[Senate Hearing 114-765]
[From the U.S. Government Publishing Office]








                                                        S. Hrg. 114-765

                   THE LONG	TERM BUDGETARY CHALLENGES
                    FACING THE MILITARY SERVICES AND
                  INNOVATIVE SOLUTIONS FOR MAINTAINING
                        OUR MILITARY SUPERIORITY

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

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 15, 2016

                               __________

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                      COMMITTEE ON ARMED SERVICES

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

                                  (ii)

  





























                        C O N T E N T S

_______________________________________________________________________

                           September 15, 2016

                                                                   Page

The Long-Term Budgetary Challenges Facing the Military Services       1
  and Innovative Solutions for Maintaining Our Military 
  Superiority.

Milley, General Mark A., USA, Chief of Staff of the United States     4
  Army.
Richardson, Admiral John M., USN, Chief of Naval Operations of        8
  the United States Navy.
Neller, General Robert B., USMC, Commandant of the United States     12
  Marine Corps.
Goldfein, General David L., USAF, Chief of Staff of the United       17
  States Air Force.

Questions for the Record.........................................    55

                                 (iii)

 
                   THE LONG-TERM BUDGETARY CHALLENGES 
                    FACING THE MILITARY SERVICES AND 
                  INNOVATIVE SOLUTIONS FOR MAINTAINING 
                        OUR MILITARY SUPERIORITY 

                              ----------                              


                      THURSDAY, SEPTEMBER 15, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:34 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, Wicker, 
Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Graham, Reed, 
McCaskill, Manchin, Shaheen, Gillibrand, Blumenthal, Donnelly, 
Hirono, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning. The Senate Armed Services 
Committee meets this morning to receive testimony on the long-
term budgetary challenges facing our military.
    I would like to welcome our witnesses: the Chief of Staff 
of the Army, General Milley; the Chief of Naval Operations, 
Admiral Richardson; the Commandant of the Marine Corps, General 
Neller; and the Chief of Staff of the Air Force, General 
Goldfein. I thank each of you for your years of distinguished 
service and for your testimony today.
    Far too often, Washington is governed by crisis and stop-
gap deals like continuing resolutions, omnibus spending bills, 
and episodic budget agreements that are a poor substitute for 
actually doing our jobs. It has become an, unfortunately, all 
too familiar cycle of partisan gridlock, political 
brinksmanship, and backroom dealing. Is it any wonder why 
Americans say they are losing trust in government?
    Through it all, we lose sight of the fact that the 
dysfunction of Washington has very real consequences for the 
thousands of Americans serving in uniform and sacrificing on 
our behalf all around the Nation and the world. From 
Afghanistan to Iraq and Syria, from the heart of Europe to the 
seas of Asia, our troops are doing everything we ask of them. 
But we must ask ourselves are we doing everything we can for 
them. Are we serving them with a similar degree of courage in 
the performance of our duties? The answer I say with profound 
sadness is we are not. We are not.
    Over many years across Presidents and congressional 
majorities of both parties, Washington has overseen a steady 
explosion of our national debt. This is just a fact. But five 
years ago, rather than confronting the real driver of our 
ballooning debt, which is the unsustainable growth of 
entitlement spending, we looked the other way. We failed to 
make tough choices and necessary reforms, and the result was 
the Budget Control Act which imposed arbitrary caps on 
discretionary spending, including defense spending for a 
decade. When we failed to fix the real problem, we doubled down 
on these reckless cuts with mindless sequestration. In short, 
we lied to the American people.
    The Budget Control Act and sequestration have done nothing 
to fix our national debt. This is just mathematics. What is 
worse, the people we have punished for our failure are none 
other than the men and women of our armed services and many 
other important agencies. The world has only grown more 
dangerous over the past five years, but the resources available 
to our military has continued to decline.
    This year's defense budget is more than $150 billion less 
than fiscal year 2011. Rising threats and declining budgets 
have led to shrinking military forces that are struggling to 
sustain higher operational tempo with aging equipment and 
depleted readiness, and doing so at the expense of modernizing 
to deal with the threats of tomorrow.
    Our present crisis of military readiness is not just a 
matter of training. It is also a capacity problem. Our Army, 
Navy, Air Force, and Marine Corps are too small to train for 
and meet our growing operational requirements against low-end 
threats while simultaneously having enough spare capacity to 
prepare for full spectrum warfare against high-end threats. As 
it is, our services are cannibalizing themselves just to keep 
up with the current pace of deployments, as recent media 
reports about the Air Force and Marine Corps aviation have made 
clear. The result is that our fighting forces are becoming 
effectively hollow against great power competitors.
    If all of this is not bad enough, there is this. We are 
only halfway through the Budget Control Act. There are five 
more years of arbitrary defense spending cuts. It is true that 
last year's Bipartisan Budget Act provided some much needed 
relief, but this two-year deal is coming to an end. When it 
does, those arbitrary caps will return and remain in place 
through the next President's entire first term.
    The Department of Defense and many of us in the Congress 
believe this would devastate our national defense. Yet, we are 
fooling ourselves and deceiving the American people about the 
true cost of fixing the problem. Just consider the Department's 
current 5-year defense plan is $100 billion in total above the 
spending caps set by the Budget Control Act. In addition, 
roughly $30 billion of annual spending for base defense 
requirements is buried in the budget account for emergency 
operations, requirements that will remain for our military even 
if our present operations immediately ended, which of course 
they will not.
    What this means is that over the next five years, our 
Nation must come up with $250 billion just to pay for our 
current defense strategy and our current programs of record. 
$250 billion just to do what we are planning to do right now, 
which I think many of us would agree is insufficient to meet 
our present, let alone our future challenges. A quarter of a 
trillion dollars. That is the real hidden cost above our budget 
caps that we must come up with over the next five years.
    Put simply, we have no plan as yet to pay for what our 
Department of Defense is doing right now, even as most of us 
agree that what we are doing at present is not sufficient for 
what we really need. Those needs are great indeed, from 
maintaining the capability and capacity to wage a generational 
fight against radical Islamic terrorism, to rebuilding a ready 
and modernized force, to deter and, if necessary, defeat high-
end threats, to modernizing our nuclear deterrent, to investing 
in the next generation capabilities that will preserve our 
military technological advantage and ensure our troops never 
find themselves in a fair fight.
    The bottom line is this. From the Budget Control Act caps 
to the so-called OCO [overseas contingency operations] account, 
to our increasingly obsolete defense strategy, to the 
modernization bow wave that is coming for each of the services, 
we are lying to ourselves and the American people about the 
true cost of defending the Nation. The result is that our 
military's ability to deter conflict is weakening, and should 
we find ourselves in conflict, it is becoming increasingly 
likely that 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.
    If that comes to pass, who will be responsible? Who is to 
blame for the increasing risk to the lives of the men and women 
who volunteer to serve and defend our Nation? The answer is 
clear. We are, the President and the Congress, Democrats and 
Republicans, all of us.
    With budget debates looming ahead, the question now is 
whether we will find the courage we have lacked for five long 
years, the courage to put aside politics, to chart a better 
course, to adopt a defense budget worthy of the service and 
sacrifice of those who volunteer to put themselves in harm's 
way on our behalf.
    I am committed to doing everything I can as chairman of 
this committee to accomplishing this task. I know my colleagues 
on this committee are too. Despite the odds, I am ever hopeful 
that together we still can.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. Let 
me join you in welcoming the members of the panel and thank 
them for their outstanding service to the Nation and ask them 
to convey our thanks to the men and women who serve so proudly 
in uniform for the United States. Thank you.
    The focus of today's hearing is the long-term budget 
challenges confronting our Military Services. For 15 years, our 
armed forces have been in continuous military operations. While 
our men and women in uniform have performed their duties 
superbly and doing all that we have asked them to do and more, 
the intense operational tempo has had an impact on our 
soldiers, sailors, airmen, and marines, their training and 
their equipment. On top of all that, the services have had to 
grapple with sequestration and constrained budgets, as the 
chairman has pointed out.
    The military leaders before us today have an important 
task. As they plan their budgets for fiscal year 2018 and 
beyond, they must anticipate emerging threats for the future 
and how our military will address and ultimately defeat those 
threats. As we are reminded on a daily basis, our country is 
facing many complicated and rapidly evolving challenges that do 
not offer easy or quick solutions.
    For example, we have seen our near-peer competitors learn 
from our past successes and make advancements of their own, 
particularly in the areas of precision and long-range strike, 
anti-access/area denial, space, and cyber. As a result, the 
Department of Defense has embarked on a third offset strategy 
to address the steady erosion of U.S. technological superiority 
and recapture our qualitative advantage over our adversaries.
    We welcome our witnesses' thoughts on how their respective 
services plan to confront these critical issues again in the 
context of these very difficult budgetary issues.
    In addition to anticipating and planning our future 
threats, our witnesses today must also ensure targeted 
investments are made to rebuild readiness levels, modernize the 
force, and maintain the wellbeing of our troops. Over the 
course of this year, the committee has repeatedly heard 
testimony on these issues, and I hope that our witnesses can 
provide this committee an update on the progress that they have 
made.
    Finally, defense budgets should be based on our long-term 
military strategy which requires the Department to focus at 
least five years into the future. Last year, Congress passed 
the 2015 Bipartisan Budget Act [BBA] that established the 
discretionary funding level for defense spending for fiscal 
year 2016 and 2017. While the BBA provided the Department with 
budget stability in the near term, there is no agreement for 
fiscal year 2018 and beyond. Therefore, without another 
bipartisan agreement that provides relief from sequestration, 
the Military Services will be forced to submit a fiscal year 
2018 budget that adheres to the sequestration level budget caps 
and would undermine the investments made to rebuild readiness 
and modernization and other aspects of our military force.
    Not only is the issue one of budgets, but the issue is one 
of the certainty of knowing that you have budget levels not 
just for a year but for at least five years. That is another 
aspect we have to come to grips with.
    I will, indeed, welcome the witnesses' thoughts and 
suggestions as we move forward.
    Thank you very much, Mr. Chairman.
    Chairman McCain. General Milley?

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

    General Milley. Thanks, Chairman McCain--I appreciate 
that--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 Army's soldiers, civilians, and families.
    A ready army, as you know, is manned, trained, equipped, 
and well led as the foundation of the joint force in order to 
deter and, if deterrence fails, to fight and defeat a wide 
range of state and non-state actors today, tomorrow, and deep 
into the future.
    Although there are many challenges, as I outline below, the 
most important of which is consistent, sustained, and 
predictable funding over time, I still want to be clear. The 
United States Army is America's combat force of decision, and 
we are more capable, better trained, better equipped, better 
led, and more lethal than any other ground force in the world 
today. We are highly valued by our allies, and we are feared by 
our enemies. The enemies know full well we can destroy them. We 
can destroy any enemy. We can destroy them anywhere, and we can 
destroy them anytime.
    But having said that, our challenge today is to sustain the 
counterterrorist and the counterinsurgency capabilities that we 
have developed to a high degree of proficiency over the last 15 
consecutive years of war for many years in the future, the 
prediction of which is unknown, and simultaneously rebuild our 
capability in ground combat against higher-end, near-peer, 
great power threats.
    The Army prioritizes readiness in this NDAA [National 
Defense Authorization Act] because the global security 
environment is increasingly uncertain and complex. I anticipate 
that we will have to continue to prioritize readiness for many 
years to come. While we cannot 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 U.S. Army forces on the 
ground.
    The Army is currently committed to winning our fight 
against radical terrorists during conflict in other parts of 
the globe. Currently, the Army provides 52 percent of all the 
global combatant commander demand for military forces, and we 
provide 69 percent of all the emerging combatant commander 
demand. Currently, we have 187,000 soldiers committed in 140 
different countries globally conducting the Nation's business.
    To sustain current operations at that rate and to mitigate 
the risks of deploying an unready force into future combat 
operations, the Army will continue to prioritize and fully fund 
readiness over end strength modernization and infrastructure. 
In other words, we are mortgaging future readiness for current 
readiness.
    We request the resources to fully man and equip our combat 
formations and conduct realistic combined arms combat training 
at both home station and our combat training centers [CTC]. We 
request continued support for our modernization in five key 
capability areas that we determined are lagging: aviation, 
command and control networks, integrated air and missile 
defense, combat vehicles, and emerging threat programs.
    Our near-term innovation efforts are focused on developing 
overmatch in mobility, lethality, mission command, and force 
protection with specific emphasis on the following systems: 
long-range precision fires, missile defense, directed energy 
weapons, ground vehicles, vertical lift, cyber, electronic 
warfare, robotics, networks, and active protective systems for 
both ground and air.
    We ask your continued support for our soldiers and our 
families to recruit and retain the high level and the high 
quality of soldiers of character and competence that you have 
come to expect from the United States Army. With your support 
through sustained long-term, balanced, predictable resources, 
the Army will fund readiness at sufficient levels to meet 
current demands, build readiness for contingencies, and invest 
in the readiness of our future force.
    Thank you, Senators, for the opportunity to testify, and I 
look forward to your questions.
    [The prepared statement of General Milley follows:]

              Prepared Statement by General Mark A. Milley
                              introduction
    Today, your Army is globally engaged around the world building 
partner capacity in Iraq to fight terrorism and we continue to train, 
advise, and assist the Afghan National Defense Security Forces. We are 
engaging our partners in Africa, and throughout North and South America 
and have committed about 100,000 soldiers to sustain regional stability 
in the Asia-Pacific. In Europe, we are actively reassuring allies, with 
rotational and permanently stationed forces, in the face of emerging 
challenges and deterring Russian aggression. In short, the Army is 
protecting important national security objectives in every region of 
the world against five significant security challenges: Russia, China, 
Iran, North Korea, and counter-terrorism.
    Predictable and consistent funding is absolutely essential for the 
Army to build and sustain current readiness and progress toward a more 
modern, capable future force. We simply cannot sustain readiness or 
build the Army our Nation needs in the future if we return to 
sequestration-level funding in fiscal year 2018.
    Although there are many challenges as I outline below, I want to be 
clear--the U.S. Army is America's combat force of decision and can 
rapidly deploy to destroy any enemy in the world today.
                              where we are
    Readiness is the Army's number one priority. Readiness determines 
our ability to fight and win in ground combat. It is the capability of 
our forces, as part of the Joint Force, to conduct the full range of 
military operations to defeat any enemy. Units that are properly 
manned, trained, equipped, and led are the means by which the Army 
generates the skillful application of land power with speed and 
violence of action in order to terminate the conflict on terms 
favorable to the United States.
    While the Army is reducing end-strength, we made a deliberate 
decision to prioritize readiness, reduce infrastructure maintenance, 
and decrease funding for modernization. These choices devote resources 
to today's fight, but decrease investments for future modernization and 
infrastructure readiness, and emergent demands.
                       global demand and manning
    The Army comprises 33 percent of the DOD force structure and 
sources 52 percent of DOD's Combatant Command base demand for forces 
and 69 percent of emergent demand for forces. While the demand for Army 
units has been and is expected to remain high, we are reducing military 
end-strength in all three of our components; Regular Army, Army 
National Guard, and the Army Reserve.
                                training
    In the last year, the Army has made significant progress in our 
core warfighting skills across multiple types of units, but we have 
much work to do to achieve full spectrum readiness in decisive action 
operations.
    To build sufficient operational and strategic depth, the Army will 
prepare our formations for the entire range of military operations. All 
Army training will include elements of the Army Reserve, National 
Guard, and the Regular Army. Additionally, all units will require 
multiple iterations of individual and unit home-station ranges, 
challenging gunnery training, and realistic Combat Training Center 
rotations.
    Our challenge is to balance the requirements of remaining 
regionally engaged while simultaneously preparing to meet the demands 
of a globally responsive contingency force. About a third of our 
Regular Army Brigade Combat Teams are currently ready for high-end 
combat against a nation state. We will fully fund Combat Training 
Center rotations and protect home station training to increase training 
frequency, rigor and readiness across the force.
    However, the impacts of reduced resourcing are being felt across 
the force and throughout Army units and installations world-wide. The 
increased training tempo required to train to high-end full spectrum 
tasks to meet warfighting standards must also be balanced against 
maintaining unit equipment to operational standards.
    The last key factor for improving readiness is time. Our goal is to 
have Regular Army Brigade Combat Teams achieve 60-66 percent full 
spectrum readiness, and I estimate that it will take the Army 
approximately four years to achieve that assuming no significant 
increase in demand and no sequestration levels of funding.
                      equipping and modernization
    Equipment readiness is a critical component of overall unit 
readiness. We have deliberately allocated resources to prioritize 
readiness of equipment for the current fight and we have deferred 
investments in modernization. Our strategy has been to incrementally 
improve on existing platforms and we are at risk to lag behind near-
peer adversaries in critical capabilities over the mid-term.
    Our short-term equipment modernization strategy will continue to 
focus on the five critical capability areas: Aviation, the Network, 
Integrated Air and Missile Defense, Combat Vehicles, and Emerging 
Threats. The Army will invest in programs with the highest operational 
return and build new systems only by exception. We will delay 
procurement of our next generation platforms and accept risk to force 
in the mid-term, but we are committed to preserve some funding for 
research and development.
                           leader development
    Our Army thrives in complex and uncertain environments because our 
soldiers, non-commissioned officers, and officers are well educated, 
trained and equipped to think, improvise, and adapt to ambiguous and 
rapidly changing conditions. Our strength is derived not from platforms 
or high-tech equipment, it comes from our people. We continue to 
recruit resilient, fit men and women of character and develop them into 
competent soldiers. Training, educating and compensating our personnel 
helps to retain the best of the best, which requires appropriate and 
consistent funding as much as other readiness areas. This emphasis will 
not change now or in the future as we reduce our end-strength while 
retaining the best talent within our ranks.
                               innovation
    The Army will work with all stakeholders across the Department of 
Defense, other services, industry, research laboratories, and civilian 
innovators to develop new operating concepts and technologies. In 
particular, we are working with the Strategic Capabilities Office, 
Defense Advanced Research Projects Agency, and the Defense Innovation 
Unit Experimental on innovative technologies to improve our current and 
future capabilities. Our near-term innovation efforts are focused on 
developing technologies to protect mission critical systems from cyber-
attacks and to sustain overmatch in the key areas of: mobility, 
lethality, mission command, and force protection with specific emphasis 
on: long-range precision fires, missile defense, directed energy 
weapons, ground vehicles, vertical lift, cyber, electronic warfare, 
networks, and active protection systems (ground and air).
                              acquisition
    Our acquisition process must be innovative, agile, and effective to 
maintain overmatch. Most recently, the Army announced the stand-up of 
the Army Rapid Capabilities Office to expedite the design, development, 
evaluation, procurement and fielding of critical combat materiel 
capabilities to deliver an operational effect within one to five years. 
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.
                                  risk
    The Army prioritizes today's readiness and accepts risk in 
modernization and infrastructure maintenance in the mid and long term.
    We continue to implement efficiencies and find innovative ways to 
preserve funding for our highest priority--increasing readiness. Over 
the last few years, the Army has significantly reduced headquarters at 
two-star and above echelons, adopted energy and other efficiencies, and 
made significant business transformation improvements. Even with these 
cost saving initiatives, however, we have had to make hard funding 
choices such as deferring investments in housing modernization, 
training facilities, and power projection platforms. Our fiscal year 
2017 budget request represents the Army's lowest MILCON budget since 
1998.
    In the current global environment, the Army will continue to meet 
the demands of the fight against radical terrorism and the predictable 
demands of our geographic combatant commanders. Absent additional 
legislation, the sequestration caps set by the Budget Control Act of 
2011 will return in fiscal year 2018, forcing the Army to draw down 
end-strength even further, reduce funding for readiness, and increase 
the risk of sending under-trained and poorly equipped soldiers into 
harm's way.
                               conclusion
    Sustaining the high levels of performance our Army has demonstrated 
since 1775 requires consistent, long term, balanced and predictable 
funding. Without it, the Army must fully fund current readiness, reduce 
funding future readiness in modernization and infrastructure 
maintenance, and continue programmed end-strength reductions.
    The U.S. Army has made difficult choices to sustain current 
readiness for today and to be prepared for tomorrow. We request the 
support of Congress to predictably fund the Army at balanced and 
sufficient levels to meet current demands and to build a more capable, 
modern, ready force for future contingencies.

    Chairman McCain. Admiral Richardson?

 STATEMENT OF ADMIRAL JOHN M. RICHARDSON, USN, CHIEF OF NAVAL 
              OPERATIONS OF THE UNITED STATES NAVY

    Admiral Richardson. Good morning, Mr. Chairman, Ranking 
Member Reed, distinguished members of the committee, thank you 
for the opportunity to appear before you today and thank you 
for your sustained support to our Navy and our Nation.
    I have been traveling around a fair amount recently to put 
eyes onto our Navy around the world. As you know, the problems 
they face are getting more complex by the day. But your naval 
team is working hard, and our sailors, marines, and civilians 
are simply astounding in their skill and dedication. We must 
focus on them with everything we do to respect their mission 
and their dedication.
    I can describe our current challenges in terms of a triple 
whammy.
    The first whammy, as we have said, is the continued high 
demand for our naval forces. We just marked the 15th 
anniversary of 9/11. The past 15 years of high OPTEMPO 
[operational tempo] in support of the wars has put tremendous 
wear and tear on our ships and aircraft. It has also taken a 
toll on the sailors that take those platforms out to sea, on 
the skilled Navy civilians that build and repair them, and on 
our family members.
    The second whammy is budget uncertainty. Eight years of 
continuing resolutions, including a year of sequestration, have 
driven additional cost and time into just about everything that 
we do. The services are essentially operating in three fiscal 
quarters per year now. Nobody schedules anything important in 
the first quarter. The disruption that this uncertainty imposes 
translates directly into risk to our Navy and our Nation.
    The third whammy is the resource levels in the Budget 
Control and Bipartisan Budget Acts. Funding levels require us 
to prioritize achieving full readiness only for our deploying 
units. These are ready for full spectrum operations, but we are 
compromising the readiness of those ships and aircraft that we 
will have to surge to achieve victory in a large conflict. We 
have also curtailed our modernization in a number of areas 
critical to staying ahead of our potential adversaries.
    One more related point. Mr. Chairman, this highlights a 
point you brought up. Your Navy thrives on long-term stability, 
and when putting together shipbuilding plans, it is necessary 
to think in terms of decades. While I know we are mostly here 
to talk about the current challenges, I feel I must say I was 
struck by the recent Congressional Budget Office report 
updating their long-term budget and economic outlook. In it, 
they predict that within the decade, discretionary spending, 
which includes defense, will drop to the lowest levels in more 
than 50 years. It makes crystal clear that it is vital that we 
all dive in and get to work on this problem now for the 
security of our country.
    In terms of a solution, we must work as partners. On one 
hand, we must work to set sufficient resource levels and 
restore stability to the budgeting process. On the other hand, 
we must ensure--I must ensure that every dollar that the 
American taxpayer gives the Navy is spent as efficiently and 
effectively as possible. I am committed to meeting my 
responsibilities here and in partnering with you as we go 
forward.
    Together with our sister services, your Navy is here to 
protect our great Nation. Your sailors and civilians continue 
to do everything that is being asked of them, even as the 
demands continue to grow. Working together with you, I am 
committed to finding a way to address these challenges.
    Thank you, sir, and I look forward to your questions.
    [The prepared statement of Admiral Richardson follows:]

