    [Senate Hearing 114-46]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 114-46
     .
       THE IMPACT OF THE BUDGET CONTROL ACT OF 2011 AND SEQUESTRATION ON
                               NATIONAL SECURITY

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

                                    HEARING

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                JANUARY 28, 2015

                                   __________

             Printed for the use of the Committee on Armed Services

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

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    95-604 PDF                       WASHINGTON : 2015

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                          COMMITTEE ON ARMED SERVICES

                         JOHN McCAIN, Arizona, Chairman

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

                       Christian D. Brose, Staff Director

                   Elizabeth L. King, Minority Staff Director

                                      (ii)

                                C O N T E N T S

                                   __________

                                january 28, 2015

                                                                       Page

    The Impact of the Budget Control Act of 2011 and Sequestration on
      National Security..............................................     1

    Odierno, GEN Raymond T., USA, Chief of Staff of the Army.........     4
    Greenert, ADM Jonathan W., USN, Chief of Naval Operations........    13
    Welsh, Gen. Mark A., III, USAF, Chief of Staff of the Air Force..    21
    Dunford, Gen. Joseph F., Jr., USMC, Commandant of the Marine
      Corps..........................................................    27
    Questions for the Record.........................................    77

                                     (iii)

       THE IMPACT OF THE BUDGET CONTROL ACT OF 2011 AND SEQUESTRATION ON
                               NATIONAL SECURITY

                                  ----------

                          WEDNESDAY, JANUARY 28, 2015

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 9:30 a.m. in room
    SD-106, Dirksen Senate Office Building, Senator John McCain
    (chairman) presiding.
        Committee members present: Senators McCain, Inhofe, Wicker,
    Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Lee,
    Graham, Reed, McCaskill, Manchin, Shaheen, Gillibrand,
    Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

           OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

        Chairman McCain. The hearing will come to order.
        I will ask all spectators who are here to observe the
    hearing today to observe the courtesy of allowing us to hear
    from the witnesses and for the hearing to proceed. Of course,
    if you decide to disrupt the hearing, as you usually do, we
    will have to pause until you are removed. I do not see what the
    point is, but I would ask your courtesy to the witnesses and to
    the committee and to your fellow citizens who are very
    interested in hearing what our distinguished panelists who have
    served our country with honor and distinction have to say. I
    hope you would respect that.
        So we will move forward.
        The Senate Armed Services Committee meets today to receive
    testimony on the impacts of the Budget Control Act of 2011
    (BCA) and sequestration on U.S. national security. I am
    grateful to our witnesses not only for appearing before us
    today but also for their many decades of distinguished service
    to our country in uniform. I also appreciate their sincere and
    earnest attempts over many years to warn Congress and the
    American people of what is happening to their Services, the
    brave men and women they represent, and our national security
    if we do not roll back sequestration and return to a strategy-
    based budget. We look forward to their candid testimony on this
    subject today.
        Such warnings from our senior military and national
    security leaders have become frustratingly familiar to many of
    us. Despite an accumulating array of complex threats to our
    national interests, a number of which arose after our current
    2012 strategy was developed and then adjusted in the 2014
    Quadrennial Defense Review (QDR), we are on track now to cut $1
    trillion from America's defense budget by the year 2021.
        While the Ryan-Murray budget agreement of 2013 provided
    some welcome relief from the mindlessness of sequestration,
    that relief was partial, temporary, and ultimately did little
    to provide the kind of fiscal certainty that our military needs
    to plan for the future and make longer-term investments for our
    national defense, and yet, here we go again. If we in Congress
    do not act, sequestration will return in full in fiscal year
    2016, setting our military on a far more dangerous course.
        Why should we do this to ourselves now? Just consider what
    has happened in the world in just this past year:
        Russia launched the first cross-border invasion of another
    country on the European continent in 7 decades.
        A terrorist army with tens of thousands of fighters, the
    Islamic State of Iraq and Syria (ISIS), has taken over a swath
    of territory the size of Indiana in the Middle East. We are now
    on track to having nearly 3,000 U.S. troops back in Iraq, and
    we are flying hundreds of airstrikes a month against ISIS in
    Iraq and Syria.
        Yemen is on the verge of collapse, as an Iranian-backed
    insurgency has swept into Sana'a and al Qaeda continues to use
    the country's ungoverned spaces to plan attacks against the
    West.
        China has increased its aggressive challenge to America and
    our allies in the Asia-Pacific region where geopolitical
    tensions and the potential for miscalculations are high.
        Of course, just last month, North Korea carried off the
    most brazen cyberattack ever on U.S. territory.
        Let us be clear. If we continue with these arbitrary
    defense cuts, we will harm our military's ability to keep us
    safe. Our Army and Marine Corps will be too small. Our Air
    Force will have too few aircraft, and many of those will be too
    old. Our Navy will have too few ships. Our soldiers, sailors,
    airmen, and marines will not get the training or equipment they
    need. It will become increasingly difficult for them to respond
    to any of a number of contingencies that could threaten our
    national interests around the world.
        We have heard all of this from our top military commanders
    before. Yet, there are still those who would say never fear.
    The sky did not fall under sequester. What a tragically low
    standard for evaluating the wisdom of Government policy.
        The impacts of sequestration will not always be immediate
    or obvious. But the sky does not need to fall for military
    readiness to be eroded, for military capabilities to atrophy,
    or for critical investments in maintaining American military
    superiority to be delayed, cut, or canceled. These will be the
    results of sequestration's quiet and cumulative disruptions
    that are every bit as dangerous for our national security.
        I will say candidly that it is deeply frustrating that a
    hearing of this kind is still necessary. It is frustrating
    because of what Dr. Ash Carter, President Obama's nominee for
    Secretary of Defense, said before this committee 2 years ago. I
    quote Dr. Carter.
        ``What is particularly tragic is that sequestration is not
    a result of an economic emergency or a recession. It's not
    because discretionary spending cuts are the answer to our
    Nation's fiscal challenge; do the math. It's not in reaction to
    a change to a more peaceful world. It's not due to a
    breakthrough in military technology or a new strategic insight.
    It's not because paths of revenue growth and entitlement
    spending have been explored and exhausted. It's purely the
    collateral damage of political gridlock.''
        I would also like to echo what General James Mattis told
    this committee yesterday: ``No foe in the field can wreck such
    havoc on our security that mindless sequestration is
    achieving.''
        America's national defense can no longer be held hostage to
    domestic political disputes totally separated from the reality
    of the threats we face. More than 3 years after the passage of
    the BCA, it is time to put an end to this senseless policy, do
    away with budget-driven strategy, and return to a strategy-
    driven budget. Our troops and the Nation they defend deserve no
    less.
        Senator Reed.

                     STATEMENT OF SENATOR JACK REED

        Senator Reed. Thank you very much, Mr. Chairman. Thank you
    for calling this very important hearing and for your very
    timely and insightful remarks.
        I would also like to welcome our witnesses and thank these
    gentlemen for their extraordinary service to the Nation and to
    the soldiers, sailors, marines, and airmen that they every day
    represent and lead. Thank you.
        This hearing takes place as the administration and Congress
    continue to wrestle with two intersecting policy problems and
    debate on how to solve them.
        Because of sequester, we have a strategic problem, which
    Senator McCain has illustrated very well. Every senior civilian
    and military leader in the Department of Defense (DOD) has told
    us that if defense budgets continue to be capped at
    sequestration levels, we will likely not be able to meet the
    national defense strategy without an unacceptable level of
    risk.
        As Senator McCain has indicated, we face a variety of new
    and continuing threats around the world, from the Ukraine to
    Syrian, to Yemen, and beyond. If we do not address the problem
    of sequestration, we will severely limit the range of available
    military options to address these threats and protect our
    national interests.
        For the last 3 years, in numerous rounds of congressional
    hearings and testimony, our witnesses have described the
    increased strategic risk and damaging impact of BCA top-line
    caps and sequestration restrictions on our military readiness,
    modernization, and the welfare of our servicemembers and their
    families. I am sure that we will hear a similar message today.
        Compromise and difficult choices will be required to
    provide sequestration relief for DOD and for other critical
    national priorities, including public safety, infrastructure,
    health, and education.
        Mr. Chairman, I know you are committed to working with our
    Budget Committee to find a way to work through these
    challenges, and I am eager to help in this effort. In the
    meantime, I look forward to the testimony of our witnesses.
        Thank you.
        Chairman McCain. Thank you, Senator Reed.
        Just for a moment, since a quorum is now present, I ask the
    committee to consider a list of 41 pending military
    nominations. All of these nominations have been before the
    committee the required length of time.
        Is there a motion to favorably report these nominations?
        Senator Reed. So moved.
        Chairman McCain. Second?
        Senator Manchin. Second.
        Chairman McCain. All in favor, say aye. [Chorus of ayes.]
        The ayes have it.
        [The list of nominations considered and approved by the
    committee follows:]
     Military Nominations Pending with the Senate Armed Services Committee
      which are Proposed for the Committee's Consideration on January 28,
                                     2015.
         1. In the Air Force, there are 31 appointments to the grade of
    brigadier general (list begins with Tony D. Bauernfeind) (Reference No.
    24).
         2. In the Air Force, there is one appointment to the grade of
    lieutenant colonel (Rodrick A. Koch) (Reference No. 73).
         3. In the Air Force, there is one appointment to the grade of
    lieutenant colonel (James F. Richey) (Reference No. 74).
         4. In the Marine Corps, there are three appointments to the grade
    of lieutenant colonel (list begins with Morris A. Desimone III)
    (Reference No. 78).
         5. In the Marine Corps, there are two appointments to the grade of
    lieutenant colonel (list begins with Steven P. Hulse) (Reference No.
    79).
         6. In the Marine Corps, there is one appointment to the grade of
    lieutenant colonel (Brian L. White) (Reference No. 81).
         7. In the Marine Corps, there are two appointments to the grade of
    lieutenant colonel (list begins with Steven R. Lucas) (Reference No.
    83).
        Total: 41.

        Chairman McCain. Welcome to all of our witnesses, and we
    will begin with you, General Odierno.

    STATEMENT OF GEN RAYMOND T. ODIERNO, USA, CHIEF OF STAFF OF THE
                                  ARMY

        General Odierno. Thank you, Chairman McCain, Ranking Member
    Reed, other distinguished members of the Senate Armed Services
    Committee. Thank you for allowing us the opportunity to talk
    about this important topic today.
        As I sit here before you today as sequestration looms in
    2016, I am truly concerned about our future and how we are
    investing in our Nation's defense. I believe this is the most
    uncertain I have seen the national security environment in my
    nearly 40 years of service. The amount and velocity of
    instability continues to increase around the world. The Islamic
    State in Iraq and the Levant's unforeseen expansion, the rapid
    disintegration of order in Iraq and Syria have dramatically
    escalated conflict in the region. Order within Yemen is
    splintering. The al Qaeda insurgency Shia expansion continues
    there and the country is quickly approaching a civil war.
        In north and west Africa, anarchy, extremism, and terrorism
    continue to threaten the interest of the United States, as well
    as our allies and partners.
        In Europe, Russia's intervention in the Ukraine challenges
    the resolve of the European Union and the effectiveness of the
    North Atlantic Treaty Organization.
        Across the Pacific, China's military modernization efforts
    raise concerns with our allies and our regional interests while
    the cycle of North Korean provocation continues to increase.
        The rate of humanitarian and disaster relief missions, such
    as the recent threat of Ebola, heightens the level of
    uncertainty we face around the world, along with constant
    evolving threats to the homeland.
        Despite all of this, we continue to reduce our military
    capabilities. I would like to remind everyone that over the
    last 3 years, we have already significantly reduced the
    capabilities of the U.S. Army and this is before sequestration
    will begin again in 2016. In the last 3 years, the Army's
    Active component end strength has been reduced by 80,000, the
    Reserve component by 18,000. We have 13 less Active component
    brigade combat teams. We have eliminated three active aviation
    brigades. We are removing over 800 rotary wing aircraft from
    the Army inventory. We have already slashed investments in
    modernization by 25 percent. We have eliminated our much-needed
    infantry fighting vehicle modernization program, and we have
    eliminated our Scout helicopter development program. We have
    significantly delayed other upgrades for many of our systems
    and aging platforms.
        Readiness has been degraded to its lowest level in 20
    years. In fiscal year 2013 under sequestration, only 10 percent
    of our brigade combat teams were ready. Our combat training
    center rotations for seven brigades were canceled, and almost
    over a half a billion dollars of maintenance has been deferred,
    both affecting training and readiness of our units. Even after
    additional support from the BBA, today we only have 33 percent
    of our brigades ready to the extent we would expect them to be
    if asked to fight. Our soldiers have undergone separation
    boards, forcing us to involuntarily separate quality soldiers,
    some while serving in combat zones.
        Again, this is just a sample of what we have already done
    before sequestration even kicks in again in 2016. When it
    returns, we will be forced to reduce another 70,000 out of the
    Active component, another 35,000 out of the National Guard,
    another 10,000 out of the Army Reserve. We will cut an
    additional 10 to 12 brigade combat teams. We will be forced to
    further reduce modernization and readiness levels over the next
    5 years because we simply cannot draw down end strength any
    quicker to generate the required savings.
        The impacts will be much more severe across our acquisition
    programs, requiring us to end, restructure, or delay every
    program with an overall modernization investment decrease of 40
    percent. Home station training will be severely underfunded,
    resulting in decreased training levels. Within our
    institutional support, we will be forced to drop over 5,000
    seats from initial military training, 85,000 seats from
    specialized training, and over 1,000 seats in our pilot
    training programs. Our soldier and family readiness programs
    will be weakened, and our investments in installation,
    training, and readiness facility upgrades will be affected,
    impacting our long-term readiness strategies.
        Therefore, a sustainable readiness will remain out of reach
    with our individual and unit readiness rapidly deteriorating
    between 2016 and 2020.
        Additionally, overall the mechanism of sequestration has
    and will continue to reduce our ability to efficiently manage
    the dollars we, in fact, do have. The system itself has proved
    to be very inefficient and increases costs across the board,
    whether it be in acquisition or training.
        So how does all of this translate strategically? It will
    challenge us to meet even our current level of commitments to
    our allies and partners around the world. It will eliminate our
    capability on any scale to conduct simultaneous operations,
    specifically deterring in one region while defeating in
    another. Essentially for ground forces, sequestration even puts
    into question our ability to conduct even one long, prolonged,
    multi-phased, combined arms campaign against a determined
    enemy. We would significantly degrade our capability to shape
    the security environment in multiple regions simultaneously. It
    puts into question our ability to deter and compel multiple
    adversaries simultaneously. Ultimately, sequestration limits
    strategic flexibility and requires us to hope we are able to
    predict the future with great accuracy, something we have never
    been able to do.
        Our soldiers have done everything that we have asked of
    them and more over the past 14 years, and they continue to do
    it today. Today our soldiers are supporting five named
    operations on six continents with nearly 140,000 soldiers
    committed, deployed, or forward-stationed in over 140
    countries. They remain professional and dedicated to the
    mission, to the Army, and to the Nation, with the very
    foundation of our soldiers and our profession being built on
    trust.
        But at what point do we, the institution, and our Nation
    lose our soldiers? trust to trust that we will provide them the
    right resources, the training and equipment, to properly
    prepare them and lead them into harm's way, trust that we will
    appropriately take care of our soldiers and their families and
    our civilians who so selflessly sacrifice so much? In the end,
    it is up to us not to lose that trust. Today they have faith in
    us, trust in us to give them the tools necessary to do their
    job. But we must never forget our soldiers will bear the burden
    of our decisions with their lives.
        I love this Army I have been a part of for over 38 years. I
    want to ensure it remains the greatest land force the world has
    ever known. To do that, though, it is our shared responsibility
    to provide our soldiers and our Army with the necessary
    resources for success. It is our decisions, those that we make
    today and in the near future, that will impact our soldiers,
    our Army, and the joint force and our Nation's security posture
    for the next 10 years. We do not want to return to the days of
    a hollow Army.
        Thank you so much for allowing me to testify today and I
    look forward to your questions.
        [The prepared statement of General Odierno follows:]
               Preapred Statement by GEN Raymond T. Odierno, USA
        Chairman McCain, Ranking Member Reed, and other distinguished
    members, thank you for inviting us to speak this morning about the
    impacts and challenges of sequestration on the military.
        I want to begin by thanking each member of the committee for their
    unwavering support and commitment to U.S. Army soldiers, civilians, and
    families, particularly while we remain committed around the globe with
    the specter of strategic uncertainty ever present. The Nation's
    investment in our Armed Forces over the past decade has proven decisive
    in ensuring the success of American service men and women to achieve
    our national security objectives.
        For nearly 4 years now, you have charged me with leading our
    Nation's Army and providing my best military advice. Sequestration is
    the single greatest barrier to the effectiveness of our Armed Forces--
    to its Training, Readiness, and Modernization. I assure you that ending
    sequestration is the most prudent measure we can take for ensuring that
    our military is able to meet the demands of global security now and in
    the future. Today, the Army is meeting every mission, just as it always
    has, but at a long-term cost to our people, our facilities, and our
    equipment.
                 consequences of fiscal year 2013 sequestration
        As I have already testified, the abrupt nature of sequestration in
    fiscal year 2013 has significantly impacted every aspect of the Army,
    from training to readiness to family programs. Although the Bi-Partisan
    Budget Act (BBA) gave us some relief from sequestration, the reduced
    spending levels in fiscal year 2014 and fiscal year 2015 have forced us
    to reduce our training, jeopardize readiness, defer needed maintenance
    upgrades, and delay or cancel much-needed procurement programs. Should
    sequestration or sequester funding levels return in fiscal year 2016,
    the Army will have to further limit the readiness of forces around the
    world while slashing Army modernization, extending and postponing
    maintenance cycles, and standing by as the conditions of our facilities
    deteriorate.
        Fiscal year 2013 sequestration compelled the Army to take drastic
    measures:

             Combat Training Center (CTC) rotations for seven
            brigade combat teams (BCT) were cancelled--the equivalent of
            two divisions--that were not slated to deploy to Afghanistan or
            serve in the Global Response Force. The seven BCTs funded for
            collective training at a CTC in preparation for an Afghanistan
            deployment were trained for the Train and Assist mission
            required for that theater; they were not prepared for any other
            contingency operation;
             Approximately $716 million of fiscal year 2013
            equipment reset (maintenance) was deferred into fiscal year
            2014 and fiscal year 2015 and contributed to a backlog of 172
            aircraft awaiting maintenance;
             The reset of nearly 700 vehicles, almost 2,000
            weapons, over 10,000 pieces of communications equipment, Army
            Prepositioned Stocks and numerous doldier equipment and
            clothing items was postponed;
             In our aviation program, procurement of a new Armed
            Aerial Scout helicopter could not be afforded requiring the
            development of new organizational concepts to mitigate our
            shortfalls in Aerial Reconnaissance;
             Implementation of the Aviation Restructure Initiative;
             Modernization of our Apache helicopters was delayed
            from fiscal year 2013 to fiscal year 2014 and fiscal year 2015;
             System upgrades for unmanned aerial vehicles were
            delayed and cancelled;
             Modernization of Air Defense Command and Control
            systems were delayed at a time North Korea risks increased in
            North East Asia;
             New basic research grants in fiscal year 2013 and
            affected grants at more than 120 universities in 38 States were
            halved;
             From the end of fiscal year 2013 through fiscal year
            2014, boards convened to separate up to 30 percent of the
            captains from year groups 2006, 2007, and 2008, the majority of
            whom have served multiple deployments in combat;
             Approximately 197,000 civilian employees were
            furloughed, 48 percent of whom are Veterans, forcing them to
            take a 20-percent pay cut for 6 weeks; and
             Base sustainment funds were reduced by $2 billion, a
            70 percent drop from historic levels of funding.

        In sum, the Army has adjusted to the realities of sequestration and
    sequestration level-funding since fiscal year 2013. But despite our
    expectations, the demands for Army forces have increased rather than
    decreased around the world. In my 38 years of service, I have never
    seen a more dynamic and rapidly changing security environment than the
    one we face now. We no longer live in a world where we have the luxury
    of time and distance to respond to threats facing our Nation. Instead,
    we face a diverse range of threats operating across domains and along
    seams--threats that are rapidly changing and adapting in response to
    our posture.
            sequestration in an evolving global security environment
        As the Army draws down, we have had to reduce and reorganize our
    force structure and involuntarily separate quality soldiers, including
    some while they were serving in a combat zone. In the last 12 months,
    we reduced the size of the Active component from 532,000 to 503,000,
    with end strength set to fall to 490,000 in fiscal year 2015; and then
    to 450,000. Similarly, the end strength in our Army National Guard is
    set to fall to 335,000 and the Army Reserve to 195,000. But if
    sequestration returns, we will need to reduce end strength even further
    to 420,000 in the Active component by fiscal year 2020; and 315,000 in
    the National Guard and 185,000 in the Army Reserve, both by fiscal year
    2019. Yet, the reality we face is that the demand for Army forces
    throughout the world is growing while the size of the force is
    shrinking.
        Today, we are increasingly called upon to meet the demands of
    combatant commanders. We continue to support our partners in
    Afghanistan. We have returned to Iraq to advise and assist Iraqi
    Security Forces as they fight the Islamic State of Iraq and the Levant
    (ISIL). We have deployed forces to Jordan and throughout the Middle
    East, where terrorism continues to spread and destabilize the region.
    In West Africa, more than 2,000 soldiers are providing humanitarian
    assistance to combat the Ebola epidemic, while another 1,000 soldiers
    are actively engaged in supporting partners as they combat extremism in
    the Horn of Africa. In Europe, Army forces have been deployed to
    Poland, Estonia, Latvia, and Lithuania since last spring to counter
    Russian aggression and assure our European allies. We stand beside
    these Allies who have recently been shaken by attacks in Paris. Across
    the Pacific, thousands of Army forces are supporting operations whether
    in Thailand, the Philippines, or Malaysia; Australia, Indonesia, or
    Korea. Around the world, we are training alongside allies and partners
    to help them develop professional and capable armies; and at home we
    are supporting civil authorities while defending our critical networks
    against cyber attacks.
        With each one of these diverse missions, units rely on tailored
    teams of experts, logistics capabilities, transportation, intelligence,
    and communication support to accomplish the mission. In sum, we remain
    fully engaged with nearly 140,000 soldiers committed, deployed, or
    forward-stationed conducting 5 named operations on 6 continents in
    nearly 140 countries, with 9 of our 10 division headquarters employed
    across the globe. But in spite of the range of threats facing our
    Nation, sequestration remains the law of land, and we are reducing our
    capacity and capability.
                          rethinking past assumptions
        For the past 3 years, we have developed several budget strategies
    in response to fiscal constraints that we knew we were going to face.
    In 2012, we worked very hard on drafting strategic guidance within the
    Pentagon based on the budget prior to sequestration--guidance that was
    approved by the President and discussed with Congress.
        We made some assumptions in that budget that must now be revisited.
    We assumed we could accept risks in Europe. Now, we face major security
    issues in Europe ranging from increasing Russian aggression to a rise
    in soft target attacks by terrorist networks. We made decisions based
    on the fact that we were coming out of Iraq and Afghanistan and did not
    anticipate sending people back into Iraq. We made an assumption that
    although we knew we had a long fight against extremist organizations
    around the world, we could focus our budget primarily on defeating al
    Qaeda. We now have emerging extremist networks that are destabilizing
    regions around the world in ways we did not foresee. Over the last
    year, we witnessed the growing threat and gruesome toll of ISIL.
        We assumed that future conflicts will be short in duration. But the
    threats we face today cannot be solved quickly. Defeating ISIL will
    require years of sustained international commitment. Without persistent
    pressure and focus, groups such as ISIL will continue to ravage
    populations and undermine regional stability. So we must recognize that
    the operating environment has changed. It is important to now have a
    new discussion as we consider the impacts and potential risks of
    sequestration based on the world we live in and not the one we wish it
    to be.
        With an increase in threats around the world that have rendered
    some of our planning assumptions optimistic, we must acknowledge that
    the fiscal year 2016 post-sequestration spending cap, which was set
    almost 4 years ago, has not kept pace or accounted for an increasingly
    complex and dangerous world. We are now operating on multiple
    continents simultaneously. With the velocity of instability increasing
    around the world, continuing unrest in the Middle East, and the threat
    of terrorism growing rather than receding--witness the recent tragedies
    in Paris and Nigeria--now is not the time to be dramatically reducing
    capability and capacity.
        If we are forced to take further endstrength reductions beyond the
    planned levels in the President's budget due to sequestration, our
    flexibility deteriorates, as does our ability to react to strategic
    surprise. We are witnessing firsthand mistaken assumptions about the
    number, duration, location, and size of future conflicts and the need
    to conduct post-stability operations. These miscalculations translate
    directly into increased military risk.
                       long-term impacts of sequestration
        A return to sequestration-level funding would require the Army to
    size and equip the force based on what we can afford, not what we need,
    increasing the risk that when called to deploy, we will either not have
    enough soldiers or will send soldiers that are not properly trained and
    equipped. As I have stated before, if the discretionary cap reductions
    from sequestration occur, the Army will be at grave risk of being
    unable to fully execute the Defense Strategic Guidance requirements.
        In fiscal year 2014, we operated with almost $10 billion less in
    funding than in fiscal year 2012, which is a major reduction. The 2014
    budget, with the support of Congress, provided us some relief while
    enabling us to reinvest in readiness. But in fiscal year 2015, we have
    significantly less funding than we executed in 2014 and frankly we are
    going to be challenged to maintain the readiness of our force. Any
    readiness we do generate in fiscal year 2015 is coming at the expense
    of our long-term modernization and sustainment. Future reductions
    devastate the delicate balance between end strength, readiness, and
    modernization. Although the 2014 Bipartisan Budget Agreement and
    Overseas Contingency Operations (OCO) funding provided some welcome
    relief in fiscal year 2014 and fiscal year 2015, sequestration has
    debilitated readiness and severely reduced modernization and manpower.
    The Army has in effect mortgaged its future to buy back partial
    readiness today.
        Through fiscal year 2015 to fiscal year 2018, as we draw down and
    restructure the Army into a smaller force, the Army will have
    significantly degraded readiness and extensive modernization program
    shortfalls. The Army will only start to regain balance between end
    strength, readiness, and modernization in fiscal year 2020, albeit for
    a much smaller Army--not until fiscal year 2023 do we begin to achieve
    required readiness and reinvest in modernization programs. Until then,
    we will have to undertake even more significant reductions in force
    structure and end strength at the cost of readiness and modernization,
    which will further frustrate our ability to fully execute the defense
    strategy.
    Force Structure and End Strength
        The Army is preparing to drawdown to 980,000 (450,000 Active
    component, 335,000 Army National Guard, and 195,000 U.S. Army Reserve).
    But if sequestration returns, Total Army end strength will fall an
    additional 60,000 to 920,000 (420,000 Active component; 315,000 Army
    National Guard; 185,000 U.S. Army Reserve). The impacts of these
    reductions will be spread across the Total Army. These are not cuts we
    want to make but rather cuts we are compelled to make.
        We have already cut 11 BCTs from our force structure, and we will
    reduce an additional 4 Active component BCTs from the fiscal year 2015
    total of 32 (to 28) to achieve a 450,000 Active component force. But,
    despite operational requirements to support the strategic guidance, a
    return to sequestration will cut another 2 BCTs (to 26) from the Active
    component and 2 BCTs (to 24) from the Army National Guard; as well as
    associated enablers.
        The Army has to date worked deliberately to mitigate the impacts of
    sequestration-level funding on U.S. installations by cutting Europe and
    Korea-based forces and enlarging U.S.-based BCTs. However, despite
    efforts to implement these efficiencies, we are now compelled to reduce
    military and civilian personnel at U.S. installations across the
    country. We are reducing the size of every headquarters by 25 percent
    by fiscal year 2019. Duty positions and personnel requirements at every
    installation will be reduced to mission critical levels only. Across
    the Army, the impacts will be broad and deep.
        The Army released a Supplemental Programmatic Environmental
    Assessment (SPEA) assessing the impacts of sequestration driving Active
    component end strength to 420,000 soldiers; it identified 30
    installations with the potential to lose 1,000 or more Active component
    soldiers and Army civilians. These force cuts have severely impacted
    communities across the United States. The breadth and adverse effects
    of future force cuts and forced involuntary separations of thousands of
    soldiers will accelerate under full sequestration each year through
    fiscal year 2020.
    Readiness
        To maintain a high level of sustained readiness, it is critical
    that the Army receive consistent and predictable funding. Sequestration
    puts the Army on a path of accelerated and much deeper cuts to our
    forces while debilitating readiness and reducing modernization and
    manpower. Funding fluctuations force the Army to train and maintain the
    force in fits and starts, which is cost inefficient and damaging to
    long-term readiness.
        The impacts of continued sequestration will endure for at least a
    decade. It is going to be the next Chief and the Chiefs after that who
    must respond to the long-term and hidden impacts of sequestration.
    Readiness is not something that we can just fund piecemeal--once in a
    while and year to year. It has to be funded consistently over time. If
    not, it is fleeting, and it goes away. As we approach 2016, we can't
    take end strength out any faster without impacting our ability to
    conduct operations already committed. The Army will only be able to
    meet priority Global Force Management missions, and must rely on OCO
    funding to maintain any additional readiness for emergent needs. Under
    sequestration, sustainment readiness remains extremely reliant on OCO
    funding to mitigate risk to the program. In fiscal year 2013, the Army
    deferred $323.3 million in Depot Maintenance and was only recently
    funded through the Army's fiscal year 2015 OCO submission. The Army
    must also accept additional risk by deferring the emplacement of the
    Southwest Asia Army Prepositioned Stocks (APS) Fires and Sustainment
    brigades, an important element of the Army's revised APS strategy, for
    2 years. The rolling sequestration impacts on readiness thus handcuff
    our strategic flexibility.
        The Bipartisan Budget Act allowed us to buy back some training
    readiness in 2014 and increased funding for some training support
    system enabling capabilities. In fiscal year 2014, the Army completed
    19 rotations at the CTCs, including 6 rotations for deploying BCTs and
    13 decisive action training rotations (12 Active component and 1
    Reserve component BCTs). We restored two of four cancelled CTC
    Rotations. But due to sequestration, the Army cancelled two Reserve
    component rotations. Comparatively, even though we received some relief
    from sequestration in fiscal year 2014 and fiscal year 2015, just a
    third of our BCTs--23 of 66--are trained in their core mission
    capabilities in Decisive Action and Unified Land Operations. Reducing
    CTCs erodes the capacity of our formations from conducting Combined
    Arms Maneuver. CTCs are the culmination of a comprehensive training and
    readiness cycle for our BCTs, enabling them to deploy worldwide at a
    moment's notice.
        Although the Army attempts to mitigate the impacts on training
    readiness, we must continue to implement the Contingency Force model of
    fiscal year 2015 in order to maintain readiness for the 24 of 60 BCTs
    that will receive sufficient funding to conduct training at CTCs and
    home station. The remaining 36 BCTs will be limited to minimum
    Individual/Crew/Squad resourcing levels through sufficient Training
    Support Systems (TSS). In short, sequestration forces the Army to
    ration readiness. But regardless of funding levels, we have committed
    to keeping CTCs a priority. That means our home station training goes
    unfunded except for brigades going to CTCs.
        At the soldier level, Institutional Training will also take a
    significant reduction that will take years to recover. Already
    strained, the Army will further reduce Specialized Skill Training by
    85,007 seats (65 percent drop) and fund only the most critical courses
    resulting in 47,659 seats funded out of 199,212 seats (23.9 percent).
    Furthermore, this causes a training backload that will take years to
    reduce, hindering units' abilities to train and negatively affecting
    unit readiness. Ultimately, this further reduces the Army's ability to
    meet combatant commander needs for critical capabilities and skills.
        Installations across the Army where soldiers train and families
    live are severely impacted under current law. To contain the impacts of
    sequester-level funding, we have assumed significant risk within
    installations by relegating the impacts to installation support. These
    impacts will be further magnified as we mitigate readiness shortfalls.
    If sequestration level funding returns in fiscal year 2016, Base
    Operations Support will be decreased by $1 billion. No installation
    will be untouched by the reductions. This reduction will eliminate jobs
    and contract funding for grounds maintenance, pest control, custodial
    services, and refuse collection at all garrisons. Family programs, such
    as child and youth services and MWR services, will have to be reduced
    or fees increased to absorb this reduction.
        The reduced funding levels required by sequestration, should it
    occur again in fiscal year 2016, would only afford funding for life,
    health, and safety issues. The costs accumulate and for every year of
    sequestration level funding, it takes 2-3 years to address facility
    maintenance backlogs with facility sustainment reduced by over $750
    million. The cuts also reduce funding available for installation
    security by $162 million, directly reducing the capability of security
    forces at all installations worldwide and resulting in a loss of
    uniformed personnel available for other missions as they assume the
    critical base security role. Network Services and information assurance
    will have to be reduced by almost $400 million. This reduction will
    decrease the Army's ability to protect itself from cyber attacks across
    all spectrums. The fact is that traditional efficiency-seeking
    initiatives are not keeping pace with the decline of spending power in
    the defense budget.
    Modernization
        The Army has already undertaken significant cost cutting efforts
    and reduced personnel and equipment requirements during the first 2
    years of sequestration. In the triad of impacts to sequestration, Army
    modernization suffers the most. Modernization accounts have been
    reduced by 25 percent and every program affected; maintenance deferred;
    and the defense industrial base increasingly skeptical about investing
    in future innovative systems needed to make the force more agile and
    adaptive.
        As part of the balancing process, the Army has already made
    difficult choices in dropping the Armed Aerial Scout, Unmanned Ground
    Vehicle upgrades, the Mounted Soldier System, and Ground Combat Vehicle
    program. Under sequestration, planned upgrades to our current systems,
    such as UH-60 Blackhawk, Abrams, Bradley, and Stryker would be reduced
    or slowed (e.g. Stryker DVH upgrades will cease) leaving our soldiers
    more vulnerable, especially if deploying as part of a smaller force
    where technology optimizes soldier performance and capabilities. Over
    270 acquisitions and modernization programs have already been impacted
    by sequestration, and more than 137 additional programs may also be
    affected under continued sequestration.
        The Army is unable to protect upgrades and procurement on top of an
    already depleted capital investments portfolio at sequestration level
    funding. These modernization disruptions will stop development and
    production in critical programs that enable a smaller force to
    accomplish diverse missions. Under sequestration, the Army will have to
    stop the 4th Double-V Hull Brigade conversion; slow the Patriot system
    upgrade; halt the procurement of one new MQ-1C Gray Eagle Company and
    the accelerated fielding of another, both of which are needed to
    address the increased UAV demand in Syria and Iraq; delay the Aerial
    Intelligence Surveillance and Reconnaissance 2020 strategy by several
    years; reduce and extend the active electronically scanned array radar
    development; and delay development of Radar-on-the-Network for Patriot
    and Terminal High Altitude Area Defense-integration until fiscal year
    2022, which is a vital capability protecting our homeland from missile
    threats.
        In fiscal year 2014, we also continued our Aviation Restructuring
    Initiative. Our current aviation structure is unaffordable, so the
    Army's plan avoids $12.7 billion in costs while sustaining a modern
    fleet across all components, although there is no funding for an Armed
    Aerial Scout replacement. We cannot afford to maintain our current
    aviation structure and sustain modernization while providing trained
    and ready Aviation units across all three components. Therefore, we are
    supporting the comprehensive review of our strategy. ARI will
    ultimately allow us to eliminate obsolete airframes, sustain a
    modernized fleet, and reduce sustainment costs while maintaining all
    aviation brigades in the Reserve component.
        Modernization enables a smaller, agile, and more expeditionary Army
    to provide globally responsive and regionally engaged forces
    demonstrating unambiguous resolve. But sequestration adversely impacts
    the Army's ability to modernize and field critical capabilities that
    improve operational readiness of aging equipment. Predictable and
    consistent funding is required to modernize on the current timeline,
    meet the evolving threat, and fully execute Defense Strategic Guidance
    requirements. The cumulative cuts in modernization programs threaten to
    cede our current overmatch of potential adversaries while increasing
    future costs to regain or maintain parity if lost.
    Army Operating Concept: Win in a Complex World
        Even as the Army confronts the many challenges wrought by
    sequestration, we continue to seek efficiencies while adapting to the
    complexities of an evolving and unstable security environment. It is
    imperative that our Army adapts to the future Joint operating
    environment, one that consists of diverse enemies that employ
    traditional, unconventional, and hybrid strategies which threaten U.S.
    security and vital interests. In October of last year, we introduced
    the new Army Operating Concept, Win in a Complex World. This concept
    recognizes the changing world around us.
        The Army Operating Concept reinforces our five strategic
    priorities:

