[Senate Hearing 114-219]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2016

                              ----------                              


                         WEDNESDAY, MAY 6, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:35 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Shelby, Collins, Murkowski, 
Blunt, Daines, Moran, Durbin, Leahy, Feinstein, Mikulski, Reed, 
Tester, Udall, and Schatz.

                         DEPARTMENT OF DEFENSE

                        Office of the Secretary

STATEMENT OF HON. ASHTON B. CARTER, SECRETARY
ACCOMPANIED BY HON. MIKE McCORD, UNDER SECRETARY OF 
            DEFENSE (COMPTROLLER) AND CHIEF FINANCIAL 
            OFFICER


               opening statement of senator thad cochran


    Senator Cochran. The committee will please come to order. 
Today our Subcommittee on Defense Appropriations reviews the 
budget request of the Department of Defense (DOD). We are very 
pleased to welcome Secretary of Defense Ash Carter and Chairman 
of the Joint Chiefs of Staff, General Martin Dempsey, United 
States Army. This is our final scheduled hearing of the year on 
the 2016 Defense budget request.
    The subcommittee recognizes the uncertainty of the current 
fiscal environment and the impact it has on the Department of 
Defense and its planning. We also appreciate the complexity of 
building the fiscal year 2016 budget request, and we look 
forward to comments from Secretary Carter and General Dempsey 
on how we can support our men and women in uniform and our 
national security interests. We are pleased to recognize Dr. 
Carter on his first appearance before the subcommittee in his 
capacity as Secretary of Defense. Mr. Secretary, we look 
forward to working with you.
    Secretary Carter. Thank you.
    Senator Cochran. I also want to recognize that this will be 
General Dempsey's final appearance before the Defense 
Subcommittee as Chairman of the Joint Chiefs of Staff. General 
Dempsey, you have served with distinction since 2011, and this 
committee is grateful for your contributions. We will miss your 
valuable insight when your term comes to an end in October.


                           prepared statement


    The committee also welcomes Mr. Mike McCord, the 
Undersecretary of Defense and the Chief Financial Officer for 
the Department. I am confident that Mr. McCord will provide the 
committee with useful information as the subcommittee 
formulates the 2016 Defense budget. Thank you for appearing 
before us this morning. Your full statements will, of course, 
be included in the record.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Today our Subcommittee on Defense Appropriations reviews the budget 
request the Department of Defense. We are pleased to welcome: Secretary 
of Defense, Ash Carter and Chairman of the Joint Chiefs of Staff, 
General Martin E. Dempsey, United States Army.
    This is our final scheduled hearing on the fiscal year 2016 defense 
budget request. This Subcommittee recognizes the uncertainty of the 
current fiscal environment and the impact it has on the Department of 
Defense and its planning. We also appreciate the complexity of building 
the fiscal year 2016 budget request and look forward to comments from 
Secretary Carter and General Dempsey on how we can support our men and 
women in uniform and our national security interests.
    We are pleased to recognize Dr. Ash Carter on his first appearance 
before the subcommittee in his capacity as Secretary of Defense. Mr. 
Secretary, we look forward to working with you.
    I also want to recognize that this will be General Dempsey's final 
appearance before the Defense Subcommittee as Chairman of the Joint 
Chiefs of Staff. General Dempsey, you have served with distinction 
since your valuable insight when your term comes to an end in October.
    The Committee also welcomes Mr. Mike McCord, the Under Secretary of 
Defense and Chief Financial Officer, for the Department. I am confident 
that Mr. McCord will provide the committee with useful information as 
the subcommittee formulates the fiscal year 2016 defense budget.
    Thank you for appearing before us this morning. Your full 
statements will be included in the record.
    Now I will turn to my friend and the Vice Chairman, Senator Durbin, 
for his opening remarks. Thank you.

    Senator Cochran. I will now turn to my friend and vice 
chairmen of the committee, Senator Durbin, for his opening 
remarks.

                 STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. Thank you, Mr. Chairman, and thank you all 
for being here. And, Secretary Carter, glad to see you and glad 
we had a chance to chat for a minute or two. Mr. McCord, thank 
you as well for being part of this. Special thanks, General 
Dempsey, for your many years of service in the United States 
and to the United States in terms of our national defense. You 
have risen to the top rank within the White House and 
Administration as Chairman of the military side of our defense, 
and I appreciate all the talent that you brought to it and all 
the dedication. I wish you the best wherever life takes you 
with your wife, Deanie, your children, and grandchildren whom 
you will now able to enjoy a lot more.
    Secretary Carter and General Dempsey, it is important for 
us to hear your advice on a number of pending issues. The first 
is a threat of our creation called sequestration. There are 
efforts within the House and Senate to increase defense 
spending by using what is, in fact, a budget gimmick, namely to 
shift tens of billions of dollars of funds from the base budget 
over to the Overseas Contingency Operations Account. I believe 
this effort is not the right way to address the problem. While 
I support avoiding sequestration, Congress must address funding 
shortfalls for the entire Government and do it responsibly. 
Moving programs from the base bill to the war funding accounts 
adds to our problems instead of fixing them. The Department of 
Defense cannot operate efficiently if the U.S. Government 
lurches from one fiscal crisis to another year after year, and 
I want to hear from you on that subject, please.
    This manufactured budget crisis comes at a time of a 
quickly changing global security environment. Our military is 
operating all over the globe: operations in Afghanistan and 
Africa; stability in the Pacific; responding to Russian 
aggression in Eastern Europe. And since last year's hearing, we 
have added military operations in Iraq and Syria to a busy 
military operational tempo.
    There are a number of issues that I hope to get to in the 
questioning: maintaining our competitiveness and innovative 
edge in technology and medical research; ending what I believe 
is an exploitation of servicemembers and their families by 
predatory for-profit colleges; making certain that the 
Department of Defense can keep track of the contractors that 
are working for them. And lastly, and keeping in mind General 
Dempsey's persistent admonition that job one is getting our 
people right, late last week the Department reported an 
estimated 20,000 servicemembers were sexually assaulted last 
year. The number of individuals reporting these incidents sadly 
is up. More than half of those individuals still experience 
retaliation for doing so. We have to make more progress, and it 
requires a strong commitment.
    This is a daunting array of challenges and just a few of 
the many that you face. I look forward to your testimony.
    Senator Cochran. Thank you, Senator. Secretary Carter, you 
may proceed.

            SUMMARY STATEMENT OF SECRETARY ASHTON B. CARTER

    Secretary Carter. Thank you. Mr. Chairman, thank you. Vice 
Chairman Durbin, members of the committee, thank you for 
inviting me here today. And, Mr. Chairman, I want to especially 
recognize the sense of civility and courtesy with which you 
conduct all you do, including the leadership of this committee. 
It does not go unnoticed, least of all by me, and is much 
appreciated. And, Vice Chairman, I will make sure that we get 
to the issues you raised both in our private conversation and 
just now in the course of this, and thank you for your 
leadership. And thank you all for thanking my friend and 
shipmate, Marty Dempsey, for his wonderful service. I am going 
to miss him.
    I know all of you on this committee share the same devotion 
that I do to the finest fighting force the world has ever known 
and to the defense of our great country. And I hope that my 
tenure as Secretary of Defense will be marked by partnership 
with you on their behalf.
    I am gratified that this committee, as well as the three 
other Defense committees, recognize the urgent need to halt the 
decline in Defense spending imposed by the Budget Control Act. 
President Obama and I deeply share in that recognition. And 
indeed, I want to commend you and your colleagues for both 
recognizing and saying that sequestration threatens our 
military readiness, the size of our war fighting forces, the 
presence and capabilities of our air and naval fleets, our 
future technological security, and ultimately the lives of our 
men and women in uniform. The Joint Chiefs have said the same, 
and they have specified the kinds of cuts that their services 
would have to make if sequester returns.
    Over the past 3 fiscal years, the Defense Department has 
taken over three-quarters of a trillion dollars in cuts to its 
future years' defense spending. The magnitude of these cuts 
would stress the most capable planners and programmers. But the 
stresses have been made even greater because of the frequently 
sudden and unpredictable timing and nature of the cuts, as well 
as continued uncertainty over sequestration. And as a result, 
DOD has been forced to make a series of incremental, 
inefficient decisions, often made well into a fiscal year after 
prolonged continuing resolutions are finally resolved.
    Moreover, even as budgets have dropped precipitously, our 
forces have been responding to unexpectedly high demand from a 
tumultuous world. As a result, our belief is our Defense 
program is now unbalanced. We have been forced to prioritize 
force structure and readiness over modernization, taking on 
risks and capabilities in infrastructure that are far too 
great. This is a serious problem. High demands on smaller force 
structure mean the equipment and capabilities of too many 
components of the military are growing too old, too fast, from 
our nuclear deterrent to our tactical forces.
    Meanwhile, in each of the past several years, painful, but 
necessary, reforms proposed by DOD, including many significant 
reforms like eliminating overhead and unneeded infrastructure, 
retiring older force structure, and making reasonable 
adjustments in compensation, have been denied by Congress at 
the same time that sequestration looms. And we are starting to 
see this double whammy once again in markups of legislation 
this year. If confronted with sequestration level budgets and 
continued obstacles to reform, I do not believe that we can 
simply keep making incremental cuts. As I have said before, we 
would have to change the shape and not just the size of our 
military, significantly affecting parts of our defense 
strategy.
    In recent weeks, some in Congress have tried to provide DOD 
with its full budget request for fiscal year 2016 by 
transferring funds from the base budget into our accounts for 
overseas contingency operations, or OCO, meant to fund the 
incremental temporary costs of overseas conflicts in 
Afghanistan, Iraq, and elsewhere. While this approach clearly 
recognizes that the budget total we have requested is needed, 
the avenue it takes is just as clearly a road to nowhere. I say 
this because President Obama has already made it clear that he 
will not accept a budget that locks in sequestration going 
forward as this approach does, and he will not accept a budget 
that severs the link between our national security and our 
economic security. Legislation that implements this budget 
framework will, therefore, be subject to veto.
    So if we do not come together and find a different path by 
fall when a budget is needed, it will put our Department and 
our troops in an all too familiar and very difficult position. 
We will yet again have to make very hasty and drastic decisions 
to adjust to the failure to have an adequate DOD budget, 
decisions that none of us wants to make. The Joint Chiefs and I 
are concerned that if our congressional committees continue to 
advance this idea and do not explore alternatives, then we will 
be left holding the bag. That is not where I want to be in 6 
months, but since the OCO funding approach is not the kind of 
widely shared budget agreement that is needed, we can see now 
that it will not succeed.
    Moreover, the 1-year OCO approach does nothing to reduce 
the deficit. It risks undermining support for a mechanism, OCO, 
which is meant, as I said, to fund incremental costs of 
overseas conflicts in Afghanistan, Iraq, and elsewhere. Most 
importantly, because it does not provide a stable multiyear 
budget horizon. This 1-year approach is managerially unsound 
and also unfairly dispiriting to our force. Our military 
personnel and their families deserve to know their future more 
than just 1 year at a time. And not just them. Our defense 
industry partners, too, need stability and longer-term plans, 
not end-of-year crises or short-term fixes if they are to be 
efficient and cutting edge as we need them to be. Last and 
fundamentally, as a Nation we need to base our Defense 
budgeting on our long-term military strategy, and that is not a 
1-year project.
    This funding approach also reflects a narrow way of looking 
at our national security, one that ignores vital contributions 
made by the State Department, Justice Department, Treasury 
Department, Homeland Security Department, and disregards the 
enduring long-term connection between our Nation's security and 
many other factors, factors like scientific R&D (research and 
development) to keep our technological edge, education of a 
future all-volunteer military force, and the general economic 
strength of our country.
    Finally, I am also concerned that how we deal with the 
budget is being watched by the rest of our world, by our 
friends and potential foes alike. It could give a misleadingly 
diminished picture of America's great strength and resolve. For 
all these reasons, we need a better solution than the one now 
being considered.
    Two years ago, we saw members of Congress come together and 
reach a 2-year budget through the Murray-Ryan bipartisan Budget 
Act. Although we preferred a longer term solution to 
sequestration, that deal was able to provide DOD a measure of 
stability needed to plan for more than just 1 year. Today, I 
hope we can come together for a longer term multiyear agreement 
that provides the budget stability we need by locking in 
Defense and non-Defense budget levels consistent with the 
President's request.
    I pledge my personal support to this effort as well as the 
support of the entire staff of the Department of Defense, and I 
would like to work with each of you as well as other leaders 
and Members of Congress to this end. If we are successful, I am 
confident we can build a force of the future that is powerful 
enough to underwrite our strategy and to show resolve to 
friends and potential foes alike; a force that is equipped with 
bold, new technology and ideas, able to lead in cutting-edge 
capabilities in cyber and space; a force that is lean and 
efficient throughout the enterprise, that continues to attract 
and inspire new generations of Americans to contribute to this 
great mission. That is the vision for the force of the future I 
have been pursuing since I took office 11 weeks ago, and I hope 
to continue doing so in partnership with all of you.