            Prepared Statement by Admiral John M. Richardson
    Mr. Chairman, Ranking Member Reed, and distinguished members of the 
Armed Services Committee, thank you for the opportunity to discuss the 
Navy's current and future fiscal needs. I have appeared before you and 
your colleagues in the Congress multiple times to tell this story over 
the last 14 months; unfortunately, little has changed during that time. 
The gap between the demands the Navy is facing and the solutions 
available to address them is growing, and remains my deepest concern. 
As has always been true, each of the Military Services seeks to find 
the best balance between readiness for today's operations and ensuring 
adequate preparation for the future. The solution required to establish 
the best balance includes two broad dimensions: how much resources are 
provided, and how Navy uses those resources to best effect.
    Regarding how much resources are provided, there is no question 
that the fiscal limits imposed by the Budget Control Act (BCA), 
application of the sequester mechanism, and even the slightly relaxed 
limits in the Bipartisan Budget Act have made finding this balance much 
more difficult. The Navy has seen increasing pressure on its budget 
since President's Fiscal Year (FY) 2014 request. Against that baseline, 
our funding has been cut by $30 billion, to include a $5 billion 
reduction reflected in the pending fiscal year 2017 proposal.
    Reduced funding levels are just one of aspect of the ``triple 
whammy'' that the Navy faces. Those cuts come at a time when continued 
mission demands result in high operational tempo, and there is 
persistent uncertainty about when budgets will be approved. The 
combination of these factors has resulted in Navy incurring substantial 
``readiness debt,'' just like carrying a debt on a credit card.
    The operational demands on the Navy remain high. The maritime 
security environment is becoming increasingly congested and 
competitive, when technology is advancing and being adopted at 
unprecedented rates, and when competition in the information domain is 
permeating every aspect of our existence. China and Russia are 
leveraging these trends to expand both their capabilities and capacity, 
and are making the maritime competition felt both at sea and in the 
air. North Korea's missile programs continue to advance and their 
provocations persist. Iranian forces vacillate between professional and 
more threatening actions on the sea, raising the potential for 
miscalculation, and ISIL continues to demonstrate its ability to 
threaten America and its interests.
    In response to these challenges, the Navy's sustained operational 
tempo has been high. To meet demands, the Navy continues to extend 
deployments and stress our platforms beyond projections. Our analysis 
from the last 15 years of conflict shows that a seven-month deployment 
is sustainable. But between late 2013 and the end of 2015, the average 
deployment for our carrier strike groups was nine months. We are 
currently taking steps to return to our seven-month goal as rapidly as 
possible, but the need to support the fight against ISIL recently led 
us to extend the deployments of the USS Harry S. Truman and USS 
Theodore Roosevelt Carrier Strike Groups to eight and eight and a half 
months respectively.
    The effects of this high operational tempo manifest themselves 
through increased wear and tear on ships, aircraft, and people. As we 
conduct much-needed repairs, the average amount of work needed for the 
34 ships currently in private shipyards is exceeding our projections by 
35 percent. For aircraft, our planned maintenance in depot work periods 
for legacy F/A-18s is taking 345 days to return them to safe flying 
status, almost double the 180 days we had planned. This results from 
extended operations and increased use of our systems, which causes 
material conditions to degrade faster than anticipated. Longer 
maintenance cycles have operational implications, and often have a 
cascading effect. Aircraft carrier strike group deployments are just 
one example: last year, the USS Dwight D Eisenhower's scheduled dry 
dock repairs had to be extended by nine months. In order to meet 
mission requirements, the USS Harry S Truman's maintenance period was 
cut short so she could deploy in place of Eisenhower. The deferred work 
on the Truman will now be rolled into her upcoming maintenance period 
that begins later this month. For surface combatants, the Congress is 
currently considering reprogramming actions that will help us to 
address cost growth and support planned maintenance availabilities for 
three destroyers in this fiscal year, but sustained budget pressure and 
higher than expected maintenance volume has already led to delaying an 
attack submarine maintenance period beyond this fiscal year.
    Our people are also feeling the strain. While we continue to meet 
both our recruiting and retention goals in the aggregate, these numbers 
mask lower retention for certain heavily stressed specialties like 
SEALs (26 percent less than the goal from 2013 to 2015) and surface 
nuclear officers (14 percent less than the goal over the same period). 
Navy aviation is another area where this is a concern. We are seeing 
declines in officer retention for multiple grades, and bonuses are not 
proving fully effective. Though we are still able to meet our manning 
needs, these trends are particularly worrisome given the projected 
increases in civilian aviation hiring. This fraying of the team 
represents a grave threat to our future. We ask a lot of our sailors, 
and they expect very little in return. At a minimum, we owe them the 
ability to sustain a personal and family life as they pursue their Navy 
careers.
    Constrained resources, reduced funding levels, combined with 
operational and related maintenance challenges, have been exacerbated 
by budget uncertainty. Building and maintaining high-end ships and 
aircraft requires long term stability and commitment. Without it, costs 
grow and work takes longer. Skilled workers leave the workforce--many 
don't return. Private industry defers investments in necessary process 
improvements. Despite these obstacles, recovery from our current 
maintenance backlog is underway--but it will take time. We must find a 
way to restore the trust and confidence that underpin the crucial 
relationship with our acquisition and maintenance workforce. Our 
ability to achieve true effectiveness and efficiency has been 
undermined by budget instability, workforce limitations, and eight--now 
likely nine--straight years of budget uncertainty and continuing 
resolutions.
    The impact of continuing resolutions is significant. Navy leaders 
have essentially been managing an enterprise, with a budget the size of 
a ``Fortune 10 Company,'' in what amounts to three fiscal quarters per 
year. This compromises our mission, and drives inefficiency and waste 
into all that we do. For example, a short term continuing resolution 
requires us to break what would otherwise be single annual contract 
actions into multiple transactions. This results in a 20 percent 
increase in the overall number of funding documents for activities like 
base support and facilities maintenance, and fails to take advantage of 
savings from contractors who could better manage their workload and 
pass on lower costs to the Navy. These redundant efforts drive 
additional time and cost into the system, for exactly the same output.
    As our first priority, Navy leaders ensure that every single unit 
we send forward on deployment is fully prepared to conduct its mission. 
Doing so at current budget levels forces difficult choices about 
readiness levels of the force we have in reserve, and the resultant 
length of time that would be needed if we are called upon to ``surge'' 
that force in response to a large conflict or emergent contingency. For 
example, we are falling short in the numbers of ready aircraft and the 
parts to support them. This means it will take more time and training 
if there were a need to push them forward in response to a crisis. We 
have also been forced to rely upon contingency funding to augment our 
base budget. For example, our fiscal year 2017 budget proposal funds 
only 20 of the 24 steaming days per quarter for non-deployed unit 
training and readiness--the four remaining days are reflected in our 
contingency request. If contingency funding is curtailed, the loss of 
steaming days will directly impact the surface fleet's training and 
readiness to conduct exercises at sea for basic, intermediate, and 
advanced training.
    The Navy's uncompromising commitment to preserving the readiness of 
the forces deploying today also affects investments in our future 
readiness, as reflected in our modernization accounts. Some examples of 
this tension include lower funding for Counter Electronic Attack Kits 
to defeat high end threats; continued procurement for next generation 
F-35C aircraft; additional advanced tactical cryptologic and 
cryptologic support tools; additional AIM-9X missiles; and a modernized 
DDG combat system that leverages the latest advances in attack 
capabilities. These are critical modernization capabilities that are 
currently not funded at desired levels.
    My top modernization priority, and greatest concern, is adequate, 
stable funding for the Ohio Replacement Program (ORP) while still 
providing a fleet that will meet other important Navy missions.
    In the immediate future, January 2017 is planned to be a major ORP 
milestone when we transition from research and development to ship 
construction funding in order to conduct detailed design work. The 
absence of an approved budget puts at risk this transition, and the 
Program as a whole. If we cannot find a way to begin this work by the 
beginning of the calendar year, ORP will almost certainly experience 
unnecessary cost growth, as well as experience delays that threaten the 
conduct of an existential mission that we have covered continuously 
since 1960. I welcome the opportunity to provide any additional 
information to further explain the imperative of keeping this program 
on track.
    I have other concerns as well. We foresee future shortfalls in our 
Attack Submarines, Future Surface Combatants (including Destroyers and 
Frigates), in strike fighter aircraft, and in facilities. We are taking 
steps to mitigate all of those shortfalls as best we can. For example, 
a major part of our aviation ``get well plan'' rests on a multifaceted 
strategy that involves extending the service lives of the F/A-18s; 
improving the capabilities of the F/A-18 Super Hornets to address 
current and emerging threats; getting F-35s built on time, in 
sufficient numbers, and out to the fleet; and pushing unmanned aircraft 
out to the flight deck. Our MQ-25 Stingray program is the leading edge 
of this effort, and I am driving this as quickly as possible so we can 
capitalize on the step increase in capability unmanned systems will 
offer us in the future.
    Another area of concern is our shore infrastructure. It is aging, 
and we currently carry a facilities maintenance backlog of over $5.5 
billion--an amount that is growing at $600 million annually. We are 
prioritizing funding those projects that resolve safety deficiencies 
and repair the most mission critical facilities, but this is far short 
of what is needed to support a reasonable quality of life and work for 
the sailors, civilians, and families that make up our Navy team.
    The other important dimension to closing the gap between mission 
requirements and solutions is how the Navy uses our resources to best 
effect. As I've previously testified, budget constraints are forcing 
choices that limit our naval capabilities in the face of growing 
threats. I look forward to providing any additional support I can to 
inform discussions about how best to address those constraints, and 
would be especially grateful for any solution that offered greater 
budgetary stability.
    But I also share some of the responsibility to address the gap 
between Navy missions and the resources we have to address them. While 
I do not write the amount of the Navy's check, I can ensure that we are 
spending what we get to greatest effect. I see changing how we do 
business to be faster and more efficient as both a moral and a 
warfighting imperative.
    To that end, I am working to the limits of my authority to bring 
greater speed to our acquisition process without compromising the 
discipline ingrained in our practice. We are increasing our emphasis on 
rapid prototyping and experimentation and simplifying our bureaucracy 
to the maximum extent possible, seeking input and ideas not only from 
within but from our traditional and non-traditional industry partners. 
This will save money. Even more importantly, it will put capabilities 
in the hands of our sailors that they need to remain superior to 
adversaries who are gaining on us in many key technology areas.
    Given the pace at which things are changing, I also owe you hard 
thinking about our future needs and how we can best address them. We 
are nearing completion of our assessment of future fleet size, 
composition, and capabilities, which is being updated to reflect 
contemporary missions and threats. We are also engaged in a wide set of 
studies, wargames, experimentation, and analysis to think through new 
ways to ensure the Navy retains our advantage in an environment that is 
dynamic, uncertain, and accelerating everywhere we look. We have 
clarified roles and responsibilities for thinking through the near, 
mid, and far term that will bring greater coherence and rigor to our 
plans, and are taking a more strategic approach to allocating the 
resources in support of those efforts. And we are doing all of this at 
the same time we are reducing our headquarters staffs, consistent with 
your direction. I am convinced that these adjustments, while painful, 
will force us to become more creative and effective as we continue to 
downsize.
    In sum, taking all of factors into account, the fiscal year 2017 
budget request represents our best proposal to strike the appropriate 
balance between today and tomorrow, given available funding. The Navy's 
budget addresses our gaps on a prioritized basis, takes measured steps 
to improve current readiness, and starts to accelerate investments in 
some of the capabilities most important to maintaining a competitive 
advantage over our adversaries.
    Looking forward, I remain deeply concerned about the gap between 
what the American people expect of their Navy now and for the 
foreseeable future, and the available resources to deliver on those 
expectations. Your Navy team has always and will always do everything 
that is asked of them, and every ship and aircraft being sent forward 
is fully prepared to conduct its mission. The strain on the depots, 
labs, shipyards, logisticians and others that allow us to maintain this 
standard--which we will not compromise--is substantial. We are taking 
every step we can to relieve it. For the Navy, the size of this gap is 
likely to grow as the nation's strategic challenges increase in number 
and complexity, and as resources in both the short and longer term 
remain tight. A return to reliable and predictable budgeting is equally 
important. To fulfill our responsibility to be effective stewards of 
the resources we receive, we are doing all that we can to bring to bear 
the ingenuity and creativity that has characterized your Navy 
throughout its history. Thank you, and I look forward to your 
questions.

    Chairman McCain. General Neller?

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

    General Neller. Chairman McCain, Ranking Member Reed, 
distinguished members of the committee, thank you for the 
opportunity to appear today and talk about your marines. I 
thank you for your support of marines, sailors that serve with 
marines, our civilian marines, and our families.
    Marines have a unique perspective on readiness based on the 
intent of Congress. We are the Nation's force in readiness, and 
being ready is central to our identity as part of the Navy/
Marine Corps team.
    That said, Mr. Chairman, my understanding of the purpose of 
this hearing is for the Service Chiefs to provide our best 
military advice on our current and future readiness challenges. 
My experience in the Marine Corps has been to make do with what 
we have been given. That is just the way I was raised, and I 
have never been comfortable asking for anything more. I also 
understand there are many competing fiscal requirements that 
this Congress has to deal with.
    However, based on the current top line in the future budget 
projections and though we are meeting our current requirements, 
I believe we are now pushing risk and the long-term health of 
the force into the future. As an example, we submitted an 
unfunded priority list of approximately $2.6 billion, which is 
the largest we have ever submitted.
    The global security environment drives our requirements, 
and requirements equal commitments. Your marines are as busy 
and as committed now as during the height of operations in Iraq 
and Afghanistan. Current OPTEMPO balanced against fiscal 
reductions, instability of continuing resolutions, and the 
threat of sequestration during the past few years have driven 
us to critically review the allocation of our resources in 
order to meet these commitments.
    We, like the other services, make tough choices every day, 
and we are facing our readiness challenges head on. Our 
readiness has been to deployed and next-to-deploy units. 
Current readiness shortfalls in aviation, facility sustainment, 
future modernization, retention of critical skills, and 
building the depth on our ready bench forces at home are our 
primary concerns.
    That said, we have not stood idly by in planning for our 
future. I am confident we have identified our requirements for 
readiness recovery and improvements, and we are making progress 
slowly, but progress nonetheless. Our Force 2025 initiative is 
identifying the requirements of our future Marine Corps, 
balanced against fiscal reality. Force 2025 addresses current 
capability shortfalls, sustainment of capacity, and future 
manpower requirements to fight on the 21st century battlefield.
    Fiscal constraints necessarily bring tradeoffs, and to 
paraphrase one of my predecessors, we will give you the most 
ready Marine Corps the Nation can afford. The Marine Corps 
remains good stewards of what we are given, and we will 
generate the maximum readiness possible with the resources we 
are provided. We will create and generate a Marine Corps that 
is agile, ready, and lethal.
    Working side by side with Congress, the other services, and 
our Navy shipmates especially, you can count on your marines to 
meet and exceed the standards the American people have set for 
us.
    I look forward to your questions.
    [The prepared statement of General Neller follows:]

             Prepared Statement by General Robert B. Neller
                              introduction
    The landscape and pace of the 21st century demands a ready Marine 
Corps to buy time, decision space, and options for our Nation's 
leaders. All Marines, past and present, understand the expectations of 
the American people and their elected leaders--to answer the Nation's 
call, fight, and win. Marine Corps capabilities and the posture of our 
force would not be possible without the support and actions of the 
Congress. A balanced Marine Corps is a force that is healthy, has a 
sustainable operational tempo, is able to train with the needed 
equipment for all assigned missions, and has a reasonable quality of 
life across the force. The result of this balance is optimally trained 
and equipped forces that deploy when planned, with the ideal quantity 
of forces (capacity), on the required timeline with a steady reserve of 
non-deployed forces that can surge to meet large scale contingencies 
and operational plans. 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 in the near term, and 
to modernize to achieve future readiness.
                              our threats
    Multi-dimensional security threats challenge all aspects of our 
national power and security. The evolution and expansion of the 
information domain, advanced robotics, and improved weapons 
technologies are causing threats to emerge with increased speed and 
lethality. While your Marines and Sailors have been and remain 
operationally committed 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 modernize the force. We continue to make tough choices and balance 
our available resources to meet current operational commitments and, at 
the same time, achieve tomorrow's readiness.
                             our readiness
    Marines have a unique perspective on 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 must 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 emerging technologies and threats of 
the 21st century demand a modernized force with new capabilities that 
complement our traditional warfighting skills and equipment. The fiscal 
reductions and budget instability of the past few years have negatively 
impacted our current and future 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 cost. The current 
operational risk to the Marine Corps is tangible.
                   amphibious warships and operations
    Decreased quantity and availability of Navy Amphibious warships, 
the preferred method of deploying and employing Marine Corps 
capabilities, have resulted in establishing land-based Special Purpose 
Marine Air Ground Task Forces (SPMAGTFs) to compensate so the Marine 
Corps can meet operational commitments and ensure timely response to 
crises. Where an Amphibious Ready Group/Marine Expeditionary Unit (ARG/
MEU) may have been the response force of choice in the past, these 
SPMAGTFs have been called on to conduct operations in support of 
Geographic Combatant Commands.
    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. 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.
    The Navy and Marine Corps Team require 38 amphibious warships, with 
an operational availability of 90 percent, to support two Marine 
Expeditionary Brigades, and to provide the Nation a forcible entry 
capability. The Marine Corps fully supports the efforts of the 
Secretary of the Navy and Chief of Naval Operations 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 LXR (using the LPD hull form) represent the Department of the 
Navy's commitment to a modern expeditionary fleet.
                            ``ready bench''
    The Marine Corps will continue to prioritize the readiness of 
deployed and next-to-deploy units over non-deployed units. Our 
deploying units are ready, while our non-deployed commands lack 
sufficient resources to meet the necessary personnel, training, and 
equipment readiness levels to respond today. 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. Commitment of regional SPMAGTFs removes 
regimental-level headquarters and associated ground, aviation, and 
logistics elements from their parent Marine Expeditionary Force, which 
commits leadership and forces of what previously was the ``ready 
bench.'' This requirement does not allow these units the stability or 
time for additional training, professional development, and readiness 
to respond to a major contingency.
                                aviation
    For several years, our aviation units have been unable to 
adequately meet our aircrew training requirements, primarily due to 
Ready Basic Aircraft (RBA) shortfalls. To remedy this critical 
situation, we have developed an extensive plan to recover or improve 
readiness across every Type/Model/Series (T/M/S) in the current 
inventory, while continuing the procurement of new aircraft to ensure 
future readiness. In executing this plan, we are seeing slow but steady 
improvements in aviation readiness, but the plan requires sustained 
funding and time. The recovery and sustainment of our current fleet is 
necessary to support both training and warfighting requirements. Each 
T/M/S requires attention and action in specific areas: maintenance, 
supply, depot backlog, and in-service repairs.
    Operational tempo has increased the utilization and stretched the 
sustainability of our most in-demand aviation assets. To continue to 
meet operational commitments, we are reducing our MV-22 footprint from 
12 to 6, and our KC-130J footprint from 4 to 3 for our SPMAGTFs in 
CENTCOM and AFRICOM. To reduce risk in the stressed USMC TACAIR force, 
we have reduced F-18 squadron aircraft levels from 12 to 10.
    Over the past year, the Marine Corps committed nearly every MV-22 
Osprey pilot to source all of its global commitments, and the increased 
utilization rates on these airframes affects the longevity of their 
service life. Exacerbating our concerns in aviation is a potential 
exodus of pilots and maintenance personnel to join civilian airlines. 
We anticipate requiring additional fiscal resources in future budgets 
to provide bonus incentives to remain competitive and keep the talent 
we have invested in. With the continued support of Congress, Marine 
Aviation can recover its readiness by re-capitalizing our aging fleet, 
while at the same time procuring new aircraft to meet our future needs 
and support our ground forces.
                             ground forces
    The Marine Corps is also executing readiness initiatives with our 
ground equipment. Our post-combat reset strategy and Equipment 
Optimization Plan (EOP) are key components of the overall ground 
equipment ``Reconstitution'' effort. The Marine Corps has reset 90 
percent of its ground equipment, with 61 percent returned to the 
Operating Forces and our strategic equipment programs. This strategic 
war reserve is our geographically prepositioned combat equipment, 
located 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 2019. This service-level strategy would not have 
been possible without the continued support of Congress and the hard 
work of your Marines. That said, our ground forces require 
modernization to replace legacy capabilities in addition to development 
of new capabilities to be effective on the modern battlefield.
                    bases, stations, and facilities
    Improving the current state of our facilities is the single most 
important investment to support training, operations, and quality of 
life. The Marine Corps has developed a Facility Sustainment, 
Restoration, and Modernization (FSRM) initiative to achieve this 
requirement. Our 2017 budget proposes funding FSRM at 74 percent of the 
OSD Facilities Sustainment Model. This reduced funding level is an area 
of concern because our bases and stations are more than where we work 
and live--they are platforms from which we train and generate 
readiness. The sustainment of military construction (MILCON) funding is 
crucial to managing operational training and support projects. As we 
transition to new capabilities and realign our forces in the Pacific, 
adequate MILCON is a key enabler for the Marine Corps' future success.
    Readiness is not just in our equipment supply and maintenance, but 
also 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 
of our leadership; standards-based inspections; evaluated drills and 
training exercises; and an understanding that the call to respond to 
crises can come at any time. Our Marines and Sailors know we must be 
ready and able to answer.
                                training
    Organizing and executing high quality training is not easy. It 
takes time, deliberate thought, and effort. Our approach to training is 
to emphasize the basics: combined arms, competency in the use of our 
weapons and systems, and expeditionary operations; but also to 
reemphasize operations in a degraded command, control, communications, 
computers and intelligence (C4I) 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.
                             modernization
    The Marine Corps must continue to evolve. The change we see in the 
21st century is as rapid and dramatic as the world has ever known. The 
Marine Corps' modernization and technology initiatives must deliver 
future capabilities and sustainable readiness. The Marine Corps must 
continue to develop and evolve the Marine Air Ground Task Force 
(MAGTF), ensuring it is able to operate in all warfighting domains. To 
do so, Marines are re-invigorating experimentation of new concepts in 
order to advance our capabilities.
    The ability to properly plan achieves stability and predictability 
for our personnel and families, ensures ample time to train, and 
fosters development of our small unit leaders. Effective planning 
produces unit cohesion and leadership in our operating forces, and 
financial predictability for our necessary modernization programs. The 
Marine Corps' goal is to retain our tactical advantage across the range 
of military operations with the most capable systems today and in the 
future. 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 range of 
military operations.
    Modernization is a key part of our 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. The Marine Corps has 
important combat programs under development that need your continued 
support. The Amphibious Combat Vehicle (ACV) will replace our aging 
Amphibious Assault Vehicle (AAV), which is now more than 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 M1A1 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). The 
increasingly lean budgets of fiscal year 2016 and fiscal year 2017 will 
provide increased readiness challenges and cause shortfalls in key 
areas.
                             our challenges
    As recently as the 1990s, the Marine Corps' operational tempo was 
relatively predictable and sustainable (1:3 deployment-to-dwell.) 
Marines were home for approximately 18 months and deployed for 6 
months. There was a ``healthy bench'' of non-deployed forces to surge 
in time of major contingency, such as Operations Desert Shield and 
Desert Storm. Since the formal conclusion of Operations Iraqi Freedom 
and Enduring Freedom, the Marine Corps, like the other Military 
Services, has not had the benefit of an ``interwar'' period to reset 
and reconstitute our force. Fifteen years of continuous combat have 
created a high operational tempo, adding significant stress on the 
force, specifically on our people, our equipment (particularly 
aviation) and our readiness. There has not been a post-war intermission 
to reset the force.
    Today's Marines (and Sailors) are deploying at a rate comparable to 
the height of our commitment during Operations Iraqi Freedom and 
Enduring Freedom (1:2 deployment-to-dwell) with an end strength of only 
183,500. The stress on our force will continue as we decrease to the 
currently-planned end strength of 182,000. To mitigate our current 
operational tempo, return to a sustainable 1:3 deployment-to-dwell 
ratio, retain necessary combat capability, and grow future 
capabilities, the Marine Corps will need to be larger, as such our end 
strength needs to be revisited.'' Requirements will likely drive the 
future force to consist of more senior Marines overall. A more senior 
force will be more expensive to maintain. Without an end strength 
increase and associated funding we will be forced to trade capacity 
and/or capability to build the force we believe we will need.
    The Marine Corps is now on its way down to 182,000 marines by the 
end of fiscal year 2017. 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 maintain 
the skill sets we need today, and develop future skill sets with 
quality Marines.
    The character of the 21st century is rapid evolution. Our potential 
adversaries have evolved, and it is imperative that we keep pace with 
change. 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 114th 
Congress provided sufficient resources to support the Marine Corps' 
near-term readiness, and we thank the Congress for this fiscal 
stability. However, current funding levels increasingly stretch the 
Nation's Ready Force. This is not healthy for your Marine Corps or for 
the security of our Nation as we prepare for future readiness.
    Unstable fiscal environments prevent the deliberately planned, 
sustained effort needed to recover current readiness of our legacy 
equipment in the near term, and to modernize in the longer term. The 
harmful effects of ``sequestration'' are well known and will continue 
to harm the Marine Corps if they continue. A BBA II budget that allows 
flexibility in distributing funding cuts according to service 
discretion is certainly preferable to sequestration, but still does not 
meet our readiness requirements. A Service Chief manages uncertainty 
and risk through planning. The 2017 budget has yet to be approved. 
Decisions in the 2017 budget will affect the 2018 program, which will 
be impacted by sequestration or BCA caps if the BCA is not repealed.
    Threats to our Nation remain constant. The Services have become all 
too accustomed to Continuing Resolutions (CR). A short-term CR of three 
months or less is undesirable but manageable, but a longer duration CR 
dramatically increases risk to an already strained fiscal environment 
and disrupts predictability and our ability to properly plan and 
execute a budget and a 5-year program.
                               conclusion
    The Marine Corps will continue to provide trained and ready forces 
to meet current operational requirements. However, without consistent 
sustained funding we cannot rebuild and recapitalize our readiness. We 
have readiness recovery and future modernization plans to address 
aviation, ground forces, and facilities, bases and stations. We can re-
establish our ``ready bench'' to ensure the Marine Corps has greater 
depth to respond to crises or contingencies. With the continued support 
of Congress, the Marine Corps can maintain ready forces today and 
modernize to generate readiness in the future. The wisdom of the 82nd 
Congress, and reaffirmed by the 114th Congress, remains valid today--
the vital need of a strong force-in-readiness. The Marine Corps remains 
committed to be ready to go when we are called.

    Chairman McCain. Thank you, General.
    General Goldfein?