        1.  Develop adaptive Army leaders for a complex world;
        2.  Build a globally responsive and regionally engaged Army;
        3.  Provide a ready and modern Army;
        4.  Strengthen our commitment to our Army profession; and
        5.  Sustain the premier All-Volunteer Army.

        The Army Operating Concept describes the Army's contribution to
    globally integrated operations. It recognizes the need for Army forces
    to provide foundational capabilities required by the combat commanders
    and to synchronize and integrate effects across land and from land into
    the air, maritime, space, and cyberspace domains.
        The Army Operating Concept ensures that we are prepared to lead
    Joint, Interorganizational, and Multinational Teams in complex security
    environments through a dedicated ``Campaign of Learning'' under Force
    2025 Maneuvers to assess new capabilities, design, and doctrine. This
    enables expeditionary capabilities and enhances agility. We are
    assessing key capabilities such as manned-unmanned teaming, operational
    energy and expeditionary command posts. The Army Operating Concept
    represents a cost-effective way to enhance readiness, improve
    interoperability, and modernize the force. It is also a cost-effective
    way to assess and demonstrate joint and multi-national interoperability
    and readiness.
        We are rethinking how the Army operates to ``Win in a Complex
    World,'' and we ask Congress to enable us to adapt to meet what is
    demanded of us at home and abroad.
                              congressional action
        As I have detailed above, the impacts of sequestration today and in
    the near future continue to be bleak. If Congress does not act to
    mitigate the magnitude and method of the reductions under the
    sequestration, the Army will be forced to make blunt reductions in end
    strength, readiness, and modernization. We cannot take the readiness of
    our force for granted. If we do not have the resources to train and
    equip the force, our soldiers, our young men and women, are the ones
    who will pay the price, potentially with their lives. It is our shared
    responsibility to ensure that we never send members of our military
    into harm's way who are not trained, equipped, well-led, and ready for
    any contingency to include war. We must come up with a better solution
    than sequestration.
        As Congress continues to work through the challenges of passing a
    budget and of confronting sequestration, we ask that you consider the
    following actions to allow us to deal with these cuts in a cost-
    effective way that meets strategic demands.
    Relief from Sequestration
        Relief from sequestration's immediate impacts has already proven
    effective, but under current law, there is no flexibility within the
    budget to adjust to these effects. The fiscal year 2014 Balanced Budget
    Act resulted in the Army managing the impacts to which I testified in
    November 2013. Without relief from sequestration, the Army cannot meet
    defense strategic requirements, and we will be on a path to a hollow
    Army.
    Predictable Funding
        Sequestration and continuing resolutions disaggregate Army budgets
    and make responsible planning almost impossible. Funding fluctuations
    force the Army to train and maintain the force in fits and starts,
    which is cost inefficient and damaging to long-term readiness. As a
    result, things cost more and take longer to get. Modernization efforts
    are disrupted and training is inefficient. Predictable funding enables
    the Army to minimize costs by sustaining training across the Total Army
    at home-station; and by maximizing agility and adaptability at combined
    arms training exercises, and as part of other joint, multinational
    exercises.
    Support for Cost-Saving Reforms
        Sequestration's debilitating impacts will be compounded if we are
    denied the flexibility to manage these smaller budgets. The Army has
    made tough choices and needs congressional support for compensation
    reform, force restructuring, and a cost-saving Base Realignment and
    Closure (BRAC).
    Compensation Reform
        We are extremely grateful for the high quality care and
    compensation our Nation has shown to our service men and women over the
    last decade. Military manpower costs remain at historic highs and
    consume 46 percent of the Army budget. As we go forward, we must
    develop compensation packages that reduce future costs but at the same
    time recognize and reward our soldiers and their families for their
    commitment and sacrifice. If we do not slow the rate of growth of
    soldier compensation, it will consume a higher, disproportionate
    percentage of the Army budget.
    Force Restructuring
        As we move forward, the shaping and restructuring of the Total Army
    is necessary to ensure we have the right mix of talent and skills to
    support our Army for the future. These are crucial to us in order to
    maintain our professional and capable uniformed and civilian workforce.
    BRAC
        To offset the wide impact of sequestration, the Army supports
    another round of BRAC in fiscal year 2019. As the Army's end strength,
    force structure, and funding decline, hundreds of millions of dollars
    are wasted maintaining underutilized buildings and infrastructure at
    installations we no longer need. If we do not make the tough decisions
    necessary to identify inefficiencies and eliminate unused facilities,
    we will divert scarce resources away from training, readiness, and
    family programs, and the quality of our installation services will
    suffer.
                                   conclusion
        We are developing a leaner, smaller Army that remains the most
    highly-trained and professional All-Volunteer land force in the world;
    one that is uniquely organized with the capability and capacity to
    provide expeditionary, decisive landpower to the Joint Force, and is
    ready to perform the range of military operations in support of
    combatant commanders to defend the Nation and its interests at home and
    abroad, both today and against emerging threats.
        The choices we must make to meet sequestration-level funding are
    forcing us to reduce our Army to a size and with limited capabilities
    that I am not comfortable with. If we follow this path to its end, we
    will find a hollow Army. For those that present the choice as one
    between capacity and capability, I want to remind them that for the
    Army, soldiers are our capability. The Army must train and equip
    soldiers to achieve decisive strategic results on the ground. If the
    funding dictates a smaller Army, then we must be prepared for both
    reduced capacity and reduced capability.
        If we do not have the resources to train and equip the force, our
    soldiers, our young men and women, are the ones who will pay the price,
    potentially with their lives. The lack of funding for readiness places
    the burden of our decisions on the shoulders of our soldiers. I have a
    great concern about that burden. It is our shared responsibility to
    ensure that we never send members of our military into harm's way who
    are not trained, equipped, well-led, and ready for any contingency, to
    include war.
        Today, we have the best Army in the world because we stand on the
    shoulders of those who came before us. It is our charge, Congress and
    DOD working together, to ensure that by the end of this decade, we
    still have the best Army as part of the greatest Joint Force in the
    world. Thank you for allowing me to testify today and for listening to
    our concerns.
        The strength of our Nation is our Army.
        The strength of our Army is our Soldiers.
        The strength of our Soldiers is our Families.
        This is what makes us Army Strong!

        Chairman McCain. Thank you, General.
        Admiral Greenert.

      STATEMENT OF ADM JONATHAN W. GREENERT, USN, CHIEF OF NAVAL
                               OPERATIONS

        Admiral Greenert. Chairman McCain, Ranking Member Reed, and
    distinguished members of the committee, thank you for the
    opportunity to testify about the impact of sequestration on our
    Navy thus far and the impact of a potential return to that in
    2016.
        Mr. Chairman, presence remains the mandate of our Navy. We
    must operate forward where it matters and we need to be ready
    when it matters. I have provided a chart to show you where it
    matters around the world to us and where it matters to our
    combatant commanders that we be.
        Now, recent events testify to the value of forward
    presence. For example, when tasked in August, the USS George
    H.W. Bush strike group relocated from the Arabian Sea to the
    north Arabian Gulf and was on station within 30 hours ready for
    combat operations in Iraq and Syria. Navy and Marine strike
    fighters from the carrier generated 20 to 30 combat sorties per
    day and for 54 days represented the only coalition option,
    strike option, to project power against ISIL.
        The United States shipped trucks that arrived in the Black
    Sea to establish a U.S. presence and reassure our allies within
    a week after Russia invaded the Crimea.
        Over a dozen U.S. ships led by the USS George Washington
    strike group provided disaster relief to the Philippines in the
    wake of the super typhoon Hayan just about a year ago.
        The USS Fort Worth and the USS Sampson were among the first
    to support the Indonesian-led search effort for the AirAsia
    aircraft recovery.
        Mr. Chairman, we have been where it matters when it matters
    with deployed forces.
        However, due to sequestration in 2013, our contingency
    response force--that is what is on call from the United
    States--is one-third of what it should be and what it needs to
    be. Sequestration resulted in a $9 billion shortfall in 2013
    below our budget submission. This shortfall degraded fleet
    readiness and created consequences from which we are still
    recovering.
        The first round of sequestration forced reductions in
    afloat and shore operations. It generated ship and aircraft
    maintenance backlogs, and it compelled us to extend unit
    deployments.
        Now, since 2013, our carrier strike groups, our amphibious
    ready groups, and most of our destroyers have been on
    deployments lasting 8 to 10 months or longer. This comes at a
    cost of our sailors' and our families' resiliency. It reduces
    the performance of the equipment and it will reduce the service
    lives of our ships.
        Navy's fleet readiness will likely not recover from the
    ship and aircraft maintenance backlogs until about 2018. Now,
    that is 5 years after the first round of sequestration. This is
    just a small glimpse of the readiness price that is caused by
    sequestration.
        Although the funding levels provided to us under the
    Bipartisan Budget Act of 2013--they were $13 billion above
    sequestration--those budgets were $16 billion below the
    resources we described in our submission as necessary to
    sustain the Navy. So now to deal with these shortfalls, we
    slowed--that means we just pushed out--modernization that we
    had scheduled to be done during this Future Years Defense Plan.
    We reduced procurement of advanced weapons and aircraft. We
    delayed upgrades to all but the most critical shore
    infrastructure.
        The end result has been higher risk, particularly in two of
    the missions that are articulated in our Defense Strategic
    Guidance. That is our defense strategy, and I also provided a
    copy of that. It has a synopsis of the 10 missions and what is
    the impact of sequestration. The missions with the highest risk
    are those missions requiring us to deter and defeat aggression
    and the mission to project power despite an anti-access area
    denial challenge.
        Now, a return to sequestration in 2016 would necessitate a
    revisit and a revision of our defense strategy. We have been
    saying this for years. That would be a budget-based strategy
    for sure. We would further delay critical warfighting
    capabilities, further reduce readiness of contingency response
    forces, the ones that are only at a one-third level, and
    perhaps forgo our stretched procurement of ships and submarines
    and further downsize our munitions.
        In terms of warfighting, the sequestered Navy of 2020 would
    be left in a position where it could not execute those two
    missions I referred to. We go from high risk to we cannot
    execute those missions, and we would face higher risk in five
    additional missions of those 10. So that is 7 out of 10. More
    detail on the impact, as I just described, is on a handout in
    front of you and it is outlined in my written statement, which
    I request be added for the record.
        Now, although we can model and we can analyze and we can
    quantify warfighting impacts, as General Odierno said, what is
    less easy to quantify is sequestration's impact on people.
    People underwrite our security. We call them our asymmetric
    advantage. They are the difference in the Navy for sure between
    us and even the most technologically advanced navy close to us.
    We have enjoyed meeting our recruiting goals, and until
    recently, our retention has been remarkable.
        However, the chaotic and indiscriminate excursion of
    sequestration in 2013--it really left a bitter taste with our
    sailors, with our civilians, and with our families. The threat
    of looming sequestration, along with a recovering economy, is a
    troubling combination to me. We are already seeing
    disconcerting trends in our retention, particularly our strike
    fighter pilots, our nuclear trained officers, our SEAL's, cyber
    warriors, and some of our highly skilled sailors in information
    technology, our Aegis radar, and our nuclear fields.
        These retention symptoms that I just described remind me of
    the challenges that I had as a junior officer after the Vietnam
    War period on the downsize, and it reminds me of when I was in
    command of a submarine in the mid-1990s downsize, periods that
    took decades to correct. However, the world was more stable
    then, Mr. Chairman, than it is today, and I would say we cannot
    create that same circumstance. Sequestration will set us right
    on that same course that I just described and, frankly, I have
    been before. As General Odierno said, I do not think we need to
    go there again.
        Now, the shipbuilding and related industrial base also
    stand to suffer from a sequestered environment. Companies, not
    necessarily the big primes, but the companies that make the key
    valves, the key circuit cards, and the things that put us
    together, make us the great sea power we are might be forced to
    close their businesses, and it takes a long time to build a
    ship and longer yet to recover from the losses of these skilled
    workers or the materials that some of these companies provide.
    The critical infrastructure in this vital section of our
    Nation's economy is key to sea power.
        So, Mr. Chairman, I understand the pressing need for our
    Nation to get the fiscal house in order. I do. It is imperative
    we do so, I say, in a thoughtful and a deliberate manner to
    ensure we retain the trust of our people--we have to retain
    that trust--and to sustain the appropriate warfighting
    capability for your Navy, the forward presence, and its
    readiness. So unless naval forces are properly sized,
    modernized at the right pace with regard to the adversaries
    that we might have, ready to deploy with adequate training and
    equipment, and capable to respond in the numbers and at the
    speed required by the combatant commanders, they will not be
    able to answer the call.
        I look forward to working with this committee, with
    Congress to find the solutions that will ensure that our Navy
    retains the ability to organize, to train, and to equip our
    great sailors and marines and soldiers and airmen and Coast
    Guardsmen in defense of this Nation. Thank you.
        [The prepared statement of Admiral Greenert follows:]
                Prepared Statement By ADM Jonathan Greenert, USN
        Chairman McCain, Senator Reed, distinguished members of the
    committee, thank you for the opportunity to testify about the effects
    of sequestration on our Navy to date and the potential impacts of
    reverting back to the sequestration-level discretionary caps imposed by
    the Budget Control Act of 2011 (BCA) in fiscal year 2016.
        In this statement, I will describe the lingering consequences of
    sequestration in 2013, the current situation resulting from the
    Bipartisan Budget Act of 2013 (BBA), and specific impacts to readiness
    and modernization should we revert back to the sequestration-levels in
    fiscal year 2016. will also assess specific. mission risks and critical
    assumptions I use to base my assessments.
             continuing impact of sequestration in fiscal year 2013
        Sequestration in fiscal year 2013 resulted in a $9 billion
    shortfall in Navy's budget, as compared to the President budget for
    2013 submission. This instance of sequestration was not just a
    disruption, it created readiness consequences from which-we are still
    recovering, particularly in ship and aircraft maintenance, fleet
    response capacity, and excessive carrier strike group (CSG) and
    amphibious ready group (ARG) deployment lengths. As I testified before
    this committee in November 2013, the continuing resolution and
    sequestration reductions in fiscal year 2013 compelled us to reduce
    both afloat and ashore operations, which created ship and aircraft
    maintenance and training backlogs. To budget for the procurement of
    ships and aircraft appropriated in fiscal year 2013, Navy was compelled
    to defer some purchases to future years and use prior-year investment
    balances to mitigate impacts to programs in fiscal year 2013 execution.
    The most visible impacts occurred in Operations and Maintenance funded
    activities. Specific impacts to Navy programs:

             Cancelled five ship deployments;
             Delayed deployment of USS Harry S. Truman strike group
            by 6 months;
             Inactivated, instead of repaired, USS Miami;
             Reduced facilities restoration and modernization by
            about 30 percent (to about 57 percent of the requirement);
             Reduced base operations, including port and airfield
            operations, by about 8 percent (to about 90 percent of the
            requirement);
             Furloughed civilian employees for 6 days, which,
            combined with a hiring freeze and no overtime, reduced our
            maintenance and sustainment output through lost production and
            support from logisticians, comptrollers, engineers, contracting
            officers, and planners; and
             Cancelled fleet engagements and most port visits,
            except for deployed ships.

        While the Navy was able to reprioritize within available resources
    to continue to operate in fiscal year 2013, this is not a sustainable
    course for future budgets. The actions we took in 2013 to mitigate
    sequestration only served to transfer bills amounting to over $2
    billion to future years for many procurement programs--those carryover
    bills were addressed in Navy's fiscal year 2014 and fiscal year 2015
    budgets. If we were sequestered again, we would be forced to degrade
    current and future fleet readiness since sources available to mitigate
    in fiscal year 2013 are no longer available.
        Shortfalls caused by the fiscal year 2013 sequestration remain in a
    number of areas and the Navy is still working to recover from them. For
    example, we have not yet recovered from shipyard maintenance backlogs.
    We are working through shipyard personnel capacity issues to determine
    when ships can be fit back into the maintenance cycle and are balancing
    that against operational demands on the ships to ensure we meet the
    global force management requirement for combatant commands. The result
    of maintenance and training backlogs has meant delayed preparation for
    deployments, forcing us, in turn, to extend the deployments of those
    units already on deployment. Since 2013, our ships have deployed beyond
    the traditional 6-month deployment--many CSGs, ARGs, and destroyers
    (DDG) reaching 8-9 months or longer. This comes at a cost to the
    resiliency of our people, sustainability of our equipment, and service
    lives of our ships.
        Maintenance and training backlogs have also reduced Navy's ability
    to maintain required forces for contingency response to meet combatant
    command operational plan requirements. Although the requirement calls,
    on average, for three additional CSGs and three additional ARGs to
    deploy within 30 days for a major crisis, Navy has only been able to
    maintain an average of one group each in this readiness posture. Root
    causes can be traced to the high operational tempo of the fleet, longer
    than expected shipyard availabilities, and retirements of experienced
    shipyard workers, but the fiscal year 2013 sequestration exacerbated
    the depth of this problem and interfered with our efforts to recover.
        With a stable budget and no major contingencies for the foreseeable
    future, I estimate that we will recover from the maintenance backlogs
    that have accumulated from the high operational tempo over the last
    decade of war and the additional effects of sequestration by
    approximately 2018, 5 years after the first round of sequestration.
    This is a small glimpse of the readiness ``price'' of sequestration.
                               current situation
        The President's budget for fiscal year 2014 (PB-2014) was the last
    budget submission to fully meet all the missions of the Defense
    Strategic Guidance (DSG). The DSG and Quadrennial Defense Review are
    the foundation of our current planning, programming, and budgeting.
    Congress' passage of the BBA averted about $9 billion of an estimated
    $14 billion reduction we would have faced under sequestration. It
    enabled us to fund all planned ship and aircraft procurement in fiscal
    year 2014, but cumulatively the shortfalls increased risk in Navy's
    ability to execute DSG missions. The BBA still left a $5 billion
    shortfall below the PB-2014 submission in our investment, operations
    and maintenance accounts. The shortage in funding compelled us to
    reduce procurement of weapons (many missile types) and aircraft spare
    parts, defer asymmetric research and development projects, cancel
    repair and maintenance projects for facilities ashore, and defer
    procurement of maintenance/material support equipment for the fleet.
        The recent passage of the National Defense Authorization Act for
    Fiscal Year 2015 and Consolidated and Further Continuing Appropriations
    Act averted about $4 billion of the estimated $15 billion reduction
    that Navy would have faced under sequestration; an $11 billion
    shortfall remains (as compared to PB-2014). We are again able to fund
    all planned ship and aircraft procurement in fiscal year 2015. This
    enabled us to continue the refueling and complex overhaul of the USS
    George Washington (CVN 73). This carrier and her associated air wing
    are critical to maintaining power projection, presence and contingency
    response capacity. Having the additional global presence resident in
    this carrier and air wing will decrease the demand placed on the
    remaining carrier fleet, thus reducing the operating tempo impact on
    the ship, aircraft, and their crews.
        Navy balanced its portfolio to mitigate the $11 billion shortfall
    by making choices between capability, capacity, cost, and risk. We were
    compelled to further reduce the capacity of weapons and aircraft, slow
    modernization, and delay upgrades to all but the most critical shore
    infrastructure. As I described in my testimony to this committee in
    March 2014, the fiscal year 2015 budget represented another iterative
    reduction from the resources we indicated were necessary to fully
    resource the DSG missions, making Navy less ready to successfully Deter
    and Defeat Aggression and Project Power Despite Anti-Access/Area Denial
    (A2/AD) Challenges. Continuing along this budget trajectory means by
    2020 (the DSG benchmark year), Navy will have insufficient contingency
    response capacity to execute large-scale operations in one region,
    while simultaneously deterring another adversary's aggression
    elsewhere. Also, we will lose our advantage over adversaries in key
    warfighting areas such as Anti-Surface Warfare, Anti-submarine Warfare,
    Air-to-Air Warfare, and Integrated Air and Missile Defense.
              return to sequestration starting in fiscal year 2016
        A return to sequestration in fiscal year 2016 would necessitate a
    revisit and revision of the DSG. Required cuts will force us to further
    delay critical warfighting capabilities, reduce readiness of forces
    needed for contingency response, forego or stretch procurement of ships
    and submarines, and further downsize weapons capacity. We will be
    unable to mitigate the shortfalls like we did in fiscal year 2013
    because prior-year investment balances were depleted under fiscal year
    2013 sequestration.
        The revised discretionary caps imposed by sequestration would be a
    reduction of about $10 billion in our fiscal year 2016 budget alone, as
    compared to PB-2015. From fiscal year 2016-2020, the reduction would
    amount to approximately $36 billion. If forced to budget at this level,
    it would reduce every appropriation, inducing deep cuts to Navy
    Operation and Maintenance, investment, and modernization accounts. The
    Research, Development, Test, and Evaluation accounts would likely
    experience a significant decline across the Future Years Defense
    Program (FYDP), severely curtailing the Navy's ability to develop new
    technologies and asymmetric capabilities.
        As I testified to this committee in November 2013, any scenario to
    address the fiscal constraints of the revised discretionary caps must
    include sufficient readiness, capability, and manpower to complement
    the force structure capacity of ships and aircraft. This balance would
    need to be maintained to ensure each unit will be effective, even if
    the overall fleet is not able to execute the DSG. There are many ways
    to balance between force structure, readiness, capability, and
    manpower, but none that Navy has calculated that enable us to
    confidently execute the current defense strategy within dictated budget
    constraints.
        As detailed in the Department of Defense's April 2014 report,
    ``Estimated Impacts of Sequestration-Level Funding,'' one potential
    fiscal and programmatic scenario would result in a Navy of 2020 that
    would be unable to execute 2 of the 10 DSG missions due to the
    compounding effects of sequestration on top of pre-existing fiscal year
    2013, 2014, and 2015 resource constraints. Specifically, the cuts would
    render us unable to sufficiently Project Power Despite Anti-Access/Area
    Denial Challenges and unable to Deter and Defeat Aggression. In
    addition, we would be forced to accept higher risk in five other DSG
    missions: Counterterrorism and Irregular Warfare; Defend the Homeland
    and Provide Support to Civil Authorities; Provide a Stabilizing
    Presence; Conduct Stability and Counterinsurgency Operations; and
    Conduct Humanitarian, Disaster Relief, and Other Operations. (Table 1
    provides more detail on mission risks.) In short, a return to
    sequestration in fiscal year 2016 will require a revision of our
    defense strategy.
        Critical assumptions I have used to base my assessments and
    calculate risk:

             Navy must maintain a credible, modern, and survivable
            sea-based strategic deterrent;
             Navy must man its units;
             Units that deploy must be ready;
             People must be given adequate training and support
            services;
             Readiness for deployed forces is a higher priority
            than contingency response forces;
             Capability must be protected, even at the expense of
            some capacity;
             Modernized and asymmetric capabilities (advanced
            weapons, cyber, electronic warfare) are essential to projecting
            power against evolving, sophisticated adversaries; and
             The maritime industrial base is fragile--damage can be
            long-lasting, hard to reverse.