                           PREPARED STATEMENT

    Mr. Chairman, this a time for coming together and problem 
solving, which we have come to know well from members of this 
committee. Much like in December 2013, our only choice is to 
come together to find a real solution that reflects our 
strength and security as a Nation. I look to this committee and 
the many leaders who sit on it to help us get on the right path 
out of this wilderness. Thank you.
    [The statement follows:]
              Prepared Statement of Hon. Ashton B. Carter
    Chairman Cochran, Vice Chairman Durbin, Members of the Committee: 
thank you for inviting me here today to discuss the President's fiscal 
year 2016 budget request for the Department of Defense (DOD). Oversight 
is key to our system of government. I not only welcome your wisdom and 
experience; I also want your partnership, and need your help.
    I also want to thank Chairman Dempsey for his leadership, as well 
as Deputy Secretary Work and Vice Chairman Winnefeld, in particular for 
all their hard work over the past year in helping develop the budget 
request we will be discussing today.
                       introduction and strategy
    Shortly after I was sworn in 11 weeks ago, I spoke to the people of 
the Department of Defense--military, civilian, and contractor--and told 
them I had three commitments as Secretary of Defense.
    The first is to them and their families--to safeguard them, to 
ensure that they are treated with dignity and respect, and above all to 
ensure that when they are sent into harm's way, it's done with the 
utmost care.
    The second commitment is to the President--to offer him my best 
strategic advice as he faces a complex world, to ensure at the same 
time that he receives candid military advice, and to see that his 
decisions are carried out with DOD's expected excellence.
    And my third commitment is to the future--to ensure our military 
remains the very best in an ever-changing world, amid fast-moving 
technological and commercial change, and as we seek to attract new 
generations to the mission of national security.
    To meet those commitments, I have since traveled to Afghanistan, 
Kuwait, Japan, and South Korea to meet with our troops, commanders, and 
allies in those countries. I also released DOD's new cyber strategy, 
launched the next phase of our rebalance to the Asia-Pacific, 
reaffirmed our unwavering commitment to ridding our ranks of sexual 
assault, approved new U.S.-Japan Guidelines for Defense Cooperation, 
and outlined my vision for how people, technology, and innovation will 
contribute to our force of the future.
    Everything I have done since taking office has reaffirmed for me 
that in every region of the world, in every domain--air, land, sea, 
space, and in cyberspace--it is America's leadership, and America's men 
and women in uniform, who stand between disorder and order--who stand 
up to malicious and destabilizing actors, while standing with those who 
believe in a more secure, just, and prosperous future for all our 
children.
    Mr. Chairman, this committee and this Congress will determine 
whether our troops can continue to do so--whether they can continue to 
defend our Nation's interests around the world with the readiness, 
capability, and excellence our Nation has grown accustomed to, and 
sometimes taken for granted.
    Halting and reversing the decline in defense spending imposed by 
the Budget Control Act, the President's budget would give us the 
resources we need to execute our Nation's defense strategy.
    It would ensure we field a modern, ready force in a balanced way, 
while also embracing change and reform, because asking for more 
taxpayer dollars requires we hold up our end of the bargain--by 
ensuring that every dollar is well-spent.
    The President is proposing to increase the defense budget in fiscal 
year 2016, but in line with the projection he submitted to Congress 
last year in the fiscal year 2015 budget's Future Years Defense Program 
(FYDP). The department is executing the plan it presented last year. 
Accordingly, for fiscal year 2016, the President is proposing $534 
billion for DOD's base budget and $51 billion in Overseas Contingency 
Operations (OCO), totaling $585 billion to sustain America's national 
security and defense strategies.
    The Defense Department needs your support for this budget, which is 
driven by strategy, not the other way around. More specifically, it is 
driven by the defense strategy identified in the 2014 Quadrennial 
Defense Review, which reflects the longtime, bipartisan consensus that 
our military must protect the homeland, build security globally, and 
project power and win decisively. We do so in line with our 
longstanding tradition of maintaining a superior force with an 
unmatched technological edge, working in close partnership with friends 
and allies, upholding the rules-based international order, and keeping 
our commitments to the people who make up the all-volunteer force.
    Our defense budget's priorities line up with our strategic 
priorities: sustaining America's global leadership by:
  --rebalancing to the Asia-Pacific region;
  --maintaining a strong commitment to security and stability in Europe 
        and the Middle East;
  --sustaining a global counterterrorism campaign;
  --strengthening key alliances and partnerships; and
  --prioritizing key modernization efforts.
    This budget ensures we can execute our defense strategy with 
manageable risk, even as it does require us to accept elevated risk in 
some areas.
    But--and I want to be clear about this--parts of our Nation's 
defense strategy cannot be executed under sequestration, which remains 
the law of the land and is set to return 148 days from today.
    As I have said before, the prospect of sequestration's serious 
damage to our national security and economy is tragically not a result 
of an economic emergency or recession.
    It is not because these budget cuts are a mathematical solution to 
the Nation's overall fiscal challenge--they are not.
    It is not because paths of curbing nondiscretionary spending and 
reforming our tax system have been explored and exhausted--they have 
not.
    It is not due to a breakthrough in military technology or a new 
strategic insight that somehow makes continued defense spending 
unnecessary--there has been no such silver bullet.
    And it is not because the world has suddenly become more peaceful--
for it is abundantly clear that it has not.
    Instead, sequestration is purely the collateral damage of political 
gridlock. And friends and potential enemies around the world are 
watching.
    We in the Department of Defense are prepared to make difficult 
strategic and budgetary choices. We are also committed--more than ever 
before--to finding new ways to improve the way we do business and be 
more efficient and accountable in our defense spending.
    But in order to ensure our military remains the world's finest 
fighting force, we need to banish the clouds of fiscal uncertainty that 
have obscured our plans and forced inefficient choices. We need a long-
term restoration of normal budgeting and a deal that the President can 
sign, and that lives up to our responsibility of defending this country 
and the global order. And that means, among other things, avoiding 
sequestration.
    To be sure, even under sequestration, America will remain the 
world's strongest military power. But under sequestration, our 
military--and our national security--would have to take on 
irresponsible and unnecessary risk--risk that previous Administrations 
and Congressional leaders have wisely chosen to avoid.
    Sequestration would lead over time to a military that looks 
fundamentally different and performs much differently than what we are 
used to. Not only as Secretary of Defense, but simply as an American, I 
deeply, earnestly hope we can avert that future. I am committed to 
working with the members of this committee, and your colleagues 
throughout the Congress to prevent it.
    I know how proud you and all Americans are that we field the finest 
fighting force the world has ever known. But our military superiority 
was not built, and will not be sustained, by resting on our laurels. So 
instead of resigning ourselves to having the diminished military that 
sequestration would give us, I propose that we build the force of the 
future, together.
                    building the force of the future
    Assuming the Congress funds the President's fiscal year 2016 budget 
and averts sequestration, we have the opportunity to build the force of 
the future. We have inherited a long tradition of military excellence 
from those who came before us, and we must preserve it for those who 
will come after.
    But to do so, DOD must embrace the future--and embrace change--
throughout our institution. We at the Pentagon must, as I say, think 
outside our five-sided box, and be open to new ideas and new ways of 
doing business that can help us operate more efficiently and perform 
more effectively in an increasingly dynamic and competitive 
environment.
What DOD Needs To Do
    As DOD counters the very real dangers we face in the world, we will 
also grab hold of the bright opportunities before us--opportunities to 
be more competitive and re-forge our Nation's military and defense 
establishment into a future force that harnesses and develops the 
latest, cutting-edge technology, and that remains superior to any 
potential adversary; one that is efficient and accountable to the 
taxpayers who support it; and one that competes and succeeds in 
attracting the next generation of talented Americans to fill its ranks.
    These are the three main pillars on which DOD will build the force 
of the future.
            Competitiveness through Technological and Operational 
                    Superiority
    As other nations pursue comprehensive military modernization 
programs and develop technologies designed to blunt our military's 
traditional advantages, the first pillar of our future force must be 
ensuring that we maintain--and extend--our technological edge over any 
potential adversary.
    The President's fiscal year 2016 budget includes targeted 
investments in modernized space, cyber, and missile defense 
capabilities geared toward countering emerging threats that could upend 
our technological superiority and our ability to project power. DOD 
would look forward to providing a full account of our proposed 
modernization investments, and the threats that compel them, in a 
classified setting.
    The budget also supports the Defense Innovation Initiative, which 
will help ensure the military continues to ride the leading edge of 
innovation, and makes deferred modernization investments that will 
ensure America's nuclear deterrent remains safe, secure, and effective. 
Across all these efforts, we must be open to global, commercial 
technology as well, and learn from advances in the private sector. 
That's why, less than two weeks ago at Stanford University, I outlined 
some first steps we are taking to be more open, rebuild bridges, and 
renew trust between the Pentagon and the tech community--such as 
establishing a DOD branch of the U.S. Digital Service, creating a new 
Defense Innovation Unit (Experimental) to be located in Silicon Valley, 
expanding and improving the Secretary of Defense Corporate Fellows 
Program, and developing a pilot project with the independent, non-
profit startup backer In-Q-Tel to provide innovative solutions to our 
most challenging problems.
    Because we know that technology alone--however advanced--cannot 
sustain our military's superiority, just as important is a ruthless 
focus on operational excellence. This means using our existing forces 
and capabilities in new, creative, and fiscally prudent ways to achieve 
our objectives. This also means working to develop more innovative and 
effective strategic and military options for the President, introducing 
a new and more rapidly responsive global force management model, 
developing new operational concepts, and reforming and updating all our 
operational plans.
            Competitiveness through Accountability & Efficiency
    The second pillar of building the force of the future requires 
redoubling our efforts to make DOD more accountable and efficient. We 
live in a competitive world and need to be a competitive organization. 
If we don't lean ourselves out and maintain our fighting weight, we 
have no business asking our fellow citizens for more resources.
    As I made clear in my confirmation hearing, I cannot suggest 
greater support and stability for the defense budget without at the 
same time frankly noting that not every defense dollar is always spent 
as well as it should be.
    American taxpayers rightly have trouble comprehending--let alone 
supporting--the defense budget when they read of cost overruns, 
insufficient accounting and accountability, needless overhead, and the 
like.
    If we're asking taxpayers to not only give us half a trillion of 
their hard-earned dollars, but also give us more than we got last year, 
we have to demonstrate that we can be responsible with it. We must do 
all we can to spend their money more wisely and more responsibly. We 
must reduce overhead, and we must curb wasteful spending practices 
wherever they are.
    DOD has sought to continuously improve our acquisition processes 
over the past 5 years, and I am proud myself to have been a part of 
that effort. Today, I am recommitting the Defense Department to working 
both with Congress, and on our own, to find new and more creative ways 
of stretching our defense dollars to give our troops the weapons and 
equipment they need.
    The department's Better Buying Power initiative is now on its third 
iteration since I established it in 2010, with Better Buying Power 3.0 
focused on achieving dominant capabilities through technical 
excellence. I know well and very much appreciate the strong support for 
acquisition reform demonstrated by members of both the Senate and 
House, and I share their deep desire to achieve real, lasting results 
that benefit both America's security and taxpayers.
    DOD is working closely with Senate and House Armed Services 
committee members and staff on ways to eliminate some of the burdensome 
and duplicative administrative requirements levied on our program 
managers. To that end, the President's fiscal year 2016 budget 
submission includes a number of legislative proposals designed to help 
streamline the program oversight process. We look forward to continuing 
our close partnership with Congress to see these measures implemented.
    As we sustain our focus on acquisition reform, I believe that DOD 
must concurrently undertake a wholesale review of our business 
practices and management systems.
    Our goal is to identify where we can further reduce the cost of 
doing business to free up funding for readiness and modernization--
ensuring that our energy, focus, and resources are devoted to 
supporting our frontline operations as much as possible.
    We intend to work closely with industry partners--who execute or 
enable many of our programs, logistics, training, administrative, and 
other functions--throughout this process, both to explore how they 
could help us accomplish our missions at reduced cost, and because they 
may have new and innovative ideas worth considering.
    Additionally, the Defense Department is pursuing creative force 
structure changes to be more agile and efficient--such as how we're 
modernizing our cruisers and restructuring Army aviation. We've 
established a new Defense POW/MIA Accounting Agency. And four previous 
rounds of efficiency and budget reduction initiatives have yielded 
approximately $78 billion in projected and actual savings in fiscal 
year 2016, helping to cushion our defense programs from successive 
years of budget cuts.
    We're also working hard to cut unnecessary overhead: from reducing 
management headquarters budgets by 20 percent across the department, to 
divesting excess bases and infrastructure.
    When DOD recently requested a round of domestic Base Realignment 
and Closure, Congress asked that we first pursue efficiencies in 
Europe. We did. DOD has approved and is pursuing a broad European 
Infrastructure Consolidation--which will result in some $500 million in 
annual recurring savings. We now need a round of domestic BRAC 
beginning in fiscal year 2017 to address excess infrastructure here at 
home.
    Simply put, we have more bases in more places than we need. We 
estimate DOD has about 25 percent more infrastructure capacity than 
necessary. We must be permitted to divest surplus infrastructure as we 
reduce and renew force structure. With projected recurring savings from 
a new BRAC round totaling some $2 billion a year, it would be 
irresponsible to cut tooth without also cutting tail.
    For base communities in question, it's important to remember that 
BRAC is often an opportunity to be seized. Communities have shown that 
BRAC is ultimately what you make of it, and there are plenty of places 
that have emerged from it stronger than they were before.
    Consider Lawrence, Indiana, which took advantage of Fort Harrison's 
closure in 1996 to create an enterprise zone, community college, 
recreational facilities, and commercial sites that in just 7 years not 
only replaced 100 percent of the jobs lost when the base closed, but 
created even more.
    Charleston, South Carolina stepped up when the Charleston Naval 
Complex closed in 1993, and now is home to more than 80 new industrial 
and Federal agency tenants. The former naval base is now producing 
millions of dollars' worth of goods that are exported to Europe, 
Africa, and the Middle East.
    And at former Mather Air Force Base in Sacramento County, 
California, the local redevelopment effort has invested $400 million 
and created more than 6,500 jobs--over six times the number of jobs 
lost when the base closed in 1993. It's now home to scores of 
businesses, a mixture of private companies, government agencies, and 
non-profit organizations.
    These are just a few examples of what can happen when local 
leaders, communities, and businesses work together and take advantage 
of the opportunities for new jobs and new growth after BRAC.
    One more point on accountability: Whether we're improving 
acquisition or closing bases, it is not enough to simply tell taxpayers 
that we're spending their dollars responsibly. We have to also show 
them, which is why good cost accounting and financial auditability is 
so important to me.
    DOD has made significant progress over the past 5 years in adding 
more discipline to our business environment, but there is much work 
left to be done, and we remain fully committed to our audit goals.
    Today, over 90 percent of DOD's current year, general fund 
budgetary resources are under some form of financial audit, with the 
Army, Navy, and Air Force now under audit and following the model 
employed by the Marine Corps.
    We plan to submit every corner of DOD to this kind of audit regimen 
beginning in fiscal year 2016. With this foundation, the department 
will progressively expand the scope of these audits until all our 
organizations, funds, and financial statements will be under audit in 
fiscal year 2018. I intend to do everything I can--including holding 
people to account--to get this done.
            Competitiveness through Attracting Future Talent
    Third, but no less important, DOD must be competitive when it comes 
to attracting new generations of talented and dedicated Americans to 
our calling of defending the Nation.
    We know how the attacks of September 11th, 2001 motivated so many 
Americans to want to be part of this noble endeavor. Going forward, we 
must ensure our future force can continue to recruit the finest young 
men and women our country has to offer--military and civilian--like 
those who serve today.
    As we do this, we must be mindful that the next generation expects 
jobs that give them purpose, meaning, and dignity. They want to be able 
to make real contributions, have their voices heard, and gain valuable 
and transferable experience. We must shape the kind of force they want 
to be in. The battle for talent will demand enlightened and agile 
leaders, new training schemes, new educational opportunities, and new 
compensation approaches.
    DOD is already pursuing several initiatives that will help ensure 
the military is a compelling career option and improve how we recruit, 
retain, and transition both current and future generations of talented 
Americans. In recent years, we've been expanding pilot programs that 
facilitate breaks in service that let our people gain diverse work 
experience. We've tailored our transition assistance program, 
Transition GPS, to better prepare servicemembers to enter the civilian 
workforce--providing different tracks for those who want to go to 
college, those who want skills training, and those who want to be 
entrepreneurs. And we've put a renewed focus on military ethics and 
professionalism, as well as making sure our military health system is 
held to the same high-quality standards we expect from the 
servicemembers and military family members under its care.
    And we're going to keep doing more, because we have to compete if 
we're going to succeed. As I recently told students at my former high 
school in Abington, Pennsylvania, today's young Americans are a great 
fit for the U.S. military and a great fit for what we do, but because 
our mission is so important and since our people are at the heart of 
it, we're exploring new ideas that will make us an even better fit for 
new generations like theirs. For example, we're looking at ways to 
increase the permeability of the wall between the government and young 
people working in the private sector, so we can bring in more highly-
skilled people in areas like cyber. We're looking at how we can provide 
personnel with more flexibility and choice in their careers, and 
improve how we evaluate and promote people based on performance and 
merit. And we're making sure that we prepare our people to think 
through their next steps after military service from the day they 
arrive here, so that they're all primed for success in whatever they 
decide to do next.
    Because we know how important it is--both for today's 
servicemembers and the generation that will follow them--we're also 
deeply committed to creating an environment and culture where we live 
the values we defend and every servicemember is treated with the 
dignity and respect they deserve.
    That's why we're continuing to expand combat positions available to 
women--because everyone who's able and willing to serve their country 
should have full and equal opportunity to do so.
    It's why we're striving to eliminate sexual assault from the 
military--because as I recently told local ROTC cadets and midshipmen 
at Georgetown University and some of our sexual assault first 
responders at Fort Myer, no man or woman who serves in the United 
States military should ever be sexually assaulted.
    And it's why we've been making sure gay and lesbian servicemembers 
can serve openly, and that their families receive the benefits their 
loved ones have earned.
    But for everything we're doing, DOD cannot build the force of the 
future by ourselves. We need Congress's help.
What We Need Congress To Do
    Since our current defense budget drawdown began several years ago, 
I've observed something of a phenomenon here in Washington.
    Along with our troops, their families, and our defense civilians, I 
thank our supporters on Capitol Hill, including most members of this 
committee, who have joined with us in trying to do everything possible 
to get Congress to prevent more mindless cuts to our defense budget.
    Unfortunately, these combined efforts have been unsuccessful in 
actually restoring adequate and predictable resources for DOD. We have 
had to endure deep cuts to readiness, weather pay freezes and civilian 
furloughs, and cut badly needed investments in modernization and 
critical technologies. At the same time, Congress has sometimes sought 
to protect programs that DOD has argued are no longer needed, or 
require significant reform.
    We have had the worst of both worlds--a double whammy of mindless 
sequestration coupled with inability to reform.
    As many of you know, it wasn't always this way.
    During the defense drawdown after the Cold War, DOD had much more 
flexibility thanks to the help of Congress. For example, we were able 
to resize the Army, retire the A-6 Intruder and many other weapons 
systems, and implement multiple BRAC rounds, which freed up dollars we 
re-allocated to keep our force structure ready, capable, and deployable 
around the world.
    I know some of the changes and reforms we're proposing may feel 
like a significant change from how we currently do business. But if 
anyone can understand how the dots connect and how we need Congress's 
help to be able to defend our country, our allies, and our interests in 
an increasingly dangerous world, it's you--the members of this 
committee.
    The fact is, if we're not able to implement the changes and reforms 
we need, we will be forced to make painful tradeoffs, even at the 
higher topline the President is requesting. We will lose further ground 
on modernization and readiness--leaving tomorrow's force less capable 
and leaving our Nation less secure. And we will face significant 
hurdles to executing our Nation's defense strategy. That's why we need 
your help.
                the president's fiscal year 2016 budget
    As we do every year when formulating our budget, this budget seeks 
to balance readiness, capability, and size--because we must ensure 
that, whatever the size of our force, we have the resources to provide 
every servicemember with the right training, the right equipment, the 
right compensation, and the right quality of fellow troops. That is the 
only way we can ensure our military is fully prepared to accomplish its 
missions.
    Almost two-thirds of DOD's fiscal year 2016 base budget--$348.4 
billion--funds our day-to-day expenses, similar to what a business 
would call its operating budget. This covers, among other expenses, the 
cost of fuel, spare parts, logistics support, maintenance, service 
contracts, and administration. It also includes pay and benefits for 
military and civilian personnel, which by themselves comprise nearly 
half of our total budget.
    The remaining third of our base budget--$185.9 billion--comprises 
investments in future defense needs, much like a business' capital 
improvement budget. It pays for the research, development, testing, 
evaluation, and ultimately acquisition of the weapons, equipment, and 
facilities that our servicemembers need.
    Broken down differently, our base budget includes the following 
categories:
  --Military pay and benefits (including healthcare and retirement 
        benefits)--$169 billion, or about 32 percent of the base 
        budget.
  --Civilian pay and benefits--$79 billion, or about 15 percent of the 
        base budget.
  --Other operating costs--$105 billion, or about 20 percent of the 
        base budget.
  --Acquisition and other investments (Procurement; research, 
        development, testing, and evaluation; and new facilities 
        construction)--$181 billion, or about 34 percent of the base 
        budget.
Modernization
    What makes this budget different is the focus it puts, more so than 
any other over the last decade, on new funding for modernization. After 
years of war, which required the deferral of longer-term modernization 
investments, this budget puts renewed emphasis on preparing for future 
threats--especially threats that challenge our military's power 
projection capabilities.
            Threats to Power Projection and our Technological Edge
    Being able to project power anywhere across the globe by rapidly 
surging aircraft, ships, troops, and supplies lies at the core of our 
defense strategy and what the American people have come to expect of 
their military. It guarantees that when an acute crisis erupts anywhere 
in the world, America can provide aid when disaster strikes, reinforce 
our allies when they are threatened, and protect our citizens and 
interests globally. It also assures freedom of navigation and 
overflight, and allows global commerce to flow freely.
    For decades, U.S. global power projection has relied on the ships, 
planes, submarines, bases, aircraft carriers, satellites, networks, and 
other advanced capabilities that comprise our military's unrivaled 
technological edge. But today that superiority is being challenged in 
unprecedented ways.
    Advanced military technologies, from rockets and drones to chemical 
and biological capabilities, have found their way into the arsenals of 
both non-state actors as well as previously less capable militaries. 
And other nations--among them Russia, China, Iran, and North Korea--
have been pursuing long-term, comprehensive military modernization 
programs to close the technology gap that has long existed between them 
and the United States.
    These modernization programs are developing and fielding advanced 
aircraft, submarines, and both longer-range and more accurate ballistic 
and cruise missiles. They're developing new and advanced anti-ship and 
anti-air missiles, as well as new counter-space, cyber, electronic 
warfare, undersea, and air attack capabilities. In some areas, we see 
levels of new weapons development that we haven't seen since the mid-
1980s, near the peak of the Soviet Union's surge in Cold War defense 
spending.
            Targeted Investments in the President's Budget
    One of the reasons we are asking for more money this year than last 
year is to reverse recent under-investment in new weapons systems by 
making targeted investments to help us stay ahead of emerging threats--
adding substantial funding for space control and launch capabilities, 
missile defense, cyber, and advanced sensors, communications, and 
munitions--all of which are critical for power projection in contested 
environments. The $70 billion we're requesting for research and 
development is essential to help build the world's most advanced 
fighters and bombers, develop new phased arrays for radar, and produce 
the satellites, missiles, and ships that let us strike terrorists in 
the Middle East and underwrite stability in the Asia-Pacific.
    The budget also makes significant investments in the resilience and 
survivability of our infrastructure and forces, particularly in the 
western Pacific, with improved active defenses such as our Patriot and 
AEGIS systems, as well as selective hardening of key installations and 
facilities.
    DOD is also addressing the erosion of U.S. technological 
superiority with the Defense Innovation Initiative (DII). The DII is an 
ambitious department-wide effort to identify and invest in innovative 
ways to sustain and advance America's military dominance for the 21st 
century.
    The DII will identify, develop, and field breakthrough technologies 
and systems through a new Long-Range Research & Development Planning 
Program, and the President's budget supports this effort through 
specific investments in promising new technologies and capabilities 
such as high-speed strike weapons, advanced aeronautics, rail guns, and 
high energy lasers. The DII also involves the development of innovative 
operational concepts that would help us use our current capabilities in 
new and creative ways--like adapting our Tomahawk missiles to be used 
against moving targets in a maritime environment, or using smart 
projectiles that can be fired from many of our existing land- and ship-
based artillery guns to defeat incoming missiles at much lower cost per 
round. The ultimate aim is to help craft `offset strategies' that 
maximize our strengths and exploit the weaknesses of potential 
adversaries.
    Our budget is also making focused and sustained investments in 
modernization and manning across the nuclear enterprise, even as we 
reduce the roles and numbers of nuclear weapons in the U.S. nuclear 
posture. These investments are critical for ensuring the continued 
safety, security, and effectiveness of our nuclear deterrent, as well 
as the long-term health of the force that supports our nuclear triad, 
particularly after recent troubling lapses in parts of DOD's nuclear 
enterprise. To help fund improvements across the nuclear enterprise, we 
are requesting an increase of approximately $1 billion in fiscal year 
2016, and about $8 billion over the FYDP.
Readiness
    DOD must rebuild and recover after more than 13 years of 
uninterrupted war. But our effort to do so has been frustrated by two 
variables, both of which are out of our hands--one, the continued high 
operational tempo and high demand for our forces, and two, the 
uncertainty surrounding annual appropriations.
    Only over the last couple of years has readiness begun to recover 
from the strains of over a decade of war, exacerbated by sequestration 
in 2013. Nevertheless, readiness remains at troubling levels across the 
force.
    While our forward-deployed forces remain ready, our surge forces at 
home are not as ready as they need to be. The President's budget 
therefore invests in near-term unit readiness by adjusting service end-
strength ramps to reduce personnel turbulence and stress on the force, 
while increasing funding to improve home station training and training-
related infrastructure.
    This past year has demonstrated that our military must be ready to 
fight more than just the last war. We have to be prepared across all 
domains--air, land, sea, space, and in cyberspace--to engage in both 
low- and high-end missions and conflicts, as well as in the shadowy, 
so-called `hybrid warfare' space in between.
    While this budget submission's requested and projected funding 
levels will enable the military to continue making steady progress 
toward full-spectrum combat readiness, the gains we've recently made 
are fragile. Sustaining them to provide for ready and capable forces 
will require both time and a stable flow of resources, which is why, 
even under the budget we're requesting, the Army, Navy, and Marine 
Corps won't all reach their readiness goals until 2020, and the Air 
Force won't do so until 2023.
            Army:
    For fiscal year 2016, the Army's base budget of $126.5 billion 
supports an end-strength of 1,015,000 soldiers--475,000 soldiers on 
active duty, 342,000 soldiers in the Army National Guard, and 198,000 
soldiers in the Army Reserve--comprising 57 total force brigade combat 
teams and associated enablers. The budget also supports 19 brigade-
level training rotations at the Army's Combat Training Centers, which 
are critical to the Army's efforts to reach full-spectrum combat 
readiness.
    While the Army's postwar end-strength target remains a force of 
approximately 450,000 active-duty soldiers, 335,000 Army National Guard 
soldiers and 195,000 Army Reserve soldiers, this year's budget slows 
the drawdown rate. Rather than planning to reduce the active-duty force 
by 20,000 soldiers and the National Guard by 14,000 soldiers in fiscal 
year 2016, the Army will instead plan to reduce by 15,000 active-duty 
soldiers and 8,000 Guardsmen, while still maintaining its schedule for 
reducing unit structure. This will help mitigate personnel turbulence 
and stress, while also improving unit manning as the Army approaches 
its target size.
    The Army's budget for fiscal year 2016 also includes $4.5 billion 
for Army helicopter modernization. Specifically:
  --UH-60M Black Hawk: We are requesting $1.6 billion to support buying 
        94 multi-mission helicopters in fiscal year 2016, and $6.1 
        billion for 301 helicopters over the FYDP.
  --AH-64E Apache: We are requesting $1.4 billion to support 
        development and purchase of 64 attack helicopters in fiscal 
        year 2016, and $6.2 billion for 303 helicopters over the FYDP.
  --CH-47F Chinook: We are requesting $1.1 billion to support 
        development and purchase of 39 cargo helicopters in fiscal year 
        2016, and $3.2 billion for 95 helicopters over the FYDP.
  --UH-72 Lakota: We are requesting $187 million in fiscal year 2016 to 
        support the final buy of 28 light utility helicopters.
    These investments require difficult trade-offs given today's 
constrained fiscal environment. That is why the Army is resubmitting 
the Army's Aviation Restructure Initiative, which makes the most 
efficient use of taxpayer dollars by retiring outdated airframes and 
streamlining the Army's helicopter fleet so that platforms can be 
modernized and allocated where they are needed most.
    As you know, I am committed to reviewing the Army's Aviation 
Restructure Initiative. However, the Army believes that fully 
implementing the Aviation Restructure Initiative (ARI), which includes 
shifting National Guard Apaches to active-duty units while providing 
Guard units with Black Hawks, is prudent for several reasons.
    For one, Apaches are in high demand at high levels of readiness 
that would require Guard units manning them to mobilize at 
unprecedentedly high rates; or alternatively, for the Army to spend a 
total of approximately $4.4 billion to fully equip the Guard's Apache 
battalions, and then $350 million per year to maintain them at those 
high levels of readiness. Meanwhile, Black Hawks are more suitable for 
Guard missions here at home. Whether homeland defense, disaster relief, 
support to civil authorities, or complementing our active-duty 
military, these missions tend to demand transport and medical 
capabilities more than the attack capabilities of Apaches. In sum, the 
initiative avoids approximately $12 billion in costs through fiscal 
year 2035 and saves over $1 billion annually starting in fiscal year 
2020. Considering these figures, implementing the Aviation Restructure 
Initiative is not only in the best warfighting interest of the Army, 
but also in the interest of the taxpayers who fund it.
    I know this is a contentious issue. However, we believe the ARI is 
the least cost, best solution for the Army's aviation enterprise. DOD 
looks forward to making its case to the National Commission on the 
Future of the Army established by the 2015 National Defense 
Authorization Act.
            Navy & Marine Corps:
    The Navy and Marine Corps are allocated $161 billion for fiscal 
year 2016, supporting a 282-ship fleet in 2016 and a 304-ship fleet by 
fiscal year 2020 with a return to 11 aircraft carriers, 386,600 active-
duty and Reserve sailors, and 222,900 active-duty and Reserve Marines.
    The President's budget invests $16.6 billion in shipbuilding for 
fiscal year 2016, and $95.9 billion over the FYDP. The budget protects 
critical Navy and Marine Corps investments in undersea, surface, 
amphibious, and airborne capabilities--all of which are critical for 
addressing emerging threats. Specifically:
  --Submarines: We are requesting $5.7 billion for fiscal year 2016, 
        and $30.9 billion over the FYDP, to support buying two 
        Virginia-class attack submarines a year through fiscal year 
        2020. We are also requesting $1.4 billion in fiscal year 2016, 
        and $10.5 billion over the FYDP, to support the replacement for 
        the Ohio-class ballistic missile submarine.
  --DDG-51 Guided Missile Destroyers: We are requesting $3.4 billion 
        for fiscal year 2016, and $18.5 billion over the FYDP, to 
        support the continued development and procurement of two DDG-51 
        destroyers a year through fiscal year 2020.
  --Aircraft Carriers: The President's budget plan enables us to 
        support 11 carrier strike groups. We are requesting $678 
        million in fiscal year 2016, and $3.9 billion over the FYDP, to 
        support the refueling and overhaul of the USS George 
        Washington. We are also requesting $2.8 billion in fiscal year 
        2016, and $12.5 billion over the FYDP, to support completion of 
        the Gerald Ford, fourth-year construction of the John F. 
        Kennedy , and long-lead items for CVN-80, Enterprise.
  --Littoral Combat Ships (LCS) and Small Surface Combatants: We are 
        requesting $1.8 billion in fiscal year 2016, and $9.4 billion 
        over the FYDP, to support development and procurement of 14 
        littoral combat ships over the FYDP--including three LCS in 
        fiscal year 2016. We are also requesting $55 million in fiscal 
        year 2016, and $762.8 million over the FYDP, to support 
        capability improvements to the survivability and lethality of 
        the LCS required for the Navy to modify it into a small surface 
        combatant.
  --Fleet Replenishment Oiler: We are requesting $674 million to 
        support buying one new fleet replenishment oiler, the TAO(X), 
        in fiscal year 2016--part of a $2.4 billion request to buy four 
        of them over the FYDP.
  --Amphibious Transport Docks: We are requesting $668 million in 
        fiscal year 2016 to finish buying one San Antonio-class 
        amphibious transport dock.
  --F-35 Lightning II Joint Strike Fighter: The Department of the Navy 
        is procuring two F-35 variants, the Navy carrier-based F-35C 
        and the Marine Corps short-take-off-and-vertical-landing F-35B. 
        The Navy and Marine Corps are requesting $3.1 billion in fiscal 
        year 2016 to support procurement of 13 aircraft--nine F-35Bs 
        and four F-35Cs--and aircraft modifications and initial spares, 
        and $20.9 billion over the FYDP to support procurement of 121 
        aircraft and aircraft modifications and initial spares.
  --Patrol and Airborne Early Warning Aircraft: We are requesting $3.4 
        billion in fiscal year 2016, and $10.1 billion over the FYDP, 
        to support continued development and procurement of 47 P-8A 
        Poseidon maritime patrol aircraft through fiscal year 2020. We 
        are also requesting $1.3 billion in fiscal year 2016, and $6.1 
        billion over the FYDP, to support buying 24 E-2D Hawkeye 
        airborne early warning aircraft through fiscal year 2020.
    Making these investments while also abiding by fiscal prudence, we 
had to make more difficult trade-offs. For that reason, we are 
resubmitting our request to place some of the Navy's cruisers and an 
amphibious landing ship--12 ships in total, including 11 cruisers--into 
a phased modernization program that will provide them with enhanced 
capability and a longer lifespan. Given that our cruisers are the most 
capable ships for controlling the air defenses of a carrier strike 
group, and in light of anti-ship missile capabilities being pursued by 
other nations, this modernization program will, over the next decade 
and a half, be a baseline requirement for sustaining both our cruiser 
fleet and 11 carrier strike groups through 2045.
    I acknowledge and appreciate the plan put forward in the omnibus 
Consolidated and Further Continuing Appropriations Act, 2015, which 
helps us get to our goal, and which we have begun to implement. 
However, this plan is more expensive, and results in shorter ship life. 
Considering that our plan is critical for our power projection 
capabilities, we believe it should be implemented in full, and look 
forward to working with the Congress as we move forward.
            Air Force:
    The Air Force is allocated a base budget of $152.9 billion for 
fiscal year 2016, supporting a force of 491,700 active-duty, Guard, and 
Reserve airmen, 49 tactical fighter squadrons, 96 operational bombers 
out of a total 154-aircraft bomber fleet, and a safe, secure, and 
effective nuclear deterrent that includes 450 intercontinental 
ballistic missiles.
    The Air Force's budget reflects DOD's decision to protect 
modernization funding for advanced capabilities and platforms most 
relevant to both present and emerging threats--in this case, fifth-
generation fighters, long-range bombers, and mid-air refueling aircraft 
to assure our air superiority and global reach; both manned and 
remotely-piloted aircraft to help meet Combatant Commanders' needs for 
intelligence, surveillance, and reconnaissance (ISR); and research and 
development to ensure continued and competitive space launch 
capabilities. Specifically:
  --F-35A Lightning II Joint Strike Fighter: We are requesting $6 
        billion to support buying 44 aircraft, aircraft modifications, 
        and initial spares in fiscal year 2016, and $33.5 billion to 
        support buying 272 aircraft, modifications, and spares over the 
        FYDP.
  --KC-46A Pegasus Refueling Tanker: We are requesting $2.4 billion to 
        buy 12 aircraft in fiscal year 2016, and $14.6 billion to buy 
        72 aircraft over the FYDP.
  --Long-Range Strike Bomber: We are requesting $1.2 billion for 
        research and development in fiscal year 2016, and $13.9 billion 
        over the FYDP.
  --Remotely-Piloted Aircraft: We are requesting $904 million to 
        support buying 29 MQ-9A Reapers in fiscal year 2016, and $4.8 
        billion to support buying 77 of them over the FYDP. This 
        investment is critical to ensuring the Air Force has enough 
        around-the-clock permissive ISR combat air patrols--in this 
        case, allowing us to increase from 55 to 60--to meet increased 
        battlefield demands.
  --Competitive Space Launch: This budget supports year-over-year 
        increases in competitive space launches--going up from two in 
        fiscal year 2015 to three in fiscal year 2016, and further 
        increasing to four competitive launches in fiscal year 2017. 
        The budget also supports investments to mitigate DOD reliance 
        on the RD-180 space engine that powers the Atlas V Evolved 
        Expendable Launch Vehicle rockets.
  --Combat Rescue Helicopter: We are requesting $156 million in fiscal 
        year 2016 for the Air Force's next-generation combat rescue 
        helicopter--part of a total $1.6 billion request over the FYDP 
        for research, development, testing, and evaluation--and 
        requesting $717 million over the FYDP for procurement.
    In light of high demand coupled with Congressional consultations, 
the Air Force budget reflects DOD's decision to slow the retirement 
timelines for three key ISR and battle management platforms.
    We chose to defer the retirement of the U-2 Dragon Lady 
reconnaissance aircraft until fiscal year 2019, when planned sensor 
upgrades to the RQ-4 Global Hawk will combine with other capabilities 
to mitigate the loss of the U-2. We chose to delay the previously 
planned retirement of seven E-3 Sentry AWACS until fiscal year 2019, so 
they can support air operations over Iraq and Syria. And we chose to 
delay retirement of any E-8 JSTARS through fiscal year 2020, pending 
final approval of the Air Force's acquisition strategy for its 
replacement.
    The Air Force budget also supports a timeline that would phase out 
and retire the A-10 in fiscal year 2019. With the gradual retirement of 
the A-10 that we're proposing, the Air Force will better support legacy 
fleet readiness and the planned schedule for standing up the F-35A by 
filling in some of the overall fighter maintenance personnel shortfalls 
with trained and qualified personnel from the retiring A-10 squadrons.
    As you know, F-35 maintainer demand has already required the Air 
Force to use the authority Congress provided last year to move some A-
10s into back-up aircraft inventory status. I should note that the Air 
Force is doing so only to the extent that it absolutely must, and so 
far intends to move fewer A-10s into this status than what Congress has 
authorized. I know this is an important issue, and DOD looks forward to 
working with you on it.
            Defense-Wide:
    The remaining share of our base budget--about $94 billion--is 
allocated across the Department of Defense. This includes funding for 
cyber, U.S. Special Operations Command, the Defense Advanced Research 
Projects Agency, the Defense Health Agency, the Joint Staff, the Office 
of the Secretary of Defense, and missile defense.
    For fiscal year 2016, a $9.6 billion total investment in missile 
defense helps protect the U.S. homeland, deployed forces, and our 
allies and partners. This includes $8.1 billion for the Missile Defense 
Agency, $1.6 billion of which will help ensure the reliability of U.S. 
ground-based interceptors, which are currently sited at Fort Greely, 
Alaska and Vandenberg Air Force Base, California. The budget also 
continues to support the President's timeline for implementing the 
European Phased Adaptive Approach.
            Overseas Contingency Operations:
    Separate from DOD's base budget, we are also requesting $50.9 
billion in Overseas Contingency Operations (OCO) funding for fiscal 
year 2016. This represents a 21 percent decrease from last year's $64.2 
billion in OCO funding, continuing OCO's decline since 2010, while also 
reflecting continued operational demands on U.S. forces around the 
world. OCO comprises funding for:
  --Afghanistan and Other Operations: We are requesting $42.5 billion 
        to support Operation Freedom's Sentinel and other missions. 
        This includes $7.8 billion for reset and retrograde of U.S. 
        equipment from Afghanistan, as well as $3.8 billion for 
        training and equipping the Afghan National Security Forces 
        through our ongoing train-advise-and-assist mission.
  --Counter-ISIL Operations: We are requesting $5.3 billion to support 
        Operation Inherent Resolve. This includes $1.3 billion for 
        training and equipping Iraqi forces, including Kurdish forces, 
        and the vetted moderate Syrian opposition.
  --Counterterrorism Partnerships Fund: Reflecting the vital role that 
        our allies and partners play in countering terrorism that could 
        threaten U.S. citizens, we are requesting $2.1 billion for the 
        Counterterrorism Partnerships Fund that President Obama 
        established last year.
  --NATO Reassurance: We are requesting $789 million for the European 
        Reassurance Initiative, which the President created last year 
        to help reassure our NATO allies and reinforce our Article V 
        commitment in light of Russia's violations of Ukrainian 
        sovereignty.
    The conclusion of major combat operations in Afghanistan and Iraq 
has resulted in a 73 percent drop in DOD's OCO costs from their $187-
billion peak in fiscal year 2008.
    We are continuing to use OCO as appropriate to finance our 
military's response to unforeseen crises, but we must also account for 
those enduring priorities that we do not envision going away--such as 
supporting our Afghan partners, countering terrorism, maintaining a 
strong forward presence in the Middle East, and ensuring our military 
is ready to respond to a wide range of potential crises.
    The Administration intends to transition OCO's enduring costs to 
the base budget between fiscal years 2017 and 2020. We will do this 
over time, and in a way that protects our defense strategy--including 
DOD's abilities to deter aggression, maintain crisis-ready forces, and 
project power across the globe. This transition, however, will not be 
possible unless the threat of sequestration has been removed.
    Having financed the costs of key military activities--such as 
counterterrorism operations and our Middle East posture--outside the 
base budget for 14 years, and knowing that the security situation in 
the Middle East remains volatile, it will take time to determine which 
OCO costs are most likely to be enduring, and which are not. But we 
will release a plan later this year, which will also address how we 
will budget for uncertainty surrounding unforeseen future crises, and 
implications for DOD's budget.
                              compensation
    The choices we face about military compensation are vexing, 
critically important, and closely followed, so I want to be direct and 
upfront with you.
    When our troops go into battle--risking their lives--we owe to 
them, and their families, not only adequate pay and compensation, but 
also the right investments--in the right people, the right training, 
and the right weapons and equipment--so that they can accomplish their 
missions and come home safely.
    To meet all of these obligations at once, we have to balance how we 
allocate our dollars. It would be irresponsible to prioritize 
compensation, force size, equipment, or training in isolation, only to 
put our servicemembers' lives at unacceptable risk in battle.
    For the President's fiscal year 2016 budget, the Defense Department 
considered its compensation proposals very carefully, as well as those 
approved by Congress in the 2015 National Defense Authorization Act. 
Accordingly, this budget again proposes modest adjustments to shift 
funds from compensation into readiness, capability, and force 
structure, so that our people can continue executing their missions 
with continued excellence.
    As you know, last week President Obama informed the Congress of his 
Administration's positions on the recommendations released by the 
Military Compensation and Retirement Modernization Commission. The 
Department of Defense commends the commission for its 18-month 
independent review of the military retirement and compensation programs 
administered both inside and outside DOD. Their work confirmed many 
positive changes that we're making to uphold our commitments to our 
people, and also pointed out areas where we can do better.
    As I testified before Congress in March, many of the commission's 
proposals would significantly affect our servicemembers and their 
families, and DOD owes them, President Obama, and the country our 
utmost diligence and most rigorous analysis. And over the past 3 
months, DOD has conducted a rapid yet comprehensive review of the 
commission's recommendations, working closely with both the commission 
and our interagency partners to adopt or refine the specific proposals 
where possible.
    We are now prepared to support specific proposals for 10 of the 
commission's 15 recommendations, and, given the complexities of four 
others, we will continue to conduct analysis and work with the 
commission over the next few months. In some instances, the Defense 
Department is already taking steps to implement these first 10 
recommendations, but in areas that will require legislative changes to 
do so, we will work quickly to submit proposed legislative language to 
Congress as soon as possible.
    However, while we agree with the commission that reforms to the 
military healthcare system are needed, we also believe that the TRICARE 
proposals in President Obama's fiscal year 2016 budget serve as a good 
first step by offering servicemembers, military families, and retirees 
greater choice and control over their healthcare decisions. DOD looks 
forward to working with the commission, our interagency partners, and 
interested members of Congress over the course of this year as we 
develop additional reform proposals to be considered for the 
President's fiscal year 2017 budget.
    DOD will continue to work closely with the Congress and the 
commission to achieve the goals we share: ensuring the long-term 
strength and vitality of our all-volunteer force, and honoring all our 
servicemembers--past, present, and future.
                        impact of sequestration
    At the end of 2013, policymakers came together on a bipartisan 
basis to partially reverse sequestration and pay for higher 
discretionary funding levels with long-term reforms. We've seen how 
that bipartisan agreement has allowed us to invest in areas ranging 
from research and manufacturing to strengthening our military. We've 
also seen the positive impact on our economy, with a more responsible 
and orderly budget process helping contribute to the fastest job growth 
since the late 1990s.
    The President's budget builds on this progress by reversing 
sequestration, paid for with a balanced mix of commonsense spending 
cuts and tax loophole closures, while also proposing additional deficit 
reduction that would put debt on a downward path as a share of the 
economy. The President has also made clear that he will not accept a 
budget that locks in sequestration going forward.
    As the Joint Chiefs and others have outlined, and as I will detail 
in this testimony, sequestration would damage our national security, 
ultimately resulting in a military that is too small and insufficiently 
equipped to fully implement our defense strategy. This would reflect 
poorly on America's global leadership, which has been the one critical 
but defining constant in a turbulent and dangerous world. In fact, even 
the threat of sequestration has had real effects.
    You don't need me to tell you that the President has said he will 
not accept a budget that severs the vital link between our national and 
economic security. Why? Because the strength of our Nation depends on 
the strength of our economy, and a strong military depends on a strong 
educational system, thriving private-sector businesses, and innovative 
research. And because that principle--matching defense increases with 
non-defense increases dollar-for-dollar--was a basic condition of the 
bipartisan agreement we got in 2013, the President sees no reason why 
we shouldn't uphold those same principles in any agreement now.
    In recent weeks, some in Congress have tried to provide DOD with 
its full budget request for fiscal year 2016 by transferring funds from 
the base budget into our accounts for Overseas Contingency Operations, 
or OCO. While this approach clearly recognizes that the budget total 
we've requested is needed, the avenue it takes is just as clearly a 
road to nowhere. I say this because President Obama has already made 
clear that he won't accept a budget that locks in sequestration going 
forward, and he won't accept a budget that severs the vital link 
between our national security and economic security. Legislation that 
implements this budget framework will therefore be subject to veto. So 
if we don't come together and find a different path by fall when a new 
budget is needed, it would put our department and our troops in a very 
difficult position. We will yet again have to make some very hasty and 
drastic decisions--decisions that none of us want to be made. The Joint 
Chiefs and I are concerned that if our Congressional committees 
continue to advance this idea and don't explore alternatives, then 
we'll all be left holding the bag.
    That's not where I want to be in 6 months, but since the OCO 
funding approach is not the kind of widely-shared agreement needed, we 
can see now that it won't succeed.
    Moreover, the 1 year OCO approach does nothing to reduce the 
deficit. It risks undermining support for a mechanism--OCO--meant to 
fund incremental costs of overseas conflicts in Afghanistan, Iraq, and 
elsewhere. Most importantly, because it doesn't provide a stable, 
multi-year budget horizon, it is managerially unsound, and also 
unfairly dispiriting to our force. Our military personnel and their 
families deserve to know their future more than just 1 year at a time. 
And not just them. Our defense industry partners, too, need stability 
and longer-term plans--not end-of-year crises or short-term fixes--to 
be efficient and cutting-edge. As a nation, we need to base our defense 
budgeting on our long-term military strategy, and that's not a 1 year 
project.
    This funding approach also reflects a narrow way of looking at our 
national security--one that ignores the vital contributions made by the 
State, Justice, Treasury, and Homeland Security Departments, and 
disregards the enduring long-term connection between our Nation's 
security and many other factors. Factors like scientific R&D to keep 
our technological edge, education of a future all-volunteer military 
force, and the general economic strength of our country.
    Finally, I'm also concerned that how we deal with the budget is 
being watched by the rest of the world--by our friends and potential 
foes alike. It could give a misleadingly diminished picture of 
America's great strength and resolve.
    The only way we're going to get out of the wilderness of 
sequestration is if we work together. I therefore appeal to members of 
Congress, from both parties, to start looking for ways to find a truly 
bipartisan compromise. I hope they can make clear to their colleagues 
that sequestration would also damage America's long-term strength, 
preventing our country from making pro-growth investments in areas 
ranging from basic research to early childhood education--investments 
that, in the past, have helped make our military the finest fighting 
force the world has ever known.
    Sequestration is set to return in just under 150 days. Letting that 
happen would be unwise and unsafe for our national defense, over both 
the short and long term.
Short-Term Impact
    DOD has had to live with uncertain budgets for the last 3 years, 
continuous and sudden downward revisions of our budget plans, and even 
a government closure. To continue meeting all of our mission 
requirements, we've done our best to manage through these 
circumstances, underfunding significant parts of our force and its 
support systems. Put bluntly, we have survived, but not thrived. Our 
military has made painful choices and tradeoffs among the size, 
capabilities, and readiness of our joint force, and we've amassed a 
number of bills that are now coming due.
    That's why the department has been counting on and planning for a 
budget increase of roughly $35 billion above sequestration-level caps 
in fiscal year 2016. If it looks like DOD will be operating at 
sequestration levels in 2016, on October 1 we will have to swiftly 
begin making cuts so that we don't end up $35 billion short as we 
approach year's end.
    A return to sequestration in fiscal year 2016 would affect all 
aspects of the department, but not all equally.
    More than one-third of the fiscal year 2016 cuts would come have to 
come from Operations and Maintenance accounts, with unavoidable 
reductions in readiness and our ability to shape world events in 
America's interest. Let me put this more plainly: allowing 
sequestration to return would deprive our troops of what they need to 
accomplish their missions.
    Approximately half of the cuts would have to come from the 
department's modernization accounts, undermining our efforts to secure 
technological superiority for U.S. forces in future conflicts. Because 
there are bills that DOD absolutely must pay--such as the salaries of 
our troops--many capabilities being developed to counter known threats 
from highly capable adversaries would be delayed or cancelled, 
deepening our Nation's vulnerabilities at a time when the world is 
growing more dangerous, not less. Sequestration would put a hold on 
critical programs like our Aerospace Innovation Initiative, the Next 
Generation Adaptive Engine, the Ground-Based Interceptor missile 
defense kill vehicle redesign, and several space control efforts.
    Deferring these investments is bad policy and makes the Defense 
Department less competitive for the future. What's more, it breaks 
faith with the troops of today and the troops of tomorrow. And it 
undermines the defense industrial base that is a critical foundation 
for our national security.
Long-Term Impact
    If sequestration were to persist over time, the long-term 
consequences would be harder hitting. We would ultimately have a 
military that looks fundamentally different, and that performs much 
differently, from what our Nation is accustomed to.
    If we are forced to sequestration-level budgets, I do not believe 
that we can continue to make incremental cuts and maintain the same 
general set of objectives as we've had in our defense strategy. I will 
insist that new cuts be accompanied by a frank reassessment of our 
strategic approach to addressing the threats we face around the world--
what we are asking the Armed Forces to do and to be prepared to do.
    I cannot tell you right now exactly what that means--DOD is not 
resigned to the return of sequestration--but I can tell you that I will 
direct the department to look at all aspects of the defense budget to 
determine how best to absorb these cuts. No portion of our budget can 
remain inviolate.
    What I will not do is let DOD continue mortgaging our future 
readiness and capability. I will not send our troops into a fight with 
outdated equipment, inadequate readiness, and ineffective doctrine.
    Everything else is on the table.
    What does that mean? We could be forced to consider pay cuts, not 
just cuts in the growth of compensation. We could be forced to consider 
all means of shedding excess infrastructure, not just working within 
the Congressional BRAC process. We could be forced to look at 
significant force structure cuts, not just trimming around the edges. 
We could be forced to ask our military to do--and be prepared to do--
significantly less than what we have traditionally expected, and 
required of it.
    I am not afraid to ask these difficult questions, but if we are 
stuck with sequestration's budget cuts over the long term, our entire 
Nation will have to live with the answers.
    A prolonged period of depressed defense budgets will almost 
certainly mean a smaller, less capable, and less ready military. No one 
can fully predict the impact on the future. But it could translate into 
future conflicts that last longer, and are more costly in both lives 
and dollars.
    That may sound severe to some, but it is a fact, and history should 
be our guide when we think about the true cost of sequestration.
The Case for Repealing Sequestration
    I know I'm preaching to the choir here. If sequestration could have 
been reversed by just this committee and its counterpart in the House, 
it probably would have happened years ago. So I offer the following to 
Members of the Committee about what you can remind your colleagues when 
you ask for their vote to repeal sequestration:
    Remind them that even after the increase we're asking for, DOD's 
budget as a share of total Federal spending will still be at a near-
historic low--a quarter of what it was during the Korean War, a third 
of what it was during the Vietnam War, and half of what it was during 
the Reagan buildup.
    Remind them that the increased funding is for modernization that's 
critical to keeping our military's technological edge and staying ahead 
of potential adversaries.
    Remind them that DOD has hands-on leadership from the very top--
me--devoted to using taxpayer dollars better than they've been used in 
the past. You have my personal commitment to greater accountability, 
greater efficiency, and running this department better and leaner than 
before.
    Remind them that sequestration's cuts to long-term investments will 
likely make those investments more costly down the line. All who bemoan 
unnecessary Pentagon program delays and the associated cost overruns 
should know that sequestration will only make these problems worse. I 
can easily sympathize with my non-defense counterparts in this regard; 
knowing how wasteful and inefficient sequestration would be at DOD, I 
have no doubt the same is true at other departments and agencies as 
well.
    Remind them that sequestration's impact on our domestic budget will 
cause further long-term damage to our defense--because the strength of 
our Nation depends on the strength of our economy, and a strong 
military needs strong schools to provide the best people, strong 
businesses to provide the best weapons and equipment, and strong 
science and research sectors to provide the best new innovations and 
technologies.
    Remind them that we can't keep kicking this can down the road. The 
more we prolong tough decisions, the more difficult and more costly 
they will be later on.
                               conclusion
    The men and women of the Department of Defense are counting on 
Congress to help assure the strength of our military and American 
global leadership at a time of great change in the world.
    We must reverse the decline in defense budgets to execute our 
strategy and fund a modern, ready, leaner force in a balanced way. We 
must seize the opportunity to enact necessary reforms in how we do 
business. And we must bring an end to the threat sequestration poses to 
the future of our force and American credibility around the world.
    As you evaluate the President's budget submission, I encourage you 
and your colleagues to keep it in perspective.
    In the years since the President's fiscal year 2012 budget 
request--the benchmark for cuts prescribed under the 2011 Budget 
Control Act--DOD's 10-year budget projections have absorbed more than 
$750 billion in cuts, or more than three-quarters of the trillion-
dollar cuts that would be required should sequestration be allowed to 
run its course. And while some claim this is our biggest budget ever, 
the fact is, as a share of total Federal spending, DOD's fiscal year 
2016 budget is at a near-historic low--representing about 14 percent of 
total Federal discretionary and non-discretionary outlays. DOD's total 
budget remains more than $100 billion below what it was at the height 
of the wars in Iraq and Afghanistan.
    I think we can all agree that the world in 2014 was even more 
complicated than we could have foreseen. Given today's security 
environment--which has over 200,000 American servicemembers stationed 
in over 130 countries conducting nearly 60 named operations--our 
proposed increase in defense spending over last year's budget is a 
responsible, prudent approach.
    Some of you may recall how, in 1991, after America's Cold War 
victory and amid doubts about America's engagement with the world and 
calls for a bigger domestic peace dividend, a bipartisan group in 
Congress stepped forward to help shape America' global leadership and 
make long-term decisions from which we continue to benefit.
    Senators Sam Nunn and Dick Lugar helped craft, pass, and pay for 
the small Cooperative Threat Reduction Program that allowed the United 
States and DOD to provide the funding and expertise to help former 
Soviet states decommission their nuclear, biological, and chemical 
weapon stockpiles.
    The Nunn-Lugar program was initially opposed abroad, and there were 
also doubts at the Pentagon about whether we could implement it without 
losing track of funding. I know. I helped lead the program in its early 
years. But with slow and diligent effort by American defense officials, 
the Congress, and our foreign partners, it worked.
    It helped prevent weapons of mass destruction from falling into the 
wrong hands. It helped establish a pattern of international cooperation 
and global norms in the post-Cold War international order. And, in the 
light of the current instability in Ukraine, it might have staved off 
several variants of nuclear disaster.
    But it also set an important precedent for our work on this budget 
and in the years ahead. It shows what Congressional conviction--
especially when it is bipartisan--can accomplish in foreign policy. It 
shows the value of foresight and planning for an uncertain future. And 
it shows how spending a relatively few dollars today can generate huge 
value down the line.
    As the new Secretary of Defense, I hope it will be possible to 
again unite behind what our great Nation should do to protect our 
people and make a better world, and provide our magnificent men and 
women of the Department of Defense--who make up the greatest fighting 
force the world has ever known--what they deserve.
    Thank you.