STATEMENT OF GENERAL DAVID L. GOLDFEIN, USAF, CHIEF OF STAFF OF 
                  THE UNITED STATES AIR FORCE

    General Goldfein. Thank you, Chairman McCain, Ranking 
Member Reed, and distinguished members of the committee. It is 
an honor to be here and to be a member of this JCS [Joint 
Chiefs of Staff] team, serving beside men I have known for 
years, fought with, and admire.
    In the interest of brevity, Chairman, you and Ranking 
Member Reed asked five key questions in your letter to us 
requesting this hearing.
    You asked, what are the Air Force's modernization needs? We 
need to maintain stable, predictable funding for the F-35, the 
KC-46, and the B-21 in order to outpace our adversaries. At the 
same time, shoulder to shoulder with the Navy, we must 
modernize our aging nuclear enterprise. While we continue to 
extend the life of our existing fleets, we need the flexibility 
to retire aging weapon systems and reduce excess infrastructure 
in order to afford the technology needed to maintain our 
advantage, given adversary advancements in satellite-enabled 
precision, stealth, cruise and ballistic missiles, ISR 
[intelligence, surveillance, and reconnaissance], and other 
anti-access/area denial capabilities that continue to 
proliferate worldwide.
    You asked, how will the Air Force regain full spectrum 
readiness? It starts with people. Our Bipartisan Budget Act end 
strength totals 492,000 airmen for fiscal year 2017, 317,000 of 
which are Active Duty. Based upon current and projected global 
demands for air power to deter and, if required, defeat 
challenges presented by China, Russia, Iran, North Korea, and 
violent extremism, we respectfully request your support to grow 
our force to 321,000 Active Duty airmen by the end of fiscal 
year 2017. This remains our top priority in the current budget 
request.
    You asked, how will the Air Force maintain its 
technological edge? We are laser-focused on fighter, tanker, 
and bomber recapitalization, nuclear modernization, preparing 
for a war that could extend into space, increasing our 
capability and capacity in the cyber domain, and leveraging and 
improving multi-domain and coalition-friendly command and 
control as the foundation of future combined arms operation.
    You asked, how will your requirements impact the budgetary 
top line from fiscal year 2018 onward? We will be forced to 
continually make strategic trades to simultaneously sustain 
legacy fleets engaged in the current fight while smartly 
investing in modernization and the future technologies that 
will be required to meet combatant commander demands in the 
information age of warfare. Repealing sequestration, returning 
to stable budgets without extended continuing resolutions, and 
allowing us the flexibility to reduce excess infrastructure and 
make strategic trades are essential to success.
    Finally, you asked, what solutions are available for 
mitigating growing costs such as new acquisition authorities or 
innovative solutions to maintaining our military? As the chief 
requirements officer, I review every major program to ensure 
requirements are clearly published and sustained throughout the 
program and by personally signing documents leading to 
milestone A and B decisions to ensure we meet cost, schedule, 
and performance standards for our warfighting commanders. 
Additionally, we aligned our continuous process improvement 
efforts with DOD's [Department of Defense] Better Buying Power 
3.0 initiatives, as well as Secretary James' Bending the Cost 
Curve activities.
    In summary, all of our portfolios depend on steady, 
predictable, and timely funding, and the flexibility to make 
key trades to balance capability, capacity, and readiness. 
Current global security demands remind us that America's joint 
team must be ready to engage anytime, anywhere across the full 
spectrum of conflict, all while defending the Homeland and 
providing a safe, secure, and reliable strategic nuclear 
deterrent. America expects it. Combatant commanders require it. 
With your support, our soldiers, sailors, airmen, and marines 
will continue to deliver it.
    We look forward to your questions.
    [The prepared statement of General Goldfein follows:]

            Prepared Statement by General David L. Goldfein
                              introduction
    In today's world, credible and effective 21st century deterrence 
demands both properly-sized nuclear capabilities and multi-domain, 
multi-functional Joint Forces. Across the spectrum of national security 
challenges the U.S. faces--China, Russia, Iran, North Korea, and 
Violent Extremism (Terrorism)--controlling and exploiting air, space, 
and cyberspace is foundational to Joint Force success.
    Against any of these global challenges, today's airmen are 
organized, trained, and equipped to both deter and/or defeat these 
threats while simultaneously defending the homeland and sustaining a 
safe, secure, and effective nuclear enterprise. However, satellite-
enabled precision, stealth, cruise and ballistic missiles, and other 
military technology proliferate worldwide. In short, the technology and 
capability gaps between America and our adversaries are closing 
dangerously fast.
                             modernization
    Our curtailed modernization resulted in procuring approximately 175 
fewer fighter aircraft per year than we did 25 years ago. As our 
challengers employ increasingly sophisticated, capable, and lethal 
systems, we must modernize to deter, deny, and decisively defeat any 
actor that threatens our homeland and national interests. In order to 
stall the shrinking capability gap, the Air Force remains committed to 
our top three conventional acquisition priorities: the F-35A Joint 
Strike Fighter, the KC-46A Pegasus, and the B-21 long-range bomber.
    At the same time, we are focused on modernizing the nuclear 
enterprise. The last major recapitalization of U.S. nuclear forces 
occurred in the 1980s and many of these systems face substantial 
sustainment and reliability challenges. While these forces are safe, 
secure, and effective today, significant investment will be required in 
the coming years to ensure they remain ready and credible for the 21st 
century.
    To address modernization challenges and ensure a reliable nuclear 
deterrent for the Joint Force, the Air Force requires sustained 
funding. The fiscal year 2017 budget request supports a number of 
improvements, including recapitalizing legacy bombers with the B-21, 
replacing aging Air-Launched Cruise Missiles with the Long Range 
Standoff weapon, modernizing Intercontinental Ballistic Missiles 
(ICBMs) with the Ground Based Strategic Deterrent program, and critical 
investments across the Nuclear Command and Control (NC3) enterprise 
that are required to integrate and employ all three legs of the nuclear 
triad.
    Additional modernization efforts will allow us to balance new 
capabilities that can defeat future threats with legacy fleets meeting 
current threats. In fiscal year 2016, we invested in B-1 service life 
extension to maintain this strategic capability against evolving 
threats. In fiscal year 2017, we plan to modernize and sustain the 
three combat-coded B-1 squadrons with additional precision weapons and 
digital data links. Additionally, we are approaching our second service 
life extension on F-16s. High demand for our F-15Cs and F-15Es drove 
structural fatigue and require consistent funding for repairs.
                        full-spectrum readiness
    The Air Force defines full-spectrum readiness as the right number 
of airmen--properly organized, trained, equipped, and led--to either 
lead and/or support Joint Task Forces (JTFs) in both contested and 
uncontested environments. In order to meet the full requirements of our 
Defense Strategic Guidance and current operation plans, our combat 
squadrons must be full-spectrum ready.
    To develop airmen properly trained to meet the Joint Force demand 
signal, we are funding flying hours to their maximum executable level. 
In addition, we continue to invest in joint and coalition combat 
exercises such as Red Flag and Green Flag.
    Weapon System Sustainment (WSS) costs continue to increase due to 
the complexity of new systems, the challenges of maintaining old 
systems, and operations tempo. We fly our aircraft to their full 
service life and beyond which requires increased investment in 
preventive maintenance and manpower. WSS thrives on sufficient, stable, 
and predictable funding which facilitates planning to meet future 
challenges.
    With your help, the Air Force aggressively responded in fiscal year 
2016 as a pivot to improve readiness conditions and increased our 
manning by over 6,000 personnel. However, there is a lag between 
recruiting airmen and presenting fully-trained airmen to squadrons. The 
Air Force surged recruiting in fiscal year 2016 and will finish the 
fiscal year by restoring our Active Duty force to 317,000 airmen. 
Maintaining the force remains our number one funding priority in fiscal 
year 2017.
    We project airpower from our bases, and our infrastructure must 
keep up with modernization and recapitalization to sustain a ready 
force. Today, the Air Force maintains infrastructure that is excess to 
operational needs. We have 500 fewer aircraft than we had 10 years ago, 
yet they are spread across the same number of bases. This arrangement 
is inefficient with aging, unused, and underutilized facilities 
consuming funding that should be redirected to readiness and 
modernization. Reducing and realigning Air Force infrastructure would 
best support Air Force operations. Therefore, we support a new base 
realignment and closure evaluation.
    To put it simply, Defense Strategic Guidance places demands on the 
capability and capacity of the Air Force that consume its resources in 
today's fight and exceed our capacity to address readiness requirements 
for a high-end fight against a near-peer adversary. If airmen are 
unprepared for all possible scenarios, it could take longer to get to 
combat, jeopardize our ability to win, and cost more lives.
             maintaining the military's technological edge
    Air forces that fall behind the technology curve fail, and if the 
Air Force fails, the Joint Force fails. Thus, we must team with our 
joint partners, labs, and industry to leverage existing technology 
while developing new technology to maintain our edge. Recently, our Air 
Combat Command Commander declared F-35A Initial Operating Capability--
meaning our Joint Strike Fighters are ready for limited combat. At the 
same time, our F-22s are in high demand in the Central, Pacific, and 
European theaters due to the increasingly aggressive and 
technologically advancing nature of our potential adversaries. 
Therefore, we must modernize our fleet to stay ahead of the evolving 
threat with continued investment in the F-35A, along with a request for 
additional funds to upgrade our F-15Cs with modern sensor and 
electronic warfare suites, and advanced air-to-air weaponry. Fourth 
generation fighters play a critical warfighting role as we develop, 
test, and field fifth generation technology.
                  topline: fiscal year 2018 and beyond
    The Air Force will be challenged to sustain legacy fleets and 
simultaneously invest in developing and procuring the systems required 
to counter threats in fiscal year 2018 and beyond. Given these 
challenges, and current funding levels, we initiated a series of in-
depth enterprise-wide capability studies of the Air Force's five core 
missions. Our first effort, Air Superiority 2030, identified a need for 
increased research and development in advanced capability and capacity. 
I fully intend to collaborate with Congressional, Department of 
Defense, and Air Force leaders to build a force capable of achieving 
our national strategic objectives in the more advanced threat 
environment of the future.
    In today's contests, decision-quality information is paramount--and 
combatant commanders simply cannot get enough Intelligence, 
Surveillance, Reconnaissance (ISR). In order to gain and maintain the 
ISR advantage, the Air Force must find new ways to integrate 
capabilities across multiple domains (air, land, sea, space, and 
undersea) and cyberspace. Our next enterprise-wide capability review 
will explore ISR and multi-domain command and control operations. With 
the right mix of people, platforms, and resources, we will meet Joint 
Force requirements across the full spectrum of conflict.
    Meanwhile, space and cyberspace threats continue to grow. In space, 
our Global Positioning System provides the world's gold standard in 
positioning, navigation, and timing. Our 37 existing Global Positioning 
System satellites remain healthy, but they are exceeding projected 
service life. Further, their ability to provide unfettered information 
is increasingly at risk from our adversaries. To maintain this 
capability, we requested support to improve anti-jamming and secure 
access of military Global Positioning Systems. We continue to partner 
with the Joint Force on the Space Security and Defense Program and the 
Joint Interagency Combined Space Operations Center (JICSpOC) to develop 
options for a more integrated and resilient National Security Space 
Enterprise. To improve offensive and defensive cyber readiness, we 
remain on track to grow our 30 Cyber Force Mission Teams to 39 fully 
operational teams in fiscal year 2018 and continue investing in the 
Joint Information Environment (JIE).
    Air Force command and control represents the connective tissue 
among the Joint Force--providing the essential link between our Joint 
Force Air Component Commanders and the joint team. The ability to 
understand changing battlefield conditions and command friendly forces 
is central to an agile, effective combat force in today's 
transregional, multi-domain environment.
                       acquisition and innovation
    The Air Force is committed to acquisition excellence. Our costs are 
trending downward, we are meeting Key Performance Parameters for our 
major programs at a rate greater than 90 percent, and we garnered 
nearly $10 billion in ``should-cost'' savings--we are using these 
savings to secure greater capabilities and additional weapons for our 
warfighters. But there's ample room for improvement. We aligned our Air 
Force continuous improvement efforts to the Department's Better Buying 
Power 3.0 initiatives, as well as the Secretary of the Air Force's 
``Bending the Cost Curve'' effort, all of which are designed to 
strengthen our ability to innovate, achieve technical excellence, and 
field dominant military capabilities.
    In today's complex environment, rapid change is truly the new norm. 
We believe incorporating strategic agility into the Air Force 
acquisition enterprise is the way to capitalize on this dynamic 
environment. Therefore, we are focusing on five key areas: 1) strategic 
planning, prototyping, and experimentation; 2) requirements 
development; 3) science and technology; 4) modular, open systems 
architecture; and 5) acquisition workforce development. I am exercising 
the increased acquisition authorities Congress vested in the Service 
Chiefs to push these five key focus areas and drive for improved 
execution of on-going acquisition efforts and formulation of future 
acquisition strategies.
                               conclusion
    We are grateful for relief from the Budget Control Act caps in 
fiscal years 2016 and 2017. However, uncertain future budget toplines 
make it difficult to deliberately balance investments to modernize, 
recover readiness, right-size the force, win today's fight, and fully 
execute Defense Strategic Guidance. Therefore, permanent relief from 
the Budget Control Act--with predictable funding--is absolutely 
critical to rebuilding Air Force capability, capacity, and readiness 
across our portfolios. Global developments remind us that America's Air 
Force must have the capability to engage anytime, anywhere, across the 
full spectrum of conflict--all while providing a reliable strategic 
nuclear deterrent. America expects it; combatant commanders require it; 
and with your support, airmen will deliver it.

    Chairman McCain. Thank you. I thank the witnesses and thank 
you for your leadership and service to the Nation.
    I think we would all agree that the world has changed a lot 
since the initiation of sequestration. A simple question. Do 
you feel that you would have resources and ability to defend 
this Nation against present and future threats if we continue 
down this path of sequestration, beginning with you, General 
Milley?
    General Milley. Under sequestration, no, sir, I do not.
    Chairman McCain. Admiral Richardson?
    Admiral Richardson. I agree with General Milley, sir. 
Sequestration will prevent us from doing that.
    Chairman McCain. General Neller?
    General Neller. No, sir, we would not have the capability.
    Chairman McCain. General Goldfein?
    General Goldfein. The same.
    Chairman McCain. Thank you.
    Admiral Richardson, you talk about in your written 
statement how our people are feeling the strain. We continue to 
meet our recruiting and retention goals. But you go on to talk 
about SEALs. You begin to talk about surface nuclear officers 
not meeting the goals. Naval aviation is another area of 
concern. We see declines in officer retention for multiple 
grades, and bonuses are not proving fully effective.
    I guess I would ask, Admiral Richardson, General Neller, 
and General Goldfein. It is not a matter of money with these 
young pilots. Is that not true? It is a matter of being able to 
fly and operate. I mean, when we just talk about solving this 
problem with bonuses, we are never going to compete with the 
airlines because they can always up the ante. But when our 
pilots are flying less hours a month than Russian and Chinese 
pilots are, you are going to have a problem. I will begin with 
you, Admiral Richardson.
    Admiral Richardson. Sir, I agree with you. Our pilots join 
the Navy to fly naval aircraft. That is what they want to do. 
This is a much bigger problem than money. Money can help up to 
a point. We want to make sure we adequately compensate all of 
our people. There is competition, as you say. But at the heart 
of the matter, this is a highly dedicated team that wants to 
defend the Nation in high performance aircraft, and that is 
what they want to do. They want to fly.
    Chairman McCain. General Neller?
    General Neller. Sir, I would agree with that. On paper our 
situation looks a little bit better, but it does not take into 
account the experience level of those aircrew. But it is all 
about the best retention thing we can is provide modern, 
maintainable, ready-to-fly airplanes.
    But I would also say it is more than just the aircrew. It 
is also the maintainers. We are making it now on the backs of 
those sergeants and those staff sergeants out there that have 
to do work twice and to get the part from one to put it on the 
other. I am as concerned about maintainers sticking around. As 
we go to depots, we compete not just with airlines for aircrew, 
but we compete with contractors and commercial concerns for the 
marines that maintain our airplanes.
    Chairman McCain. While I have still got you, in your 
written statement, you said 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. That is a pretty strong statement, General.
    General Neller. Based on the current fiscal environment, as 
was stated I believe by all my fellow chiefs, we are all making 
trades, and those trades require us to accept risk in certain 
areas. I would like to have our parts support when you look at 
the aviation particularly, but I could say the same thing about 
ground equipment. The amount of money we are able to put 
against parts and supply support is not what we need to 
maintain our legacy aircraft.
    Chairman McCain. General Goldfein?
    General Goldfein. Sir, I approach this as a balanced 
challenge and opportunity, quality of service, and quality of 
life. Removing financial burdens through aviation bonuses 
certainly fall in the quality of life category. But what we 
have found in the past--and we have been through this before 
because airlines have hired before--is that quality of service 
is as important as quality of life. Quality of service is 
making sure that you are given the opportunity to be the best 
you can be in your chosen occupation. Pilots who do not fly, 
maintainers who do not maintain, controllers who do not control 
will walk, and there is not enough money in the treasury to 
keep them in if we do not give them the resources they need to 
be the best they can be. In my mind, readiness and morale are 
inextricably linked. Where we have high readiness, we tend to 
have high morale because they are given the opportunities to 
compete. Where we have low readiness, we have our lowest 
morale.
    Chairman McCain. General Milley, in your written statement, 
you said our goal is to have regular Army brigade combat teams 
achieve 60 to 66 percent full spectrum readiness, and I 
estimate that it will take the Army approximately four years to 
achieve that, assuming no significant increase in demand and no 
sequestration levels of funding. That is a pretty alarming 
statement when you look at the potential challenges that we are 
facing. Do you want to elaborate on that a bit?
    General Milley. Thanks, Senator.
    For 15 consecutive years, the Army has been decisively 
committed in Iraq and Afghanistan and other counterterrorist/
counterinsurgency type operations. In order to do that, we 
essentially came off of a core warfighting skills of combined 
arms maneuver against a near-peer or a higher-end threat.
    For example--just a couple of examples. An armor officer 
today, a tank officer, up through, say, the rank of major has 
very little experience in terms of maneuvering tanks against an 
opponent who has armor, very little experience in gunnery. 
Artillery battalion have not fired battalion level fires 
consistently in a decade and a half. We have to rebuild that, 
and that is going to take considerable time, effort on our 
part. We have made a lot of progress, by the way, in the last 
year.
    Chairman McCain. You cannot do it with sequestration.
    General Milley. Oh, absolutely not. Sequestration will take 
the rug out from underneath us. Absolutely.
    Chairman McCain. Well, you know, I would just like to say 
before I turn to Senator Reed at your confirmation hearings, I 
asked you to come before this committee and give us your frank 
and honest view. I appreciate the testimony here today, and I 
think it will be very helpful in our efforts to eliminate the 
effect of sequestration and give you the wherewithal that you 
need to make sure that we meet the challenges which are, as I 
said in the beginning, far more significant than they were on 
the day that sequestration began. We have got a lot of issues, 
but I appreciate the fact that you have outlined for this 
committee and I hope for the American people the necessity of 
us addressing these challenges. I thank the witnesses.
    Senator Reed?
    Senator Reed. Well, thank you very much, Mr. Chairman.
    Again, thank you, gentlemen, for your testimony. It is very 
insightful, very sobering, and also reinforces the point that 
the chairman made that we just have to move away from 
sequestration. One of the issues that has been illustrated by 
your testimony is it is not just the limits on spending. It is 
the uncertainty. Admiral Richardson, you pointed out that you 
only operate really three quarters of a year, that one quarter 
is just sort of standing around wishing and hoping. Can you 
elaborate a bit?
    Admiral Richardson. Well, sir, you know behaviors are 
modified to adapt to the reality of the last eight years. Big 
programs that require new funding and that require authorities 
for new starts--those are all prohibited in a continuing 
resolution environment. Rather than put those programs in the 
first quarter and put them all at risk, we just live in a three 
quarter year. That first quarter is a light touch on just 
trying to keep things going.
    Senator Reed. General Milley and then General Neller, 
General Goldfein, your comments too about this uncertainty 
factor. In fact, one could argue--let me get your insight--that 
effectively you are losing lots of money and wasting lots of 
money because of this uncertainty, not saving anything because 
of sequestration. Is that fair?
    General Milley. That is correct, Senator, because if all we 
are doing is planning things year to year or actually three 
quarters of a year to three quarters of a year, things like 
multiyear contracts, developing long-term relationships with 
industry where they can count on us and so on--that becomes 
very difficult. What ends up happening is the price per unit 
goes up. It has built in inefficiency. It has built in cost 
overruns. It is an un-good situation. It is not good and it 
needs to end.
    Senator Reed. General Neller, your comments?
    General Neller. It is very much the same, Senator. We have 
got some major programs and we would like to have the certainty 
and be able to tell the vendor that they have got the funding 
there and we can press them to drive the cost down. If we live 
year to year or month to month, that is not going to happen.
    But in line with what General Goldfein said, I think the 
force out there--they are watching us. They are looking at us 
and they want to know what the plan is. People, for all of us, 
are our center of gravity. That is the one thing we have to 
protect. We can buy all the planes and ships and tanks and 
vehicles we want, but this is a volunteer force. This is a 
recruited and retained force. They watch everything that is 
going on. These young men and women are very smart, and they 
want to know that there is commitment that they can count on as 
they decide whether they are going to continue to stay in.
    Senator Reed. Thank you, sir.
    General Goldfein?
    General Goldfein. Thank you, sir.
    Just perhaps to add some perspective, if we end up in a 
long-term continuing resolution [CR], this will be the eighth 
that we have had to deal with. To give you a scale then for 
what will happen in the United States Air Force if we go beyond 
three months into a long-term CR, that will be about $1.3 
billion less that is in the fiscal year 2017 budget. Some 
immediate impacts: KC-46 will go from 15 to 12 aircraft, and we 
will be procuring munitions at the fiscal year 2016 rates. In 
the fiscal year 2017 budget, we were actually able to forecast, 
based on what we believe we will be dropping in the current 
fight. That will go away, and so we will be procuring preferred 
munitions at a lower rate, which not only affects all of us 
that are engaged in the campaign, but it also affects our 
coalition partners who are relying on us as well for preferred 
munitions. We will have 60 acquisition programs that will be 
affected and 50 MILCON [military construction] projects, to 
include those that are new mission bed-down will also be 
affected, that just by a long-term CR.
    Senator Reed. Thank you.
    One of the issues that you all discussed and the chairman 
has made I think appropriate reference to is the changing 
situation in terms of unexpected challenges in the last several 
years. My sense too is that as we look around, particularly 
from technology, you are beginning to discover unanticipated 
costs for legacy systems in addition that we might not even 
have added into the projection. Is that fair to say, General 
Goldfein? Then we will go down the panel.
    General Goldfein. Yes, sir. What happens is we do what we 
call a service life extension program, or SLEP. There is 
actually a reason it is a four-letter word because what we do 
is we put an aircraft and we shake it and we put it through all 
kinds of environmental testings. Then we find out what those 
failure parts are, and then we either buy those parts or we put 
them in the bench stock and we try to predict what we will 
need. Then we certify that aircraft will fly to, you know, the 
next 2,000 hours. The reality is we only fix what we can 
accurately predict, and then we put these aircraft into depot 
maintenance. We pull the skin off. What we find are there are 
things that are breaking that we never predicted.
    A classic example. F-15C has a nose wheel steering problem, 
and we go look for the part and we have not made that part in 
five years. Then we go out to industry and we find that we have 
got to hand make now a part that we have not made in years, and 
that just causes the costs to go up. What we have found over 
the years is that older aircraft--it is actually not a linear 
path in terms of cost growth. It actually gets at some point to 
an exponential growth. Then that cost per flying hour requires 
us to put more money into sustaining systems longer than 
putting that money into the modernization which we desperately 
need.
    Senator Reed. Thank you. My time has expired. Thank you, 
gentlemen, again for your service.
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    You know, General Milley, when you were talking about 
ground troops, I am reminded of my last year in the House. I 
was on the House Armed Services Committee. It was 1994 when we 
had an expert witness sitting out there like you guys are 
saying in ten years we would no longer need ground troops. I 
think about often what our needs are going to be in the future 
and how we are trying to survive today. Looking into the 
future, yes, you talk about the KC-46 and the need. The KC-135 
has been around for 57 years, and it is going to be around for 
a lot longer. This is not what the other side, the competition 
does.
    I think the chairman is right when he says that he asked 
for your honest opinion. I do not have and we do not have the 
credibility to go out to the public and adequately explain the 
level of risk that we are accepting today and the fact that we 
are in the most threatened position in my opinion we have ever 
been. They depend on hearing that from you not from people like 
me.
    When General Dempsey said--and this is some time ago. He 
said we are putting our military on a path where the force is 
so degraded and so unready that it would be immoral to use 
force. Now, that to me was a courageous statement that I have 
used. People are shocked when they hear it. This is some time 
ago now.
    Winnifield. He made the statement there could be for the 
first time in my career instances where we would be asked to 
respond to a crisis, and we will have to say that we cannot. 
You know, that is a shocker.
    When our former colleague, Chuck Hagel, said American 
dominance of the seas, in the skies, and in space can no longer 
be taken for granted.
    What I am saying is that you folks need to be outspoken. 
You need to be heard because you are the experts. The public is 
not aware of the threats that we have.
    I want to ask you in a minute a question just on the size 
of the military but let me give you a couple of--these are 
quotes from you and other people talking about just the size. 
General Goldfein, you said our strategic capability advantage 
over competitors is shrinking and our ability to protect 
strategic deterrence is being challenged.
    Your predecessor, General Welch, said virtually every 
mission area faces critical manning shortages, and the Air 
Force risks burning airmen out.
    General Milley, you said in light of the threats 
confronting our Nation, to include Russia, China, North Korea, 
Iran, ISIS [the Islamic State of Iraq and Syria]--you know, we 
need to talk about that--the Army has accepted high military 
risk to meet the requirements of the national security 
strategy.
    General Allen. At today's end strength, the Army risks 
consuming readiness as fast as it builds it.
    I would like to ask each one of you do the realities of the 
strategic environment today and the foreseeable future call for 
a change in the size of our military. We will start with you, 
General Milley.
    General Milley. Thank you, Senator.
    I think the Army has got adequate readiness and adequate 
size to deal with our current demand which is fighting 
terrorists, counterinsurgency operation in Iraq, Afghanistan, 
elsewhere around the world, and to meet the current global 
combatant commander demand for day-to-day operations.
    Senator Inhofe. Now, you are saying the current end 
strength or that which is projected?
    General Milley. The current. The day-to-day, what is going 
on today, the national military strategy, given that we are 
actively engaged against ISIS, Al Qaeda, and other groups. That 
is current.
    The risk comes if we have a conflict with a near-peer, 
high-end competitor. Those other contingencies that Secretary 
of Defense Carter and many others have talked about with China, 
Russia, North Korea, or Iran, each of which is different 
operationally and tactically, each of which would require 
different levels of forces, types of forces, and methods of 
operation.
    But the bottom line is with the size of the U.S. Army 
today, if one or more of those other contingencies took place, 
I maintain that our risk would significantly increase, as I 
mentioned before, and if two of them happen at the same time, I 
think it is high risk for the Nation.
    Senator Inhofe. We understand. Of course, that is not 
predictable. We do not know.
    General Milley. Of course, not. But we have to be prepared 
for it.
    Just one last comment. You know, what we want is to deter. 
Nobody wants to have these wars with near-peer competitors, 
great powers. The only thing more expensive than deterrence is 
actually fighting a war, and the only thing more expensive than 
fighting a war is fighting one and losing one. This stuff is 
expensive. We are expensive. We recognize that. But the bottom 
line is it is an investment that is worth every nickel.
    Senator Inhofe. Briefly, Admiral Richardson, size.
    Admiral Richardson. Sir, philosophically I could not say it 
any better than General Milley did. I agree with him.
    In terms of the size, we are asking the same question. When 
I first came in to be the CNO [Chief of Naval Operations], our 
current fleet size--and there is more to capability than size, 
but size does matter--is 308 ships. That assessment was done 
without considering the emergent threat of Russia, without 
considering the emergent threat of ISIS. We are completing a 
study this month that gets at a new force structure assessment, 
and we will be ready to bring that to you very shortly.
    Senator Inhofe. You two generally agree with that?
    General Neller. I think it is two things, Senator. First, 
it is the capacity and the size that you talked about, but it 
is also--I think it was mentioned by everybody else--the 
capability sets that we have now. The future fight, if there is 
one--hopefully there is not, but they deter a future fight. 
There are capabilities that we do not in the Marine Corps have 
that we are going to require because we focused on the fight 
against terrorism in the last 15 years. How big is that force? 
What do you do? Otherwise, you have to trade because there are 
capabilities that we have now that we do not want to get rid 
of. As you trade one capability for another, you either give 
something up and you accept risk there to get the other 
capability. Those are the trades that we are in and discussing 
at this time.
    Senator Inhofe. That is right. You have to accept risk. I 
know that.
    There is not time for you to answer that question, but I do 
have another comment to make concerning you, General Goldfein.
    I agree with the fact--and I talked to the pilots. They 
want to fly more. That is significant. You cannot completely 
eliminate the fact that it costs $9 million, if you take 
someone off the street and make an F-22 pilot out of them. Yet 
the bonuses--you were talking about what? $25,000 a year. That 
has to be considered also I would say.
    General Goldfein. Sir, in terms of the fact that we are 
moving forward for an aviation bonus----
    Senator Inhofe. You have to consider that too along with 
the flying hours because the expense of taking someone and 
putting them in advanced Air Force training and then you take 
them all the way up to F-22 capability.
    General Goldfein. Yes, sir. As a matter of fact, our 
studies that we have done show that. We have not adjusted the 
aviation bonus for a number of years.
    Senator Inhofe. That is right.
    General Goldfein. We are asking for Congress' support to 
give us authorization for a higher level based on the data that 
we have that shows that it will take more than what we offer 
today to be able to provide the quality of life incentives to 
be able to allow them to stay in.
    But at the same time, I will tell you I am laser-focused on 
the quality of service aspect to this because even if I pay 
them more, if I do not get them in the air, they are going to 
walk.
    Senator Inhofe. You are right.
    Thank you.
    Senator Reed [presiding]. On behalf of the chairman, 
Senator McCaskill.
    Senator McCaskill. Thank you.
    I want to associate myself with the opening statement of 
Senator McCain in many ways because I think you all honestly 
step forward and lead an amazing fighting force. I think we owe 
the American people honesty about the military budget.
    What is going on in the House of Representatives this year 
is, once again, a phony budget gimmick to pretend that they are 
somehow being fiscally conservative because they are using the 
overseas contingency operations fund to fund the base 
operations of our military. That is dishonest on its face. It 
is inefficient and ineffective for our military.
    General Milley, I would like to bring this home to my 
State. Obviously, we have Fort Leonard Wood that dates back to 
World War II in terms of some of its buildings, and we have 
temporary military construction dating back to that time. We 
are in an aggressive updating of that facility, which is such a 
key facility for our Army. I noticed that they even had the 
nerve to put military construction activities at bases in the 
United States in the overseas contingency operating fund.
    Can you comment about how this impacts your ability on 
readiness and training when you are being put in a fund that is 
year-to-year and not certain and you cannot plan with it?
    General Milley. Sure, Senator. You are exactly right. You 
cannot plan with it and you cannot just go year to year. Things 
like multiyear contracts and having relationships with the 
commercial industry in order to upgrade either weapons, 
equipment, et cetera.
    Now, specifically what you are talking about is 
infrastructure, which is a key component. We often talk about 
man, train, and equip sort of thing, but also the 
infrastructure on Army bases is atrophying and the training 
ranges are not as modern as they should be, throughput 
capacities and so on. We have got a laundry list. It is not 
just in Missouri. It is in many other places. That is of great 
concern, and we have been robbing that account for quite a few 
years now in order to maintain readiness in order to pay for 
the war. That is another area of great concern is that 
infrastructure.
    Senator McCaskill. Our men and women that have been 
deployed--they are not deployed for a half a year. We certainly 
should not fund their money for half a year.
    General Goldfein, I also had an opportunity to go to the 
139th Airlift Wing over the last few weeks. You know, it is the 
top gun of airlift in terms of training. The frustration there 
is there seems to be a disconnect, and only you and people that 
you interact with can fix this. That is, these are strategic 
level courses. We are training people from all over the country 
at this facility in terms of lift and internationally I might 
add, our allies, as you probably well know.
    But for some reason, they are having to deal with an annual 
funding issue instead of getting programmatic funding. I do not 
get that. I do not get why the National Guard Bureau and the 
Air Mobility Command cannot get together because you know what 
they are both doing? They are doing this. One is saying, oh, we 
are putting it programmatic, and the other is saying, well, we 
do not have it. It is really frustrating for that excellent 
facility to have to continue to beat on this door and have 
nobody answer. I would like your commitment today to look into 
this and see if you cannot get this resolved once and for all.
    General Goldfein. Yes, ma'am. I will just tell you quickly 
that we had this come also up in the remotely piloted aircraft 
business. What we found was that because there are so many 
elements associated with actually getting a CAP airborne and 
doing a sortie, that we had not gone through and done the work 
that built the requirements that lay out over an entire year. 
The wing commanders were having to plug holes and go month to 
month to month. As a result of that, we put together a team and 
we are actually working with the Director of the Air National 
Guard to lay out annual requirements for the MPA [Military 
Personnel Appropriation] days. Then once we have those annual 
requirements, then we are going to fund them on an annual basis 
so that wing commanders will not be there. I will take this on 
and make sure that that----
    Senator McCaskill. That would be terrific.
    [The information referred to follows:]