        The primary benchmarks I use to gauge Navy capability and capacity
    are DOD Global Force Management Allocation Plan presence requirements,
    Combatant Commander Operation and Contingency Plans, and Defense
    Planning Guidance Scenarios. Navy's ability to execute DSG missions is
    assessed based on capabilities and capacity resident in the force in
    2020.
        The following section describes specific sequestration impacts to
    presence and readiness, force strUcture investments, and personnel
    under this fiscal and programmatic scenario:
    Presence and Readiness
        A return to sequestration would reduce our ability to deploy forces
    on the timeline required by global combatant commands in the event of a
    contingency. Of the Navy's current battle force, we maintain roughly
    100 ships forward deployed, or one-third of our entire Navy. Included
    among the 100 ships are 2 CSG and 2 ARG forward at all times. CSGs and
    ARGs deliver a significant portion of our striking power, and we are
    committed to keeping, on average, three additional CSGs and three
    additional ARGs in a contingency response status, ready to deploy
    within 30 days to meet operation plans (OPLANs). However, if
    sequestered, we will prioritize the readiness of forces forward
    deployed at the expense of those in a contingency response status. We
    cannot do both. We will only be able to provide a response force of one
    CSG and one ARG. Our current OPLANs require a significantly more ready
    force than this reduced surge capacity could provide, because they are
    predicated on our ability to respond rapidly. Less contingency response
    capacity can mean higher casualties as wars are prolonged by the slow
    arrival of naval forces into a combat zone. Without the ability to
    respond rapidly enough, our forces could arrive too late to affect the
    outcome of a fight.
        Our PB-2015 base budget funded ship and aviation depot maintenance
    to about 80 percent of the requirement in fiscal years 2016-2019. This
    is insufficient in maintaining the Fleet and has forced us to rely upon
    Overseas Contingency Operations funding to address the shortfall.
    Sequestration would further aggravate existing Navy backlogs. The
    impacts of these growing backlogs may not be immediately apparent, but
    will result in greater funding needs in the future to make up for the
    shortfalls each year and potentially more material casualty reports,
    impacting operations. For aviation depot maintenance, the growing
    backlog will result in more aircraft awaiting maintenance and fewer
    operational aircraft on the flight line, which would create untenable
    scenarios in which squadrons would only get their full complement of
    aircraft just prior to deployment. The situation will lead to less
    proficient aircrews, decreased combat effectiveness of naval air
    forces, and increased potential for flight and ground mishaps.
        Critical to mission success, our shore infrastructure provides the
    platforms from which our sailors train and prepare. However, due the
    shortfalls over the last 3 years, we have been compelled to reduce
    funding in shore readiness since fiscal year 2013 to preserve the
    operational readiness of our fleet. As a result, many of our shore
    facilities are degrading. At sequestration levels, this risk will be
    exacerbated and the condition of our shore infrastructure, including
    piers, runways, and mission-critical facilities, will further erode.
    This situation may lead to structural damage to our ships while
    pierside, aircraft damage .from foreign object ingestion on
    deteriorated runways, and degraded communications within command
    centers. We run a greater risk of mishaps, serious injury, or health
    hazards to personnel.
    Force Structure Investments
        We must ensure that the Navy has the required capabilities to be
    effective, even if we cannot afford them in sufficient capacity to meet
    the DSG. The military requirements laid out in the DSG are benchmarked
    to the year 2020, but I am responsible for building and maintaining
    capabilities now for the Navy of the future. While sequestration causes
    significant near-term impacts, it would also create serious problems
    that would manifest themselves after 2020 and would be difficult to
    recover from.
        In the near term, the magnitude of the sequester cuts would compel
    us to consider reducing major maritime and air acquisition programs;
    delaying asymmetric capabilities such as advanced jammers, sensors, and
    weapons; further reducing weapons procurement of missiles, torpedoes,
    and bombs; and further deferring shore infrastructure maintenance and
    upgrades. Because of its irreversibility, force structure cuts
    represent options of last resort for the Navy. We would look elsewhere
    to absorb sequestration shortfalls to the greatest extent possible.
        Disruptions in naval ship design and construction plans are
    significant because of the long-lead time, specialized skills, and
    extent of integration needed to build military ships. Because ship
    construction can span up to 9 years, program procurement cancelled in
    fiscal year 2016 will not be felt by the combatant commanders until
    several years later when the size of the battle force begins to shrink
    as those ships are not delivered to the fleet at the planned time.
    Likewise, cancelled procurement in fiscal year 2016 will likely cause
    some suppliers and vendors of our shipbuilding industrial base to close
    their businesses. This skilled, experienced, and innovative workforce
    cannot be easily replaced and it could take years to recover from
    layoffs and shutdowns; and even longer if critical infrastructure is
    lost. Stability and predictability are critical to the health and
    sustainment of this vital sector of our Nation's industrial capacity.
    Personnel
        In fiscal year 2013 and 2014, the President exempted all military
    personnel accounts from sequestration out of national interest to
    safeguard the resources necessary to compensate the men and women
    serving to defend our Nation and to maintain the force levels required
    for national security. It was recognized that this action triggered a
    higher reduction in non-military personnel accounts. If the President
    again exempts military personnel accounts from sequestration in fiscal
    year 2016, then personnel compensation would continue to be protected.
    Overall, the Navy would protect personnel programs to the extent
    possible in order to retain the best people. As I testified in March
    2014, quality of life is a critical component of the quality of service
    that we provide to our sailors. Our sailors are our most important
    asset and we must invest appropriately to keep a high caliber All-
    Volunteer Force. We will continue to fund sailor support, family
    readiness, and education programs. While there may be some reductions
    to these programs if sequestered in fiscal year 2016, I anticipate the
    reductions to be relatively small. However, as before, this would
    necessitate higher reductions to the other Navy accounts.
                                   conclusion
        Navy is still recovering from the fiscal year 2013 sequestration in
    terms of maintenance, training, and deployment lengths. Only one-third
    of Navy contingency response forces are ready to deploy within the
    required 30 days. With stable and consistent budgets, recovery is
    possible in 2018. However, if sequestered, we will not recover within
    this FYDP.
        For the last 3 years, the Navy has been operating under reduced
    top-lines and significant shortfalls: $9 billion in fiscal year 2013,
    $5 billion in fiscal year 2014, and $11 billion in fiscal year 2015,
    for a total shortfall of about $25 billion less than the President's
    budget request. Reverting to revised sequester-level BCA caps would
    constitute an additional $5-$10 billion decrement each year to Navy's
    budget. With each year of sequestration, the loss of force structure,
    readiness, and future investments would cause our options to become
    increasingly constrained and drastic. The Navy already shrank 23 ships
    and 63,000 personnel between 2002 and 2012. It has few options left to
    find more efficiencies.
        While Navy will do its part to help the Nation get its fiscal house
    in order, it is imperative we do so in a coherent and thoughtful manner
    to ensure appropriate readiness, warfighting capability, and forward
    presence--the attributes we depend upon for our Navy. Unless naval
    forces are properly sized, modernized at the right pace, ready to
    deploy with adequate training and equipment, and capable to respond in
    the numbers and at the speed required by combatant commanders, they
    will not be able to carry out the Nation's defense strategy as written.
    We will be compelled to go to fewer places, and do fewer things. Most
    importantly, when facing major contingencies, our. ability to fight and
    win will neither be quick nor decisive.
        Unless this Nation envisions a significantly diminished global
    security role for its military, we must address the growing mismatch in
    ends, ways, and means. The world is becoming more complex, uncertain,
    and turbulent. Our adversaries' capabilities are diversifying and
    expanding. Naval forces are more important than ever in building global
    security, projecting power, deterring foes, and rapidly responding to
    crises that affect our national security. A return to sequestration
    would seriously weaken the U.S. Navy's ability to contribute to U.S.
    and global security.

        Chairman McCain. Thank you.
        General Welsh.

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

        General Welsh. Thank you, Mr. Chairman, Ranking Member
    Reed, and members of the committee. It is always an honor to be
    here. It is a special honor to sit before you today with three
    people I consider to be friends and mentors and literally
    heroes.
        My pride in our Air Force and the airmen who give it life
    has not changed since the last time I appeared before you, but
    what has changed is that we are now the smallest Air Force that
    we have ever been.
        Chairman McCain. Repeat that again. Repeat that. We are now
    the smallest Air Force----
        General Welsh. We are now the smallest Air Force we have
    ever been, Mr. Chairman.
        When we deployed to Operation Desert Storm in 1990, the Air
    Force had 188 fighter squadrons. Today we have 54 and we are
    headed to 49 in the next couple of years. In 1990, there were
    511,000 active duty airmen alone. Today we have 200,000 fewer
    than that. As those numbers came down, the operational tempo
    went up. Your Air Force is fully engaged. All the excess
    capacity is gone and now, more than ever, we need a capable,
    fully ready force. We simply do not have a bench to go to, and
    we cannot continue to cut force structure, as we have been
    doing for the last few years, to pay the cost of readiness and
    modernization or we will risk being too small to succeed in the
    tasks we have already been given.
        But BCA level funding will force us to do exactly that. We
    will have to consider divestiture of things like the KC-10
    fleet, the U-2 fleet, the Global Hawk block 40 fleet, and
    portions of our airborne command and control fleet. We would
    also have to consider reducing our MQ-1 and MQ-9 fleet by up to
    10 orbits. The real-world impact of those choices on current
    U.S. military operations would be significant. In the
    intelligence, surveillance, and reconnaissance (ISR) mission
    area alone, 50 percent of the high altitude ISR missions being
    flown today would no longer be available. Commanders would lose
    30 percent of their ability to collect intelligence and
    targeting data against moving vehicles on the battlefield, and
    we would lose a medium altitude ISR force, the size of the one
    doing such great work in Iraq and Syria today. The Air Force
    would be even smaller and less able to do the things that we
    are routinely expected to do.
        I would like to say that that smaller Air Force would be
    more ready than it has ever been, but that is not the case, 24
    years of combat operations have taken a toll. In fiscal year
    2014 and 2015, we used the short-term funding relief of the
    Balanced Budget Act to target individual and unit readiness and
    the readiness of our combat squadrons has improved over the
    past year. Today just under 50 percent of those units are fully
    combat-ready--under 50 percent. Sequestration would reverse
    that trend instantly. Just like in fiscal year 2013, squadrons
    would be grounded. Readiness rates would plummet. Red and green
    flag training exercises would have to be canceled. Weapon
    school classes would be limited, and our aircrew members'
    frustration and their families' frustration will rise again
    just as the major airlines begin a hiring push expected to
    target 20,000 pilots over the next 10 years.
        We also have a broader readiness issue in that the
    infrastructure that produces combat capability over time,
    things like training ranges, test ranges, space launch
    infrastructure, simulation infrastructure, nuclear
    infrastructure, have all been intentionally underfunded over
    the last few years to focus spending on individual and unit
    readiness. That bill is now due. But BCA caps will make it
    impossible to pay. The casualty will be Air Force readiness and
    capability well into the future.
        I would also like to tell you that your smaller Air Force
    is younger and fresher than it has ever been, but would not be
    true either. Our smaller aircraft fleet is also older than it
    has ever been. If World War II's venerable B-17 bomber had
    flown in the first Gulf War, it would have been younger than
    the B-52, the KC-135, and the U-2 are today. We currently have
    12 fleets--12 fleets--of airplanes that qualify for antique
    license plates in the State of Virginia. We must modernize our
    Air Force. We want to work with you to do it within our top
    line. It certainly will not be easy and it will require
    accepting prudent operational risk in some mission areas for a
    time.
        But the option of not modernizing really is not an option
    at all. Air forces that fall behind technology fail, and joint
    forces that do not have the breadth of the airspace and cyber
    capabilities that comprise modern air power will lose.
        Speaking of winning and losing, at the BCA funding levels,
    the Air Force will no longer be able to meet the operational
    requirements of the Defense Strategic Guidance. We will not be
    able to simultaneously defeat an adversary, deny a second
    adversary, and defend the homeland. I do not think that is good
    for America no matter what angle you look at it from.
        We do need your help to be ready for today's fight and
    still able to win in 2025 and beyond. I believe our airmen
    deserve it. I think our joint team needs it, and I certainly
    believe that our Nation still expects that of us.
        I would like to offer my personal thanks to the members of
    this committee for your dedicated support of airmen and their
    families.
        I look forward to your questions.
        [The prepared statement of General Welsh follows:]
               Prepared Statement by Gen. Mark A. Welsh III, USAF
        Chairman McCain, Ranking Member Reed, and members of the committee,
    it is an honor to appear before you. Thank you for your continued
    support of our Air Force, our airmen, and their families.
        In November 2013, I spoke to this committee about sequestration and
    asked that you:

              `` . . . pass funding bills that give us stability, both in
            the near term and the long term. If not, we'll have these same
            conversations year after year. Help us be ready now . . . and
            still able to win in 2023. Let us focus on combat capability,
            on our five core missions, and on global vigilance, global
            reach, and global power for America. Our airmen deserve it, our
            joint team needs it, and our Nation expects it.''

        My pride in our airmen and the remarkable way they accomplish our
    five core missions of: (1) air and space superiority; (2) intelligence,
    surveillance, and reconnaissance (ISR); (3) rapid global mobility; (4)
    global strike; and (5) command and control has not changed since my
    last testimony. Nor has my plea to this committee for the leadership,
    resources, funding stability, and decision flexibility required to keep
    America's Air Force formidable.
        What have changed are the global operational environment and the
    demand signals created for the Air Force and other Services; the level
    of effort in Iraq and Syria that is much greater than planned; the
    continuing requirement for Air Force support in Afghanistan; a
    resurgent and aggressive Russia and the need for U.S. military presence
    to assure allies and deter further aggression; an unraveling Libya and
    Yemen; an increase in counterterrorism activity on the African
    continent; an increasing domestic terrorism concern that has already
    manifested itself in Europe; and technological advances by both Russia
    and China that could dramatically narrow capability gaps between our
    Air Force and any air force using their new systems.
        Sequestration imposed sudden and significant budget cuts and
    restrictions without any reduction in operational requirements while we
    were still fully engaged in combat operations. Since sequestration took
    effect, Air Force operations have not slowed down.
                          air force operations in 2014
        In calendar year 2014, our combat air forces flew 19,959 close air
    support sorties in Operations Enduring Freedom and Inherent Resolve. In
    support of U.S. Central Command alone, airmen flew 35,163 intelligence,
    surveillance, and reconnaissance (ISR) missions, identified 1,700
    improvised explosive devices, helped remove over 700 high value enemy
    combatants from the battlefield, responded to 1,500 troops-in-contact
    events, disseminated 18 million images, analyzed 4 million signals
    intelligence reports, and collected more than 1.6 million hours of full
    motion video. Over the last 7 months, 24 percent of those ISR missions
    directly supported Operation Inherent Resolve against the Islamic
    State.
        While Syria, Iraq, and Afghanistan dominated the headlines, airmen
    never took their eyes off the rest of the globe. Since June, they've
    conducted 1,518 ISR missions in support of other combatant commands.
    Airmen launched 25 space missions, 9 of which were National Security
    Space missions. Their hard work this year brought the total number of
    consecutive successful Evolved Expendable Launch Vehicle space launches
    to 79. Air Mobility airmen flew 79,445 airlift sorties supporting
    operations on every continent. As the linchpin to the U.S. military's
    ability to rapidly project power, Air Force tanker crews flew 29,892
    sorties worldwide and offloaded over 172 million gallons of fuel to
    joint and coalition air forces. Aeromedical evacuation crews airlifted
    6,075 wounded soldiers, sailors, airmen, marines, and injured civilians
    around the globe.
                            impact of sequestration
        Many of the accomplishments of our airmen in 2014 would not have
    been possible at sequestered levels of funding. As you will remember,
    when sequestration took effect in 2013 we grounded 31 flying squadrons
    (including 13 combat-coded squadrons), furloughed most of our 180,000
    civilian airmen, and made deep cuts to flying hours, weapon system
    sustainment, facility sustainment, training, and equipment. Our
    facilities and base infrastructure suffered, and we faced a $12 billion
    back-log in much needed facility maintenance. We deferred maintenance,
    repair, and upgrades to our operational training ranges and decreased
    their ability to support high-end combat training. Sequestration caused
    months of aircraft maintenance backlog and reduced advanced pilot
    training, things that can only be corrected with time and additional
    resources. We deferred critical long-term investment in nuclear
    infrastructure, black and white world test infrastructure, and space
    launch infrastructure.
        The Bipartisan Budget Act (BBA), the limited, short-term budget
    relief that Congress provided for fiscal years 2014 and 2015, started
    the long process of readiness recovery after more than 20 years of
    overseas combat engagement. BBA did two things for us: first, it
    removed the threat of sequestration for those fiscal years which would
    have resulted in immediate across the board reductions, where we had no
    ability to prioritize the reductions based on mission needs. Second,
    the BBA provided funding levels higher than sequestration levels,
    although it still left us with difficult choices to make. Because of
    BBA, we began to recover Airmen's individual readiness for the full
    spectrum of missions we provide the joint force; started to regain
    ground on aircraft and facility maintenance; invested in our nuclear
    Force Improvement Program; increased funding in our training ranges;
    and sustained our priority investments in the F-35, the KC-46, and the
    Long-Range Strike Bomber; three programs that will be essential to
    joint mission success in 2025 and beyond. It was not enough, but it was
    a start. A return to sequestered levels of funding in fiscal year 2016
    will reverse any progress we made in addressing our infrastructure and
    facility maintenance and exacerbate our problems with readiness and
    modernization. It will also make it impossible for us to meet the
    operational requirements of the Defense Strategic Guidance.
                              impact to readiness
    Nuclear
        Air Force nuclear forces remain safe, secure, and effective, but
    only sustained, significant investment in our nuclear infrastructure
    will prevent long-term readiness problems. The Air Force has investment
    plans for facilities and large military construction programs to
    address findings from the recent Nuclear Enterprise Reviews. All
    require resources over time to realize. Those resources will not be
    available at sequestered funding levels. Sequestration level funding
    would leave all nuclear enterprise military construction projects
    unfunded except a $95 million Weapon Storage Facility project at F.E.
    Warren Air Force Base. Sustainment and recapitalization of legacy
    facilities would also be crippled. In short, sequestration level
    funding counters our commitment to get healthier and threatens our
    ability to ensure nuclear readiness and unquestionable deterrence in
    the future.
    Individual Readiness
        We will work very hard to maintain the short-term individual
    readiness of our force by cutting only small percentages of our flying
    hour program and weapon system sustainment account. A 4- to 5-percent
    cut in Training and Exercise accounts will be unavoidable. That cut is
    the equivalent of one Weapons School and a 50 percent reduction in Red
    and Green Flag exercises. At our current pace of operations, we expect
    individual readiness to decrease only slightly in fiscal year 2016. But
    in order to minimize impacts to individual readiness, we will be forced
    to cannibalize other accounts, and exacerbate other, long-term
    institutional readiness issues, such as the readiness of our Total
    Force for the high-end fight that Weapons School, Red Flag and Green
    Flag are designed to emulate.
    Depots
        Funding our Depot workforce at sequestered levels will result in
    over 1.8 million fewer work hours and potentially impact over 2,000
    jobs. The impact of that on unit/individual readiness is very difficult
    to measure, but it is certainly not insignificant.
    Global Mobility
        Sequestration level funding will further degrade global access and
    engagement. The majority of our mobility air forces, the backbone of
    our Nation's Global Reach and the Air Force's Rapid Global Mobility
    mission, reside in the Air Reserve Components (ARC). A full 73 percent
    of our tactical airlift, and 66 percent of our tanker fleet, is
    assigned to either Air National Guard or Air Force Reserve units. The
    ARC still has not fully recovered from fiscal year 2013 sequestration.
    If we return to sequestered funding levels, the ARC will absorb a large
    percentage of the mobility force's Flying Hour Program cuts in fiscal
    year 2016, further delaying combat readiness and capacity to support
    national requirements. The ability of their aircrew members to regain/
    retain proficiency will also be challenged by reduced man-day funding
    levels.
    Weapons
        Sequestration funding levels will intensify significant weapons
    shortfalls. We are already thousands of weapons below our stockpile
    requirements. Direct attack munitions remain well below acceptable
    inventory levels and the high demand of current operations, as well as
    Foreign Military Sales to our allies and coalition partners further
    depletes the remaining inventory. The industrial base has almost no
    capacity to ``surge'' in case of a new conflict and we cannot afford to
    have that industrial base atrophy. Weapons expenditures in support of
    Operation Inherent Resolve since August of 2014 total more than $215
    million. Since 2012, Hellfire expenditures in Operations Inherent
    Resolve, Enduring Freedom, and Freedom Sentinel increased nearly 500
    percent, and procurement has not kept pace. An additional $180 million
    added in fiscal year 2015 (1,700 missiles) helped, but only pushed the
    problem to the right by 1 year. Under sequestration funding levels,
    Hellfire and Joint Direct Attack Munition (JDAM) procurement would
    plummet 61 percent (3,197 weapons) and guidance kit procurement would
    fall 19 percent (24,474 kits). Sequestration level funding would delay
    the munition requirement recovery by an additional 5 to 15 years, and
    in the case of the JDAM, a preferred weapon, even longer.
        Our overall readiness as a force is already significantly impacted
    by the size and age of our current aircraft fleet. It is now the
    smallest and oldest in the history of our Service. It is also the least
    ready--less than half of our combat coded units are fully combat
    capable. As Secretary James and I testified a year ago, a return to
    sequestered levels of funding in fiscal year 2016 will multiply the
    number of very tough choices we will be forced to make in our fiscal
    year 2016 POM recommendations. All of them impact our ability to do the
    jobs the Nation, and the Joint Force, expect of us.
        Possible fiscal year 2016 sequestration level actions that directly
    impact readiness include:

            - Divest the KC-10 fleet (cuts 13 percent of available
            refueling booms and 21 percent of fuel capacity)

                     Airpower could be late to the fight.
                    Sustaining operations would be difficult, especially in
                    the Pacific.

            - Divest the U-2 fleet (reduces high-altitude ISR capacity by
            50 percent)

                     Decreases high altitude airborne imagery
                    collection by 70 percent; eliminates high-altitude
                    multi-spectral capability; leaves a State Department
                    critical treaty mission (Olive Harvest) unsupported.

            - Divest the RQ4 Block 40 fleet

                     Reduces CENTCOM and PACOM intelligence
                    collection on ground moving targets by 6,000 hours per
                    year.

            - Divest a portion of the E-3 AWACS aircraft fleet

                     Further degrades our ability to meet combatant
                    commander requirements for airborne command and
                    control.

            - Reduce the MQ1/MQ-9 fleet by 10 orbits

                     Reduction is equivalent to the level of medium
                    altitude ISR activity supporting air operations in
                    Syria and Iraq today.

        We cannot repair readiness without people and we do not plan to cut
    airmen to pay a sequestration bill. We are fully engaged in operations
    around the world and simply cannot get smaller and still meet the
    demand of current and projected operations. Sequestration level funding
    would drive Total Force end strength down by nearly 10,000 personnel.
    The Air Force is at a Red Line for personnel strength now; further
    reductions will cause us to become too small to succeed. If we return
    to sequestered funding levels, we will choose to further reduce
    modernization and recapitalization investment instead of cutting
    people.
                            impact on modernization
        For the Air Force, and the Joint Force, to be successful over time,
    we must very carefully balance readiness, capability, and capacity.
    Over the last 10 to 15 years, the Air Force chose to trade capacity
    (force structure) for both readiness and capability (modernization).
    But in the warfighting business, quantity has a quality all its own.
    The Air Force has downsized our force structure as far as we can go and
    in many areas must surge to do the jobs we have been asked to be ready
    to do. Because we have not been allowed to take any significant savings
    in personnel accounts, or to close installations, reductions to meet
    sequestered funding limits will continue to come from readiness, force
    structure or modernization accounts. Since cutting more capacity (force
    structure), beyond what is necessary to wisely build tomorrow's Air
    Force, is a bad idea, what sequestration level funding will do is drive
    a choice between ``ready and capable now'' and ``ready and capable in
    the future.'' It is a false choice . . . we must be both for the Joint
    Force to be successful--sequestration may make that impossible. The
    following paragraphs contain examples of specific modernization program
    impacts at sequestered levels of funding.
    Nuclear
        A sequestration level budget would cut roughly 66 percent of
    currently planned funding intended to modernize nuclear systems and
    infrastructure. This would include weapons storage areas at two
    intercontinental ballistic missile (ICBM) bases; the UH-1N
    recapitalization; modernization programs for bombers and nuclear weapon
    components; and long-term risk reduction for future modernization
    programs. We will be prepared to discuss details during the fiscal year
    2016 posture hearings, but these cuts would severely challenge legacy
    facility/system sustainment, recapitalization for things like ICBM and
    cruise missile replacements, and F-35 Dual Capable Aircraft
    certification.
    F-35
        Sequestration level funding would likely require the Air Force to
    defer a number of aircraft from the fiscal year 2016 buy (Low Rate
    Initial Production 10--delivers in 2018). It could also delay
    development of Software Block 3F, with an accompanying possibility of a
    delay to Full Operational Capability and Dual Aircraft Capability
    efforts.
    Science and Technology (S&T)
        Sequestration level funding will reduce Air Force S&T funding by an
    estimated $223 million in fiscal year 2016 and by approximately $1.08
    billion over the FYDP. This will delay or terminate approximately 100
    contracts across the following technology areas: air dominance;
    directed energy; manufacturing; human systems; munitions; propulsion;
    structures; cyber; sensors; and space technologies.
    Adaptive Engine Transition Program
        At sequestered funding levels, we will be hard pressed to continue
    this program. It has the potential to produce fuel savings of up to 25
    percent on every aircraft we fly in the future, but we will likely not
    have the investment dollars we need to continue it in the near term.
    This may have a devastating impact on the industrial base.
    RQ-4 Block 30
        In addition to divestment of the RQ-4 Block 40 fleet, a
    sequestration level budget will delay approximately $110 million in
    investments for RQ-4 Block 30 reliability, viability, and sensor
    enhancements. These are the enhancements needed to replace current U-2
    capabilities.
    Facilities
        In addition to the specific program impacts above, sequestration
    level will force us to cut 24 military construction projects and 126
    other facility restoration and modernization projects across the Air
    Force and at combatant commands.
        The bottom line is that the sequestration level of funding will
    have a very clear impact on the Air Force's ability to develop the
    force required to train and operate efficiently and successfully
    execute our core missions against a capable, well-equipped adversary in
    2025 and beyond.
                               impact on mission
        There are three critical assumptions that underlie this assessment:

        1.  The Defense Strategic Guidance remains the same. Should it
    change, I would need to reassess the impacts of sequestration level
    funding against the new Defense Strategic Guidance tasking.
        2.  Current combatant command operational plans, force
    requirements, and response timelines remain unchanged. Again, should
    they change, I would need to reassess.
        3.  Budget Control Act caps and the mechanism of sequestration
    remain as currently stipulated in law.

        With those assumptions, the mission risk is clear. The impacts on
    readiness and modernization outlined above would result in an Air Force
    that, at sequestered levels of funding, cannot successfully execute all
    Defense Strategic Guidance requirements. We will not have sufficient
    force structure to meet the fundamental requirement to simultaneously
    Defeat an adversary, Deny a second adversary, and Defend the Homeland.
    I would be happy to discuss this in more depth in a classified forum.
                                   in closing
        The U.S. Air Force is still the best in the world. When the bugle
    calls, we will answer, and we will win. But the vulnerabilities
    sequestration introduces into our force will encourage our adversaries,
    worry our allies, limit the number of concurrent operations we can
    conduct, and increase risk to the men and women who fight America's
    next war.
        Thanks to the members of this committee for your persistent support
    of our military. We need your continued help to be ready for today's
    operations . . . and still able to win in 2025. Please give us the
    stable funding profiles we need to focus on combat capability, on our
    five core missions, and on global vigilance, global reach, and global
    power for America. Our airmen deserve it, our joint team needs it, and
    our Nation still expects it.

        Chairman McCain. Thank you.
        General Dunford.

