-18 decisions
    to supplement the FoM budget. All other currently-defined Follow-on
    Modernization requirements are included in the FoM budget.

        16. Senator McCain. Dr. Gilmore, the requirements for the first two
    increments of follow-on modernization, Block 4.1 and 4.2 are due to be
    finalized this summer. What are the dangers of finalizing the
    requirements prior to completion of Initial Operational Test &
    Evaluation (IOT&E)?
        Dr. Gilmore. There will certainly be discoveries of deficiencies
    during IOT&E for which the program will need to develop fixes and
    conduct flight testing. Finalizing the requirements for Block 4.1 and
    4.2 before these deficiencies are addressed and ensuring the
    capabilities delivered in Block 3F allow the F-35 to be effective in
    combat, may cause the program to underfund these fixes and ``over
    commit'' to Block 4.1 and 4.2 capabilities, resulting in unrealistic
    and unachievable schedules and costs for executing Block 4. The program
    faced similar circumstances in early 2016, when instabilities and
    deficiencies in Block 3i software, in what was planned to be the final
    release, were carried into Block 3F software development. Failing to
    correct these deficiencies prior to adding capability in subsequent 3F
    builds became problematic and the program--rightfully so--stopped
    flight testing of Block 3F and returned to the Block 3i development to
    fix instabilities and address the Air Force's ``must fix'' deficiencies
    prior to that service's declaration of initial operational capability.

        17. Senator McCain. General Bogdan, your most recent program update
    indicates the program intends to pursue the F-35 modernization contract
    as a Fixed Price Incentive Fee (FPIF) contract. This is a change from
    previous plans to pursue the contract as a sole source Cost Plus Fixed
    Fee (CPFF) contract. Why the change? Why does a FPIF contract offer the
    government the best value?
        General Bogdan. In general, a fixed price contract provides the
    strongest incentive for a contractor to control costs. A Fixed Price
    Incentive Fee (FPIF) contract allows the contractor and the Government
    to share in cost savings and potential cost overruns and provides focus
    on the areas that are important to the Government. Provisions of this
    contract type also allow the Government to assist in managing potential
    cost growth and schedule delays yet provide a ceiling, beyond which the
    Contractor bears total cost responsibility. This contract type also
    provides the necessary insight into actual costs incurred, which is
    necessary to demonstrate program accountability. Although we recognize
    that the contract type is subject to approval by the Service
    Acquisition Executive, the Defense Acquisition Executive, and an
    element of negotiations, and not pre-determined until the time of
    award, the JPO believes that proceeding through the acquisition
    planning process while pursuing a FPIF contract type will result in the
    necessary rigor and discipline for our requirements review process,
    which will help us achieve our overall program objectives for
    Modernization.
               management of the follow-on modernization program
        18. Senator McCain. All witnesses, gentlemen, does the decision to
    manage the F-35 follow-on modernization program within the existing F-
    35 program adhere to best practices identified by GAO and relevant DOD
    policies and statutes? Why or why not?
        Dr. Gilmore and Secretary Kendall. Managing the F-35 Follow-on
    Modernization program within the existing F-35 program does not adhere
    to the ``best practices'' identified by the GAO; it is also not
    consistent with the lessons learned from executing follow-on
    modernization of the F-22. As stated in my written testimony, the
    Department's current plans for executing F-35 Follow-on Modernization
    incorporate numerous unrealistic assumptions including, but not limited
    to, an overly optimistic schedule. For example, there is a four year
    gap between the final version of Block 3F software in late 2016 and the
    planned release of Block 4.1 in late 2020, without an interim software
    release to fix critical deficiencies found in the remaining
    developmental and operational testing. Pursuing this plan will
    inevitably result in new Block 4 capabilities being overlaid on the
    unresolved Block 3F deficiencies with a result analogous to the
    problems encountered when the program attempted to overlay unresolved
    Block 2B deficiencies onto Block 3i avionics hardware, and new Block 3F
    capabilities onto unresolved Block 3i problems. Another concern is that
    the proposed modernization schedule finalizes the content of Blocks 4.1
    and 4.2 in early 2016 and would award contracts to start simultaneous
    development of those two Blocks in 2018, well prior to completion of
    IOT&E and understanding the inevitable problems it will reveal. Also,
    the test periods and resources (test personnel and aircraft) allocated
    to complete Block 4 developmental and operational testing are not
    adequate to support the substantial and complex content planned for
    each increment of Block 4. Finally, the program recently identified the
    need for new Technical Refresh-3 processors, to provide the
    computational capacity needed to allow the new Block 4 capabilities to
    be hosted on the F-35, at a cost of $700 million that is currently
    unfunded. In my view, these issues demonstrate the need for the
    rigorous and critical oversight that would be provided by managing
    Block 4 as a separate program, thereby assuring the F-35 Follow-on
    Modernization program is executable and affordable, and that it does
    not repeat the substantial cost overruns and schedule slippages that
    have occurred during the ongoing F-35 Block 3F program.
        Mr. Sullivan. The decision to manage the F-35 follow-on
    modernization program within the existing F-35 program does not adhere
    to acquisition best practices. Managing the follow-on modernization
    program this way means that it would not have a Milestone B review-the
    DOD acquisition review that sets in motion oversight mechanisms
    including an acquisition program baseline; Nunn-McCurdy unit cost
    growth thresholds; and periodic reporting of the program's cost,
    schedule, and performance progress. These mechanisms form the basic
    business case and oversight framework to ensure that a program is
    executable and that Congress and DOD decision makers are informed about
    the program's progress. Best practices recommend an incremental
    approach in which new development efforts are structured and managed as
    separate acquisition programs. In addition, each separate program
    should have a business case that matches requirements with resources-
    proven technologies, sufficient engineering capabilities, time, and
    funding-before product development begins. Because DOD does not plan to
    hold a Milestone B review, its approach for Block 4 modernization will
    not require the program to have such important reporting and oversight
    mechanisms in place.

        19. Senator McCain. Secretary Kendall, what lessons has the
    Department learned from the F-22 modernization program? Do you believe
    it was a good decision to establish the F-22 modernization program as a
    separate MDAP? Why or why not?
        Secretary Kendall. The Department learned many lessons from the F-
    22 modernization program. The Department reviewed the F-22
    modernization program as well as the modernization efforts for the F-16
    and F/A-18 as we looked at the most cost effective, efficient, and
    flexible approach to F-35 modernization. One of the key lessons learned
    from F-22 was the need to establish a new contract for the
    modernization and to separate the budget for modernization into
    separate program elements and cost reporting elements. The F-22
    modernization program was initially added to the existing Engineering
    Management and Development contract, with budget included as part of
    the baseline development budget. F-35, on the other hand, has a
    separate modernization statement of work and contract. Additionally, F-
    35 modernization is clearly broken out as separate program elements in
    the budget documentation with separate cost and earned value
    performance reporting. Due to the nature of how the F-22 program
    initially approached modernization, I believe it was a good decision to
    break out the modernization effort as a separate program. However, I
    believe that due to the prior planning and execution undertaken to
    provide full transparency and appropriate cost, schedule, and
    performance oversight, the F-35 modernization effort is best suited to
    be managed as an extension of the baseline program.
        The chart below shows those actions the Joint Program Office will
    implement to ensure full transparency without having the added
    administrative cost and burden of declaring a new separate Major
    Defense Acquisition Program.
        [Deleted. Chart retained in committee files]
        20. Senator McCain. Secretary Kendall, with the F-35 follow-on
    modernization effort being planned in increments for each block
    upgrade, it appears a good opportunity for fixed price contracts would
    be the best value for the American taxpayer for each increment of
    capabilities, would you agree?
        Secretary Kendall. I would envision a combination of fixed price
    type and cost reimbursable contracts as the F-35 Joint Program Office
    continues to mature the acquisition strategy for the Follow-on
    Modernization effort. A contract that includes mixed Cost Line Items,
    utilizing both fixed price and cost incentive where appropriate, will
    likely provide the optimum risk and responsibility apportionment.

        21. Senator McCain. Mr. Sullivan, what lessons regarding program
    management and execution can be learned from the F-22's follow-on
    development, yet another very complex fighter modernization program,
    but in many ways less complex than the F-35's program will be because
    the F-22 was for a single service from a single nation?
        Mr. Sullivan. Our experience with the F-22 highlighted that
    managing modernization programs of this magnitude within an existing
    program baseline hinders transparency. In March 2005, we found that the
    Air Force was managing its multi-billion dollar F-22 modernization
    efforts within the existing F-22 acquisition baseline and had not
    established separate knowledge-based business cases for each
    modernization increment. \1\ As a result, the F-22 baseline and
    schedule were not immediately adjusted to reflect the new timeframes
    and additional costs, comingling the funding and some content for the
    baseline development and modernization efforts-some content that had
    not been achieved under the baseline program were deferred into the
    modernization program. When the content, scope, and phasing of
    modernization capabilities changed over time, it appeared that the F-22
    program was fraught with new schedule delays and further cost overruns.
    The comingling of modernization efforts with the existing baseline
    reduced transparency and Congress could not readily distinguish the new
    costs associated with modernization funding from cost growth in the
    original baseline. We recommended that the Air Force structure and
    manage F-22 modernization as a separate acquisition programs with their
    own business cases-matching requirements with resources-and acquisition
    program baselines. In line with our recommendation, the department
    separated its F-22 modernization efforts, beginning with F-22 Increment
    3.2B, from the baseline program with a Milestone B review, which
    increased transparency and better facilitated oversight. Since then,
    the F-22 3.2B modernization program has achieved relatively positive
    outcomes.
    ---------------------------------------------------------------------------
        \1\ GAO, Tactical Aircraft: Air Force Still Needs Business Case to
    Support F/A-22 Quantities and Increased Capabilities, GAO-05-304
    (Washington, D.C.: March 15, 2005).