    Senator, as you know, the C-130H Weapons Instructor Course (WIC) 
and the Advanced Airlift Tactics Training Center (AATTC), both located 
at St. Joseph, MO and co-located with the 139th Airlift Wing, add 
important combat capability to the Total Air Force. We recognize that 
the C-130H WIC is a core requirement, while AATTC adds further value to 
the Mobility Air Forces by increasing the warfighting effectiveness and 
survivability of our mobility team. It is important to note that 
requirements continue to be evaluated in the Mobility Air Force 
community and we are actively engaged with the Air National Guard, Air 
Force Reserve, other services, and allied nations to chart a long-term 
programmatic path. Specifically, in November, personnel from the 
National Guard Bureau, Air Force Reserve Command, and Air Mobility 
Command will visit St. Joseph, MO to assess both WIC and AATTC 
manpower, funding, infrastructure, and airframe requirements in the 
near term and future years. Our intent is to develop options to 
programmatically inform the FY19PB submission and provide an enduring 
funding construct for the Weapons Instructor Course and the Advanced 
Airlift Tactics Training Center. The contributions of the Missouri ANG 
remain important to the success of war fighters in the Mobility Air 
Forces, as well as the entire USAF, and we share your pride in having 
them on our team.''

    Finally for you, General Neller, I am a big, big fan of the 
Marines. But I was struck when I was at Fort Leonard Wood. I 
had a chance to visit with recruits who were in the last two 
weeks of their training. They had done nine weeks. They were in 
their AIT [Advanced Individual Training] training. I had a 
chance to visit with these men and women. I was struck how many 
immigrants were in this training class from South Korea, 
Honduras, Costa Rica. They had just done a naturalization 
ceremony on the base for 67 soldiers becoming United States 
citizens. These people are saying they want to cross the line 
and die for their country.
    When I saw the way that the Muslim soldier was treated in 
Parris Island, it hurt my heart, and I just want it on the 
record for you to commit that you will get to the bottom of 
this and there will be no question in the Marines that abusing 
someone because of their ethnicity or their religion is 
absolutely unacceptable or their gender orientation.
    General Neller. Senator, you have my complete and total 
commitment to that.
    Senator McCaskill. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Reed. On behalf of Chairman McCain, Senator 
Fischer, please.
    Senator Fischer. Thank you, Senator Reed.
    Thank you, gentlemen, for being here today.
    I am going to pick up a little bit on Senator McCaskill's 
expression of frustration and expand that. Many times the 
American people--they hear different stories, different 
information from different sources, and I would like to 
highlight part of that today and get your response to that and 
if you would clarify it.
    General Milley, the ``Wall Street Journal'' published an 
article by General Petraeus last month, and it was entitled 
``The Myth of the U.S. Military Readiness Crisis.'' In it, he 
characterized the Army's weapons inventory in the following 
way. While some categories of aircraft and other key weapons 
are aging and will need replacement or major refurbishment 
soon, most equipment remains in fairly good shape. According to 
our sources in the military, Army equipment has, on average, 
mission capable rates today exceeding 90 percent, and that is a 
historically high level.
    General, do you believe that General Petraeus was correct 
in this assessment that the equipment and the mission capable 
rates are what he says they are? What does that tell us or 
possibly what does it not tell us about the state of the Army?
    General Milley. Thanks, Senator.
    I know General Petraeus well and have got a lot of respect 
for him, served under him, et cetera, along with Mr. O'Hanlon 
who is the co-author. Both of them are very talented.
    But as you might expect, I do not necessarily agree with 
that. The title of the article is ``Readiness Crisis: A Myth.'' 
I do not know if ``crisis'' is the right word. That is packed 
with all kinds of emotion. But there are serious readiness 
challenges in the United States Army today. The operational 
readiness rates for our key weapon systems are not above 90 
percent. They are well below 90 percent in some cases, and that 
is cause for great concern. They are improving, but they are 
below 90 percent. 90 percent is the standard, nine out of ten 
weapon systems ready to go to war at a moment in time. Our 
weapon systems are not in that condition at this time.
    Senator Fischer. Thank you, sir, for clarifying that.
    Also, the column goes on to argue that training for full 
spectrum operations is resuming. It claims that by 2017 the 
Army plans to rotate nearly 20 brigades, about a third of its 
force, through national training centers each year. The Marine 
Corps plans to put 12 infantry battalions, about half its 
force, through large training exercises, and the Air Force is 
funding its training and readiness programs at 80 to 98 percent 
of what it considers fully resourced levels.
    Generals, do you think that accurately portrays your 
services and their readiness to conduct the full spectrum 
operations? General Milley?
    General Milley. It is a partial answer. The flagship 
training event for an Army unit, an Army brigade combat team, 
is going to a combat training center at the National Training 
Center or Joint Readiness Training Center down in Louisiana. A 
few years ago, we were not doing decisive action operations 
against higher-end threats. We changed gears about 24 months 
ago, and about 12 to 18 months ago, we started putting brigades 
through the paces of going against near-peer competitors unless 
they were specifically designated to go into Afghanistan or 
Iraq.
    At the end of fiscal year 2017, by the end of next year, 
100 percent of our brigade combat teams on Active Duty will 
have one rotation. It is all about reps. If you were, back in 
the day, pre-9/11, a typical battalion commander or a major, 
for example, or a company commander, you would have three, 
four, five, maybe more rotations through a training center by 
the time they reached those levels. Today we have an entire 
generation of officers going into the field grade ranks 
commanding battalions or even in some cases companies that have 
very little or no experience at a CTC. By the end of fiscal 
year 2017, 100 percent of the brigades, but it is a matter of 
reps. We have to do it over and over again.
    The data I have and the forecast we have is by the end of 
2018, 24 months from now, we will have nine of our brigades 
with three rotations, 18 of them with two, and four with one. 
That is not bad. It is better and all that is good. But there 
is more to it than just going to the training centers. That is 
a key part but there is more to it.
    Manning levels are holding us back. We have over 30,000 
non-available soldiers in the regular Army today. That is a 
corps, an entire corps not available for medical, legal, and a 
variety of other reasons. That is not even talking about your 
training account, basic training, or the overhead it takes to 
run basic training. Your personnel piece is big, and then 
equipment maintenance, which you just talked about with OR 
rates. Those are big. Those are all parts of readiness. That is 
just readiness with the equipment, the modernization, the 
systems we have today. Five or ten years from now, there are 
lots of systems out there that we need to invest in to get them 
online to be able to deal with a near-peer great power, if in 
fact that day ever comes.
    I do not subscribe 100 percent to what General Petraeus, as 
much as I respect him, or Michael O'Hanlon wrote. I like them 
both.
    Senator Fischer. Thank you. I am out of time. But, General 
Neller and General Goldfein, if you could get that information 
to me, I would be happy to put that out.
    I too respect the service that General Petraeus has given 
to this country, but I think it is important that we get 
correct information out to the people of this country so they 
understand the situation that we are facing with our military.
    Thank you.
    Senator Reed. On behalf of Chairman McCain, Senator Hirono, 
please.
    Senator Hirono. Thank you very much, gentlemen, for your 
testimony and for your service and the service of the men and 
women whom you lead.
    Over the course of the many hearings that this committee 
has had with regard to the negative impacts of sequestration, 
we have been provided with objective information as to those 
impacts that causes me to question the article that my 
colleague just talked about, as much as, of course, we 
appreciate the service of General Petraeus.
    For General Neller, I have been monitoring the progress 
with the Marine Corps Pacific laydown, including visits to 
Okinawa, Guam, and CNMI [Commonwealth of the Northern Mariana 
Islands]. I know that it will be very important to have 
adequate training facilities.
    General, can you talk briefly about the current status and 
if you have any concerns about the progress so far of the 
Marine Corps specifically to plan? I just read an article 
recently about the Governor of CNMI and his position regarding 
training in Pagan.
    General Neller. Well, Senator, we are still in the 
execution of the current plan of the Pacific laydown for marine 
forces. The Futenma replacement facility has been separated 
from the move from Guam, but from the very beginning our 
movement to Guam was contingent based on the fact that we could 
train and maintain our readiness once deployed there. Because 
of actions of others and environmental impact, right now that 
is potentially at risk and has pushed the timeline to the 
right. We are still committed to go to Guam, but to go to Guam, 
we have to be able to sustain the readiness of the force, 
whatever that force is that we deploy there.
    I am concerned with it. I am watching it. I think there may 
be some other forces involved in this and that is causing 
delays in this. There are also still issues on Okinawa about 
building on to the north of the Futenma replacement facility 
that are tied up between negotiations between the Government of 
Japan and their prefecture of Okinawa, and we continue to 
monitor that.
    Senator Hirono. I share your concerns because there are a 
number of moving parts with regard to the move out of Futenma 
and Henoko, and there are now delays there.
    I realize that we are doing the buildup necessary for Guam, 
but we cannot send our troops there unless they have a place to 
train. CNMI and the discussions that we are having and whatever 
negotiations we are having with that government is really 
critical, and I would appreciate your keeping me apprised as we 
go along. Anything that this committee and I can do to help----
    General Neller. Yes, ma'am, we will certainly do that.
    Senator Hirono. For General Milley and General Goldfein, I 
want to commend you in your leadership of your respective 
services, including the National Guard components in your 
mission. As you know, a combined force of Active, Guard, and 
Reserve components is imperative to the defense of our country.
    At our full committee hearing on cybersecurity this week, 
the important role that the National Guard plays in 
contributing to total force requirements was discussed. Can 
both of you talk about progress in other areas where you will 
be depending on your Guard components to fulfill Army and Air 
Force requirements?
    General Goldfein. Senator, I will give General Milley a 
break.
    We are looking across the entire enterprise of the five 
core missions that the Air Force does for the joint team in the 
Nation to look at where we can partner with Air National Guard 
to leverage that component and the Air Force Reserves across 
all these mission areas: cyber, intelligence, command and 
control, nuclear enterprise, conventional air power in terms of 
both bomber and fighter force. We are looking at all of that. 
In the mobility portion of our business, you go into a C-17 and 
ask the question in the cockpit today, okay, who is Guard, who 
is Active, who is Reserve, and very often all three hands will 
go up because we are that connected. We have three components. 
We have one Air Force. We have five missions. We are looking 
across all of those mission areas.
    I predict that cyber will be a growth industry when it 
comes to including our Air National Guard because it is ideally 
suited for that mission set. We are looking across the 
enterprise at ways we can partner and we can increase that.
    Senator Hirono. General Milley?
    General Milley. Thanks, Senator.
    We have made a lot of strides I think in the last year in 
trying to integrate and enhance the readiness of the National 
Guard. It is my assessment that we are going to have to 
significantly improve the readiness of the United States Army 
National Guard and the Army Reserve.
    We are the only service that has over 50 percent of our 
force structure in the Reserve component, and we have got about 
53 percent. A significant chunk of the Army is in the Reserve.
    As was designed many, many years ago, the bottom line is 
the United States Army cannot conduct sustained land campaigns 
overseas without the National Guard and without the United 
States Army Reserve. It is not possible. That is the way the 
system was designed many, many decades ago.
    Today what do we rely on? There is a considerable amount of 
maneuver force in the Army National Guard. We are moving to 26 
brigades with this President's budget--maneuver brigades. There 
is a lot of artillery. There is a lot of combat power in the 
National Guard, a lot of attack helicopters, and so on. If you 
look at combat service support, logistics units, about 60 
percent, 62 percent of the United States Army's logistics is 
all in the Reserve component.
    The Army, bottom line, could not fight, could not feed 
itself, could not maneuver, could not conduct any sort of 
extended land campaign anywhere in the world without the Guard 
or the Reserve. It is absolutely critical to what we are doing 
and we need to increase their readiness as well.
    Senator Hirono. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain [presiding]. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    Gentlemen, I want to thank you for your service. As a 
matter of fact, somebody stated Secretary Carter, when he 
testified last time, I know a number of us have had a lot of 
criticisms with some of the Obama administration's foreign 
policy and national security. But one area where I want to 
commend the President is the quality and character of the men 
and women he has been nominating that have come before this 
committee for confirmation to lead our military. I think the 
four of you exemplify that quality and character, and I just 
want to commend you for that.
    Part of the reason--and the chairman has already touched on 
it--is the frank and honest views that you have been giving 
this committee and others since your confirmations and your 
important positions leading the men and women in uniform of our 
Nation. I want to commend you on that as well.
    General Milley, when you were here a couple months ago, you 
talked about the issue--and you already restated it--of a near-
peer, full-spectrum threat in terms of a conflict. If we had to 
address that, you stated that the U.S. Army would be at high 
military risk and you mentioned again to meet our national 
security strategy. Do you continue to hold that view?
    I would like to have each of the other Service Chiefs here 
give us your assessment of where your service is in terms of 
risk. I thought it was remarkable. I thought it was courageous 
of you to say that. The press did not pick up on it, but the 
fact that the Chief of Staff of the Army was saying high 
military risk is pretty remarkable. I just want each of the 
servicemembers in terms of a full-spectrum conflict, the 
ability to meet that for our Nation's security, where are we in 
terms of risk for your service?
    General Milley. Thank you, Senator.
    My assessment remains the same. Just as a reminder, what 
does it mean when I am using that term? I am talking about the 
ability to accomplish the military tasks assigned to Army 
units. The ability to do it on time and the ability to do that 
at an acceptable level of cost expressed in terms of 
casualties, troops, killed and wounded. But I maintain my same 
assessment.
    Senator Sullivan. High military risk.
    General Milley. That is correct.
    Senator Sullivan. Admiral Richardson?
    Admiral Richardson. Senator, I concur with General Milley. 
I have sort of forbidden my team to use the word ``risk'' 
because it has become so overused that you start to lose a 
sense of what that means. But it is exactly as General Milley 
described. If we get into one of those conflicts, we will win, 
but it is going to take a lot longer than we would like. It is 
going to cost a lot more in terms of dollars and in casualties.
    Senator Sullivan. General Neller?
    General Neller. Senator, in short, I agree. We built a 
force that has been focused on a counterinsurgency fight, and 
while we have been doing this effectively, our potential 
adversaries have recapitalized and from ground up built a force 
that has very significant capability that grows every day. We 
are in the process now of getting ourselves back and looking at 
those capabilities we need to match that up.
    Would we win? Yes, we would win. But I would associate 
myself that it would take longer and I think the cost would be 
higher.
    Senator Sullivan. You are putting the Marine Corps at high 
military risk as well.
    General Neller. If we had to do, based on the contingency 
plans that were one major contingency and then a near 
simultaneous of a second one, yes.
    Senator Sullivan. General Goldfein?
    General Goldfein. Sir, that is the key for this discussion, 
which is ready for what. What we are all, I believe, talking 
about is if the guidance tells us that we have to be 
simultaneously ready to defeat a near-peer adversary in an 
anti-access/area denial environment, a near-peer, while at the 
same time imposing cost in deterring another adversary, while 
at the same time ensuring your safe, secure, reliable nuclear 
enterprise, while at the same time defending the Homeland to 
the level that will be required, then we are at high risk. But 
you have got to walk down that line----
    Senator Sullivan. Right. But that is what we expect of you. 
That is your mission.
    Let me just end by mentioning we talk a lot about costs. 
General Milley mentioned it. I know some of you in the Army and 
in the Marine Corps--the book by T.R. Fehrenbach is still given 
to our infantry officers to read, ``This Kind of War.'' When 
you talk about costs--maybe this is for General Milley and 
General Neller--when we are sending less ready units into a 
near-peer fight, we talk about costs. That sounds like dollars 
and cents. What is it? Relate that to ``This Kind of War.'' 
Relate that to the first summer in 1950 in Korea. The costs 
were dead Americans in the thousands. Is that not correct?
    General Milley. Well, that is exactly right. I mean, the 
butcher's bill is paid in blood with American soldiers for 
unready forces. We have a long history of that. Kasserine Pass, 
Guadalcanal, Tarawa, Task Force Smith in the Korean War. It 
goes all the way back to Bull Run. Lincoln thought he was going 
to fight a war for 90 days. Wars are often thought to be short 
when they begin. They are not. They are often thought to cost 
less than then they end up costing, and they end up with 
outcomes and take turns that you never know. It is a dangerous 
thing.
    The best thing I know of is to ensure that you have forces 
that are sized, trained, manned, equipped, and very, very 
capable to first prevent the war from starting to begin with, 
and then once it starts, to win and win fast and win 
decisively. That is the most humane thing to do when you are 
engaged in combat. Otherwise, you are expending lives that I do 
not think are necessary.
    In the Korean War, the book you are referring to, in that 
war, Task Force Smith, the 21st Infantry Regiment, was alerted 
out of Japan, went forward to the peninsula on relatively short 
notice, and they were essentially decimated. It was not because 
they were bad. It was not because they were incompetent. The 
battalion commander was an experienced World War II guy. It was 
because they had two 90 millimeter recoilless rifles. Their 
mortars did not work. Their ammo was not done. The training was 
not done. They were not properly equipped. They were not in 
great shape. They were doing occupation duty in Japan. They 
were sent into combat, into harm's way unready, and they paid 
for it. Tens of thousands of others paid for it in those early 
months, the first six months of Korea. It is not a pretty 
picture.
    Readiness matters. Reps at training centers matter. 
Equipment matters. Personnel fill matters. To do otherwise for 
us at this table is the ultimate sin to send someone into 
combat who is unready.
    Senator Sullivan. Thank you, Mr. Chairman.
    Chairman McCain. That is a risk we are facing right now.
    Senator King?
    Senator King. Thank you.
    General Milley, I think you have delivered the line of the 
day for me. The only thing more expensive than deterrence is 
fighting a war, and the only thing more expensive than fighting 
a war is losing a war. That sort of summarizes the situation.
    I would like to ask a couple of questions of you 
specifically about Afghanistan and then go on to the more 
general question.
    I know the President has modified the troop drawdown 
schedule in Afghanistan, which I think was an appropriate 
response to the situation. Were the authorities maintained for 
the forces that we have there that allow them to act 
effectively to assist the Afghan forces?
    General Milley. As I understand it, yes. I am heading over 
there next month actually, and I will see General Nicholson. 
But with my JCS hat on, as I understand, the operational 
authorities are adequate to do his task. But I will double 
check that and I can get back with you.
    [The information referred to follows:]

    Based on my conversations with Commanders on the ground, the 
authorities are appropriate and allow them to effectively assist our 
Afghan partners.

    Senator King. The second question is related. Are the NATO 
[North Atlantic Treaty Organization] commitments that have 
been, in a sense, proportional to ours being maintained?
    General Milley. I believe yes, but let me get you a better 
answer than that. Let me get you a specific answer.
    Senator King. I would appreciate it. Thank you.
    [The information referred to follows:]

    Yes. As a proportion, non-U.S. NATO Allies and partners will 
increase their commitments to Afghanistan relative to the United 
States. As reported at the NATO Summit in Warsaw just two months ago, 
our Allies reconfirmed NATO's long-term commitment to Afghanistan's 
stability. They declared that NATO will extend its Resolute Support 
Mission to train, advise, and assist the Afghan security forces beyond 
2016: pledged to sustain funding through 2020: and agreed to strengthen 
and enhance the Enduring Partnership with Afghanistan. While the US 
will draw down its own Afghanistan presence by 14 percent, all 38 other 
NATO Allies and partners involved in the Resolute Support Mission have 
committed to provide either the same number of troops as in 2016 or 
increase their presence beyond 2016.