     STATEMENT OF GEN. JOSEPH F. DUNFORD, JR., USMC, COMMANDANT OF
                            THE MARINE CORPS

        General Dunford. Chairman McCain, Ranking Member Reed, and
    distinguished members of the committee, thank you for the
    opportunity to appear before you today. I am honored to
    represent your marines and testify on the impact of
    sequestration.
        I would like to begin by thanking the committee for your
    steadfast support for the past 13 years. Due to your
    leadership, we fielded the best trained and equipped Marine
    Corps our Nation has ever sent to war.
        I know this committee and the American people have high
    expectations for marines as our Nation's naval expeditionary
    force-in-readiness. You expect the marines to operate forward,
    engage with partners, deter potential adversaries, and respond
    to crises. When we fight, you expect us to win. You expect a
    lot of your marines and you should.
        This morning, as you hold this hearing, your marines are
    doing just what you expect them to be doing. Over 31,000 are
    forward-deployed and engaged. Mr. Chairman, I have captured
    what those 31,000 are doing in my statement. I just ask that
    that be accepted for the record in the interest of time.
        Our role as the Nation's expeditionary force-in-readiness
    informs how we man, train, and equip the Marine Corps. It also
    prioritizes the allocation of resources that we receive from
    Congress. Before I address what would happen if a BCA level of
    funding with sequestration, let me quickly outline where we are
    today.
        As we have experienced budget cuts and fiscal uncertainty
    over the past few years, we prioritized the readiness of our
    forward-deployed forces. But in order to maintain the readiness
    of our forward-deployed forces, we have assumed risk in our
    home station readiness, modernization, infrastructure
    sustainment, and quality of life programs. As a result,
    approximately half of our nondeployed units, those who provide
    the bench to respond to the unexpected, are suffering
    personnel, equipment, and training shortfalls. In a major
    conflict, those shortfalls will result in a delayed response
    and/or additional casualties.
        We are investing in modernization at an historically low
    level. We know that we must maintain at least 10 to 12 percent
    of our resources on modernization to field a ready force for
    tomorrow. To pay today's bills, we are currently investing 7 to
    8 percent. Over time, that will result in maintaining older or
    obsolete equipment at higher cost and more operational risk.
        We are funding our infrastructure sustainment below the DOD
    standard across the Future Years Defense Program. At the
    projected levels, we will not be properly maintaining our
    enlisted barracks, training ranges, and other key facilities.
        While we can meet the requirements of the Defense Strategic
    Guidance today, there is no margin, and even without
    sequestration, we will need several years to recover from over
    a decade of war and the last 3 years of flat budgets and fiscal
    uncertainty. In that context, BCA funding levels with sequester
    rules will preclude the Marine Corps from meeting the
    requirements for the Defense Strategic Guidance. Sequester will
    exacerbate the challenges we have today. It will also result in
    a Marine Corps with fewer Active Duty battalions and squadrons
    than would be required for a single major contingency. Perhaps
    as concerning, it will result in fewer marines and sailors
    being forward deployed and in position to immediately respond
    to crises involving our diplomatic posts, American citizens, or
    interests overseas.
        While many of the challenges associated with sequestration
    can be quantified, there is also a human dimension to what we
    have been discussing today, and the other chiefs have addressed
    that. Our soldiers, sailors, airmen, and marines and their
    families should never have to face doubts about whether they
    will be deployed without proper training and equipment. The
    foundation of the All-Volunteer Force, as General Odierno has
    said, is trust. Sequestration will erode the trust that our
    young men and women in uniform, civil servants, and families
    have in their leadership. The cost of losing that trust is
    incalculable.
        Given the numerous and complex security challenges we face
    today, I believe DOD funding at the BCA level with
    sequestration will result in the need to develop a new
    strategy. We simply will not be able to execute the strategy
    with the implications of that cut.
        Thank you once again for the opportunity to appear before
    you this morning, and I look forward to your questions.
        [The prepared statement of General Dunford follows:]
            Prepared Statement by Gen. Joseph F. Dunford, Jr., USMC
        Chairman McCain, Ranking Member Reed, and member of the committee,
    thank you for the opportunity to appear before you today on this
    important matter. The Marine Corps is the Nation's expeditionary force-
    in-readiness. Congress specifically-and uniquely-structured the
    organization and prescribed the role of the Marine Corps as a '' . . .
    balanced force-in-readiness, air and ground . . . to suppress or
    contain international disturbances short of large scale war.'' To that
    end, marines serve forward to shape events, manage instability, project
    influence, respond to crises, and when necessary, serve as the initial
    response force that enables heavier contingency forces to deploy from
    the United States. Marines are expeditionary-partnered with the Navy,
    we come from the sea, to operate ashore, but without dependence on
    fixed bases or facilities. Our role as America's 9-1-1 force informs
    how we man, train, and equip our force. It also drives how we
    prioritize and allocate the resources we are provided by Congress.
        Today, there are over 31,000 marines forward engaged conducting a
    full range of theater security and crisis response missions. Marine
    Expeditionary Units are embarked and underway aboard Amphibious Ready
    Groups as part of a strong Navy-Marine Corps team. These combined arms
    air-ground-logistics forces, consisting of approximately 2,400 marines
    and sailors, are capable of responding rapidly to a wide range of
    forward presence and stability missions. Marines are currently
    conducting security cooperation activities in 29 countries across the
    globe. Marines are deployed to Iraq supporting Operation Inherent
    Resolve and in Afghanistan supporting Operation Freedom's Sentinel.
    They are on alert status in Moron, Spain, and Sigonella, Italy--ready
    to respond to crises across Africa and Europe. Over 22,000 marines are
    west of the international dateline in the Pacific building partnership
    capacity, strengthening alliances, deterring aggression, and preparing
    for any contingency. Marines are routinely serving at 175 embassies and
    consulates around the globe and currently reinforcing security with
    additional forces at our embassies in Iraq to deploy, or have recently
    returned from deployment. Our operational tempo since September 11,
    2001, has been high and remains high today. We expect this trend to
    continue.
        Your marines are proud to be the Nation's ready force. They are
    proud that they were the force of choice for immediate response during
    the Fukushima nuclear disaster in Japan, the earthquake in Turkey, the
    flood in Pakistan, the devastating tsunami in the Indian Ocean basin,
    and the Ebola epidemic in West Africa. Marines are proud of their
    recent role in safely evacuating American citizens in South Sudan and
    Libya. They are proud of their performance in Iraq and Afghanistan.
    With the support of Congress, they are committed to remaining ready and
    continuing a tradition of innovation, adaptation, and winning the
    Nation's battles.
        Maintaining the readiness of our forward deployed marines during a
    period of fiscal uncertainty has come at a cost. To meet our
    responsibilities as the Nation's 9-1-1 force, we prioritized near-term
    readiness while assuming risk in our home station readiness,
    modernization, infrastructure sustainment, and quality of life
    programs. Today, approximately half of our home station units are at an
    unacceptable level of readiness. Our investment in the future is less
    than what we believe is required, and we are funding our infrastructure
    sustainment below the Department of Defense standard. We have
    significantly reduced many of the programs that have allowed us to
    maintain morale and family readiness through over a decade of war. We
    are also maintaining a very challenging level of deployment-to-dwell
    time. Our operating forces are deploying for up to 7 months and
    returning home for 14 or less months before redeploying.
        While we can meet the requirements of the President's Defense
    Strategic Guidance (DSG) today, there is no margin. We have yet to
    fully appreciate the impact of cuts that have been made to Marines
    Corps' share of this cut has caused us to make difficult decisions that
    have significantly degraded our ability to respond to a major
    contingency today and adversely affected our ability to maintain a
    ready force for tomorrow. The sequestration cuts to date, combined with
    a sustained high level of operations, will challenge our future ability
    to be the Nation's force-in-readiness.
        The Marine Corps views readiness through the lens of the five
    pillars of readiness: high quality people, near-term unit readiness,
    capability and capacity to meet combatant commanders' requirements,
    infrastructure sustainment, and modernization. The sequestration cuts
    to date, and the challenges associated with an increasingly dangerous
    and uncertain world, have precluded us from maintaining balanced
    readiness even as we stretch to meet the DSG requirements. However, the
    possibility of an extended period of severely reduced funding as a
    result of sequestration coupled with the inefficient manner in which
    those cuts must be applied will preclude the Marines Corps from meeting
    the requirements of the DSG and the requirements of the geographic
    combatant commanders. We will continue to protect near-term unit
    readiness at the expense of other areas, but our capacity for crisis
    and major contingency response will be significantly reduced. In short,
    the full weight of the sequestration reductions will preclude the
    Marine Corps from meeting its full title 10 responsibilities and
    adequately preparing for the future.
        The Marine Corps continues to evaluate the long-term impacts of the
    sequestration reductions. The fiscal challenges we already face today
    will be exacerbated and significant additional challenges will be
    forced on all the Services. Through thorough analysis, we have
    determined that the Marine Corps will assume additional significant
    risk in long-term modernization and infrastructure sustainment as well
    as further detrimental impacts to readiness. The Marine Corps' capacity
    to meet operational requirements in the long-term will be reduced. We
    expect that we will be forced to further reduce our Active component
    force resulting in an unacceptable deployment to dwell ratio of less
    than 1:2 for most of our key operational units and their critical
    enablers. Our non-deployed units will not be ready to fight. Other
    probable impacts include:

              Further delay of major acquisition programs.
              Forced sustainment of aged legacy systems resulting
            in increased operations and support costs and higher defense
            bills.
              Risk to the realignment to the Pacific.
              Infrastructure sustainment funding would be cut well
            below current standards (less than 70 percent of the model
            requirement vice 90 percent) creating increased costs sooner
            for the American public.
              Morale and family support services would be further
            reduced or eliminated including child care and family
            readiness. This will lead to foreseeable morale issues and
            quality of life degradation.

        As Commandant, I am also sensitive to the impacts that a
    sequestered budget will have on your marines, sailors, and civilians.
    Beyond the specific and tangible challenges described above is the
    human cost. Sequestration will create great uncertainty in the force.
    It is important that our people know they will have the resources to
    get the job done. It is important that they know they will have the
    training, equipment, support, family services, and quality of life they
    need and deserve. The impacts of sequestration, in all these areas,
    will chip away at their confidence. Our servicemembers should be
    singularly focused on accomplishing their mission. They, and their
    families, should never have to face doubts of whether they will be
    deployed in harm's way without the best training and equipment our
    Nation can afford. The foundation of the All-Volunteer Force is trust--
    sequestration will erode the trust that our young men and women in
    uniform, civil servants, and families have in their leadership. The
    cost of losing that trust is incalculable.
        The American people have come to expect their marines to do what
    must be done in ``any clime and place'' and under any conditions. They
    expect us to respond quickly and win. To meet their expectations, I
    will ensure that the Marine Corps will provide the most ready crisis
    response forces our Nation can afford. I will do my best to manage the
    institutional risk we will incur with the resources that are made
    available. However, the support of Congress and the American people is
    a critical requirement for your Corps of Marines to remain the Nation's
    expeditionary force-in-readiness. I most strongly urge that we avoid
    sequestration.
        Lastly, as a member of the Joint Chiefs of Staff, I want to
    reinforce Chairman Dempsey's recent comments related to sequestration.
    I share his and my fellow Service Chiefs' concerns that, under the full
    effects of sequestration, we will have less capability and capacity to
    bring options to our National Command Authority, our elected leaders
    and the American people. When our Nation has options, we have strategic
    flexibility. When our options are limited, we create strategic risk. We
    want to be forward-engaged to reduce the risk of going to war and don't
    ever want our young men and women in a fair fight--we want them to have
    a decisive edge over any adversary. In the context of today's strategic
    landscape, sequestration will cause great harm to the security of our
    Nation.

        Chairman McCain. Well, thank you and I thank you all for
    very compelling statements. I hope that all of our colleagues
    and, in fact, all the American people could hear the statements
    and see the statements that you made today, our most respected
    members of our society.
        I would also have an additional request, and that is that
    if you could provide for the record, all of you, a list of some
    of the decisions you would have to make if sequestration
    continues to be enacted and there is no amelioration of the
    situation that you are in.
        [The information refered to follows:]
        General Odierno. A return to sequestration-level funding would
    require the Army to size and equip the force based on what we can
    afford, not what we need, increasing the risk that when called to
    deploy, we will either not have enough soldiers or will send soldiers
    that are not properly trained and equipped. As I have stated before, if
    the discretionary cap reductions from sequestration occur, the Army
    will be at grave risk of being unable to fully execute the Defense
    Strategic Guidance requirements.
           sequestration impacts to force structure and end strength
        The Army is already preparing to drawdown to 980,000 (450,000 AC,
    335,000 ARNG, and 195,000 USAR). But if sequestration returns, Total
    Army end strength will fall an additional 60,000 to 920,000 (420,000
    AC; 315,000 ARNG; 185,000 USAR). The impacts of these reductions will
    be spread across the Total Army. These are not cuts we want to make but
    rather cuts we are compelled to make.
        We have already cut 11 Brigade Combat Teams (BCTs) from our force
    structure, and we will reduce an additional 4 AC BCTs from the fiscal
    year 2015 total of 32 (to 28) to achieve a 450,000 AC force. But,
    despite operational requirements to support the strategic guidance, a
    return to sequestration will cut another 2 BCTs (to 26) from the AC and
    2 BCTs (to 24) from the ARNG; as well as associated enablers.
        The Army has to date worked deliberately to mitigate the impacts of
    sequestration-level funding on U.S. installations by cutting Europe and
    Korea-based forces and enlarging U.S.-based BCTs. However, despite
    efforts to implement these efficiencies, we are now compelled to reduce
    military and civilian personnel at U.S. installations across the
    country. We are reducing the size of every headquarters by 25 percent
    by fiscal year 2019. Duty positions and personnel requirements at every
    installation will be reduced to mission critical levels only. Across
    the Army, the impacts will be broad and deep.
        The Army released a Supplemental Programmatic Environmental
    Assessment assessing the impacts of sequestration driving AC end
    strength to 420,000 soldiers; it identified 30 installations with the
    potential to lose 1,000 or more Active component soldiers and Army
    civilians. These force cuts have severely impacted communities across
    the United States. The breadth and adverse effects of future force cuts
    and forced involuntary separations of thousands of soldiers will
    accelerate under full sequestration each year through fiscal year 2020.
                       sequestration impacts to readiness
        To maintain a high level of sustained readiness, it is critical
    that the Army receive consistent and predictable funding. Sequestration
    puts the Army on a path of accelerated and much deeper cuts to our
    forces while debilitating readiness and reducing modernization and
    manpower. Funding fluctuations force the Army to train and maintain the
    force in fits and starts, which is cost inefficient and damaging to
    long-term readiness.
        The impacts of continued sequestration will endure for at least a
    decade. It is going to be the next chief and the chiefs after that who
    must respond to the long term and hidden impacts of sequestration.
    Readiness is not something that we can just fund piecemeal--once in a
    while and year to year. It has to be funded consistently over time. If
    not, it is fleeting, and it goes away. As we approach 2016, we can't
    take end strength out any faster without impacting our ability to
    conduct operations already committed. The Army will only be able to
    meet priority Global Force Management missions, and must rely on OCO
    funding to maintain any additional readiness for emergent needs. Under
    sequestration, sustainment readiness remains extremely reliant on OCO
    funding to mitigate risk to the program. In fiscal year 2013, the Army
    deferred $323.3 million in Depot Maintenance and was only recently
    funded through the Army's fiscal year 2015 OCO submission. The Army
    must also accept additional risk by deferring the emplacement of the
    Southwest Asia Army Prepositioned Stocks (APS) Fires and Sustainment
    brigades, an important element of the Army's revised APS strategy, for
    2 years. The rolling sequestration impacts on readiness thus handcuff
    our strategic flexibility.
        The Bipartisan Budget Act allowed us to buy back some training
    readiness in 2014 and increased funding for some training support
    system enabling capabilities. In fiscal year 2014, the Army completed
    19 rotations at the Combat Training Centers (CTCs), including 6
    rotations for deploying brigade combat teams (BCTs) and 13 decisive
    action training rotations (12 Active component and 1 Reserve component
    BCTs). We restored two of four cancelled Combat Training Center (CTC)
    Rotations. But due to sequestration, the Army cancelled two Reserve
    component rotations. Comparatively, even though we received some relief
    from sequestration in fiscal year 2014 and fiscal year 2015, just a
    third of our BCTs--23 of 66--are trained in their core mission
    capabilities in Decisive Action and Unified Land Operations. Reducing
    CTCs erodes the capacity of our formations from conducting Combined
    Arms Maneuver. CTCs are the culmination of a comprehensive training and
    readiness cycle for our BCTs, enabling them to deploy worldwide at a
    moment's notice.
        Although the Army attempts to mitigate the impacts on training
    readiness, we must continue to implement the Contingency Force model of
    fiscal year 2015 in order to maintain readiness for the 24 of 60 BCTs
    that will receive sufficient funding to conduct training at CTCs and
    home station. The remaining 36 BCTs will be limited to minimum
    Individual/Crew/Squad resourcing levels through sufficient Training
    Support Systems (TSS). In short, sequestration forces the Army to
    ration readiness. But regardless of funding levels, we have committed
    to keeping Combat Training Centers a priority. That means our home
    station training goes unfunded except for brigades going to CTCs.
        At the soldier level, Institutional Training will also take a
    significant reduction that will take years to recover. Already
    strained, the Army will further reduce Specialized Skill Training by
    85,007 seats (65 percent drop) and fund only the most critical courses
    resulting in 47,659 seats funded out of 199,212 seats (23.9 percent).
    Furthermore, this causes a training backload that will take years to
    reduce, hindering units' abilities to train and negatively affecting
    unit readiness. Ultimately, this further reduces the Army's ability to
    meet combatant commander needs for critical capabilities and skills.
        Installations across the Army where soldiers train and families
    live are severely impacted under current law. To contain the impacts of
    sequester-level funding, we have assumed significant risk within
    installations by relegating the impacts to installation support. These
    impacts will be further magnified as we mitigate readiness shortfalls.
    If sequestration level funding returns in fiscal year 2016, Base
    Operations Support will be decreased by $1 billion. No installation
    will be untouched by the reductions. This reduction will eliminate jobs
    and contract funding for grounds maintenance, pest control, custodial
    services, and refuse collection at all garrisons. Family programs, such
    as child and youth services and MWR services, will have to be reduced
    or fees increased to absorb this reduction.
        The reduced funding levels required by sequestration, should it
    occur again in fiscal year 2016, would only afford funding for life,
    health, and safety issues. The costs accumulate and for every year of
    sequestration level funding, it takes 2-3 years to address facility
    maintenance backlogs with facility sustainment reduced by over $750
    million. The cuts also reduce funding available for installation
    security by $162 million, directly reducing the capability of security
    forces at all installations worldwide and resulting in a loss of
    uniformed personnel available for other missions as they assume the
    critical base security role. Network Services and information assurance
    will have to be reduced by almost $400 million. This reduction will
    decrease the Army's ability to protect itself from cyber attacks across
    all spectrums. The fact is that traditional efficiency-seeking
    initiatives are not keeping pace with the decline of spending power in
    the defense budget.
                     sequestration impacts to modernization
        The Army has already undertaken significant cost cutting efforts
    and reduced personnel and equipment requirements during the first 2
    years of sequestration. In the triad of impacts to sequestration, Army
    modernization suffers the most. Modernization accounts have been
    reduced by 25 percent and every program affected; maintenance deferred;
    and the defense industrial base increasingly skeptical about investing
    in future innovative systems needed to make the force more agile and
    adaptive.
        As part of the balancing process, the Army has already made
    difficult choices in dropping the Armed Aerial Scout, Unmanned Ground
    Vehicle upgrades, the Mounted Soldier System, and Ground Combat Vehicle
    program. Under sequestration, planned upgrades to our current systems,
    such as UH-60 Blackhawk, Abrams, Bradley, and Stryker would be reduced
    or slowed (e.g. Stryker DVH upgrades will cease) leaving our soldiers
    more vulnerable, especially if deploying as part of a smaller force
    where technology optimizes soldier performance and capabilities. Over
    270 acquisitions and modernization programs have already been impacted
    by sequestration, and more than 137 additional programs may also be
    affected under continued sequestration.
        The Army is unable to protect upgrades and procurement on top of an
    already depleted capital investments portfolio at sequestration level
    funding. These modernization disruptions will stop development and
    production in critical programs that enable a smaller force to
    accomplish diverse missions. Under sequestration, the Army will have to
    stop the 4th Double-V Hull Brigade conversion; slow the Patriot system
    upgrade; halt the procurement of one new MQ-1C Gray Eagle Company and
    the accelerated fielding of another, both of which are needed to
    address the increased UAV demand in Syria and Iraq; delay the Aerial
    Intelligence Surveillance and Reconnaissance 2020 strategy by several
    years; reduce and extend the Active Electronically Scanned Array (AESA)
    radar development; and delay development of Radar-on-the-Network for
    Patriot and THAAD-integration until fiscal year 2022, which is a vital
    capability protecting our homeland from missile threats.
        In fiscal year 2014, we also continued our Aviation Restructuring
    Initiative. Our current aviation structure is unaffordable, so the
    Army's plan avoids $12.7 billion in costs while sustaining a modern
    fleet across all components, although there is no funding for an Armed
    Aerial Scout replacement. We cannot afford to maintain our current
    aviation structure and sustain modernization while providing trained
    and ready Aviation units across all three components. Therefore, we are
    supporting the comprehensive review of our strategy. ARI will
    ultimately allow us to eliminate obsolete airframes, sustain a
    modernized fleet, and reduce sustainment costs while maintaining all
    aviation brigades in the Reserve component.
        Modernization enables a smaller, agile, and more expeditionary Army
    to provide globally responsive and regionally engaged forces
    demonstrating unambiguous resolve. But sequestration adversely impacts
    the Army's ability to modernize and field critical capabilities that
    improve operational readiness of aging equipment. Predictable and
    consistent funding is required to modernize on the current timeline,
    meet the evolving threat, and fully execute Defense Strategic Guidance
    requirements. The cumulative cuts in modernization programs threaten to
    cede our current overmatch of potential adversaries while increasing
    future costs to regain or maintain parity if lost.
                                    closing
        As I have detailed above, the impacts of sequestration today and in
    the near future continue to be bleak. If Congress does not act to
    mitigate the magnitude and method of the reductions under the
    sequestration, the Army will be forced to make blunt reductions in end
    strength, readiness, and modernization. We cannot take the readiness of
    our force for granted. If we do not have the resources to train and
    equip the force, our soldiers, our young men and women, are the ones
    who will pay the price, potentially with their lives. It is our shared
    responsibility to ensure that we never send members of our military
    into harm's way who are not trained, equipped, well-led, and ready for
    any contingency to include war. We must come up with a better solution
    than sequestration.
        Admiral Greenert. A return to sequestration in fiscal year 2016
    would necessitate a revisit and revision of the defense strategy. As I
    have testified before, sequestration would significantly reduce the
    Navy's ability to fully implement the President's defense strategy. The
    required cuts would force us to further delay critical warfighting
    capabilities, reduce readiness of forces needed for contingency
    responses, further downsize weapons capacity, and forego or stretch
    procurement of force structure as a last resort. Because of funding
    shortfalls over the last 3 years, our fiscal year 2016 President's
    budget represents the absolute minimum funding levels needed to execute
    our defense strategy. We cannot provide a responsible way to budget for
    the defense strategy at sequester levels because there isn't one.
        Today's world is more complex, more uncertain, and more turbulent,
    and this trend around the world will likely continue. Our adversaries'
    are modernizing and expanding their capabilities. It is vital that we
    have an adequate, predictable, and timely budget to remain an effective
    Navy. Put simply, sequestration will damage the national security of
    this country.
        General Welsh. The fiscal year 2016 President's budget supports our
    critical needs to execute the defense strategy, but we made tough
    choices in capacity and capability/modernization. The Office of
    Management and Budget has provided direction through the Office of the
    Secretary of Defense that the Air Force does not support any reductions
    to the President's budget. Without a repeal of sequestration the Air
    Force will simply not have the capacity required to fully meet the
    current Defense Strategic Guidance. Therefore, support of the
    President's budget and repeal of 2013 Budget Control Act (BCA) is
    essential. If forced into BCA funding levels in fiscal year 2016, we
    would, out of necessity divest entire fleets, reduce quantities for
    procurement of weapons systems, and reduce readiness accounts.
    Potential impacts include:

             Divest RQ-4 Block 40 fleet and cut Block 30
            modifications
             Reduce MQ-1/MQ-9 ISR capacity by 10 CAPs--equivalent
            to current operations in Iraq/Syria
             Retire KC-10 fleet--15 in fiscal year 2016 and 59
            total across Future Years Defense Program
             Defer second Presidential Aircraft Recapitalization
             Reduce Flying Hours, Weapon System Sustainment, range
            support and munitions
             Reduce quantities for fighter recapitalization (F-
            35As) by 14 aircraft in fiscal year 2016
             Reduce investments in Space programs, Cyber Mission
            Areas, Nuclear Enterprise, and Science and Technology
             Terminate Adaptive Engine Program
             Divest seven E-3s in fiscal year 2016
             Divest U-2

        Bottom line--stable budgets at a higher level than BCA are critical
    to long-term strategic planning, meeting the Defense Strategic
    Guidance, and protecting the Homeland.
        General Dunford. Any discussion regarding how the Marine Corps
    would implement a sequester or reduce its budget request to a Budget
    Control Act level would need to be part of a larger conversation about
    the priorities of the Department and the defense strategy. Decisions
    regarding the appropriate size of the Marine Corps, and the resources
    required, need to be made with a full understanding of the expectations
    of the Corps at a severely reduced funding level.