    Senator Cochran. Thank you, Mr. Secretary. I noticed in the 
submission that we have before us this morning, you have 
created or proposed to create a new defense innovation unit, a 
point-of-partnership so-called, apparently to be led by a 
civilian with a military deputy and staffed with an elite team 
of Active Duty, Reserve, and civilian personnel. It sounds like 
an ambitious undertaking and may be complicated. And there is 
the suggestion that the team will look for breakthroughs in 
emerging technologies.
    I wonder if you could let us know how much do you think 
this is going to cost and how long will it take to have--be up 
and running?
    Secretary Carter. I surely can provide you with the costs, 
and I will do so.
    [The information follows:]

    The initial cost estimate for Defense Innovation Unit Experimental 
(DIUx) startup is $1.75 million in fiscal year 2015 and an estimated 
$5.0 million per year thereafter. The unit was officially stood up on 
July 2, 2015 in Mountain View, California.

    Secretary Carter. As far as the mechanism is concerned, it 
is an important effort. It is an experimental effort. This is 
our so-called Defense Innovation Unit (Experimental) that I 
announced the creation of about a week and a half ago. It has a 
couple of things that it brings together, Mr. Chairman. One is 
our need to continue to be on the cutting edge, especially the 
cyber edge, represented by the Silicon Valley tech industry.
    Second, our need, which I mentioned in my statement, to 
continue to attract the very best to Defense, so we want to 
have an open door so we are an exciting and attractive place 
for the country's smartest young people to come and work, even 
if they can only work for a period of time and contribute, to 
come in and help us out. And third, it combines an ingredient 
you mentioned, which is the use of the Reserve component, which 
is a huge treasure for our Department. A lot of the reservists 
are very technologically savvy, and so they, who are out there 
anyway in that region, will contribute to it.
    So it brings a number of ingredients together for the 
future, and we are going to try it out. It does say it is an 
experiment. It is not a costly experiment, but it is critical, 
I think, for us to have an open avenue between us and Silicon 
Valley. And by the way, this is other innovative corridors as 
well. We need to be an innovative department so we stay fresh 
and attractive.
    Senator Cochran. Thank you. General Dempsey, I would ask 
you if you would like to make your opening statement. You may 
proceed at this point.
STATEMENT OF GENERAL MARTIN E. DEMPSEY, U.S. ARMY, 
            CHAIRMAN, JOINT CHIEFS OF STAFF
    General Dempsey. Thank you, Chairman and Vice Chairman 
Durbin, distinguished members of this committee. Thanks very 
much at the outset for the very kind words about my service. It 
has been a rare privilege to hold this position and to be able 
to represent the millions of men and women and their families 
who serve around the world. And thank you to this committee for 
your support through those years.
    So this is my hearing. I thank you for the opportunity, and 
if it turns that it is not, then I suppose until we meet again.
    On that note, I would like you to know that I fully support 
the selection or the nominations of General Joe Dunford as the 
19th chairman and of General Paul Selva as the vice chairman. 
They will serve with distinction. You can count on them. You 
can trust them, which I think is the right word, to provide you 
timely, pragmatic, and effective military advice.
    I would just like to reiterate something that I have said 
in the previous hearings for this fiscal year, which is that 
the global security environment is as uncertain as I have seen 
in 40 years of service. And we are at a point where our global 
aspirations are exceeding our available resources. We have 
heard the Congress of the United States loud and clear that we 
have to become more efficient, and we have to do the rigorous 
strategic thinking to determine the minimum essential 
requirements that we believe--that is to say, the uniform 
military--are essential to protect our national interests 
across the globe.
    We think that President's budget 2016 is the answer to that 
latter point, which is the minimum essential requirements. In 
my judgment, this budget represents a responsible combination 
of capability, capacity, and readiness. But we are at the 
bottom edge of our manageable risk in achieving and fulfilling 
our national security strategy as it is currently designed. 
Funding lower than President's budget 2016 and lacking the 
flexibility to make the internal reforms that we believe we 
need to make will put us in a position where we will have to 
change our national security strategy.
    For the past--and let me describe what kind of change you 
might see--for the past 25 years, the United States military 
has secured the global commons. We have deterred our 
adversaries, we have reassured our allies, and we have 
responded to crises and conflict primarily by maintaining our 
presence forward or abroad. It has been our strategy to shape 
the future in the international security environment by our 
forward presence and by building relationships with regional 
partners.
    In general terms, about one-third of the force is forward 
deployed, one-third has just returned, and one-third is getting 
ready to go. This, as you know, puts a significant strain on 
the men and women in uniform, but we have kept the Nation safe 
by following that paradigm. Sequestration would fundamentally 
and significantly change the way we deploy the force, and in so 
doing, affect the way we can shape the security environment. We 
will probably be almost 20 percent smaller from where we 
started when I became the chairman.
    And our forward presence will be reduced by more than a 
third. We will have less influence, and we will be less 
responsive. Conflict will take longer to resolve and will be 
more costly in terms of dollars and casualties in an age when 
we are less certain about what will happen next, but certain 
that it will happen more quickly. We will be further away and 
less ready than we need to be. Simply stated, sequestration 
will result in a dramatic change to how we protect our Nation 
and how we promote our national security interests.
    Mr. Chairman and members of this committee, our men and 
women in uniform are performing around the globe with 
extraordinary courage, character, and professionalism. It seems 
to me that we owe them and their families clarity and, 
importantly, predictability on everything from policy to 
compensation, healthcare, equipment, training, and readiness. 
Settling down the uncertainty that we have experienced over the 
past 4 years, and our decisionmaking processes, and getting us 
out of the 1-year-at-a-time cycle that we have been in will 
help us keep the right people in our all-volunteer force. And 
that, after all, is our decisive edge. And we will be able to 
maintain the military that the American people deserve, and, 
frankly, I think they expect.

                           PREPARED STATEMENT

    I am grateful for the continued opportunity to support our 
men and women in uniform, and I promise I will run through the 
tape, as we say, in the time remaining and make myself 
available at any time to help you shape the policy and fiscal 
decisions ahead of you. Again, I thank you, the Congress of the 
United States, and the members of this committee for your 
support.
    [The statement follows:]
            Prepared Statement of General Martin E. Dempsey
    Chairman Cochran, Vice Chairman Durbin, members of this Committee, 
it is my privilege to report to you on the state of America's Armed 
Forces, the changes in the global security environment, and the 
opportunities and challenges ahead.
    I am exceptionally honored to represent the men and women of our 
Armed Forces. Those who defend this Nation and the families who support 
them remain our most valuable national treasure and our competitive 
advantage. Deeply experienced from 14 years of continuous deployments 
in harm's way, our All-Volunteer Force has been adaptable and resilient 
beyond expectation. Our men and women in uniform have performed around 
the globe with extraordinary courage, character, and professionalism. I 
am grateful for the continued support they receive from this 
distinguished body and from the American people.
    What makes America's Armed Forces who we are is our ability to 
provide options to the national command authority and our elected 
leaders to keep our Nation safe from coercion. The American people and 
our Allies expect that of us.
    Our military remains strong today. However, with threats 
proliferating, resources declining, and sequestration just months away, 
our ability to assure our allies is in question and our advantages over 
our adversaries are shrinking. This is a major strategic challenge 
affecting not only our military, but ultimately, America's leadership 
in the global world order.
    With your support, we can--and we must--sustain our military's 
decisive edge by prioritizing investments in readiness, training, 
modernization, and leader development. We must make the tough, but 
necessary choices in our strategy, our structure, and our resources for 
our Nation's future. Our men and women in uniform and the American 
people are trusting us to get it right.
                         joint force operations
    It has been an extraordinarily busy time for America's military. 
During the past 12 months, the men and women of our Joint Force have 
been on point around the world. They have maintained our enduring 
global commitments, bolstered long-term partnerships, and responded to 
new threats.
    Over the past year, the Joint Force continued to support the Afghan 
National Security Forces through the first democratic transfer of power 
in Afghanistan's history. My regular visits to Afghanistan reinforce 
just how much our coalition and Afghan partners have accomplished 
together over 13 years of significant investment. The end of 2014 
marked the completion of the International Security Assistance Force 
(ISAF) mission. While Afghanistan is headed in the right direction 
towards a fully-functioning inclusive government, the path is neither a 
straight line, nor is it short. Moving forward with NATO's Resolute 
Support mission, our remaining force of about 10,000 troops will assist 
our Afghan partners in strengthening the Afghan institutions, systems, 
and processes that will support long-term security and stability--
ultimately giving the Afghan people the opportunity to succeed on their 
own.
    At the same time, the force has maintained pressure on Al Qaeda, 
the Islamic State of Iraq and the Levant (ISIL), and other violent 
extremist groups both directly and through our partners where U.S. and 
allied interests are threatened. We have reinforced our commitment to 
our NATO allies in Europe in the face of Russian aggression. We have 
helped to address urgent humanitarian crises such as the Yazidi 
refugees trapped on Mount Sinjar and the Ebola outbreak in West Africa. 
We have maintained an active presence in the South and East China Seas, 
while remaining prepared to respond to provocations on the Korean 
Peninsula. And we have campaigned against sources of instability in 
Africa and in Latin America.
    We have also postured with our interagency partners to reinforce 
security to our homeland--to include providing ballistic missile 
defense, countering persistent threats of terrorism, and improving our 
defenses against cyber-attack on government networks and critical 
infrastructure.
    In the near term, we will sustain--in some cases adjust--these 
commitments around the globe to protect our national security 
interests. And, while our global mission requirements have decidedly 
gone up, we will manage all of these demands with constrained 
resources. Consequently, we will have to assume higher risk in some 
areas to create opportunity in others.
                   the changing security environment
    Our understanding of the security environment carries important 
consequences for our Nation and for our military. It drives our 
strategy and budget, shapes the size, structure, and capability of the 
force, and affects where and when we send America's sons and daughters 
into harm's way.
    Last year, I stated that the global security environment is as 
fluid and complex as we have ever seen. That has certainly played out 
over the past 12 months. We have seen significant shifts in an already 
complex strategic landscape--increasingly capable non-state actors who 
are taking advantage of the internal conflict within Islam and the 
reemergence of states with the capability and potentially the intent to 
constrain us. This is increasing the strain on the international order.
    In what I often term the ``heavyweight'' category, Russia's 
coercive and destabilizing actions have threatened NATO's eastern 
flank. Russia is investing deeply in advancing their capabilities 
across the board, especially in Anti-Access Area-Denial (A2AD) and 
cyberspace. Meanwhile, China is also fielding new defense platforms at 
a startling pace. In almost everything we do globally, we must consider 
the second- and third-order effects on our relationships with Russia 
and China.
    In the ``middleweight'' category, Iran seeks to be a hegemon in the 
Middle East. Beyond Iran's nuclear aspirations, as one of the world's 
leading exporter of arms, Iran employs surrogates and proxies in many 
places across the globe. Iran is also becoming increasingly more active 
in cyberspace. We have significant interests in the region that would 
not be well-served should Iran achieve their purposes.
    North Korea is the other ``middleweight.'' Cyclical provocations by 
North Korea have increased the risk of potential miscalculation. We 
must use all instruments of national power to ensure North Korea does 
not achieve its intentions. We have a large stake in maintaining 
stability on the Korean Peninsula and supporting our Republic of Korea 
ally.
    We are also seeing power in the international system shifting below 
and beyond the nation-state, particularly across the network of radical 
movements that use terrorism as a tactic. This network extends across 
an already unstable Middle East and North Africa, vis-a-vis the complex 
situations we have seen unfold over the last year in Libya, Gaza, Iraq, 
Syria, Nigeria, and Yemen. Within the trans-regional terror network, we 
have seen ISIL gain prominence in Iraq and Syria, while inspiring 
existing radical franchises like Al Qaeda affiliates and Boko Haram to 
rebrand themselves into an even more aggressive ideology. That is what 
makes this movement so dangerous.
    With our partners, we must keep relentless pressure across the 
entire network with our full suite of capabilities to include 
intelligence, building partners, and in some cases, direct action. At 
the same time, we must be careful not to fixate on a single group, nor 
paint these violent extremist groups all with one brush. We have to 
apply the right mix of tools of national power at the right time, over 
the right length of time, in order to make a difference. Even more 
challenging is keeping pressure on a network that adapts and 
metastasizes. Overmatch in size and technology matters, but the rate in 
which we can innovate and adapt relative to these non-state actors 
matters more. This is a generational challenge.
    Running north and south in our own hemisphere, the well-financed 
transnational organized criminal network is growing extraordinarily 
capable. Beyond a drug trafficking network, it is capable of moving 
anything from arms and unaccompanied children to terrorists and weapons 
of mass destruction. This network deserves more attention not just 
because of its effect on the social fabric of our country, but because 
of the effect it could have--and is having--on the security of our 
Nation.
    In cyberspace, our adversaries have become increasingly more 
capable, attempting to level the playing field in this critical domain. 
While we have expanded authorities and capabilities to defend our 
military networks, critical civilian infrastructure and private sector 
companies are an Achilles' heel in our Nation's security. Together, we 
must reconcile these issues. To this end, cybersecurity legislation 
that facilitates information sharing and encourages public-private 
partnerships is required to ensure our continued security and 
prosperity. Staying ahead of our adversaries in the cyber domain will 
require a concerted effort of the whole Nation.
    Across the board, as the international order trends towards 
instability, strategic risk trends higher. And, while our potential 
adversaries grow substantially stronger, most of our allies are growing 
more dependent on sustained U.S. assistance. I believe these trends 
will continue.
    We must bring to bear every tool of national power in America's 
arsenal in coordination to address these emerging trends. Likewise, 
deepening relationships of trust with our allies and building the 
capacity of our partners to be more self-sustaining will be even more 
vital in the years ahead.
                       preparing the joint force
    Within the context of the rapidly evolving security landscape, the 
Joint Force of the future will require exceptional agility in how we 
shape, prepare, and posture. Here are my five guideposts to sustain and 
improve the force:
The All-Volunteer Force (AVF)
    Our competitive advantage is our people and their adaptability. I 
firmly believe that our Nation needs a professional All-Volunteer Force 
(AVF). The AVF is the right force for this Nation and the Nation should 
never take it for granted. Conversely, the force has earned the trust 
and confidence of the American people and must renew that contract 
daily.
    As part of strengthening the AVF, the Joint Chiefs and I are 
committed to offer everyone in uniform equal professional opportunities 
to contribute their talent. We are removing the legacy gender-based 
barriers to service that no longer make sense. The Services are 
progressing through validation of occupational standards and are on 
target to recommend final decisions to integrate remaining closed 
positions or any exceptions to policy by the end of the year.
    To keep the AVF on a viable path, getting our personnel costs in 
balance is a strategic imperative. Ultimately, we need to make sure 
that we can continue to recruit, retain, equip, and train the best 
fighting force on the planet and fairly compensate America's best for 
their service.
    We owe our men and women some clarity--and importantly, 
predictability--on everything from policy to compensation, healthcare, 
equipment, training, and readiness. Frankly, right now we are not 
delivering. Settling down uncertainty in our decisionmaking processes 
will help keep the right people in the Service. To this end, I want to 
continue working with Congress to address the growing imbalances in our 
accounts in a sensible, holistic way that preserves the All-Volunteer 
Force well into the future.
    As such, we are looking closely at the recommendations of the 
Military Compensation and Retirement Modernization Commission. We are 
pleased that the commission supported our request to grandfather any 
changes to retirement pay for those currently serving and retirees. And 
we will continue to place a premium on efforts that support wounded 
warriors and mental health.
    We will also keep working with the Department of Veterans Affairs, 
other agencies, veteran service organizations, and communities across 
the country to make sure those who are transitioning home and 
reintegrating into civilian life have access to healthcare, quality 
education opportunities, and meaningful employment. This especially 
includes those with enduring mental and physical challenges. I 
appreciate Congress for recently passing legislation to improve the 
access of veterans to mental health and suicide prevention services.
    This remarkable generation is not done serving. As such, earlier 
this year, the Joint Chiefs and I signed a Call to Continued Service 
letter that will go to all transitioning service members, encouraging 
them to keep serving the Nation in their communities. Our collective 
effort to enable our veterans and their families to continue 
contributing their strengths is a direct investment in the future of 
America.
Preserving Jointness
    Our military has become more integrated operationally and 
organizationally across the Services and across the Active, Guard, and 
Reserve components, especially over the past decade. However, the 
institution tends to work like a rubber band--if you stretch it and 
then release it, it will return to its normal form and shape. This is 
especially true in a resource-constrained environment. This tension 
comes at a time when our ability to win together through jointness is 
at its peak. The Joint Chiefs and I are committed to preserving the 
strength we have gained as a more seamless force. We are likewise 
committed to preserving the vital relationships with our interagency 
partners.
    Additionally, across the Services, we are resetting how we train 
and develop our forces for conflict across the spectrum. For the past 
decade, the Joint Force primarily focused on counterinsurgency centered 
in the Middle East. As we work to institutionalize the lessons of our 
recent wars--for example, by establishing building partnership capacity 
as a competency of the entire force, not just Special Forces--we are 
also working to restore balance and strategic depth in our 
capabilities. This includes those critical conventional areas that were 
deemphasized over the past decade by necessity.
    Concurrently, we are adapting how we engage and posture around the 
world in ways that are more dynamic, more strategic, and more 
sustainable. We are reevaluating how we employ our assets around the 
globe to better identify opportunities that generate the greatest 
advantages. And, we are developing new approaches across and within 
commands in how we assign, allocate, and apportion forces inside a 
broader interagency construct.
    We are also adapting our learning institutions to maximize the 
diverse talent of our men and women and to better cultivate agile 
thinkers for a global Joint Force. Within our Joint Professional 
Military Education (JPME) programs, we are mapping desired strategic 
leader attributes to the curriculum to ensure we are delivering them.
    And, we are undergoing an integrated, Department-wide effort to 
identify and invest in innovative ways to reverse the erosion of U.S. 
technological superiority--ensuring that our military remains dominant 
now and in the future. We are seeking innovation not only in 
technology, but also in leader development, wargaming, operational 
concepts, and business processes.
The Defense Industrial Base
    Our Nation cannot sustain the world's finest military without also 
sustaining the world's strongest and most innovative defense industrial 
base (DIB).
    An enduring source of strategic advantage, we count on the defense 
industry to be able to research, develop, produce, deliver, and 
maintain the world-class weapons systems on which our military has long 
relied.
    I remain concerned that an unstable budget environment will promise 
long-term damage to critical segments of the DIB, most significantly in 
the small businesses that support our Nation's defense. Furthermore, 
sequester-level cuts will lead to a hollow DIB that no longer holds all 
of the critical design and manufacturing capabilities our military 
needs.
    A strong, efficient, and technologically vibrant defense industry 
is fundamental to securing our Nation's defense.
Our Allies
    Our alliances remain paramount to our own security. We are far more 
effective when we have a global network of capable partners with shared 
values. Our Allies and partners provide vital basing and access, offer 
complementary military capabilities, and help shape outcomes towards a 
common purpose. Improving partner capability and capacity in targeted 
ways is an important component of our military strategy.
    We are continuing the rebalance to the Asia Pacific as part of our 
government's larger priority effort to foster stability and growth in 
that region. We have old and new partners in the Asia Pacific and we 
will continue to develop our relationships, engage more at every level, 
and shift assets to the region, over time.
    Europe remains a central pillar to our national security and 
prosperity. NATO has the capability and must sustain the will to 
address the threats to its eastern and southern flanks. In the near 
term, we will continue to reassure allies and improve NATO's readiness. 
Over the long term, we will adapt our strategies and structures to meet 
new realities. NATO is and will remain the most important and most 
capable alliance in history.
    In every theater, we must guard against a slow erosion of our 
alliances and be careful not to shunt the steady work required to 
sustain these ties. Remaining the security partner of choice increases 
our Nation's collective ability to safeguard common interests and 
support greater stability in weaker areas of the world.
The Profession
    Rekindling our understanding and our resolve as a profession 
continues to be one of my foremost priorities as Chairman. On and off 
the battlefield, we must always be good stewards of the special trust 
and confidence gifted to us by our fellow citizens. We owe it to the 
American people and to ourselves to look introspectively at whether we 
are holding true to the bedrock values and standards of our profession.
    The vast majority of our force serves honorably with moral courage 
and distinction every day. But failures of leadership and ethics, and 
lapses of judgment by a fraction of the force show that we still have 
work to do.
    We are seeing substantial progress in sexual assault prevention and 
response, however, we will remain laser-focused on reinforcing a 
climate where sexual assault is unacceptable, not just because it is a 
crime, but because it is completely counter to our core values.
    All of these issues have my ongoing and full attention. We know we 
own the profession and must reinforce the enduring norms and values 
that define us to continue to be a source of trust and pride for our 
Nation.
                    resourcing our defense strategy
    I stated last year that the balance between our security demands 
and available resources has rarely been more delicate. The National 
Security Strategy (NSS) released earlier this year addresses some of 
our top concerns--the decline in military readiness, the strategic risk 
that will result should sequester-level cuts return, and the need to 
pursue greater integration with our Allies and partners. We need the 
full proposed President's Budget (PB) for fiscal year 2016 to support 
this strategy and to maintain the military the American people deserve 
and expect.
    PB16 reverses the decline in national defense spending of the past 
5 years and helps ensure we can manage risk, meeting near-term defense 
needs while preparing for the future. It represents a responsible 
combination of capability, capacity, and readiness investment--leading 
to a Joint Force that is global, networked, and can provide options for 
the Nation. As the risks to our national security are increasing, this 
budget resources the force to remain capable, ready, and appropriately 
sized--able to meet today's global commitments and prepare for 
tomorrow's challenges.
    The Joint Chiefs and I fully support the PB16 budget. It is what we 
need to remain at the lower ragged edge of manageable risk in our 
ability to execute the defense strategy.
    However, we have no slack, no margin left for error or strategic 
surprise. And, we remain concerned that we still lack support for the 
reforms necessary to ensure that the Joint Force is combat ready and 
that we can preserve military options for our Nation into the future. 
We need budget certainty and we need flexibility to reset the force for 
the challenges we see ahead.
    Congress--and the American people--challenged us to become more 
efficient and to determine the minimum floor we need to be able to do 
what the Nation asks us to do. PB16 is that answer. Funding lower than 
PB16, especially if sequestration-level cuts return next year, combined 
with a lack of flexibility to make the reforms we need, will render the 
overall risk to our defense strategy unmanageable. In other words, our 
Nation's current defense strategy will no longer be viable.
    I ask Congress to support the entirety of this budget and end the 
deep, indiscriminate cuts that sequestration will impose.
    Thank you for your enduring support.