    This hearing has focused a lot on money, and I think it is 
appropriate. There should be some context. In 1967, defense 
spending was 8.6 percent of GDP [Gross Domestic Product]. In 
1991, it was 5.2 percent. Today it is 3.3 percent. I think 
often the public and all of us get caught up in these big 
numbers of $560 billion, but the reality is our commitment to 
defense has fallen dramatically in the last 45 years in part 
because of a perception that the world was getting safer and in 
part because of budgetary issues.
    The other thing I would point out is that net interest on 
the national debt today is more than a third of the military 
budget, and we are at an all-time low in interest rates. That 
is going to only go up, which will tend to make the budget be 
strained even more.
    I just think we need to be talking to the American people 
about the fundamental responsibility of any government, which 
is to keep its people safe, and that the dramatic reduction in 
the commitment that we have made to defending this country.
    The follow-up point, of course, which has been made 
previously, is that since 2011 and the Budget Control Act, we 
have had Syria, ISIS, South China Sea, Ukraine, the North Korea 
nuclear development, and cyber. To maintain a rigid budget 
structure in the light of those changes, it just seems to me is 
dumb. We are trying to protect this country. We have new 
threats.
    It is similar to the discussion we have had, Mr. Chairman, 
about the troop levels in Afghanistan. We have got to respond 
to circumstances on the ground, and the circumstances have 
dramatically changed in the last five years in terms of threats 
that this country faces.
    The other point that has been made by Ranking Member Reed. 
Certainty is as important as amount. I think you testified to 
that. The other way we are not serving the public is by the 
absolutely ridiculous process around here of not adopting 
budgets, doing continuing resolutions, getting you the money in 
the middle of the year, which does not allow you to plan, does 
not allow you to do the capital planning and the long-term 
planning that you need to do.
    I realize I have talked a long time without a question. I 
am going to add one more point.
    The other piece of this financial burden that we are facing 
is the nuclear recapitalization, and I have got some slides 
that I think make this clear that to me are rather dramatic. 
What we are facing is a very large bulge, if you will, in the 
commitment, and if we do not make some additional overall way 
of dealing with that issue, it is going to eat up everything 
else. We are not going to be able to maintain aircraft or 
develop the ships that we need because all the money is going 
to go into that. I just point this out. It has been 40 years 
since there has been a recapitalization, and we are heading 
into a--we have got to have some special way of accounting for 
this, it seems to me. It does not mean borrow for it. But it 
does mean fund it in some way. Otherwise, it will crowd out the 
necessity of modernization across the rest of the enterprise.
    If you can find a question in there, gentlemen, you are 
welcome to it. Admiral?
    Admiral Richardson. Senator, I will jump on that because 
between General Goldfein and I--and we are lockstep on trying 
to solve this problem in every way we can. I think that that 
bulge talks to a number of the points that you made.
    One, as General Milley said, it is much cheaper to deter a 
war, and this is what this program is all about. This is about 
deterrence.
    Senator King. It is a theory that has worked for us for 80 
years.
    Admiral Richardson. It has been absolutely effective for 80 
years not only nuclear war, of course, but also conflict 
worldwide. If you look at sort of before and after, it is a 
startling difference.
    The other point is that each of these recapitalizations, 
the first one in the 1960s, then in the 1980s, and then now, we 
are getting that mission done for less. Each of those peaks is 
subsequently smaller.
    Then to your point, we can get that peak even smaller if we 
have predictable funding in place. We are going to recapitalize 
the undersea leg with 12 submarines. If we get that to 
predictable funding to buy that package in a block, we could 
get those 12 submarines probably for the cost of 10 or 11. You 
can see real savings that come through this predictability.
    But I want to go back to my first point. It is absolutely 
essential that we get this done because without that deterrent 
effect--we think things are bad now--it would be much worse.
    Senator King. Thank you, gentlemen. Thank you all for your 
service and for your outstanding testimony here today. Thank 
you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Graham?
    Senator Graham. Thank you, Mr. Chairman.
    Let us see if we can summarize here.
    All of you agree that a long-term CR is bad for the 
military.
    General Goldfein. Yes, sir.
    Senator Graham. When I hear my House colleagues wishing for 
a long-term CR, you do not wish for that.
    General Goldfein. No.
    Senator Graham. Okay.
    To my House colleagues, the OCO account. Do you all have a 
problem with what they are doing, taking OCO money to fund the 
military?
    General Goldfein. Sir, I will tell you that our preference 
is a stable, long-term budget that we can plan on.
    Senator Graham. Do you think OCO funding is not stable?
    General Goldfein. It is one-year funding. It does not give 
us long-term stability.
    Senator Graham. Does everybody agree with that? You would 
prefer not to go that route.
    Why do they do this? They do not want to bust the caps. 
They do not want to take on the right and tell them you all are 
crazy. You know, this sequestration is not working.
    Have you all talked to the President about this? Have you 
told the President what you are telling us about the state of 
the military under sequestration? Have you had a conversation 
with the commander-in-chief telling him what you just told us, 
General Milley?
    General Milley. I have not personally had a conversation 
with the President.
    Senator Graham. What about the Navy?
    Admiral Richardson. No, sir, not personally.
    Senator Graham. What about the Marines?
    General Neller. No, sir, not personally.
    Senator Graham. What about the Air Force?
    General Goldfein. No, sir.
    Senator Graham. What are you doing at the White House, Mr. 
President? You are threatening to veto a bill that would 
increase defense spending because it does not have non-defense 
increases. I will make some suggestions to you. Go tell the 
President what you are telling us.
    I absolutely see the flaws in what the House is doing. I 
cannot believe the commander-in-chief is sitting on the 
sidelines and watching this happen, taking a laissez-faire 
attitude that if you send me a bill that increases defense 
spending without increasing non-defense spending, I will veto 
it. I find that as repugnant as what the House is doing.
    Okay. By the end of 2021, we will be spending what percent 
of GDP on defense if sequestration is fully implemented? Does 
anybody know? 2.3 percent. Check the math. Senator King made a 
very good point.
    Do you see by the end of 2021, given the threats we face as 
a Nation, it is wise to cut defense spending in half in terms 
of historical numbers?
    General Goldfein. No, sir.
    Senator Graham. Do you, General?
    General Neller. No, sir, I do not.
    Admiral Richardson. No, sir.
    General Milley. No, sir.
    Senator Graham. Well, somebody should ask, how could your 
Congress and your President allow that to happen. I ask that 
all the time. I do not have a really good answer.
    If sequestration goes back into effect in 2017, are we 
putting people's lives at risk because of the effects of 
sequestration in terms of training?
    General Milley. Yes, sir.
    General Goldfein. Yes, sir.
    Senator Graham. Well, does anybody else listen to these 
hearings but us? How do you live with yourself? I say that. I 
include me. I am part of this body. I voted against 
sequestration, but that is no excuse. Do you want to do revenue 
to fix it? I will do revenue. But what I am not going to do is 
keep playing this silly game.
    When you rank threats to our military from nation states 
and terrorists, would you say sequestration is a threat to our 
military?
    General Goldfein. Yes, sir.
    General Milley. Sure.
    Senator Graham. Would you agree with me, General, that the 
Congress is going to shoot down more planes than any enemy that 
we can think of in the near term?
    General Goldfein. Potentially.
    Senator Graham. Do you agree with me that we are going to 
park more marines and take them out of the fight than any enemy 
we can think of in the near term here, General, with 
sequestration?
    General Neller. Sir, nobody is going to park us. We are 
going to fight, but we will be at risk.
    Senator Graham. What is your budget in terms of personnel 
cost?
    General Neller. We pay about 61 percent of the green TOA 
[total obligation authority] for personnel.
    Senator Graham. Let us just walk through that real quickly. 
60 percent of your budget is personnel.
    General Neller. Yes, sir.
    Senator Graham. If sequestration goes into effect, are you 
going to lose marines?
    General Neller. Yes, sir, we will.
    Senator Graham. Okay. They will be out of the fight.
    How many ships will the Navy have if sequestration is fully 
implemented, Admiral?
    Admiral Richardson. Sir, hard to say, but fewer than the 
308.
    Senator Graham. They say 278. Is that about right?
    Admiral Richardson. That is in the ball park.
    Senator Graham. The Congress is going to sink how many 
ships?
    Admiral Richardson. Sir, I might take you on with the word 
'sink,' but it will be----
    Senator Graham. Okay. Well, whatever. They are not going to 
be there.
    Admiral Richardson. Thirty.
    Senator Graham. How many brigades are we going to wipe out, 
General, in the Army?
    General Milley. Our estimation is we will lose between 
60,000 and 100,000 troops if sequestration comes out.
    Senator Graham. Would you agree with me when you rank the 
threats to the military, you would have to put Congress and the 
President in that mix if we do not fix sequestration?
    General Milley. I will not judge either----
    Chairman McCain. You are not required to answer that 
question.
    [Laughter.]
    General Milley. I am not judging the President or Congress.
    Chairman McCain. Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman.
    Chairman McCain. I would remind the witnesses. There are 
certain questions that you are not required to answer.
    [Laughter.]
    Senator Blumenthal. I was about to say that I was going to 
reask that question, but it would probably reach the same 
result.
    I just want to say how much I respect your service, and I 
think we all do. Regardless of the demanding and tough 
questions that have been asked, we approach this as a collegial 
effort working together with men and women who have devoted 
their lives to the service of our Nation with extraordinary 
distinction and bravery. That goes for you and all who serve 
with you. I just want to begin with my profound thanks for your 
service.
    Admiral, I want to talk a little bit about submarines. I 
know that we are moving toward building two submarines a year, 
Virginia-class. In your testimony, you briefly note your 
concern for the future shortfall in our attack submarines. What 
is the Navy's strategy to deal with that shortfall when the 
desired 48-boat minimum in 2025 reaches a low point in 2029 of 
41, potentially placing our Nation in jeopardy? Do we have a 
strategy to address that shortfall?
    Admiral Richardson. Sir, we do. First, that shortfall 
highlights sort of a fundamental element of shipbuilding plans, 
which is that you have got to think long-term. Some of these 
things are very difficult to correct in the short term. It just 
takes time to build submarines and there are capital 
investments as well.
    But we are building two per year. We are going to continue 
to do that. We are also going to look to every possible way to 
extend the life of the current Los Angeles-class submarines 
that are carrying much of the burden today so that we can fill 
in that trough as much as possible. We are building two 
Virginia-class submarines a year. We are going to examine 
continuing that as we bring the Ohio replacement program 
online, particularly in the year 2021. If you put that 
submarine in place, it actually starts to fill in a good 
percentage of that trough. Then we will look forward to more 
creative deployment options so that we get more out of every 
submarine. We will use all of these methods together to try and 
minimize the effect of that trough, but we are not going to be 
able to erase it.
    Senator Blumenthal. Your point about the importance of 
planning I think is profoundly important, little understood by 
the American people who often think we can snap our fingers and 
turn on the spigot for submarines. But we know and so do the 
dedicated men and women at Electric Boat in Groton that 
planning requires investment in skill training and the defense 
industrial base that consists of those men and women who in 
many ways are as vital as the men and women in uniform because 
they build the platforms, the submarines, that make our 
projection of power possible around the world. Would you agree?
    Admiral Richardson. I would completely agree. In terms of 
their talent and the skill level, I wish we could take every 
American through that facility up at Electric Boat and the same 
at all of our shipbuilding facilities just to see what America 
can do when it puts its mind to it. It is stunning.
    But as we ramp up to build the Ohio replacement, the 
biggest challenge is the workforce and bringing those skilled 
laborers on. I agree with you 100 percent. It is a team effort, 
and it is a tough job.
    Senator Blumenthal. I hope you will come back. I have been 
privileged to go through Electric Boat with you. I know Senator 
Reed has on many occasions as well. This investment--it is not 
spending. It is investment in our future--I think is really 
vital.
    Likewise, General Milley, on the Blackhawks, as you know, 
the National Commission on the Future of the Army issued 
aviation recommendations earlier this year, and these 
recommendations create some budgetary tension with the aviation 
restructure initiative the Army proposed in 2014. I am 
concerned that the planned UH-60 Blackhawk procurement, which 
is a vital modernization initiative for the Active Army and 
National Guard across the Nation, will be reduced to pay for 
other programs. As you move forward with the Army aviation 
fiscal year 2018-2022 budget, are revisions being made to 
assure that future aviation modernization plans will be 
sustained in light of the commission's recommendation?
    General Milley. Aviation is one of our top priorities. It 
is one of the ones I mentioned in my opening statement, 
Senator. absolutely we are committed to improving the 
modernization, and we have got several initiatives underway.
    With respect to the National Commission, we have put some 
of the aviation requirements into the UFR [unfunded 
requirements], into the unfinanced requirement list. Others we 
are funding. We think the commission did great work, and we 
intend to implement their recommendations to the extent we can.
    Senator Blumenthal. Thanks.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, Mr. Chair.
    Gentlemen, thank you for being here today. It is a 
privilege to be in the same room with you.
    We do have a lot of difficulties coming up, especially with 
sequestration, and I do not think I can be any more eloquent 
than Senator Graham.
    Admiral, I would like to start with you. I do understand 
the Navy is facing some significant budgetary challenges, and 
this is true of all of our services. However, I was able to 
visit one of your ships earlier this year, and I was stunned to 
learn about the requirement for up-to-date paper charts aboard 
U.S. Navy ships and the low priority of celestial training. I 
did send a letter to the Navy on this topic about two months 
ago, as of yesterday, and I am still waiting for a written 
response.
    But what I would like to know from you, what steps are you 
taking to increase basic nautical and celestial navigation 
training for your sailors and remove dependency from electronic 
devices? The way I understand it, they do use an off-the-shelf 
product that other civilian navigators use, as well as a 
program that is specific to the Navy. They just do not get 
those up-to-date downloads, and they do not have the paper 
charts necessary. Maybe you can fill me in a little bit.
    Admiral Richardson. Well, with respect to navigation, it is 
something that, obviously, we take very seriously every moment 
that we are underway and looking into the future.
    With respect to minimizing our vulnerability to electronic 
navigation, global positioning system [GPS], and those sorts of 
systems, really a multifaceted approach. We have started 
teaching celestial navigation, and so those types of courses 
are back in the curriculum at the Naval Academy and other 
places. We can use technology to move us beyond the sextant in 
terms of proficiency and accuracy there.
    One of the things that I am working hard with our 
industrial base partners is there are other ways to get 
precision navigation and timing into our systems, which is so 
critical not only for navigation, but also for weapon system 
performance and everything across the board. That is an area of 
emphasis as well. These would be systems that would be 
independent of GPS and potentially more precise than GPS. We 
are working very hard across the full spectrum.
    Senator Ernst. Okay. That is very encouraging. We cannot 
forget that we need to stay a little bit old school.
    Admiral Richardson. We have got to stay in the channel, 
ma'am.
    Senator Ernst. That is right. Outstanding. Thanks, Admiral. 
I appreciate that.
    General Goldfein, I recently did have the opportunity to 
visit one of my Iowa Air National Guard units, 185th Air 
Refueling Wing, in Sioux City. One of the things I noticed was 
the pilot shortage. They continue to talk about that. I know 
the chairman has already addressed this issue. But what I would 
like to maybe know from you is, is there a solution for the 
Guard and Reserve force as well? What can we do to better 
enable them with our pilot shortage?
    General Goldfein. Ma'am, actually it is a very similar 
solution to what we look at in the Active Duty because the 
motivations are the same and the same pilot who joins because 
very often, as you know, a lot of the Air National Guard 
actually came from the Active Duty. The important part for us 
is to ensure that they are getting the same opportunities to 
train in the Air National Guard as they have in the Active 
Duty.
    Like General Milley said for the Army, the Air Force is 
structured in a way as well that we could not do the job that 
we are required to do without the Air National Guard, the Air 
Force Reserves, and the Active component all working together. 
Especially in the mobility community is where we are actually 
the most connected in terms of these associations and how we 
get together to get the mission done.
    Actually what I mentioned in terms of quality of service, 
making sure they have the hours to fly, that they have the 
resources they need to be able to be competitive, at the same 
time, we also provide the financial incentives they need to 
stay. All those come together. That is going to improve our 
retention rates, and we are fully committed to that.
    Senator Ernst. Wonderful. Thank you very much.
    Just very briefly, in March, the Army announced a new 
associated units pilot program partnering National Guard and 
Reserve components with an Active brigade combat team. My 
understanding is that this could greatly increase the readiness 
of our Reserve forces and reduce costs.
    General Milley, do you have any updates on how this program 
is working so far? Again, sir, very briefly, please.
    General Milley. Yes. We have got 14 associated units right 
now in the pilot program. We do think and hope that it will 
increase the readiness of the Guard, along with increased CTC 
rotations and increased requests for man-days. In combination, 
all of those things will help increase the readiness of the 
National Guard.
    Senator Ernst. Outstanding. We love our Guard folks, do we 
not?
    General Milley. Absolutely.
    Senator Ernst. Okay. Thank you, sir.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Tillis?
    Senator Tillis. Thank you, Mr. Chair.
    General Goldfein, thank you for being here. I would note I 
was here for your opening comments. I had two concurrent 
committee meetings I had to run to. But you said something I 
think made me reflect on the 440th, and I am not going to focus 
on it except to say you were saying you need the flexibility to 
get to shed excess infrastructure if you are going to address 
some of your budget constraints. I think the 440th was a 
classic example of that because I know very well that there 
were at least five or six other sites that were either 
statutorily protected or protected by BRAC [Base Realignment 
and Closure] that in your opinion would have been a better, 
more appropriate way to get to the target that you were 
hitting. I understand the pressure you are under.
    Hopefully, we will repeal sequestration, but if we do not, 
we need to find some other ways to provide you with flexibility 
to weather this storm.
    I have one question for you, and it really has to do with 
the NDAA from fiscal year 2016 which has I think a requirement 
to retain 1,900 aircraft. How are you going to comply with that 
requirement, or can you?
    General Goldfein. Sir, actually in this FYDP [Future Years 
Defense Program], we will comply with that. The next FYDP 
afterward is going to be a challenge because as we bring on new 
weapon systems, given all the other challenges we face, being 
able to maintain the 1,900 is going to be a challenge as we 
also increase investment in some other key areas that the 
Nation requires----
    Senator Tillis. I am not sure I see how you do it. We 
should probably, outside of this committee hearing, talk about 
shedding light on that versus putting a requirement in there 
that I do not think you are going to be able to achieve.
    To the Commandant, General Neller, I have spent a fair 
amount of time down in North Carolina at Cherry Point, and I 
have had a number of discussions up here. I continue to hear 
about challenges facing readiness for your aircraft, and then 
you have the second and third order effects on challenges for 
pilot flying time, training time.
    How would you assess the current state of readiness? Give 
me an idea of what the trend lines look like.
    General Neller. The current state of readiness for Marine 
aviation is dependent upon what model type series, but in the 
aggregate, it is improving but it is not where we need it to 
be. It is below an acceptable level. We are not flying enough. 
We do not have enough ready basic aircraft, and that means the 
aircraft that we fly get turned faster and so they are harder 
to maintain. We are at our flight hour program, not that we are 
flying a lot of hours, but that is also where we get our parts.
    We are not where we want to be. I do not think we are going 
to be where we want to be. Assuming consistent, stable funding, 
if we can increase the parts support funding, it will happen 
faster. If we can get new airplanes sooner, it will happen 
faster. But the trend line is up, slightly up.
    Senator Tillis. I tell you one thing I saw down at Cherry 
Point where really the rubber hits the road and you are down 
there and you see these repair operations. The way that it 
works, they can go so far with certain repairs, and then they 
are either waiting for parts or they are relying on some other 
part of the supply chain to finish the repairs. We got planes 
that could probably be ready to go but for changes in some of 
the processes, some other things that we may need to do to 
provide you with the flexibility or the funding to do it. I 
know that has to do with funding in some of the accounts that 
have been depleted over time. We have got to shed light on that 
as we go into planning for next year.
    General Milley, you made a comment about we are mortgaging 
our future readiness to be ready today. I mean, we are creating 
a debt. Would you mind getting into specific examples of what 
that looks like?
    General Milley. Well, specifically with respect to the 
budget, we have, over many, many years now, undercut or reduced 
our S&T [science and technology] and R&D [research and 
development] parts in the modernization accounts. That part of 
the budget, that part of the pie has been reduced over time. 
That is the part of the pie that is future readiness because 10 
years from now, 15 years from now, those R&D projects, those 
S&T projects--they become real weapons or real equipment. That 
is what I am talking about. That part of the pie has been 
reduced.
    We are trying to, in this President's budget, make some 
hard choices as a service given a top line and given basically 
a fixed amount on the compensation piece of it to try to 
balance the readiness today versus modernization, S&T, and 
infrastructure, et cetera for tomorrow. These are hard, tough 
choices. In the Army's piece of it, we are preferencing, we are 
biasing today's readiness because of the gaps from the last 15 
years. We got to get them back up to speed because of the 
threats we have all been talking about.
    Senator Tillis. Well, thank you all for your service. I 
thank Senator McCain for opening his question about your 
position on the deleterious effects that sequestration is going 
to continue to have. If we take nothing away from this, we have 
to be unified and end this ridiculous way to budget and protect 
our Nation. Thank you all.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Donnelly?
    Senator Donnelly. Thank you, Mr. Chairman.
    Thank you all for being here.
    In 2014, the Jacob Sexton Military Suicide Prevention Act 
was signed into law through the fiscal year 2015 NDAA. It was 
the first bill I introduced after joining the Senate, and it is 
named after a Hoosier soldier we lost to suicide in 2009. Last 
year was the fourth straight year we lost more servicemembers 
to suicide than to combat.
    My colleague, Senator King, is sponsoring a showing of a 
movie, ``Thank you for Your Service,'' which touches upon this 
very subject. When we talk about taking care of our troops, 
when we talk about readiness, when we talk about maintaining 
the strongest fighting force the world has ever known, I cannot 
think of anything more fundamental than ensuring the physical 
and mental health of our men and women in uniform.
    The Sexton Act mandated that each of the services provide a 
robust mental health assessment to every servicemember, Active 
or Guard or Reserve, every year. I would like to know how each 
of your branches are doing in implementing this requirement. 
General Milley, if you could touch on that.
    General Milley. Thank you, Senator.
    Within the Army we are seeing in the last year an 
improvement, meaning a reduced number of suicides, slight but 
significant enough to be noticeable across the force. That is 
important. All the efforts that we have done with your help and 
Congress' help and lots of folks' help over the last several 
years we think are showing leading indicators of improvement in 
suicide, which we recognize is a component of readiness because 
it is a tragic event.
    Specific to your question, we are implementing through 
MEDCOM [U.S. Army Medical Command] annual mental health 
assessments for the force in the regular Army. I would have to 
check on the Guard and Reserve on how that is being done. But 
we are doing that throughout the force.
    [The information referred to follows:]

    In 2014, the Army began incorporating the annual Mental Health 
Assessment into the routine annual Periodic Health Assessment, which is 
utilized by all three components (Active Army, Guard and Reserve). 
These assessments are completed concurrently. The Mental Health 
Assessment questionnaire may be reviewed by a behavioral health 
provider or the medical provider completing the Periodic Health 
Assessment. The review is followed by a person-to-person encounter as 
required in Department of Defense Instruction 6490.12, and section 
1074n of title 10, United States Code.
    The new Department of Defense Periodic Health Assessment will 
provide an optional opportunity for a Behavioral Health provider to 
review the Mental Health Assessment portion only, while a healthcare 
provider will complete the rest of the Periodic Health Assessment. 
Periodic Health Assessment completion is carefully tracked throughout 
the Army.
    The Mental Health Assessment is also fully integrated into the 
Deployment Health Assessment program with a person-to-person pre-
deployment mental health assessment and three post-deployment mental 
health assessments as directed in section 1074m of title 10, and 
implemented in Department of Defense Instruction 6490.12, Mental Health 
Assessments for Service Members Deployed in Connection with a 
Contingency Operation.