        Chairman McCain. I guess the only other comment I would
    like for you to answer because I would like all my colleagues
    to be able to have time to answer questions is the old line
    about those of us that ignore the lessons of history. General
    Odierno, you made reference to it. When General Shy Meyer came
    before this committee and said that we had a hollow Army--I
    know that my friend, Senator Reed, remembers that also. We were
    able to recover hardware-wise and ships and airplanes and guns,
    but it took a lot longer than that to restore the readiness and
    even the morale of members of our military. And all four of you
    made reference to it.
        But I would like you to perhaps elaborate a little bit on
    the personnel side of this because it seems that there is
    always the best and the brightest that leave first when you are
    a pilot that cannot fly and you are on a ship that does not
    leave port and you are in a Marine Corps or Army outfit that
    does not exercise and does not have equipment. So maybe each of
    you could give a brief comment about this intangible that makes
    us the greatest military on earth. I will begin with you,
    General Odierno.
        General Odierno. Thank you, Senator.
        The center of everything we do is our soldiers. The Army is
    our soldiers, and without them and their capabilities, our
    ability to do our job becomes very, very difficult. It is
    something that happens over time. My concern is when you are
    funding readiness, you are funding leader development. You are
    funding the development of our young soldiers. You cannot just
    do that episodically. You have to do it in a sustained manner
    because it is a continuous learning cycle that allows them to
    execute the most difficult and complex missions that we face.
    In today's world, those missions are becoming more complex and
    more difficult.
        My concern is as they see that maybe we are not going to
    invest in that, they start to lose faith and trust that we will
    give them the resources necessary for them to be successful in
    this incredibly complex world that we face. I think sometimes
    we take for granted the levels of capability that our soldiers
    bring and the investment that we have made into their education
    and training, which is central to everything that we do, and we
    cannot lose sight of that.
        Unfortunately, with sequestration, we are going to have to
    reduce that over the next 4 to 5 years for sure because we
    cannot take end strength out fast enough to get to the right
    balance because of our commitments that we have. So, therefore,
    you have to then look at readiness, training, and
    modernization. We are losing cycles of this training that
    develops these young men and women to be the best at what they
    are and the best at what they do. So for us, we can never ever
    forget that.
        Admiral Greenert. Mr. Chairman, I bring something to
    everybody's attention. When we had sequestration, we said,
    well, we exempted personnel as if, hey, that is good. That
    means they got paid, but that does not mean that they got--that
    is kind of their quality of life and we gave them their housing
    allotment and all. That is good. But the quality of their work,
    which is what you are alluding to, when they go to work and
    what the General was alluding to--they are not proficient at
    what they do. Therefore, they are not confident. And as a
    sailor, you are out to sea. You are on your own. You have to
    have that confidence, know that you can be proficient.
        You alluded to pilots. You kind of have a have and a have-
    not. If you are deployed, you are flying 60 hours a week
    sometimes. If you are not deployed, you may be flying 10 hours
    a week, and some of that, by the way, may be in the simulator.
    So you are sitting around the classroom looking out the window
    at your strike fighter Hornet. It looks really great, but it is
    on the tarmac. That is not why you joined. The same goes at sea
    if you are a destroyer man and the same in the submarine. So
    you are not operating.
        That becomes behavioral problems eventually because the
    idle mind is the devil's workshop. So we are out and about. Our
    alcohol problems go up. I alluded to it. I saw it in command. I
    saw it as a junior officer, and this is what happens. Then that
    gets to family problems. It just starts cascading.
        So you bring all that together. We have an All-Volunteer
    Force that wants to contribute and they want to do things. They
    want to be professionally supported in that regard.
        Thank you.
        Chairman McCain. General Welsh?
        General Welsh. Chairman, during the first round of
    sequestration, our civilian airmen felt like we committed a
    breach of faith with them. They have still not recovered
    completely from that, and if it happened again, it would be
    absolutely horrible and I believe we would see the effect
    immediately in retention.
        I cannot emphasize enough my agreement with what John just
    said about people not joining this business to sit around.
    Pilots sitting in a squadron looking out at their airplanes
    parked on the ramp certainly feel like a hollow force, whether
    we define it that way or not. The same thing with the people
    who want to fix those airplanes, load weapons on them, support
    them from the storage areas. They join to be really good at
    what they do. In fact, all they want is to be the best in the
    world at whatever it is they do. All of our people are that
    way. If they do not think that we will educate them and train
    them and equip them to do that and to fill that role, then they
    will walk. They are proud of who they are. They are proud of
    who they stand beside, and they are proud of what they
    represent. And when they lose that pride, we will lose them,
    and if we lose them, we lose everything.
        Chairman McCain. And also, we are going to have, as you
    made reference to, a significant draw from the airlines as the
    Vietnam era pilots retire from the airlines. I think that is an
    additional issue that we are going to have to face up to anyway
    without sequestration.
        Admiral Greenert. We see it today, sir.
        General Dunford. Mr. Chairman, thank you.
        You alluded to the hollow force in the 1970s, and like the
    other chiefs, I was on Active Duty during that time. I was a
    platoon commander. We had an organization of about 190,000
    marines, but we did not have proper manning. We did not have
    proper training. We did not have proper equipment, and where we
    saw the impact was in poor reenlistments. We saw it in
    discipline rates. We saw it in poor maintenance of our
    equipment and the lack of professionalism. We were unable to
    maintain the quality of people that we wanted to have and,
    quite frankly, I know myself and many of my counterparts at the
    time had a very difficult decision to stay in the Marine Corps.
    Many of us only made the decision to stay once the Marine Corps
    started to turn around in the 1980s. As you alluded to, it
    actually took 5 to 7 years, even after we started to make an
    investment, for the morale to catch up.
        The thing that I would add to what the other chiefs have
    said, though, is that I think most of us would not have been
    able to predict the quality of the All-Volunteer Force and its
    ability to sustain now over 13 years at war. There is nothing
    that has allowed that force to sustain except for intangible
    factors. It has not been how much we have paid them. It has
    been their sense of job satisfaction, their sense of purpose,
    their sense of mission and, as I alluded to in my opening
    statement, their sense of trust. I think I probably speak for
    all the chiefs. None of us on our last tour on Active Duty want
    to be a part of returning back to those days of the 1970s when
    we did have, in fact, a hollow force. I think we are fortunate
    that we were not tested at that time.
        Chairman McCain. Senator Reed?
        Senator Reed. Thank you very much, Mr. Chairman, and thank
    you, gentlemen, again for your testimony and for your great
    service to the Nation.
        You have already reduced end strength. You have already
    reduced training. You have already reduced maintenance. You
    have already stretched out acquisition programs, et cetera.
    Whatever we do, I think you will manage, which presents the
    interesting problem that we could be in a period of a steady
    accelerating but invisible decline until a crisis, and then the
    reckoning will be severe. So we have to, I think, take
    appropriate action now, and the chairman's leadership is
    absolutely critical in that.
        But let me just go and ask you individually. With all these
    cuts you have already made, with all the losses, looking
    forward, what are the one or two capabilities that you will see
    leaving or lost if sequester goes into effect? I will ask each
    of you gentlemen. General Odierno?
        General Odierno. I often get asked the question, Senator,
    what keeps me up at night. The number one thing that keeps me
    up at night is that if we are asked to respond to an unknown
    contingency, I will send soldiers to that contingency not
    properly trained and ready. We simply are not used to doing
    that. The American people and we expect our soldiers to be
    prepared and that they have had the ability to train, that they
    understand their equipment, they have been able to integrate
    and synchronize their activities so they are very successful on
    the ground. That is the one thing that I really worry about as
    we move to the future.
        The second thing is our ability to do simultaneous things.
    We are coming to the point now where we will be able to do one
    thing. We will able to do it pretty well, but that is it. But
    this world we have today is requiring us to do many, many
    things, maybe smaller, but many, many things simultaneous. I
    worry about our ability to do that.
        Senator Reed. Admiral Greenert, please.
        Admiral Greenert. We are at a time of modernization. So our
    benchmark is the year 2020 and our ability to do these missions
    that I referred to. For the Navy, a lot of those missions
    require joint access to areas around the world against an
    advanced adversary. So what I am talking about, as I look in
    the future, is perhaps the inability--we will fall further
    behind in what I call electromagnetic maneuver warfare. It is
    an emerging issue. It is electronic attack, the ability to jam,
    the ability to detect seekers, radars, satellites, and that
    business. We are slipping behind and our advantage is shrinking
    very fast, Senator.
        Also anti-air warfare. Our potential adversaries are
    advancing in that. We are losing that. If we do not have that
    advantage, we just do not get the job done in the 2020
    timeframe.
        The undersea domain. We dominate in it today. But again, we
    have to hold that advantage, and that includes the Ohio
    replacement, the sea-based strategic deterrent, in addition to
    anti-submarine warfare.
        So it is about access and the ability to get that access
    where we need.
        Cyber is also another one that we talk about a lot.
        Lastly, I cannot underestimate the fact that we are good
    and we will continue. As General Dunford said, our forces we
    put forward we will put forward and they will be the most
    ready. But we are required to have a response force, a
    contingency force. We owe that to the combatant commanders. It
    has to be there on time and it has to be proficient. We are not
    there today, and we will just never get there if we go to
    sequestration. We will remain at about one-third of what we
    need to be.
        Thank you.
        Senator Reed. Thank you.
        General Welsh, if you could be succinct.
        General Welsh. Infrastructure that gives you long-term
    capability, training ranges, test facilities, those kind of
    things over time. We have not been investing. It will cost us
    the ability to operate in the future. Multiple simultaneous
    operations. We simply do not have the capacity anymore to
    conduct that, particularly in areas like ISR, air refueling, et
    cetera. The capability gap is closing, as John mentioned,
    between the people trying to catch up with us technologically
    and they have momentum. If we let the gap get too close, we
    will not be able to recover before they pass us.
        Space and nuclear business. In the space business, we
    cannot forget that that is one of the fastest growing and
    closing technological gaps. In the cyber arena, if we do not
    try and get ahead in that particular race, we will be behind
    for the next 50 years, as everybody else has been behind us in
    other areas.
        Those are my biggest concerns.
        Senator Reed. Thank you.
        Commandant?
        General Dunford. Thank you, Senator Reed.
        The two capability areas. First would be our ability to
    come ship to shore. We are in a vehicle right now that is over
    40 years old, and replacing that is both an issue of
    operational capability as well as safety.
        Also our airframes. The AV-8 and the F-18 are both over 20
    years old. Once again, an issue of both operational capability
    and safety.
        But I would say, Senator--and you alluded to it--that my
    greatest concern, in addition to those two capability areas, is
    actually the cumulative effect of the cuts that we have made to
    date and the cuts that we would make in the future. Quite
    frankly, every day I am still finding out second- and third-
    order effects of the cuts that have been made to date in the
    sequestration that was put in effect in 2013.
        Senator Reed. Thank you very much.
        Further complicating your lives and our lives is that this
    is a focus today on DOD, but the ramifications go across this
    Government and the impacts will roll back on you. One of the
    more obvious examples is if the State Department is subject to
    sequestration, they will not be able to assist you in the
    field. General Mattis, who was brilliant yesterday in his
    testimony, said last March that if you do not fund fully the
    State Department, then I need to buy more ammunition. So that
    is one effect.
        But there are even more subtle effects. We provide Impact
    Aid to the Department of Education. They administer it. If the
    Department of Education is subject to sequestration, then there
    will be an impact. In fact, Secretary of Education Duncan
    before the Appropriations Committee last year said the Killeen
    Independent School District in Texas, which has 22,000
    federally connected children, including 18,000 military
    dependents in Fort Hood, would lose an estimated $2.6 million.
        So we have to take not only a view towards DOD but across
    the whole Government because you all talked about retaining
    troops. When those young soldiers down at Fort Hood do not
    think their education opportunities for their children are as
    good as they were, they are going to vote with their feet.
        So that is not your responsibility. That is our
    responsibility. This has to be a comprehensive solution to this
    issue because it will affect you in so many different ways.
    You, as General Dunford, will be waking up getting complaints
    about how the schools are bad and I am leaving. That is not
    title 10.
        So, gentlemen, thank you for your service and your
    testimony.
        Chairman McCain. Senator Wicker?
        Senator Wicker. Thank you, gentlemen. This is very profound
    testimony today and very helpful to us.
        There are members of this committee who are also going back
    and forth today to the Budget Committee hearing. We have a debt
    problem in this country. General Mattis spoke about it
    yesterday with another distinguished panel. No nation in
    history has maintained its military power if it failed to keep
    its fiscal house in order. So we are balancing a spending
    problem we have in the Government overall with really, frankly,
    the lack of funds in DOD that you have talked about today.
        General Odierno, you said in your 40 years or so of
    service, this is the most uncertain time you have seen as a
    professional military person.
        Admiral Greenert, this is the fewest number of ships we
    have had since World War I. Is that correct?
        Admiral Greenert. That is correct, sir.
        Senator Wicker. General Welsh, as an Air Force veteran
    myself, it is astonishing to hear that this is the smallest Air
    Force ever in the history of the United States.
        General Welsh. Since we were formed in 1947, yes, sir.
        Senator Wicker. Right.
        General Dunford, in talking about sequestration, you say it
    is the funding levels and also it is the rules of
    sequestration. So I thought I would start with you and then we
    would go back up the panel here.
        If we were able a little more easily and quickly to give
    you flexibility within the funding levels and some relief from
    the rules, to what extent would that help you in the short run
    or in the long run?
        General Dunford. Thanks, Senator, for that question.
        Just the funding caps alone would reduce our overall budget
    by about $4 billion to $5 billion a year from where we were in
    President's budget 2012. So that is for us about 18 to 20
    percent. It would certainly be better if we did not have the
    rules associated with sequestration. What I can guarantee you,
    Senator, is whatever amount of money Congress provides to the
    U.S. Marine Corps, we will build the very best Marine Corps we
    can. But even at the BCA levels without sequestration, we will
    reduce the capacity to the point where we will be challenged to
    meet the current strategy.
        Senator Wicker. General Welsh, to what extent would
    flexibility within these very low levels be somewhat of a help?
        General Welsh. Senator, I think all of us understand that
    our Services and DOD has to be part of the debt solution for
    the Nation. We do not live in a mushroom farm and not believe
    that that has to be true.
        The things that we would need, though, with any kind of
    reduced levels of funding as we have been looking at is
    stability and predictability in funding over time and then the
    ability to make the decisions that will let us shape our
    Services to operate at those funding levels that are less than
    predicted.
        For the Air Force, if you look back to the 2012 budget,
    which is where we kind of came out of and said, okay, we can
    execute this new Strategic Guidance, the 2012 budget projected
    then for fiscal year 2016 was $21 billion more per year than we
    will have at BCA levels. $21 billion a year requires some very
    tough decisions to be made, some very hard and unpopular
    decisions to be made, but without the ability to make those
    decisions, we will continue to be stuck not sure of where we
    are going in the future.
        Senator Wicker. The clock is ticking away on that
    predictability. Is it not, General?
        General Welsh. Yes, sir, it is.
        Senator Wicker. Admiral?
        Admiral Greenert. My colleagues have spoken to the number,
    that is, the dollar value. But I would say if the verb
    'sequestered'--that is an algorithm. All accounts--and we have
    been through this--they get decremented, and then we spend
    months reprogramming with your help up here on the Hill. We
    lose months. We lose 4, 5, 6 months on a program like for us
    the Ohio replacement program where we do not have time. So
    shipbuilding gets held up. Projects get held up. People are not
    hired. That loses that trust with industry. So precluding
    getting sequestered is helpful and continuing resolutions have
    a similar effect in that we are not doing any new projects and
    some of these are pretty critical as we go into the years and
    need to modernize.
        General Odierno. Senator, the first comment I would make is
    over the last 2 years, we have been given money above the level
    of sequestration. In the Army, we are still only 33 percent
    ready. So, yes, flexibility will give us the ability to manage
    insufficient funds in our department, but that is all it does.
    It allows us to better manage because today we have had to
    extend all our aviation programs. So the cost for every Apache
    has gone up. The cost for every UH-60 has gone up. The cost for
    every CH-47 has gone up because we have had to extend the
    programs longer and longer and longer. So we are paying more
    money per system. So we are inefficient with the less dollars
    we have. So that even exacerbates the readiness problems even
    more. So flexibility would help, but it is not going to solve
    the problem we have, which is a problem of insufficient funds
    to sustain the right level of readiness.
        Senator Wicker. Thank you.
        Let me just ask briefly. There was a decision we were going
    to pivot to Asia-Pacific. To what extent were the Joint Chiefs
    of Staff consulted on that? We have eastern Europe. We have
    Russia. We still have the Middle East and everything going on
    there. It does not seem to have calmed down as some people
    thought. To what extent was this a Pentagon decision that we
    could even have a re-pivot to Asia-Pacific and afford it?
        Admiral Greenert. That was part of our discussions. We had
    numerous discussions with the White House and within the
    Pentagon when we did the Defense Strategic Guidance in 2012. So
    that was one of kind of the foundations of that strategy. So I
    would say, Senator, I felt we had a good discussion on what we
    call the rebalance to Asia-Pacific.
        General Odierno. I would just comment I agree with that. We
    had thorough discussions and we thought the rise of China--this
    was 2012--was very important, and we had to be able to have the
    capability to respond potentially to that and also the problems
    with North Korea and other problems in the Asia-Pacific. We
    made some assumptions about where we would be in the rest of
    the world. Those have not quite played out the way we thought
    with Iraq, ISIS, and specifically Russia and their increased
    aggression.
        The strategy is still good. We just have to recognize that
    there are some additional threats out there that we did not
    expect and that we are going to have to deal with those. That
    increases the risk as we look at sequestration and other budget
    cuts.
        Senator Wicker. Thank you, gentlemen.
        Chairman McCain. Senator Donnelly?
        Senator Donnelly. Thank you, Mr. Chairman.
        Thank you all for your service.
        General Welsh, I wanted to ask you in regards to our
    nuclear mission. It is a very, very critical mission obviously.
    What impact is sequestration going to have on your efforts in
    this area?
        General Welsh. Sir, two specific areas I think are at the
    top of the list. The first is that nuclear infrastructure I
    mentioned before. We are at a point in time where we have to
    start modernizing and recapitalizing some of that
    infrastructure in terms of facilities that were built 50 years
    ago now. We have an investment plan designed. It is prepared to
    be put into place. We actually have it in the President's
    budget this year. If we go to sequestration, all of the
    facility maintenance and new buildings that we have put into
    that proposal will fall off the table except for a single
    weapons storage area at one of the bases. So that is the first
    point.
        The second one is that we do have a requirement as a Nation
    to make decisions on what do we want to recapitalize and
    modernize in terms of nuclear weapons and nuclear command and
    control capability over the next 15 to 20 years. It affects the
    Air Force and the Navy. The decisions on that need to be made
    in the near future. Sequestration and BCA caps will limit the
    amount of things you can do in that arena, and they will make
    those decisions more important to make earlier so we do not
    waste money leading into the time when those things have to be
    done.
        Senator Donnelly. Admiral, how will this affect the plans
    you have for the Ohio class?
        Admiral Greenert. I get back to the verb. If we are
    sequestered, we lose months, as I was saying before, hiring
    engineers. We are on a very tight timetable to start building
    the first Ohio-class in 2021. So that is kind of one piece. We
    have to continue to do that. The sea-based strategic deterrent,
    including the Ohio-class replacement, is my number one program.
        But in fiscal years 2017 through 2020, we have $5 billion
    invested as advanced procurement for the first Ohio-class which
    in 2021 is $9 billion built, on top of the shipbuilding plan
    that we have now. Very difficult to do. We have to do it,
    though, Senator, so we will have to continue to work in that
    regard.
        Senator Donnelly. Thank you.
        I obviously have the same concern you all do on our
    warfighting capabilities. When you look at the difficulties in
    Syria and Iraq and that area, what are the kind of things we
    are not able to do there that you look and you go if we were
    doing this and this, it would really help move the ball
    forward? Where are you being placed in a tighter spot right
    now? General Odierno, if you would give us a start.
        General Odierno. Well, I would just say it is--the first
    thing is this fight against ISIL in Iraq and Syria is a long-
    term issue. So this is not something that is going to be
    resolved in weeks and months. It is something that is going to
    have to be resolved in years. It is going to require a
    combination of efforts with the local indigenous governments.
    It is going to require efforts from training indigenous forces,
    and it is going to require support from us for a very long
    period of time. It is going to require continued assessments
    and adjustments on how we believe we will continue to support
    that effort. I think over time, if that threat continues, we
    will have to reassess what our strategy is.
        So that is the hard part about it. This is not a short-term
    problem. It is a long-term problem, and it is going to take a
    long-term, dedicated effort to solve it across many different
    lines of effort, whether it be through diplomatic efforts,
    whether it be through a combination of joint capability and
    enabling indigenous forces, our ability to train indigenous
    forces, and the capability that we will need to do that for
    long periods of time.
        Senator Donnelly. So, in effect, you are facing a long-term
    challenge, and as you look long-term, you may have less tools
    in the toolbox to deal with it.
        General Odierno. That is correct.
        Senator Donnelly. General Dunford?
        General Dunford. Senator, thanks for that question.
        Right now, as I mentioned earlier, we are taking all the
    risk not with our deployed units but our units in home station.
    So everything that General Austin has asked us to do from a
    Marine Corps perspective we are able to do right now.
        But as General Odierno said, should this continue on,
    really for us it is a question of capacity to do everything
    that we are doing at a sustainable deployment-to-dwell rate.
    Just to give you some idea of how fast our marines are turning
    right now, they are all deploying for about 7 months. They are
    home for 14 months or in some cases less and then back out for
    7 months in perpetuity. So that sustained level of operational
    tempo is something that concerns me, and ISIL is really just a
    part of that.
        Senator Donnelly. That also makes it pretty difficult on
    the homefront. Does it not?
        General Dunford. Senator, there are really two issues. One
    is the time available to train for all of your missions, and
    the second is obviously the time available to spend time with
    your family. We are particularly concerned with our mid-grade
    enlisted marines when it comes to that particular challenge.
        Senator Donnelly. General Odierno, as you look forward, how
    are you planning to mix with the National Guard and how does
    that figure into your plans as we look forward?
        General Odierno. So clearly if you look at what we have
    done--so in the end, if we go to full sequestration, we are
    taking 150,000 people out of the Active Army. So the large
    majority of our cuts are coming out of the Active Army. So
    because of that, we are going to have to rely more on the
    National Guard and U.S. Army Reserves.
        We have to remember what we are trying to achieve is our
    National Guard and Reserve provides us a depth to respond to
    complex problems. So the issue becomes we are going to have to
    rely in some areas more on them in the beginning such as in
    logistics and areas like that where we do not have enough
    structure in the Active component now because of these
    reductions. We are going to have to rely more heavily on the
    National Guard and U.S. Army Reserve for things such as that.
        In terms of the combat capability, they are still going to
    have to provide us the depth. We might have to use that depth
    earlier because we are going to have less capability in the
    Active component. So this all gets to this balance that we are
    trying to achieve.
        I worry about the fact that if we reduce the Active
    component too much, our ability to respond quickly is going to
    be affected because the world today spins much quicker than it
    used to. Instability happens quicker and the necessity for us
    to respond has to be quicker. I worry that we are going to lose
    that capability because that is what we expect our Active
    component to do, and then we expect our National Guard and
    Reserves to be right behind us helping us as we move forward
    with this. I worry about that as we go forward.
        Senator Donnelly. Thank you all for your leadership.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Ayotte?
        Senator Ayotte. Thank you, Mr. Chairman. Appreciate it.
        I want to thank all of you for your leadership and what you
    are doing for the country and most importantly this discussion
    about sequestration. I think it is very clear the impact that
    it is going to have, and our ability to defend the Nation is
    one that calls all of us to act to address this for each of
    you. So I thank you for being so clear about what the impacts
    will be today.
        Yesterday, we heard the same thing from General Mattis and
    General Keane and Admiral Fallon about the impacts of
    sequester, and I think there is a clear consensus among those
    who have served and have formerly served in the military, the
    devastating impact on our ability to defend the Nation and our
    men and women in uniform.
        I want to ask each of you. When our men and women volunteer
    for service in the armed services, they give up a number of
    rights that the rest of us enjoy. They volunteer to tell our
    Government--we tell them what to wear, what to do, where to
    live, and to some extent they give up to some degree what they
    can say. Most importantly, they obviously are willing to
    sacrifice their lives to defend our Nation.
        In return for these restrictions and expectations, Congress
    has guaranteed these brave men and women the ability to
    communicate with us. I believe that this is very important. In
    fact, Congress put in place a law, title 10, U.S. Code 1034,
    that prohibits anyone from restricting a member of the Armed
    Forces in communicating with a Member of Congress. Do all of
    you agree that this law is important? Yes or no.
        General Odierno. Yes.
        Admiral Greenert. Yes, ma'am.
        General Welsh. Absolutely.
        General Dunford. Yes, Senator.
        Senator Ayotte. Thank you.
        General Welsh, I want to ask you about comments that have
    come to my attention that were reported to have been made by
    Major General James Post, the Vice Commander of Air Combat
    Command. He is reported to make these comments when addressing
    a group of airmen this month, and what he is said to have made
    in comments to the airmen was anyone who is passing information
    to Congress about A-10 capabilities is committing treason. As
    part of those comments, he also said: if anyone accuses me of
    saying this, I will deny it.
        Let me just ask you this, General Welsh. Do you find those
    comments to be acceptable in any way, to accuse our men and
    women in uniform to say you are committing treason if you
    communicate with Congress about the capabilities of the A-10 or
    the capabilities of any other of our weapon systems? Yes or no.
        General Welsh. No, ma'am, not at all. There is an
    investigation currently ongoing into that incident. When I read
    the newspaper article, I actually contacted the general officer
    involved and his commander. The DOD IG is overseeing an
    investigation being run by SAF-IG and will present the facts to
    the committee as soon as that investigation is completed.
        Senator Ayotte. Well, I hope that this is a very thorough
    investigation because, obviously, I think this is very serious
    to accuse people of treason for communicating with Congress.
        One thing I would like your commitment on that I think is
    very important. Do you unconditionally denounce, if it is found
    to be true? By the way, Air Combat Command in responding to
    press inquiries about this, has not denied that the general
    made those comments. But do you denounce those comments, and do
    you support the legal rights of members of the Air Force to
    communicate lawfully with Congress about the A-10 or any other
    issue? Do you commit that the Air Force will take no punitive
    action against airmen who are exercising their lawful right to
    communicate with Congress?
        General Welsh. Senator, I completely commit to the
    lawfulness of communication with Congress. I support any
    airman's right to discuss anything that you would like to
    discuss with them and to give you their honest opinion.
        In this particular case, with the investigation ongoing, my
    job is to wait until the facts are known, make recommendations
    to my secretary, and then we will report the decisions that she
    makes as a result of that when it is done.
        Senator Ayotte. I appreciate that, General Welsh, because
    it worries me about the climate and the tone that is set if
    airmen/airwomen are told that they would be committing treason
    for communicating with us. I just want to be clear because what
    I am hearing is that there is actually an investigation going
    on in reverse to find out who has communicated with Congress.
    To me that seems the opposite of what we would be trying to
    accomplish in looking at what General Post said and whether it
    was lawful or not. So I hope that there will be no punishment
    or any kind of pursuit of people trying to communicate with
    Congress. Will you commit to me with that?
        General Welsh. Senator, I know of nothing along those lines
    at all. I would be astonished by that. Certainly I am not part
    of it. The Secretary is not part of it, and I would not condone
    it.
        Senator Ayotte. Thank you.
        Chairman McCain. Senator Shaheen, happy birthday.
        Senator Shaheen. Thank you, Mr. Chairman. We will not talk
    about which birthday it is. [Laughter.]
        But it is certainly better than the alternative. So I
    appreciate that.
        Thank you very much for being here, gentlemen, and for your
    service to the country.
        Apropos Senator Ayotte's questions, one of the things I
    would hope is that our men and women in the military would let
    Members of Congress know about their concerns with respect to
    sequestration because I do think it is helpful for each of us
    to hear from people serving what they see firsthand about the
    impacts of some of these policy decisions. So I am hopeful that
    we will hear more of those discussions.
        Now, I have been pleased that Chairman McCain has started
    the Senate Armed Services Committee hearings this year with a
    broader view of national security policy. One of the issues
    that has been brought up with respect to national security
    policy is that one of the concerns is the fact that we have not
    had an ongoing budget process that people can count on, that we
    have a debt that in the future is a concern, and that it would
    be important for us to address that. I certainly put
    sequestration in that category that it is important for us to
    address this and to do it in a way that provides certainty that
    deals with the shortfalls that our military is facing and that
    it is important for us to do that with respect to all of the
    agencies of the Federal Government that deal with national
    security. I wonder, gentlemen, if you would agree that that is
    an important goal that we should be working towards in
    Congress. General Odierno?
        General Odierno. Well, I think, again the strength of our
    country is based on many different factors. It is important
    that we understand that as we go forward. We certainly
    understand that.
        What I would just say to that is that the important part of
    our defense spending, the important role that plays in ensuring
    our security should also be considered as we do that. I know
    you know that, Senator.
        Senator Shaheen. Thank you. Does everyone agree with that?
        Admiral Greenert. Yes, ma'am.
        General Welsh. Yes, ma'am.
        General Dunford. Yes, Senator.
        Senator Shaheen. So to be a little parochial this morning,
    as I think most of you are aware, the Portsmouth Naval Shipyard
    is a shipyard that is shared between New Hampshire and Maine
    and is, I think, one of our very important public shipyards.
    Admiral Greenert, I know you know this. I wonder if you could
    talk about the importance and the impact of sequestration on
    our shipyards, on our depots and the concern that that
    provides. We have talked a lot about the impact on our Active
    Duty military, but our civilian workforce is also affected.
        Admiral Greenert. Thank you, Senator.
        I would say the impact was very much underestimated and
    that is part of your point.
        So a few facts. We lost 75,000 man-days of planned shipyard
    work that we had to defer because we had no overtime. We could
    not hire, and then, of course, on top of that we furloughed
    them. So how do they feel about the importance of it?
        But what did we lose in that? We lost--you understand
    this--1,700 submarine days. So that is like taking five
    submarines and tying them up for a year. So, I mean, that is
    the kind of impact.
        So I worry about--and as I said, it takes 5 years to
    recover from that collectively.
        We talked about the importance of the nuclear deterrence.
    Well, these public shipyards underwrite all that. That is our
    SSBNs. Because of Portsmouth, I can do work in the other
    shipyards on the other SSBNs. Portsmouth is a major, major part
    of a ship maintenance enterprise that we must have, and I worry
    about it in sequestration.
        Senator Shaheen. Thank you very much.
        Does anybody want to add to the impact on depots in the
    country?
        General Dunford. Senator, I can add from an aviation
    perspective. When we did furlough folks, we lost a lot of
    engineers and artisans. Right now, 50 percent of our F-18s are
    out of reporting, and we are having a very difficult time
    recovering from the loss of maintenance throughput capacity as
    a result of those furloughs.
        Also importantly, because it was mentioned in most of our
    opening statements, when we talk about trust and we talk about
    retaining high quality people, predictability is very important
    to people. I fear that some of those folks that were furloughed
    will not come back because they do have other opportunities.
        Senator Shaheen. I certainly share that. Admiral Greenert,
    I know you appreciate this with respect to the shipyard. One of
    the things that I have heard from some of our shipyard
    employees is that as we are looking at an aging workforce and
    the need to hire new people and the shortage of STEM-educated
    people, that engineers, mathematicians, scientists--they are
    all in very short supply. If they do not feel like there is
    certainty about Government work, then they are going to look in
    the private sector, and that creates a real issue for all of
    us.
        Admiral Greenert. Senator, if I could add. We have already
    reduced about 4,500 out of our depots, contractors, civilian
    employees. What we found following the furlough, as you just
    pointed out, is our doctors, our engineers, our behavioral
    health specialists, all of these people, because now they are
    worried about the uncertainty and there are jobs available for
    them other places--they are taking those jobs at a higher rate
    than they have in the past. That is the impact that this has.
    This capability that we have developed and experience that we
    are developing we are losing, and it is a big concern for us
    specifically in the STEM area that you are talking about.
        Senator Shaheen. Yes. Thank you all very much. My time has
    expired.
        Chairman McCain. Colonel Ernst?
        Senator Ernst. Thank you, Mr. Chairman.
        Gentlemen, thank you all for being here today. I do
    appreciate your continued service to the United States.
        General Odierno, thank you for mentioning in your brief the
    Reserve and National Guard forces and also to Senator Donnelly
    for bringing that point up as well. We do feel the impact. We
    are hurting. We are hurting too through sequestration.
        With respect to the DOD and sequestration, General, you
    mentioned just this morning that we must appropriately care for
    our soldiers. Our soldiers and their families are bearing the
    burden of our decisions. We must train, maintain, and sustain a
    force and our equipment. But with sequestration in place, we
    also recognize that we have to utilize taxpayer dollars to the
    best of our ability.
        So could you please give examples to the panel on where we
    are holding our military leaders accountable and how they are
    best utilizing taxpayer dollars in such a time as this?
        General Odierno. So there are a couple of things that we
    continue to do that I think are important. We are reducing all
    our headquarters. The reason we are doing that, so we can get
    more capability to the soldiers that are serving. So we made a
    decision in the Army to reduce all our headquarters down to the
    two-star level by 25 percent to free up dollars in order to
    train our soldiers which helps. We have reorganized our brigade
    combat teams and eliminated headquarters. So we are able to
    fund and train the best we can.
        We are trying to reorganize in our aviation capability. So
    we are getting rid of aircraft that are no longer capable of
    doing the things we need them to do.
        We are transforming our training strategies. We have just
    now developed a total force strategy in Forces Command where we
    are training every--all training we do is a combination of
    active, Guard, and U.S. Army Reserve so we can maintain that
    capacity. So we are trying to make it as efficient as possible.
        We are also looking at how we are making the most out of
    our training dollars in live training, virtual training, and
    constructive training.
        So all of those things are the kind of things we are doing.
        We are also streamlining some of our sustainment activity
    because we became too over-reliant on contractors, especially
    during peak years in Iraq and Afghanistan. We want to retrain
    our green suit capability because we have to sustain that at
    very high levels. That also will reduce our dollars we are
    spending on contracts that allow us to do this.
        So these are just a sample of the kind of things we are
    trying to do to put money back in that allow us to take care of
    our soldiers. The best way to take care of our soldiers in my
    opinion is to make sure they are prepared and trained to do
    their jobs.
        Senator Ernst. Very good. Thank you, General.
        As a follow-on to that--and maybe all of you can just very
    briefly respond--just last week we had the State of the Union.
    I had invited a friend of mine from Iowa State--we were cadets
    together--to attend. He lives here in Washington, DC, at least
    temporarily. He responded, Joni, I would love to but I cannot.
    I am being fitted for my new leg. Well, he is stationed at Fort
    Bragg but he lives here right now at Walter Reed. A great
    friend of mine. I was able to visit with him on Monday. So his
    last tour to Afghanistan was a little more difficult than most,
    and because of that, he has lost his left leg.
        We have a lot of soldiers, a lot of members that are going
    through difficulties and challenges. I would like to know, just
    briefly from each of you, the impact of sequestration in regard
    to our medical care and follow-on for soldiers and their
    families. Just very briefly, gentlemen.
        General Odierno. One of the issues that we are working
    through that we have to watch very carefully is we have to
    consolidate our medical capability and facilities. As we do
    that, we have to make sure that every soldier and their family
    member gets provided the same level of support no matter where
    they are stationed, and that becomes a challenge as you start
    to reduce. So we have to be careful to ensure that. We will
    still have the best, highest level care.
        The issue becomes the sustained care over time across the
    country and overseas where our people are serving and making
    sure that they get the right coverage for themselves and their
    families. There are some difficult decisions that are going to
    have to be made. I do worry that they should be able to rely on
    the best medical care for them and their families as we move
    forward. So this is something that we are going to have to
    watch very carefully as we move forward.
        Senator Ernst. Admiral?
        Admiral Greenert. I think the General got the key points
    there.
        For us, it is about the resiliency programs and the Wounded
    Warrior care and recovery programs. We have to fund them and we
    have to make sure they do not get caught up in some overall
    reduction. So we have to be very vigilant in that. For us, it
    is a program called Safe Harbor. I watch it myself to make sure
    that we do not inadvertently--heaven help us we do it
    consciously, but inadvertently have these kinds of things
    caught up and--again the verb--they get sequestered. So we got
    to watch that.
        Senator Ernst. Thank you.
        General Welsh. Senator, I think the thing for us is what
    John highlighted there and that is identifying where they could
    get caught up in this and then come to you and ask for help
    because I know you will provide it. This committee will provide
    it. This is one of those sacred trust things that we owe our
    people.
        Senator Ernst. Thank you.
        General?
        General Dunford. Senator, maybe I would just address also
    the non-medical care aspect of it. We established a Wounded
    Warrior regiment to take care of our wounded warriors about 10
    years ago, and we are very proud of the way that we take care
    of marines. As General Welsh said, it is about keeping faith.
    We have funded that to date through OCO funding, and so one of
    the challenges now, as we move forward and OCO goes away, we
    have to move that into the base and we have to move it into the
    base at the very same time we are dealing with sequestration.
    So that will certainly remain a priority for us. It will be one
    of the other things that competes with the resources that we
    are going to have fewer of.
        Senator Ernst. Right. Thank you very much, gentlemen.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator Kaine?
        Senator Kaine. Thank you, Mr. Chairman.
        To the witnesses, thank you all. I did my back-of-the-
    envelope math, and I think this is 156 years of service to the
    United States that is sitting before us at the table in
    military capacity. We owe you thanks, but we ought to also
    listen to you.
        For the record, I would just note I voted with enthusiasm
    for the nominations that were before us earlier. But there were
    42 nominations to lieutenant colonel and colonel, and there was
    not one woman among the nominees. Those nominated had superb
    qualifications, but that is a fact of interest and I just
    wanted to bring it up that people on the committee pay
    attention to that.
        The sequester was voted in by Congress in August of 2011,
    and I think as some of your testimony indicates and as we all
    know, when it was voted in, everyone wanted it not to happen.
    The idea was that Congress would find a better path forward.
    All agreed that a sequester path would have exactly the kinds
    of consequences that you have testified to this morning.
        Since August of 2011, as you have also testified, the world
    has not gotten simpler. We have seen the rise of ISIL, an Ebola
    threat, increasing Russian bellicosity toward neighboring
    nations, North Korea's cyber attacks, a devastating Syrian
    civil war, a decline in the situation in Libya and other
    nations in Africa, flexing of the muscles by the Chinese,
    flexing of the muscles by the Iranians. The challenges have
    gotten only more intense since August 2011.
        But while the challenges are getting more intense, we are
    needlessly inflicting pain through budgetary mechanisms on our
    military.
        General Mattis testified yesterday--and the chairman
    indicated this in his opening statements. It is a pretty
    powerful statement when you think about it. No foe in the field
    can wreck such havoc on our security that mindless
    sequestration is achieving. There are some powerful foes in the
    field. General Mattis' testimony yesterday was that none of
    them will have as much effect on American national security as
    sequester. That is why it is imperative that we reverse it. We
    have to take steps to reverse it.
        If you look at budgets, budgets tell you about priorities.
    We can say all we want about how we value military service and
    the defense mission, but at the end of the day, our budgets
    tell us something about what we really value. In 2015, 1.3
    percent of Americans' GDP was spent on interest payment. That
    number is rising, 3.2 percent of the GDP was on defense. That
    number is dramatically falling. 3.3 percent on non-defense
    discretionary. That number is falling even more dramatically.
    5.6 percent of our GDP was spent on Federal health care. That
    is growing dramatically. 4.9 percent on Social Security. That
    is growing dramatically. But by far the largest item on the
    expenditure side is tax expenditures, $1.5 trillion year of
    deductions, exemptions, loopholes, credits, et cetera, 8.1
    percent of the GDP and rising. What our budget is telling us is
    that we support tax expenditures much more than any of these
    other areas and we need to find appropriate ways to rebalance
    the budget in the sequester and invest what we need to to
    combat the challenges that we have discussed.
        General Dunford, I wanted to dig in with you a little bit
    on some of the testimony you gave about the relationship in the
    Marine Corps between readiness and forward deployment. We have
    demanded of you that you be more forward deployed. In the
    aftermath, for example, of the horrible tragedy in Benghazi, we
    have asked you to restructure to have expeditionary units and
    rapid response teams closer to the action. We have asked the
    same of other Service branches.
        But forward deployment has a cost. Talk a little bit about
    what sequester does in terms of whether you have folks forward
    deployed or whether you have to have them back home. If that is
    the case, what is the effect of that on our ability to respond
    to crises?
        General Dunford. Thank you, Senator, for that question.
        Our ability to be forward deployed is based on our
    capacity. As I mentioned earlier, today our units are deploying
    for about 7 months; they are home for 14 months and back for 7
    months. If we get sequestered, we will reduce capacity, and we
    will reduce capacity to the point where we will be closer to a
    1-to-1 deployment to dwell rate, meaning that our marines will
    be deployed for 7 months--our marines and sailors--back out for
    7 months and deployed for 7 months. So that is a pretty
    significant cost. Again, we talked earlier about both the
    impact on training. Very difficult to maintain core
    competencies with that quick a turnaround. We have experience
    doing that. We were about that level about 4 or 5 years ago at
    the peak of the requirements in Afghanistan and Iraq. So that
    is the biggest impact on sequestration is that reduced
    capacity. Now, that is the most significant one.
        The other impact, though, is because of its mindlessness--
    and it cuts across all of the lines--it will also have an
    impact on home station training, facilities that are available,
    amount of ammunition, amount of fuel, amount of batteries, the
    things that you need to do to properly train when you are back
    at home station.
        All of that degrades two things, Senator. One is the number
    of marines that are forward deployed. As we discussed before,
    in the wake of Benghazi, I think there is an expectation that
    marines and sailors will be there and respond within hours to a
    threat against our diplomatic core, U.S. citizens, or interests
    abroad. The fewer marines and sailors there are forward
    deployed, the longer the timeline it is for us to be able to
    respond.
        With sequestration, I also have concerns over time about
    the capabilities that those marines have both from the
    equipping and training perspective and the human factors, again
    because of that quick turnaround from a deployment-to-dwell
    perspective.
        Senator Kaine. Thank you, Mr. Chairman. My time has
    expired.
        Colonel Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman.
        Gentlemen, thank you for your wonderful service to our
    country.
        I just wanted to echo what Senator Wicker mentioned in
    terms of General Mattis' comments yesterday about the strategic
    aspects from a national security perspective of the national
    debt that we have racked up over the last several years, $18
    trillion and increasing. So I think we all see that we are
    struggling with the issues of sequestration, with the issues of
    readiness, but with the broader issues of how our fiscal
    situation in this country actually impacts national security.
    So I appreciate the testimony here.
        I also appreciate the focus on what is happening, what
    potentially could be happening with regard to training,
    readiness, morale, particularly given the global security
    threats that I know that we all recognize are out there.
        Similar to Senator Shaheen, I also would like to focus a
    little bit more, though, on local impacts. I think it is
    important that the people that we represent also hear what the
    potential for local impacts could be with regard to
    sequestration.
        I am sure all of you gentlemen would agree that Alaska is
    one of the most strategic, most important military places that
    we have in this country, whether it is missile defense, world-
    class unrivaled training areas and ranges, a platform for rapid
    deployment into the Asia-Pacific and to Eurasia. You will be
    hearing me talk about that a little bit in some of our
    hearings. I am sure my colleagues will as well.
        But the large number of Army and Air Force bases and
    personnel in Alaska I think is a testament to the important
    geostrategic location and training. General Welsh, you
    mentioned the importance of training. Joint Pacific Alaska
    Range Complex (JPARC) in Alaska is probably the premier
    airspace for Air Force training in the world, larger than
    several American States.
        General Odierno, I know that you are heading up to Alaska
    soon. Sir, we are looking forward to that. I wanted to let you
    know there was an article today in the Alaska Dispatch. It
    mentioned how the Army is looking to eliminate 120,000
    positions, looking at potentially 30 installations that could
    be impacted, including a couple combat brigades possibly from
    Fort Rich or Fort Wainwright in Alaska. Obviously, this is
    having big concerns in my State.
        Is sequestration driving this focus in the Army to look at
    30 different installations, including brigades, in Alaska? Is
    that something that is being driven directly by sequestration?
        General Odierno. It is being driven directly by
    sequestration and the fact that we will have to reduce
    significantly the amount of forces that we have in our Active
    component and National Guard and Reserve component. So
    throughout all of the United States and overseas, we will have
    to take reductions. Every installation could be affected as we
    make these decisions.
        Senator Sullivan. So that exercise right now, as described
    in the Alaska Dispatch, is a direct result of you preparing for
    a sequestration?
        General Odierno. Direct result, yes, sir.
        Senator Sullivan. General Welsh, I know that the F-35 is a
    top program with regard to the Air Force. Alaska is a front-
    runner for a future F-35 basing, something that we are quite
    excited about. I think it would be great not only for Alaska
    but for the country, given our location. I look forward to
    having future discussions with you on how to cement that
    decision. But I actually wanted to ask you about the impact of
    sequestration on that program, if there is any, if the future
    basing could be delayed or undermined with regard to the F-35s.
    Is that something that could also be impacted by sequestration?
        General Welsh. Senator, if sequestration occurred again in
    2016, it might be necessary to defer some of the aircraft buy
    in fiscal year 2016 out of 2016, and the details of that will
    be in our budget rollout. We will be able to discuss those in
    detail with you and your staff beginning next week. But that is
    a possibility. We have defended this program from the beginning
    as a priority program for us, and so we hope that does not
    become reality. That would not, by the way, put the initial
    operational capability date at risk in my view.
        Clearly, your emphasis on the strategic benefits of the
    State of Alaska and the training capability at JPARC are pretty
    well supported by the decisions we are trying to make with F-22
    bed-down already made, tanker bed-down already made, and now
    consideration of Eielson as the leading candidate for our
    Pacific bed-down. So I would agree with everything you said
    about the location and the strategic value.
        Senator Sullivan. Yes, sir. Thank you. Again, I look
    forward to having that discussion in more depth with you and
    other members of your staff.
        General Dunford, you mentioned--actually several of you
    mentioned--your experience with, when you initially joined the
    Service, kind of the hollow Army or the hollow Marine Corps.
    Could you provide a little bit more details, any of you or all
    of you, quickly on specifics of kind of then and now, when you
    joined the Service, saw the initial kind of hollow military
    versus the high level of training that we have had with regard
    to our troops and readiness?
        General Dunford. Senator, I would start by talking about
    the quality of people in the aggregate. There is absolutely no
    comparison between the quality of the men and women that we
    have in uniform today and the quality that we had in the wake
    of Vietnam during the late 1970s. We certainly had some very,
    very good people, but the comparison I would make today in the
    quality of people would be very significant.
        But really what was going on in the 1970s is we did not
    have sufficient money to train, and so the training was not
    effective. Our capabilities were not growing. We did not have a
    significant amount of money to take care of our infrastructure
    and our barracks. Frankly, I can remember days of asbestos
    carpeting, lead pipes, raw sewage in the barracks, and
    conditions of habitability that frankly we were embarrassed
    about in the 1970s.
        But I think the one thing that is different today and the
    1970s is the spirit, the will, and the discipline of the force
    in addition to being very well equipped. Of course, much of the
    equipment we had was old. But the most important thing of the
    intangible quality of the force today--and again, we have all
    spoken about trust. We have all spoken about the ability to
    predict the support that you are going to have when you go into
    harm's way. All of those things have given us that spirit,
    will, and discipline. That is the thing I would be most
    concerned about losing is the quality of the force and those
    characteristics that we see in our soldiers, sailors, airmen,
    and marines today.
        Chairman McCain. Senator Manchin?
        Senator Manchin. Thank you, Mr. Chairman.
        Thank you all for your outstanding service to our country,
    and we appreciate it very much.
        I do not know a person in West Virginia that would not
    sacrifice for our military. Not one that would not do without,
    that would not give up something that they are getting now or a
    benefit for our military. I do not know of one. But they do ask
    the question, can we do it better? Can we make it more
    efficient?
        I just remember the omnibus bill we just passed. There was
    $5 billion of new equipment in there for DOD that I understand
    nobody asked for. So I am sure if it was built in my State or
    some other State, we are wanting you all to buy and pushing it
    on. There has to be a more effective, efficient way of
    procurement. We have to have enough resilience.
        I know the chairman has fought on this forever. I have
    heard him when I was Governor of the State and when I was in
    the legislature. There has to be a better way. When Eisenhower
    said beware of the industrial military complex, man, he knew
    what he was talking about. Even back to George Washington knew
    that there could be a problem.
        We have to break that so that we can go back to the people
    who are willing to sacrifice, whether it is in my State of West
    Virginia, Arizona, or wherever it may be. They said, fine, what
    is everybody else doing? I will sacrifice but are we doing it
    better? We do not have an audit. So without an audit, I have
    never been able to run a business without an audit knowing
    where my problems were. We have a hard time getting an audit
    out of DOD so that we know where the waste or efficiencies or
    things of that sort.
        We force stuff upon you all that you all do not want. I
    know you cannot speak and it makes it politically very
    challenging. But we have to be there for you. If we are going
    to have the best readiness and prepared and support the
    greatest DOD the world has ever seen, we have to make sure we
    are doing it in the most efficient fashion.
        So I look at that, and I have a whole different approach to
    this 2 years of Military Service. I was a product of the
    Reserve Officers' Training Corp (ROTC), a mandatory ROTC, in
    West Virginia University, and I enjoyed it. I would never have
    had that chance if I did not, with the draft process and all,
    everything that went with that. I still believe in 2 years of
    public service for every young person. Really, we could tie it
    to this 2 years of college of the President and say you earn 2
    years of college if you give 2 years of public service. It does
    not have to be the military. You all could pick and choose the
    best if they wanted to go there. We still have that option. I
    think it has more value and buy-in to our country if they do
    that.
        I just want to know--and I have the most frustration with
    the procurement of this process of ours--why it takes so long
    to get an idea for new technology to market. Why is it so long
    for us to get that and the cost that goes in that. F-35. I know
    our chairman has been on this for as many years as I can
    remember. There is no quid pro quo. There is no incentive or
    reward or penalty, it seems like. We do not run the private
    sector the way we are running the procurement in the military
    that I know of.
        So it is kind of an open end, and I would like anybody's
    comment that would want to chime in. We can start with General
    Odierno and go down if any of you want to chime in on this. But
    give us some direction that we can help you and how an audit
    would work to reveal the inefficiencies so the transparency
    that we need up here to give you all the support you need.
    General?
        General Odierno. Senator, thank you.
        First, we are working very hard towards auditability. We
    are starting to put the systems in place that are enabling us
    to better see ourselves and where we are spending money, where
    we are wasting money, and where we are underfunding money. We
    are getting there, and I think the requirement is by 2017, but
    we are working very fast to get there. We are starting to see
    some of that come to fruition. So I want you to know we are
    taking that very seriously and we are making some progress. We
    are not where we need to be yet, but we are making progress and
    we should be prepared by 2017 to meet that goal.
        A couple things I would just comment on what you said. Yes,
    we are still having to procure systems we do not need. Excess
    tanks is an example in the Army. Hundreds of millions of
    dollars spent on tanks that we simply do not have the structure
    for anymore. There are reasons for that, I can understand. But
    there are things that go on. When we are talking about tight
    budgets, a couple hundred million dollars is a lot of money,
    and we got to understand how we do it.
        The other thing is I know there are lots of people that
    have looked at procurement reform, and the one thing that has
    been frustrating to me as the Chief of Staff of the Army is how
    little authority and responsibility that I have in the
    procurement process. I have a say in requirements to some
    extent, but I have very little say. Now, what I have to do is
    use my influence, use my influence as a four-star general and
    the Chief of Staff of the Army, to try to influence the
    process. But frankly I have no authority inside of that process
    outside of requirements. So I think when you are in this
    position, you have been in serving for decades, you fought
    wars, you have some experience in what is needed and how we
    develop and procure items. I would like to see us in the
    uniform get a bit more involved. I would ask as we review this,
    that we would all take a look at that, sir.
        Admiral Greenert. We too are working on auditability. This
    year we are going under what is called the schedule of
    budgetary activity. That means the financial transactions. We
    should complete that by December. That takes us to the next
    step, which is to look at the four classic areas of
    auditability. So I tell you the Navy is on track. We will
    continue to keep the committee and yourself informed.
        When I look at the procurement process--Ray has it about
    right--we need to clarify the chain of command. There are too
    many people involved in the process. If I say I need a thing
    and it starts moving towards somebody building it and there are
    a whole lot of people telling us, no, this is what you really
    need. I am talking about in the Pentagon, just to get it out of
    the building. That is one.
        Two, we need to be able to compromise once we tell somebody
    to go build us something. If I say it has to be this fast, do
    this greatness, and I am reaching hard, it can be quite
    expensive, and the technology just may not be there. We may
    need to de-scope this. It is too expensive. It will not deliver
    on time. Cost and schedule need to become a much bigger factor
    in this process than it is today. I think it ought to be a key
    performance parameter. That is big speak in the Pentagon. It
    means if you breach this, you got to go back and stop, take a
    pause, and look at this again.
        Senator Manchin. If I could just finish. My time is up.
        But I would love to speak to you all, if I can, because I
    am really interested in the procurement and changing the
    procurement, how we do it. I am more interested in finding how
    many ideas come from you all, what you just described as what
    you need, versus what some on the outside think you need. Those
    are the things I would like for you to think about, and I will
    come and visit with you all if I may.
        Thank you very much. I am sorry, Mr. Chairman.
        Chairman McCain. I thank you, Senator Manchin. That is our
    second top priority item I think for this committee in the
    coming session.
        Senator Tillis.
        Senator Tillis. Thank you, Mr. Chairman.
        Gentlemen, thank you for being here, your leadership, and
    your service to our Nation.
        I apologize for being out. I have a competing committee
    meeting over in Judiciary with the appointment of the nominee.
        But my question to you--I came from the North Carolina
    legislature and we had a budget crisis back in 2011. We had to
    cut. What I heard from the heads of the various administration
    members were that they could absorb some of these cuts if the
    legislature were willing to provide them with the flexibility
    to determine where they do it and potentially even changing
    some of the processes, I think alluding to what maybe the
    Admiral said on procurement processes.
        Has there been much of a comprehensive focus on if you
    could make changes to the way you procure, deploy, and
    prioritize spending and provide that feedback to Congress? That
    is one.
        Another question is with respect to sequestration--I do not
    know that much about it, although I do know that I would vote
    to repeal it--can you describe what kinds of constraints
    prevent you from being able to absorb the suggested cuts with
    sequestration that may make it easier if it were to stay in
    place and go down the line?
        General Odierno. Senator, the one thing I would say is I
    think sequestration level of budget is simply not enough budget
    for us to meet the demands that are on the force. I want to be
    very clear about that up front. I just think it does not allow
    us to meet what is our defense strategy and the Defense
    Strategic Guidance that we are operating under now.
        That said, we are inefficient. Just sequestration itself is
    inefficient because it is in some cases salami slice cuts that
    limit how you manage. What it has done is it has stretched
    programs longer than they need to be. So the cost per item is
    more. It is causing us to reduce training and some of our other
    modernization activities much broader than we need to. It is
    causing us to cut end strength too quickly. So all of those add
    to an inefficient use of the resources that we are provided. So
    we can make some adjustments around, that would help if we were
    able to change some of the mechanisms associated with
    sequestration. That said, I just believe the level of funding
    under sequestration is simply not enough for us to do the
    things that we need to do.
        Senator Tillis. General, does that suggest that--if I were
    to have that discussion with someone in business, the question
    that I would ask is how productive and how efficient do you
    think your organization is. So are you suggesting that now that
    the cuts suggested by sequestration are beyond your capacity to
    drive additional efficiencies and productivity out of the
    organization?
        General Odierno. No. I would not, no. There is always room
    in the Army for a continued efficiency. We have taken several
    steps to try to improve our efficiency, whether it be in how we
    get contracts, whether it be how we size our headquarters,
    whether it be how we manage some of our programs. We always
    have to be doing that and adjusting and adapting how we do
    things and be more efficient in our ability to train. We are
    always looking at those items. So there is always room for
    that.
        But I think we have to understand the levels we are talking
    about really hinders us, I believe, in a very difficult
    security environment to meet the needs of the Nation.
        Thank you.
        Senator Tillis. Admiral?
        Admiral Greenert. I echo what General Odierno said. The
    absolute value of money that it takes to do the strategy and
    what the country needs the military to do today--it does not
    balance. So what I am saying in my testimony was you have to
    change what you are asking us to do. Well, the world is getting
    a pretty big vote on this. So there is a mismatch and imbalance
    in that.
        As General Odierno said--I will give you just a quick
    anecdote. In the President's budget 2015, which we brought up
    here, there was a $90 billion change--or difference in what we
    say we needed and what we had. $20 billion of that we made up
    through overhead reduction, efficiency, buying more
    efficiently, if you will. We call it better buying power. So,
    sir, we are doing our best to be as efficient as possible. I
    would say that takes time for these things to come to roost--
    the efficiencies. The kind of reductions we are talking about
    are today. So there is a mismatch in that as well.
        Senator Tillis. Thank you.
        General Welsh?
        General Welsh. Senator, sequestration is a blunt force
    instrument. It was intended to be, as was referenced earlier in
    the hearing, so that we would not keep it in the law. The
    problem with it is there is nothing about that instrument that
    you would use in the business world. You would never expect to
    create great savings the first year you decided to restructure
    your entire business.
        Senator Tillis. Just for the record, that is why I agree. I
    think just strategically it is a poor approach towards
    addressing or driving out efficiencies. So I agree with that,
    General Welsh.
        General Welsh. Yes, sir. When it comes to efficiency, we in
    the Air Force have not used our auditor general well. We have
    never done implementation audits for new programs, new ideas,
    new organizations. We have started that over the last 18
    months. We found that if you get off to a good start in these
    changes, you have a much better chance of success. That same
    logic applies to acquisition programs. If you start procurement
    with a bad milestone chart, a bad funding plan, or a bad
    acquisition strategy, we will end up in here explaining to you
    why the program is failing. We have to do a better job of
    starting the right way, and that involves a number of people
    supporting us and changing policy law and us paying more
    attention to it.
        Senator Tillis. Thank you.
        General Dunford?
        General Dunford. Senator, I would associate myself with the
    comments of the other chiefs.
        You asked about what about the methodology makes it very
    difficult. In 2013, our manpower account was exempt from
    sequestration. We spent somewhere--almost 70 percent of our
    budget is towards people. So the full weight of sequestration
    then fell within 30 percent of our budget. So if we went back
    to sequestration in 2016, it would be a similar impact where
    the full weight of sequestration comes against 30 percent of
    the budget. So not only do you have no flexibility in its
    application, but it is a very narrow part of my budget where
    the full weight of sequestration would fall.
        Senator Tillis. Thank you, General. That really gets to the
    point about the constraints.
        Thank you, Mr. Chairman.
        Chairman McCain. Senator King?
        Senator King. Thank you, Senator.
        I just returned from the Budget Committee. I apologize for
    missing some of the discussion, and I may touch upon some of
    the points.
        Chairman McCain. Not accepted.
        Senator King. Thank you. Always a pleasure to work with
    you, Mr. Chairman. [Laughter.]
        I want to emphasize a point that I understand Senator Kaine
    made and that is, number one, sequestration was designed to be
    stupid. Did you know that? It was expressly designed to be so
    stupid and unacceptable that Congress would never allow it to
    go into place. I remember campaigning in 2012. People said,
    well, what do you think of the sequester? I said it will never
    happen. Congress will not let that happen. But here we are.
        One of the reasons that it does not make much sense is that
    we are focusing all our budgetary attention on the declining
    part of the budget. The growth in the budget right now is in
    mandatory programs and particularly in health care costs,
    Medicare, Medicaid, the children's health program. That is what
    is driving the Federal deficit. It is not defense. It is not
    national parks. It is not the Head Start program. The sequester
    is like invading Brazil after Pearl Harbor. It is a vigorous
    reaction, but it is the wrong target because this is not where
    the problem is.
        We are headed for a moment, by the way, Mr. Chairman, where
    discretionary spending, including defense, is at the lowest
    level ever--ever. We really should not even be having this
    discussion because it is a pointless exercise in terms of
    trying to deal with the budget. We need to be talking about a
    much larger question, particularly the extraordinary cost of
    health care in this country as a percentage of GDP and per
    capita.
        So I know you have had all the testimony and I heard it at
    the beginning about how devastating it will be. We really have
    to start talking about how to deal with it. I hope, Mr.
    Chairman, that this committee, which sees the impact of
    sequester more than any other committee in Congress because
    more than half of it falls within our jurisdiction, can lead
    the way in trying to find some kind of solution that will make
    sense.
        So I do not really have any specific questions except to
    underline what I heard all you gentlemen say in your opening
    statements, that this will really be devastating.
        Americans' lives are being put at risk by this policy.
    Would you agree with that, General Odierno?
        General Odierno. Yes, sir.
        Senator King. Admiral?
        Admiral Greenert. Yes, sir, I do agree.
        General Welsh. Yes, sir.
        General Dunford. Yes, Senator.
        Senator King. That should be the headline, that Americans'
    lives are being put at risk. We go to such extraordinary
    lengths to protect the lives of our people, and yet by
    compromising readiness, by compromising morale, by compromising
    modernization, by compromising training, that is the inevitable
    result. You guys are having to go through these extraordinary
    gyrations to try to deal with the uncertain budget situation,
    and the danger is risk to American lives, both our people in
    uniform and our civilians. So I certainly want to thank you for
    your testimony.
        Also, I would like to ask one other question. I would
    assume that the uncertainty of this whole situation is almost
    as bad as the dollars. Is that correct, General?
        General Odierno. It is. There is a lot of angst in the
    force about what is in the future, what is going to happen.
    They are focused on what they are doing today, but they do
    worry a bit about what it means to them for the future, our
    soldiers and their families. So it is creating some angst in
    the force, and that is concerning to me. For the Army
    especially, because we are reducing so much force structure and
    might be required to reduce so much more force structure, it is
    creating great angst in the force itself.
        Senator King. One final question for you, Admiral. Talk
    about the risk to the industrial base. My concern is that you
    cannot turn on and off the industrial base. When welders leave
    to go somewhere else, you cannot just pick them back up the
    next year. Is that not a deep concern to the Navy?
        Admiral Greenert. It is, Senator. We are at the point--in
    our shipbuilding plan, we are about, if you will, minimum
    sustaining. The good news is we are buying efficiently. But
    that all comes unraveled if you start dropping out ships here
    or there. In aircraft and weapons, we are at minimum
    sustaining.
        So what happens is people think, well, the big primes are
    going to go under, and they say that will not happen. That is
    not the concern. It is what you said. It is kind of the mom and
    pop, the smaller or mid-business people that make very specific
    and refined equipment. Over half of our nuclear industrial base
    is sole source. So we really, really need them. So this lack of
    planning, the inability--it cannot keep them open. You cannot
    buy an economic order quantity and it is a deep concern. As you
    said, we cannot bring it back fast.
        Senator King. Well, and the irony is that when you have to
    delay a multiyear procurement, for example, you end up paying
    more in the end. So the taxpayers lose both ways.
        Admiral Greenert. They absolutely do. It is like some say
    eating at 7-11 every night. It is not sustainable and it is
    more expensive.
        Senator King. I have 7-11s in Maine so I am not going to
    comment on that. [Laughter.]
        Thank you, Mr. Chairman.
        Chairman McCain. Senator King, I want to thank you for the
    work that you are doing, along with a number of efforts, to try
    to address this issue, and I thank you very much.
        Senator Cotton?
        Senator Cotton. Thank you very much, Chairman McCain.
        Thank you, gentlemen, for your distinguished service to our
    country.
        I want to look back on a few of the statements you made at
    the last hearing we had, General Odierno, starting with you.
    You had said that if sequestration level reductions continue in
    fiscal year 2014, 85 percent of our BCTs would not meet
    readiness levels appropriate for contingency requirements. Are
    we in a situation now where 85 percent of our BCT's are not in
    fact ready?
        General Odierno. We got down to actually 90 percent at one
    time in 2013. Because of the BBA, we built that up back in 2014
    and 2015 to 33 percent. But if sequestration begins in 2016, we
    will be headed right back down to those numbers again.
        Senator Cotton. How are you managing that lack of
    readiness?
        General Odierno. Sir, what we have had to do is we have had
    to develop a force. So we are saying, okay, we are going to
    take this amount of the Army and we are going to give you the
    money and train you to the highest level, which means the rest
    of the Army is training at a significantly lower level, which
    really concerns me because what I worry about is I have to have
    some level of the force capable of deploying to an unknown or
    no-known contingency. But what that does is it means we are not
    funding the rest of the force. It affects morale. It affects
    capabilities and it takes longer to recover from it.
        Senator Cotton. So in a concrete sense, does that mean
    certain BCT's are only doing individual tasks or platoon and
    company level collective training?
        General Odierno. Individual squad and some platoon and that
    is it.
        Senator Cotton. You had said that only 20 percent of the
    operating force would have sufficient funds for collective
    training. Is that the case?
        General Odierno. That was the case. Again, when we got the
    additional money in 2014 and 2015 above sequestration, we were
    able to increase that to about 35 percent of the force. But if
    it kicks again in 2016, then we will go right back down again.
        Senator Cotton. Where do we stand on schools now, basic
    professional schools like Warrior Leader, BNOC, ANOC?
        General Odierno. Right now they are funded fully. If
    sequestration kicks in, we will start to see a reduction in our
    special training schools. So ANOC, BNOC--we will try to fund
    those. Where we are going to have to limit is Ranger, Airborne,
    Pathfinder. About 85,000 spaces will be unfunded in our
    specialty schools which are critical to providing the high-
    level competence that we need.
        Senator Cotton. What kind of percentage decrease would that
    be for the specialty training schools like Ranger, Airborne,
    and Pathfinder?
        General Odierno. Well, it will be somewhere around the 50
    to 60 percent level.
        Senator Cotton. Have you seen that affecting retention?
        General Odierno. Well, we have not done it yet. We would
    have to do that if we go back into sequestration.
        Senator Cotton. Do you foresee it affecting retention?
        General Odierno. Yes, I think it will affect retention. All
    of this affects retention. The most important thing we do is to
    make sure they are absolutely trained to do their mission. When
    we start backing off on the ability to train, it will affect
    the retention.
        Senator Cotton. You had projected the need to go from just
    over 533,000 troops to 420,000. Is that still your assessment?
        General Odierno. That is in fact the case, Senator.
        Senator Cotton. At what levels are we going to see the most
    declines in personnel? Soldier or junior or senior
    noncommissioned officer, company grade, field grade officer?
        General Odierno. It is all. So we manage officers by year
    group. We are already going through boards now. Even just to
    get to 490,000, we are involuntarily separating officers at the
    captain, major, lieutenant colonel, and colonel level. We are
    also reducing the amount of noncommissioned officers. We are
    reducing the amount of soldiers we are bringing in. We actually
    over the last couple years have reduced the ability for people
    to reenlist. That will increase if we have to go to
    sequestration.
        Senator Cotton. At those levels, those are the soldiers who
    tend to have the multiple combat deployments underneath their
    belts?
        General Odierno. That is correct. That is absolutely
    correct.
        Senator Cotton. So you are losing their combat experience
    and replacing it with new privates and lieutenants who do not
    have it.
        General Odierno. Yes, sir.
        Senator Cotton. General Dunford, if I could switch to you
    for a moment. Your predecessor had projected that you would
    have to decrease your end strength of about 187,000 to 174,000.
    Is that projection still accurate?
        General Dunford. Senator, that is correct with
    sequestration.
        Senator Cotton. With sequestration.
        Could you explain to a layman why what might seem like a
    relatively small reduction of about 13,000 could be so hurtful
    to the Corps?
        General Dunford. I can, Senator. Thanks for that question.
        The biggest impact would be--that reduced capacity would
    have an impact on the deployment-to-dwell ratio of our marines.
    So today we consider the optimal force--and we did a study on
    this in 2011--would be 186,800 marines. That would allow
    marines to be gone for 7 months, home for 21 months, and gone
    for 7 months again. We call that a 1-to-3 deployment-to-dwell.
    When we came down to 182,000, that puts us at a 1-to-2
    deployment-to-dwell. So we are deploying 7 months, home for 14
    months, back out for 7 months. If we go down to 174,000 and
    really with a marine security guard plus-up, that would be
    about 175,000. It would be the only change I would make from my
    predecessor's comment. If we go down to that level, many of our
    units will be closer to 1-to-1 than 1-to-2. So marines would be
    home for about 8 or 9 months between 7-month deployments with
    an impact on the quality of training that we are able to
    provide, as well as impact on families.
        Senator Cotton. Admiral, you had testified that if
    sequestration remained in place, you would only be able to
    sustain about 255 ships, which is approximately 50 less than
    today. Is that still the case?
        Admiral Greenert. It is not, Senator. That was about 15
    months ago when I gave that testimony. That was a scenario
    based on our using force structure retirement to garner savings
    and mandates from Congress, and we have kind of taken that off
    the table. So I would look in other avenues, probably other
    modernization. It concerns me about--when I talk to capability
    and the future, that is more likely where we would go for that
    kind of savings.
        Senator Cotton. My time has expired. Thank you all.
        Chairman McCain. Senator McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman. As you might be
    able to tell, I do not have much a voice today, which is a fact
    that is being celebrated many places around here. I will not
    spend a lot of time questioning because I have questions for
    the record that I would like.
        I know that Senator Manchin touched on the acquisition
    process. I would certainly recommend to the members of this
    committee and to the leaders in our military the report that
    was issued by the Permanent Subcommittee on Investigations
    under the leadership of Senators McCain and Levin where they
    took information from a variety of important experts about our
    acquisition process and particularly the challenges that the
    bifurcation represents between the civilian and the military
    and how awkward that has been and how freaking expensive it has
    been in the long run. That is a technical term, ``freaking.'' I
    figure I can say that since I cannot talk. [Laughter.]
        I will just use this time to briefly ask one question. One
    of the things I have discovered as I have done an enormous
    amount of work in the area of acquisition--and by the way,
    getting rid of sequestration I think is maybe the most
    imperative bipartisan challenge we have in the Senate. It is a
    bipartisan challenge, and we are going to have a lot of them.
    How we on this committee step up in a bipartisan way to try to
    address it I think will be very meaningful.
        But one of the problems in the military is that it is based
    on leadership and your ability to be promoted, and what
    positions you have are relevant to whether or not you are
    promoted. It is kind of the short stick to get to be a systems
    manager. So what happens--these program managers--they do not
    want to hang out in those jobs because they get all the heat
    when things go wrong. They are not seen as bright and rising
    starts within the military. It is not the career path that is
    the most desirable whether you are back in the days when we
    could not get the companies to even give anybody with authority
    that clipboard to check on contracting, the corps'
    representatives. I mean, when I started doing this, it was the
    lamest member of the company that was handed that clipboard to
    do the contracting checks.
        So I would love, not now but in writing later, how you all
    believe you can elevate these positions so they are seen as
    part of a trajectory of success within the military because
    until we get quality leaders running these acquisition systems,
    these programs, we are going to continue to struggle with costs
    that we just frankly cannot afford in this country anymore.
        I only have 3 minutes left. So if any of you want to take a
    stab at that, that would be great. I apologize for my voice.
        General Odierno. Senator, we are very aware of the issue
    you just brought up in terms of ensuring that in certain parts
    of our Service, they have the ability to move up and get
    rewarded for the work that they are doing. We manage it very
    carefully. With our acquisition corps specifically, we have
    management guidelines that we are attempting to follow. For me,
    it is not only that, but it is more about the mixture of
    experience between acquisition and operational experience. That
    would help also in that area where we make sure we have that
    dual experience. We have moved away from that a little bit
    where we make somebody an acquisition officer very early on.
    But that said, we have put programs in place to ensure that
    their promotion rates are at least equal. But with that said, I
    believe we have to constantly review it, look at it, and ensure
    that they are having the opportunities for promotion. I will
    respond in writing in more detail.
        Admiral Greenert. Ma'am, in the Navy, we have a corps
    called acquisition professionals. It is not literally a corps.
    It is a subspecialty and it is in statute how they are promoted
    and what jobs they are required. But we need to do some work in
    there.
        Number one, the report of fitness is very similar to an
    unrestricted line officer. So the attributes that they are
    evaluated on do not match up with the reality of what they do
    day-in and day-out. We need to revise that. That is in
    progress. I am working with our acquisition professional.
        Number two, we need to cross pollinate. People who may not
    be acquisition professionals need to serve with them and
    understand what do they do so that as we go back and forth and
    describe what I need, what they need, their reality--we need to
    understand that so we can do better.
        Number three, the assignment process needs to be--it is
    like a conga line right now. We need to go in and find out, to
    your point, who are these people who are performing very well,
    get them in the right job, keep them there so that they can
    develop the program and we are not just shifting people through
    there.
        Then lastly, encourage our program managers to come
    forward. If the program is not doing well, we have to evaluate
    them and actually reward them for coming forward and saying I
    got a problem here because what happens is they fill in the
    data and they say check it out, doing well. I got to get out of
    here before this thing goes bad. Then the poor person that
    comes in and it explodes gets the heat.
        General Welsh. Senator, I think this is a fascinating area
    for study. I spent about 2\1/2\ years in the acquisition
    business, and the thing I walked away with is my primary lesson
    was I did not understand any of the rules when I left any more
    than I did when I walked in. It is complicated.
        But what I did understand is the quality of the people we
    have in the acquisition business in the Air Force. It is a
    specialty for us. We get a lot of people actually wanting to
    come to the Air Force as young acquisition and contracting
    officers. The talent level is phenomenal. Where we start to
    lose them is when they become disconnected in their duties,
    when they get to the mid-career, with what the rest of the Air
    Force is doing. They do not feel that they are critically
    important to the big Air Force. They feel they are critically
    important to their program. Not having that connection is a big
    problem in my view. We have a number of general officers who
    are acquisition officers. We have some who are contracting
    officers. So there is a path for them if we can make them want
    to stay long enough to enjoy it. It is tough work. You have to
    be very talented to do it well, and we have to make sure they
    understand that they are critically important to the Air Force.
    This is where that civilian-military connection I think will
    make a big difference if we can get it right. They have to feel
    like we are all in the same Air Force, not that they are in a
    separate section just buying things for us. That will not work
    over time.
        General Dunford. Senator, I think we have a similar
    construct to what Admiral Greenert talked about with the Navy.
    I understand the question you were asking. I do not have
    anything to add that the other chiefs have not already said,
    but we will take the time to respond thoughtfully in writing.
        [The information referred to follows:]