    Senator Cochran. Thank you very much, General. We 
appreciate your leadership and your statement.
    I am going to recognize the ranking member, Mr. Durbin, for 
any comments or statement he would wish to make.
    Senator Durbin. Thank you, Chairman Cochran, and I think I 
was going to into the OCO issue, but I think your statements, 
both of you, have been unequivocal on that particular issue. So 
I would like to go an issue not of budgetary consequence, but 
of great consequence nevertheless.

                         HUMANITARIAN SAFE ZONE

    Just a few days ago, I joined with my colleagues, Senator 
Tim Kaine of Virginia, Senator Lindsey Graham, and Senator John 
McCain, and sent a letter to the President requesting the 
administration to consider the establishment of the 
humanitarian safe zone, or more than one, around Syria to allow 
for the protection and medical treatment of the people of 
Syria. I did that with some reluctance, realizing that it would 
require a commitment by the United States for the safety of 
that zone, and we discussed that yesterday.
    But I have to say that though this may not be a genocide by 
classic legal definition, it is the humanitarian crisis for our 
time with 200 to 400,000 casualties, millions of people 
displaced, and no end in sight. You were very candid in your 
response yesterday, and I would appreciate it, Mr. Secretary, 
if you would tell us what you think of this concept and the 
challenge that it could present to us.
    Secretary Carter. Sure. Thank you, Senator. You are right, 
it is--what is happening in Syria is a terrible humanitarian 
tragedy. It has been going on now for several years. There are 
many displaced people within Syria fleeing to countries around. 
We are caught between two forces or the country is caught 
between two forces, both of which are contributing to this 
violence against the very people of the country, namely ISIL 
(Islamic State of Iraq and the Levant) and its like on the one 
hand, and the Syrian regime on the other hand. As you know, we 
are trying to create a third force to combat those two and to 
create an environment in which the Syrian people can live in 
peace, which they deserve.
    Your question is about can we establish ourselves a 
humanitarian safe zone. We did discuss that yesterday, and I 
will say something about the practicalities of that. That in 
concept is an area in which people--to which people could flee 
and find safety. I think that was your concept. And what I was 
saying to you was that we would need to, and we have thought 
this through, how to secure that zone. Doing something like 
that would be something that would be contested both by ISIL 
forces and other--al-Nusra and others on the one hand and by 
Syrian forces on the other would not necessarily be supported 
by the neighbors or supported militarily in a strong way by the 
neighbors, and, therefore, something we would do ourselves. 
That is a combat mission and a major combat mission.
    And so, the practicalities of it are significant, and that 
is what I was sharing with you yesterday. Perhaps General 
Dempsey would like to add something to that. But we would need 
to fight to create such a space, and then fight to keep such a 
space, and that is why it would--it is a difficult thing to 
contemplate or challenge, to use your words.
    Senator Durbin. Let me say before the General responds, and 
I am anxious to hear his response. My concept is that we would 
not be going it alone. My hope is that it would be done either 
through the United Nations or in concert with other nations 
that might join us in this effort. And I am not naive enough to 
believe that ISIL is going to sign up, so we would have to be 
prepared to defend the space, and I am anxious to hear the 
General's response.
    General Dempsey. Yes, thanks, Senator. It would not just be 
ISIS (Islamic State of Iraq and Syria) that would--could be a 
potential challenge to the zone, but also the regime itself. 
And so, the assumption--I think you are right that this, to be 
practical and effective, would have to involve regional 
partners.
    I can tell you that militarily both at U.S. CENTCOM 
(Central Command) and in conjunction with European Command and 
our Turkish counterparts, we have been planning for such a 
contingency for some time. The question, if you ask can we do 
this, of course militarily we can do it. There would be 
opportunity costs; that is to say that resources that we have 
deployed elsewhere would have to be repositioned.
    And I will not miss the opportunity to point out the 
cognitive dissonance about talking about doing more in the 
world when, in fact, we are facing losing another $250 billion 
over the next 5 years. But I will say that it is military--it 
is practical militarily, but it would be a significant policy 
decision to do so.
    Senator Durbin. Thank you very much.
    Senator Cochran. Thank you, Senator.
    The Senator from Alabama, Mr. Shelby.
    Senator Shelby. Thank you, Mr. Chairman. Welcome, Secretary 
Carter and General Dempsey. I join others in congratulating you 
on your long career. It has been 41 years now since you 
graduated from West Point. You have served this Nation with 
honor and distinction. Thank you very much.
    General Dempsey. Thank you.

                              SPACE LAUNCH

    Senator Shelby. Secretary Carter, it is my understanding 
that the Department of Defense has recommended a legislative 
solution for section 1608, which would allow the use of as many 
as 18 RD-180s for future space launch competitions. Is that 
correct?
    Secretary Carter. It is, yes.
    Senator Shelby. Okay. It has also been informed that if the 
DOD solution is implemented, and we hope it will be, that there 
could be a minimum of 2 to 3 years' gap in assuring access to 
space. Have you looked at that?
    Secretary Carter. Yes.
    Senator Shelby. And do you agree or disagree with that, and 
how can we ensure that there is no gap there because these 
programs are so important to national intelligence and a lot of 
other things. Is that correct?
    Secretary Carter. It absolutely is. We cannot afford to 
have a gap, and just to scope out the issue as a whole, these 
engines that power some of our rocket boosters that take our 
satellites--national security satellites into space are 
manufactured in Russia. We want to get off of that dependency 
on Russia, but it takes some time to do so. And in the 
meantime, we do not want to have a gap.
    Therefore, our approach is to not order more, but not to 
cancel the orders we have placed for the engines while we are 
able to prepare competitive entrants that are not Russian into 
the space lift business, so that is our strategy. And you are 
absolutely right. We cannot afford to have a gap because we 
need to be able to launch national security satellites.
    Senator Shelby. But it is important for us to build our own 
rocket in the future, is it not?
    Secretary Carter. Absolutely.
    Senator Shelby. But it takes time. Sometimes it is hard to 
rush technology that sensitive or that----
    Secretary Carter. Correct.
    Senator Shelby. [continuing]. Revolutionary in a way. Is 
that correct?

                             IRANIAN THREAT

    Secretary Carter. Absolutely yes.
    Senator Shelby. I will pose this next question to you and 
also to General Dempsey if I can. The Iranian threat, not just 
in the Middle East, but to the Persian Gulf, we all are 
familiar, not as much as you two are, of what is going on in 
Yemen. A lot of our allies are very nervous there, and probably 
should be. And as we are negotiating or the administration is 
negotiating with Iran on nuclear weapons, it seems that they 
continue to supply, train, and so forth their allies all over 
the area that is causing us and our allies more than 
apprehension.

                                  IRAN

    So I would like your comments if you can, where you can, on 
Iran. I believe Senator Durbin brought up ISIS in a sense, what 
is going on there. We are fighting in a sense with Iranians 
there, the Revolutionary Guard and some of them, and then in 
Yemen we are on different sides. It is a contradiction. We 
understand that happens sometimes. But what are our challenges 
with North Korea, too, and perhaps even with Russia?
    Secretary Carter. Okay.
    Senator Shelby. I know that is a lot of questions.
    Secretary Carter. Thank you. I will say something briefly 
about some of them and ask the Chairman.
    Senator Shelby. Thank you.
    Secretary Carter. You are right that Iranian behavior is 
concerning on a number of fronts and in a number of locations 
both as regards to the stability of Gulf countries, freedom of 
navigation, which is very important, and other things in 
addition to their nuclear program, of course, which is the 
concern that inspires the negotiations to which you referred. I 
will say that for us in the Department of Defense, I think this 
creates a continuing requirement for presence in the region, 
reassurance of allies and partners in the region by 
particularly Israel, but not confined to Israel, but 
particularly Israel.
    And also, of course, with respect to the nuclear agreement, 
the President has said that he would take no deal over a bad 
deal, and, therefore, we are under instruction to have a 
military option, which we work hard to maintain. So those are 
our responsibilities with respect to Iran.
    ISIS is a continuing threat both in Iraq and Syria, and 
then you see the ability of it as a movement to inspire the 
lost and the radical worldwide to acts of violence, so it is 
seriously concerning in both of those respects. And we are 
combatting it from the air and with partners in both Iraq and 
Syria, and we can go into that in substantially more detail if 
you wish.
    Just to touch on North Korea, North Korea's behavior in 
South Korea just a couple of weeks ago continues to be 
provocative. Considerable uncertainty about their future 
behavior, so we need to watch it carefully. And we say that 
South Korea is the place where--our slogan is we need to be 
able to fight tonight. It is not a game over there. We need to 
be ready every day. And so, as we talk about our budget and our 
presence and so forth, one thing we cannot trim is our 
deterrent in the Korean peninsula.
    I have gone on long enough. We can talk Russia later 
perhaps, but let me see if the Chairman wants to add anything 
on those subjects. It is entirely up to you.
    Senator Shelby. I think General Dempsey wants to say 
something.
    General Dempsey. Rather than going down the lineup card of 
the threats, let me unpack really briefly. I said in my 
statement that it is the most uncertain security environment 
that I have experienced in 40 years, and here is why: We face 
emerging threats from both state actors. You mentioned the 
threat that Russia poses to Europe, the threat that Iran poses 
not just in the nuclear arena, the threat of the DPRK, a rising 
China, which is not yet a military threat, but if left--if that 
relationship is not managed carefully--could become one. So we 
have--we have state issues with state actors, and we have got a 
large body of non-state actors: ISIL, al-Qaeda, other groups 
that have aligned themselves. And for the first time in my 
career, they are both manifesting themselves simultaneously. 
This is not a time to be withdrawing from the world.
    Senator Shelby. Thank you, Mr. Chairman.
    Senator Cochran. The Senator from Rhode Island, Mr. Reed.
    Senator Reed. Thank you very much, Mr. Chairman. Thank you, 
Mr. Secretary, for your eloquent testimony. Thank you, General 
Dempsey, for your extraordinary service, and I think you will 
obviously attribute it to the brilliant first classman who 
mentored you as a plebe at West Point.
    General Dempsey. How could I have forgotten, sir?
    Senator Reed. Just for the record. But thank you for your 
extraordinary service to the Nation and for your testimony 
today.

                 OVERSEAS CONTINGENCY OPERATIONS MONEY

    In regard to the proposals to move OCO money around and to 
do things that might help defense, you indicated previously, 
General Dempsey, in testimony that there are nine lines of 
operation against ISIL. The Department of Defense has two of 
those lines. The other lines are agencies that would not 
benefit directly or not benefit as much from this OCO maneuver. 
Is that fair to say?
    General Dempsey. To tell you the truth, Senator, I have not 
looked at anyone's budget other than myself. But it is fair to 
say--other than ours. It is fair to say that of the nine lines 
of operation, two of them are military. The others are other 
agencies of government.
    Senator Reed. And those other agencies would be the State 
Department, which is not able to ramp up their efforts. In 
fact, their efforts are contracted because you have got to fill 
the gap somehow or you cannot because you do not have that 
expertise. Homeland Security, FBI agents deployed forward, DEA 
agents deployed forward. You have got a whole strategy, which 
will become unhinged even if you get the extra OCO money.
    General Dempsey. Again, Senator, I do not know what the 
other departments are lacking. I mean, I literally do not know. 
But what I will tell you is in general terms that those kinds 
of threats that you described, the threat of non-state actors 
in particular, will require a whole of government approach, not 
just a military approach.
    Senator Reed. Let me just--you know, one example I have 
seen that seems to leap out to everybody is the sophisticated 
use of social media by ISIL and our response to that--certainly 
the Department of Defense is responding. But without State, 
without USAID, without traditional non-defense actors who have 
a role in this, our response will be, as it has been to date, 
unsatisfactory. That is a conclusion. You do not have to 
concur, but that is my conclusion.
    Mr. Secretary, you also I think made a very interesting 
point not only in terms of how can you have a long-term 
strategy with a short-term budget. How can you go ahead and do 
things that require complementary partners in government--like 
we just talked about--when they do not have the resources? But 
the other point, too, is the one about how the world is 
watching. And you travel to capitals. You talk to defense 
ministers, et cetera. And, in fact, you are looking and you are 
getting intel about our adversaries or potential adversaries. 
And they are looking at us unwilling to invest and pay for 
long-term national security. And they get it, I think, 
unfortunately. Is that your----
    Secretary Carter. That is my experience, and then, of 
course, you travel as well. And among our friends it is concern 
about whether we have our wits about us in terms of the danger 
of the world, the responsibilities of America, and the inherent 
strength of our country. And I obviously do not talk to our 
potential foes, but they talk to others and say, well, see what 
the Americans are doing to themselves.
    Now, I think it is important to come back and say we are 
still the world's greatest fighting force. We are an immensely 
powerful country. We are amazingly experienced, including in 
our military, in complex missions. We do take a whole of 
government approach, which is necessary in the world, and so 
you need to tell people that they cannot look at the 
difficulties we have, and we obviously have them in terms of 
reaching a budget, and conclude that America is eclipsed or 
losing its power. And I hasten to add that.
    At the same time, it would certainly improve our standing 
were we to come together as I urged behind the future for our 
budget.
    Senator Reed. There is another aspect to this, too, and I 
agree with you. We still remain the paramount military force in 
many dimensions, but the gap is narrowing in so many areas. And 
it used to be not fight tonight in Korea. It was fight this 
month and we could get BCTs (brigade combat teams) there, and 
we cannot do that any longer. It used to be we put aircraft up 
in the air, it is going to be dominant for 10 years. That 
question might not be as long now.
    And a lot of the programs that are not reached by OCO or 
not reached by some of these proposals are these long-term 
investments in capabilities, cyber and elsewhere, that if we do 
not make them now, we can keep the lights on, but that gap will 
get to the point where the gap disappears. Is that fair?
    Secretary Carter. That is very fair.
    Senator Reed. Thank you.
    Senator Cochran. The Senator from Maine, Ms. Collins.
    Senator Collins. Thank you very much, Mr. Chairman. 
Welcome, Mr. Secretary. Thank you, General Dempsey, for your 
service.

                              SHIPBUILDING

    Mr. Secretary, twice this morning we have heard General 
Dempsey say that this is the most uncertain security 
environment that he has seen in his 40 years of service. It is 
the Navy that allows us to project power particularly in areas 
where we would otherwise be denied access in trouble spots 
around the world. Yet the Navy's 30-year shipbuilding plan does 
not include enough funding for ships to fully support the 308-
ship goal over the entire 30-year period.
    We have seen the need for naval ships to be deployed. Just 
last week a destroyer that was built in Bath Iron Works, which 
I had the honor to christen, was deployed in response to the 
Iranian naval forces firing upon and boarding a commercial 
shipping vessel. At the same time, combatant commander 
requirements for missile defense platforms are soaring in the 
Middle East and the Asia Pacific regions as our adversaries 
develop missile technology. And recently, the Office of Naval 
Intelligence just last week described how China has launched 
more naval ships than any other country during the past 2 years 
and will do so in the next 2 years.
    Mr. Secretary, I know you are well aware that ships cannot 
be built overnight and that operational requirements are 
increasing. What then is the Department's plan to mitigate the 
risks associated with the short-falls in shipbuilding and to 
preserve a robust shipbuilding industrial base?
    Secretary Carter. Thank you, Senator. First of all, let me 
say I completely agree with you. It is one of the great 
strengths of our country is our ability to project power around 
the world. The Navy is an important ingredient of that, and 
also to ensure freedom of navigation and to dominate the naval 
commons as we are able to do because of the quality as well as 
the size of our fleet, and we are committed to continuing to do 
that. And you are right, we cannot do that without an 
industrial base that is robust.
    We have, as you know full well, a vibrant and competitive 
marketplace, but we need to keep that going. And I suppose 
where this links up with the discussion we are having today 
about the long-term budget is exactly the point you made, which 
is ships, particularly ships of the quality that are made in 
Bath and elsewhere for our Navy. Those are not 1-year projects. 
And so, if you have a 1 year budget horizon, how are you 
supposed to build over time to a Navy of the size you need? We 
need that kind of horizon, and our industry partners and the 
shipyards need that kind of horizon as well, and that is one of 
the reasons why we are asking for that kind of planning 
horizon.

                           OFFENSIVE WEAPONS

    Senator Collins. Thank you. General Breedlove, the U.S. 
Commander of NATO, testified last month before the Armed 
Services Committee that Russia and pro-Russian separatist 
forces continue to exploit the recent ceasefire in Eastern 
Ukraine to reset and reposition themselves, and that they 
appear to be preparing for a fresh offensive against Ukraine's 
military. He voiced his support for providing Ukraine with 
offensive military hardware to deter a Russian advance. By 
contrast, I recently met with German Chancellor Merkel, who 
argued exactly the opposite and against providing offensive 
weapons.
    Could you give us your thoughts on this issue and what 
factors you are considering in deciding whether or not to 
provide military weapons to Ukraine, and what your assessment 
is of our ability to protect those in Ukraine and the 
sovereignty of that country?
    Secretary Carter. First of all, General Breedlove is right. 
It does appear that the Russian--clearly Russian-backed 
separatists in Eastern Ukraine are preparing for another round 
of military action that would be inconsistent with the Minsk 
Agreement. And we are supporting the Ukrainian military, not 
with offensive arms, but with defensive arms.
    But I think that Chancellor Merkel is also making an 
important point that need not be at variance with helping the 
Ukrainian military, namely that the big influencer, if there is 
anything that will influence Russian behavior, is the 
combination of economic sanctions and the fall in oil prices. 
That is what is punishing Russia now. And it is also true that, 
since you mentioned Chancellor Merkel, is the weight of 
European sanctions that matters most because they do most of 
the trade with Russia.
    That is why we are so intent on working with the Europeans 
led by Germany, and appreciate the steadfastness of Germany in 
leading those sanctions because by ourselves, we would have a 
lot less pressure to apply to Russia simply because of the 
volume of trade with us is less than Russia. So we need 
Russia--I mean, we need Germany rather and the Europeans to 
apply that kind of pressure. I cannot predict whether that will 
work or not, but that is the main thing that is applying 
pressure to Russia even as we try to assist the Ukrainians in 
defending themselves.
    Senator Collins. Thank you.
    Senator Cochran. I have been advised that Senator Mikulski 
has a need to be out of here by 11:30, and I was going to ask 
unanimous consent that she be permitted to proceed now. Senator 
Schatz will be the next Senator following her if there is no 
objection. I ask unanimous consent on her behalf.
    Senator Mikulski. Thank you. Thank you, Senator Schatz. I 
need to be involved in a conference with the White House on the 
Baltimore situation. First of all, I want to certainly thank 
General Dempsey for his many, many, many years of service, but 
Dr. Carter, we also want to thank you for coming back. You had 
a pretty good life lined up for yourself, and you were willing 
to come back and to serve, and we are grateful both to you and, 
of course, to General Dempsey. We have heard so much from you, 
and I can understand why the men and women in the military have 
such not only respect for you, but such affection for you. You 
have truly been a soldier's soldier, and I think your 
inspirational leadership has been something that has inspired 
us all.

                                THREATS

    In terms of the testimony today, I found it enormously 
sobering, and the threats that the Nation is facing and then 
the threats that we are imposing upon ourselves. It seems that 
we have two threats: the threats in the world that you are 
sworn to defend and protect, and then there are threats that we 
are self-imposing through our approach to the way we are 
dealing with our money. The most stunning prospect of yet 
another sequester where we all met and kind of bonded more than 
2 years ago is really deeply troubling.

                                 BUDGET

    The budget that we just passed yesterday is so deeply 
flawed that it will only provoke tremendous problems in this 
committee, and I am deeply concerned that what we passed 
yesterday, despite the best efforts of the chairman, will 
result in 302(b) allocations that will only trigger more 
gridlock and more confrontation. This is not something I look 
forward to as the ranking member. I have such respect for the 
chairman, both sides of the aisle, but we are not heading for a 
good situation.
    Now, there are those who say let us lift the caps on DOD, 
and it is clear the compelling needs that you have presented. I 
am also going to look at the domestic caps, and I will come 
back to my question. But one of the most troubling things that 
I heard in your testimony was that we cannot even give our 
military or our civilian defense employees a 2.3 percent cost 
of living increase, and that we are holding the line at 1.3 to 
save a billion dollars.
    Well, you had to do it, but my god, what a nickel and dime 
approach to our problems. And one of your solutions--again, 
this is not a criticism--is let us change the hours of the 
commissaries so that our enlisted people even have less 
resources to nutritious food and all the good things that come 
out of the commissaries, and in some ways are becoming 
nutritional settlement houses on many, many bases.
    So let me get to my question. As you look at this year's 
budget and then appropriations, two different things. There are 
those who support the lifting of the DOD caps. How does the 
Defense Department look at also the lifting of the domestic 
caps? And I am reminded of what General Dempsey has said to me 
several times, that out of every four people who enlist in our 
military, very desirous of serving, only one is going to be 
eligible because one cannot read, the other is too sick to 
serve, and the third may have other mental health or addictive 
problems that they cannot serve.
    So out of four people who want to join our military maybe 
to get out of their lives, only one is going to be eligible, 
and yet this is where we are. Could you comment about what I 
just said?
    Secretary Carter. Two comments. First of all, thank you. 
And with respect to confrontation and gridlock, I hope that we 
are able to come together and get past that by the end of the 
year so we do not find ourselves in the situation of 
confrontation and gridlock. I earnestly hope we can do that. A 
nickel and dime approach to defense, as you say, is not the 
right one. We need a longer horizon than that.
    Senator Mikulski. And I am not being critical of you.
    Secretary Carter. I understand.
    Senator Mikulski. I am being critical of ourselves.

                           NATIONAL SECURITY

    Secretary Carter. Of all of us, and it is not a way to run 
a proud Department that is protecting us. You mentioned other 
departments well. The Chairman mentioned the same thing. I 
mean, we are defense, but national security is bigger than 
that. National security, which I have to take an interest in 
and responsibility for--I think you expect me to--is bigger 
than our Department and today's world because of the complexity 
of the threats. So we need Homeland Security, and we need law 
enforcement and other things that are not military and not in 
our budget.
    And then finally, you mentioned quality people for our 
force. We have a magnificent force in terms of the quality of 
the people we have, but that is because we are able to be 
selective from a large pool of excellent young Americans who 
are patriotic, and able, and want to serve. And you have got to 
worry--not worry, but you need to make sure that we have future 
generations that are like that. That is why education, and R&D, 
and the other parts of what makes a country great in the long 
run are important to national security as well. So I think we 
do need to think larger about national security.
    Senator Mikulski. Did you want to say something?
    General Dempsey. No, I have nothing to add, Senator. Thanks 
for the kind words, by the way.
    Senator Mikulski. Thank you, Mr. Chairman.
    Senator Cochran. The Chair recognizes Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much. General 
Dempsey, Secretary Carter, thank you for the opportunity to 
visit with you this morning. General Dempsey, thank you for 
your service. Thank you for meeting with me several months ago 
at Fort Riley. I appreciate the time you extended to me, and I 
value that conversation. Thank you from Kansans for having in 
your background advanced degrees from the General Staff and 
Command College at Fort Leavenworth. We honor your service, and 
are grateful to--a grateful Nation for it. And, Mr. Secretary, 
I look forward to getting better acquainted with you and 
welcome the entree that you made this morning suggesting that 
we do that.

                        ABSENCE OF SEQUESTRATION

    General, let me start by asking you a question. We have had 
a conversation that the theme seems to be sequestration, OCO 
funding. Let me ask you, in the absence of sequestration, can 
you envision any circumstance in which you would be 
recommending to the Secretary, to the President, to us as 
members of Congress an Army of less than 490,000 men and women 
in uniform?
    General Dempsey. Absolutely. I mean, the plan we have got 
now even at President's budget 2016 takes the Active Army to 
450,000.
    Senator Moran. Let me ask--make sure you understand my 
question. My question is in the absence of sequestration, the 
necessity of what sequestration requires, would you otherwise 
see a circumstance in which you would be recommending that 
$450,000--I am sorry, 450,000 personnel to the Secretary? Is 
there a scenario in which that would ever look good for the 
safety and security of our country?
    General Dempsey. The Chief of the Army and the Secretary 
have a plan that they have put forward where they say they can 
meet the national security interests at 450 Active, and they 
have numbers for the Guard and Reserve, and so I have supported 
them in that. But General Odierno himself would tell you that 
that number would be a greater risk than a 490 Army. And it 
really--the question really then, Senator, becomes, back to my 
testimony about the security environment, where do we want to 
maintain the kind of forward presence that we have?
    If the answer to that is we want to be less forward and 
more at home, we just incur risk. And so, as I said, the Chief 
of Staff of the Army says he can manage the national security 
strategy at 450. Anything below that he says he cannot. He will 
also tell you that he would sure like to keep 490, but in the 
current budget scenario, we cannot do that.
    Senator Moran. Our country is safer at 490 than 450?
    General Dempsey. It is almost too stark a choice, Senator, 
to be honest with you. I mean, it is almost a bit like the AT&T 
commercial. Bigger is better than smaller, I mean, you know, I 
can see. But the Army can manage the security strategy we have 
at 450, but if this body were to decide that we have the 
resources to stay higher than that, I do not think you would 
find any of us saying, ``No, thank you.''

                             CYBERSECURITY

    Senator Moran. Thank you, General. Mr. Secretary, I have 
been interested in cybersecurity. I appreciate your emphasis. I 
know that you are out recruiting. One of the things that seems 
clear to me is the opportunity. You mentioned the Reserve in 
response to the chairman's question, the National Guard. One of 
the things that I think those components provide in regard to 
cybersecurity is personnel that have outside experience, that 
have the latest technologies and advancements available to them 
in their day jobs. And then they bring that to protecting our 
country through the work they do then in the Guard or Reserve.
    And I think you confirmed that in response to the 
Chairman's question about the value of that relationship and 
what the Guard and Reserve can provide in cybersecurity. Is 
that true?
    Secretary Carter. You are so right.
    Senator Moran. Would you explain why that is important to 
you?
    Secretary Carter. It is important because cyber, it 
pervades everything we do. None of our equipment or our plans 
operate properly, just like much of the rest of society, 
without the Web. And so, having the best technology embedded in 
our military, defending it so that others cannot disrupt it or 
exploit it, using cyber offensively as necessary and required, 
these are all important parts of the future of the military.
    And we have excellent people in both military and civilian 
full time, but there is a great untapped, not yet fully tapped 
resource, which is the one that we are talking about that I 
completely agree with you, we need to tap even more, which is 
our Guard and Reserve. A lot of those people are very cyber 
savvy, and using them to help us in this mission is a great 
resource.
    Senator Moran. Mr. Secretary, this I think can be close to 
a yes or no answer. In your better buying power efforts, are 
you beyond the theoretical demonstration of the value of this 
program, and are you ready to pursue acquisition to prove that 
it works, that it is of value?
    Secretary Carter. Yes. Yes.
    Senator Moran. Thank you. Chairman, thank you.
    Senator Cochran. Thank you, Senator. Senator Schatz is 
recognized.
    Senator Schatz. Thank you, Mr. Chairman. Thank you, 
Secretary Carter. Thank you, General Dempsey for your service. 
Secretary Carter, thank you for the visit in Hawaii, and I want 
to especially acknowledge your commitment to the Asia Pacific 
rebalance.

                               CHINA SEA

    I want to address what is happening today in the South 
China Sea. China is constructing artificial land in the Spratly 
Islands in parts of seized territory and redrawing maritime 
borders in violation of longstanding, customary, and 
international law. While other countries that lay claim to the 
Spratly Island have built small outposts and engaged in minor 
maintenance on features they already occupy, in one less year 
China has rapidly exceeded anything its neighbors have done.
    China's artificial islands are expected to support 
airstrips which will allow the military to land fighter jets 
and surveillance aircraft, adding a military dimension to a 
complex regional dispute. Admiral Locklear cautioned that these 
expanded land features could eventually lead to the deployment 
of long-range radars and advanced missiles. So what are we 
doing to deter China's continued aggression in the South China 
Sea and to reassure our partners?
    Secretary Carter. Great question, and thank you for your 
hospitality in Honolulu, and thanks for your interest in the 
Asia Pacific strategy, which is critical to us because half of 
humanity and half of the world's economy are in the Asia 
Pacific theater. So we pay a lot of attention to the Middle 
East and so forth, and we need to, but we can never forget that 
that is the heart of things.
    The Chinese behavior in the South China Sea is something 
that we oppose because the militarizing of these situations and 
the creation of confrontation over longstanding land disputes 
is not the way to resolve problems. We make that clear to the 
Chinese. Everybody makes it clear to the Chinese. I will say 
one thing. That it is having the effect of--that among the 
things China does, it is having the effect of increasing the 
pace and depth with which our allies and partners seek out to 
work with us. So in the case of the Philippines, for example, 
the Filipinos want to do more with us. That is not unrelated.
    And so, it is both a--that kind of behavior is both a--
demonstrates--that kind of Chinese behavior both demonstrates 
the need for the rebalance in order to make sure that the 
stability system of Asia remains as it has for decades, one of 
peace and stability. And it is also oddly a source of further 
strengthening of our partnerships and alliances in the region, 
which we alone have.
    Senator Schatz. Thank you. When we look at the challenges 
we face from potential adversaries making investments in anti-
access aerial denial capabilities, it is clear we have got to 
continue to take advantage of our technological superiority. 
Investments in technology like unmanned systems play a role in 
restoring conventional deterrence, but they are going to 
require continued investments.
    The DOD and industry have invested over one and half 
billion dollars in the Unmanned Combat Air System Demonstration 
Program, which was stood up to mature these technologies. The 
demonstration program is scheduled to conclude this month, but 
extending the program could make it possible to mature these 
key technologies and give us an opportunity to learn more about 
future U-CLASS operations and carrier air wing integration.
    Given the investment we have already made, do you feel it 
would be premature to close the program now, and are there 
additional tests that you think the Navy could conduct that 
would further buy down the future risk?
    Secretary Carter. You are absolutely right. The so-called 
UCAS-D Program, which is a demonstration, has reached the end 
of what it was anticipated to do. I think we are going to have 
to, however, do some more research and testing not necessarily 
of the same air frame for the reason you cite, namely unmanned 
aircraft in the Navy are part of the future. I think we 
recognize that. That is what the UCLASS Program is all about, 
and we are trying to determine what the requirements will be 
for the UCLASS Program going forward. And I think once those 
requirements are defined, there will be a path of R&D and 
demonstration that falls out of or follows from that definition 
of the requirements. We have not yet and the Navy has not yet 
finished that process.
    Senator Schatz. Thank you.
    Senator Cochran. Thank you. The time of the Senator has 
expired.
    The Senator from Montana, Mr. Daines.