    We also do routine post-deployment health assessments. If 
you go to Iraq, Afghanistan, come back, we do TBI [traumatic 
brain injury] checks. We have got a lot of programs right now 
throughout the force to focus on the very thing that you are 
talking about. We are taking it serious, and we think we are 
making some improvement.
    Senator Donnelly. Thank you.
    Admiral Richardson and General Neller, I know you are a 
team in many ways on this. If you could touch upon it.
    Admiral Richardson. Sir, exactly the same commitment. We 
are on track to implement that completely in compliance with 
your intent. We share your deep commitment to the mental health 
of our sailors.
    With respect to the other measures to prevent, we find that 
the more that we can make our sailors feel like a member of a 
team that they have got, a network of support that they can 
fall back on, that seems to be one of the most effective 
things. That, in combination with an assessment, we hope to 
turn this thing downward.
    Senator Donnelly. Thank you.
    General Neller?
    General Neller. According to the senior medical officer, 
who is a Navy admiral that is for the Marine Corps, we are in 
the process of implementation. He estimates on the active side 
by the end of fiscal year 2017, it will be implemented. The 
Reserve will probably take longer just because of the nature of 
their drilling on weekends and having access. But as far as 
filling out the questionnaire online and then having a care 
provider contact them and have a conversation with all the 
intentions of the legislation and the law, we are planning on 
being fully implemented by the end of fiscal year 2017, 
Senator.
    Senator Donnelly. Thank you so much.
    General Goldfein?
    General Goldfein. Sir, I will just say we are in the same 
boat, and we will be fully implemented by about the mid part of 
fiscal year 2017.
    But I will also add we are taking a little bit different 
approach as well. It is fairly new. We are actually taking the 
SOCOM [Special Operations Command] approach that they have 
approached it with. Their approach is if we would take an 
aircraft on the schedule at a certain periodic time to do 
periodic maintenance and then take an aircraft off the schedule 
at longer periods of time to do depot maintenance and make sure 
they are in good shape and put them back in the fight, why 
would we not do the same thing for airmen? We are actually 
looking at taking your initiative to the next level, which is a 
periodic maintenance schedule for the human to increase 
performance. That takes the stigma off because if you are 
having to go in based on a schedule and everybody is having to 
do it, we think it will have profound effects.
    Senator Donnelly. Okay.
    Admiral Richardson, you were kind enough to visit Crane 
Naval Base. It is integral to several modernization efforts we 
have going, most prominently the Ohio replacement program. How 
does our pattern of reliance on continuing resolutions impact 
your ability to modernize the Navy?
    Admiral Richardson. Sir, I think that we all sort of feel 
this pain in some way or another. This continuing resolution 
business really undercuts the trust and confidence that we have 
with our suppliers, with the industrial base that are so key to 
providing not only at the ship level, particularly in the 
strategic deterrent business, but also down at the component 
level. When you disrupt that trust and confidence, when you 
double the amount of contracts that you have to write just to 
get through the year, when you prevent the ability to buy 
things in blocks over a long period of time, the only thing you 
are doing is increasing cost, increasing time, and that 
translates to increasing risk to our warfighter.
    Senator Donnelly. Thank you all for your hard work and 
dedication.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Manchin?
    Senator Manchin. Thank you, Mr. Chairman.
    I thank all of you for your service and for being here 
today.
    The one question I wanted to ask--and I know it has been 
batted around quite a bit, but the United States Air Force--I 
will start, General Goldfein, with you, but it is really for 
all of you. Standing tradition of leadership and coalition 
building, which you all do, and it is evident today in the 
significant role in the 20-nation air coalition aligned against 
ISIL [Islamic State of Iraq and the Levant], which you all have 
done quite effectively. As you may know, only four of our 
fellow NATO coalition members spend at least two percent of 
their GDP on defense spending. The target for NATO countries--
there are 28, and it should be at two percent. There is only 
five, including the U.S. That leaves 23 that do not seem to 
care or make any attempt whatsoever. I cannot figure why that 
condition was even put in if it was not intended to be kept or 
met.
    I think I would just like to hear your all's assessment of 
this and what effect it is having. I know there have been some 
wild political statements made about what would be done. I do 
not subscribe to any of that. But I am thinking why do we still 
have that condition if we are not going to force anyone or 
there is no retribution if you do not. How is it affecting I 
think, sir, is what I would ask.
    General Goldfein. Sir, I will just tell you the Secretary 
has been over there and talking to NATO significantly about 
their contribution and increasing their investment in defense. 
that was certainly something I think all of us at the table 
would want to see not only in the air domain but in all the 
domains.
    One of the areas that we are focused on in the Air Force 
specifically over the next several years is coalition-friendly 
command and control because the information age of warfare is 
more about data sharing. It is more about information sharing, 
and it is more about being able to connect into a common 
network and architecture. Technology has increased security 
over time and has actually made that harder. As we partner with 
not only our NATO allies but other allies and partners around 
the globe, being able to have them connect into a common 
framework, a common network, share information, and be able to 
fight as a coalition is going to become more important in the 
future, not less.
    Senator Manchin. I know that, but I am just saying how much 
of a strain does that put? We know with our challenges we have 
financially and everybody else's challenges around the world. 
But if they are basically able to just neglect that, thinking 
we are going to do all the heavy lifting, which we have done 
and I understand, but also come up with the financial 
wherewithal to do it too. Is there anything that we could do 
that kind of--do you see any movement in a positive direction? 
I mean, I understand Germany kind of takes the lead on this and 
the rest of them follow Germany. If Germany does not take it 
serious, it is not going to happen.
    General Goldfein. Sir, one of the areas that would be very 
helpful I think--and we have had this conversation. I know I do 
it as an air chief, as a global air chief, and my partners here 
do as well--and that is, you know, we call something high-
demand, low-density, and then we tend to admire it over time. 
We do the best we can to be able to increase the density or 
decrease the demand, but it does not often happen. It would be 
very helpful if our NATO partners and others could actually 
contribute in those key mission areas and enablers, which would 
raise the bar for everyone as opposed to sometimes what they 
choose to invest in.
    Senator Manchin. Would anybody else have any comments?
    General Neller. Senator, I would just add that, first, this 
is not a new problem. I was a NATO officer in the 1990s, and 
after the end of the Cold War, they took a peace dividend and 
they have not reinvested.
    Second, our military counterparts--they want to participate 
and they want to play, and they play within their capability. I 
think we need to provide them opportunities to do that, 
whatever their percentage of GDP is for investment.
    Lastly, I think it is changing. I think it is changing. I 
think the world environment and the strategic environment you 
see particularly in Europe is causing them to recognize that 
they have under-invested particularly if the Eastern European 
countries are going the point. I think there will be some 
change. I think we should encourage them. I think if there are 
foreign sales, that we should facilitate their purchase of U.S. 
equipment, which would increase our interoperability. Then 
whatever way, whether it is FMS [foreign military sales] or 
their own money, we encourage them to increase their 
capability.
    Admiral Richardson. Sir, I will just add onto that.
    First, just like General Neller said, my counterparts in 
NATO--they are as frustrated as anybody about this. They want 
to be full participants in securing not only their nation but 
Europe and contributing to global security and stability. To 
that end, again, the importance of American leadership to 
provide an example, be there is another thing that they comment 
on consistently. As a team, whether it is equipment 
interoperability, command and control, they want to participate 
and they are as frustrated at these policy decisions as 
anybody.
    Senator Manchin. General?
    General Milley. As you know, Senator, we have had a long 
history in Europe with Army. We have still got 30,000 troops 
over there doing a lot of exercises. We are putting out APS 
[active protection system] systems, et cetera.
    With respect to the NATO partner spending, et cetera, what 
I have read is that their defense spending is actually 
increasing with many of these countries lately, perhaps not at 
two percent yet, but Lithuania, Latvia, Estonia, Poland, even 
Germany, Sweden, Finland, Norway, to include the U.K. [United 
Kingdom] recently--they are reversing some of these trends 
because of what they have seen in Ukraine, in Crimea, and 
elsewhere. They are investing and they are expanding.
    The key now is interoperability and work as a team.
    NATO is a critical alliance. There has been a long peace in 
Europe since 1945, so going on seven decades. Part of that is 
because of nuclear weapons but also because 300,000 soldiers 
stood on a wall up until 1989-1990, but also because of those 
European allies all shoulder to shoulder facing down the Soviet 
Union. That alliance is key. It is critical, and I think it is 
mutually interdependent between us and them in order to achieve 
effect on any kind of future battlefield.
    Senator Manchin. I will just finally wrap up real quick. If 
this is one of the conditions that the NATO member nations had 
when they formed NATO, how many other conditions are not being 
met?
    There is no enforcement, no policing. There is no 
retribution. I mean, it just seems that if you are not going to 
do anything, why do we have it there? They are going to say do 
not worry about that. The Americans will pick it up. They will 
pay.
    You know, you understand when we go to our constituents, it 
is pretty hard to explain why is it there if you are not going 
to make them do something, if there is no retribution. I am not 
saying we are not going to help, not going to defend. But 
maybe, you know, the World Bank, interest rates, things of this 
sort that gives them privileges being a NATO member, that there 
might be a little bit of a penalty. It might give them a little 
bit of a push. I am understanding it is not from the military. 
It must be coming from the policymakers and state departments.
    But thank you all again for your service. I really 
appreciate it.
    Senator Reed [presiding]. Thank you.
    On behalf of Chairman McCain, Senator Wicker, please.
    Senator Wicker. Thank you, sir.
    For General Neller, on April 6th, Secretary Stackley 
testified that the required number of amphibious ships 
necessary to provide the lift of two Marine expeditionary 
brigades to conduct joint forcible entry operations is 38 
ships. But he also said that number is fiscally constrained to 
34 ships, with an operational availability of 90 percent.
    We often hear about combatant commander requirements 
concerning amphibious ships.
    General, you are the man who provides the marines who 
operate off those ships. What is the right number in your 
opinion? What mix of ships should that include, sir?
    General Neller. Well, Senator, you are correct. The 
combatant commanders--if we could meet all the requirements, it 
would take 50 ships. The fiscally constrained requirement is 38 
with 90 percent availability. Right now, we are at 31. We are 
going to go to 34 by 2022.
    Senator Wicker. We will get to 34?
    General Neller. We will get to 34 by 2022.
    Senator Wicker. Where would that leave us? What would that 
not permit us to do, sir?
    General Neller. It will not give us, based on the average 
availability, the ability to embark two Marine expeditionary 
brigades which is the minimum requirement for forcible entry.
    Ultimately we will get to 38, but it will be beyond 
multiple FYDPs, I believe 33, and then it will start to go down 
if we do not sustain it.
    What is the right mix? The right mix is ideally a minimum 
of 12 big deck amphibs that can handle F-35 and Osprey, 12 LPD-
17 class, and then a 12 other comparable hull forms, ideally 
either an LPD-17 repeat or what we are calling the LXR, which 
uses the LPD-17 hull form as its base.
    Senator Wicker. That is only 36.
    General Neller. You have also got two LHA(R)s and other 
ships that would get you to 38. We have two non-well deck, big 
deck ships which would actually get you 14 big decks.
    Senator Wicker. Between the LDP-28 and the LXR, can you get 
more ship at less cost if the schedule is accelerated?
    General Neller. Well, first, Senator, I thank the Congress 
for giving us the 12th LPD.
    But absolutely. It is similar to what the CNO [Chief of 
Naval Operations] said about submarines. Anything that we block 
buy and that we can give the shipyard, whatever shipyard it is, 
certainty where they can get the workforce, they can train the 
workforce and they can learn as they build the ships, they can 
build these ships faster for less money. If we were to block 
buy five LPD-17 replacements or LXR, we could probably get 
three and a half ships for the cost of five. But that is a big 
number. I know Mr. Stackley would agree with that. It goes with 
any type of ship or any type of platform, whether it is an 
airplane. The more we can provide certainty to not just to the 
primary vendor but all the subs that build the parts, we can 
drive the cost down, and the workforce gets better. They get 
smarter. They get faster.
    Senator Wicker. Thank you, sir.
    General Milley, about Afghanistan, my understanding of our 
goal in Afghanistan is to participate in a sustained 
partnership with the elected leadership there. I would observe 
that we have had a sustained partnership for decades with our 
friends in Europe and a successful sustained partnership in 
Korea. Although there is not much kinetic warfare going on in 
Korea at this point, we are there. We have had a sustained 
partnership, and I think it has been successful for the people 
there and for Americans also.
    What is the understanding in your opinion of the Afghan 
people about our purpose in being there and our long-term 
relationship?
    General Milley. Senator, thanks.
    As you know, I have got a fair amount of time in 
Afghanistan.
    In general, the Afghan people are very supportive of the 
United States military being there. They would be fearful of us 
withdrawing completely, at least in the near term.
    What we are trying to do is working by, with, and through 
the Afghan Security Forces, who have been built up to a 
significant size now--what we are trying to do is train, 
advise, assist them in order to maintain stability against 
their enemy, their internal enemies, so that the government and 
the other elements of the campaign plan, the economy, and rule 
of law, et cetera can be sustained over time. I think that is 
going to take a considerable length of time. The attitude of 
the Afghan people is, at least from my experience, that they 
would prefer that we continue to stick with them. I think that 
is our plan, our current U.S. Government plan, and I think that 
is also the NATO plan is to continue to sustain that effort.
    Senator Wicker. I for one concur in your conclusion there, 
sir.
    Is it unsettling to the Afghan people when they hear that 
we might leave early?
    General Milley. I would say yes, but I think that we, the 
United States, and NATO have been very firm in our commitment 
now, and we have said what we are going to have going forward. 
I think that the government, the military, and the people 
understand that message, that we are not going to abandon 
Afghanistan.
    Senator Wicker. Mr. Ranking Member, I understand we have 
had some discussion about sequestration. But my understanding 
is no one has asked these panelists if they are designing a 
FYDP that reflects the return to sequestration. I realize I am 
a bit over my time, but I think it would be important for us to 
hear. I know they are horrified at the thought of sequestration 
returning.
    But if each of you could tell us, are you designing a 
future years defense plan to reflect going back to 
sequestration? General Goldfein?
    General Goldfein. Sir, we are not.
    Senator Wicker. You are not?
    General Goldfein. We are not.
    Senator Wicker. But you are aware it is the law of the 
land.
    General Goldfein. Yes, sir. We absolutely are.
    Senator Wicker. Okay.
    General Neller?
    General Neller. Sir, we are not designing one, but we have 
had discussions about what might be the consequences and some 
actions we could possibly have to take if it went into effect.
    Senator Wicker. Admiral Richardson?
    Admiral Richardson. Sir, I would say our design is based on 
providing the security that the Americans expect of the United 
States Navy. But we have always got to start that conversation 
with the sequestration levels, which puts us in a terrific bind 
to be able to meet that mission.
    Senator Wicker. No FYDP, though, that actually reflects the 
draconian things that you would have to implement.
    Admiral Richardson. No, sir. We would have to adapt.
    Senator Wicker. Finally, General Milley.
    General Milley. We have done some preliminary planning, 
Senator. I understand what the order of magnitude actions that 
would have to take place in the event of full sequestration. 
However, no, we have not developed a POM [Program Objective 
Memorandum] or a FYDP to that level of detail that would be 
submitted to the President and the Congress.
    Senator Wicker. Well, I certainly we can avoid it, but as I 
said years ago, Senator Reed, it is the law of the land and it 
surprised us all the last time when we got to that point and it 
actually went into effect. I hope we can avoid it.
    Thank you all for your service.
    Senator Reed. Thank you very much.
    On behalf of the chairman, Senator Shaheen, please.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you all very much for being here and for your service 
to our country.
    I apologize. I had two other hearings this morning. I am 
sorry that I missed much of the discussion. I am sure you may 
have already answered this question, but I think it is 
important to ask again.
    As I have traveled around the month of August, when we were 
not here in Washington, and met with businesses, one of the 
things I consistently heard from many of our businesses in New 
Hampshire--and we have a significant number that have contracts 
with the Department of Defense that provide equipment and 
technology to our military--was concern about two things. One 
was about the budgeting process and about the fact that we are 
going in again with no budget for the upcoming year and a 
short-term continuing resolution. Hopefully, we will have a 
longer-term budget after the election. The other was about the 
reduced investment in research and development.
    Can I ask you to speak to what the impact is not just of 
your budgets in the military but also of the industrial base 
that supports our military that we need to maintain if we are 
to keep our technological edge? General Goldfein, I see you 
nodding. Maybe you could begin?
    General Goldfein. Yes, ma'am. You know, the impact to 
industry, when we cannot provide some stable budget and 
projection for them, probably hits them the hardest in their 
technical workforce. What I see as a rather technical force is 
when I am talking to a company that is building, for instance, 
let us just say, an air-to-air or an exquisite air-to-ground 
missile or munition, they have got to keep a certain amount of 
that workforce engaged over time. Then when I go to them with 
one-year budgets and tell them my procurement quantities now 
are going to be here and the next year, because of trades, they 
are going to be down here, and I go jack them around back and 
forth, it causes an incredible challenge for industry to be 
able to sustain their workforce that we need. That does not 
even go into at what point do I go to them and say because of 
the global security environment, I need you to surge and build 
even more capability and produce more weapons over the period 
of time. what they tell me is, hey, we got rid of that 
workforce because you told me that you were coming down this 
year. Everything that we deal with in terms of an unstable 
budget and one-year budgets actually gets accelerated into 
industry as well.
    Senator Shaheen. You alluded to the impact that has on our 
national security and our ability to be prepared. But can I get 
you to elaborate a little more on that?
    General Goldfein. Well, ma'am, it goes to what kind of 
weapon systems that we need to modernize. For the Air Force, 
like all the services, we have got aircraft that have already 
exceeded their service life or are at the end of their service 
life and they have got to be replaced. We rely on industry to 
be able to support us with our acquisition programs going 
forward. If we do not have stable budgets, if we do not have 
the research and development dollars to be able to develop that 
technology for the future, then what happens to us is we 
continue to push that to the right. Like General Milley said, 
you start mortgaging the future to pay for the current 
readiness in the fight you have.
    The other challenge you have is as the aircraft age over 
time, they actually become more and more expensive to fly. You 
take even more of those dollars that you need for research, 
development, and modernization, and you shift them left into 
sustainment of older weapon systems. This all adds up to an 
increased risk.
    Senator Shaheen. Thank you.
    Admiral Richardson. Ma'am, if I can pile onto that----
    Senator Shaheen. Please.
    Admiral Richardson.--in support of my fellow chief. This is 
really a team effort, and this message of stability is critical 
because it is not just government R&D but those businesses that 
you visited--they are investing their own dollars in IRAD 
[independent research and development]. They need to know if 
they are going to get anything back on that investment. When we 
do not give them that signal of stability and confidence, they 
are simply not going to invest. They are going to cash out and 
they are going to be out of the business.
    The other thing is that particularly with technology 
changing so quickly today--and Senator Reed highlighted it in 
his opening statement--what used to be long-term future, that 
is becoming a more short-term future. We are not talking 
decades into the future anymore. We are talking single digits 
of years because things are moving so fast in directed energy, 
additive manufacturing, electronic magnetic maneuver warfare, 
artificial intelligence, biotechnologies. We have got to keep 
on the step with this because we are not the only team out 
there looking to capture these capabilities.
    Senator Shaheen. Thank you. Well, hopefully that is an 
admonition to Congress that we get our act together and produce 
a budget and some certainty for the long term.
    Mr. Chairman, could I ask one more question?
    Senator Reed. Senator King will have one too if you let 
him. You go first.
    Senator Shaheen. Okay.
    I know this on budget, but I just came from a hearing in 
the Foreign Relations Committee on Afghanistan, and I heard 
Senator Wicker asking about Afghanistan. I wanted to ask you 
all about the special immigrant visa program for the Afghans 
because, as I am sure you are aware, it is about to expire, and 
Congress so far has declined to extend that program. Therefore, 
we have several thousand Afghans in the pipeline who it is 
questionable whether they will get visas, and many of them are 
under immediate threat or their families are being threatened. 
Can I ask you to speak to the importance of that program to our 
men and women on the ground and why it would be important for 
Congress to extend it? General Milley, do you want to start?
    General Milley. Yes. Thank you, Senator.
    Lots, hundreds of thousands, of Afghans work for us, the 
United States military since 9/11, since we went in in 2001. 
They have been interpreters. They have been analysts. They have 
been doing a lot of things. Many of them have asked to become 
American citizens and get visas, et cetera. I personally would 
be in favor of extending that because those are brave men and 
women who have fought along our side, and there are American 
men and women in uniform who are alive today because of a lot 
of those Afghans were putting their life on the line, for their 
own country, to be sure, but with us. Now they want to become 
American citizens. I for one would like to afford them that 
opportunity.
    Senator Shaheen. Thank you.
    Would anybody else like to add? General Neller?
    General Neller. Yes, Senator. We saw a similar thing in 
Iraq and the very same thing that General Milley described 
where they are out there shoulder to shoulder with marines, 
soldiers, sailors, and airmen risking their lives and sharing 
the risk and providing great services to keep our citizens 
alive, our folks alive. I used to interview them myself and 
make sure they understood that this is not what you might have 
seen on TV but you are going to come here, you are going to 
work because you have an opportunity.
    I think there is a proper vetting process. I know 
commanders up to the rank of flag and general officers are 
involved in this. I signed off on all of these myself. I know 
there are background checks. I fully support, with the proper 
vetting process, that this program be allowed to continue.
    Senator Shaheen. Thank you all very much.
    Thank you, Mr. Chairman.
    Senator Reed. On behalf of Chair McCain, Senator King, 
please.
    Senator King. Just briefly, Senator.
    One of the privileges of serving on this committee is the 
relationship that we have with our services, and one of those 
relationships is the military fellows that are assigned to our 
offices. Today marks probably the last hearing for Lieutenant 
Commander Dennis Wishmeyer, a naval officer who has served in 
my office for this year. I just want to recognize the 
importance of that program, recognize the work that Lieutenant 
Commander Wishmeyer has made. If I have asked good questions, 
they have been his. If I have asked stupid questions, they are 
mine. I just wanted to provide that recognition.
    Thank you, Mr. Chairman.
    Senator Reed. He must have been here today, Senator King.
    On behalf of Chairman McCain, let me thank you, gentlemen, 
for your testimony, forthright and very sobering. Thank you for 
your service individually and please extend our thanks and 
gratitude to the men and women that you lead so proudly.
    With that, I would adjourn the hearing.
    [Whereupon, at 11:45 a.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator John McCain
                future modernization vision and strategy
    1. Senator McCain. I assume each of your services has a vision for 
how your force should be configured ten years from now with respect to 
warfighting capacity and capability, and accompanied by a modernization 
strategy to meet the needs of the combatant commanders. Can you each 
describe the major components of your respective Service's 
modernization vision, and the strategy you will follow to achieve that 
vision?
    General Milley. The vision is an agile, adaptive Army that is 
lethal, professional and technically competent with a decisive edge 
over potential near-peer state adversaries. To achieve this, the Army 
must achieve an affordable balance between modernization, readiness, 
and manpower. Right now we are out of balance, with Army modernization 
paying the bills to build readiness--we have no other choice.
    Based on the current fiscal constraints, in the near- to mid-term 
the Army will guide equipment modernization efforts through five 
components: 1) Protect--Protecting Science and Technology investments 
is key to ensuring the next generation of breakthrough technologies can 
be rapidly applied to existing or new equipment designs; 2) Invest--The 
Army continues iterative reviews of capability gaps to ensure proper 
alignment of limited resources with mission requirements and Army 
priorities; 3) Modernize--the Army must incrementally modify or 
modernize existing systems to extend service life and maintain an 
advantage at each echelon; 4) Sustain--Returning Army equipment to the 
required level of combat capability remains central to regenerating and 
maintaining near-term readiness; and 5) Divest--The Army divestment 
process seeks to identify equipment and systems that are excess, 
obsolete or no longer required to reduce and eliminate the associated 
sustainment costs.
    For the long-term we are in the process of identifying the 
characteristics of the future battlefield, the attributes our soldiers 
will require to fight and win on that battlefield, rewriting our 
doctrine and, finally, determining what critical capabilities we 
require to fight and win in that environment. We will have a phased 
approach as we are investing in the development and fielding of new 
combat capabilities while divesting others.
    Admiral Richardson. The Navy vision for the future force has two 
components: a ``fleet design'' and a ``fleet architecture''. ``Fleet 
design'' is how the Navy fights and wins, expressed through concepts, 
doctrine, and tactics, techniques, and procedures. ``Fleet 
architecture'' refers to the activities that support the fleet design, 
which include:

      Presence, surge forces, and force packages
      The processes through which forces are prepared for and 
recover from deployment
      Bases and facilities that support or host material 
components of the fleet
      Material components of the fleet, such as ships, 
aircraft, unmanned vehicles, personnel, weapons, and sensors.