        General Odierno. The military officer element of the Army's
    Acquisition Corps (AAC) is a strong, competent, professional workforce
    grounded in operational experience and reinforced with robust
    acquisition education, training, and experience. Military officers are
    accessed into the AAC through the Voluntary Transfer Incentive Program
    (VTIP) after demonstrating 6-8 years of successful operational
    experience in one of the Army's basic branches. Acquisition is one of
    the most highly sought after functional areas through VTIP with only
    approximately half of those requesting accession into the Acquisition
    Corps getting selected.
        Once accessed into the AAC, officers spend the rest of their Army
    career exclusively in acquisition assignments. For those focusing on
    the program management career field, accession is followed by 6 weeks
    of foundational training. Once their 6-week training is complete,
    officers spend the next 12-14 years in acquisition assignments gaining
    the experience required to be level three Defense Acquisition Workforce
    Improvement Act (DAWIA) certified in program management. This is prior
    to assuming a centrally selected program manager (PM) position at the
    lieutenant colonel (LTC) level. Also during the 12-14 year time period,
    virtually all acquisition officers have earned a Master's degree. LTC
    level PM positions require a 3-year tenure. Upon completion of a PM
    position at the LTC level, the officer usually attends the Senior
    Service College and obtains acquisition experience at OSD, Joint Staff,
    or HQDA. The best qualified AAC officers are then selected for
    promotion to colonel (COL) and serve as a PM. As a result, our COL
    level PMs serve an additional 3 or 4 year tenure, based on the
    acquisition category of their program. If for some reason tenure must
    be shorter, it is only waived by the Army Acquisition Executive.
        Over the past 4 years, the AAC promotion rates have on average been
    commensurate with the Army Competitive Category (ACC). Data from the
    fiscal year 2011-2014 promotions show that AAC promotion rates for both
    COLs and LTCs have on average exceeded that of ACC by approximately 2.5
    percent. Although the number of PM positions available for fill varies
    from year to year, AAC Central Select List selection rates have also
    kept pace with the ACC over time. Additionally, in the last several
    years those selected for CSL have possessed an advanced degree at a
    rate of greater than 95 percent.
        For the opportunity to be a PM, Army Acquisition Officers must
    complete not only the Branch specific Pre-Command Course (for instance,
    the Infantry Pre-Command Course for PMs assigned to PEO soldier), the
    Ft. Leavenworth Pre-Command Course, but also the Acquisition Leaders
    Preparation Course. They must take PMT 401, a 10-week course on program
    management, as a LTC. When selected for a COL PM, they complete PMT
    402, a 4-week executive program management course. In addition to the
    DAWIA levels of certification above, our ACC officers must also meet
    all of the Army Professional Military Education requirements the rest
    of the Amy officers must meet. As a result, we have a highly trained
    and skilled set of AAC officers.
        Admiral Greenert. Ma'am, in the Navy, we have a corps called
    acquisition professionals. It is not literally a corps, it is a
    subspecialty. It is in statute how they are promoted and what jobs they
    are required. But we need to do some work in there.
        Number one, the report of fitness is very similar to an
    unrestricted line officer. So the attributes that they are evaluated on
    do not match up with the reality of what they do day-in and day-out. We
    need to revise that. That is in progress. I am working with our
    acquisition professional.
        Number two, we need to cross pollinate. People who may not be
    acquisition professionals need to serve with them and understand what
    do they do so that as we go back and forth and describe what I need,
    what they need, their reality we need to understand that so we can do
    better.
        Number three, the assignment process needs to be it is like a conga
    line right now. We need to go in and find out, to your point, who are
    these people who are performing very well, get them in the right job,
    keep them there so that they can develop the program and we are not
    just shifting people through there.
        Then lastly, encourage our program managers to come forward. If the
    program is not doing well, we have to evaluate them and actually reward
    them for coming forward and saying I got a problem here because what
    happens is they fill in the data and they say check it out, doing well,
    I have to get out of here before this thing goes bad. Then the poor
    person that comes in and it explodes gets the heat.
        General Welsh. Our experience in the Air Force is actually quite
    different from what you describe. The Air Force deliberately develops
    military and civilian acquisition professionals according to well
    defined career path models which serve as a guide for professional
    experience opportunities, education, and training. These career models
    provide ample opportunity and experience for acquisition professionals
    at all ranks, and provide a defined path to greater rank and
    responsibility within the acquisition workforce. Since 2002, when we
    implemented formal processes for ``Force Development,'' the development
    of acquisition workforce members has been enhanced by the use of career
    field Development Teams (DTs) consisting of senior leaders from within
    each career field. Using published career path models as a guide, DTs
    provide tailored developmental guidance to individuals based on their
    past record of training, education, and experiences. This action gives
    them a specific path or vector for greater progression and opportunity
    in the Air Force. The DTs also vector officers and civilians for
    developmental education, including Professional Military Education, and
    identify military and civilian candidates for command and Materiel
    Leader positions within the acquisition workforce.
        Defense acquisition professionals--especially PMs, have a special
    body of knowledge and experience that is not easily attained. Our PMs
    must deal with enormous complexity. The problems defense acquisition
    professionals are asked to solve are not simple; they are entrusted to
    develop and field the most complicated and technically advanced systems
    in the world and to conduct efforts spanning a huge variety of products
    and services. Program management doesn't lend itself to easily learned
    ``check-lists.'' There are no one-size-fits-all solutions that apply to
    all acquisition situations. The Air Force deliberate development
    approach is designed to guide and enable our acquisition managers to
    gain depth and breadth in acquisition, helping the workforce to think
    critically about their programs and focus on sound decisions tailored
    to the problem at hand. We give them the opportunities to understand
    through education, training, and experience, what works, what doesn't,
    and most importantly the why and how to best implement a specific
    decision.
        Rather than feeling like they've been handed the short stick when
    they're selected to lead a program, our aspiring program managers
    probably feel like they've grabbed the brass ring. For our major
    acquisition programs at the Acquisition Category I (ACAT I) level,
    selection means the culmination of almost two decades of preparation
    gained through successful performance in multiple acquisition jobs of
    increasing complexity and responsibility, often in not only acquisition
    program management, but another acquisition discipline such as
    engineering or test and evaluation. To compete for these PM jobs, they
    must first be selected as a Senior Materiel Leader candidate through
    the Chief of Staff's Command Screening Board process (the same process
    used for their peers in operational group and wing command billets).
    They must have attained Level III certification in the PM specialty
    (standards established under the Defense Acquisition Workforce
    Improvement Act (DAWIA)), and have maintained professional currency (at
    least 80 hours of professional development training every 2 years).
    They must exhibit not only the technical proficiencies demanded by the
    acquisition profession, but the leadership skills and potential for
    greater responsibility expected of all officers selected for command
    and command-equivalent roles at the Colonel level. From the candidate
    list produced by this board, the SAE, collaborating with the four-star
    commanders of Air Force Materiel Command and Air Force Space Command,
    selects the PM and Deputy PM (DPM) for each ACAT I and II program.
    Recommendations are approved by the Chief of Staff of the Air Force.
        Current Air Force PMs and DPMs reflect the high standards and
    intense focus on professionalism established for acquisition. On
    average, our PMs and DPMs have 18 years of acquisition experience, with
    55 percent holding not only a Level III DAWIA certification in PM, but
    at least one other Level III certification in a related acquisition
    function. Many of our military PMs also have had at least one
    assignment in an operational career broadening assignment, gaining
    invaluable perspective from the operational community.
        General Dunford. The Marine Corps recognizes and fully embraces the
    challenge to recruit, train, develop, and sustain through carefully
    managed career paths the high-quality officers required to succeed in
    the critical role of acquisition program managers. To this end, in
    2004, the Commandant of the Marine Corps formally established the
    Acquisition Management Professional Officer Military Occupational
    Specialty with the following purpose: ``To develop a population of
    professional acquisition officers who meet statutory requirements under
    the Defense Acquisition Workforce Improvement Act and are competitive
    for selection to Program Management (PM) and other Key Leadership
    Positions of major defense acquisition programs for which the Marine
    Corps has a unique or vested interest.'' Since then, we have
    increasingly focused on tracking and improving this critical officer
    population. As substantiated by data in the enclosed information paper,
    our efforts to track and improve what Senator McCaskill referred to as
    a ``trajectory of success'' for these officers have realized
    significant progress. For example, during the period of fiscal years
    2008 through 2016, the selection rate to Colonel for Marine Acquisition
    Officers was 61 percent as compared to the average promotion rate to
    Colonel across all Marine Corps occupational specialties of 52 percent.
    We deliberately select and cultivate highly talented prospects for
    acquisition duty. A key criterion is that the candidate must be a field
    grade officer. As a result, officers selected for assignment to the
    acquisition specialty bring formative experience and proven success in
    a combat arms or support specialty. As every Marine is first a
    rifleman, every acquisition officer is first a successful Marine
    officer with the innate understanding of fellow Marines as our ultimate
    acquisition customer. This connectivity is a crucial constant. For
    example, one of our current PMs served in an acquisition assignment as
    a major, returned to the operating forces to command an infantry
    battalion in combat as a lieutenant colonel, and subsequently came back
    to his competitively selected present acquisition assignment as a
    colonel. Our acquisition leadership positions are rigorously
    competitive by design. For the Marine Corps, the Commander, Marine
    Corps Systems Command is the general officer who has the authority and
    responsibility to screen and slate individuals to fill designated
    acquisition billets. He utilizes an annual board predominantly
    comprised of general officers and senior civilian members from
    Department of the Navy acquisition organizations, but may also include
    senior members from Headquarters Marine Corps stakeholder organizations
    when appropriate. Such diversity and cross-organizational membership
    ensures a broad range of views are considered in an open and
    transparent board process. In recognizing the challenge articulated by
    Senator McCaskill we are encouraged by our progress but not complacent.
    This continues to receive our focused attention to grow the best talent
    for managing the acquisition investments of the Marine Corps and
    equipping our marines with the best affordable weapons and systems.
    With the continued support of Congress, we will continue recruiting
    strong applicants to transition to the acquisition career field while
    building a solid foundation of qualified, competitive, and successful
    Marine acquisition professionals.