                             NUCLEAR TRIAD

    Senator Daines. Thank you, Mr. Chairman. Secretary Carter, 
thank you for being here today. Given the increasing 
instability in many parts of the world, including an 
increasingly aggressive Russia, and the possibility of the 
nuclear Iran, our nuclear triad is as important as it has been 
since the end of the Cold War. In fact, my favorite commander 
coin is from the 341st Air Wing, which says--out of Montana 
which says, ``Scaring the hell out of America's enemies since 
1962.''
    I applaud the Administration for requesting strong funding 
for modernizing our ICBM arsenal, but I have been concerned 
about the President's willingness to unilaterally reduce our 
arsenal. What is the Administration's outlook on the future of 
our nuclear forces, and is the President committed to 
maintaining a strong nuclear triad?
    Secretary Carter. Yes, the President has expressed a 
continuing commitment to the triad, and I think that is 
important because as he has to, and I certainly support the 
Nuclear Modernization Program and sustainment programs that we 
are doing in partnership with the Department of Energy, the 
three legs of our triad, as you mentioned, and also the command 
and control that goes with the nuclear arsenal.
    I know that slogan well and that unit well, but it speaks a 
truth, which is that even though nuclear weapons are not in the 
news every day, thank goodness, they remain the foundation of 
our security. And so, we need to maintain them. We need to 
modernize them, and it is important that we have the programs 
and the dollars to do that.
    Senator Daines. I want to pivot over to talk a little about 
Afghanistan and Iraq for a moment. This is probably for 
Secretary Carter and General Dempsey, and thank you, General 
Dempsey. Honor to have you here this morning truly. Last month 
I was in the Middle East with Leader McConnell and some other 
Senators. We visited Israel. We visited Jordan. We were in Iraq 
and Afghanistan. So impressed in meeting with our men and women 
in uniform. I thought very highly of them having spent time 
with them. It just raised my expectations. Amazing group.
    But we are seeing a stark contrast between the two 
countries in Iraq and Afghanistan. It seems we have lost many 
of the gains that we made in Iraq, and we are at risk of doing 
the same in Afghanistan if we withdraw in the wrong way. We saw 
the train, assist, advise mission in Afghanistan. We see that 
working well, especially going into this current fighting 
season with the Taliban.
    What are the commanders on the ground telling you about the 
timeline for withdrawal from Afghanistan? I think we were all 
glad to see the President put some in flexibility, extend the 
troop level now to 2015. But what are you hearing now, and what 
are your thoughts about the President's plan to draw down 
virtually to zero by January 2017?
    Secretary Carter. Well, first of all, thank you for going 
there and visiting with our folks, and I am not surprised you 
found it uplifting because I think we all do, and incredibly 
proud. I will tell you my assessment, and I do not want to 
speak for General Campbell, but I think what I see there is 
great promise in Afghanistan that we are going to achieve the 
objectives we set ourselves. And that is an enormous tribute to 
our men and women who have been there these many years now.
    And in addition to the performance of our own force, the 
important ingredient is the performance of the Afghanistan 
security forces because the whole idea here is to build them up 
so that they can keep the peace in Afghanistan. That is, so to 
speak, our ticket to an orderly--we will never be gone from 
Afghanistan because they will be an ally--not ally, but a 
security partner for a long time, but, I mean, not a big 
military presence there.
    The Afghanistan security forces are performing well, and a 
key part of that is the fact that President Ghani and Chief 
Executive Abdullah have come together in a national unity 
government, and they really pay attention to their military. 
They take care of them. They also, by the way, thank us for 
what we have done. So I think that our strategy is paying off 
in Afghanistan is my assessment.
    Senator Daines. So do you think, though, the current plan 
of withdrawal basically to an Embassy presence only in terms of 
security in January 2017, does that put us at risk of watching 
the same scenario play out in Afghanistan that we saw happen in 
Iraq?
    Secretary Carter. Well, I think we are all, including the 
President, continually assessing progress and our plans against 
that progress. The change that he made in the plan to keep the 
force level up about 3 months ago is a reflection of that, and 
also a reflection of the importance that Ghani and Abdullah 
placed on that and their progress.
    Senator Daines. And I guess lastly, probably speaking on 
behalf of, again, so proud of the men and women serving over 
there in that region. Can you assure us the situation on the 
ground and not a political calendar is driving the decision 
about withdrawing the remaining U.S. troops?
    Secretary Carter. I think everybody wants success here, and 
to have gotten so close, so to speak, to get to the five-yard 
line and fumble the ball, nobody wants to do that, and nobody 
is going to do that. I think that things are--I do not want to 
be rosy about anything, but I think that we can see the kind of 
success we have striven for so long ahead in Afghanistan, and I 
think we are all committed to doing it.
    Senator Daines. All right. Thank you.
    Senator Cochran. The time of the Senator has expired. The 
Senator from California, Ms. Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman, and 
to the Chairman I want to wish him the very best. I 
particularly want to thank you for your intellect and your good 
sense. It is a unique combination, and it is very much 
appreciated, so thank you. And to our new Secretary, it is good 
to see you in a new capacity. I only see you at the Aspen 
Strategy Group otherwise, so it is very nice to see you here.

                             STEALTH BOMBER

    I have got a question. I understand the inclusion of the 
$1.2 billion for research and development for the long-range 
stealth bomber. This would replace the B-1 and the B-52, and we 
know that this is necessary. What I do not understand is the 
Air Force's proposal for a new air launched nuclear capable 
cruise missile.
    As I understand it, for the first 5 years the development 
costs are $1.8 billion, but this is only half the cost because 
this particular missile will be capable of carrying a high 
yield nuclear device. The Air Force missile decision is driving 
a life extension program at the Department of Energy for the W-
80 warhead, which is projected to cost another $1.8 billion 
over the next 5 years. This is a large expense, and it competes 
for funding with our Nation's nuclear nonproliferation 
programs.
    I question why we need this cruise missile that can deliver 
nuclear warheads from great distances in addition to the 
numerous gravity bombs, submarine launch ballistic missiles, 
and intercontinental ballistic missiles we have armed ourselves 
with. I absolutely think it is a mistake to divert our limited 
budgetary resources from a nonproliferation effort, which is 
going to happen, for this purpose.
    So here is the question. Why does the military believe that 
this long-range stand-off nuclear missile is necessary to 
maintain our nuclear deterrence?
    Secretary Carter. You asked about the military. I will say 
something first, but then if the Chairman wants to answer as 
Chairman. The reason for advanced cruise missiles is to replace 
the cruise missiles that exist now in recognition of the fact 
that air defenses are improving around the world and that 
keeping that capability to penetrate air defenses with our 
nuclear deterrent is an important one. And you are absolutely 
right, the W-80 warhead is the warhead that will go in the 
advanced cruise missile, and it, too, needs work. And that work 
is done by the Department of Energy, and that is paid for out 
of the Department of Energy budget. And as you indicate, 
nonproliferation activities are also in the Department of 
Energy budget.
    My hope is that we could accommodate both because I think 
it is important to have--continue to have a penetrating air 
breathing cruise missile for nuclear deterrence, but I also 
nonproliferation is incredibly important as well.
    Senator Feinstein. Yes. I chair that Energy and Water 
Subcommittee, and I have watched the nuclear costs go up all 
over, whether it is uranium, whether it is plutonium. Every 
project starts out in the hundreds of millions and ends in the 
billions, and I really question adding a nuclear cruise missile 
to all of the problems we already have. I may have a very hard 
voting for it. I just want you to know that. My belief is that 
we have enough nuclear weapons in this country, and that they 
are huge, and hopefully they will never be used. And I do not 
know that the deterrent argument is met by another cruise 
missile. This one is nuclear capable. It is stand-off. I do not 
know the size of the warhead, but I am going to find out. 
General?
    General Dempsey. I will just--this will require a much more 
comprehensive answer, but it is part of sustaining the triad, 
and the Joint Chiefs, all of us, have rendered our advice that 
the triad, in order to preserve our deterrent capability, must 
be sustained, and that we should not negotiate any further 
reductions until we are joined by those other nuclear capable 
nations in the world. Our deterrence has worked for the past 70 
years, and I would never recommend changing it unilaterally.
    Senator Feinstein. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator. The Senator from 
Missouri, Roy Blunt.
    Senator Blunt. Thank you, Chairman. Secretary Carter, I 
thought you were fairly cautious in overall observations about 
how the rest of the government should be funded. I know that it 
does reflect a lot of what you do, and I appreciated that. I 
served--Senator Moran and I at least served with the 
Congressman from Georgia in the House, Mac Collins, who one of 
his favorite sayings was you have to fish your own cork. I have 
never heard anybody else use that saying, but I understand it. 
And, of course, your cork here is the Defense Department.

                                 BUDGET

    If I have my numbers right, and I would be glad for you or 
Mr. McCord, either one, to correct me if I am wrong on this. I 
think you requested $534 billion for defense, which last year 
it was a little less than $500 billion. I believe the budget 
resolution that I voted for yesterday actually gives you more 
money than you requested. Do you not want more money than you 
requested?
    Secretary Carter. Senator, two things. First, defense is my 
responsibility as you indicated. However, it is really national 
security which is my responsibility, which is why I indicated I 
think about things more broadly than that. I think that is 
expected and necessary in today's world, so I do think more 
broadly about that.
    We think that the amount of money we have requested and the 
manner in which we have requested it meets the national 
security strategy of the United States. I will repeat something 
the chairman said, which is, and the reason why we are so 
insistent upon the necessity of getting through this budget 
wilderness is that having gone through this herky-jerky history 
over the last few years, we are on the edge of being able to 
accomplish the strategy as we now have it. We have all 
testified to that effect, and it is really true. So we need to 
get a longer horizon.
    It is not just money for this year. It is money as 
requested in a multiyear budget plan. That is what we are 
asking for so we do not have a one-year-at-a-time approach. You 
cannot do defense or national security with a 1 year-at-a-time 
approach.
    Senator Blunt. Well, I voted for the budget, so I am for 
national defense, and I am for looking for ways to help do that 
even with the current law. And both the restriction and the 
advantage of the current law is it is the law, so to look 
beyond that, we do have to get somewhere else. But I think that 
current law does lay out a 2 percent increase now not for this 
year because we sort of averaged that out last year. But you 
have asked for $534 billion, and we ought to look at that, and 
I think that Congress has expressed in the joint budget 
resolution a desire to give you more than that if you have a 
need for more than that. And it will be interesting to see how 
that discussion goes on.
    In terms of what we are doing, Senator Moran asked about 
the right sized force. General Dempsey, I will let you respond 
to this first. We had General Grass--he and others from the 
Reserves last week to talk about how the Reserve component fits 
into that. One of the things that I think came out of that 
discussion was a sense that as the full-time force gets 
smaller, it would possibly make a lot of sense to look at the 
Reserve force and the National Guard in a new way so that they 
are there when you need them. Does it seem logical to you that 
as the full-time force gets smaller that we would want the 
Guard and Reserve to get smaller as well?
    General Dempsey. Actually this is a good opportunity for me 
to knit this back to what the Senator from Kansas and I spoke 
about, which is my responsibility is actually the joint force, 
which is to say how do all these things fit together, Army--you 
know, to Senator Collins' point about the Navy. Even though I 
dress like I dress, I am a big fan of the Navy, and I am a big 
fan of the Army. And I think the Air Force----
    Senator Blunt. It is that one day of the year you are not 
such a big----
    General Dempsey. Well, it is actually more than one day a 
year.
    We play each other frequently in other sports. But I am the 
one that has to, on behalf of the Secretary and finally with 
his decision, knit it all together into a joint force, and that 
includes active Guard and Reserve. And in the world in which we 
live, it may seem counterintuitive, but because I said in my 
testimony that I cannot sit here before you and tell you 
exactly what is going to happen next, but I can tell you with 
certainty it will happen more quickly. We have to balance what 
is in the active component because they are ready to go 
tonight, and the Guard and Reserve, who do incredible work for 
the Nation but have to be mobilized. Their training level has 
to be increased to a certain level before they are deployed.
    And if, by the way, you want to keep the Guard and Reserve 
at the same expertise as an active component soldier, they are 
going to cost the same thing. So this is about finding the 
right balance, and I believe we have found the right balance 
among active Guard and Reserve components in our President's 
Budget 2016 budget submission.
    Senator Blunt. Now, you mean the Guard and Reserve only 
cost the same thing when they are called back--when they are 
called up to active----
    General Dempsey. Well, what I mean is if you want them to 
be at the same state of readiness as an active component 
soldier, then you have to pay them the same as an active 
component soldier to keep them--to give them more drill days, 
and to give them the opportunities to prepare.
    Senator Blunt. Well, maybe I misstated my question because 
what I was talking about was the number of the Reserves that 
are ready to ramp up when they need to, not that they would be 
active at all times.
    General Dempsey. No, I understand, but what I am suggesting 
is what we have done in this budget submission is found what we 
believe to be the right number of active Guard and Reserve for 
the requirements that we see coming in from combatant 
commanders on a daily basis, the responses to emerging security 
threats, and our war time contingency plans. So we believe we 
have done exactly what you have said.
    And I would also point out that the active component has 
been reduced at much greater rates than the Guard and Reserve. 
So the Guard and Reserve have been somewhat, if I could use the 
term, ``advantaged'' in the budget process. But I think we 
would be taking too much risk if we migrate too much more from 
the active to the Guard and Reserve.
    Senator Blunt. I am out of time. Thank you for the answer, 
General, and thank you for your great service to the country.
    Senator Cochran. Thank you, Senator. Thank you. Our next 
questioner is Senator John Tester, the Senator from Montana.
    Senator Tester. Thank you. Thank you, Mr. Chairman, and 
welcome, Mr. Secretary, and General Dempsey, Mr. McCord, and 
your support staff sitting behind you because I know how 
important they are for the jobs that you guys do. I would just 
say this, General Dempsey, on retirement, I do not know if 
there is going to be any fly fishing in your future, but 
speaking about fishing, we have got some pretty good fishing 
holes up in Montana and would love to have you come up and try 
it out. Thank you for your service.
    It is interesting as we have just come off a conversation 
on the budget, and we have got the Defense Department here, and 
I cannot thank you enough for the work that you guys do in 
national security. You are exactly correct. And I look at the 
figure, and I know the talk around the budget, and even 
though--I mean, as the activities in the Middle East, and the 
Pacific, and all over the world tends to make me not want to 
sleep at night, and I am sure it has a much bigger effect on 
you than me. I am also concerned about the investments we are 
making in this country in infrastructure, and housing, and 
highways, and electric grid, and the list goes on and on and 
on.

                            MILITARY BUDGET

    And my concern is that as we look at the military budget, 
you are foremost. I mean, you are up here. You have got the 
most senior members on Appropriations on this committee. We 
think it is very, very important. We tend to put--we tend to 
put infrastructure, and affordable education, and all those 
things that has made this country great, due much to the GI 
Bill, I might add, in the background, and that is bothersome to 
me, too. And as we look at China spending $400 billion on 
infrastructure, a little over three times what they spend on 
their military, we have got some problems, and I do not expect 
you to solve that.
    But one of the things that has also bothered me is that as 
we go into places like the Middle East, we are the big dog and 
we have responsibilities being the leader of the free world. I 
get all that. My question is, are other countries stepping up 
and helping because, quite frankly, ISIS to me is just as big a 
threat in Russia, and China, and here, and Canada, and Brazil, 
and India. I mean, these are bad guys.
    Are other countries stepping up or do we continue putting 
our young men and women on the line, and the lion's share of 
the risk, and the lion's share of the money, or is it a shared 
a shared endeavor because, quite frankly, I compare it to being 
on the playground. As long as somebody else beats up the bully, 
I sure as hell ain't going to walk up to him, you know? So talk 
to me.
    Secretary Carter. I have a lot of sympathy for what you 
just said. We are a great country. We assume great 
responsibilities. We have values that others admire and that 
are worthwhile for people everywhere, and we express that 
around the world, but sometimes it does feel like a lonely 
mission.
    You mentioned some countries, but just to take the Middle 
East, for example, we need our partners in the Middle East to 
step up and do more. I do not think there is any question about 
that. And we say that in Syria. We say it in Iraq. And the 
reason is burden sharing, if I might use that phrase, as you 
say, but there is another reason as well, which is nothing 
sticks if it is just done by us.
    Senator Tester. That is right.
    Secretary Carter. So if we are going to have peace in Iraq, 
for example, and defeat ISIL, the only thing that is going to 
keep them defeated is an Iraqi force. We can help, but at the 
end of the day it has to be the people there. So for both those 
reasons, I think what you say is terribly important.
    Senator Tester. And I think it would make our military 
budget go a little further if we had some of our allies 
stepping up in a bigger way, too. Enough on that.
    It is my understanding that the Pentagon is exploring how 
to open previously closed combat missions for women and will 
report those findings to Congress later this year. Where are we 
at in that process?
    Secretary Carter. You are absolutely right. We are opening 
up to women just as many possibilities or positions as we 
possibly can in the military. We are down now to a fairly 
restricted, but important, category both in the Army and the 
Marine Corps, and the leadership there is looking at what is 
possible, what the implications are. I think from our point of 
view, and I think is widely shared, we want to do as much as we 
can. So, you know, the presumption ought to be that women can 
serve everywhere in our military, but there may be exceptions 
to that. We are still working our way through that in both the 
Army and the Marine Corps, and that process is not complete 
yet, but I think it is a very important evolution, and 
something that, you know, very good people are, with great 
dedication and determination, looking at.
    Let me ask Chairman Dempsey----
    General Dempsey. Well, we will have our recommendation to 
the Secretary in September.
    Senator Tester. Okay.
    General Dempsey. And the one thing that we have done that 
is important to note is we have scrutinized standards so that 
we know that we have got the standards correct, and then we can 
make a determination of who can meet them.
    Senator Tester. To make this crystal clear, in carrying out 
this Nation's combat missions, is there a valuable role and has 
there been a valuable role for women in uniform?
    General Dempsey. Yes.
    Senator Tester. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator. The time of the 
Senator has expired. The Senator from Alaska, Ms. Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. And, General 
Dempsey, thank you for your service, and I will just remind you 
about that big fish that is on the wall in my office, there are 
more in the waters.
    There is some fly fishing in Montana, but we would welcome 
you at any time. But again, thank you for your service.

                                 ARCTIC

    I want to talk a little bit about the Arctic. I just came 
from a meeting in my office. I had some primarily men and women 
from the War College who wanted to talk about issues, and I 
said, okay, if you were sitting in my chair today, what would 
you ask the Secretary and General Dempsey, and without 
question, it was the Arctic. Where are we in the Arctic when it 
comes to U.S. investment? The general opinion is that whether 
it is talking about ice breakers, or communication 
infrastructure, or even wheeled vehicles that can operate in 
Arctic environments, the United States may be 40 years behind, 
you know, depending on how you are talking to.
    I was at the Arctic Council meeting in Iqaluit last week 
with Secretary Kerry, and all anybody wanted to talk about was 
Russia's arctic push, and what were we going to do in that 
regard. And I think we are all trying to understand exactly 
what Russia is doing there. We have had plenty of Arctic 
studies. Secretary Hagel completed an Arctic strategy. We have 
got a few expenditures that are out there with respect to the 
Arctic, but I am not aware of any comprehensive spending 
strategy to address how we deal with our national security 
deficiencies in the Arctic.
    And I know that NORTHCOM is working on a paper to identify 
some of our national security needs in the Arctic. I think it 
is a little bit vague at this point in time as to whether it is 
a full-fledged operations plan or whether it is simply a 
planning document. I think we are beyond the time to be doing 
plans, and quite honestly I am not really interested in more 
studies. I think that we need to be moving forward.
    So the question to you, Secretary Carter and General 
Dempsey, is if this committee were inclined to give you some 
meaningful guidance here on how we would move forward to 
implement an Arctic national security within this bill, what do 
you suggest we do, because I think we agree we have plenty of 
issues from a military and from a defense and a national 
security perspective up in the Arctic, but other nations are 
looking at us and saying where is the United States. How do we 
respond?
    Secretary Carter. First of all, let me just associate 
myself with the point of view you are expressing. It is going 
to be a major area of importance to the United States 
strategically and economically in the future. I think it is 
fair to say we are late to the recognition of that, but I do 
think that we have the recognition, and now you are asking what 
is coming in behind the recognition.
    Senator Murkowski. Right.
    Secretary Carter. And that is just the right question. And 
I do not want to give you an off the cuff answer, but I would 
like to work with that--you obviously have a lot of expertise, 
and I appreciate you going to the Arctic Council meeting. But I 
think a plan that is more than aspirational is needed, and so I 
would be happy to work with you to that end.
    Senator Murkowski. Well, I welcome that. I think it is more 
than timely. Some would suggest that we are just so far behind 
on this that we have no excuses. Just to the end--to the 
discussion about making sure that we maintain the forward 
pressure that you have mentioned, General Dempsey. As you know, 
we have had listening groups around the country, some 30 
different bases that are viewed as potential candidates for 
reduction-in-forces moving from the 490 to the 450. We are in a 
very unique position up there in Alaska. As you know, we are at 
the convergence of three different combatant commands. We have 
NORTHCOM, we have PACOM, and we have the European Command. None 
of those combatant commanders over the past several months as 
we have been discussing with them think that it is prudent that 
we see reductions-in-force strength there in Alaska between 
Eielson and Wainwright.
    And I guess the question to you is: Are we ensuring that we 
are making a forward presence, that we are not withdrawing from 
the world as Secretary Carter has said? Are people listening to 
what the combatant commanders are recommending when it comes to 
being prepared for the security issues that present themselves 
in the High North?
    General Dempsey. Yes. I am reminded of the plaque that is 
under the fish in my office which says, ``If I had only kept my 
mouth shut, I would not be up on this wall.''
    But the answer to your question, Senator, is absolutely we 
are listening. I align myself with what the Secretary said. We 
really just started this about 2 years ago, and we are probably 
late to the meeting, but we are hard at it. NORTHCOM has 
probably the most prominent voice because they are the partners 
of Canada and, as it turns out, Mexico. But, yes, we have got 
some work to do.
    [The information follows:]

    The DOD recognizes the challenges associated with the 
ongoing opening of the Arctic. We also recognize the 
opportunities presented for the U.S. to work collaboratively 
with Allies and partners to maintain the Arctic as a secure and 
stable region where U.S. national interests are safeguarded, 
the U.S. homeland is protected, and where nations work 
cooperatively to address issues of mutual concern. Please note, 
however, that we are also fully aware of Russia's ongoing 
military activities along NATO's eastern and northern flanks, 
and that we will continue to monitor the evolution of, and 
actions associated with, Russia's force build-up within the 
region.
    As you are aware, the Department has several military 
capabilities that may be employed in a multitude of operating 
environments, including the Arctic. These capabilities were 
developed, and are regularly improved, in keeping with DOD's 
policy of preparing for a wide range of global contingencies. 
We constantly review and assess our global defense posture and 
capabilities, as well as those of our partners, friends, allies 
and adversaries. These reviews and assessments occur in all 
theaters, to include the Arctic, and they are performed through 
the Department's routine budget and force planning processes.
    We have identified many challenges associated with 
operating in the Arctic, to include: shortfalls in ice and 
weather reporting and forecasting; a lack of navigational aids 
and accurate charts; limitations in communications due to lack 
of assets and harsh environmental conditions; and a limited 
inventory of ice-capable vessels and shore-based 
infrastructure. We are addressing these shortfalls in a 
coordinated manner by the relevant Federal departments and 
agencies under the auspices of the National Strategy for the 
Arctic Region and the associated Implementation Plan.
    We will continue to invest in ground-based interceptors 
(GBIs) in Alaska, and in the North Warning System radars and 
air defense assets operating in the Arctic and northern 
approaches to North America for decades. These include the 
Ballistic Missile Early Warning radar at Thule Air Base, in 
Greenland. We will continue our training and exercises in the 
Arctic, including our participation in events such as ARCTIC 
CHALLENGE, a multinational air exercise hosted by Sweden, and 
COLD RESPONSE, a multinational cold weather exercise hosted by 
Norway. The prepositioning arrangement between the United 
States and Norway and our cost-sharing arrangement associated 
with the recently transformed Marine Corps Prepositioning 
Program-Norway (MCPP-N), allow us to respond quickly to crises 
and contingencies in Norway and throughout the region by 
providing assets to operational forces in an efficient and cost 
effective manner. We will also continue our training and 
exercise program in Alaska.
    It will take adequate resourcing to maintain these efforts. 
Additionally, any future investments in Arctic infrastructure 
or activities must be weighed against investments in other 
capabilities, such as resources for strategic weapons 
modernization or recapitalization of the U.S. Navy's ballistic 
missile submarine fleet. Ballistic missile submarines, coupled 
with strategic weapons systems, represent the most survivable 
leg of the strategic arsenal and provide the Nation's only 
assured nuclear response capability. DOD's challenge is to 
balance the risk of inadequate capabilities or insufficient 
capacities appropriate for the Arctic environment with the 
opportunity costs associated with making premature and/or 
unnecessary investments. In recent years, this challenge has 
been further complicated by the ongoing threat of sequestration 
and repeated downward revisions of the Department's budget 
plans.

    Senator Murkowski. Well, know that we stand ready to work 
with you. I would love to have further discussion about what we 
really think of Russia's Arctic push and, again, have a better 
strategy moving forward. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator. The Senator from 
Vermont.
    Senator Leahy. Thank you, and I welcome you here. General 
Dempsey, I think I join with everybody else in complimenting 
you on your service.
    General Dempsey. Thank you, sir.
    Senator Leahy. We are going to miss you. I am going to miss 
those breakfasts on St. Patrick's Day.
    General Dempsey. We could still do that.
    Senator Leahy. Well, we pass the jokes back and forth, and 
fortunately there is no press or microphones. And you are 
welcome to come fishing in Vermont, too. It is different kind 
than elsewhere, and we do have Lake Champlain, and it has got 
some great spots.
    You know, I am not the first among the members here to talk 
about how we have to do more with less. And, Secretary Carter, 
you must groan every time you hear that because I am afraid 
some are saying we do everything with nothing. I know the 
conversation you and I had prior to your confirmation.