    In order to achieve this vision, I have identified leads for fleet 
design and architecture for the near-, mid-, and far-terms. In general, 
I have designated U.S. Fleet Forces Command as the supported command 
for the ``present-to-five year'' time horizon; OPNAV N9 for the 
``three-to-ten year'' time horizon; and OPNAV N3/N5 for ``eight years 
and beyond'' time horizon. These leads are currently taking stock of 
the myriad ongoing activities across the Navy that inform our thinking 
about fleet design and architecture. They are responsible for 
aggregating the inputs from studies, war games, experiments, and other 
exploratory activities into strategies, concepts of operations, 
requirements, or additional study both within and across time frames.
    General Neller. In September, we began a detailed DOTMLPF-C 
analysis of the appropriate end strength for the Marine Corps as part 
of our Marine Corps Force 2025 (MCF 2025) efforts. This analysis will 
provide the associated costs, risks, and abilities associated with 
various courses of action.
    Assuming 182K end strength, Marine Corps Force 2025 emphasizes 
improving information warfare capability and capacity to allow our 
operational commanders the ability to fight in five domains and protect 
our ability to command and control. Additionally, we will increase our 
inventory of marines with special skills (e.g. intelligence, electronic 
warfare, and cyber) that are frequently called upon to make repeated 
deployments without even the minimum reset time. In order to do this, 
we will have to make tough decisions between modernization and 
readiness, along with force structure trades. However, some of the risk 
can be mitigated in certain circumstances by our Reserve component or 
the joint force.
    General Goldfein. The Air Force has refocused its process to have 
our strategy drive our plan and our plan drive our program. While a 
primary focus remains balancing our investments in capability, ensuring 
sufficient force capacity, and maintaining the readiness of our current 
force, our new strategy, planning, and programming process (SP3) 
provides a comprehensive and actionable pathway toward building the 
future force. This framework is designed to provide our leaders with 
the long-term outlook (10-30 years out) needed to analyze future 
challenges and assess our modernization priorities. Those priorities 
are then translated into programmatic actions in the short- to mid-term 
(1-5 years), balanced against competing internal (e.g. readiness, 
capacity, etc.) and external considerations (e.g. current operational 
requirements, fiscal constraints, etc.) and subsequently submitted to 
Congress in the form of the President's Budget. This ensures our 
continued ability to meet near-term challenges while developing the 
force of tomorrow.
                   defense modernization ``bow wave''
    2. Senator McCain. Considering the additional acquisition 
authorities Congress provided the Service Chiefs in the Fiscal Year 
2016 National Defense Authorization Act, and is proposing in the Fiscal 
Year 2017 NDAA, what specific actions will you take regarding your 
Service acquisition programs that could help you successfully navigate 
through the magnitude of the impending defense modernization ``bow 
wave'' we are facing in the next decade?
    General Milley. To navigate through the magnitude of impending Army 
defense modernization ``bow wave'' I am leveraging the authorities 
provided to me in the fiscal year 2016 NDAA by reinvigorating the Army 
Requirements Oversight Council (AROC). The AROC was changed from a 
staff centric to a commander centric forum. The AROC is the primary 
forum in which I exercise my requirements authorities and question 
assumptions. I review all categories of requirements for major 
acquisition programs and concur in programs' cost, schedule, technical 
feasibility, and performance tradeoffs before the programs' Milestone A 
and B decisions. I use the AROC to review proposed tradeoffs in the 
above areas with active participation from key stakeholders. The AROC 
has been instrumental in driving improvements in requirements analysis; 
resulting in cost savings, reduced acquisition timelines, and informed 
risk management.
    Also, to support execution of my new authorities, and with the 
Secretary's approval, I directed a significant Army Staff re-
organization pilot effort by realigning requirements and resourcing 
functions under a single three-star general, the G-8. My staff is also 
examining long-standing processes and actively making changes to 
solidify requirements and shorten acquisition timelines. For instance, 
our Analysis of Alternatives process has been restructured and will be 
initiated earlier in the requirements generation process. The Army also 
announced the stand-up of the Army Rapid Capabilities Office to 
expedite the design, development, evaluation, procurement and fielding 
of critical combat materiel capabilities to deliver an operational 
effect within one to five years. Most recently, we combined two 
existing processes into a new, single process, the Strategic Portfolio 
Analysis Review (SPAR). The SPAR reviews capabilities across a 30-year 
period to prioritize existing and emerging capabilities against a near-
peer pacing threat that are aligned with Army priorities and 
resourcing. The assessment will provide in-depth analysis the Secretary 
and I need to make difficult requirements decisions within a 
constrained resource environment.
    As a result of these initiatives, I anticipate that some 
requirements will be deferred, some programs will be accelerated, some 
programs may be terminated and some current equipment will be divested. 
In the aggregate, the Army cannot maintain aging equipment that is no 
longer relevant and execute over 700 programs within the resource 
constrained environment that stretch our fielding timelines over 
decades to make them affordable. If we plan on defeating near-peer 
threats, maintaining our technological edge, and addressing 
modernization challenges we must use these initiatives to streamline 
our processes. In the long-term, these initiatives will enable the Army 
to better navigate its future modernization challenges.
    Admiral Richardson. The 2016 NDAA has increased my ability to 
exercise ownership of the Navy acquisition process. Ownership includes 
four key elements: authority, technical expertise, responsibility, and 
accountability. I'm taking a number of steps to better execute our 
requirements, acquisition, and budget processes in ways that will 
directly impact the warfighter. I'm committed to improving execution, 
transparency, and integration in acquisition, with the goal of 
increasing effectiveness, confidence and speed.
    These efforts include an even more rigorous implementation of the 
Navy Gate Review and Resources, Requirements, Review Boards processes 
to better manage trades between cost, schedule, technical feasibility 
and performance; my early involvement and approval of Concepts of 
Operations and Concepts of Employment approval; a stronger role for 
analytically-based concepts and analysis; and more accountable 
timelines and tracking of requirements and acquisition decisions and 
documentation.
    I am also working to include discussions with industry as early as 
possible to better understand the ``knee in the curve'' above which 
additional cost yields only marginal capability enhancements. This 
collaboration will help ensure only technically feasible and affordable 
requirements are pursued.
    I am taking steps to streamline the requirements and acquisition 
processes for more concise, clear, and timely capability and 
acquisition documents. In support, I'm also taking steps to increase 
training, qualification, and career path management for our Navy 
requirements officers and professionals.
    Finally, I am convinced that we must deliver technological 
advances, warfighting capability, and operational capacity to the fleet 
more quickly. The Rapid Prototyping, Experimentation and Demonstration 
(RPED) initiative to improve agility of capabilities and expertise 
through prototyping and experimentation will result in more realistic 
and informed requirements and deliver technological advances to the 
Fleet more quickly. For technologies that are mature and ready to 
transition to production, we are establishing Maritime Accelerated 
Capabilities Office (MACO) programs to employ more tailored processes 
and decentralized decision making, which will cut the timelines for 
delivering new programs to our warfighters.
    General Neller. The fiscal year 2016 NDAA redefined the Service 
Chief role in the acquisition process with a focus on the authorities, 
responsibilities and accountability associated with defining the 
service as a customer of the Defense Acquisition System and the chief 
as the customer's direct and accountable representative. Under section 
801 of the fiscal year 2016 NDAA, the Commandant acknowledged 
responsibility for improving our acquisition outcomes and identified 
five fundamental focus areas shaping our actions in this commitment: 
leadership, people, streamlining processes, role of Service Chief and 
impact of funding stability. Subsequently, the report responding to the 
section 808 requirement to identify actions taken and planned to link 
and streamline requirements, acquisition and budget processes 
identified in greater depth and breadth the Marine Corps initiatives 
advancing this commitment. The pending legislation for the fiscal year 
2017 NDAA essentially carries on the comprehensive focus on acquisition 
reform. While the particulars may be negotiable on the Hill at present, 
the underlying mandate remains clear--to drive innovation to meet the 
warfighting needs and ensure accountability to deliver military 
capabilities on time, on budget, and fulfilling stated requirements.
    The Marine Corps modernization strategy is well-served by the 
combined acquisition improvement initiatives of Congress, the 
Department of Defense, Department of the Navy and the Marine Corps. In 
our continued efforts to achieve better program outcomes, we recognize 
the critical need to, first, get the requirement right. Our approach 
begins with strengthening the decision support foundation. We have 
anchored future capability development in two fundamental concept 
documents. They are the Commandant of the Marine Corps Fragmentary 
Order or FRAGO 01/2016: Advance to Contact issued in January 2016, and 
the Marine Corps Operating Concept dated September 2016. These 
documents will serve as the institutional mooring to continuously 
inform our capability development and budget programming decisions. As 
reported in our response to the fiscal year 2016 NDAA section 808, our 
requirements definition employs a capabilities based assessment (CBA) 
process for the necessary analytical rigor at a strategic level to 
guide force development and set priorities for investments to build the 
future Marine Corps. In coordination with organizations across the 
Marine Corps, the Deputy Commandant for Combat Development and 
Integration (DC CD&I), as the requirements process owner, leads the 
annual CBA to produce the Marine Corps Enterprise Integration Plan 
(MCEIP). This plan drives future capability development and associated 
investments aligned to CMC's strategic objectives. The CBA/MCEIP 
process provides the enterprise discipline to deliberately translate 
our warfighting concepts into modernization investments while designing 
our programs for success.
    Specifically, FRAGO 01/2016 requires that the Commanding General, 
Marine Corps Combat Development Command (the DC CD&I under a different 
``hat'' that integrates training as well) will drive our capability 
development process to ensure all materiel and non-materiel solutions 
will be ``born MAGTF,''(Marine Air-Ground Task Force) optimizing the 
MAGTF as our principal warfighting formation, known for its 
adaptability by scalable task organization. The FRAGO also specifies 
that we continue developing 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. We are committed to pursue technologies that 
enhance our warfighting capabilities such as unmanned aerial systems 
and robotics, artificial intelligence and autonomous technologies that 
provide tactical and operational advantage.
    The recently published Marine Corps Operating Concept (MOC) further 
strengthens our requirements foundation by its unflinching recognition 
of the challenge ahead. It emphasizes upfront that the Marine Corps is 
currently not organized, trained, and equipped to meet the demands of a 
future operating environment characterized by complex terrain, 
technology proliferation, information warfare, the need to shield and 
exploit signatures, and an increasingly non-permissive maritime domain. 
The MOC challenges us to ``overcome enduring obstacles to leverage and 
sustain commercial-off-the-shelf systems.'' An affordable 70 percent 
solution now is better than an outdated solution ten years from now. 
For improved capabilities in the high-demand, speed-of-light 
warfighting function ``Command and Control,'' for example, we must 
drive innovation by combining a mission perspective with commercial 
developments that allow information providers to collaborate on a 
situationally dependent architecture that lets information users opt-in 
to access or create tailored data streams. We will be vigilant to take 
more and better advantage of commercial-off-the-shelf network and data 
solutions.
    Future modernization efforts face the steep challenge of keeping up 
with globalized, rapid technology growth and proliferation. This 
demands the agility to accelerate the acquisition process when 
appropriate. In this regard, we are working with the Department of the 
Navy to create a menu of appropriate accelerated means to respond to 
the urgent materiel priorities of the operating forces. Within the 
Marine Corps we are establishing a Rapid Capabilities Office. This is a 
collaborative effort integrating our warfighting lab, requirements, and 
acquisition experts. Specifically of relevance to this QFR, The RCO 
will enable the procurement of promising capabilities, through a 
tailored acquisition process, while maintaining the ready capability to 
inform future and ongoing requirements and resource planning for 
potential transition to the traditional acquisition process. Our 
acquisition professionals are ready to work the required capabilities 
within the year of execution, specifically with emergent technology 
that appears to offer significant military utility.
    Our success in transforming the force for the future will also 
depend on the collaborative ties we form. Specifically, we are strongly 
partnered with US SOCOM and the Army through formal venues, such as the 
Army-Marine Corps Board and ongoing objective-driven discussion, e.g., 
our series of regular staff talks between the Marine Corps and the 
Special Operations Forces requirements and acquisition leadership. As 
these USMC-SOF staff talks are getting underway, they have the 
potential to yield quick wins, such as a tailored abbreviated 
acquisition program, and expanded access to our innovative requirements 
transition tool. Focused engagement with Industry will likewise serve 
to strengthen our ability to modernize our systems. For example, we 
recently kicked off the Marine Corps Infantry Equipping Challenge. We 
are engaging Marine Corps stakeholders and industry to identify 
innovative (COTS & Non-developmental Items) capabilities specifically 
tailored to our infantry marines in order to rapidly evaluate and field 
COTS & NDI technologies supporting their entire mission set.
    Another illustration of our effort to more effectively engage the 
industrial base is the recent release by the Department of the Navy of 
a special notice to industry calling for white papers on technologies 
that will be demonstrated in April. This is part of the aforementioned 
menu of accelerated acquisition means. This project is known as the 
Ship-to-Shore Maneuver Exploration and Experimentation Task Force in 
cooperation with the Deputy Assistant Secretary of the Navy for 
Research, Development, Test and Evaluation. It will explore the 
potential for what may be rapidly prototyped to help with more rapid 
ship-to-shore maneuver. We must define the art of the possible in this 
regard, whether small boats with small teams to move ashore quickly; 
robotics; manned-unmanned teaming; or unmanned aircraft systems able to 
pass information, for example. After the demonstration, the government 
will select technologies assessed good enough to sign a Cooperative 
Research and Development Cooperation Agreement.
    In addition to the foregoing, we are:

      Working with the Service Acquisition Executive to define 
in-depth the role of the Principal Military Deputy as central to the 
Commandant's acquisition decision support under fiscal year 2016 NDAA.
      Executing an Organizational Design Review of our ground 
weapon and IT systems acquisition hub (Marine Corps Systems Command), 
including its substantial realignment to implement MAGTF portfolio 
management.
      Conducting an Acquisition Workforce Review to identify 
the optimal allocation of acquisition personnel in and outside the 
acquisition community; to be completed by the end of fiscal year 2017.

    As the Commandant emphasized in his 26 May transmittal of the 808 
report, ``We remain committed to the challenge of innovating our 
acquisition processes and tools to produce 21st Century military 
capabilities apace with the changing global security, fiscal and 
technology environments.'' The above provide a representative sampling 
or snapshot of this leadership heading today, while nonetheless noting 
that we continue actively exploring, experimenting and developing 
solutions with the characteristic, forward-looking sense of mission 
urgency that drives our Corps as the nation's expeditionary force in 
readiness.
    General Goldfein. The first action is to revamp our capability 
development activities by reinvigorating Development Planning. 
Accomplishing this action, in concert with experimentation, will 
produce empirical data to inform Air Force strategic decisions about 
how to move from nearer-term, stove-piped planning toward longer-term, 
multi-domain integrated capability planning. We will also strengthen 
our capability development by sharpening our focus on prototyping and 
experimentation efforts. Our focus on prototyping and experimentation 
efforts will inform critical decisions on operational utility, 
technical feasibility, producibility, and programmatic risks and 
accelerate the fielding of advanced capabilities to operational forces.
    The second action is to insert agility and continuous improvement 
into our standard acquisition processes. Our acquisition policy and 
processes teams will review opportunities to tailor acquisition 
regulatory requirements with the objective of delivering the needed 
capability to the warfighter in the shortest practical time while 
balancing risk, ensuring affordability and supportability, and 
providing adequate information for decision making.
    Third, we will refine our affordability assessment process to 
inculcate responsible and sustainable investment decisions through the 
formal examination of the long range implications of today's capability 
requirement choices.
    Fourth, we will acquire systems using a modular open system 
approach which will accelerate replacements and/or upgrades to 
capabilities and allow for open competition to more vendors. This open 
systems approach, coupled with efforts to improve partnership with 
Industry, allows us to insert speed and flexibility in product 
development to facilitate rapid innovation and quicker technology 
updates.
    Underpinning all of these actions is our emphasis on fully 
implementing Bending the Cost Curve (BTCC) which is focused on 
expanding our dialogue with industry throughout the acquisition life 
cycle and expanding competition among traditional and non-traditional 
industry partners. We will strengthen our ability to innovate, achieve 
technical excellence and field dominant military capabilities by 
implementing AT&L's Better Buying Power initiatives as well as the 
Secretary's Bending the Cost Curve initiative.

    3. Senator McCain. The Air Force is the service most affected by 
the impending modernization investment ``bow wave'' of the 2020s, 
peaking at over half of the Department of Defense's modernization 
investment requirement in a single year at approximately $35 billion. 
When you consider all of your many modernization imperatives such as 
the F-35A fighter, KC-46A tanker, B-21 bomber, JSTARS recap,
T-X trainer replacement, Ground Based Strategic Deterrent, Long Range 
Standoff weapon; the list goes on and on . . . How will you approach 
this seemingly insurmountable funding challenge?
    General Goldfein. Without additional topline, the Air Force cannot 
fund everything and adequately address the pending acquisition bow 
wave; consequently we will be forced to sequence programs over time and 
take risk in conventional capacity, capability, and readiness.
                           army modernization
    4. Senator McCain. The preponderance of the combat equipment 
resident in our Army today was designed and built in the era of the 
Reagan defense build-up. Notwithstanding Army efforts to overhaul its 
equipment and upgrade operational effectiveness of its combat assets, 
do you believe your mission equipment inventory, from both a capacity 
and capabilities perspective, is keeping pace with the capabilities 
that other armies around the world, friendly or otherwise, are 
developing and fielding?
    General Milley. It really depends on the specific capability you 
are referring to, in some areas we maintain overmatch and in a few 
areas we have already been surpassed. For an ``overall answer,'' our 
near peer state competitors are rapidly closing the gap in several key 
areas, increasing risk. Today's Army is a decisive combat force, the 
world's best, which can rapidly deploy and destroy any enemy in the 
world. However, the size of the Army has decreased and for the last 
fifteen years we have optimized the Army to focus on counterinsurgency, 
counter-terrorism, and irregular warfare. At the same time, near peer 
competitors have modernized their forces for higher end warfare. 
Additionally, absent legislation, the sequestration caps set by the 
Budget Control Act of 2011 will return in Fiscal Year 2018 forcing the 
Army to draw down end-strength even further, further reduce funding for 
modernization, and increase the risk of sending under-trained and 
poorly equipped soldiers into harm's way.
    In the future, the Army will operate on a highly contested and 
lethal battlefield in multiple domains across multiple regions 
simultaneously. Adversaries will attempt to degrade, disrupt, and deny 
our ability to operate in the land, cyber, air, space, and maritime 
domains. The Army is prioritizing investments to counter the threat 
against mission critical systems from cyberattacks and to sustain 
overmatch in the key areas of mobility, lethality, mission command, and 
force protection. We are placing specific emphasis on long-range 
precision fires, missile defense, directed energy weapons, ground 
vehicles, vertical lift, cyber, electronic warfare, networks, and 
active protection systems for both ground and air. Because the 
resources required to invest for the future are in direct competition 
with the resources required to upgrade and improve our current combat 
systems the Army is falling behind and is at risk of losing technical 
superiority and overmatch.
                   innovation and service competition
    5. Senator McCain. In the report of the 1994 Commission on Roles 
and Missions, Commission Chairman John White wrote that `` . . . while 
DOD needs to increase jointness throughout the system, it is necessary 
to place a high value on broad Service competition,'' to produce 
``innovation in weapon systems, forces, doctrine, and concepts of 
operations that yield the dramatically superior military capabilities 
we need.'' Yet, in the ensuing two decades our armed forces divested 
much of their warfighting capacity, took a ``procurement holiday'' from 
modernizing and recapitalizing our most critical defense weapons 
systems, and ultimately drove a strategy change from a two major 
regional conflict force to something far less. In your opinions, is 
this outcome merely a symptom of declining defense budgets, or is it a 
product of the way our entire defense system is organized and allocates 
increasingly scarce resources?
    General Milley. It is probably a bit of both. The ``system'' 
rightfully allocates resources against what the leadership of the 
Defense Department believes are the most critical capability gaps and 
the more constrained the resources become, the harder the decisions on 
which critical capabilities are resourced and where we choose to assume 
risk. The easy decisions were made years ago--resourcing decisions made 
today are truly which critical capability gets funded and which do not. 
Additionally, because we have focused our combat development efforts on 
irregular warfare for the last 15 years we are behind in the 
modernization investments of our current and emerging near-peer threats 
and face losing overmatch in several key areas. National defense 
continues to be very expensive, but the alternatives are even more so.
    Admiral Richardson. The primary driver of current reduced 
warfighting capacity and modernization is the ``triple whammy'' of 
reduced funding levels, high operational tempo, and persistent budget 
uncertainty. The combination of these factors has resulted in a 
significant ``readiness debt'', both in equipment and in personnel, 
just like carrying debt on a credit card.
    Since the Budget Control Act of 2011 was passed, defense funding 
has been significantly reduced and the defense strategy has been 
revised to meet the realities of year-after-year reductions to the 
defense budget. For the Navy specifically, this has resulted in 
weapons, aircraft and modernization reductions, as well as underfunding 
of military construction and base operating programs. In addition, the 
Navy has been required to defer some depot level maintenance which has 
had a direct impact on Navy's overall readiness. Although operational 
tempo and demand for Navy units remain high, there has not been any 
corresponding fiscal relief to help offset the wear and tear that our 
units continue to experience. As a result, we see the effects of 
extended deployments in the degraded material condition of our ships 
and aircraft. The budget uncertainty also causes cost growth and 
program delays because building and maintaining high-end ships and 
aircraft requires long term stability and commitment.
    At the same time, the Navy must continuously look for ways to 
maximize every dollar that has been authorized and appropriated to 
support the defense of our nation. The enhanced Service Chief 
authorities provided by the fiscal year 2016 National Defense 
Authorization Act increased my authority in the Navy's acquisition 
system and, coupled with previous requirements and budgetary 
responsibilities, enable improvements in performance and agility. 
Thoughtful changes that improve collaborative decision making and 
oversight without creating excessive micromanagement or redundancy are 
welcomed, and I am working to make such changes.
    General Neller. Declining budgets impact our ability to field a 
capable future force and hinder our ability to equip that force with 
robust capabilities to ensure battlefield success. We must dedicate the 
resources to be able to field the needed capabilities and technologies 
to win today and more importantly transform our force with the winning 
edge capabilities for tomorrow's fight. For the Marine Corps, it is 
particularly challenging as our military personnel costs account for 61 
percent of the Marine Corps' ``green'' baseline budget request. Of the 
remainder, 27 percent is for O&M, nine percent is for modernization, 
and three percent is for military construction. Additionally, costs 
continue to rise while the budget declines. For example, the cost to 
equip and clothe a basic rifleman is currently 5.7 times of what the 
cost was in 2000 (this figure accounts for inflation and does not 
include night vision goggles). In the meantime, many of our weapons 
systems continue to age and oftentimes cannot compete with our 
adversaries' technology.
    Within that relatively small modernization investment, there are 
some big ticket, high priority items for the Marine Corps-like the 
amphibious assault vehicle (AAV) survivability upgrade which will 
continue to provide a ship to shore self-deploying capability bridge 
until we have replacement for our 40 year old AAVs. The amphibious 
combat vehicle (ACV 1.1) is our first step in an incremental approach 
to replacing those AAVs. Common Aviation Command and Control System 
(CAC2S) and Ground/Air Task-Oriented Radar (G/ATOR) provide an ability 
to control our airspace enabling freedom of action to employ our 
organic weapons with the speed and tempo that makes the Marine Air 
Ground Task Forces successful. Communication Emitter Sensing and Attack 
Systems (CESAS) II, Intrepid Tiger II, Network on the Move (NOTM), and 
MQ-21 Blackjack unmanned aerial vehicle (UAV) are some of the new 
capabilities that we must buy to support the Information Warfare (IW) 
enablers. These investments are just a few of our highest priority 
capabilities and come at the expense of the other 150+ programs in need 
of sustainment and modernization. In most cases the lower priority 
programs are underfunded, not procured to the full authorized 
acquisition objective (AAO), or not sustained at a level that would be 
expected for the Nation's crisis response force.
    The operating environment is rapidly changing due to the actions of 
increasingly aggressive and capable peer competitors that are 
demonstrating high end (to include space and cyber) capabilities across 
the range of military operations (ROMO). These potential adversaries 
are, for example, capable of creating combined arms dilemmas using 
information, cyber, deception, unmanned ISR and long range precision 
fires in highly advanced and lethal ways. The Marine Corps must not 
only modernize, but also change in order to deter conflict, compete 
and, if necessary, fight and win against such foes. Consequently, we 
have identified several areas where significant modernization efforts, 
to include new capabilities and additional structure, will be required 
if the USMC intends to be able to fight and win as a Naval Force in 
contested littoral environs against such highly capable foes. The 
Corps' leadership is convinced that the threat is not emergent, rather, 
it is upon us. The nation needs its Corps of Marines to move out on 
modernization, and to make prudent and timely changes.
    While we continue to accept risk as we prioritize our modernization 
efforts, we are often thwarted by the lack of stability in funding. 
Innovation is at the forefront of our pursuits, because we understand 
that we must adapt all our systems to the challenges at hand. 
Therefore, we appreciate the continued and redoubled Congressional 
support to not only support and help stabilize our budgets but, equally 
important, to continue working with the Department of Defense, 
Department of Navy and the Marine Corps on collaboratively improving 
how we equip our Marines to fight and win our nation's battles.
    General Goldfein. Actually the outcome reflects both budgets and 
organization. We are mindful of the fiscal situation and recognize that 
our organizations must contribute to the government-wide deficit 
reduction as a national security imperative. Our ability to make proper 
investments to modernize and sustain the capabilities of the Air Force 
is tied to the economic health of the United States. Nonetheless, we 
must respond to a changing strategic environment that has evolved over 
the past two decades. Since 2001, the Air Force has performed 
exceptionally well during combat operations in Iraq and Afghanistan. 
However, these operations have focused on missions conducted in a 
permissive air environment, with large footprints for 
counterinsurgency. This left insufficient time or resources to train 
across the full range of Air Force missions, especially missions 
conducted in contested and highly contested environments. Any budget 
increases that occurred during this time were primarily consumed by 
operational expenses, not procurement. Moreover, we made strategic 
trades to support the counter-VEO (violent extremism operations) 
campaign. For instance, we reduced investment in `high-end' capability 
to pay for capacity and readiness, build the ISR enterprise, and 
maintain legacy fighter force structure. Additionally, while budgets 
have tightened, health care costs have continued to increase. We must 
now make strategically informed choices that build a future force 
focused on the challenges posed by China, Russia, Iran, North Korea, 
and violent extremism.
                   innovation and service competition
    6. Senator McCain. What would you recommend as the way forward to 
reversing this trend?
    General Milley. Absent additional legislation, the sequestration 
caps set by the Budget Control Act of 2011 will return in Fiscal Year 
2018, forcing the Army to draw down end-strength even further, further 
reduce funding for modernization, and increase the risk of sending 
under-trained and poorly equipped soldiers into harm's way. To move 
forward with any certainty, the threat of sequestration must be 
eliminated. Sequestration is an impediment to good planning and 
represents a threat to the Department's ability to develop and maintain 
the military capabilities and forces we need to support the broader 
national security strategy. The support of Congress to predictably fund 
the Army at balanced and sufficient levels to meet current demands and 
to simultaneously build a more capable, modern, ready force for future 
contingencies is imperative.
    Admiral Richardson. Constrained resources, reduced funding levels, 
combined with operational and related maintenance challenges, have been 
exacerbated by budget uncertainty. Building and maintaining high-end 
ships and aircraft requires long-term stability and commitment. Without 
it, costs grow and work takes longer. Skilled workers leave the 
workforce and do not return, while private industry defers investments 
in necessary process improvements. Despite these obstacles, recovery 
from our current backlog is underway, but it will take time. We must 
find a way to restore the trust and confidence that underpin the 
crucial relationship with our acquisition and maintenance workforce. 
Our ability to achieve true effectiveness and efficiency has been 
undermined by budget instability, workforce limitations, and eight 
straight years of budget uncertainty and continuing resolutions.
    The solution will require that we work as partners to set 
sufficient resource levels and restore stability to the budgeting 
process, and also ensure that every dollar that the American taxpayer 
gives the Navy is spent as efficiently and effectively as possible. I 
am committed to meeting my responsibilities here and in partnering with 
you as we go forward.
    General Neller. We need to continue to strive for greater 
flexibility within our acquisition process, so that we can modernize 
our equipment, and provide our Marines the resources needed to win our 
battles. Our nation has a world premier fighting force, however, our 
equipment has been depleted by nearly 15 years of constant battles, 
without the requisite maintenance and or replacements. Our aviation 
community is particularly vulnerable when it comes to lack of required 
maintenance and or upgrades.
    We will continue to budget within our TOA. But in order to maximize 
that funding we must look for efficiencies and opportunities to 
incorporate evolving technologies. One of the ways we can achieve this 
is by participating in joint acquisition efforts, such as the JLTV, to 
reduce the per item cost and achieve more flexibility with developing 
variants to an item.
    The acquisition process, however, can be cumbersome when we are 
trying to keep pace with changes in technology and weaponry advances. 
Recognizing this, we whole heartedly support streamlining the 
acquisition process. This was addressed in my May 2016 ``Report to 
Congress on Linking and Streamlining Marine Corps Requirements, 
Acquisition, and Budget Processes'' (per fiscal year 2016 NDAA section 
808). It highlights the need for a menu of options by which we can 
increase the responsiveness to our capability needs, including agile 
adjustments to environment changes. The optimal system must build-in 
process flexibility. Flexible examples that could serve as models in 
addressing the optimal system design include the categorical tailoring 
process of our Abbreviated Acquisition Program (AAP), our cyber process 
streamlining, and rapid prototyping.
    The 808 report describes rapid prototyping as a 21st century 
solution to fast-track development and fielding of maturing 
technologies and engineering innovations. This epitomizes to a 
significant degree the challenge and opportunity of streamlining 
processes as a key element in improved acquisition system design.
    We are incorporating open architecture and modular designs in our 
prototyping efforts, and will continue to require open architecture and 
modularity in our formal acquisition programs, to further enable rapid 
prototyping at the system and component levels and ensure technology 
advancements can be quickly prototyped, demonstrated and fielded. By 
designing our platforms and systems using open architectures, we are 
confident that rapid upgrades can occur that will achieve significant 
performance improvements at significantly less cost.
    As we identify emerging requirements in our weapons procurement 
programs, we are often frustrated by the lack of funding flexibility 
and stability. The practice of reprogramming funds is necessary to 
achieve flexibility in the execution of programs. In order to optimize 
the funding we receive, raising the below-threshold reprogramming 
limits for appropriations would allow increased resilience and 
responsiveness to unpredictable changes.
    Finally, inherent in improving our weapons procurement process is 
also protest reform. Protests add program delays, financial costs, and 
lost opportunity costs for the government. Again, our 808 report 
details what we believe are thoughtful options for improvement. Our 
ability to evolve and adapt to a rapidly changing battlefield will 
ensure our Marines success. We must not only be prudent with our 
investment dollars, we need to also streamline a system that will 
ensure we field a modern capability for the current and future fight--
not an outdated capability from yesterday's fight.
    General Goldfein. For our part, we are reinvigorating development 
planning at the AF enterprise level to build-in agility and formulate 
truly innovative strategic choices. Our capability development efforts 
will foster the necessary close relationship between our operational, 
science & technology, acquisition, and requirements disciplines.
    Our efforts are aligned to initiatives which are designed to 
strengthen our ability to innovate, achieve technical excellence, and 
field dominant military capabilities. As a case in point, war in the 
information age will consist of multiple nodes operating in a network 
that can exist both physically and virtually across all domains. In 
particular we need to be able to fuse data, collected from all assets, 
to get decision-quality information to decision-makers faster than our 
adversaries. This will require open architecture systems across the 
multi-domain environment. We are focused on improving capability 
development as part of a joint force for the joint fight and the 
Nation.
                    nuclear enterprise modernization
    7. Senator McCain. According to recent estimates from the 
Department of Defense, the cost to operate, maintain, and modernize the 
Department's nuclear forces will be $234 billion between fiscal year 
2017 and 2026. These costs will increase as the Ohio-class Replacement 
Program, B-21 bomber, and the Ground Based Strategic Deterrent (the 
Minuteman ICBM replacement program), all get into the heart of their 
procurement and fielding portions of their acquisition life cycles. 
Yet, it is also a fact that nuclear modernization will comprise only 
about 12-14 percent of all DOD acquisition programs, so it is part of a 
much larger modernization investment ``bow wave.'' As your services 
comprise the three legs of our nation's nuclear triad, and if you 
consider the Department's modernization investment ``bow wave'' of 
costs peaking at the same time, how are you going to approach the 
challenge of funding the nuclear enterprise amongst all of your non-
nuclear force requirements?
    Admiral Richardson. My top modernization priority, and greatest 
concern, is adequate, stable funding for the Ohio Replacement Program 
(ORP) while still providing a fleet that will meet other important Navy 
missions. ORP is paramount to our ability to strengthen naval power at 
and from the sea, and is foundational to our survival as a nation. In 
order to procure these vessels without impacting remaining procurement 
plans, the Navy will continue to need additional resources for ship 
construction beyond the Future Years Defense Program, not unlike those 
that occurred during the construction of the Ohio-class in the 1980s. 
To minimize overall impact to other department programs, the Navy is 
pursuing an incremental funding profile for the lead and second OR 
SSBN. The Navy is also leveraging over 50 years of submarine design and 
operational experience to improve affordability and deliver the OR SSBN 
in the most cost-effective manner. These improvements in affordability 
allow the Navy to reduce the overall cost of the nuclear modernization 
compared to those incurred in the 1960s and 1980s. The Navy greatly 
appreciates Congressional support in overcoming the challenges posed by 
funding ORP and the procurement authorities provided in the fiscal year 
2016 National Defense Authorization Act that enhance affordability.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    General Goldfein. The Air Force is committed to funding the nuclear 
enterprise at the appropriate level to ensure continued safe, secure, 
and reliable operations, as well as required nuclear modernization, 
including Nuclear Command, Control, and Communications (NC3). Of 
particular note, the commander, Air Force Global Strike Command is the 
single accountable officer to the Chief of Staff and Secretary of the 
Air Force for all aspects of the nuclear mission. We have established 
NC3 as a Weapon System and have outlined NC3 milestones and programming 
actions. The Air Force's long term planning budget includes a 
significant level of funding for the nuclear enterprise, based on 
previous program estimates. As actual cost projections are refined, the 
Air Force Strategic Planning and Corporate Process will revise the 
long-term planning budget in accordance with established processes. The 
Air Force will address any program shortfalls as part of the Air Force 
Corporate Process, and may request additional Total Obligation 
Authority to meet funding obligations.
                               __________
                     Questions Submitted by Ayotte
                    child development centers (cdc)
    8. Senator Ayotte. Admiral Richardson, in April, despite the best 
efforts of those at Portsmouth Naval Shipyard (PNSY), there were at 
least 163 families waiting for childcare at the PNSY CDC with average 
wait times of almost 300 days. According to information I received this 
month from the Navy, average wait times for children in category 2 
remain above 300 days and average wait times for children in category 1 
have actually worsened since April when the Navy testified that a 
temporary solution, military learning classrooms (MLCs), would be 
installed by the end of this fiscal year. Now, the Navy has informed my 
office that these MLCs will not be installed until May 2017. What 
explains the eight month delay in installing MLCs?
    Admiral Richardson. The Navy is committed to providing quality 
child development programs at Portsmouth Naval Shipyard (PNSY) and at 
Navy installations around the world to enable readiness and help Navy 
families balance the competing demands of work and family life. We have 
worked diligently to expand the childcare program PNSY by installing 
Mobile Learning Centers (MLCs). During the planning and design phase 
for this effort, the local public works staff determined the best 
solution for PNSY families was to purchase MLCs specifically 
constructed to meet Navy childcare specifications and to install those 
facilities on underdeveloped land close enough to the existing CDC to 
allow for convenient drop off and pick up. This course of action 
triggered environmental compliance, land permitting and contracting 
requirements that took several months to complete. The PNSY team 
successfully completed all required steps and awarded the contract for 
MLCs in September. The MLCs are scheduled to be in full operation no 
later than May 2017.