        Chairman McCain. Colonel Graham?
        Senator Graham. Thank you, Captain.
        NATO partners are reducing their spending regarding defense
    in general. Is that fair to say?
        General Odierno. Yes, Senator.
        Senator Graham. How many NATO nations spend 2 percent of
    their GDP on defense?
        General Welsh. Senator, the answer is two or three I
    believe. Estonia does.
        Senator Graham. Two or three. So that is a dilemma for us
    because as you look over the next coming years, the
    capabilities of our NATO partners are diminishing, not
    increasing. Is that fair to say?
        General Odierno. On the ground side, yes.
        Admiral Greenert. The UK is improving their navy but the
    capacity is small.
        Senator Graham. Same for the Air Force?
        General Welsh. Yes, sir. The problem is a capacity problem
    for our traditional allies.
        Senator Graham. So what will be spending on defense at the
    end of sequestration? What percentage of GDP will we spend on
    defense?
        Admiral Greenert. I believe it is about 3 percent, Senator.
        Senator Graham. I think it is 2.3. Can you do me a favor
    and check among yourselves and send us, if you can find
    agreement among the four of you, the number that the military
    views that we will spend on defense relative to GDP? Also add
    into that letter the average the Nation has been spending on
    defense, let us say, since Vietnam. I think that would be very
    instructive to the committee to understand the true effects of
    sequestration. I believe it is around 2.3 percent, and that is
    about half of what we normally spend on defense since Vietnam.
    But I could stand to be corrected. Just let us know.
        [The information referred to follows:]

        The percentage of gross domestic product (GDP) that is estimated to
    be spent on the Department of Defense in 2016 is 2.84 percent.

             For year-to-year detail, see attached chart.

        Admiral Greenert. The current percentage of GDP spent on the
    Department of the Navy budget is 0.82 percent. The average since
    Vietnam is 1.32 percent.

             For year-to-year detail, see chart below.

        General Welsh. The Budget Control Act expires in 2023 and according
    to the CBO Budget and Economic Outlook: 2014 to 2024 (dated February
    2014), the Department of Defense Budget estimate for 2023 is 2.7
    percent of the GDP. The average spent by our Nation on defense since
    Vietnam is approximately 5.4 percent of the GDP (1962-2014).
        General Dunford. The current percentage of GDP spent on the
    Department of the Navy budget is 0.82 percent. The average since
    Vietnam is 1.32 percent.

        Senator Graham. Have each of you talked to the President
    about this problem with sequestration?
        General Dunford. We have, Senator.
        Senator Graham. All of you?
        Admiral Greenert. Yes, sir.
        Senator Graham. What does he say?
        General Odierno. The conversations that we are having--I
    think as you see our submission of the 2016 budget, you will
    see that in fact our budget is well above sequestration, and
    that is a budget that we have worked with the President. So I
    think you would see that he believes that DOD cannot operate
    under a budget with sequestration.
        Senator Graham. Has he suggested a solution to replace or
    repeal sequestration beyond the 2016 budget?
        General Dunford. Not to us, Senator.
        Senator Graham. Does he seem upset when you mention to him
    the consequences of what Congress has decided to do with his
    signature?
        General Odierno. I think the discussions that we have had
    with the President--he understands the challenges we have. He
    understands the security environment. He understands the
    pressure that is being put on all of our Services.
        Senator Graham. But has he submitted a plan to you and say
    I understand what you are telling me? This is unacceptable. As
    commander in chief, here is how I intend to fix it. Has he
    suggested such a plan to any of you?
        Admiral Greenert. I am not aware of one directly, sir.
        Senator Graham. I do not mean just to beat on the
    President. I think that applies to us too. We are the ones that
    created this mess. The President signed the bill. So it is not
    just fair for me to comment on the President. Congress is in
    the same boat. We do not have a plan. But Senator McCain, to
    his credit, is challenging some of us on the committee to find
    a plan. Mr. President, help us. We cannot do this by ourselves.
    We are going to need the commander in chief to weigh in and
    inform the American people that the sequestration cuts are
    unacceptable not just on the defense side.
        Are you familiar with the foreign operations account
    under--the 150 account, our foreign aid account? Are you all
    familiar with what we do, the State Department, other agencies?
    Do you agree that that is a vital program in terms of national
    defense all on its own?
        General Dunford. It is.
        Senator Graham. Have you looked at what happens under
    sequestration to our ability to be engaged in Africa to deal
    with malaria, with AIDS, and a variety of other health care
    issues?
        General Dunford. I have not, Senator.
        Senator Graham. Have you, General Odierno?
        General Odierno. We have through our commands,
    understanding the cuts and what that could mean to stability.
        Senator Graham. Well, you need to take a look because the
    military has been the strongest advocate for a robust foreign
    assistance account. If you think sequestration is a problem for
    you, you ought to look at what it does to our State Department.
        Having said all of that, do you all agree that once we get
    sequestration fixed and right, whatever that turns out to be,
    that we should reform our benefit, pay, and compensation
    packages to make the military more sustainable?
        General Odierno. Yes, Senator, because if we do not,
    regardless of sequestration, we would have to take significant
    cuts in our capacity.
        Senator Graham. Do all of you agree with what the Army just
    said?
        Admiral Greenert. I agree.
        Senator Graham. So would you urge Congress to look at this
    commission report seriously on the pay and benefit reform?
        General Odierno. Senator, I would urge them to look at it
    seriously, but not having to get into the details of the report
    itself, I am not sure of the merits of the report at this
    point.
        Senator Graham. Okay, nor am I. But I would just suggest
    that we need to look at reforming pay and benefits, be generous
    but sustainable.
        As to the Marine Corps, what is your infrastructure account
    looking like, General Dunford?
        General Dunford. Senator, we are programmed for about 70
    percent of the DOD recommended amount against our
    infrastructure. Because of OCO over the last couple years----
        Senator Graham. What does that mean to the Marine Corps?
        General Dunford. What means is we had an unprecedented $8
    billion military construction program over the last few years.
    What will happen over time is that we will not be able to
    properly maintain it. That will mean there will be mold in the
    barracks. That means that the barracks will not be maintained
    at a rate where they are suitable. Now, that means our ranges
    will not be properly sustained. Those are some of the impacts.
        Senator Graham. Do the other Services have similar
    concerns?
        General Odierno. Absolutely. We have taken significant
    risk, sir.
        Senator Graham. Will that affect retention and family
    quality of life?
        General Odierno. It will affect family programs. It will
    affect quality of life, and it will affect the ability to train
    the way we need to train.
        Senator Graham. Thank you all.
        Chairman McCain. Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        Mr. Chairman, I would apologize for being absent but I know
    that my apology will be rejected so I will not even endeavor
    because there is no committee hearing or meeting more important
    than this one going on today.
        Chairman McCain. You are forgiven.
        [Laughter.]
        Senator Blumenthal. Thank you.
        But on a more serious note, I would like to thank the
    chairman for his constant and relentless focus on this topic
    and for raising it again at the very outset of this session of
    Congress so that we can put a lot of these issues in context.
        Many of my constituents who are digging out from a major
    weather event in the Northeast might be forgiven for comparing
    sequestration to the weather. There is an old saying: everybody
    talks about the weather but nobody does anything about it. We
    have talked about sequestration a lot on this side of the dais,
    but Congress has yet to do anything meaningful about it. I
    thank the chairman for putting it very much on the front burner
    as we begin consideration of this budget.
        I take it, Admiral Greenert, that in your testimony there
    is no mention of a Base Realignment and Closure (BRAC) round
    because there is no planning for a BRAC and none is on the
    table at this point.
        Admiral Greenert. Well, DOD has requested a BRAC. In my
    testimony, I did not speak to it. I am always open to a BRAC.
    It is a good process, but I am satisfied with the Navy's
    infrastructure as it exists today--base infrastructure.
        Senator Blumenthal. So there is no immediate need for a
    BRAC in your view.
        Admiral Greenert. In the Navy, I am satisfied with my base
    lay-down there in that regard. But again, the process makes the
    bases that I have that much more efficient. It is not a bad
    process per se.
        Senator Blumenthal. You spoke very cogently in your
    testimony about the fragility of the maritime industrial base,
    which I think is a major consideration that very often the
    public does not understand as a consequence of sequestration.
    You note that the damage can be long-lasting and hard to
    reverse. That is true of facilities and manufacturing plants
    not only at places like Electric Boat but also in the supply
    chain across the country and particularly in the immediate
    vicinity, in Connecticut for example, where parts and
    components and supplies are necessary to, in effect, make the
    weapons systems and platforms that make our military as
    powerful as it is. Is that correct?
        Admiral Greenert. Yes, sir, it is correct. In fact, I would
    worry less about a company like Electric Boat, a larger
    company. But as you said, the key is they have to go to these
    sub-primes, if you will, particularly nuclear, and we are sole-
    sourced in so much of our nuclear technology and our plants.
    That is a huge asymmetric advantage of ours. That goes at risk
    if these smaller businesses close. Where do we go? Do we go
    overseas? I mean, this is really a serious subject, sir.
        Senator Blumenthal. Thank you.
        There has been some discussion of the mental health
    consequences of losing professionals as a result of the
    sequestration process. As you may know, Senator McCain and I
    have spearheaded a bill to provide better mental health care to
    our veterans, the Clay Hunt bill, which I hope will be voted on
    literally in the next day or so, next few days if not today.
    General Odierno, I wonder if you could speak to that issue
    because it is very, very concerning. The suicide rate among
    veterans is 22 a day, and within the active military, also
    extremely, deeply troubling. Perhaps you could elaborate on
    that point.
        General Odierno. Thank you, Senator. Unfortunately, we have
    had to decrease actually our behavioral health capabilities
    over the last couple of years, not something we want to do.
    This is during a time of concern where we believe we should be
    increasing our behavioral health capabilities in order to
    support our soldiers. This is a long-term problem and it is not
    one that goes away because we are out of Iraq or out of
    Afghanistan. It is one that will sustain itself for a period of
    time, and it is our requirement to do this. It is one thing
    that is very important to us and we are trying to be as
    efficient as we can. We are trying to get it down to the lowest
    levels possible. But I worry about that. We are trying
    telebehavioral health to improve it. But it is an issue that is
    of great concern to us.
        Frankly, when we had to furlough civilians, one of the
    specialties that walked away from us was our behavioral health
    specialists because there is such a need for them in many other
    walks of life, that they decided because of the uncertainty
    that they would go work somewhere else. That is very
    problematic for us as a Service.
        Senator Blumenthal. Let me ask generally. There has been a
    lot of talk about retention, which is extraordinarily
    important. What about recruitment, which is as important. You
    want the best to be attracted. Has sequestration affected
    recruitment?
        General Odierno. We have been able to meet our goals for
    recruiting, but it is starting to get more difficult. So we are
    a bit concerned as we look ahead to the next 2 or 3 years. We
    have high standards to be able to meet those standards. But
    frankly, part of the problem as well is the population that is
    eligible is decreasing because of the other problems we are
    having in the youth of our society. So for us, it is becoming
    critical. I think the uncertainty of a military service and the
    constant discussion of reducing the military budget is going to
    have an effect, I think, on reenlistment potentially and
    recruitment.
        Senator Blumenthal. Is that true of the other Services as
    well?
        Admiral Greenert. We are meeting our goal, but one of the
    measures is at what week of the month of the 4 weeks do you
    finally meet goal. We are starting to get into the third week,
    which is very unusual for the last 4 years in the high tech
    ratings.
        Senator Blumenthal. Thank you.
        General Welsh. Senator, I think for us the big draw to the
    Air Force is word of mouth from those who have served or
    testimony from those currently serving. Increasingly that
    testimony is from social media, and people see it on blog sites
    and other comments. Sequestration lit up the blog sites with
    ``this job sucks'' kind of comments. That has died off. It will
    come back and it will come back stronger than it happened
    before. Those are the testimonials I am worried about affecting
    recruiting. We have not seen an impact yet.
        General Dunford. Senator, it is an area--we are certainly
    not complacent about the need to recruit high quality people.
    We have not yet seen an impact.
        Senator Blumenthal. Thank you.
        Thank you, Mr. Chairman.
        Chairman McCain. Thank you, Senator Blumenthal, for your
    leadership on this issue that you just discussed with the
    witnesses. I am afraid it is only the beginning, but I think it
    is a good beginning.
        Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        As we struggle with sequestration--and yes, we all agree
    that we should eliminate it, but as we, as I said, struggle
    with how to do that, though--generally when confronted with a
    complex issue like this, you look at how you can achieve more
    efficiencies, and you have talked about that. There is a whole
    range of other things that should be on the table. I think
    Senator King also mentioned that we should be looking at the
    mandatory spending side of things, which is a whole other ball
    of problems.
        Should we not also be looking at the revenue side of things
    in order to look at how best can we have more revenues so that
    we can have less of these kinds of huge cuts all across the
    board, not just to the military but on the domestic side? Do
    you have any thoughts about that, any of you?
        General Welsh. Senator, I am not sure what you are
    referring to by the revenue side. If you are talking about
    efficiency of operations internal to our budget, absolutely.
        Senator Hirono. No. I am not talking about those kind of
    efficiencies. Revenues such as we look at our tax structure,
    for example.
        General Welsh. Yes, ma'am. Well, I think that is really the
    issue for Congress. As we have heard discussed already, where
    are the cuts coming from? Where do they have most benefit to
    the Nation? We have the real privilege and the much easier task
    of making recommendations to you on budgets based on military
    risk. You have a much broader problem and have to consider risk
    from many different factors in society, and that is why you
    deserve the big money, ma'am. [Laughter.]
        Senator Hirono. Anyone else want to chime in? Really, we
    talk about a big picture. I do think that we need to have an
    honest discussion, a frank discussion on the revenue side of
    the picture.
        General Odierno, I noticed in your testimony that you
    mentioned the supplemental programmatic, environmental
    assessment. Even as we speak, the Army is conducting listening
    sessions in Hawaii. I think we can agree that the men and women
    at Schofield Barracks and Fort Shafter have made tremendous
    contributions to our national security, as do our men and women
    who are serving in all other areas.
        But I am also aware that the second Stryker brigade combat
    team, the 25th infantry division from Schofield Barracks, is
    preparing to leave for joint military exercises in Thailand,
    South Korea, and the Philippines. Can you speak to the
    importance of this kind of mil-to-mil program and maintaining
    stability in the Asia-Pacific region, especially as when the
    rest of the world, particularly in the Middle East and Africa,
    are very unstable? At least if we can provide a level of
    stability in the Asia-Pacific area, I think that is worth
    pursuing. So would you give us your opinion?
        General Odierno. First, Senator, this program, under the
    guise of what we call Pacific Pathways, is an incredibly
    important program that we have done now. This is the third year
    we have done it, but it is increasing each year. What this is
    is to build confidence in our allies, our strong allies that we
    have, and developing capabilities that allows us to sustain
    strong partnerships with many militaries.
        As was discussed here, with us being reduced, it is
    important that we are able to leverage our multinational
    partner capability, and through these exercises, we were able
    to gain more interoperability capability working together,
    gaining confidence with each other, getting used to working
    with each other. So it is absolutely critical to our future
    strategy.
        Having these forces forward in Hawaii is incredibly
    important to us because that gets us about halfway there. If we
    have to go from the continental United States, it becomes much
    more difficult. So having those forces in Hawaii becomes very
    important for us because of the ability to do this in quicker
    fashion.
        Senator Hirono. So is sequestration going to negatively
    impact our ability to engage in these military-to-military
    programs?
        General Odierno. It will. It will reduce the dollars we
    have available to do events like this. We certainly would
    rather not have it reduced. We think they are very important,
    but I believe we will not be able to do events like that as
    much. We will have to reduce them and it will cause us problems
    in developing a future security architecture throughout the
    Pacific region.
        Senator Hirono. Can you provide us with the specifics of
    which of these kinds of programs you would have to reduce if
    the 2016 sequester comes into play?
        General Odierno. So the problem we have in the Army is if
    sequestration goes into effect in 2016, there are only two
    places it can come out of: modernization accounts and readiness
    accounts. Part of the readiness accounts is operation and
    maintenance which funds many of these exercises. So we will
    have to make decisions on which exercises we do not do. So
    although we would like to continue to do some of these, all
    will be affected. So we are going to have to reduce them to
    some level, and frankly, we will also reduce the readiness of
    our units that are conducting these missions.
        Senator Hirono. Thank you.
        In some of your testimonies, you discuss the importance of
    sustained investment in technological infrastructure. As we
    know, cyber warfare is very much upon us. So for what you can
    say in this forum with the increased threat of cyber warfare,
    could you address the potential impacts to our cybersecurity
    capabilities should sequestration come into play in 2016?
        General Odierno. We have increased the spending in cyber,
    but we have a lot of infrastructure kind of things that we have
    to do in order to better protect our networks that better
    protects our Nation. That is going to be prolonged. In fact,
    last year at the end of the year, we were hoping for about $800
    million we would be able to use in OCO to improve our
    infrastructure, specifically aimed at increasing our
    cybersecurity. Unfortunately, it was not approved. Because of
    that, that puts more strain on the dollars we will have
    available for the next 4 or 5 years. So if sequestration comes
    into play, it will take us longer to consolidate our networks
    and make them more capable of protecting them from outsider
    attacks, and I am very concerned about that.
        Senator Hirono. So although my time is up, I assume that
    the rest of you agree that this is going to make it very
    difficult for you to keep your cybersecurity infrastructure in
    place or to even build it.
        Admiral Greenert. It would be hard in the Navy, but it
    would be a top priority right after the sea-based strategic
    deterrent, for us.
        General Welsh. Yes, ma'am. Same comment. Nothing to add to
    that.
        General Dunford. It is a core capability, Senator, that is
    going to suffer from the same effects as all the other
    capability areas with sequestration.
        Chairman McCain. Senator Heinrich?
        Senator Heinrich. Thank you, Mr. Chairman.
        I want to thank all of you for your service and really for
    your decades of commitment. Seeing the level of experience at
    this single table, it highlights something that I think is
    worth mentioning just so that the public understands why these
    recruitment and retention issues are so incredibly important.
    The military is fundamentally different from other Government
    agencies, from the private sector. You cannot hire in a colonel
    or a general from the private sector or from another agency. I
    think the incredible amount of experience that all of you
    represent really helps highlight that to our constituents.
        I have a couple of questions that I want to ask General
    Welsh in particular. I want to thank you for, one, on my first
    question, speaking to this issue in the media recently. It is
    something I have been very concerned about recently, and that
    is with respect to remotely piloted aircraft pilots and the
    crews that make those missions possible. I have become very
    concerned about the current level of resources supporting the
    training, the retraining, the retention of those personnel. I
    know you share some of that concern.
        What I want to ask you is if we are as challenged as we
    appear to be because of the tempo pace in large part, if the
    BCA goes into effect, can you give us a sense of the scale of
    what we are going to be facing in terms of not meeting the
    demand with regard to remotely piloted aircraft in a way that
    is really going to put us at an enormous disadvantage in my
    view? I do not want to put words in your mouth, but I really
    want you to articulate, if you would, the scale of the
    challenge there for my colleagues.
        General Welsh. Senator, if sequestration went into effect,
    we believe we would have to cut the number of orbits that those
    pilots and the other crew members fly, which in a strange way
    would actually make the problem we are discussing better. We
    have enough manning to fly 55 orbits with a sustainable life
    battle rhythm work schedule over time, but we are flying 10
    above that and we have been since 2007, 10 above the number we
    had because we have been surging. We surged nine times in 8
    years with this particular force because of mission
    requirements, which those crews understand. They love doing the
    mission. They are excited about the work, but they are tired.
    If we went to 45 caps, we would create a more sustainable
    battle rhythm virtually as soon as that happens. So the problem
    would be operational requirements that would not be met but the
    manning problem would be alleviated to a great extent. So the
    issue really is meeting combatant commander requirements once
    sequestration hits, and that is a different problem but still a
    significant one.
        Senator Heinrich. I hear you. But do you see that
    operational tempo and the demand for that going down in the
    near future?
        General Welsh. No, Senator, I do not. We keep thinking we
    have it topped out and we have a plan to get there, and then it
    increases again. We have just been chasing this requirements
    rabbit for a long time, and we have to get ahead of it because
    we have to be able to train more people than move in and out of
    the system every year and we have not been able to do that yet
    because all the trainers are doing operational support.
        Senator Heinrich. Right.
        On another separate issue, General Welsh, if the BCA levels
    do go into effect, do you see any feasible way to modernize the
    existing triad-based nuclear deterrent that we have?
        General Welsh. Senator, it is going to have to be
    modernized. The question is what parts of it do you modernize
    and what do we as a Nation expect of our strategic deterrent
    force.
        Senator Heinrich. I guess I should in its entirety because
    I think that forces some very difficult conversations, and we
    have seen talk here within the last few days of a dyad as
    opposed to a triad. Would it force those kinds of decisions?
        General Welsh. I do not think that discussion will ever go
    away, Senator. I am a believer in the triad, but we will
    clearly have to have discussions that involve the Air Force,
    the Navy, DOD, Congress, the National Security Council, and the
    White House to decide where is the Nation going to go with
    this. We just do not have enough money in our budgets in the
    Air Force and the Navy to do all the modernization that you
    would need to do if we took everybody's desire and tried to
    meet it.
        Senator Heinrich. Thank you all.
        Chairman McCain. I want to thank the witnesses.
        Just for the record--I know the answer, but for the record,
    if sequestration returns next year, can your Service execute
    the Defense Strategic Guidance? Yes or no.
        General Odierno. No, Mr. Chairman.
        Admiral Greenert. No, Mr. Chairman.
        General Welsh. No, Mr. Chairman.
        General Dunford. No, Mr. Chairman.
        Chairman McCain. Thank you. I want to thank you all for
    your very straightforward testimony and candid testimony, and I
    would like to mention two things with you. One--and it was
    referred to earlier--the Military Compensation and Retirement
    Modernization Commission is reporting out. They will be
    appearing before the committee and we will be looking at their
    recommendations. We are going to need your input as to whether
    those are doable, the effect on the military, on the All-
    Volunteer Force, on our retirees. So I know you will be looking
    at that commission's recommendations. We are going to need your
    input and evaluation of it.
        Finally--again, it was raised by several members. We are
    here fighting as hard as we can to repeal sequestration, and
    that is a bipartisan effort. But we have to do a better job on
    acquisition reform, and we are going to be spending a lot of
    time on that in this committee. I have come to one conclusion
    already and that is, in the whole process, it requires your
    input in a much more meaningful fashion, and I think you would
    all agree with that. After all, if you are responsible, you
    should play a much greater role in the process. That is one of
    the conclusions that I think that we are in agreement on and
    that we will probably try to add to the National Defense
    Authorization Act. But there is a lot more that needs to be
    done. So I will be counting on you to understand that you will
    probably be asked some pretty tough questions in the days
    ahead.
        So I thank you for being here.
        Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        Chairman McCain. I thank the witnesses.
        [Whereupon, at 12:08 p.m., the committee adjourned.]