                         NATIONAL GUARD FORCES

    There has never been a time in my 41 years here in the 
Senate when the military has been as small as it is now, so it 
is not just important that--actually it is required. We have 
got to invest every dollar wisely. So let me ask this. 
Secretary Carter, going back to our earlier discussions, where 
are we in the process of deciding how the military is shaped, 
what equipment it needs for the requirements that governors 
have for National Guard forces and equipment in a domestic 
emergency? I think of our Guard actually saving our State, or a 
hurricane, others, earthquakes and so on. Are there currently 
plans for how the National Guard personnel and equipment that 
we fund could be used in a domestic event?
    Secretary Carter. Yes, Senator. Thank you. It was actually 
several years ago when I was deputy secretary, I asked the 
National Guard Bureau to look at exactly the question you are 
raising, namely the Guard has a national security function, but 
it also has a very important defense support to civil 
authorities function, which I respect, and which it has had for 
the 200-odd years that the National Guard has been in 
existence, and which is critical when it comes to floods and 
other kinds of disasters.
    And so, the question you are asking is--well, the 
background is we have never written down what it is that is 
required to respond to those disasters and potential disasters, 
and that is the process that General Grass has embarked on. 
First he took the State disaster assistance plans. Now he is 
looking at the regional disaster assistance plans and trying to 
create an overall disaster assistance plan so that we can use 
that to inform the resources of the Guard insofar as defense of 
civil authorities is concerned. So that is an important new 
thing.
    Senator Leahy. Well, it is because, of course, in a country 
as large as ours, we tend not to have earthquakes in the 
Northeast, but look at the terrible earthquakes in some parts 
of the West, and you look at tornadoes in the South and so on. 
And, General Dempsey, you have to sit there as Chairman of the 
Joint Chiefs and juggle all the demands and requirements of all 
the different departments, including General Grass' and his. Is 
this an issue that comes up to you?
    General Dempsey. Absolutely, Senator. In fact, I think over 
the last several years, the commander of NORTHCOM has gained a 
greater voice inside of our processes both for the distribution 
of the force and shaping of it. And I will tell you, the other 
thing that gets very little notoriety, but is very powerful, is 
the partnership between FEMA, the Federal Emergency Management 
Agency, and Northern Command, and the Guard Bureau. And the 
seven regions of FEMA are well partnered to respond to crises 
inside the homeland.
    Senator Leahy. I will never forget after we got devastated 
a few years ago in a hurricane in Vermont, flying into towns 
that had been totally cut off. The bridges had been torn apart. 
And going in a small helicopter with our governor and General 
Dubie as our adjutant general, and seeing the Guard plowing 
down the road creating a new--putting down a pontoon bridge, 
building it, and then FEMA arriving in it. It was a salvation, 
especially in some of those places because there is no medical 
care that can get through otherwise.
    And, General Dempsey, my time is about out. You have pushed 
hard on changes to work on the issue of sexual assault in the 
military. And if you could have your staff let mine know what 
you found effective and what more needs to be done because it 
is an issue that comes up so often. When I am home, young 
people want to go into the military in both sexes, and that is 
a question they always ask. So I would like to be able to give 
them the best answer possible.
    General Dempsey. Happy to do it, Senator. And you used the 
past tense ``pushed.'' I can assure you it is the present 
tense, ``pushing.'' Present participle actually.
    Senator Leahy. Thank you. That is an important part. And 
lastly, Secretary Carter, you talked about jet engines. I know 
you have been a proponent of the Air Force's Advanced Engine 
Program. General Welsh said it was a game changer. I watch it 
because, like many other States, so that I remind how does 
something this important wind up on the cut-off list.
    Secretary Carter. I think you are referring to the ADVENT 
Program?
    Senator Leahy. Yes.
    Secretary Carter. Well, the ADVENT Program is an important 
one. It deserves funding. And the reason for that is that we 
need more fuel efficient jet engines in the future, and the 
reason that we pursued the ADVENT Program was in part as a 
follow on and a competitor to the F-135 engine, which is in the 
Joint Strike Fighter. So it is an important program, and it is 
important for us to stay competitive in the jet engine area 
both for military, and by the way also, that is not the reason 
we do it, but for commercial competiveness also.
    Senator Leahy. Thank you. Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. Thank you, Senator Leahy. If there are no 
other questions, let me thank the panel for your cooperation, 
your appearance today, and your presentations. They will be 
very helpful to us as we proceed to complete the appropriations 
process. We are grateful for your service and look forward to 
continuing a dialogue as necessary during the 2015 
appropriation year process.
    Senators may submit additional questions which we will 
forward onto you, and request that you respond to them in a 
reasonable time.
    Secretary Carter. Will do.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Thad Cochran
    Question. Under current law, the United States Air Force is 
required to field a flight certified, domestically built rocket engine 
by the year 2019. For the current fiscal year, this Committee provided 
$220 million for this engine development program. To date, it is my 
understanding that the Air Force has only focused on studies and risk 
mitigation, and is asking Congress to provide relief on the 2019 date. 
We have been told that if the Air Force has any chance to meet this 
date, it must immediately begin a significant engine development 
program.
    If congress does change the due date for this engine, how confident 
are you that the engine development will be completed by 2019?
    Answer. Historically, it has taken 6-8 years to develop new, large 
scale rocket engines. The best strategy to develop a domestic engine by 
2019 is to leverage opportunities to partner with industry in their on-
going engine development. However, an engine alone does not result in a 
launch solution. The engine must be integrated into a launch vehicle 
and tested as an entire system. Even if the engine investment attempts 
to minimize changes to existing launch vehicles, we still need to 
integrate that new engine into the launch vehicles and launch 
complexes, modify the flight software, test the new system, and certify 
it for use. This is estimated to take another year or two after 
industry develops the engine.
    Question. Should we be doing more on rocket engine development to 
ensure that the Department of Defense has reliable, domestic access to 
space without having to rely on the Russians?
    Answer. The Department is committed to transition off the Russian 
made RD-180 as quickly as possible and is executing a plan with a goal 
of having two domestic commercial space launch providers that can also 
lift our national security space manifest to provide assured access to 
space. We have started the first step of the process, the technology 
maturation and risk reduction. Going forward, per national policy and 
the Commercial Space Act, we are seeking public-private partnerships 
with industry. The commercial launch industry is developing rockets and 
providing the launch services. Our strategy to partner with industry on 
not just an engine but a launch system will make sure that we have the 
ability to deliver national security assets into space in a 
competitive, affordable manner without strategic foreign reliance.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
    Question. Under the restrictions of the fiscal year 2015 NDAA 
Section 1608, I understand that there may be a minimum six-year gap in 
guaranteed access to space. I have also been informed that, even if 
DOD's legislative solution is implemented, there may be a minimum 2 to 
3 year gap in assured access to space. How necessary is the current DOD 
legislative solution, and will action beyond DOD's current proposal be 
required?
    Answer. The DOD legislative proposal ``Modification of Prohibition 
on Contracting with Russian Suppliers of Rocket Engines for the Evolved 
Expendable Launch Vehicle Program'' would give the Department authority 
to enter into contracts that include Russian-manufactured RD-180 
engines. The launch service provider, United Launch Alliance, has 
entered into a subcontract under which such rocket engines would be 
procured. If these engines are available for future Evolved Expendable 
Launch Vehicle (EELV) contracts, the currently contracted-for engines 
could meet the Department's needs through fiscal year 2022. The 
availability of RD-180 engines through fiscal year 2022 would ensure 
access to the Atlas V, and with the recent certification of the Falcon 
9 launch system, the Department would likely be able to meet its 
Assured Access to Space requirements, which requires the Department to 
ensure the availability of two launch vehicle systems, as established 
in policy and law, with a low probability of the occurrence of a gap. 
However, it should also be noted that neither the Falcon 9 launch 
system (as currently certified) nor the Atlas V are capable of meeting 
all the EELV required mission orbits. Therefore, manufacture of the 
Delta IV Heavy vehicle must continue until new launch capabilities are 
developed and fielded.
    Congressional enactment of the language provided in the 
Department's legislative proposal is necessary to ensure a smooth 
transition away from utilizing the RD-180 engine for National Security 
Space launches.
    Question. When Secretary James testified before the Senate Armed 
Services Strategic Forces Subcommittee last week, she noted that $13 
million in fiscal year 2015 funding has thus far been obligated toward 
a new rocket propulsion system to replace the RD-180. That leaves $207 
million to be obligated during the balance of the 2015 fiscal year. 
Yet, Secretary James also stated that, and I quote, ``we intend to 
invest an additional, say $45 million to $50 million, we project, over 
about the next 6 months.'' If Secretary James was correct in stating 
that the Air Force plans to spend $45-50 million over the next 6 
months, how does DOD plan to spend the remaining $157-162 million 
dollars appropriated?
    Answer. We plan to obligate the remaining funds, approximately $160 
million, by investing in industry's rocket propulsion systems using 
Other Transaction Authority. We released the Request for Proposals on 
June 2, 2015 and anticipate a rolling award of up to four agreements 
between September and December 2015.
    Question. I have serious concerns that the $220 million 
appropriated for a rocket propulsion system is going to be spread 
across numerous contracts, with little focused effort or results. Could 
you please clearly outline DOD's targeted acquisition strategy for a 
new rocket propulsion system?
    Answer. The Department is committed to transitioning from its use 
of Russian rocket propulsion systems in the most efficient and 
affordable manner possible. The Department currently procures launch 
services, rather than launch vehicle hardware, and is working with 
industry determining how to affordably provide these services utilizing 
domestically-produced rocket propulsion systems. It should be noted 
that transitioning from reliance on the Russian RD-180 engine requires 
more than just development of a domestic propulsion system. The 
propulsion system must be integrated into a launch system in order to 
provide access to space. This view was echoed by the Nation's leading 
launch service providers and rocket engine manufacturers in responses 
to an Air Force issued Request for Information in August 2014. It must 
also be noted that these same providers clarified in testimony that 
none of their solutions could directly replace the RD-180 in form, fit, 
or function.
    Based on those industry responses, the Air Force developed a multi-
step approach to transition to domestic rocket propulsion systems while 
assuring access to space. Started last year, the first step is to 
mature the technology to reduce engine development technical risk. The 
Air Force has obligated about $50 million toward this effort and will 
invest an additional $45-50 million in the next 6 months. The next step 
is to initiate investment in Rocket Propulsion Systems, in compliance 
with section 1604 of the Carl Levin and Howard P. ``Buck'' McKeon 
National Defense Authorization Act for fiscal year 2015, Public Law 
113-291. The Air Force plans to award multiple contracts or other 
transaction agreements with propulsion system or launch system 
providers that co-invest in on-going domestic propulsion system 
development efforts starting this fiscal year. In the third step, the 
Air Force plans to continue this approach by entering into agreements 
with launch system providers to provide domestically-powered launch 
capabilities. To complete the transition, the Air Force's goal is to 
compete and award contracts with certified launch providers for launch 
services for 2018 and beyond.
    Question. I have watched with growing concern as Iran continues to 
sow instability in the Middle East by pursuing nuclear weapons, 
sponsoring terrorism, developing offensive and defensive ballistic 
missile capabilities, and most recently by its aggressive posture in 
the Strait of Hormuz. How, if at all, will the Department of Defense's 
strategy with regard to dealing with the Iranian threat change, if a 
nuclear agreement is signed?
    Answer. The Department of Defense's approach toward Iran will not 
change as a result of a Joint Comprehensive Plan of Action agreed to 
between the P5+1 and Iran. The Department will remain prepared to 
address any scenario related to Iran.
    Question. According to a White House fact sheet, Iran's breakout 
time to acquire enough fissile material for one weapon is currently 
assessed to be 2 to 3 months. I understand that, under the Iran 
Framework agreement, not a single centrifuge will be dismantled or 
destroyed. Secretary Carter, could you please discuss the threat of a 
nuclear Iran, especially if the Iranians are allowed to continue to 
enrich uranium?
    Answer. We remain very concerned about the prospect of a nuclear-
armed Iran, but we believe that the best way to prevent that is through 
an internationally agreed upon nuclear deal that imposes significant 
restrictions on Iran's ability to enrich uranium and strict monitoring 
of its nuclear program. Although Iran would be permitted to enrich 
uranium under the Joint Comprehensive Plan of Action, it would be 
enriching within agreed limits and under strict international scrutiny. 
Finally, the Department of Defense will continue to be prepared for any 
Iran-related contingencies that may arise.
    Question. North Korean rhetoric concerning their ability to conduct 
a ``preemptive strike if necessary'' against the United States has 
recently resurfaced. How important is the Ground-Based Midcourse 
Defense (GMD) system for homeland defense against North Korean ICBM 
threats?
    Answer. In the event that deterrence fails and North Korea launches 
an intercontinental ballistic missile (ICBM) at the United States, the 
Ground-Based Midcourse Defense system is the means by which we would 
defend the homeland. Therefore, it is very important in the Nation's 
defense against North Korean ICBMs.
    Question. During Afghan President Ashraf Ghani's speech before 
Congress in March, he noted that the Islamic State poses a ``terrible 
threat'' to his country. What can you tell this Committee about ISIS's 
efforts to gain a foothold in Afghanistan, and our military's efforts 
to prevent that?
    Answer. The Afghan government and coalition forces in Afghanistan 
continue to watch closely the Islamic State of Iraq and the Levant's 
(ISIL's) attempt to expand its reach into Afghanistan. Thus far, U.S. 
forces have seen some evidence of limited recruiting efforts, and a few 
individuals formerly associated with other militant groups have 
``rebranded'' themselves as members of ``ISIL of Khorasan Province.'' 
U.S., coalition, and Afghan forces are collaborating closely in order 
to prevent this threat from expanding.
    Question. In September of 1988, a GAO report underscored the Air 
Force's concerns about ``the A-10's ability to support the Army and 
survive the Soviet air defense threat of the 1990s and beyond.'' This 
year, the President's Budget again proposes to retire the A-10. While I 
appreciate the close air support mission of the A-10, I also understand 
the difficult budgetary decisions that DOD faces. Secretary Carter, how 
might retiring the A-10 allow the Air Force to recapitalize for threats 
10 years from now? What other aircraft will provide close air support 
upon the A-10's retirement?
    Answer. In a time of reduced budgets, retiring the A-10 fleet will 
enable the Air Force to maintain critical readiness funding, sustain 
investment in high priority acquisition programs such as the F-35, 
Long-Range Strike-Bomber, and KC-46A as well as mitigate shortfalls in 
our munitions inventories. Other Air Force aircraft used to provide 
close air support are the AC-130, F-16, F-15E, B-1, B-52, and, in the 
future, the F-35.
    Question. DOD's primary weapons tester released a report in January 
of this year, noting critical cybersecurity vulnerabilities in most of 
the DOD acquisition programs tested in the previous fiscal year. How 
vulnerable are our missile defense and space assets to a cyberattack? 
And, what more can we do to protect our military assets against 
hardware, software, and supply chain cyber threats?
    Answer. Cyber threats to U.S. national and economic security are 
increasing in frequency, scale, sophistication, and severity of impact. 
Overall, the unclassified information and communication technology 
networks that support U.S. Government, military, commercial, and social 
activities remain vulnerable to espionage and/or disruption. We expect 
that the likelihood of a catastrophic attack from any particular actor 
is remote at this time. Rather than a major cyber event scenario that 
debilitates the entire U.S. infrastructure, we foresee an ongoing 
series of low-to-moderate level cyber incidents from a variety of 
sources. While the cyber threat cannot be eliminated, cyber risk must 
be managed. Military systems and operations must be made resilient and 
viable in the face of advancing adversary cyber capabilities--
protections for space and missile defense assets are no exception.
    As such, we have placed the highest priority on cyberspace defense 
in the resilience of systems and capabilities. Specific efforts are 
underway to evaluate and secure missile defense systems, control 
networks, and space assets, including the ground layer. Department of 
Defense (DOD) activities to enhance cyber security and system 
resilience against cyberspace exploitation and attack are being applied 
across the acquisition lifecycle.
    For example, the next generation Operational Control System (OCX) 
is the command and control portion of the next generation Global 
Positioning System (GPS). OCX provides significant Information 
Assurance improvements over the current GPS Operational Control Segment 
by preventing/detecting attacks and allowing GPS operators to isolate, 
contain, and operate in a cyber-contested environment.
    Likewise for missile defenses, the Department is actively and 
continually evaluating potential vulnerabilities to adversarial cyber 
operations. We are securing missile defense networks/systems and 
developing options designed to increase resilience while providing 
mission assurance. These actions include looking critically at 
supporting infrastructure and key resources, as well as working with 
industry and international partners to collaborate, inspire innovation, 
and prevent cyber incursion wherever possible.
    Moving forward, it is necessary that we establish cyber resilience 
requirements, continue to evaluate cyber vulnerabilities, and maintain 
a proactive program of remediation and operational resilience. The 
Department plans to implement a testing and training regimen that 
allows us to train like we expect to fight. We support the continuation 
and potential expansion of testing regimes to evaluate cyber 
vulnerabilities and manage the resulting risk. We have initiated 
improvements in cyber discipline and increased the ability to evaluate 
and harden fielded systems. At the same time, the Department is 
instituting the policy changes needed to build cyber resilience into 
the fabric of our business processes, designs, acquisitions, and 
operations.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander
                       electronic health records
    Question. The subcommittee heard testimony that all deployment and 
sustainment costs for the Department of Defense's Electronic Health 
Records System (EHR) are included in the life cycle cost estimate 
(LCCE) of $10.5 billion.
    Does the Department expect any change orders that would require 
additional funds? Does the Department of Defense believe that any 
additional funding will be needed during the 18 year life cycle of this 
program? Does the $10.5 billion life cycle cost estimate include all 
operational costs, including education and training efforts?
    Answer. We do not anticipate any change orders within the current 
scope of the Program that would require additional funding.
    For the items within the current scope of the Program, the 
Department of Defense does not expect the need for additional funding.
    The $10.5 billion life cycle includes all operational and support 
costs within the current Program scope, including education, training, 
and change management efforts.
                       electronic health records
    Question. How is the Department of Defense making sure that this 
electronic healthcare system will be interoperable with other systems?
    Answer. In May 2013, the Department of Defense (DOD) initiated a 
full and open competition for a core set of capabilities for Electronic 
Healthcare Record (EHR) modernization. To that end, the Program 
Executive Office Defense Healthcare Management Systems conducted 
extensive market research, hosted multiple industry engagements, and 
collaborated across the Military Health System, the Department of 
Veterans Affairs (VA), the Office of the National Coordinator, and 
Office of E-Government and Information Technology. These efforts 
contributed to the refinement of solicitation requirements in support 
of acquiring a configurable and scalable modernized EHR, which is 
interoperable with the VA and private sector healthcare providers by 
enabling standards-based, secure electronic exchange of medical and 
patient data.
    Further, in addition to solicitation requirements related to 
interoperability, the solicitation includes interoperability as part of 
the source selection evaluation. Specifically, the evaluation includes 
the likelihood the solution will achieve interoperability with the 
Virtual Lifetime Electronic Record Clinical Document Architecture, 
along with three other types of standards based interfaces consistent 
with the program's interface strategy. Also, the source selection 
considers the extent to which the offeror's proposed approach is 
consistent with the Defense Healthcare Management System Modernization 
(DHMSM) Interface Strategy, which requires interfaces be compliant with 
the IPO Information Interoperability Technical Package standards that 
details interoperability standards between Departments.
    After contract award, the new EHR system will be independently 
tested to ensure it meets operational and interoperability requirements 
with the VA and private sector healthcare providers. The DHMSM Test and 
Evaluation Master Plan describes the testing phases, evaluation 
framework, technical certifications, test organizations, test tools, 
and test management requirements that will be used to test the new EHR 
system. The test phases include contractor integration testing, 
developmental testing, and independent operational testing, which will 
ensure the EHR has a standards-compliant common clinical data model to 
achieve interoperability between DOD, VA, and national/international 
partners. During the operational testing, the product will be tested 
using typical users in an operationally realistic environment using a 
production representative system executing real mission tasks. The 
current DOD data sharing infrastructure within the Defense Medical 
Information Exchange (DMIX) program will remain operational to ensure 
continuity with the VA and national partners during the DHMSM testing 
and deployment. The DMIX infrastructure will be an integral part of the 
DHMSM test environment and test plan for interoperability testing.
                       electronic health records
    Question. Many TRICARE patients use civilian TRICARE network 
providers who are outside of military treatment facilities. How will 
vital healthcare information be shared between the Department's 
electronic health record system and non-government systems? Was a 
cloud-based program considered to address this concern?
    Answer. The Defense Healthcare Management System Modernization 
(DHMSM) solicitation includes multiple interoperability-related 
requirements enabling the sharing of healthcare information. For 
example, the solicitation requires that:

     `` . . . the EHR System will enable the application of 
        standardized workflows, integrated healthcare delivery, and 
        data standards for improved and secure electronic exchange of 
        medical and patient data between the DOD and its external 
        partners, including the Department of Veterans Affairs (VA), 
        and other Federal and private sector healthcare providers. The 
        workflows inherent to the EHR System will be adopted by and 
        standardized throughout the MHS via the DHMSM Change Management 
        process, as applicable. The EHR System will leverage data 
        exchange capabilities in alignment with the Interagency Program 
        Office (IPO) for standards-based health data interoperability 
        and secure information sharing with external partners to 
        include the VA.''

    DHMSM is a performance-based solicitation, so, rather than 
dictating how the contractor must accomplish interoperability, the 
requirements are outcome-based. To that end, offerors have the latitude 
to propose any technical solution, including a cloud-based approach, 
for achieving interoperability and data exchange so long as the 
approach is consistent with the solicitation requirements.
    In addition to solicitation requirements related to 
interoperability, the solicitation evaluates interoperability as part 
of the source selection. Specifically, the evaluation includes the 
likelihood the solution will achieve interoperability with the Virtual 
Lifetime Electronic Record Consolidated Clinical Document Architecture, 
along with three other types of standards based interfaces consistent 
with the program's interface strategy. Also, the source selection 
considers consistency with the DHMSM Interface Strategy, which requires 
interfaces be compliant with the IPO Information Interoperability 
Technical Package standards. The evaluation process also includes 
determining if proposals pass key ``Gate Criteria,'' which include data 
exchange capabilities that align with national standards used by 
governance bodies such as the Office of the National Coordinator (ONC) 
and other external standards organizations.
    It also requires a data architecture that supports open standards-
based data portability. Offerors will be evaluated on their design 
approach to achieving Open Systems Architecture, which includes 
utilizing and providing open and standardized Application Programing 
Interfaces and services to facilitate integration. The offeror must 
continue to adopt emerging standards and maintain compliancy and 
currency with ONC IT requirements and applicable national standards.
    Finally, in addition to the current systems interoperability 
accomplishments and the acquisition of a modernized interoperable 
electronic health record system, DOD has added language to the TRICARE 
Managed Care Support Contract (T2017) to enable future development of a 
time-phased Interoperability Plan to achieve machine-to-machine 
interoperability within the TRICARE system and among TRICARE network 
providers.
                       electronic health records
    Question. Given the number of questions raised by this procurement 
for an electronic health record system, are you considering delaying 
the award of this contract pending a GAO or congressional review?
    Answer. On July 29, 2015, DOD announced that the contract for the 
Defense Healthcare Management System Modernization was awarded to the 
team led by Leidos, Cerner, and Accenture. Prior to this announcement, 
the procurement had undergone multiple oversight processes, including 
but not limited to the formal DOD Peer Review process led by the Office 
of the Director, Defense Procurement and Acquisition Policy, pursuant 
to DFARS 201.170. The Program Executive Office Defense Healthcare 
Management Systems (PEO DHMS) has closely engaged with Congress 
throughout the acquisition process, including testifying before 
multiple committees and responding to all congressional requests for 
information pursuant to FAR 5.403. The PEO also participated in a 
Defense Acquisition Board review prior to contract award to ensure 
readiness of the project and to fulfill 10 U.S.C. Chapter 144 
responsibilities concerning Acquisition Category I Programs. Further, 
the PEO issued congressional notifications in accordance with DFARS 
205.303 prior to awarding the contract.
                                 ______
                                 