        22. Senator McCain. General Bogdan, do you believe the statutory
    and regulatory requirements for the management of a Major Defense
    Acquisition Program are a good for transparency and oversight? Why is
    the Follow-on Modernization program, estimated as costing over $8
    billion just for Block 4, so different that those requirements should
    not apply?
        General Bogdan. Follow-on Modernization (FoM) consists of
    improvements and upgrades to the existing Air System and is a
    continuation of the existing F-35 Program. FoM, as an element of the F-
    35 Program, remains subject to all Major Defense Acquisition Program
    (MDAP) statutory and regulatory requirements and will be incorporated
    into existing and/or planned program documentation and reporting
    products, as appropriate. This approach provides a streamlined and
    efficient modernization effort that does not jeopardize visibility or
    oversight. To ensure congressional transparency and oversight into FoM
    performance, the Acquisition Program Baseline and Selective Acquisition
    Report will include FoM-specific Research, Development, Test and
    Evaluation Threshold and Objective targets. All FoM contracts will
    implement a capability-based work breakdown/reporting structure and
    will require cost and performance reporting data deliverables separate
    from the larger Systems Development and Demonstration program and
    consistent with MDAP requirements.
        Additionally, the JPO has reviewed the lessons learned from the F-
    22 modernization program and ensured that the F-35 modernization
    program is fully transparent with respect to cost, schedule, and
    performance. The chart below shows those actions the Joint Program
    Office will implement to ensure full transparency without having the
    added administrative cost and burden of declaring a new, separate MDAP.
        [Deleted. Chart retained in committee files]
        23. Senator McCain. Dr. Gilmore and Mr. Sullivan, from your
    perspective, what would be the pros and cons of having the follow-on
    modernization program managed as a separate MDAP?
        Dr. Gilmore. Managing the F-35 Block 4 Follow-On Modernization
    program as a separate MDAP would assure the program rigorously
    addresses the significant content, cost, and schedule issues present in
    the program's current plans for executing Block 4 which are discussed
    in my written testimony. The current schedule for executing Block 4 is
    overly optimistic--the substantial upgrades in capability proposed are
    not consistent with the time being allotted for development and test,
    nor with the proposed test resources--and all costs are not well
    understood, as indicated by the recent $700 million unfunded
    requirement for new TR3 processors. The current estimate to fund the
    modernization program over the next six years is approximately $3
    billion, not counting the unfunded requirement for new processors,
    which exceeds the threshold to be designated as an MDAP. The Air Force
    initially tried to manage F-22 Follow-on Modernization as an extension
    of that aircraft's original program, but found that approach to be
    unworkable. Some assert making Block 4 a separate MDAP would increase
    its costs and delay its initiation. Those outcomes are hardly
    inevitable; in fact, at the insistence of the current Under Secretary
    for Acquisition, Technology, and Logistics, the Department's current
    acquisition procedures stress the need for, and provide numerous
    explicit opportunities for, streamlining, flexibility, and waivers in
    executing MDAPs that can be applied to F-35 Follow-on Modernization.
        Mr. Sullivan. Managing the F-35 follow-on modernization program as
    a separate program would increase transparency and oversight. Holding a
    Milestone B review would establish a new baseline and DOD would be
    required to separately account for cost, schedule and performance
    progress to Congress with regular, formal reports, known as Selected
    Acquisition Reports. This would provide Congress with clear insight
    into program cost, schedule, and performance progress and allow
    Congress to hold program officials accountable for achieving F-35
    modernization goals.
        One potential disadvantage to managing follow-on modernization as a
    separate program is that it could increase administrative burden on
    DOD. We recognize the potential for this. In 2015, we found that while
    programs spent considerable time and resources documenting the
    information required at milestone reviews, the majority of that
    documentation was not highly valued by acquisition officials. \2\
    However, we also found that DOD can successfully streamline its
    milestone decision process like it did in cases of the F-16 and F-117,
    while still maintaining appropriate levels of transparency and
    oversight. Given the magnitude of the F-35 program, any additional time
    and money that might result from additional documentation is warranted.
    ---------------------------------------------------------------------------
        \2\ 22GAO, Acquisition Reform: DOD Should Its Decision-Making
    Process for Weapon Systems to Reduce Inefficiencies, GAO-15-192
    (Washington, DC: February 24, 2015)
    ---------------------------------------------------------------------------
                fiscal year 2016 ndaa certification requirement
        24. Senator McCain. Secretary Kendall and General Bogdan, the
    fiscal year 2016 NDAA limited funds for the procurement of F-35As until
    Secretary James certified that the F-35A aircraft delivered in 2018
    will have the full combat capability with Block 3F hardware, software
    and weapons carriage. Have you recommended or do you intend to
    recommend to Secretary James that she make the certification? Why or
    why not?
        Secretary Kendall and General Bogdan. The F-35 Block 3F
    incorporates advanced tactical avionics and opens the full flight
    envelope for the F-35. Block 3F weapons for the F 35A will include the
    GAU-22 internal 25-millimeter gun system, internally-carried AIM-120C
    Advanced Medium-Range Air-to-Air Missiles, GBU 31 Joint Direct Attack
    Munitions, GBU-39/B Small Diameter Bombs, GBU-12 Paveway II laser
    guided bombs, and externally-carried AIM-9X Sidewinder missiles.
        The F-35 Program Executive Officer provided a recommendation to the
    Secretary of the Air Force to certify, as required.
        That recommendation included a status of the Block 3F effort,
    related risk, and steps being taken to mitigate the risk so that she
    can reach her own decision whether to certify to the congressional
    defense committees that Low Rate Initial Production Lot 10 USAF F-35A
    Lightning II aircraft delivered during fiscal year 2018 will be fully
    combat capable.

        25. Senator McCain. Dr. Gilmore, in your opinion, will the aircraft
    delivered in 2018 have the full combat capability of Block 3F hardware,
    software and weapons carriage? Why or why not?
        Dr. Gilmore. Although I do not expect F-35 system development and
    demonstration to be complete prior to March 2018, it is possible that
    aircraft delivered by the end of 2018 could have the ``full'' combat
    capability the Services will ultimately decide to accept for Block 3F.
    However, the ``full'' Block 3F combat capability the Services accept is
    likely to be less than the Services now indicate they expect due to the
    high likelihood of significant unresolved performance deficiencies,
    even if completion of Block 3F development is delayed until mid-2018.
    It is unlikely all of the currently identified deficiencies will be
    rectified by mid-2018, let alone the additional deficiencies that will
    be discovered during the next year of developmental testing, as well as
    the deficiencies that will be revealed during initial operational test
    and evaluation. For example, a recent discovery is that the flight
    environment in the F-35 weapons bay may be too harsh for the tail fins
    of the Small Diameter Bomb (SDB) to withstand. The path forward for
    resolving this issue is currently undetermined, and the potential lack
    of the ability to employ the SDB, or substantial restrictions on the
    flight envelope in which it (or the AIM-120, if it is in the same
    weapons bay with the SDB) could be employed, would be a significant
    degradation relative to the F-35's currently expected combat
    capability.
                      total f-35 buy quantity revalidation
        26. Senator McCain. Secretary Kendall, last year's NDAA included
    report language directing the Secretary of Defense to either revalidate
    the F-35 total buy quantity of 2,443 for all variants or submit a new
    number by May 25, 2016. Can you update the committee on the
    Department's intention to meet this requirement, as well as any
    thoughts on the Department exploring other potential future force mixes
    of different capabilities?
        Secretary Kendall. The Deputy Secretary of Defense provided the
    Department's interim response to you and the other defense committees
    on May 25, 2016.
                       block buy / multi-year procurement
        27. Senator McCain. Mr. Sullivan, can you provide the committee any
    examples of a program pursuing a block buy or multiyear procurement
    strategy prior to a full rate production decision?
        Mr. Sullivan. While we have not done extensive analysis of DOD's
    use of the block buy approach, our most recent F-35 report does note
    that the use of a block buy prior to the full rate production decision
    has taken place on at least one other DOD program, the Littoral Combat
    Ship (LCS).

        28. Senator McCain. Secretary Kendall, do you consider the F-35
    block buy contracting proposal under consideration a multi-year
    procurement scheme? Why or why not?
        Secretary Kendall. A Block Buy Contract (BBC) is similar to a
    Multi-Year Procurement (MYP), with key differences. BBC is a contract
    strategy that purchases materiel in Economic Ordering Quantities (EOQ)
    for all lots of aircraft included in the Block Buy in the year prior to
    the first lot of aircraft. Unlike a MYP, a BBC does not imply a prior
    commitment to buy all aircraft in the out years of Block Buy because
    funding will be provided annually through congressional appropriations.
    There is no additional termination liability above the funds obligated,
    which are limited to regular Advance Procurement funding and EOQ
    funding for the first year. In addition, the material purchased with
    EOQ funding may be used in future lots of aircraft if quantities
    change. The Department requires authorization from Congress for any BBC
    strategy, aircraft quantities, and the purchase of advance materiel for
    EOQ in the year prior to the start of the BBC. The Department will work
    with the Senate Armed Services Committee and the other defense
    committees as we assess the merits of an F-35 BBC.

        29. Senator McCain. Secretary Kendall, would you consider
    supporting a block buy contracting proposal for the F-35 prior to
    completion of Initial Operational Test & Evaluation (IOT&E)? Why or why
    not?
        Secretary Kendall. I would consider supporting a Block Buy
    contracting proposal prior to completion of Initial Operational Test
    and Evaluation (IOT&E). I believe we will have a tremendous amount of
    knowledge relative to the capabilities and maturity of the weapons
    system as we begin IOT&E. Information gained during IOT&E will be
    valuable in pointing out areas where the program can improve as we
    transition to Follow-on Modernization. The Services and Department can,
    and will, continue to focus on modernizing the F-35 to meet and stay
    ahead of the evolving threat. However, I do not feel that waiting for
    completion of IOT&E is absolutely essential, particularly if the
    Department, Services, and Partners can realize significant savings for
    aircraft they intend to buy.
                                 escape system
        30. Senator McCain. General Bogdan, the committee understands that
    the program office has identified three fixes to the escape system
    deficiencies and that they will all be complete by November of this
    year. Can you please provide the committee on the estimated timeline to
    complete the retrofit of all existing aircraft? What is the estimated
    cost to complete all of the retrofits, and who is responsible for
    funding these?
        General Bogdan. There are three technical solutions to the escape
    system that when in place will reduce the risk of neck injury to all
    pilots. All three are planned to be ready by the end of 2016. These
    solutions include:
        1.  A head support panel between the parachute risers. This
    eliminates the possibility of the head/helmet going between the
    parachute risers in low-speed ejections.
        2.  A pilot-selectable switch to delay parachute deployment for
    lighter weight pilots. This 80.5 second delay will reduce parachute
    opening shock and neck loads during the parachute deployment phase of
    the ejection.
        3.  A lighter Gen III pilot helmet. This will reduce neck loads
    during all phases of ejection (catapult, windblast, drogue, and
    parachute deployment).
        The current estimate to complete the entire retrofit effort is 24
    months. The first retrofits should begin in early 2017. The estimated
    cost for the complete fleet retrofit is approximately $35 million. It
    is the Government's position that this cost should be the
    responsibility of industry, particularly Martin Baker, and is in the
    process of negotiating this outcome with industry.