    9. Senator Ayotte. Admiral Richardson, what can the Navy do to 
expedite the installation of the MLCs?
    Admiral Richardson. I assure you the Navy is doing everything we 
can to expedite this process, ensuring that we also produce the highest 
quality childcare solutions for our families. We awarded a contract for 
the installation of MLCs on Sept. 20, 2016. They are scheduled to be in 
full operation by May 2017. Commander, Navy Installations Command will 
continue to provide updates to Congress on the status of childcare at 
Portsmouth Naval Shipyard.

    10. Senator Ayotte. Admiral Richardson, in the meantime, what is 
the Navy doing to provide PNSY the resources it needs to address 
unacceptable wait times and wait lists at the CDC and to make life 
better for the workers at the shipyard?
    Admiral Richardson. The Navy has prioritized the addition of PNSY 
in the Department of Defense's MilitaryChildCare.com system, which 
provides a single gateway for military families to find comprehensive 
information on military-operated or military-approved child care 
programs worldwide. PNSY families can access real-time availability and 
wait times for all military child care options based on their 
individual family priority.
                               __________
               Questions Submitted by Senator Deb Fischer
               readiness: state of full-spectrum training
    11. Senator Fischer. The Wall Street Journal published an article, 
co-authored by General David Petraeus and Michael O'Hanlon, last month 
titled: The Myth of a U.S. Military 'Readiness' Crisis. It claims that 
``by 2017 the Army plans to rotate nearly 20 brigades--about a third of 
its force--through national training centers each year. The Marine 
Corps plans to put 12 infantry battalions--about half its force--
through large training exercises. The Air Force is funding its training 
and readiness programs at 80 percent to 98 percent of what it considers 
fully resourced levels.'' Does this accurately portray the state of 
your service and its readiness to conduct full-spectrum operations?
    General Milley. I respect both General Petraeus and Mr. O'Hanlon, 
however, I do not entirely subscribe to the conclusions made in their 
article. While the Army is facing serious readiness challenges, I would 
not characterize it as a ``crisis.'' Furthermore, while large-scale 
collective training like that executed at the Combat Training Centers 
(CTCs) is essential, it is not the only critical component of 
readiness.
    Hard, realistic home-station training is a fundamental building 
block of readiness, and is essential to preparing units for CTCs. 
Demanding home-station training, coupled with the near-peer hybrid 
threat scenarios experienced at CTCs, is critical to narrow the 
generational divide in high-end warfighting experience between pre-9/11 
and current field grade officers and senior noncommissioned officers.
    With respect to numbers of CTC rotations, the Army intends to 
increase Decisive Action, full spectrum operations, Brigade Combat Team 
(BCT) rotations from 19 in fiscal year 2017 to 21 in fiscal year 2019. 
Increasing CTC rotations will permit greater repetitions across the 
Total Force. Units and leaders must get repetitions to be fully 
trained, and this will take time.
    Another critical aspect of readiness is manning. Significant 
decreases in end-strength across all Army components--Regular, Guard, 
and Reserve--compounded by elevated non-availability rates, are causing 
manning challenges. While the Army is working aggressively to decrease 
soldier non-availability within units, the overall smaller size of the 
force makes this a greater challenge.
    In addition to manning and training, a ready Army requires modern 
equipment to win. An unintended consequence of the current fiscal 
environment is that the Army is not modernizing the force at the 
desirable rate and risks falling behind near-peer adversaries.
    Lastly, a ready Army must have leaders of character who are 
technically and tactically proficient, adaptive, innovative, and agile. 
It takes time to develop leaders who can effectively train and ready 
their units, and successfully lead them in the demanding and 
unforgiving crucible that is ground combat.
    General Neller. While the training that infantry battalions and 
attached units receive at the Integrated Training Exercise (ITX) 
contributes to unit readiness, these forces constitute less than half 
of the Marine Corps' forces, which task-organize to deploy and fight as 
Marine Air Ground Task Forces (MAGTFs). The Marine Corps is meeting its 
Global Force Management Allocation Plan (GFMAP), contingency, and ``New 
Normal'' requirements, but at the cost of readiness for non-deployed 
forces, modernization, and infrastructure sustainment--all of which 
lead to a degraded ability to generate forces per Operational Plan 
timelines. There has not been a sufficient decrease to operational 
tempo at the unit level that would permit training to full spectrum 
operations, and that will not improve as the Active Duty end-strength 
is reduced to 182,000.
    Acute readiness issues exist in Marine Corps aviation units. Other 
readiness concerns are: (1) training lapses in advanced warfighting 
capabilities such as Marine Expeditionary Force-level combined arms 
maneuver, anti-air warfare, and amphibious and prepositioning 
operations; (2) personnel shortages from filling Joint Manning Document 
and Individual Augment billets; (3) shortages of critical enlisted 
leaders; and (4) the limited operational availability of amphibious 
warships and maritime prepositioning force platforms, which restricts 
core mission amphibious training to that of only our Marine 
Expeditionary Units (MEUs).
    General Goldfein. No it does not. Air Force full spectrum readiness 
is at historic lows. The Air Force operational training enterprise is 
unable to surge and quickly return the combat force to higher readiness 
due to three key constraints: chronic manpower shortfalls; limited 
capacity to train; and sustained operational tempo.
    Chronic Manpower Shortfalls: Until the Air Force can solve its 
manpower shortfalls, ``national training center'' style training will 
only have a limited impact on improving full-spectrum readiness. 
Current and projected aircraft maintenance and pilot shortfalls will 
continue until the Air Force can recruit, train, and field critical 
manpower shortfalls necessary to recover its full capacity to train to 
full-spectrum readiness. This is why we have made increasing our end-
strength a budget priority.
    Limited Capacity to Train: The Air Force currently cannot generate 
enough sorties to meet both overseas contingency missions and required 
flight training requirements. Our primary limiting factor is the lack 
of sufficient maintenance personnel to generate sorties. Additional 
limiting factors include tasks that take priority over full-spectrum 
training to include directed partial-unit taskings (i.e. Theater 
Security, Regional Assurance, Training Support), and continued low 
intensity combat operations (i.e. Afghanistan, Iraq, Syria).
    Sustained Operational Tempo: Our Air Force has become highly 
proficient in counter-insurgency air operations. Sixteen years of 
continuous low-intensity combat operations have honed the skills of our 
kinetic, mobility, support, intelligence, and space forces; however 
this has come at the expense of full-spectrum readiness. The Air Force 
simply does not have the capacity to continue both the current pace of 
today's combat operations and simultaneously rebuild full-spectrum 
readiness.
                               __________
              Questions Submitted by Senator Dan Sullivan
               freedom of navigation in the arctic region
    12. Senator Sullivan. Admiral Richardson, if tasked by the 
President, how would the U.S. Navy conduct a year-round surface FONOP 
in the Arctic?
    Admiral Richardson. The Navy currently provides year-round 
capability and presence in the Arctic primarily through undersea and 
air assets. Surface ship operations, including Freedom of Navigation 
Operations (FONOPs) to challenge excessive maritime claims, would be 
executed only after assessments of the specific operating environment 
and application of Operational Risk Management (ORM) principles to 
account for risk factors including sea ice, wind, ice accumulation on 
equipment, and impacts to communications and satellite coverage.
    The Navy also works in close coordination with interagency partners 
in order to support the National Strategy for the Arctic Region. The 
Navy would likely partner with the U.S. Coast Guard to leverage their 
extensive experience in the Arctic region to conduct surface ship 
operations, including FONOPs.

    13. Senator Sullivan. Admiral Richardson, if Russia decided to deny 
access to vital U.S. or international shipping in the Arctic region, 
could the U.S. Navy conduct a surface FONOP year-round to challenge 
that act?
    Admiral Richardson. Freedom of the seas is a national priority. The 
Navy will support access for the safe, secure, and free flow of 
resources and commerce in the Arctic Region. The Navy is prepared to 
respond to a wide range of challenges and contingencies if necessary in 
order to maintain stability in the region.
    U.S. military forces conduct Freedom of Navigation Operations 
(FONOPs) to challenge a coastal state's excessive maritime claim in 
order to preserve the global mobility of U.S. forces. As the Secretary 
of Defense has said, we will continue to fly, sail, and operate 
wherever international law allows, including in the Arctic region, to 
protect the U.S. national security interest in preserving global 
mobility of U.S. military and civilian vessels.
    The Navy currently provides year-round capability and presence in 
the Arctic primarily through undersea and air assets. Surface ship 
operations, including FONOPs, would be executed only after specific 
assessments of the operating environment and application of Operational 
Risk Management (ORM) principles to account for risk factors including 
sea ice, wind, ice accumulation on equipment, and impacts to 
communications and satellite coverage. The Navy would likely partner 
with the U.S. Coast Guard to leverage their extensive experience in the 
Arctic region to conduct surface ship operations, including FONOPs.
    The Navy's strategy in the Arctic emphasizes low-cost, long-lead 
time activities, keeping pace with the changing environmental 
conditions. Although a gradual opening of the Arctic is predicted, the 
region's frequent harsh weather and sea conditions are significant 
limiting factors for shipping in the Arctic region.

    14. Senator Sullivan. Admiral Richardson, when was the last time 
that the U.S. conducted a FONOP in the Arctic?
    Admiral Richardson. The last time the United States challenged 
excessive maritime claims in the Arctic was in 1964, when U.S. forces 
conducted oceanographic surveys in areas previously claimed by the 
former Soviet Union as historic waters. Additionally, the Navy has over 
six decades of experience operating in the Arctic with our submarine 
forces. The Navy currently provides year-round capability and presence 
in the Arctic primarily through undersea and air assets.

    15. Senator Sullivan. Admiral Richardson, should the U.S. Navy have 
that capability?
    Admiral Richardson. As the Secretary of Defense has said, we will 
continue to fly, sail, and operate wherever international law allows, 
including in the Arctic region, to protect the U.S. national security 
interest in preserving global mobility.
    The Navy currently provides year-round capability and presence in 
the Arctic primarily through undersea and air assets. The Navy also 
works in close coordination with interagency partners in order to 
support the National Strategy for the Arctic Region. The Navy would 
likely partner with the U.S. Coast Guard to leverage their extensive 
experience in the Arctic region to conduct surface ship operations, 
including FONOPs.
    The Navy is taking a deliberate, measured approach to achieve our 
strategic objectives in the Arctic, as outlined in our Arctic Roadmap. 
We will continue to study, assess and make informed decisions on Arctic 
operating requirements and procedures to keep pace with the changing 
environmental conditions.

    16. Senator Sullivan. Admiral Richardson, the U.S. stopped doing 
surface FONOPs in the SCS for three years, an absence that China 
capitalized upon to build militarized islands in sovereign seas of 
other nations. Does the same principle of Freedom of the Seas--and the 
FONOPs that help preserve it--apply just as much to the Arctic as to 
the SCS?
    Admiral Richardson. Yes, the United States is committed to 
upholding all the rights, freedoms, and lawful uses of the sea and 
airspace guaranteed to all nations under international law. As the 
Secretary of Defense has said, we will continue to fly, sail, and 
operate wherever international law allows, including in the South China 
Sea and the Arctic region, to protect the U.S. national security 
interests in preserving global mobility.
    In support of this commitment, U.S. military forces conduct Freedom 
of Navigation Operations (FONOPs) to challenge coastal States' 
excessive maritime claims in order to preserve the global mobility of 
U.S. forces. U.S. military forces execute FONOPs with respect to a wide 
range of excessive maritime claims, irrespective of the coastal State 
asserting those excessive claims.
    The United States conducted FONOPs against the excessive maritime 
claims of various South China Sea claimants in fiscal years 2012 
through 2016. FONOPs are reflected in the annual Department of Defense 
Freedom of Navigation (FON) Reports. The U.S. Navy also maintains a 
consistent presence in the South China Sea through presence operations.
                               __________
              Questions Submitted by Senator Mazie Hirono
                    general flag officer reductions
    17. Senator Hirono. General Milley, Admiral Richardson, General 
Neller, and General Goldfein, both House and Senate-passed versions of 
the Fiscal Year 2017 National Defense Authorization Act look to reduce 
the number of General and Flag Officer positions in the services. One 
version prohibits component commands under combatant commands from 
being led by an officer in a grade above Lieutenant General or Vice 
Admiral. What are your thoughts on the proposed reductions in the 
number of general and flag officers as well as the timeframe provided 
to implement these changes? Are there possible impacts including those 
at the second and third levels which could impact readiness and the 
effectiveness of our military forces? Would you have concerns with an 
implementation of these reductions and restrictions without the time to 
adequately study, plan and manage them?
    General Milley. The proposed reductions in the number of general 
and flag officers, which would be taken without regard to the mission 
of each general officer, would diminish the influence and authority the 
services need to conduct their statutory functions and provide services 
to the joint force. These actions will also lessen the services' 
capacity to assist combatant commanders' in shaping the strategic 
environment, influencing foreign counterparts, and expanding force 
capacity in response to contingency requirements. Any reduction of 
general and flag officer grades should be predicated on a thorough 
analysis of mission requirements and scope of responsibilities to 
ensure military leadership has the appropriate grade and experience for 
their scope of responsibility. Implementing the changes on an expedited 
timeframe would prevent the thorough analysis necessary.
    Admiral Richardson. At a time when we are facing a wide array of 
security challenges in the most complex security environment ever, a 
dramatic change in our military's leadership structure would introduce 
instability and adversely affect the Nation's warfighting capabilities. 
Reductions to the leadership structure should only be done after a more 
detailed study of the full range of consequences is completed.
    As written, the proposed legislation could result in the reduction 
of the grades of the Commander, U.S. Fleet Forces Command; Commander, 
U.S. Pacific Fleet; Commander, U.S. Naval Forces Europe/Africa, the 
Vice Chief of Naval Operations or Naval Reactors. These commands have 
4-star leaders because of their wide-ranging spans of responsibility 
and control; large personnel and budget portfolios; and, to a lesser 
extent, but important one, their diplomatic roles. Reductions in flag 
officer ranks need to be carefully weighed against the potentially 
adverse impacts on foreign military cooperation, diplomatic ties, and 
mission accomplishment. Any reductions may be viewed by our allies and 
rivals as a lessening of the Navy's commitment to global maritime 
security.
    General Neller. The Marine Corps opposes the Senate provision that 
would reduce the authorized number of Active Marine Corps General 
Officers (GOs) from 61 to 47 and Reserve Marine Corps GOs in an active 
status from 10 to 7. We also oppose the timeframe allowed to implement 
this reduction.
    The Marine Corps is our Nation's force in readiness. We require the 
right leadership structure to support our evolving warfighting role. 
This reduction would leave critical senior leadership billets unfilled 
or under filled, negatively impacting the leadership, capabilities, and 
readiness of the Marine Corps.
    The reduction will also impact GO management, causing significant 
promotion stagnation and a substantial loss of talent that will take 
decades to recreate. As the Marine Corps is the smallest service with 
the fewest GOs and lowest leader-to-led ratio, a blanket percentage 
reduction will be significantly more difficult to absorb without 
negative impacts to the Corps.
    A thorough study of Department of Defense senior military 
leadership should be undertaken prior to making any reductions, 
especially in light of current efforts to reduce Senior Executive 
Service and headquarters-element civilians.
    General Goldfein. The 2017 NDAA language regarding general and flag 
officer reductions is a complex proposal that requires in-depth 
Department analysis prior to implementation. The USAF supports DOD's 
efforts to conduct a detailed review of General and Flag Officer 
requirements to mitigate arbitrary reductions that would have negative 
impact on readiness and experience. The USAF also believes that any 
adjustment to GO authorizations should consider the probable impact to 
operational capability in terms of both effectiveness and efficiency. 
Until a detailed Department analysis has been conducted, we cannot say 
how we would implement the aforementioned changes. It should be noted 
that the proposed HASC NDAA language prohibiting component commands 
under combatant commands from being led by an officer in a grade above 
Lieutenant General or Vice Admiral would eliminate five 4-star general 
officer positions in the USAF. These positions include the commander of 
AF Global Strike Command (AFGSC), AF Space Command (AFSPC), Air 
Mobility Command (AMC), Pacific Air Forces (PACAF), and US Air Forces 
Europe and US Air Forces Africa (USAFE/AFAFRICOM). These cuts along 
with other proposed cuts in GO authorizations would have a significant 
and adverse impact on the experience, readiness, and representational 
duties of our senior leaders in the areas of air, space, cyberspace, 
ISR, and nuclear operations. Moreover, it would further erode the 
assurances we have provided our allies and partners in USAFE and PACAF 
who rely on our regional leadership.

    18. Senator Hirono. General Milley, it is important to have a 
strong and stable presence in the Asia-Pacific region in light of the 
actions of China in the South China Sea and the unpredictable threats 
posed by North Korea. The House-passed version of the fiscal year 2017 
NDAA prohibits component commands under combatant commands from being 
led by four-star officers. How would this change affect the forces in 
US Army Pacific? How would this provision, if enacted, affect our 
strength and presence in the Pacific? How do you think other countries 
in the region would interpret the change of the Commanding General of 
US Army Pacific being reduced from four to three-stars?
    General Milley. The Commander, U.S. Army Pacific (USARPAC) position 
was upgraded from a three to four star general in July of 2013 in 
support of the administration's declared ``Rebalance to Asia.'' At that 
time, this upgrade was explained as a sign of the U.S. commitment to 
our allies in Asia and a recognition that a four star general will have 
more influence in many Asian nations where armies are the predominant 
Military Service. Because of the emphasis placed on the importance of 
this upgrade, downgrading that position to a three-star command would 
signal to our partners and allies in the Asia-Pacific region that the 
United States is less serious about its commitment. The Asia-Pacific 
region is a strategic priority given China's demographic growth, 
expanding economic influence, and modernizing military. Maintaining a 
four-star commander at USARPAC sends a message to allies and partners 
in the Asia-Pacific Region that the United States is committed to 
building and maintaining a robust network of like-minded states that 
contribute to sustaining the rules-based regional order while deterring 
those states that seek to reform it. Furthermore, a three star USARPAC 
Commander would not garner the same level of access to senior 
government leaders in partnered Pacific countries as does the current 
four star Commander. The USARPAC Commander is also designated as the 
theater Joint Force Land Component Commander (JFLCC) for U.S. Pacific 
Command (PACOM) USARPAC Command, and provides critical mission command 
capabilities for a full range of combat and non-combat military 
operations throughout the PACOM Area of Responsibility.

    19. Senator Hirono. Admiral Richardson, it is important to have a 
strong and stable presence in the Asia-Pacific region in light of the 
actions of China in the South China Sea and the unpredictable threats 
posed by North Korea. The House-passed version of the fiscal year 2017 
NDAA prohibits component commands under combatant commands from being 
led by four-star officers. How would this change affect the Pacific 
Fleet where about 60 percent of our Navy's ships operate? How would 
this provision, if enacted, affect our strength and presence in the 
Pacific? How do you think other countries including allies, friends and 
potential adversaries in the region would interpret the change of the 
Commander of the Pacific Fleet being reduced from four to three-stars?
    Admiral Richardson. Commander, U.S. Pacific Fleet is responsible 
for production and consumption of readiness on a vast scale. As the 
Theater Joint Force Maritime Component Commander to U.S. Pacific 
Command, the Pacific Fleet Commander leverages a four-star command 
structure that provides strategic and operational integration, de-
confliction, synchronization, and mitigation oversight in an AOR 
geographically larger, and with higher human population, than the rest 
of Global Combatant Commander areas of responsibility combined. The 
Commander oversees complex, and sophisticated operational missions and 
responses across the region, while commanding 3-star subordinates 
(Commanders of Seventh Fleet, Third Fleet, and Fleet Marine Force 
Pacific) who collectively lead the world's largest expeditionary force 
and the most capable forward deployed Naval force on earth. The 
Commander is responsible for U.S. Navy engagements with 36 nations 
including five nations with whom the US shares mutual defense treaties. 
Additionally the Pacific Fleet Commander oversees the man, train, and 
equip responsibilities of three Type Commanders (Commanders of Naval 
Air Forces, Surface Forces, and Submarine Forces Pacific) as well as 
the regional responsibilities of Commanders of U.S. Naval forces in 
Japan, Korea, Singapore, and Guam. With missions, functions and tasks 
incorporating 140,000 personnel, an annual budget of $13 billion, and 
ships, aircraft, equipment and infrastructure valued at over $500 
billion, the U.S Pacific Fleet Commander's range and depth of 
responsibility is without peer in the United States Navy.
    In the case of the Commander, U.S. Pacific Fleet, the reduction of 
the service component commander pay grade from a four-star Admiral (O-
10) to a three-star Vice Admiral (O-9) would undermine the Nation's 
credibility, reduce our ability to influence world events, increase 
strategic and operational risk, and weaken the Navy's ability to 
execute U.S. national security objectives in the Pacific Fleet Area of 
Responsibility (AOR). Our current Navy rank structure in the Pacific is 
a direct reflection of the variety, magnitude, and consequence of the 
challenges faced in this region, combined with the preponderance of the 
U.S. Navy's combat power located in the region, and culminating in a 
level of responsibility and required authority far beyond the span of 
responsibility of a three-star Flag Officer. At its outset, a pay grade 
reduction would serve to discourage our allies and partners and 
embolden our potential adversaries with a strong signal that will be 
interpreted as a retreat from our commitment to America's Rebalance to 
the Indo-Asia-Pacific, and a withdrawal from our long standing 
commitment to the region's security, stability, and prosperity.
    Overall, Commander, Pacific Fleet has a 4-star leader because of 
its wide-ranging span of responsibility and control; large personnel 
and budget portfolios; and, its diplomatic role. Reductions in flag 
officer ranks need to be carefully weighed against the potentially 
adverse impacts on foreign military cooperation, diplomatic ties, and 
mission accomplishment. Any reductions may be viewed by our allies and 
rivals as a lessening of the Navy's commitment to global maritime 
security.
    In the 71 years since World War II, our allies and partners in the 
Indo-Asia-Pacific have counted on the U.S. Navy to anchor, with highly 
capable combat-ready forces, the framework of norms, standards, rules 
and laws on which their security and prosperity depend. The U.S. Navy 
requires a four-star Admiral at Pacific Fleet in order to maintain and 
ensure our Nation's role as the region's preeminent maritime power and 
leader.

                                 [all]