                Question Submitted by Senator Roy Blunt
    Question. I understand there was a recent policy change to the per 
diem allowance for long-term temporary duty. The policy change was 
based on a 2012 NDAA requirement to address cost reductions in overall 
travel, without impairing the mission. I have seen the letter from the 
Assistant Secretary of Defense for Readiness and Force Management on 
justification of the policy change and I would stress that the 
Temporary Duty of our Nation's soldiers is unique and not fully 
comparable to the State Department, VA or Health and Human Services 
Department. While this policy change may look good on paper, it may not 
look so good for DOD travelers who are forced to pay out of pocket for 
basic necessities. Will you commit to revisiting the policy if it is 
found to negatively impact morale? Further, can you tell me the extent 
to which DOD assessed the impact to businesses, which are dedicated to 
supporting our military, was addressed in the determination of this 
policy decision? Finally, as a result of this policy change how many 
soldiers are forced to pay at least some of their expenses out of 
pocket for TDY periods longer than 30 or 180 days?
    Answer. The Department's flat rate per diem policy does not force 
Service members and DOD civilian employees to pay out of pocket for 
authorized travel expenses or bare necessities. Under this policy, 
rates now more accurately reflect actual expenses incurred. To ensure 
that no one is disadvantaged, the policy allows the Authorizing 
Official to authorize reimbursement of actual lodging expenses up to 
100 percent of the per diem rate when discounted lodging cannot be 
found. Of note, the Services support flat rate per diem; this policy 
has worked well since 2008 when it was first introduced by the Services 
for contingency travel of over 180 days in duration.
    DOD has monitored this policy since it was first adopted 8 years 
ago. In fact, we continue to engage our governance bodies and seek 
feedback to assess its impact, and will adjust any policy if necessary. 
As an example, we have identified three foreign locations where the 
reduced per diem is insufficient to cover the meals and incidental 
expenses for a few isolated members traveling for U.S. Special 
Operations Command. To ensure that these members are properly 
compensated, we are revising the policy so that Service Secretaries and 
Combatant Commanders can request that travelers receive full per diem 
in foreign locations when flat rate per diem will not cover identified 
expenses due to unique local security, safety, or sanitary conditions.
    The Department also consulted our industry partners through the 
Government-wide Travel Advisory Committee (GTAC). The GTAC provided an 
opportunity for travel industry leaders and other qualified individuals 
to offer their expert advice and recommendations to the General 
Services Administration (GSA). Recognizing the merit of a long-term 
flat rate per diem policy, the GTAC recommended that all Federal 
agencies consider implementing similar policies.
    To be clear, DOD travelers are not forced to pay out of pocket for 
authorized travel expenses or necessities when on temporary duty (TDY) 
travel periods longer than 30 or 180 days. Even with reduced rates, 
travelers on TDY in the Continental U.S. for 31-180 days will receive 
$1,020-$1,620 every 30 days for meals and incidental expenses (M&IE). 
For TDY greater than 180 days, the amount is $759-$1,171. Established 
full M&IE rates are based on short stays of less than 30 days in 
duration. These rates assume travelers are dining 3 times a day at 
full-service restaurants (including taxes and tips); they do not take 
into account the economics of the extended-stay lodging/rental market, 
nor the change in traveler behavior on extended temporary duty travel. 
Providing a per diem allowance for meals affords the traveler autonomy 
in making their dining decisions. Travelers may choose to spend more or 
less than their allowance. The Department's analysis demonstrates, and 
industry best practices support, that the reduced per diem for extended 
TDY travel is sufficient and fair compensation. The Department will 
continue to ensure fair reimbursement for expenses incurred in support 
of the mission.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
    Question. In last year's fiscal year 2015 omnibus appropriation, 
this Subcommittee included a provision on the sale of tobacco and 
tobacco-related products sold at military resale outlets (SEC. 8073). 
The Subcommittee's intent was for tobacco products sold in commissaries 
to be priced at parity with the after tax price of tobacco products in 
the local community. The text of the language is also clear on that 
point. Will you ensure that DOD faithfully implements this provision, 
and if so by what date?
    Answer. Yes. Currently, prices for tobacco products in military 
exchanges and commissaries are set in accordance with section 633 of 
the Carl Levin and Howard P. ``Buck'' McKeon National Defense 
Authorization Act for fiscal year 2015, which prohibits the sale of 
tobacco products at a price below the most competitive price for that 
product in the local community and requires that the price at defense 
retail outlets overseas be within the range of prices established for 
that product in the United States. Additionally, prices for tobacco 
products in military exchanges and commissaries are set in accordance 
with section 8073 of the Consolidated and Further Appropriations Act, 
2015, which prohibits the sale in the United States of any tobacco or 
tobacco-related products at a price below the most competitive price in 
the local community, and requires the sale overseas of such items be at 
prices within the range of prices established for military retail 
system stores located in the United States.
    Question. Last year Secretary Hagel initiated a Defense Advisory 
Committee on Tobacco to review the Department's tobacco policies and 
make recommendations for future changes. As I understand it, the panel 
has concluded its work and submitted it to your office for decision. 
When will you complete your review of the tobacco panel's 
recommendations? Can you assure this Subcommittee that you will be 
aggressive in combating smoking in the military?
    Answer. The review of the tobacco panel's recommendation is nearly 
complete. As you mentioned, the Defense Advisory Committee on Tobacco 
(DACT) proposed several recommendations for tobacco use and control 
throughout the DOD. These options take into consideration the DOD's 
approach to tobacco pricing, tobacco use areas on military 
installations, tobacco use in uniform, and other areas related to 
education and outreach efforts in collaboration with the Services.
    While these policy options are under review, the DOD continues to 
make great strides towards reducing tobacco use. In accordance with the 
fiscal year 2015 National Defense Authorization Act (NDAA), the DOD 
eliminated the 5 percent discount on tobacco products in all Military 
Exchanges and Commissaries. This change is an important step toward 
ultimately removing all financial incentive to purchase tobacco 
products at Military locations.
    DOD will be comprehensive in combating smoking in the military.
    Question. In November 2014, the Department of Education announced 
it was creating an interagency task force on for-profit colleges. The 
task force is based on legislation I introduced with Representative 
Elijah Cummings to improve information sharing amongst agencies and 
improve oversight of this industry. Will Department of Defense 
participate in the task force?
    Answer. Yes. The Department of Defense stands ready to support the 
Department of Education in this endeavor to the maximum extent 
possible. We are committed to strong and effective oversight of the 
educational programs offered to our Service members and take our 
responsibility of being a good steward of taxpayer dollars and 
providing quality educational opportunities very seriously. We continue 
to work closely with the Departments of Education and Veterans Affairs 
and the Consumer Financial Protection Bureau on a comprehensive 
strategy to strengthen enforcement of, and compliance with, the 
enhanced protections delineated in the President's Executive Order 
13607, ``Establishing Principles of Excellence for Educational 
Institutions Serving Service Members, Veterans, Spouses, and Other 
Family Members.'' This mutually beneficial working relationship also 
helps promote information-sharing among our agencies on matters 
involving complaints, issues of noncompliance, and similar risk-based 
information to facilitate our holding educational institutions 
accountable when necessary.
    As you know, we require signed agreements (Memorandums of 
Understanding) between the Department of Defense and each of the more 
than 2,600 educational institutions that participate in the Tuition 
Assistance (TA) program, regardless of sector (public, private for-
profit, or private non-profit). These agreements (MOUs) are binding 
arrangements between the Department of Defense and each educational 
institution, and shape our relationships with these institutions.
    Question. A loophole in the law does not count this Subcommittee's 
funds for TA and MyCAA as Federal dollars for the purposes of the 90-10 
rule for Federal education funds. I am working to close this loophole 
legislatively. But in the meantime, we have sent a letter to Secretary 
Duncan asking him to publish 90/10 data that include DOD dollars. Will 
you work with the Department of Education to share data on the Tuition 
Assistance program and the MyCAA program?
    Answer. Yes. The Department of Defense (DOD) stands ready to 
support Secretary Duncan and the Department of Education in this 
endeavor. We are committed to strong and effective oversight of the 
educational programs offered to our Service members and take our 
responsibility of being a good steward of taxpayer dollars and 
providing quality educational opportunities very seriously. As you 
know, the Department has already improved its oversight in many ways, 
such as requiring signed agreements between DOD and educational 
institutions that participate in the Tuition Assistance (TA) program, 
implementing a centralized postsecondary education complaint system, 
and, most recently, launching ``TA DECIDE,'' a college and university 
information and comparison tool tailored to the unique needs of our 
Service members and families. We have also made TA program data 
publically available for download at http://www.dodmou.com/TADECIDE/. 
This data can be used to directly support calculations involving the 
90/10 rule.
    Question. Earlier this year, the Department issued a 'narrowing of 
solicitation' for its contract to update DOD's electronic health record 
system. In narrowing potential vendors, you eliminated the bid from the 
open-source vendor whose system was being used by the VA. First, this 
contract is estimated to cost $11 billion, and there are still 
questions about whether the remaining bidders can provide a platform 
that is interoperable with other government and private systems. Can 
you assure us that any system that is awarded the contract will have 
the capability of sharing health records across platforms? Second, as 
technology evolves the Department's electronic health record system 
must be able to stay current and adapt. Given the length of this 
contract, if you pick a proprietary electronic health record system, 
can you assure us that the vendor will be able to stay current with 
improvements in technology?
    Answer. To confirm, the Defense Healthcare Management System 
Modernization (DHMSM) solicitation was released on August 25, 2014, 
with proposals due by October 31, 2014. The Government completed the 
evaluation of initial proposals and on February 19, 2015, opened 
discussions with offerors who remain in the competitive range. On July 
29, 2015, DOD announced that the DHMSM contract was awarded to the team 
led by Leidos, Cerner, and Accenture. While DOD cannot comment on the 
details of the source selection process, the competition was robust and 
supported DOD's objective of acquiring a best value solution for the 
enterprise that meets requirements, including interoperability with the 
Department of Veterans Affairs and private sector healthcare providers.
    Regarding the estimated cost of the DHMSM contract, this has been 
misreported in the media. The $11 billion figure (which is now $9 
billion based on the latest estimates) represents the life cycle cost 
estimate for the entire DHMSM program, not just the contract, through 
fiscal year 2032. This initial contract has a value of $4.34 billion 
over the next 10 years. In addition, though the DHMSM contract has a 
potential ordering period of 10 years, it consists of an initial 2-year 
base ordering period and two subsequent option ordering periods 
consisting of 3 years each. These are followed by a potential award for 
up to 24 months for sustainment post-full deployment. This structure 
provides the government the flexibility to change course if offeror 
performance or market conditions make it advantageous for the 
Government to do so.
    Addressing the first part of the question, DHMSM is a performance-
based requirement with interoperability requirements throughout the 
solicitation. The contractor's performance will be closely monitored 
through a variety of mechanisms, including program office oversight and 
execution of the Quality Assurance Surveillance Plan, to ensure 
compliance with all requirements. As an example of an interoperability 
requirement, the solicitation requires that ``the EHR System will 
enable the application of standardized workflows, integrated healthcare 
delivery, and data standards for improved and secure electronic 
exchange of medical and patient data between the DOD and its external 
partners, including the Department of Veterans Affairs (VA), and other 
Federal and private sector healthcare providers . . . The EHR System 
will leverage data exchange capabilities in alignment with the 
Interagency Program Office (IPO) for standards-based health data 
interoperability and secure information sharing with external partners 
to include the VA.'' Further, in addition to solicitation requirements 
related to interoperability, the solicitation includes evaluation 
criteria related to interoperability.
    Addressing the second part of the question, DHMSM includes 
technology refresh requirements throughout the solicitation. Similar to 
interoperability, the contractor's performance will be closely 
monitored through a variety of mechanisms, including program office 
oversight and execution of the Quality Assurance Surveillance Plan, to 
ensure compliance with all requirements. As an example of a technology 
refresh requirement, which is captured within the Open System 
Architecture (OSA) requirements, the contractor must provide a 
Technology Refresh Plan that minimizes obsolescence, promotes adoption 
of emerging standards and new technologies, and maintains compliancy 
and currency with ONC and other applicable national standards through 
life cycle management and component modernization.
    As another example, the contractor is required to use system design 
and engineering processes (life-cycle support plan) that enable system 
improvements through upgrades of individual hardware, software modules, 
or interfaces with newer modular components without redesign of the 
entire system or large portions thereof (e.g., migration to a new thin 
client interface, adoption of integration technology standard such as 
FHIR) and without placing additional data rights/intellectual property 
rights constraints on the overall system design. Also, if future 
releases of the contractor's commercial EHR include additional 
capabilities and software modules, the solicitation requires that those 
modules be delivered at no additional cost to the Government as part of 
a major release. Further, in addition to solicitation requirements 
related to technology refresh, the solicitation includes evaluation 
criteria related OSA (inclusive of technology refresh).
    Question. Last fall, OSD halted plans to deploy a common eCMRA 
software system across DOD to track contracted services. Will OSD 
deploy a common software system, and if so when?
    Answer. DOD is proceeding deliberately to implement a solution that 
will meet Congressional intent: to generate an improved Inventory of 
Contracted Services (ICS), using ``instances'' of the Contractor 
Manpower Reporting Application (CMRA). These ``instances'' are each 
separate and specific operating IT systems of CMRA that are used across 
DOD to capture contractor-reported data.
    There are currently four ``instances,'' one for each Military 
Department and the fourth for OSD and the Fourth Estate, all modeled 
after a system developed by the Army, being utilized and accessible 
through a common portal at www.ecmra.mil. In the near term, all four 
``instances'' of CMRA will be co-located on a Defense Manpower Data 
Center (DMDC) server; DMDC will ensure system compliance with DOD 
security and Information Technology policies. Because data collection 
for the fiscal year 2014 ICS has already been completed, we expect that 
this new operational model will be used to generate the fiscal year 
2015 ICS.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
    Question. It seems that the way we are going to end our use of 
anti-personnel landmines on the Korean Peninsula--which President Obama 
has said he wants to do--is by developing technological and/or 
doctrinal and tactical alternatives. Twenty years ago, President 
Clinton called on the Pentagon to develop such alternatives, but the 
Pentagon did next to nothing. What is the Pentagon doing today, and 
what are you planning to do in the future, to finally solve this 
problem?
    Answer. Since 1997, the Department of Defense has devoted 
considerable time and resources to addressing the humanitarian concerns 
associated with the use of landmines while maintaining the military 
capabilities needed to fulfill our obligations for the defense of the 
Republic of Korea. During the past 18 years, the Department has removed 
all persistent landmines from the active stockpile and destroyed two 
million persistent landmines. The Department has also developed and 
fielded the Spider Networked Munition to replace hand-emplaced anti-
personnel landmines. Consistent with current U.S. landmine policy, the 
Department has initiated efforts to replace self-destructing anti-
personnel landmines. In 2014, the Joint Requirements Oversight Council 
approved an Initial Capabilities Document that outlines requirements 
for a new generation of terrain shaping capabilities to replace the 
current Family of Scatterable Mine (FASCAM) systems. The fiscal year 
2016 President's Budget request contains $337 million in fiscal year 
2016-2020 to develop a replacement for the Gator mine system. This 
summer, the Department expects to complete a comprehensive study of the 
operational effectiveness of anti-personnel landmines and technological 
alternatives that will help inform future plans to replace the FASCAM 
systems.
    Question. Is the Pentagon on track to meet its commitment to use 
only cluster munitions that have failure rate of no more than 1 percent 
by 2018? Since the new policy was announced in 2008, how many times, 
including when, where and for what purpose, have Combatant Commanders 
authorized the use of cluster munitions that exceed the 1 percent UXO 
rate? To what countries and in what quantity has the U.S. transferred 
cluster munitions that exceed the 1 percent UXO rate since 2008, and 
how will the U.S. ensure they do not use such munitions after 2018?
    Answer. The Department of Defense (DOD) is on track to meet its 
commitment to use only cluster munitions that have a failure rate of no 
more than 1 percent by 2018.
    Details regarding instances in which Combatant Commanders may have 
authorized the use of cluster munitions since 2008 is classified; we 
have previously provided these details to Congress in a classified 
briefing.
    A thorough review of our Foreign Military Sales database confirms 
that the Department has complied with applicable law and DOD policy. 
The U.S. Government has not sold or agreed otherwise to transfer 
cluster munitions that are not compliant with the 1 percent unexploded 
ordnance (UXO) rate to a foreign government since 2007. Therefore, 
there are no cluster munitions in the hands of foreign countries that 
could be subject to any obligation to ensure they not be used after 
2018.
    Question. As the U.S. expands military engagement in Bahrain, the 
human rights situation there continues to deteriorate. What leverage 
does our military relationship with Bahrain provide us with regard to 
the Bahraini government's handling of internal security consistent with 
professionalism and respect for human rights within the Bahraini 
security forces? What is your assessment of the Bahraini government's 
ability to professionally maintain internal order, and what has been 
the impact on Bahrain's security forces of the recent instability? What 
are we doing to mitigate the risks to U.S. investments and personnel 
associated with increased instability in Bahrain?
    Answer. The Department of Defense's bilateral relationship is with 
the Bahraini Defense Forces (BDF). Internal security is generally 
provided by forces under the Bahrain Ministry of the Interior, with 
which the Department of Defense does not have a substantive 
relationship. Nonetheless, the Department of Defense consistently 
emphasizes during military exercises, training, and engagements with 
the BDF, and with all partner nation militaries, the importance of 
professionalism, respect for human rights, and restraint.
    The Bahraini security forces have shown significant restraint and 
professionalism in the face of violent protests in recent years. We 
generally assess them to be capable of professionally maintaining order 
and we do not assess they have contributed to instability or protests 
in Bahrain, which have substantially decreased in recent months.
    The Department of Defense continually monitors the situation in 
Bahrain to ensure the safety and security of U.S. personnel. The U.S. 
Navy Fifth Fleet in Bahrain continually re-evaluates its force 
protection posture. We are confident that the measures currently in 
place are sufficient to ensure U.S. persons and interests are 
protected.
    Question. General Dempsey, as the nation is still struggling to 
bring to a successful conclusion the conflicts in Iraq and Afghanistan, 
I am disturbed by recent testimony by General Odierno that the Army is 
currently being revamped in a way that would make it very difficult to 
sustain operations of similar length because plans assume a short war. 
What are your top concerns for the Joint Force if our assumptions about 
the length of the next conflict are too short, and why has DOD approved 
the reduction of combat capabilities in the reserve components in the 
Army rather than using it as a hedge?
    Answer. There is no guidance or assumption regarding the length of 
conflict. Although our forces will no longer be sized to conduct large-
scale, prolonged stability operations, we will preserve the expertise 
gained during the past 10 years of counterinsurgency and stability 
operations in Iraq and Afghanistan. We will protect the ability to 
regenerate capabilities that might be needed to meet future demands.
    In regards to the Active, Guard, and Reserve force mix, we need to 
carefully consider potential changes in the balance among our Active, 
Guard, and Reserve forces, leveraging the unique attributes and 
responsibilities of our Services and their components. As with all the 
Services, the Army seeks to balance capability, capacity and readiness 
across its components to support national security requirements. 
Further it seeks to provide capabilities the National Guard that best 
supports both Federal and State missions. The President's Budget as 
submitted does both, despite increased risk given the climate of budget 
uncertainty.
    Question. General Dempsey, it has now been almost 2 years since the 
nation vowed not to take its ``eye off the ball again'' with regards to 
sexual assaults in the military. Under your leadership, the Department 
and Services have created new organizations, streamlined old ones, made 
changes to military law, and created new training and personnel in an 
effort to prevent and respond better to allegations. What lessons have 
you learned about how to more effectively prevent and respond to it?
    Answer. Two years ago, we placed emphasis on the role of leaders in 
combating sexual assault. As leaders became more involved, our Service 
members recognized their commitment and stepped up to take a more 
active role in prevention efforts and became a part of the solution. 
That involvement has helped to create more effective education and 
training methods. Our Service members are more aware of what 
constitutes harassing and sexist behaviors and when and how to 
intervene.
    Our military faces a variety of challenges--in combat and everyday 
life. Eradicating sexual assault from our ranks is a challenge. Our 
most effective approach to responding to and preventing incidents of 
sexual assault requires active participation of everyone wearing the 
uniform.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
               russian rocket-engine replacement program
    Question. Last year's Russian invasion of Ukraine highlighted the 
Air Force's reliance on Russian-made engines to launch U.S. national 
security satellites into space. Last year's fiscal year 2015 National 
Defense Authorization Act (NDAA) and the fiscal year 2015 Defense 
Appropriations bill both directed the Air Force to develop a U.S.-made 
engine by 2019 to replace Russian-made engines. The Appropriations bill 
provided $220 million to begin developing an alternative. Yet, the 
Defense Department has awarded little of the $220 million to date to 
begin to develop an alternative to the Russian-made RD-180 engine. 
Further, the President's budget request to continue development of a 
U.S.-made engine was $86 million, well below the initial Congressional 
investment of $220 million in fiscal year 2015. After 2016, the planned 
funding goes down to $60 million in fiscal year 2017 and then $50 
million in fiscal year 2018, fiscal year 2019, and fiscal year 2020.
    Is the Department still committed to replacing the Russian-made RD-
180 engine with a U.S. engine? If so, why has the Department not moved 
forward with an engine replacement program?
    Answer. The Department is committed to transitioning from Russian 
rocket propulsion systems in an efficient and affordable manner. The 
Department currently procures launch services rather than launch 
vehicle hardware, and is working with industry to determine how to 
ensure these services utilize domestically-produced propulsion systems. 
Transitioning from reliance on the Russian RD-180 engine requires more 
than development of a domestic propulsion system, as the propulsion 
system must also be integrated into a launch system.
    The Air Force's strategy is a four step approach to transitioning 
to domestic propulsion while assuring access to space. Step 1, started 
last year, matures the technology to reduce the technical risk of 
engine development. The Air Force has obligated $50 million toward this 
effort, and will invest an additional $45-50M in the next 6 months. 
Step 2 initiates investment in rocket propulsion systems in compliance 
with the fiscal year 2015 NDAA. The Air Force will partner with 
propulsion system or launch system providers by awarding multiple 
contracts that co-invest in on-going development efforts. In step 3, 
the Air Force will continue the public-private partnership approach by 
entering into agreements with launch system providers to provide 
domestically powered launch capabilities. In step 4, the Air Force will 
compete and award contracts with certified launch providers for launch 
services for 2018 and beyond. These providers will on-ramp the systems 
developed under shared investment while off-ramping legacy systems, 
which use Russian RD-180 engines.
                recent use of cluster munitions in yemen
    Question. Secretary Carter, according to a recent report by Human 
Rights Watch, there is substantial evidence that the Saudi-led 
collation used internationally-banned cluster munitions in western 
Yemen. U.S. policy until 2018 permits the use of cluster munitions with 
a less than 1 percent unexploded ordnance rate against clearly defined 
military targets and in areas not normally inhabited by civilians. In 
Yemen, the attack appeared over a cultivated plateau within 600 meters 
of civilian structures.
    Are you aware of the report of the use of cluster munitions in 
Yemen? [Has the Defense Department examined whether cluster munitions 
were used against clearly defined military targets and in areas not 
normally inhabited by civilians? Given the fact that cluster munitions 
leave behind small submunitions that could harm civilians in the 
future, has the Department sought assurances from the coalition that 
they will not use cluster munitions in areas normally inhabited by 
civilians or close to areas where they live?] Finally, Current Defense 
Department policy written by former Secretary Gates would prohibit the 
use of cluster munitions by the U.S. with greater than 1 percent 
unexploded ordnance rate after 2018. Does the Department of Defense 
intend to abide by this policy?
    Answer. Yes, we are aware of the report of the use of cluster 
munitions in Yemen. The Saudi government reported that the cluster 
munitions were used to target vehicles and not people. The cluster 
munitions used met the criteria of less than 1 percent unexploded 
ordnance. The Saudi government has assured us these munitions will be 
used in accordance with the U.S. requirements outlined in the Foreign 
Military Sales agreements: ``recipients of such transfers must commit 
that cluster munitions will only be used against clearly defined 
military targets and will not be used where civilians are known to be 
present or in areas normally inhabited by civilians.'' Policy questions 
are best addressed by the through the office of the Secretary.
                  new air force nuclear cruise missile
    Question. Why does the military believe that this long range 
standoff missile is necessary to maintain our nuclear deterrent? Given 
the nature of the threats we face today, how can the military justify 
so much additional funding for deterrence at the expense of non-
proliferation programs?
    Answer. Penetrating cruise missiles strengthen the credibility and 
effectiveness of our nuclear deterrent by providing the United States 
with a unique capability to hold at risk targets deep inside an 
adversary's territory despite efforts to deny access. Additionally, 
heavy bombers count as one strategic warhead under New START, 
regardless of the number of nuclear gravity bombs and cruise missiles 
we have in our inventory. This provides the United States with a rapid 
upload capability to hedge against unforeseen technical issues in the 
other parts of our nuclear deterrent or changes in the geopolitical 
environment.
    With the retirement of the nuclear-armed sea-launched cruise 
missile (TLAM-N) in 2011, which followed the earlier retirement of the 
Advanced Cruise Missile and the elimination of the intermediate-range 
Gryphon ground-launched cruised missile, the Air-Launched Cruise 
Missile (ALCM) is the United States' only nuclear-armed cruise missile 
and its only air-launched, long-range nuclear standoff capability. ALCM 
was originally designed to last for 10 years and is now over 30 years 
old. As our adversaries modernize their nuclear forces and acquire 
increasingly sophisticated air defenses, the credibility of the ALCM as 
an element of our nuclear deterrent will inevitably deteriorate. The 
Long-Range Standoff (LRSO) cruise missile will replace the aging ALCM, 
thus sustaining the credibility of this unique capability to hold 
adversary targets at risk. LRSO is not a new military capability.
    More generally, we do not view funding for our nuclear deterrent to 
be at the expense of non-proliferations programs. Investments in both 
LRSO and non-proliferation programs are needed to address the full 
range of security challenges we face, even as we work towards future 
negotiated nuclear arms reductions with Russia.
                               guantanamo
    Question. Do you support the cessation of detention operations at 
Guantanamo? Do you believe their continuation harms U.S. interests? How 
do you plan to help close Guantanamo, which the President ordered on 
his second day in office? There have been no transfers of Guantanamo 
detainees since January 15. When can we expect to see some additional 
transfers of the 57 detainees cleared for transfer? Understanding that 
you want to avoid undue command influence, do you believe the military 
commissions process is working? When will the 9/11 co-conspirators be 
brought to justice? Is the Department seeking additional funds for 
construction at Guantanamo related to the ongoing detention operations? 
Why does the Department insist on continuing force feeding in a manner 
inconsistent with the Bureau of Prisons and against the recommendations 
of the Defense Health Board? If so, why?
    Answer. I believe it's in our national interest to close the 
detention facility at Guantanamo. Legal cases surrounding detainees at 
Guantanamo are complicated and legally complex requiring due 
deliberation in order to work through the matters in an appropriate and 
transparent manner. Both the accused and the government are represented 
by able counsel who work diligently on behalf of their clients and in 
the interests of justice. These cases are being presided over by 
thoughtful and deliberate military judges. I will defer to the Office 
of the Convening Authority and Office of the Chief Prosecutor for 
Military Commissions on when or if 9-11 co-conspirators will be 
prosecuted. The Department submitted to Congress a list of unfunded 
priorities which are not endorsed unless enacted funds exceed the 
amount requested in PB '16. One of these priorities included SOUTHCOM's 
request for $76 million to complete critical repairs to GTMO barracks 
to ensure the health and safety of our personnel. This construction is 
not related to detention operations, per se, and can be repurposed for 
other missions in the future. The Department remains committed to the 
safe, humane, legal, and transparent treatment of all individuals 
detained by U.S. Forces. Regarding policy decisions about additional 
detainee transfers, request for additional funding or how the detention 
facility at GITMO may be closed, I defer to the Secretary.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski
    Question. Commissaries remain a highly valued benefit for our 
military families. Yet, the Department's fiscal year 2016 budget cuts 
$300 million from commissaries, and proposes a further reduction in the 
commissary budget to $500 million by 2017. What is the basis for 
proposing these significant reductions? Has there been any assessment 
of the impact of these reductions on exchanges, and other welfare and 
recreation programs? Additionally, what will the impact of these cuts 
have on a military family's budget?
    Answer. The Department's ongoing fiscal constraints require a 
comprehensive review of all programs. For fiscal year 2016, we believe 
the decrease in the commissary subsidy can be absorbed via operating 
changes. The operating change most visible to commissary patrons would 
be a reduction in operating days and hours, but all commissaries would 
remain open at least 5 days a week. Legislative changes, if enacted, 
would allow us to include the cost of second destination transportation 
in the price of commissary goods worldwide (but would result only 
minimal--approximately 2 percent--increases in prices), and would 
transition the costs of operating supplies from the appropriation to 
surcharge.
    For fiscal year 2017 and beyond, the Department believes that the 
Defense Commissary Agency must shift to become a partially self-
sustaining business model, while minimizing the impact on active duty 
and retiree families who rely on the commissary as a benefit of 
service.
    Currently, the Department does not have any definitive assessments 
of the impact of reduced commissary system operating days and hours 
and/or increased commissary prices on the exchanges and morale, 
welfare, and recreation programs.
    Pursuant to section 634 of the NDAA for fiscal year 2015 (Public 
Law 113-291), the Department is conducting a review of the commissary 
system utilizing the services of an independent organization 
experienced in grocery retail analysis. The Department has awarded a 
contract to the Boston Consulting Group to conduct the required 
independent study which will result in a report, due not later than 
September 1, 2015, that provides details and analysis on the following 
issues, including the impact on military families:

  --Using variable pricing in commissary stores to reduce the 
        expenditure of appropriated funds;
  --Implementing a program to make private label products available in 
        the commissary system;
  --Eliminating or reducing appropriated ``second destination 
        transportation'' funding for shipment of goods overseas;
  --Converting the defense commissary system to a nonappropriated fund 
        activity;
  --Assessing the impact that elimination or reduction of the 
        commissary subsidy would have on eligible beneficiaries.

    The Department's goal is to protect the value of the commissary 
benefit by maintaining 20 percent aggregate customer savings (as 
compared to commercial prices) on an average market basket of grocery 
items. The commissary's pricing strategy will be targeted in a manner 
to maximize the customer savings level and minimize the impact on the 
military family's budget.
    Question. Fort Meade is rapidly growing, with over 50,000 people 
working on Fort Meade every day. However, the Army only has 6,000 
Service Members at Fort Meade, and it does not recognize other tenants 
on the installation. Therefore, the Army only funds Fort Meade for 
6,000 people-- not 50,000 people--which has resulted in a $130 million 
O&M project backlog. This is a substantial problem that greatly 
contributes to deterioration and substandard maintenance funding for 
the installation. What can be done to ensure that the necessary funding 
needed to sustain operations at Ft. Meade--for all of the 50,000 people 
who actually work there--is provided for?
    Answer. The Army's official database of record for Installation 
population does recognize the Fort Meade workforce of 51,158 personnel, 
including over 40,000 military service members and government 
civilians. Within those numbers are over 100 Federal agencies and 
units, many of which are reimbursable to the Garrison for their 
facilities and services. In keeping with the Army's facilities 
sustainment, restoration and modernization practices applied across all 
its installations, these workforce figures are indeed being applied in 
determining Fort Meade facility funding requirements.
       c-130j basing at warfield air guard station (martin state)
    Question. The Air Force has stated it would like to divest the A-10 
by 2019, and has stated its intention to transfer from the A-10 to C-
130J's in Maryland in 2018. If A-10's are divested with no replacement, 
the Air Guard at Martin State will have no flying mission. This mission 
is a top priority for Maryland and the Air Force has promised to 
replace the A-10's with C-130J's. Can you confirm that the A-10's in 
Maryland will be replaced with C-130J's, and confirm when the Air Force 
will have a Bed Down plan for the location of these C-130J's?
    Answer. The fiscal year 2015 President's Budget submission replaces 
the A-10 Thunderbolt II aircraft assigned to the 175th Wing (ANG) with 
C-130J Super Hercules aircraft in fiscal year 2018. The fiscal years 
2016 President's Budget submission reaffirmed this position.
    Headquarters Air Force staff is working a transition plan with the 
Air National Guard for the bed down of C-130Js at Warfield Air Guard 
Station (Martin State Airport) once final A-10 retirement schedules are 
determined.
    Question. In December of 2014, the Department published its report 
on the ``Review of the Roles, Selection, and Evaluation of 
Superintendents of Military Service Academies.'' I am pleased that the 
Department worked to provide the important recommendations identified 
in this report. What are the plans to follow-up on these 
recommendations?
    Answer. The Department has directed the establishment of a Military 
Service Academy Superintendent working group that will be chaired by 
the Director for Senior Officer Policy. This working group will be 
comprised of members from each of the Services, and its principal task 
will be to review the seven recommendations and establish a plan to 
enhance the performance, development, and preparation of 
superintendents.
    The working group will focus on the following areas:

  --How to better prepare and train future superintendents for the 
        challenges of these critical leadership positions.
  --The potential for early confirmation for superintendent nominees to 
        permit more time for preparation and training between 
        nomination and the actual assignment.
  --Developing and adopting more deliberate selection criteria and 
        preparation processes.
  --How to continue strong, vital superintendent-Service military 
        leader relationships; build a cadre of quality superintendent 
        candidates; establish a more deliberate selection process for 
        nominees; and improve continuity and build more effective, 
        lasting relationships, possibly through longer tour lengths.

    Question. The Department just recently published its annual report 
on sexual assault in the military. The report shows, among other 
things, that retaliation remains a significant problem. I am deeply 
troubled that 62 percent of victims who report an assault face some 
type of retaliation, and strongly believe this is unacceptable. What 
are you doing to address retaliation against victims, besides 
collecting data?
    Answer. In both 2012 and 2014, 62 percent of Service women victims 
who said they filed an unrestricted report of sexual assault indicated 
that they perceived professional retaliation (32 percent), social 
retaliation (53 percent), adverse administrative actions (35 percent), 
or punishments for violations associated with the sexual assault (11 
percent). DOD survey responses on retaliation should not be viewed as 
an indicator of actionable offenses under military law. DOD asks about 
retaliation on surveys as a way to better assess victim well-being and 
to understand the stressors experienced following a report of sexual 
assault, not to establish a rate that would align with actionable 
offenses under military law. While victims certainly perceived 
alienation by peers and reprisal by other parties, these perceptions 
are only one piece of a criminal retaliation charge. Other factors, 
such as the intent of the individual suspected of reprisal and the 
behavior experienced by the victim must be evaluated before a criminal 
offense can be charged. Thus, the retaliation figure of 62 percent is 
an estimate from a survey that assesses victims' broad and unspecified 
perceptions.
    That said, the Department views retaliation as a significant 
concern and is committed to addressing retaliatory action, improving 
resources for victims, and providing tools for commanders to prevent 
and respond to retaliation. As such, I have directed a number of 
initiatives aimed at better understanding the problem and the most 
effective ways to combat it, including leadership actions, policy 
initiatives, and enhanced training. Below are specific examples of 
ongoing efforts reflecting the intensified focus on retaliation at 
every level across the Department:

  --The DOD Strategy.--Development of a Department-wide strategy to 
        prevent retaliation as a result of reporting of any crime, not 
        just sexual assault.
  --Review of policy.--The Department is conducting a systematic review 
        of retaliation allegations made to the Service commands and 
        Inspectors General to better assess the experience of 
        retaliation and identify potential points of intervention.
  --Survey/Data improvement.--The Department is modifying the questions 
        it asks in future surveys so as to be able better capture 
        victim perceptions of retaliation, as it is described in new 
        policy and law.
  --Training.--The Department has already implemented enhanced training 
        of first-line supervisors who work with our youngest troops--
        those at greatest risk for sexual assault--to teach the skills 
        needed to intervene early should they witness inappropriate or 
        retaliatory behavior. Additional training enhancements are 
        currently under review, such as augmenting the focus of 
        bystander intervention training to include intervening when 
        retaliation occurs.
  --Special Victims' Counsel/Victims' Legal Counsel Program.--The 
        newly-established Special Victims' Counsel Program attorneys 
        play an important role in protecting victim's rights and 
        reducing the negative impact of retaliation when it does occur. 
        These attorneys are trained to guide victims who are 
        experiencing retaliation to the appropriate reporting 
        authorities.
  --Awareness campaigns.--The Department is expanding its awareness 
        campaign on reporting options for those who experience 
        retaliation after making a report of sexual assault. One effort 
        underway is to include information on how to report retaliation 
        on the DOD Safe Helpline (expected to go live in June 2015).
  --Case Management Groups.--The Department is leveraging monthly case 
        management groups to actively inquire about retaliation alleged 
        by victims and response professionals, and forwarding 
        allegations to the proper authorities for investigation and 
        follow up.
  --Commander Oversight.--DOD has fully implemented Section 508 of the 
        Carl Levin and Howard P. ``Buck'' McKeon National Defense 
        Authorization Act for fiscal year 2015. This provision requires 
        all performance appraisals of commanding officers to address 
        the command climate established, in order to ensure that all 
        allegations of sexual assault are properly managed and fairly 
        evaluated, and that victims can report without fear of reprisal 
        or ostracism. Further, the Department is establishing new 
        procedures for commanders to regularly assess--and act on--all 
        reports of retaliation in any form from a victim, witness or 
        first responder, as well as identifying the mechanisms 
        available to commanders and creating action plans to address 
        retaliation within their units.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
    Question. The Department recently released a new report on sexual 
assault in the military, an issue that I feel very strongly about and 
have worked hard to address. While it is encouraging to see the 
estimated number of sexual assaults down, and reporting up, we must do 
more to protect our men and women in uniform. No servicemember should 
live in fear of sexual assault. I wrote several provisions in the 2014 
defense authorization bill to address this--including one that requires 
a comprehensive Special Victims' Counsel program in each service, to 
help victims get the support and legal advice they need.This program is 
a critical part of the progress we are seeing so far. SVCs have more 
than 90 percent approval, and demand for those services continues to 
rise. This program must be resourced to meet this increased demand.
    How many cases is each SVC expected to manage effectively, and how 
much additional funding and personnel are needed to meet the growing 
demand for these services?
    Answer. The number of cases that each victims'counsel can manage 
effectively depends on a number of factors, including case complexity, 
the counsel's training and experience, the counsel's existing caseload, 
the geographic locations of the victim and counsel, and the location of 
the hearings. Therefore, I will ensure each Service is properly 
resourced to provide victim counsel services in a method that works 
best for that Service. If the Department requires additional resource 
or support for this program, we will make it our priority to consult 
Congress.
    Question. The rates of sexual assault in the guard and reserves are 
very concerning. The latest sexual assault report says 85 percent of 
sexual assaults among reserve members involved another servicemember or 
took place in a military setting.
    How do you explain why rates are so much higher for guard and 
reserve members in military settings versus civilian settings?
    Answer. Most Reserve Component members who indicated on the 2014 
RAND Military Workplace Study experiencing a sexual assault in the past 
year said that the assault was by another member of the military or in 
a military setting. The study's results did not provide any further 
clarifying details to help explain this finding. We will follow up on 
this information in the Workplace and Gender Relations Survey of the 
Reserve Component to be conducted later this year.
    We agree the findings in the report are concerning. We have made 
great strides in facing what was once a silent problem and are 
committed to eliminating sexual assault from the DOD. While we are 
concerned at the amount of sexual assault that is being reported, we 
are encouraged that members are coming forward to report the crime more 
often, in both the active and reserve components. We take each report 
seriously and are making sure that members receive appropriate care and 
counseling and, with the member's consent, we are fully investigating 
the incident.
    Question. Malaria is a serious threat to our troops in many places 
around the world, as well as the local populations.In fact, in 2010 the 
Defense Department ranked malaria as the greatest infectious disease 
threat to U.S. forces. And in recent years we have seen drug resistant 
strains start to emerge.
    Please provide an evaluation of malaria's effect on current 
military operations.
    Answer. Military operations are impacted by malaria. The longer the 
Service member is present in endemic areas the greater they are at risk 
of acquiring malaria. Force protection must be considered when 
deploying to areas known to have malaria. Almost all cases of malaria 
can be prevented if these preventive measures are employed: avoiding 
geographic areas of risk, employing bed nets, residual pesticides, 
permethrin-treated uniforms, and chemoprophylaxis. In addition, Service 
members are at risk for a year afterwards as cases can have latent 
periods. This is why the Armed Services Blood Program places a 12 month 
restriction on voluntary blood donations if the Service member deploys 
to malaria-endemic areas. Malaria is endemic in over 100 countries 
throughout tropical and subtropical regions of the world. Therefore 
military planners must anticipate the geography-based presence or 
absence of the malaria threat and countermeasures implemented. Our 
Armed Forces have long had policies and prescribed countermeasures 
effective against vector-borne diseases such as malaria.
                                 ______
                                 