        31. Senator McCain. Dr. Gilmore, has the escape system been tested
    in other than stable conditions (i.e. out of control flight)? If no,
    what is the potential for further discrepancies to be discovered?
        Dr. Gilmore. DOT&E is not aware of any testing with the F-35 escape
    system in other than stable conditions. Off-nominal testing of other
    systems that have a similar escape system--where the canopy is
    shattered with the detonation of an embedded flexible linear shaped
    charge at the beginning of the ejection sequence--has shown that
    contact between canopy chards and the pilot can occur, adding risk to
    the ejection sequence; thus, the potential still exists for discovery
    of additional problems with the F-35 escape systems. To understand and
    characterize these interactions, the program should complete off-
    nominal testing of the escape system as soon as possible, a
    recommendation I made in my F-35A Ready-for-Training Operational
    Utility Evaluation Report in February, 2013.
                            block 3i and 3f software
        32. Senator McCain. General Bogdan, please provide the committee an
    update on flight testing of the Block 3i and 3F software and current
    projected delivery of each
        General Bogdan. Block 3i Development:
          The final Mission System Block 3i development build was
    delivered to flight test on March 17, 2016, and completed flight
    testing on April 26, 2016. No additional Flight Science testing was
    required. The 3iP6.21 software was loaded on Operational Test aircraft
    and is currently still being flown.
          On April 28, 2016, the F-35 Program Executive Officer
    made the decision that all Block 3i work was complete and recommended
    to the Secretary of the Air Force that Block 3i software is ready for
    United States Air Force Initial Operational Capability.
        Block 3F Development:
          F-35 Block 3F software is now in development flight test.
    The software is projected to support remaining Weapon Delivery Accuracy
    surge events in summer 2016 (excluding gun events).
          All remaining required Block 3F capability is on track to
    begin flight testing in September 2016 and will support the final
    verification testing requirements for System Development and
    Demonstration.
          Development and testing continues to improve; activities
    include:
          -  increase/refine modeling, simulation, and software lab
    development cycles
          -  ground testing events for flight test risk reduction
          -  utilizing engineering test builds to safely and rapidly
    incorporate flight test feedback for final software capability
    solutions
          -  continuous reassessments of criticality and severity of
    ``must-fix'' deficiencies for incorporation and verification of
    projected performance data requirements requested
          -  concurrent testing to include weapon surge events
        As previously stated, the full Block 3F combat capability will
    complete flight testing in the fall of 2017 timeframe, with A model
    capability fielded in late 2017 followed by B and C models capability
    in early 2018.

        33. Senator McCain. Dr. Gilmore, what are your biggest concerns
    regarding the Block 3i and 3F software and your estimate for their
    respective deliveries?
        Dr. Gilmore. My concerns with Block 3i are that even with
    improvements in its stability, it will still provide limited combat
    capability. Block 3i software was designed to simply enable the limited
    Block 2B mission systems capabilities, implemented using the F-35's
    original processing hardware, to work on the upgraded Technical Refresh
    2, or TR2, hardware used in the production of Lot 6 and later aircraft.
    An early version of Block 3i software was delivered in October 2014,
    when the Air Force accepted its first Lot 6 aircraft, although the
    capabilities this version provided were very limited and mission
    systems stability proved to be significantly worse than Block 2B.
    Subsequent versions of the software have undergone flight testing and
    fielding, the latest version having completed developmental testing at
    the end of April (referred to as 3iR6.21). The program recently
    completed an abbreviated flight test of Block 3iR6.21 and is conducting
    analyses of the stability of the mission systems to see if it is
    adequate to field to operational units and to be the final Block 3i
    build of software which would support the Air Force decision to declare
    initial operational capability (IOC). Initial indications are that the
    latest version of Block 3i has improved the stability of mission
    systems performance in-flight significantly relative to previous
    versions. However, pre-flight stability issues persist, and the status
    of the correction of the other deficiencies cited in my written
    testimony, for example in sensor fusion, is unknown. I expect that
    Block 3i will be accepted by the Air Force to support its IOC in the
    fall of this year, consistent with the threshold date for achieving
    that capability.
        My concern with Block 3F is that it is maturing slowly and is
    unlikely to ultimately provide the full set of combat capabilities the
    Services currently expect. Block 3F software development was paused in
    February this year when the latest version of Block 3F software--
    version 3FR5--was so unstable that productive flight testing could not
    be accomplished. To fix the stability problems, the program reverted to
    Block 3i development and flight testing, and just recently restarted
    flight testing with an updated version of Block 3FR5 software that
    incorporates the new stability fixes from Block 3iR6.21. The program
    plans to release to flight testing the last build of Block 3F software
    that adds capability--3FR6--later this summer, then complete two more
    builds--3FR7 and 3FR8--to address problems expected to be discovered
    during testing. The efficiency in accomplishing test points during
    flight test may be improved from what was seen earlier in CY16, if the
    stability fixes completed in Block 3i and many critical deficiency
    fixes are realized in Block 3F. Delivering and testing the numerous new
    and advanced capabilities planned to be in Block 3F mission systems,
    which are specified in the program's Operational Requirements Document
    (ORD), presents significant challenges for remaining development and
    flight test. As of the end of April, over 80 percent of the baseline
    test points in the Block 3F test plans remained to be completed,
    including the most difficult envelope and avionics testing, along with
    most of the weapons deliveries. Based on the deficiencies currently
    cited as critical that must be fixed, and the program's currently
    booked test points, including weapon delivery events, I anticipate that
    development of Block 3F will complete no earlier than the middle of
    calendar year 2018. However, the Services may ultimately decide to
    accept significant deficiencies in Block 3F mission systems
    capabilities relative to their current expectations in order to keep
    the program within its currently stated cost and schedule. In that
    event, the costs and time required for correction of deficiencies and
    implementation of forgone capabilities would carry into Block 4
    development, and adverse findings during initial operational test and
    evaluation would be likely.

        34. Senator McCain. Secretary Kendall, under what type of contracts
    are the deliveries of software blocks, fixed price or cost plus?
        Secretary Kendall. Block 3i and 3F software is delivered under the
    F-35 System Development and Demonstration contract, which is a cost-
    plus incentive fee contract. Block 3F will be the last block of
    software delivered under this contract.
                 autonomic logistics information system (alis)
        35. Senator McCain. General Bogdan, please provide an update on the
    estimated delivery of ALIS version 2.02, which is required for Air
    Force Initial Operational Capability (IOC). DO you believe this will
    impact the Air Force's declaration of IOC within their planned window?
        General Bogdan. The basic Autonomic Logistics Information System
    (ALIS) 2.0.2 capability will be available for fielding in late
    September 2016. However, a portion of this capability (engine
    integration) has been delayed beyond this. We are working through
    technical software challenges and expect that full 2.0.2 capability
    will be available for fielding prior to the end of December 2016.
        It is important to note that United States Air Force (USAF) Initial
    Operational Capability (IOC) is not fully dependent on ALIS 2.0.2
    delivery. The USAF requirement for IOC with respect to ALIS is that the
    system be able to support deployed combat operations. The decision as
    to which version of ALIS is adequate for deployed operations is a USAF
    decision.

        36. Senator McCain. Secretary Kendall, what type of contract is
    ALIS being developed under?
        Secretary Kendall. Autonomic Logistics Information System (ALIS)
    development is covered under the F-35 System Design Development
    contract, with a cost-plus incentive fee construct.

        37. Senator McCain. Dr. Gilmore, can you provide an assessment of
    the ALIS program and what its greatest risks are?
        Dr. Gilmore. Overall, ALIS has demonstrated steady, but slow
    improvement. Nonetheless, deficiencies and usability problems require
    users to employ workarounds, which are often time- and labor-intensive,
    to complete normal maintenance tasks and set up operations for
    deployment. Service-led deployment exercises conducted during the past
    year have shown that, despite a more modular version of the hardware
    components, transferring data from the home-station unit to the
    deployed location is problematic, requiring the services of contractor
    personnel to ensure aircraft data files are accurate and complete.
        Two major software releases, ALIS 2.0.2 and 3.0.0, are planned
    before completion of F-35 development, but schedule risks exist in
    delivering the capability currently expected for each of these
    releases. As noted in my annual report, the program has previously
    deferred capability content of ALIS software releases (i.e., ALIS 2.0.1
    planned for Marine Corps initial operational capability (IOC)) to meet
    schedule; however, this pattern of behavior cannot be sustained through
    the rest of F-35 development. Completing the development, testing, and
    fielding of the capabilities planned for ALIS 3.0.0 before the end of
    development is high risk. ALIS 3.0.0 is required prior to the start of
    initial operational test and evaluation; however, progress has been
    limited as the program is still struggling to deliver planned ALIS
    2.0.2 functionality, which the program now says is at least 60 days
    late. Another area of high risk is cybersecurity. Although the risks
    from a breach in cybersecurity are not limited to ALIS components and
    its supporting network infrastructure (i.e., they apply to the F-35 air
    vehicle as well), the program and Marine Corps have been resistant to
    support cybersecurity testing of operational components due to a
    concern that such testing would disrupt day-to-day flight operations.
    The limited testing completed to date on ALIS components has revealed
    significant deficiencies that must be corrected which validates the
    requirement to complete all cybersecurity testing planned for the
    balance of F-35 development. Disruptions that could occur during combat
    resulting from a cyber attack that exploits unrealized vulnerabilities
    due to inadequate testing would clearly be much more disruptive and
    serious than disruptions occurring now when the F-35 is not being used
    in combat.
        Beyond these risk areas, the program also faces a number of
    challenges to address within ALIS:
          Deployability--Though the program has begun fielding the
    more deployable ALIS hardware and both the Air Force and Marine Corps
    have conducted deployment demonstrations with this hardware, software
    deficiencies and problems with data transfer make it difficult for
    units to rapidly achieve readiness for operations once they deploy.
          Data Integrity and Process Maturity--Units have
    difficulty maintaining data integrity when attempting to use spare
    parts or transfer data. Missing or inaccurate electronic equipment
    logbooks require manual tracking and time-consuming corrections which
    adversely impact maintenance and operations.
          Lack of Redundancy--ALIS data flow from operational units
    through the single U.S. Central Point of Entry (CPE) at Eglin AFB and
    the single operational Autonomic Logistics Operating Unit (ALOU) at
    Fort Worth. The program is working to create an alternate
    ``Operationally Representative Environment'' that will allow testing of
    ALIS off of the operational grid, but currently has no redundant
    systems for the CPE or ALOU.
          Action Requests (ARs)--Maintenance personnel submit ARs
    to seek assistance from Lockheed Martin, but the process is inefficient
    and units do not have visibility into ARs submitted by other units
    which can delay completion of maintenance.
          Immaturity of ALIS Applications--Pilots find the Off-
    board Mission System (OMS) used for mission planning difficult to use
    because it does not include all needed capabilities. Since the program
    does not provide dedicated OMS training, pilots also find OMS difficult
    to learn. The Training Management System (TMS), which is used to track
    pilot and maintainer qualifications, has generally not met Service
    needs, causing units to track qualifications outside of ALIS and
    increasing the risk personnel will be assigned to tasks for which they
    are unqualified. Other applications also have functionality and
    usability deficiencies.
          Immaturity of ALIS Training--Formal ALIS training relies
    on PowerPoint presentations that do not reflect how ALIS actually
    performs and does not address currently required workarounds. Many
    personnel are forced to learn to use ALIS on the job at the unit level,
    increasing the risk of inconsistent processes and inefficient practices
    while increasing the risk of errors.
                              lessons learned (?)
        38. Senator McCain. All witnesses, gentlemen, what are the lessons
    to be learned from the troubles of the F-35 program? How are they being
    applied to acquisition and program management decisions today? What
    specific steps have been put in place to ensure this ``acquisition
    malpractice'' is not repeated? What steps can Congress take to ensure
    future major acquisition programs such as the B-21 bomber, and Next
    Generation Air Dominance are developed and procured more rapidly and at
    reasonable cost to the American taxpayer?
        Dr. Gilmore. We must develop requirements that are technically
    feasible, operationally sound, combat mission-focused, and affordable,
    which can only be accomplished if both operators and engineers are full
    partners in that development, which is not now the case. We should
    pursue more evolutionary upgrades than revolutionary leaps forward, and
    develop and approve operational requirements accordingly. We must
    initiate programs using realistic, independently- and critically-
    reviewed estimates of cost, schedule, and technical readiness. The
    independent cost-estimating provisions contained in the Weapon System
    Acquisition Reform Act have been very helpful with regard to cost
    realism. Similar initiatives are needed regarding independent, critical
    review of technical readiness and schedule. We must be realistic
    regarding what modelling and simulation can and cannot do, particularly
    with regard to (but not limited to) substituting for live testing,
    rather than imposing unrealistic assumptions regarding what modelling
    can do in order to make program costs and schedules fit unrealistic
    targets that will never be met. We should lengthen the tenure of
    program managers sufficiently to eliminate the existing incentive to
    rationalize away and pass on problems to a successor. We should
    continually critically review programs' progress and be prepared to
    recognize and, if warranted, re-structure or terminate programs that
    are failing. We must demand leadership with the expertise and courage
    to actually do what I list above and hold that leadership accountable.
    Prior to its re-structure in 2010, the F-35 program and its leadership
    (both within and above the program office) were deficient in all of the
    above areas. Developing realistic requirements, cost estimates, and
    schedules for executing F-35 Block 4 development using the principles
    cited above are critical to Block 4's success. Unfortunately, as I
    discussed during my testimony, the program's current plans for Block 4
    development incorporate numerous unrealistic assumptions.
        Secretary Kendall. There are numerous lessons learned from the F-35
    Program. The first lesson that became apparent early on was the
    requirement for technology demonstrators, nominally required to
    demonstrate vertical lift and common configuration concepts, as opposed
    to more robust representative prototypes was not optimal. Inadequacies
    in the technology demonstrators led to underestimating the weight of
    the aircraft, requiring additional time and money, and an almost
    immediate re-baselining of the development program. Much of the future
    of Joint Strike Fighter cost growth was largely written when budget and
    pricing decisions were made in 2001 based on those unrealistic and
    immature expectations with regard to cost and schedule. Additionally,
    acquisition reform initiatives from the mid-1990s had transferred much
    of the responsibility for requirements interpretation and integration
    from the Government to the contractor. This has proven to be a faulty
    arrangement. Finally, a critical lesson we learned was that
    concurrency, on the level of the F-35 Program, is not sound acquisition
    practice. Buying as many aircraft as we did, prior to having a stable
    and producible design, created difficulties across the F-35 enterprise
    and will result in large modification costs. Better Buying Power
    initiatives put in place over the last five years have resulted in an
    increased focus on cost reduction and responsible program management.
    Following the Nunn McCurdy cost breach, subsequent certification, and
    re-baselined program, cost and schedule performance have been largely
    as predicted and stable. There are still technical challenges that have
    surfaced and been addressed or are still being addressed, but that is
    normal for any program in development. However, the unrealistic and
    optimistic basis for which this program was initially established has
    been replaced by responsible realism and a ``prove it'' attitude on the
    part of the oversight and management team. The best thing that Congress
    can do to ensure future programs are established, developed, and
    procured at the most reasonable cost to American taxpayers is to leave
    in place the Department's current acquisition oversight structure. This
    will allow the positive trends seen over the past five years on this
    program and others to continue.
        Mr. Sullivan. While there are numerous lessons to be learned from
    the F-35 program, the primary lesson is that programs with high levels
    of concurrency between technology development and product development,
    and/or between developmental testing and production are likely to
    experience significant cost and schedule problems. Our prior work on
    knowledge-based acquisition approaches shows that a knowledge deficit
    early in a program can cascade through design and production, leaving
    decision makers with less knowledge to support decisions about when and
    how to best move into subsequent acquisition phases that commit more
    budgetary resources. Demonstrating technology maturity is a
    prerequisite for moving forward into product development, during which
    time the focus should be on design and integration. A stable and mature
    design, proven through testing, is also a prerequisite for moving
    forward into production, where the focus should be on efficient
    manufacturing. In 2016, our analysis of DOD's major defense acquisition
    programs found that programs still did not fully apply knowledge-based
    best practices aimed at decreasing concurrency. \3\ For example, some
    programs were still carrying technology risk well into system
    development or are proceeding into production before manufacturing
    processes are under control. We also found less use of competition
    measures throughout the acquisition life cycle and overlap between
    developmental testing and production, which threaten programs'
    abilities to meet their cost, schedule, and performance objectives.
    ---------------------------------------------------------------------------
        \3\ GAO, Defense Acquisitions: Assessments of Selected Weapon
    Programs, GAO-16-329SP (Washington, DC: March 31, 2016).
    ---------------------------------------------------------------------------
        There have been several recent initiatives by Congress and DOD that
    have been aimed at improving program performance such as the Weapon
    Systems Acquisition Reform Act of 2009 (WSARA) and DOD's ``Better
    Buying Power'' initiative. Both of which seem to have improved some
    program results. For example, programs that started development after
    the implementation of the WSARA and DOD's ``Better Buying Power''
    initiatives began in 2010 have achieved cost reductions or shown less
    cost growth than those that began development before 2010.
        A particular challenge for Congress is the fact that committees
    must often consider requests to authorize and fund a new program well
    ahead of the start of product development-the point at which key
    business case information would be presented. For example, a budget
    request to begin system development could come 18 months before the
    actual program decision. Given this time lag, Congress could be making
    critical funding decisions-which in effect authorize the start of
    development- with limited information about program risk factors,
    systems engineering progress, and the soundness of the program's
    business case. Therefore, to ensure future weapon systems are developed
    and procured more rapidly and at a reasonable cost, Congress could
    focus on ensuring that programs have a knowledge-based acquisition
    approach with an executable business-case that matches requirements
    with resources before starting system development. Partly, this can be
    done by requiring DOD to report on each major acquisition program's
    systems engineering status in the department's annual budget request,
    beginning with the budget requesting funds to start development. In
    addition, ensure that programs demonstrate a product works as intended
    through development testing before production begins.
                                   __________
                  Questions Submitted by Senator Joe Donnelly
                             f135 engine components
        39. Senator Donnelly. Lt Gen Bogdan, I understand that certain
    components or subassemblies in the F135 engine are built overseas.
    Could you provide a comprehensive list of the components of
    subassemblies that are built or assembled overseas?
        General Bogdan. Of the over 4,000 F135 engine components (parts),
    there are 272 parts with an international source supplier--260 of the
    272 parts are sourced to suppliers in member nations of the F-35
    International Partnership. In addition to the international sources,
    there is a U.S. source for 150 of these 272 components. We are prepared
    to provide the Committee a briefing if any additional information is
    required.

        40. Senator Donnelly. General Bogdan, for any of these components
    or subassemblies, is any of the engineering and design effort
    supporting that work provided by overseas workers? If so, for which
    ones is this true?
        General Bogdan. Engineering and design effort is provided for 75
    out of the 272 parts with international suppliers. We are prepared to
    provide the Committee a briefing if any additional information is
    required.
                            alternate engine program
        41. Senator Donnelly. The Department of Defense included funding
    for the F-35 alternate engine from fiscal year 1996 through fiscal year
    2007. What benefits did the alternative engine program and the
    associated competition between the F135 and F136 yield for the F-35
    program overall?
        Secretary Kendall and General Bogdan. Almost $3 billion was
    invested in the F136 engine through fiscal year 2007. The F136
    alternate engine contributed significant risk reduction for the F-35
    propulsion program. While the F136 did not make it into competitive
    production, it did allow the Department to manage the program's
    propulsion efforts to a point where the risk involved with a single
    engine provider was deemed manageable. In addition, the F136 program
    provided the Department with a competitive industrial base alternative
    for tactical aircraft size propulsion systems. Development of the F136
    helped in enabling a competitive engine contractor to continue with the
    advanced propulsion programs the Department is working on now that will
    benefit us in the future. The Department does not have empirical data,
    but we also believe that the F136 program resulted in an increased
    emphasis on cost and responsiveness on the part of the F135 prime
    contractor.
        Mr. Sullivan. We have not conducted any recent analysis
    specifically addressing the benefits or effects of the competition
    between the F135 and F136. Our last assessment of the alternate engine
    program was in 2010. \4\
    ---------------------------------------------------------------------------
        \4\  GAO, Defense Acquisitions: Analysis of Costs for the Joint
    Strike Fighter Engine Program, GAO-07-656T (Washington, D.C.: March 22,
    2007). GAO, Joint Strike Fighter. Assessment of DOD's Funding
    Projection for the F136 Alternate Engine, GAO-10-1020R Washington,
    D.C.: September 15, 2010).

        42. Senator Donnelly. Mr. Sullivan, can you explain further the
    April 2016 GAO assessment that the F35A and B engines are at 55 percent
    and 63 percent (respectively) of where the program expected them to be?
        Mr. Sullivan. According to data provided by Pratt & Whitney, the
    reliability growth curves established for the F-35A engine-which is the
    same engine being used on the F-35C-projected that on average, the
    engine should have been achieving 142 hours between failures as of
    September 2015. However, as of as of September 2015, actual engine
    performance data collected and provided to us by Pratt & Whitney
    indicated that the F-35A engine was only averaging 79 hours between
    failures across the operational fleet. Similarly, Pratt and Whitney's
    growth curves projected that the F-35B engines should have been
    achieving 106 hours between failures as of September 2015, while the
    actual engine performance data as 0T September 2015 indicated that they
    were only averaging 67 hours across the operational fleet at that time.

        43. Senator Donnelly. Mr. Sullivan, General Bogdan's testified that
    ``today the F-35 engine has about 52,000 fleet hours on it, and it's
    maintaining about a 94 percent full mission-capable rate.'' Please
    explain the 94 percent mission capable rate as compared to GAO's
    assessment of the engines being at 55 percent and 63 percent of where
    they were expected to be.
        Mr. Sullivan. We have not seen the specific data or analysis
    underpinning General Bogdan's claim that the F-35 engine was
    maintaining a 94 percent full mission-capable rate. That said, it is
    important to note that ``mission capable rate'' is a different measure
    than the reliability metrics we reported on, so the data points are not
    directly comparable. According to DOD, mission capable rates measure
    the ability of a system to perform its intended missions, while the
    reliability metrics we reported, mean time between failures-design
    controlled, track the amount of time between failures that are directly
    attributable to the design of the aircraft. In addition, General
    Bogdan's assessment appears to combine and average the data from all F-
    35 engines (F-35A, F-35B, and F-35C) while the data we reported makes a
    distinction between the F-35A / F-35C engines and the F-35B engines.
                            f-35b lift fan overhaul
        44. Senator Donnelly. Indiana's Rolls Royce factory opened the
    first repair and overhaul facility for the F-35B lift fans in March
    2015. The facility serves a critical need in keeping the F-35B flying
    safely and does both the initial testing and regularly scheduled
    maintenance for the liftfan system. General Bogdan, what is the annual
    capacity of the Rolls Royce facility in Indiana to overhaul lift fans?
        General Bogdan. The annual capacity is estimated at 64 Lift Fans
    based on a normal 1-shift, 5-day work week.