                Questions Submitted by Senator Tom Udall
    Question. Secretary Carter, how concerned are you about the 
shortfall in funds available for maintenance, in your opinion is this 
sustainable, and why is the Department of Defense shortchanging future 
readiness by proposing a decreased budget for operations and 
maintenance...specifically one which leaves a $220 million backlog in 
restoration and maintenance at White Sands?
    Answer. Yes, I am concerned about the risk the Department of 
Defense (DOD) is forced to accept in global infrastructure maintenance; 
but with the Budget Control Act (BCA) and the continued unwillingness 
of Congress to authorize a cost saving Base Realignment and Closure 
(BRAC) round, we really have no choice. The Department has, and would 
continue to, accept risk in facilities sustainment and maintenance in 
order to minimize risk in readiness. While the fiscal year 2016 budget 
request moves our investments, including maintenance, in our 
installations in the right direction, more needs to be done and it is 
essential that we amend the BCA caps so that we can achieve the defense 
funding levels necessary to properly support our installations.
    Congress could also help mitigate the long-term impacts of this 
underfunding by authorizing another round of BRAC as requested in the 
President's Budget. By reducing DOD infrastructure to better match our 
declining force structure, we can reduce our facility maintenance and 
out-year recapitalization requirements and rededicate savings resulting 
from a BRAC round on the infrastructure we really need to train and 
operate our forces.
    Question. Secretary Carter and General Dempsey, there has been a 
lot of attention to recent failures in the nuclear security enterprise. 
Both you and your predecessor have made it a point to once again make 
the strategic forces of the United States a priority. Would you agree 
that strong funding for the life extension programs, including the B61, 
are important and how would they be impacted if we were to allow 
sequestration to return?
    Answer. In PB16, the Department re-affirmed the nuclear enterprise 
as its number one priority, and invested accordingly to address long-
standing sustainment issues and to accelerate recapitalization. 
Sequestration-level funding would intensify existing shortfalls, delay 
recapitalization, and undermine our foundational nuclear deterrence 
capabilities.
    Question. Secretary Carter, New Mexico plays an important role 
ensuring that our Nation's nuclear deterrent remains safe, secure, and 
effective. One of the next big programs on the horizon is the Long 
Range Strike Bomber...And given past cost increases for major programs, 
I think it is extremely important that DOD get this one right...with 
regards to this program, how will you be working with the national labs 
to ensure the LRSB's specifications are compatible with current life 
extension programs, including the B61 LEP?
    Answer. The LRS-B program has been working closely with all the 
appropriate organizations to ensure compatibility with relevant life 
extension programs. The program has been engaged on multiple levels 
with STRATCOM, Air Force Global Strike Command, the Air Force Nuclear 
Weapon Center, B-61 LEP program, NNSA leadership and other Air Force 
and Department of Defense organizations involved in nuclear development 
efforts. As the program moves forward through the acquisition 
lifecycle, the program office will continue this interaction to ensure 
the applicable compatibility between life extension programs and LRS-B 
continues.
    Question. This panel has had a lot of questions about access to 
space, particularly with regards to heavy payloads. In New Mexico, 
Operational Responsive Space is working to decrease the need for heavy 
payloads, as it develops smaller satellite technologies to give the 
warfighter access to space based technologies without the need for an 
expensive launch or large satellite requiring years to develop. 
Secretary Carter, how does the Department of Defense intend to use the 
technologies developed by ORS, and will these smaller payloads help 
take the pressure off the increased need for heavy launch payloads?
    Answer. We do not anticipate significant changes to our heavy 
launch system requirements due to Operational Responsive Space (ORS)-
related activities. The ORS program office has a unique mandate and 
acquisition authorities with the goal to drive down cost and decrease 
delivery time for urgently needed space capabilities, thus enabling a 
broad range of replenishment and reconstitution options.
    Two examples where the Air Force looks to integrate ORS concepts 
are Weather System Follow-On and Space Based Space Surveillance Follow-
On.
    Question. Secretary Carter and General Dempsey. I have had a lot of 
conversations about 3D printing with the national labs and the 
potential for this future technology at the labs and the military. My 
understanding is that both the Navy and the Air Force are working to 
test this technology, specifically in the battlefield where replacement 
parts and other tools may not be easy to acquire. How do you see 3D 
printing changing the future of the battlefield, and is the military 
concerned that this technology could potentially be a force enabler for 
our military and adversaries?
    Answer. Services are actively pursuing, fielding, and demonstrating 
additive manufacturing, also known as 3D printing, as a means to 
increase readiness and agility by reducing acquisition lead times, 
cycle times, inventories and logistics footprint. Additive 
manufacturing has the potential to transform the supply chain by 
enabling on-demand manufacture or repair of critical parts at or near 
the battlefield. The Department of Defense is actively partnering with 
industry and academia to address intellectual property rights, cyber 
security, training, certifications and standards to determine an 
effective and affordable DOD strategy. Just as we recognize the 
potential value of additive manufacturing, our adversaries are also 
pursuing this technology.
    Question. Describe the role of the DOD Chief Information Officer 
(CIO) in the development and oversight of the IT budget for DOD. How is 
the CIO involved in the decision to make an IT investment, determine 
its scope, oversee its contract, and oversee continued operation and 
maintenance?
    Answer. The DOD CIO issues policy and guidance for the development, 
collection, and oversight of the Department's IT budget. Policy is 
codified in the DOD Financial Management Regulations, and annual IT 
Budget guidance is provided by the DOD CIO through the Director, Cost 
Assessment & Program Evaluation (CAPE) and Under Secretary of Defense, 
Comptroller (OUSD(C)) Integrated Program Budget Guidance and annual DOD 
CIO Guidance for Information Technology Budget Submissions.
    The CIO is an active participant in the Department's three major 
decision --making processes; specifically, the requirements process; 
the Planning, Programming, Budget and Execution (PPBE) system process; 
and the Defense Acquisition System (DAS). These processes are used to 
manage the Department's investments, including its IT investments.
    Question. Describe the existing authorities, organizational 
structure, and reporting relationship of the Chief Information Officer. 
Note and explain any variance from that prescribed in the newly-enacted 
Federal Information Technology and Acquisition Reform Act of 2014 
(FITARA, PL 113-291) for the above.
    Answer. The Department of Defense Chief Information Officer's (DOD 
CIO) reports directly to me and is the Principal Staff Advisor for 
information technology (IT) (including national security systems and 
defense business systems), information resources management (IRM) and 
efficiencies. The DOD CIO is responsible for all matters relating to 
the DOD information enterprise, including communications; spectrum 
management; network policy and standards; information systems; 
cybersecurity; positioning, navigation, and timing (PNT) policy; and 
the DOD information enterprise that supports DOD command and control 
(C2). The DOD CIO's authorities align and are consistent with the 
authorities and responsibilities prescribed by the Clinger-Cohen Act, 
as amended, FITARA and Title 10, United States Code.
    Question. What formal or informal mechanisms exist at DOD to ensure 
coordination and alignment within the CXO community (i.e., the Chief 
Information Officer, the Chief Acquisition Officer, the Chief Finance 
Officer, the Chief Human Capital Officer, and so on)?
    Answer. The Department of Defense has formal and informal 
mechanisms to ensure integration and alignment within and across the 
CXO communities. Formal mechanisms include participation by the various 
CXO communities in governance venues across the Department. These 
formal, chartered venues (see table below for a sampling of the primary 
functional venues) are chaired and co-chaired by the CXO officials as 
the functional leads, and include the other CXO officials as members. 
This broad representation and participation ensure that the views of 
CXO officials are shared during deliberative processes, which, in turn, 
promote strategic alignment across the Department. Moreover, these 
functional venues provide CXO-vetted products to the Deputy's 
Management Action Group (DMAG), which is the Deputy Secretary of 
Defense's primary management forum to support the Secretary of Defense. 
The DMAG prioritizes and deliberates issues that have resource, 
management, and broad strategic and/or policy implications.

------------------------------------------------------------------------
               CXO Officials                   Governance Forum by CXO
------------------------------------------------------------------------
DSD/Chief Management Officer (CMO/COO)....  DMAG (DSD serves as the
                                             Chair and the Vice Chairman
                                             of the Joint Chiefs of
                                             Staff serves as the Co-
                                             chair).
Deputy CMO................................  Defense Business Council
                                             (DCMO is a Co-chair)
                                             Financial Improvement and
                                             Audit Readiness Governance
                                             Board (DCMO is a Co-chair).
CIO DOD...................................  Defense Business Council
                                             (CIO DOD is a Co-chair) DOD
                                             CIO Executive Board
                                             (Chair).
USD(C)/CFO................................  Financial Improvement and
                                             Audit Readiness Board
                                             (USD(C)/CFO is a Co-chair).
USD(Acquisition, Technology, and            Defense Acquisition Board
 Logistics)/Defense Acquisition Executive.   (Chair).
USD(Personnel and Readiness)/Chief Human    Defense Human Resources
 Capital Officer.                            Board (Chair)
------------------------------------------------------------------------

    Another formal mechanism is the requirement for CXO officials to 
coordinate on DOD issuances, policies, and memoranda. As the heads of 
their respective functional domains, the CXOs are all formally 
chartered by the Secretary of Defense/Deputy Secretary of Defense, and 
are assigned policy and program responsibilities and functions, 
delegated specific authorities to enable the execution of their 
responsibilities, and directed to enter into relationships and 
engagements with other CXOs and Departmental organizations to ensure 
coordination and alignment of their interfacing equities. The DCMO, as 
the proponent for the DOD Issuances Program, manages and oversees the 
process to ensure that policy and procedural guidance has been properly 
reviewed and coordinated with the functional CXO communities, and 
issues have been appropriately adjudicated before finalization.
    Informal mechanisms that ensure coordination and alignment in the 
CXO community are the relationships and communications of and between 
the CXO officials and their staffs. Engagement at all levels, between 
senior officials, action officers, and subject matter experts across 
the various offices, is encouraged and expected in order to synchronize 
interrelated efforts across the Department, ensure alignment with 
strategic priorities, and develop integrated solutions for DOD senior 
leaders.
    Question. According to the Office of Personnel Management, 46 
percent of the more than 80,000 Federal IT workers are 50 years of age 
or older, and more than 10 percent are 60 or older. Just 4 percent of 
the Federal IT workforce is under 30 years of age. Does DOD have such 
demographic imbalances? How is it addressing them?
    Answer. The 80,000+ IT workers referenced by the Office of 
Personnel Management (OPM) are the Federal-wide population of the 2210 
IT Management series. This series is the largest IT/cyber occupation in 
the Federal Government, and DOD has almost 36,000 of the employees in 
this series (44 percent of the total Federal population). The Federal 
age demographics cited by OPM are virtually identical for the 
Department of Defense.
    The DOD typically hires experienced workers for the civilian 
component of its IT/cyber workforce (while the military provides a 
large source of younger, entry-level personnel). The two largest 
sources of hires into the civilian IT/cyber community come from our 
veteran population. For example, in fiscal year 2014, 608 military 
retirees and 1,365 prior military (non-retiree) personnel were hired 
into this occupation by DOD, comprising 69 percent of the 2210 series' 
hires by the Department for last year. These individuals provide a rich 
source of experience to the DOD civilian IT/cyber community as they are 
already familiar with the DOD environment and mission but they do skew 
the age demographics. Additionally, DOD does use internships, 
scholarship programs, and college recruitment programs to attract 
promising new talent to Federal service in the IT/cyber community. The 
Department is currently examining the feasibility of establishing a 
Cyber Workforce Development Fund which could be used to help attract 
and retain highly qualified individuals at all levels of experience.
    Question. How much of the DOD budget goes to Demonstration, 
Modernization, and Enhancement of IT systems as opposed to supporting 
existing and ongoing programs and infrastructure? How has this changed 
in the last 5 years?
    Answer. Development, Modernization, and Enhancement (DME) 
represented almost $10.5 billion or 28 percent of the total DOD IT 
budget submission for fiscal year 2016. Over the past 5 years, annual 
DME requests have decreased.
    Question. What are the 10 highest priority IT investment projects 
that are under development within DOD? Of these, which ones are being 
developed using an ``agile'' or incremental approach, such as 
delivering working functionality in smaller increments and completing 
initial deployment to end-users in short, 6-month timeframes?
    Answer. The Department has a number of high priority IT 
investments, which follow the Department's Better Buying Power (BBP) 
Initiatives. In the case of IT investments, BBP 3.0 expands upon 
efforts that were already underway, such as expanding the number of 
enterprise IT buys and negotiating enterprise licenses. The Department 
uses agile and incremental development approaches for its IT 
investments to deliver capabilities to the warfighter incrementally and 
with limited fielding decisions as appropriate.
    DOD's high priority IT investments include:

  --Joint Regional Security Stacks (JRSS).--JRSS are the first or 
        foundational phase of the Joint Information Environment (JIE), 
        are a regionally based, centrally managed rack of servers, 
        switches, and other equipment that are being implemented in a 
        phased or incremental approach to replace the current set of 
        separate, individualized, localized Service and Agency security 
        systems. The investment in JRSS will help to ensure that the 
        Department's facilities are using the same security 
        architecture and improve our overall cyber posture and enable 
        the operations commander and service partners to see a common 
        network picture.
  --Mission Partner Environment.--The Department is working to develop 
        a more commercially based and robust mission partner 
        environment/network. This approach will provide a more cost-
        effective, rapidly reconfigurable and multi-level data 
        protection network. It will provide full data media capability 
        to support operations in all environments, with the ability to 
        rapidly add and subtract mission partners. This is a top 
        requirement for all Combatant Commands, and will be fielded in 
        an incremental manner
  --Cloud computing investments.--Cloud computing plays a critical role 
        in the Department's IT modernization efforts. Our key objective 
        is to deliver a cost efficient, secure enough enterprise 
        environment that can readily adapt to the Department's mission 
        needs. We will use a hybrid approach to cloud that takes 
        advantage of all types of cloud solutions, provided by both 
        commercial providers and DOD Components, to get the best 
        combination of mission effectiveness and efficiency in a 
        flexible and agile manner.
  --Mobility.--DOD continues to evolve areas critical to mobility: the 
        networking infrastructure, devices, and applications. The goal 
        is to reduce the cost of accessing information while 
        integrating a security strategy that protects the data and 
        incorporates the most recent commercial technologies. Specific 
        examples of DOD mobility initiatives include: an effort to 
        simplify the ability to encrypt and authenticate email, 
        layering multiple commercial standards permitting smart phones/
        devices manufactured by vendors such as BlackBerry, Samsung and 
        Boeing, to handle secret data and the use of commercial cloud 
        providers to globally distribute and synchronize flight 
        information for the Air Force's Electronic Flight Bag program. 
        This enables the Department to deliver capability improvements 
        incrementally to users as the mobile solutions provide 
        cybersecurity sufficient for the data and mission.
  --Cybersecurity.--The Department's cyberspace operations investments 
        include a number of critical capabilities designed to identify, 
        remediate and protect against cyber threats. These include 
        enclave defense capabilities, zero day defense, and similar 
        tools. Our efforts in this area are continuous to rapidly 
        deliver the capabilities that defend against the relentless 
        evolution of our adversary's attacks.
  --Defense Healthcare Management System Modernization (DHMSM).--The 
        DHMSM program will replace the existing outpatient and 
        inpatient MHS clinical systems with a single, integrated 
        capability. This will improve interoperability and data sharing 
        to clinicians, purchased care providers, and Veterans Affairs. 
        The DHMSM deployment will enable the standardization of care 
        across the MHS to ensure that patients receive consistent, 
        medically and cost effective treatment. When fully operational, 
        DHMSM is expected to maximize medical readiness for our 
        military and support DOD's current population of more than 9.6 
        million beneficiaries and 153,000 MHS personnel.
  --Joint Enterprise License Agreements (JELA).--One of the ways the 
        Department has improved its investments in software is to enter 
        into Joint Enterprise License Agreements (JELA). These 
        contractual agreements allow DOD to leverage its size to get 
        better pricing on software products and purchase licenses when 
        needed. This is an integral part of the Department's Better 
        Buying Power 3.0 initiative. DOD is also working with the 
        General Services Administration and other Federal Agencies as 
        part of the President's Management Agenda to establish Federal-
        wide software purchasing agreements that should even further 
        reduce the price of software products.
  --Multi-Protocol Label Switching (MPLS) routers.--As the Department 
        implements the Joint Information Environment we are eliminating 
        outdated, unmaintainable circuit switches with multi-protocol 
        label switching (MPLS) routers that enable us to do everything 
        over Internet protocol (IP). This change improves security, 
        provides greater capability, and allows for better use of 
        existing network capacity.
  --Next Generation Enterprise Network (NGEN) Increment 1.--The 
        Department of the Navy's Next Generation Enterprise Network is 
        a true success story that is providing capability now. The NGEN 
        contract delivered $1.2 billion in real savings across the FYDP 
        as a result of leveraging competitive market forces to drive 
        down costs. The NGEN contract provides for an enterprise 
        network for both Navy and Marines and is an integral element of 
        delivering JIE and JRSS capabilities.
  --Joint IT Service Provider--Pentagon (JITSPP) Implementation.--This 
        is a phased implementation that will result in consolidation of 
        existing IT service providers into a single organization that 
        provides common IT services for the entire Pentagon. This 
        approach will provide for significant cost efficiencies and 
        commonality of IT services across DOD headquarters.
    Question. To ensure that steady state investments continue to meet 
agency needs, OMB has a longstanding policy for agencies to annually 
review, evaluate, and report on their legacy IT infrastructure through 
Operational Assessments. What Operational Assessments have you 
conducted and what were the results?
    Answer. The Department reviews its operational IT investments for 
business value, alignment with the overall architecture, return on 
investment, and efficiency & effectiveness as part of existing DOD 
processes. For example, the Defense Business Council serves as the 
Investment Review Board (IRB) for business systems, pursuant to section 
2222 of Title 10, U.S.C., and ensures that defense business system 
investments are aligned to the lines of business for the Department; 
supports measureable improvements to the Department's business 
objectives; and generates a measureable return on investment. Based 
upon the reviews, investments are designated for either continued 
operation and sustainment or retirement.
    Question. What are the 10 oldest IT systems or infrastructures 
within DOD? How old are they? Would it be cost-effective to replace 
them with newer IT investments?
    Answer. The following list identifies 10 of the oldest IT systems 
and whether or not the system is being replaced by other capabilities 
or systems:

------------------------------------------------------------------------
                                        Age in
               System                    Years         Future Plans
------------------------------------------------------------------------
General Accounting and Finance               55   No plans to be
 System--Reengineered.                             replaced at this
                                                   time.
Integrated Logistics Systems-Supply          51   Scheduled to be
 ILS-S.                                            replaced in 2020.
Mechanization Of Contract                    50   Scheduled to
 Administration Services (MOCAS).                  replacement.
Item Management Control System--IMCS         47   Scheduled to be
                                                   replaced in 2020.
Aircraft Structural Integrity                44   Scheduled to be
 Management Information Systems                    replaced in 2020.
 ASIMIS.
Acquisition and Due In System (ADIS)         43   Migrating in 2016.
Reparability Forecast Model System--         38   Scheduled to be
 RFM.                                              replaced in 2017.
Depot Maintenance Workload Planning          38   Scheduled to be
 and Control System--DMWPCS.                       replaced in 2017.
Personnel Budget and Analysis System         35   No plans to be
 Web--PBASWeb.                                     replaced at this
                                                   time.
MISTR Requirements Scheduling and            34   Scheduled to be
 Analysis System--MISTR.                           replaced in 2017.
------------------------------------------------------------------------

    Question. How does DOD's IT governance process allow for DOD to 
terminate or ``off ramp'' IT investments that are critically over 
budget, over schedule, or failing to meet performance goals? Similarly, 
how does DOD's IT governance process allow for DOD to replace or ``on-
ramp'' new solutions after terminating a failing IT investment?
    Answer. The governance process for IT systems is similar to that 
for major defense weapons systems. Information Systems that critically 
breach their cost, schedule or performance parameters are reviewed by 
the respective Milestone Decision Authority (MDA) for that investment 
in accordance with title 10 USC Chapter 144A (which establishes a 
reporting regime for the Major Automated Information System programs) 
and/or guidance in DOD Instruction 5000.02 (which governs Operation of 
the Defense Acquisition System for programs of all magnitudes). These 
reviews follow the basic tenets of capital planning and investment 
control, and are used by the decision authority to review cost, 
schedule, performance, and operational as well as technical risk as the 
basis for the decision. Two MAIS programs have been terminated after 
such reviews: the Virtual Interactive Processing System in December 
2012 and the Expeditionary Combat Support System (ECCS) in March 2013.
    In deciding to ``on-ramp'' a new investment after terminating a 
failing investment, the Department looks at root causes of the failure 
and puts corrective actions in place before initiating the replacement 
investment to address the needed capability.
    Question. What IT projects has the DOD decommissioned in the last 
year? What are DOD's plans to decommission IT projects this year?
    Answer. The following two tables provides a list of IT investments/
systems decommissioned last year and scheduled to be decommissioned 
this year.

                        DECOMMISSIONED LAST YEAR
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Combined Federated Battle Laboratories Network (CFBLNet):
    4EYES Enclave
    CISCO 7500 Routers
    DISN Video Services--Global (DVS-G)
    System Network Availability Performance Service (SyNAPS)
    Third Party Outpatient Collections System (TPOCS)
------------------------------------------------------------------------


                SCHEDULED TO BE DECOMMISSIONED THIS YEAR
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Interim DOD Enterprise Classified Travel Kit (iDECTK):
    DOD Mobility Classified Capability (DMCC) 1.0
    DISN Asynchronous Transfer Mode Services (DATMS)
    Combined Enterprise Regional
    Defense Collaboration Online (DCO)
    Patient Movement Items Tracking System (PMITS)
    Military Health System (MHS) Learn
    Army Knowledge Online AKO) email service
------------------------------------------------------------------------

    Question. The newly-enacted Federal Information Technology and 
Acquisition Reform Act of 2014 (FITARA, PL 113-291) directs CIOs to 
conduct annual reviews of their IT portfolio. Please describe DOD's 
efforts to identify and reduce wasteful, low-value or duplicative 
information technology (IT) investments as part of these portfolio 
reviews.
    Answer. FITARA includes language that allows the Department to use 
its existing processes to satisfy many requirements. The annual review 
of the Department's IT portfolio under FITARA is accomplished 
consistent with section 833 of Public Law 113-291 and section 2222 of 
title 10, United States Code, which requires that the Department 
annually review its business system portfolio investments. This process 
is used to ensure that business system IT investments are aligned to 
the Department's strategy, enable end-to-end integration, improve 
business operations and leverage the appropriate technology to deliver 
agile, effective, and efficient business solutions that support and 
enable the Warfighter. The DOD CIO and the DOD Chief Management Officer 
co-chair the Defense Business Council, which reviews these investments. 
The process is documented in the Department's ``Guidance for Review and 
Certification of Defense Business Systems'' and takes a functional 
portfolio-based approach in reviewing business systems to ensure 
performance, alignment with strategies, and eliminate duplication. The 
Department's March 2015 annual report to Congress on defense business 
operations includes additional information about the Department's 
efforts in this area.''
    Question. In 2011, the Office of Management and Budget (OMB) issued 
a ``Cloud First'' policy that required agency Chief Information 
Officers to implement a cloud-based service whenever there was a 
secure, reliable, and cost-effective option. How many of DOD's IT 
investments are cloud-based services (Infrastructure as a Service, 
Platform as a Service, Software as a Service, etc.)? What percentage of 
the DOD's overall IT investments are cloud-based services? How has this 
changed since 2011?
    Answer. Today, the Department is investing in six DOD provided 
cloud services: Armed Forces Billing and Collection Utilization 
Solution (ABACUS), DOD Enterprise Email (DEE), DOD Enterprise Portal 
Service (DEPS), Defense Collaboration Services (DCS), Global Content 
Delivery Service (GCDS), and milCloud. Today, DEE is supporting 
approximately 1.6M users. The Department is also making over 20 
different investments in several commercial cloud services including: 
Akamai's Content Delivery Service, Amazon's East/West US Public Cloud, 
Amazon's Government Community Cloud, Blackboard's Learning Management 
Cloud, Google Apps for Government, Google Apps for Education, IBM Cloud 
Services, Microsoft's Office365 Public Cloud, Microsoft's Office365 
Dedicated ITAR Private Cloud, Oracle's Service Cloud, and Schoology's 
Learning Management Cloud.
    Today, cloud investments only represent about 2 percent of the 
Department's IT budget. To accelerate adoption of commercial cloud 
services, the DOD CIO recently updated the Department's cloud policies, 
published the DOD Cloud Computing Security Requirements Guide, and 
provided Business Case Analysis guidance that requires new IT 
investment efforts to evaluate commercially provided cloud services as 
an option.
    Question. Provide short summaries of three recent IT program 
successes--projects that were delivered on time, within budget, and 
delivered the promised functionality and benefits to the end user. How 
does the DOD define ``success'' in IT program management? What ``best 
practices'' have emerged and been adopted from these recent IT program 
successes? What have proven to be the most significant barriers 
encountered to more common or frequent IT program successes?
    Answer. Success in delivery of IT capabilities is driven by 
executing on the basics: cost, schedule, and performance. It must be 
delivered on time, be delivered at an affordable price, and perform as 
required. Delivering IT capability requires competent IT program 
management and more importantly great contracting strategies and 
performance management. DOD uses commercial service providers to 
deliver many of its IT services. The days of everything being delivered 
in a DOD program of record where capabilities are cobbled together in 
unique solutions are past.
    One of our key priorities is implementation of the Joint Regional 
Security Stacks (JRSS). This is the foundation of the Joint Information 
Environment (JIE) initiative to replace our current Service- oriented 
and localized security architecture and systems with a set of servers, 
tools, and software that will provide better C2, more security. JRSS is 
a coordinated effort by the Military Services and the Defense 
Information Systems Agency to converge outputs from their individual 
``programs'' and deliver the improved enterprise networking that JIE 
represents. While this is not a traditional program, the fundamental 
changes represented by this effort demonstrate how DOD is improving the 
effectiveness and efficiency of delivering IT to the warfighter.
    The Department of the Navy's Next Generation Enterprise Network is 
a true success story that is providing capability now. The NGEN 
contract delivered $1.2 billion in real savings across the FYDP as a 
result of leveraging competitive market forces to drive down costs. The 
NGEN contract provides for an enterprise network for both Navy and 
Marines and is an integral element of delivering JIE and JRSS.
    Teleport Generation 3 which is managed by the Defense Information 
Systems Agency, is another example of a successful program. Teleport 
Generation 3 is delivering upgrades to our satellite ground station 
gateways that improves communications support in the Ultra High 
Frequency (UHF), Extremely High Frequency, military Ka and Commercial 
(i.e., C and Ku) SATCOM frequency bands and represents a ten-fold 
increase to the throughput and functional capabilities of these 
gateways.
    One of the barriers to more common or frequent IT program successes 
is the customization of software. In looking at programs that have gone 
awry in this area, invariably there has been over- customization of the 
COTS software to make the software fit existing business processes. Our 
focus is on doing the appropriate business process reengineering up 
front to minimize customization. We are seeing that pay off in complex 
programs like Army Integrated Pay and Personnel System and the Air 
Force Defense Enterprise Accounting and Management System (DEAMS).
    Question. Terry Halverson, the DOD Chief Information Officer (CIO), 
has outlined a vision for DOD use of cloud computing that empowers the 
military departments and components to procure their own cloud 
computing solutions. How will the implementation of this transition to 
cloud computing be rationalized across DOD to ensure that common 
standards, data portability and other enterprise-wide issues are 
properly managed and addressed?
    Answer. The Department, under the leadership of the DOD CIO, has 
established a comprehensive program to improve the interoperability and 
standardization of DOD IT capabilities and investments, to include 
those using cloud computing services. DOD and CIO policy is designed to 
implement a capability-focused, architecture-based approach for 
achieving DOD IT interoperability. These policies establish the 
procedures and responsibilities for identifying and implementing IT 
standards, and for sharing electronic data and IT services, including 
cloud computing technologies and services, within the Department.
    Question. In a November 2014 letter to GAO, the DOD Principal 
Deputy CIO wrote that the department plans to save $2.6 billion by 
fiscal year 2017 from consolidating data centers and that such savings 
``will increase to $4.7 billion in future years as efficiencies are 
gained.'' How many data centers have been closed to date? How much 
savings have been realized as a result? By what date does DOD expect to 
achieve $4.7 billion in savings?
    Answer. As of May 26, 2015, 488 data centers have been closed. DOD 
estimates that data center closures and efficiency achievement through 
fiscal year 2014 has resulted in $265 million of cumulative realized 
savings. DOD expects to achieve $4.7 billion in cumulative savings by 
the end of fiscal year 2019, contingent upon DOD Components achieving 
prescribed efficiencies by fiscal year 2018 as established by the DOD 
CIO in a Memorandum dated July 11, 2013 titled ``DOD Component Data 
Center Consolidation Implementation Plans''.
    Question. Of the 124 major IT investments DOD funds annually, only 
5 of these investments are currently reported as ``high risk'' on the 
Federal IT Dashboard. Given DOD's many challenges in the area of IT, is 
this an accurate reporting of the risk level of these investments? If 
not, what is a more accurate assessment of currently high risk IT 
investments?
    Answer. The risk levels reported on the Federal IT Dashboard 
accurately reflect program risk at the time the assessment was made. 
DOD reports its ratings twice a year, as agreed to with OMB. The 
ratings currently showing on the dashboard were made of 28 October 
2014, and are in the process of being updated.

                          SUBCOMMITTEE RECESS

    Senator Cochran. The subcommittee stands in recess.
    Secretary Carter. Thank you, Mr. Chairman.
    [Whereupon, at 12:20 p.m., Wednesday, May 6, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]