        45. Senator Donnelly. Are there any barriers to increasing
    production/capacity at the Indiana lift fan facility?
        General Bogdan. There are no known barriers to increasing Lift Fan
    production/capacity.

        46. Senator Donnelly. Based on the USMC's procurement of 353 F-
    35B's and their forecasted utilization of 25 flight hours per month,
    how many lift fan overhauls does the Joint Program Office estimate need
    to be completed for the fiscal years 2018 through 2030?
        General Bogdan. An estimated 330 Lift Fans will be overhauled
    between fiscal year 2018 and fiscal year 2030. The by-year breakout is
    shown below. In addition to Maintenance Repair and Overhaul (MRO)
    activities, all production Lift Fans utilize a common resource--the
    Lift Fan Acceptance Test Cell. A second shift serving this facility
    will allow the combined yearly MRO and production rates to exceed the
    64 Lift Fan per year.

    ------------------------------------------------------------------------
                         Fiscal Year                         MRO Forecast
    ------------------------------------------------------------------------
    2018................................................                 17
    ------------------------------------------------------------------------
    2019................................................                 13
    ------------------------------------------------------------------------
    2020................................................                 15
    ------------------------------------------------------------------------
    2021................................................                 24
    ------------------------------------------------------------------------
    2022................................................                 20
    ------------------------------------------------------------------------
    2023................................................                 22
    ------------------------------------------------------------------------
    2024................................................                 25
    ------------------------------------------------------------------------
    2025................................................                 27
    ------------------------------------------------------------------------
    2026................................................                 28
    ------------------------------------------------------------------------
    2027................................................                 31
    ------------------------------------------------------------------------
    2028................................................                 33
    ------------------------------------------------------------------------
    2029................................................                 36
    ------------------------------------------------------------------------
    2030................................................                 39
    ------------------------------------------------------------------------
    Total...............................................                330
    ------------------------------------------------------------------------

                                   __________
                 Questions Submitted by Senator Mazie K. Hirono
                               acquisition reform
        47. Senator Hirono. Secretary Kendall and Lt. Gen. Bogdan,
    sometimes a program can experience delays and issues as a result of the
    rules and regulations that make up our acquisition process. As you
    know, this committee under the leadership of Chairman McCain and
    Ranking Member Reed is looking at the acquisition process to find ways
    to improve the way we procure systems. Are there any areas where
    changes to the current process could have benefitted the Joint Strike
    Fighter program in the past and more importantly are there areas to
    change which can help this program as well as others succeed in the
    future?
        Secretary Kendall and Lt. Gen. Bogdan. I appreciate the support
    that the Senate Armed Services Committee (SASC) has provided to the F-
    35 Joint Strike Fighter program as well as other acquisition programs
    in the past. With the help of the SASC, the F-35 Program has realized
    stable costs across the areas of development and procurement for the
    five years since the program was re-baselined following the Nunn
    McCurdy certification. SASC guidance was instrumental in the transition
    to fixed price production contracts earlier than initially planned. The
    move to fixed price production contracts, in conjunction with the
    Department's emphasis on should cost affordability initiatives, helped
    to put the F-35 unit costs on a path to realize significant savings for
    the U.S. Services and our International Partners and allies. The use of
    fixed price-type contracting was appropriate at that time for that type
    of contract. However, that reasoning cannot and should not be applied
    wholesale across the breadth of the Department's acquisition contracts.
    The ability to negotiate a fixed price-type contract for the Low Rate
    Initial Production (LRIP) Lot 6 contract was achievable because of the
    knowledge and insight gained into actual costs from the prior five LRIP
    contracts. If that same logic had been applied to the development
    contract, the Government would have been forced to accept far more risk
    and likely incur costs in excess of the negotiated cost-type contract.
        I believe the most effective way that the SASC can help the F-35
    and other programs in the future is to allow the Department to retain
    the current acquisition management and oversight structure. The
    Department has seen improvements in all measures of acquisition
    performance over the past seven years. This improvement can be traced
    to implementation of the Weapons System Acquisition Reform Act of 2009
    (WSARA) and the Better Buying Power initiatives from 2010 to the
    present. Both of these acquisition improvement initiatives involved the
    Department working together with Congress to actively reform and
    improve the acquisition process. However, initiatives in the current
    legislation, such as the dissolution of the Office of the Under
    Secretary of Defense for Acquisition, Technology, and Logistics (USD
    AT&L), among others, would reverse key aspects of WSARA and slow the
    implementation of many of the Better Buying Power initiatives.
                                   __________
                   Questions Submitted by Senator Jim Inhofe
                         f-35 operational capabilities
        48. Senator Inhofe. Lt. Gen. Bogdan, what capabilities does the F-
    35B have with the Block 2B software? How do those capabilities compare
    to legacy aircraft and ability to execute combat missions in a denied
    access environment?
        Lt. Gen. Bogdan. Block 2B provides initial warfighting capability
    to the F-35 fleet, including basic avionic and mission system
    capabilities, improved flight envelope, and internal weapons carriage
    and employment for the AIM-120C Advanced Medium-Range Air-to-Air
    Missile and the GBU-31 Joint Direct Attack Munition. It enables the
    mission areas required by the U.S. Marine Corps to support Initial
    Operational Capability, including close air support, limited offensive
    and defensive counter-air, limited suppression and destruction of enemy
    air defenses, air interdiction, assault support escort, and armed
    reconnaissance. At the current time, Block 2B equipped F-35B aircraft
    are only capable of 5.5Gs. The Joint Program Office is exploring a path
    that will allow F-35B aircraft with Block 2B to operate out to 7.0Gs by
    the end of 2017. The F-35's unique combination of stealth, advanced
    sensor suite, data fusion, electronic warfare, and battlespace
    situational awareness allow it to perform all of these missions in a
    denied environment to a level that would not be possible with legacy
    platforms like the F-16, F/A-18, and AV-8B.

        49. Senator Inhofe. Lt. Gen. Bogdan, same questions for the F-35A
    with the Block 3i software--its capabilities and comparison to legacy
    aircraft?
        Lt. Gen. Bogdan. Block 2B and Block 3i End-State software loads,
    2BR5.3 and 3iR6.21 respectively, represent a common level of capability
    that we have begun to roll-out to the fleet. Block 3i aircraft stand
    out in that they operate on upgraded hardware that will allow for
    capability expansion with Block 3F software, and they utilize the full
    capability of the Generation III Helmet Mounted Display System. Block
    3i provides initial warfighting capability to the F-35 fleet, including
    basic avionic and mission system capabilities, improved flight
    envelope, and internal weapons carriage and employment for the AIM-120C
    Advanced Medium-Range Air-to-Air Missile and the GBU-31 Joint Direct
    Attack Munition. It will enable the mission areas required by the U.S.
    Air Force to support their Initial Operational Capability (IOC),
    including basic close air support, interdiction, and limited
    suppression and destruction of enemy air defenses in a contested
    environment. The F-35's unique combination of stealth, advanced sensor
    suite, data fusion, electronic warfare, and battlespace situational
    awareness allow it to perform all of these missions in a denied
    environment to a level that would not be possible with legacy platforms
    like the F-16, F/A-18, and AV-8B.

        50. Senator Inhofe. Lt. Gen. Bogdan, what additional operational
    capabilities does Block 3F bring to the F-35? What combat missions will
    it be able to execute?
        Lt. Gen. Bogdan. Block 3F will provide full F-35 warfighting
    capability by incorporating advanced decision aids, integration of
    internal and external sensors, additional radar modes, enhanced
    electronic warfare capabilities, enhanced geolocation, embedded
    training, full datalink capabilities, threshold weapons (to include
    external carriage and employment), and expanded flight envelopes. U.S.
    F-35s will be capable of employing the following weapons in Block 3F,
    in some cases depending on variant:
          AIM-120C/D Advanced Medium-Range Air-to-Air Missile
    (AMRAAM)
          GBU-31 Joint Direct Attack Munition (JDAM) 2,000 lbs
          GBU-32 Joint Direct Attack Munition (JDAM) 1,000 lbs
          GBU-12 Paveway II
          GBU-39/B Small Diameter Bomb (SDB I)
          AIM-9X Sidewinder
          AGM-154 Joint Stand-Off Weapon C (JSOW-C)
          GAU-22 Gun System (internal or external missionized gun
    pod)
        Block 3F takes full advantage of the Tech Refresh 2 suite of
    hardware by incorporating new software functionality that enables all
    of the mission areas specified in the Joint Strike Fighter Operational
    Requirements Document:
          Air Interdiction (AI), moving and stationary targets
          Offensive Counter Air (OCA), fighter sweep
          Defensive Counter Air (DCA), cruise missile defense,
    fighter and bomber
          Close Air Support (CAS), battlefield and urban
          Strategic Attack
          Suppression/Destruction of Enemy Air Defenses (SEAD/
    DEAD), strategic and tactical
          Armed Reconnaissance (AR)
          Strike Coordination and Reconnaissance (SCAR) with
    inherent Electronic Protection (EP)
          Electronic Attack (EA) and Electronic Warfare Support
    (ES)
          Anti-Air Warfare (AAW)
          Tactical Air Controller (Airborne) (TAC(A))
          Forward Air Controller (Airborne) (FAC(A))
          Assault Support Escort
          Attack of Maritime Surface Targets
          Mining and Reconnaissance
          Combat Search and Rescue (CSAR)
        Across the entire F-35 Air System, Block 3F includes sustainability
    and supportability features like Prognostic Health Management and
    representative training devices.

        51. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, what
    impact will the F-35 have on our ability to fight in an anti-access/
    area denial (A2/AD) environment?
        Secretary Kendall and Lt. Gen. Bogdan. The F-35 will play an
    integral role in the Department's ability to engage any adversary in an
    anti-access/area denial (A2/AD) environment. The F-35 has been
    developed with the objective of providing the Air Force, Navy, and
    Marine Corps, as well as our allies, with a 5th-generation strike
    fighter capable of executing the missions required to counter an
    increasingly advanced threat. The multi-role F-35 will complement the
    F-22 in the air superiority role required in an A2/AD challenge in
    addition to having the ability to penetrate robust air defenses and
    deliver a wide range of precision attack weapons. From a naval
    perspective, the F-35 will complement the F/A-18 E/F and provide 5th-
    generation strike fighter capability for both Carrier Strike Groups and
    Expeditionary Strike Groups. Our ability to continue to procure the F-
    35 in sufficient numbers required to recapitalize our legacy tactical
    aircraft fleet is critical to meeting the current and future A2/AD
    challenges.

        52. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, what
    outstanding airframe and hardware issues still need to be resolved for
    the F-35A, F-35B and F-35C?
        Secretary Kendall and Lt. Gen. Bogdan. Among the 734 unique Line
    Replaceable Components (LRCs), 717 have been qualified, 17 are still
    undergoing qualification, and all are on schedule to complete prior to
    the end of the System Development and Demonstration (SDD) Program.
    Below is a list and expected completion date for these 17:
          one for the F-35A refueling receptacle / scheduled to
    complete summer 2016
          one for the F-35C aileron actuator / schedule to complete
    summer 2016
          one for the 270-volt battery / schedule to complete
    summer 2016
          one for the 28-volt battery charger and control unit /
    schedule to complete summer 2016
          two for the F-35C tailhook / scheduled to complete winter
    2017
          one for the weapons bay / scheduled to complete winter
    2017
          ten for the landing gear / scheduled to complete fall
    2017
        In addition, the team is working to complete development of a
    carbon monoxide catalyst system in support of improved pilot protection
    when aircraft are in close proximity. The team is also working to
    complete development of the chemical and biological protective pilot
    flight equipment. Of significance, the 270-volt battery is experiencing
    challenges meeting gunfire vibration requirements and may need to be
    redesigned to higher vibration levels. Also, the F-35B main landing
    gear tire improvement effort will continue after completion of full
    qualification in order to provide improved tire life.
        As F-35 flight and ground testing continue, additional discoveries
    may occur. If they do, the F-35 Government and industry team will
    investigate to determine what, if any, mitigations are necessary.
        Durability testing is progressing. F-35A completed two lifetimes of
    testing in October 2015 and is approximately one-quarter of the way
    through third lifetime testing. F-35C has completed 87 percent of two
    lifetimes testing, with a number of findings affecting the portions of
    the fuel floor, forward root rib, and fuselage station 497 bulkhead.
    Production incorporation of redesigns is expected no later than Low
    Rate Initial Production (LRIP) Lot 11 for identified findings. F-35B
    testing has completed 62 percent of two lifetimes. Major findings
    previously identified on wing carry through bulkheads and wing rear
    spar have resulted in incorporation of redesigns for production no
    later than LRIP Lot 9. In addition to using conventional redesign/
    retrofit processes, such as cold working for redesign and retrofit
    concepts, the team is qualifying Laser Shock Peening (LSP) for specific
    locations. LSP is a highly controlled process that changes the stresses
    in a metallic part to improve its damage tolerance. Qualification is
    expected to complete by October 2017, allowing LSP to be used in both
    production and retrofit processes.
                         aircraft production and costs
        53. Senator Inhofe. Lt. Gen. Bogdan, did the F-35 meet its
    production goal in fiscal year 2015? What is the current cost for each
    F-35 variant and projected cost through full rate production? How many
    F-35s are we producing on the line today, US and allied, and what is it
    maximum capacity of the plant? What is the cost difference in
    production between the low numbers we are producing today and
    increasing production to maximum or near maximum rate? How much money
    is saved purely from producing higher quantities?
        Lt. Gen. Bogdan. Yes, 45 of 45 aircraft were delivered.
        Low Rate Initial Production (LRIP) Lot 8 aircraft are currently
    being delivered by Lockheed Martin. The LRIP Lot 8 unit price,
    including the engine and industry's fees, of each F-35 variant is
    provided in the table below:

    ------------------------------------------------------------------------
                           Variant                           LRIP 8 Price
    ------------------------------------------------------------------------
    F-35A...............................................              $108M
    ------------------------------------------------------------------------
    F-35B...............................................              $134M
    ------------------------------------------------------------------------
    F-35C...............................................              $129M
    ------------------------------------------------------------------------

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        As of June 30, 2016, 126 F-35 aircraft are in various stages of
    production, including 54 Partner/Foreign Military Sales aircraft. This
    includes various subassemblies spanning multiple LRIP Lots.
        The current capacity at the Lockheed Martin Fort Worth facility is
    49 aircraft per year. Lockheed Martin's 2016 delivery commitment is 48
    aircraft comprising of 24 F-35As, 19 F-35Bs, and 5 F-35Cs. The current
    Lockheed Martin Fort Worth 2016 delivery mix is F-35 A = 24 aircraft,
    F-35 B = 19 aircraft, and F-35 C = 5 aircraft. Production capacity will
    continue to grow (year over year) as we approach peak production
    demand. For example, at Lockheed Martin Fort Worth, maximum capacity
    will grow from 49 aircraft per year in 2016 to 65 aircraft per year in
    2017.
        The URF difference between a LRIP Lot 8 and Lot 13 is $24 million
    for each F-35A and F-35C. The URF difference is $27 million for each F-
    35B between these same two lots.
        When you increase quantity for a given LRIP lot, you move further
    down the learning curve in that lot thus reducing the average cost per
    unit. If you reduce the quantity in a given lot, the opposite is true.
    Learning curve theory tells us that for every doubling of quantity, UFR
    will reduce by 5 percent. If applied to future year procurements, when
    you convert to Then Year dollars that include inflation, some of the
    reduction goes away because of the inflation impact.

        54. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, are
    there still concurrency issues with the F-35 production line? If yes,
    what are the costs?
        Secretary Kendall and Lt. Gen. Bogdan. Concurrency within the F-35
    System Demonstration and Development (SDD) phase remains a part of the
    program of record. Modifications to the configuration baseline will
    continue until the end of SDD, at which time the aircraft will be fully
    qualified.
        Concurrency budgets are reducing in line with system maturity and
    are not adversely impacting the production line. Our latest concurrency
    analysis indicates the estimated average concurrency cost per aircraft
    has come down from approximately $26 million per aircraft at LRIP 1 to
    approximately $4 million per aircraft at LRIP 8, and it is estimated to
    be below $1 million per aircraft by LRIP 10. Additionally, as shown in
    Figure 1 of the April 2016 Concurrency Report to Congress (shown
    below), over 75 percent of the estimated concurrency costs are known
    issues and all issues will be known by the end of SDD.
        Figure 1, Fifth Report to Congress on F-35 Concurrency Costs

        55. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, how much
    savings could be achieved through a Block Buy Contract? What are the
    advantages and disadvantages? Is there a right time to execute a Block
    Buy Contract for this program?
        Secretary Kendall and Lt. Gen. Bogdan. RAND Project Air Force
    performed an independent assessment and determined that savings on the
    order of $2.5 to $3.0 billion over 3 lots of aircraft (Lots 12, 13, and
    14) can be achieved by providing 4 percent of aircraft cost as Economic
    Order Quantity funding in advance.
        The advantages of a Block Buy Contract are increased savings over a
    single lot buy and supplier/program stability.
        Disadvantages include possible reduction in savings due to
    configuration changes and aircraft quantity changes that drive the need
    to renegotiate. The Joint Program Office (JPO) intends to minimize this
    risk through contract language and a quantity floor that allows
    reduction in quantities without the need to renegotiate.
        The JPO has assessed the Program's stability and determined the
    risk to starting a Block Buy in Lot 12 is low.

        56. Senator Inhofe. Lt. Gen. Bogdan and Mr. Sullivan, I have seen
    numerous cost estimates regarding the life cycle costs for this program
    and I understand we are now estimating costs to operate over 60 years.
    How does the F-35 cost to operate over 60 years compare to other
    aircraft? Please provide the relative numbers for the B-52, the KC-135,
    and the F-16 and/or F/A-18 for a comparison?
        Lt. Gen. Bogdan. The F-35 program is the first aircraft program to
    estimate Operations and Support (O&S) costs over that extended length
    of time. The F-35's currently planned 30 years of procurement combined
    with a service life that could last 30 years make the F-35 O&S estimate
    unique and unprecedented in aircraft acquisition. The F/A-18 series was
    originally designed in the late 1970's to be operated for 6,000 hours,
    or about 20 years, and then be retired. We are currently flying F/A-
    18A's with over 8,000 hours on the airframe. Similarly, the F-18E/F was
    also designed as a 6,000 hour/20 year aircraft. Rather than look at
    what the original estimate for a bomber, tanker, or tactical aircraft
    program was, then attempt to equate that with the current estimate for
    F-35, we are focused on reducing the costs to operate the F-35 and
    looking at all cost drivers that will lower those costs. The antecedent
    comparison in the F-35 Selected Acquisition Report (SAR) is useful in
    looking at how we are working toward reducing F-35 costs and comparing
    them with the aircraft that they will replace. The Cost-Per-Flight-Hour
    (CPFH) values for the F-16 and F-35A from the December 2015 and
    December 2011 F-35 SARs are shown below. The takeaway from this data is
    that F-35 CPFH estimates are coming down and the legacy CPFH is going
    up. It is not surprising that the F-16 costs are increasing as this is
    what we typically see as aircraft reach the end of their service life.
    The reduction in F-35 costs to operate are due to a combination of
    factors, which we will continue to assess, review, and validate as we
    continue to place more F-35 aircraft into operational service.

                                Costs FY 2012 $K
    ------------------------------------------------------------------------
                                                      F-35A        F-16C/D
    ------------------------------------------------------------------------
    December 2011 F-35 SAR......................       31.923         22.47
    ------------------------------------------------------------------------
    December 2015 F-35 SAR......................       29.806         25.54
    ------------------------------------------------------------------------

        Mr. Sullivan. From 2014 to 2015, DOD increased the life cycle of
    the F-35 program by six years from 53 to 59 years at a cost of an
    addition $1 billion over the life cycle. We have not conducted recent
    analysis to compare the costs of the F-35s to the B-52 and KC-135 nor
    have we conducted recent analysis comparing the new operating and
    supporting costs to other legacy aircraft. However, in 2014, we
    reported that the Cost Assessment and Program Evaluation (CAPE) office
    estimated that the combined costs to operate and sustain several legacy
    aircraft--the F15C/D, F-16C/D, AV-8B, and F-18A-D fleets-in 2010
    exceeded $11 billion. \4\ Based on CAPE's 2013 cost estimate, the
    annual cost to sustain the F-35 will be about $19.9 billion (in base
    year 2012 dollars) during its steady state. This $8.8 billion
    difference represents an increase of more than 79 percent in annual O&S
    costs for the F-35 as compared with the legacy aircraft CAPE examined.
    ---------------------------------------------------------------------------
        \4\ GAO, F-35 Sustainment: Need for Affordable Strategy, Greater
    Attention to Risks, and Improved Cost Estimates, GAO-14-778
    (Washington, D.C.: September 23, 2014).
    ---------------------------------------------------------------------------
                                foreign partners
        57. Senator Inhofe. Lt. Gen. Bogdan, what is the current status of
    international participation--countries that are or will be purchasing
    F-35s as well as countries who are or will be manufacturing aircraft
    parts as well as assembly locations around the world? How do these
    impact the overall program?
        Lt. Gen. Bogdan. [Deleted.]
                          software--aircraft and alis
        58. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what is your
    assessment of the current status of the Block 3i and 3F software?
        Lt. Gen. Bogdan. The Block 3i software is demonstrating the level
    of performance we expected at this point while also being approximately
    twice as stable as previously fielded blocks of software. Because of
    this performance, on April 28, 2016, I made the decision that the F-35
    Program has completed all of the work needed for Block 3i, and I am
    recommending to the Secretary of the Air Force that Block 3i software
    is ready for United States Air Force Initial Operational Capability
    (IOC).
        Block 3F software development and testing had been on hold while
    the program focused its energy on Block 3i. However, with the
    completion of Block 3i, the team can now focus all of the program's
    efforts on Block 3F. Block 3F is currently undergoing development and
    testing and is progressing towards becoming the delivered capability.
    However, the combination of delays due to the focus on Block 3i, along
    with some challenges experienced by the prime contractor in delivery of
    capability, has resulted in a risk of about a four to six months slip
    in schedule for final delivery. Because the program had some margin at
    the end of the development program, I do not believe that the
    currently-projected schedule slip will impact the United States Navy's
    IOC.
        Dr. Gilmore. Block 3i software was designed to simply enable the
    limited Block 2B mission systems capabilities, implemented using the F-
    35's original processing hardware, to work on the upgraded Technical
    Refresh 2, or TR2, hardware used in the production of Lot 6 and later
    aircraft. An early version of Block 3i software was delivered in
    October 2014, when the Air Force accepted its first Lot 6 aircraft,
    although the capabilities this version provided were very limited and
    mission systems stability proved to be significantly worse than Block
    2B. Subsequent versions of the software have undergone flight testing
    and fielding, the latest version having completed developmental testing
    at the end of April (referred to as 3iR6.21). The program recently
    completed an abbreviated flight test of Block 3iR6.21 and is conducting
    analyses of the stability of the mission systems to see if it is
    adequate to field to operational units and to be the final Block 3i
    build of software which would support the Air Force decision to declare
    initial operational capability (IOC). Initial indications are that the
    latest version of Block 3i has improved the stability of mission
    systems performance in-flight significantly relative to previous
    versions. However, pre-flight stability issues persist, and the status
    of the correction of the other deficiencies cited in my written
    testimony, a number of which have been characterized as ``must-fix'' by
    the Air Force, is unknown to DOT&E.
        Block 3F software development was paused in February this year when
    the latest version of Block 3F software--version 3FR5 -was so unstable
    that productive flight testing could not be accomplished. To fix the
    stability problems, the program reverted to Block 3i development and
    flight testing, and just recently restarted flight testing with an
    updated version of Block 3FR5 software that incorporates the new
    stability fixes from Block 3iR6.21. The program plans to release to
    flight testing the last build of Block 3F software that adds
    capability--3FR6--later this summer, then complete two more builds--
    3FR7 and 3FR8--to address problems expected to be discovered during
    testing. The efficiency in accomplishing test points during flight test
    may be improved from what was seen earlier in CY16, if the stability
    fixes completed in Block 3i and many critical deficiency fixes are
    realized in Block 3F. Delivering and testing the numerous new and
    advanced capabilities planned to be in Block 3F mission systems, which
    are specified in the program's Operational Requirements Document (ORD),
    presents significant challenges for remaining development and flight
    test. As of the end of April, over 80 percent of the baseline test
    points in the Block 3F test plans remained to be completed.

        59. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, has the cause
    of the Block 3i and 3F software instability been identified? If yes,
    what is the fix?
        Lt. Gen. Bogdan. I believe the program has identified the root
    cause of stability problems in Block 3i and Block 3F software. The
    cause was traced to the timing of software messages from the sensors to
    the main F-35 fusion computer. A mismatch in timing of different
    messages would cause the system to repeatedly reboot, and we addressed
    this issue through changes in the timing of certain messages. We have
    tested the solution in a lab environment and in-flight test, and the
    fixes were successful. At the completion of developmental flight
    testing of the fixes, the system was demonstrating stability that was
    two times better than previously-fielded versions of software and four
    times better than prior to application of the fixes. The updated
    version of Block 3i software has been released to the operational
    fleet, and we incorporated the stability fixes in the Block 3F
    software, which is supporting flight test. However, as integration of
    new capabilities in the Block 3F software continues, we can expect to
    find more issues that could potentially affect stability. This is a
    normal part of the development cycle, and we will address any new
    issues that arise prior to the final fielding of Block 3F software.
        The graphics below show before and after stability fixes data for
    in-air mean flight hours between stability events and ground clean
    start-up rates.

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Dr. Gilmore. The program made corrections to address instability in
    the latest version of Block 3i mission systems software, Block 3iR6.21,
    and recently completed flight testing at the end of April. The program
    and test centers are currently analyzing the results of the flight
    testing--particularly the stability--and will determine whether another
    software build will be required prior to fielding. It appears that
    Block 3iR6.21 has significantly improved in-flight stability;
    nonetheless there are still system start-up problems that frequently
    delay takeoffs and it remains to be seen if there are any new problems
    caused by the software changes. Whether this version is fielded, or
    another version is built, flight tested, and fielded, the Air Force
    plans to declare initial operational capability later this year with
    Block 3i software, which will provide essentially the same, limited
    combat capability of the Block 2B software.

        60. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, have you made
    changes to how software updates are released and fielded? How will that
    improve software reliability, testing, training and operations?
        Lt. Gen. Bogdan. The F-35 Joint Program Office (JPO) continues to
    place strong emphasis on fielding a quality product to the Warfighter
    to support the full range of operations. In order to ensure that the
    final version of software delivered in the System Development and
    Demonstration program meets all of the documented requirements, I have
    modified how software updates are released and fielded. Rather than
    following a schedule-driven process to drive capability to the field,
    the JPO is now following a more event-based process to ensure that no
    capabilities are left behind. I am holding the line on software
    deliveries--I will not release to the fleet the software build that has
    been targeted for full capability without that build, in fact, having
    all capability, even if that means slipping schedule to ensure we have
    the full complement of capabilities.
        Additionally, I have encouraged the development team to quickly
    turn incremental engineering test builds to mature specific
    capabilities prior to final release of software to flight test, and the
    JPO is also using ground testing to facilitate earlier discovery and to
    supplement lab testing. To support getting capability to the Warfighter
    sooner, I have provided early releases of Block 3F software to support
    preparations and training for the Operational Test fleet.
        The JPO continues work to improve software reliability by ensuring
    that the software has full capability and is stable before it is
    released to the field. Additionally, stable software with full
    capability will improve how quickly and efficiently flight tests are
    executed. For the Warfighter, stable software with full capability
    improves the quality and quantity of training and operations.
        Dr. Gilmore. The stability and functionality problems in the
    initial versions of Block 3F that were provided to flight testing early
    this year, including those inherited from Block 3i and problems caused
    by new Block 3F capabilities, were so significant that the program
    could not continue flight test. As a result, the program recently
    announced a shift to capability-based software releases, rather than
    schedule-driven, overlapping releases. While this may cause delays
    relative to the current, unrealistic schedule, I agree with the
    program's decision to shift to a serial process of flight testing and
    fixing software in the lab before releasing the next software version,
    and the recent improvements observed in Block 3i stability validate
    this serial approach. Based upon the improved version of Block 3i, the
    program recently released an updated version of Block 3FR5 software to
    flight test in April and, after incorporating fixes to the deficiencies
    discovered during the remainder of this re-started testing, the program
    plans to release Block 3FR6 later this summer. If the fixes to
    stability achieved in the latest Block 3i software continue to reduce
    the need for avionics resets in flight, without unintended
    consequences, mission systems testing and weapons releases can resume
    in earnest and the test point completion rate will increase, which is
    essential given the significant amount of testing and limited time that
    remains before initial operational test and evaluation.

        61. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what impact
    will these software issues have on Air Force reaching IOC by its
    threshold date of December 2016?
        Lt. Gen. Bogdan. The Block 3i software is demonstrating the
    performance we expected at this point while also being approximately
    twice as stable as previously fielded blocks of software. Because of
    this performance, on April 28, 2016, I made the decision that the F-35
    Program has completed all of the work needed for Block 3i, and I am
    recommending to the Secretary of the Air Force that Block 3i software
    is ready for United States Air Force Initial Operational Capability
    (IOC). This software has been released to the operational fleet, which
    meets the USAF requirement to declare IOC by December 2016.
        Dr. Gilmore. The decision to declare Initial Operational Capability
    (IOC) is one made by the individual Services. The Air Force is
    conducting an accelerated IOC Readiness Assessment to help inform their
    decision on when to declare IOC; however, no formal operational test
    and evaluation of the Block 3i set of capabilities is planned. To the
    extent that software stability has improved in flight, the Block 3i
    configuration may support the Air Force requirements for IOC before the
    end of calendar year 2016. Similar to the Marine Corps' IOC declaration
    in July 2015 with F-35B aircraft in the Block 2B configuration, the
    capabilities of the Block 3i-configured F-35A aircraft will be limited
    if called upon to be used in combat.

        62. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what are the
    key obstacles to beginning IOT&E in August 2017? What actions can be
    taken to mitigate those obstacles? Is August 2017 for OT&E start
    achievable?
        Lt. Gen. Bogdan. The F-35 Joint Program Office (JPO), in
    coordination with the Service Operational Test Agencies (OTA), the
    Joint Strike Fighter Operational Test Team (JOTT), and other Initial
    Operational Test and Evaluation (IOT&E) stakeholders, has identified
    six key areas that present significant challenges to the beginning of
    IOT&E. These and the mitigating strategies follow:
        1) Providing sufficient test aircraft: The JPO worked with the
    JOTT, the Services, and International Partners to develop a course of
    action that reduced the number of required aircraft from 25 to 23 and
    modifies some earlier LRIP Lots 3, 4, and 5 aircraft to the Lot 9
    configuration. This approach was fully vetted and accepted by the U.S.
    Services and International Partners.
        2) Software and weapons capability: IOT&E requires use of the final
    Block 3F software and full Block 3F weapons capability and envelope. To
    provide as much capability as soon as possible, the JPO is planning a
    May 2017 Block 3F software release to the fleet. Additionally, early
    versions of Block 3F software will be released to Operational Test (OT)
    to enable familiarization, early feedback to JPO, and spin-up
    activities.
        3) Mission Data File (MDF): The United States Reprogramming Lab
    (USRL), which develops the MDF, is currently projecting an initial MDF
    delivery in February 2017 and the final MDF delivery, required for
    IOT&E, in August 2017. To mitigate this schedule, USRL will use earlier
    versions of Block 3F software to complete preliminary work. This allows
    for quicker development of the MDF when the final Block 3F software is
    released.
        4) Simulation. Testing the full capability of the F-35 within the
    limits of existing ranges against air and surface threats will be
    difficult. The use of a validated, high-fidelity simulation
    incorporating both the F-35 as well as advanced threats can improve our
    ability to judge the effectiveness of the weapon system in a broader
    environment and provide recommendations to the Warfighters on tactics
    and issues. The initial plan was to use a Lockheed Martin developed F-
    35 multi-ship, real-time, Manned Tactical Simulator based
    representation of the F-35 air vehicle designed to replicate a high-
    density simulation environment not available on open-air ranges,
    similar to the system used by the F-22. However, Lockheed Martin was
    behind schedule and over budget, and this solution had limited room for
    future growth. In 2015, the program made a strategy change to have the
    Government develop an open-system simulation environment that will
    endure beyond Block 3F testing while Lockheed Martin maintains a focus
    on delivering the F-35 specific simulation. This hybrid is called the
    Joint Simulation Environment (JSE) and is being developed cooperatively
    by the U.S. Navy, U.S. Air Force, and Lockheed Martin so the skill sets
    of industry and Government are leveraged for long-term sustainment of
    the end product. The risk to IOT&E due to the strategy shift to JSE is
    the same as would have been present had the original Lockheed Martin
    proprietary strategy been maintained, and is principally schedule. To
    mitigate this, JSE will be delivered to the JOTT incrementally to allow
    early trial use and feedback from OT, and full capability is planned
    for mid-calendar year 2018, which will be in time to support test
    events toward the latter part of IOT&E. As a further mitigation, the
    JOTT has increased some open-air test events to gather specific
    information that would otherwise be developed using the simulated
    environment. Given what we know of the JOTT planning, JSE will not
    prevent the start of IOT&E flight testing if the simulation is not
    available at the beginning of IOT&E.
        5) Autonomic Logistics Information System (ALIS): IOT&E is planned
    to begin with ALIS 2.0.2 and then upgrade to ALIS 3.0 (the final
    version of ALIS) upon its release in spring 2018.
        6) Air-to-Air Range Infrastructure II (AARI2): AARI2 flight test is
    currently scheduled for summer 2016, and recent lab tests indicate it
    will meet IOT&E performance requirements. However, the range is
    projected not to be ready to support IOT&E until winter 2018.
        In addition to the mitigations listed above, the JOTT is working on
    a phased entry into IOT&E. This approach allows the JOTT to conduct
    portions of the test when entrance requirements for those portions, but
    not necessarily the full test entrance requirements, have been met. For
    example, the JOTT can conduct much of the Close Air Support testing
    without going above 1.3 Mach, without AARI2, and with ALIS 2.0.2. This
    approach will allow the JOTT to conduct as much testing as soon as
    possible.
        Dr. Gilmore. As I stated in my testimony, the current plan to
    complete development and enter IOT&E by August 2017 is unrealistic.
    Several obstacles must be overcome before IOT&E can begin. These
    include:
          Completion of Block 3F development. The program has
    completed less than 20 percent of the baseline Block 3F test points as
    of the end of April 2016. Completing the remaining nearly 4,200
    baseline points will not occur until the end of January 2018, based on
    historical test point burn rates.
          Weapons integration. Much of the weapons testing remains,
    particularly to support the additional weapons being brought on with
    Block 3F (SDB, JSOW, AIM-9X, and the gun)
          Modifications to operational test aircraft. The
    operational test aircraft must be production-representative and have
    the required instrumentation called for in the Test and Evaluation
    Master Plan (TEMP). Modifying the currently designated fleet of
    operational test aircraft to the Block 3F configuration would extend
    beyond August 2017. Although the requirement to modify these aircraft
    has been known for years by the program and Lockheed-Martin, adequate
    plans were not made to accommodate these modifications. For example,
    all of the operational test aircraft need the Tech Refresh 2 (TR2)
    processors, which have been included in the production aircraft since
    Lot 6 aircraft were delivered in late 2014, but TR2 processors for
    retrofitting the OT aircraft were not ordered in time to support
    completing modifications prior to August 2017.
          Mission data. The programming lab that provides mission
    data needs to be upgraded to provide adequate, optimized, and tested
    mission data files for IOT&E; upgrades that have yet to be put on
    contract. As a result, the signal generators needed to adequately test
    the mission data loads will probably not arrive until 2019 at the
    soonest, causing risk to F-35 avionics performance during IOT&E and in
    combat.
          Sustainment. The program set a target of 60 percent
    aircraft availability for the fleet as an objective at the end of CY14,
    but has yet to reach that goal. To efficiently complete the mission
    trials during IOT&E, most of which will require 4-ship formations of a
    single variant (out of 6-aircraft fleets of each US variant), the
    program will need to have an availability of approximately 80 percent,
    which is consistent with the availability that will be needed to
    support actual combat operations. Improvements in reliability and
    maintainability, along with significant improvements to ALIS, are all
    needed.

        63. Senator Inhofe. Lt. Gen. Bogdan, what is the current status of
    ALIS and its ability to support F-35 operations from home station and
    while deployed? What actions are being taken improve ALIS?
        Lt. Gen. Bogdan. The Standard Operating Unit Version 2 (SOUv2)
    hardware, initially fielded to support United States Marine Corps
    Initial Operational Capability in July 2015, provides a more deployable
    version of Autonomic Logistics Information System (ALIS). This new
    hardware is ruggedized, modular, and an alternative to the original
    large server rack design. The Marine Corps and Air Force have
    successfully used the SOUv2 in several deployment exercises, and the
    Joint Program Office has received positive feedback on the
    deployability of ALIS.
        Dr. Gilmore. ALIS has supported operational and training units
    since early production aircraft were accepted by the Services in 2011.
    Although deficiencies in ALIS have made it difficult to efficiently
    support F-35 operations, continued development and releases of ALIS
    software updates have led to improvements. The program is attempting to
    address the functionality and usability deficiencies with quarterly
    service pack updates, which they began to field in January 2016. Two
    major software releases, ALIS 2.0.2 and 3.0.0, are planned before
    completion of F-35 SDD, but the schedule to deliver the planned
    capability requirements for each of these releases is high risk. As
    noted in my annual report, the program has previously deferred
    capability content of ALIS software releases (i.e., ALIS 2.0.1 planned
    for Marine Corps IOC) to meet schedule; this pattern of behavior cannot
    be sustained through the rest of SDD. Completing the development,
    adequate testing, and fielding of the capabilities planned for ALIS
    3.0.0 before the end of SDD is high risk. ALIS 3.0.0 is required prior
    to the start of IOT&E; however, progress has been limited as the
    program is still struggling to deliver planned ALIS 2.0.2
    functionality, which the program now says is at least 60 days late.
        As stated in my testimony, Service-led deployments over the past
    year have revealed challenges in setting up and supporting flight
    operations at forward locations. The fielding of the modularized
    version of the Standard Operating Unit (SOU) has allowed the Marine
    Corps and Air Force to conduct deployment demonstrations during which
    they moved ALIS hardware to a deployed location. However, they
    discovered difficulties in either building a network to support
    deployed operations or in integrating ALIS into an existing network.
    Transferring aircraft data between the home station and the deployed
    SOU, which is necessary to support deployed flight operations, does not
    function seamlessly within ALIS, as it was designed, but often requires
    manual updating or corrections to data files after a transfer has
    occurred. ALIS is a multi-level security system with particular
    infrastructure requirements to support high levels of server activity
    and data movement. Additionally, the program has not yet completed
    comprehensive deployability tests in a shipboard or overseas operating
    environment. ALIS currently has no hardware redundancy, so if the
    Central Point of Entry (CPE) at Eglin AFB, Florida or ALIS main
    operating unit at Fort Worth, Texas experience some type of failure,
    the entire F-35 fleet would need to operate offline until functionality
    is restored. While the program has made provisions for ALIS to operate
    offline, it would compromise some ALIS functionality such as supply
    chain management.
        The F-35 program is aware of these ALIS deficiencies, but it is
    still unclear if the program has a plan to prioritize and address them
    within the remaining SDD timeline.

        64. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what is the
    status of ALIS version 2.0.2 and how will it impact Air Force IOC?
        Lt. Gen. Bogdan. The Autonomic Logistics Information System (ALIS)
    2.0.2 software release has experienced challenges with the integration
    efforts between the Pratt & Whitney and Lockheed Martin enterprise
    systems that will support the overall management of the F135 engine
    system within ALIS. We are working through those issues and expect that
    full 2.0.2 capability will be available for fielding prior to the end
    of December 2016.
        It is important to note that United States Air Force (USAF) Initial
    Operational Capability (IOC) is not fully dependent on ALIS 2.0.2
    delivery. The USAF requirement for IOC with respect to ALIS is that the
    system be able to support deployed combat operations. The decision as
    to which version of ALIS is adequate for deployed operations is a USAF
    decision.
        Dr. Gilmore. ALIS version 2.0.2, which is planned to support Air
    Force IOC, is expected to upgrade earlier versions by adding
    functionality to some of the embedded capabilities and introducing the
    first phase of life-limited parts management, the latter of which
    includes propulsion integration. Propulsion data are currently
    downloaded and tracked separately by Pratt and Whitney during post-
    flight maintenance activities, but ALIS 2.0.2 should allow the
    propulsion data to be downloaded and processed simultaneously with the
    rest of the air vehicle data.
        The program is facing delays in the release of ALIS 2.0.2 primarily
    due to difficulties with propulsion integration. The latest program
    estimates show a 60- to 90-day delay fielding the 2.0.2 release,
    resulting in delivery to Hill AFB in October 2016, vice August 2016 as
    previously planned. Delivery of ALIS 2.0.2 later this year might still
    support an Air Force IOC declaration by the end of the year. However,
    the Air Force may choose to declare IOC without fielding ALIS 2.0.2, or
    accept an interim version of ALIS 2.0.2 without the additional
    capabilities and/or with known deficiencies.

        65. Senator Inhofe. Lt. Gen. Bogdan, what actions are you taking to
    ensure both the F-35 and ALIS do not have cyber-vulnerabilities?
        Lt. Gen. Bogdan. We are continuing to implement the necessary
    Information Assurance controls and testing required by the Department
    and the individual Services to allow Autonomic Logistics Information
    System (ALIS) to be connected to the U.S. Air Force, U.S. Marine Corps,
    and U.S. Navy networks. The Joint Operational Test Team (JOTT) is now
    performing Adversarial and Vulnerability Cyber Testing on the ALIS and
    will continue this over the next year and a half. This testing will
    inform us of any deficiencies that may need to be addressed to mitigate
    risks of malicious attacks. Finally, we have contracted for backup
    hardware for key elements of the ALIS that we will be installing later
    this year in different geographic areas. This effort will eliminate
    single points of failure and mitigate risks from cyber-attacks and
    natural disasters.

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