        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John McCain
                                 sequestration
        1. Senator McCain. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, reports indicate that the budget request
    will come in at approximately $37 billion above the budget caps
    established in the Budget Control Act (BCA) for the Department of
    Defense (DOD). Would each of you provide a detailed list of what you
    would recommend be reduced from your portion of the DOD fiscal year
    2016 budget and Future Years Defense Program (FYDP) request, if
    Congress were forced to mark to the BCA budget caps rather than the
    anticipated president's budget request? The list should include budget
    appropriation, budget activity, dash one line item, sub-activity group,
    program element and or project level detail as applicable.
        General Odierno. For the Army, the President's budget represents
    the bare minimum needed for us to carry out our missions and execute
    and meet the requirements of our defense strategy. We cannot sustain
    any reduction in funding less than what was requested without severely
    degrading our ability to train, build, and sustain readiness, or
    modernize for the future. At this time, the Army cannot provide a list
    of programs that can or should be reduced if Congress appropriated
    fewer dollars than expected. What I can tell you, is that in my
    professional military judgment, we will be unable to meet the demands
    of the defense strategy at sequestration funding levels.
        Admiral Greenert. A return to sequestration in fiscal year 2016
    would necessitate a revisit and revision of the defense strategy. As I
    have testified before, sequestration would significantly reduce the
    Navy's ability to fully implement the President's defense strategy. The
    required cuts would force us to further delay critical warfighting
    capabilities, reduce readiness of forces needed for contingency
    responses, further downsize weapons capacity, and forego or stretch
    procurement of force structure as a last resort. Because of funding
    shortfalls over the last 3 years, our fiscal year 2016 President's
    budget represents the absolute minimum funding levels needed to execute
    our defense strategy. We cannot provide a responsible way to budget for
    the defense strategy at sequester levels because there isn't one.
        Today's world is more complex, more uncertain, and more turbulent,
    and this trend around the world will likely continue. Our adversaries
    are modernizing and expanding their capabilities. It is vital that we
    have an adequate, predictable, and timely budget to remain an effective
    Navy. Put simply, sequestration will damage the national security of
    this country.
        General Welsh. The fiscal year 2016 President's budget supports our
    critical needs to execute the defense strategy, but we made tough
    choices in capacity and capability/modernization. The Office of
    Management and Budget (OMB) has provided direction through the Office
    of the Secretary of Defense (OSD) that the Air Force does not support
    any reductions to the President's budget. Without a repeal of
    sequestration the Air Force will simply not have the capacity required
    to fully meet the current Defense Strategic Guidance (DSG). Therefore,
    support of the President's budget and repeal of 2013 BCA is essential.
    If forced into BCA funding levels in fiscal year 2016, we would, out of
    necessity divest entire fleets, reduce quantities for procurement of
    weapons systems, and reduce readiness accounts. Potential impacts
    include:

             Divest RQ-4 Block 40 fleet and cut Block 30
            modifications
             Reduce MQ-1/MQ-9 intelligence, surveillance, and
            reconnaissance (ISR) capacity by 10 CAPs--equivalent to current
            operations in Iraq/Syria
             Retire KC-10 fleet--15 in fiscal year 2016 and 59
            total across FYDP
             Defer second Presidential Aircraft Recapitalization
             Reduce Flying Hours, Weapon System Sustainment, range
            support and munitions
             Reduce quantities for fighter recapitalization (F-
            35As) by 14 aircraft in fiscal year 2016
             Reduce investments in Space programs, Cyber Mission
            Areas, Nuclear Enterprise, and Science and Technology
             Terminate Adaptive Engine Program
             Divest seven E-3s in fiscal year 2016
             Divest U-2

        Bottom line--stable budgets at a higher level than BCA are critical
    to long-term strategic planning, meeting the DSG, and protecting the
    Homeland.
        General Dunford. Any discussion regarding how the Marine Corps
    would implement a sequester or reduce its budget request to a BCA level
    would need to be part of a larger conversation about the priorities of
    the Department and the defense strategy. Decisions regarding the
    appropriate size of the Marine Corps, and the resources required, need
    to be made with a full understanding of the expectations of the Corps
    at a severely reduced funding level.

        2. Senator McCain. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, given the president's budget request is
    still expected to be significantly below the funding level for DOD
    originally recommended to support the DSG if sequestration were not in
    effect, would each of you provide for the record your fiscal year 2016
    list of unfunded priorities? Please provide information in priority
    order and with associated costs, and the same budget level detail as
    cited in Question 1 above.
        General Odierno. It is imperative that the Army maintain strategic
    and operational flexibility to deter and operate in multiple regions
    simultaneously--in all phases of military operations--to prevent
    conflicts, shape the security environment and, when necessary, win in
    support of U.S. policy objectives. The accelerating insecurity and
    instability across Europe, the Middle East, Africa and the Pacific,
    coupled with the continued threat to the Homeland and our ongoing
    operations in Afghanistan, remain a significant concern to the Army.
    The fiscal year 2016 President's budget request, while emphasizing
    readiness, will only generate the minimum readiness required to meet
    the current Defense Strategy.
        Our Army needs congressional support now more than ever.
    Operational and fiscal environments are straining the Army as we
    attempt to balance end strength, readiness, and modernization to meet
    current demands while building the foundations of a force that can meet
    future challenges. In accordance with section 1003 of the National
    Defense Authorization Act (NDAA) for Fiscal Year 2013, Pub. L. 112-239,
    and in accordance with the current House Armed Services Committee's
    request, the Army has provided to DOD the Army's list of unfunded
    priorities for submission to Congress.
        Admiral Greenert. Let me start by saying that our fiscal year 2016
    President's budget (PB-16) is carefully balanced to meet the DSG and
    Quadrennial Defense Review (QDR). Because of funding shortfalls over
    the last 3 years, we still face high risk in executing 2 of the 10 DSG
    missions. However, our PB-16 budget is the minimum funding needed to
    execute our defense strategy.
        The Navy's fiscal year 2016 Unfunded Priorities List is has been
    approved by the Secretary of Defense, in accordance with the NDAA for
    Fiscal Year 2013. As before, the items on my list are not of higher
    priority than items in our PB-16 budget and I request they not be
    funded at the expense of our fiscal year 2016 budget request. I ask for
    Congress' support in fully funding our PB-16 budget and preventing the
    return to sequestration level funding.
        General Welsh. The Secretary of Defense submitted the DOD
    consolidated Unfunded Priorities List (UPL) above our fiscal year 2016
    President's budget request to the Congressional Defense Committees on
    March 27, 2015. It is imperative Congress prioritizes and supports
    those requirements included in the fiscal year 2016 PB request as it
    carefully balances capability, capacity, and readiness. Any extra
    program inserted into our budget submission will come at the expense of
    other programs we deemed more important, with ripple effects across the
    rest of the budget.

        General Dunford. DOD has submitted to Congress a consolidated list
    of the Services' unfunded priorities. The Marine Corps portion of this
    list totals $2.1 billion.
                                     ______

                 Questions Submitted by Senator James M. Inhofe
                             risk of sequestration
        3. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, each year you have testified that your
    Service is accepting more risk. What is your Service's current risk
    level?
        General Odierno. The compromises we have made to modernization and
    readiness, combined with reductions to our force size and capabilities,
    translates directly into strategic risk. Today, we are generating just
    enough readiness to meet our day-to-day needs for immediate
    consumption. We are unable to generate any residual readiness to
    respond to unknown contingencies or to even reinforce ongoing
    operations. This is a dangerous balancing act. We have fewer soldiers,
    the majority of whom are in units that are not ready; and they are
    manning aging equipment at a time when demand for Army forces is higher
    than we originally anticipated.
        If we are forced to take further endstrength reductions beyond the
    planned levels in the President's fiscal year 2016 budget due to
    sequestration, our flexibility deteriorates, as does our ability to
    react to strategic surprise. We are witnessing firsthand mistaken
    assumptions about the number, duration, location, and size of future
    conflicts and the need to conduct post-stability operations. These
    miscalculations translate directly into increased military risk.
        In this unclassified medium, we can only speak in general terms
    about the level of risks we are facing. The Chairman's Risk Assessment
    (CRA) and Secretary of Defense's Risk Mitigation Plan (RMP), both
    submitted to Congress on February 12, 2015, provide a more detailed
    assessment.
        Admiral Greenert. The cumulative effect of sequestration and budget
    shortfalls over the last 3 years has forced the Navy to accept
    significant risk in key mission areas, notably if the military is
    confronted with a technologically advanced adversary or forced to deny
    the objective of an opportunistic aggressor in a second region while
    engaged in a major contingency. If sequestration were to occur in
    fiscal year 2016, we would be compelled to further reduce the capacity
    of weapons and aircraft, slow modernization, and delay upgrades to all
    but the most critical shore infrastructure.
        General Welsh. Even with the funding increases in the fiscal year
    2016 President's budget we believe our current air and space advantages
    are increasingly at risk. The Air Force is at the ragged edge to meet
    the DSG at the fiscal year 2016 PB funding level. The Air Force faces
    critical capability, capacity and readiness shortfalls to meet the
    current security environment and defense strategy demands. Recovering
    and resetting the force for full-spectrum operational readiness is at
    high risk as the Air Force has taken capacity reductions necessitated
    by funding cuts and continues to be engaged in current operations
    around the world.
        Further discussion regarding risk levels would need to occur in a
    classified setting.
        General Dunford. Risk to Service is best illustrated by our
    deployment-to-dwell ratio, which is currently around 1:2. Generally
    speaking, this means for every 6 months deployed, many Marine units
    spend 12 months at home before deploying again. This is not much time
    for commanders to ready their units. Due to competing demands, and the
    Marine Corps imperative to deploy ready forces, shortfalls in equipment
    and personnel make the time at home even more challenging for units in
    dwell. Add to this the strain on your marines, their spouses and
    children, and it makes for a significant institutional challenge.
        The Marine Corps is operating at an elevated risk level in meeting
    the tenants of the defense strategy. At funding below the President's
    budget request, we would not have adequate forward presence to assure
    allies or respond to crisis in the manner needed. The defense strategy
    requires a sustained ability to deter aggression, operate effectively
    across all domains, and respond decisively to emerging crises and
    contingencies. The Marine Corps, as the Nation's expeditionary-force-
    in-readiness, does this by defending the Homeland with forward
    presence. Under sequestration, there will be less forward deployed
    forces resulting in increased risk to our national security interests.
        For classified details on the Marine Corps risk level, please see
    the 2015 CRA and the accompanying the Secretary of Defense's RMP
    submitted to Congress in February.

        4. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, are we accepting too much risk today? What
    does that mean?
        General Odierno. The compromises we have made to modernization and
    readiness, combined with reductions to our force size and capabilities,
    translates directly into strategic risk. Today, we are generating just
    enough readiness to meet our day-to-day needs for immediate
    consumption. We are unable to generate any residual readiness to
    respond to unknown contingencies or to even reinforce ongoing
    operations. This is a dangerous balancing act. We have fewer soldiers,
    the majority of whom are in units that are not ready; and they are
    manning aging equipment at a time when demand for Army forces is higher
    than we originally anticipated.
        If we are forced to take further endstrength reductions beyond the
    planned levels in the President's fiscal year 2016 budget due to
    sequestration, our flexibility deteriorates, as does our ability to
    react to strategic surprise. We are witnessing firsthand mistaken
    assumptions about the number, duration, location, and size of future
    conflicts and the need to conduct post-stability operations. These
    miscalculations translate directly into increased military risk.
        In this unclassified medium, we can only speak in general terms
    about the level of risks we are facing. The CRA and Secretary of
    Defense's RMP, both submitted to Congress on February 12, 2015, provide
    a more detailed assessment.
        Admiral Greenert. We continue to accept significant risk in two DSG
    missions, making Navy less ready to successfully Deter and Defeat
    Aggression and Project Power Despite Anti-Access/Area Denial (A2/AD)
    Challenges. While this risk is currently manageable, continuing along
    the budget trajectory of significant funding shortfalls each year means
    by 2020 (the DSG benchmark year), Navy will have insufficient
    contingency response capacity to execute large-scale operations in one
    region, while simultaneously deterring another adversary's aggression
    elsewhere. Also, we will lose our advantage over adversaries in key
    warfighting areas such as Anti-Surface Warfare, Anti-Submarine Warfare,
    Air-to-Air Warfare, and Integrated Air and Missile Defense.
        General Welsh. Bottom line: The capability gap is closing and the
    Nation risks losing in a contested environment if the Air Force does
    not have fiscal year 2016 PB level funding. While the fiscal year 2016
    PB restores some capacity to meet combatant commanders' most urgent
    needs (e.g. U-2, E-3) while enhancing capability and rebuilding
    readiness, it also reduces some force structure to meet budget targets
    (e.g., A-10, EC-130H). We are at the ragged edge, in this budget
    environment, to provide the capabilities required to meet the DSG.
        Specifically, the Air Force must modernize a primarily fourth-
    generation fleet with F-22 Increments 3.2A and 3.2B, F-16 and F-15
    avionics upgrades, and recapitalize to the next generation of
    capability. We must procure the F-35 Lightning II, KC-46A, and the LRS-
    B. Moreover, the Air Force's fighter fleet is approaching an average
    age of 30 years--the oldest in the history of the Air Force-closing the
    capability gap with potential adversaries. At 55 combat-coded squadrons
    reducing to 49, the Air Force is fielding its smallest fighter force
    ever. By comparison, the Air Force had 134 combat-coded fighter
    squadrons in Operation Desert Storm. Additionally, the Air Force is
    currently well below total fighter aircraft manning requirements and
    current funding level projections indicate this deficit will continue
    to grow, degrading vital air operations, test, and training expertise,
    slowing the transition to next generation capability.
        General Dunford. The Marine Corps can meet the DSG at PB-16 levels,
    but there is no margin. As the Chairman of the Joint Chiefs of Staff
    testified earlier this month, ``It [PB-16 level] is what we need to
    remain at the lower ragged edge of manageable risk in our ability to
    execute the defense strategy.''
        What that means.
        Maintaining the readiness of our forward deployed forces during a
    period of high operational tempo (OPTEMPO) while amidst fiscal
    uncertainty; as well as fiscal decline, comes with ever increasing
    operational and programmatic risk. Today, approximately half of the
    Marine Corps' home-station units are at an unacceptable level of
    readiness in their ability to execute wartime missions, respond to
    unexpected crises, and surge for major contingencies. Furthermore, the
    ability of non-deployed units to conduct full spectrum operations
    continues to degrade as home-station personnel and equipment are
    sourced to protect and project the readiness of deployed and next-to-
    deploy units. As the Nation's first responders, the Marine Corps' home-
    stationed units are expected to be at or near the same high state of
    readiness as our deployed units, since these non-deployed units will
    provide the capacity to respond with the capability required
    (leadership and training) in the event of unexpected crises and or
    major contingencies.
        Despite this challenge and imbalance, the Marine Corps continues to
    provide units ready and responsive to meet core and assigned missions
    in support of all directed current operational, crisis, and contingency
    requirements. However, we continue to assume long-term risk
    particularly in supporting major contingencies in order to fund unit
    readiness in the near term. Consequently, the Marine Corps' future
    capacity for crisis response and major contingency response is likely
    to be significantly reduced. Quite simply, if those units are not ready
    due to lack of training, equipment, or manning, it could mean a delayed
    response to resolve a contingency or to execute an operational plan,
    both of which create unacceptable risk for our national defense
    strategy as well as risk to mission accomplishment and to the force as
    a whole.

        5. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, do you agree that risk equals lives?
        General Odierno. Yes. If we do not have the resources to train and
    equip the force, our soldiers, our young men and women, are the ones
    who will pay the price, potentially with their lives. The lack of
    funding for readiness and modernization places the burden and
    consequences of our resourcing decisions on our soldiers. We cannot
    take the readiness of our force for granted. It is our shared
    responsibility to ensure that we never send members of our military
    into harm's way who are not trained, equipped, well-led, and ready for
    any contingency, to include war.
        Admiral Greenert. Yes, it can. By ``risk,'' we mean that some of
    our platforms will arrive late to the combat zone, and engage in
    conflict without the benefit of markedly superior combat systems,
    sensors and networks, or desired levels of munitions inventories. In
    real terms, this means longer timelines to achieve victory, more
    military and civilian lives lost, and potentially less credibility to
    deter adversaries and assure allies in the future.
        General Welsh. Yes, we agree that risk equals lives.
        General Dunford. Absolutely, risk equals lives lost, not only for
    the current force, but also for the future force. The current imbalance
    in our institutional readiness comes with long-term impacts. The
    funding problem has already created a physics problem that will take
    years to fix. BCA level funding/sequestration will make it worse:

             While the President's budget moves us in the right
            direction, it will take many years and a sustained effort to
            address the serious risk in the current inventory and
            availability of amphibious ships.
             Our declining budget has forced the Marine Corps to
            make difficult choices at the expense of modernization to
            maintain current and near-term readiness. If we do not
            modernize, we will actually move backwards.
             Our adversaries continue to develop new capabilities
            exploiting any technology gaps. By under-resourcing equipment
            modernization we will ultimately fall behind.
             Increasing threats, the proliferation of A2/AD weapon
            systems, and the aging of key material capabilities present an
            unacceptable risk to forcible entry operations and our overall
            combat effectiveness if modernization continues to be
            diminished or halted.

        6. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, what impact does sequestration have on our
    national military strategy?
        General Odierno. Sequestration will challenge us to meet even our
    current level of commitments to our allies and partners around the
    world. It will eliminate our capability, on any scale, to conduct
    simultaneous operations, specifically deterring in one region while
    defeating in another. Essentially, for ground forces, sequestration
    even puts into question our ability to conduct even one prolonged
    multiphase, combined arms, campaign against a determined enemy. We
    would significantly degrade our capability to shape the security
    environment in multiple regions simultaneously. It puts into question
    our ability to deter and compel multiple adversaries simultaneously.
    Ultimately, sequestration limits strategic flexibility and requires us
    to hope we are able to predict the future with great accuracy.
    Something we have never been able to do.
        Admiral Greenert. A return to sequestration in fiscal year 2016
    would necessitate a revisit and revision of the defense strategy. For
    the Navy specifically, the cuts would render us unable to sufficiently
    meet 2 of the 10 missions in the DSG: Project Power Despite Anti-
    Access/Area Denial Challenges and Deter and Defeat Aggression. In
    addition, we would be forced to accept higher risk in five other DSG
    missions: Counter Terrorism and Irregular Warfare; Defend the Homeland
    and Provide Support to Civil Authorities; Provide a Stabilizing
    Presence; Conduct Stability and Counterinsurgency Operations; and
    Conduct Humanitarian, Disaster Relief, and Other Operations.
        General Welsh. The Air Force cannot meet the DSG if sequestration
    is triggered.
        General Dunford. Sequester will exacerbate the challenges we have
    today. It may result in a Marine Corps with fewer active duty
    battalions and squadrons than would be required for a single major
    contingency. It will result in fewer marines and sailors being forward
    deployed in a position to immediately respond to crises involving our
    diplomatic posts, American citizens or interests overseas.
        Given the numerous and complex security challenges we face today, I
    believe DOD funding at the BCA level, with sequestration, will result
    in the need to develop a new strategy. We simply will not be able to
    execute the strategy with the implications of that guidance.

        7. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, do you believe that the dangers of
    sequestration were exaggerated or do critics fail to understand how
    much damage was actually done?
        General Odierno. I believe this is the most uncertain I have seen
    the national security environment in my nearly 40 years of service. The
    amount and velocity of instability continues to increase around the
    world. The Islamic State in Iraq and the Levant's unforeseen expansion
    and the rapid disintegration of order in Iraq and Syria have
    dramatically escalated conflict in the region. Order within Yemen is
    splintering; the al Qaeda insurgency and Shia expansion continues
    there; and the country is quickly approaching a civil war. In North and
    West Africa, anarchy, extremism, and terrorism continue to threaten the
    interests of the United States, as well as our allies and partners.
        In Europe, Russia's intervention in Ukraine challenges the resolve
    of the European Union and the effectiveness of the North Atlantic
    Treaty Organization. Across the Pacific, China's military modernization
    efforts raise concerns with our allies and our regional interests while
    the cycle of North Korean provocation continues to increase. The rate
    of humanitarian and disaster relief missions, such as the recent threat
    of Ebola, heightens the level of uncertainty we face around the world,
    along with constant evolving threats to the Homeland.
        Despite all of this, we continue to reduce our military
    capabilities. Over the last 3 years we have already significantly
    reduced the capabilities of the U.S. Army, and this is before
    sequestration begins again in 2016. In the last 3 years, the Army's
    Active component end strength has been reduced by 80,000; the Reserve
    component by 18,000. We have 13 less Active component Brigade Combat
    Teams. We have eliminated three active aviation brigades. We are
    removing over 800 rotary wing aircraft from the Army inventory. We have
    already slashed investments in modernization by 25 percent. We have
    eliminated our much needed infantry fighting vehicle modernization
    program. We have eliminated our scout helicopter development program.
    We have significantly delayed other upgrades for many of our systems
    and aging platforms.
        Readiness has been degraded to its lowest levels in 20 years. In
    fiscal year 2013, under sequestration, only 10 percent of our Brigade
    Combat Teams were ready. Combat Training Center rotations for seven
    brigade combat teams were cancelled and over half a billion dollars of
    maintenance was deferred, both affecting training and readiness of our
    units. Even after additional support from the BBA, today, we only have
    33 percent of our brigades ready, to the extent we would ask them to be
    if asked to fight. Our soldiers have undergone separation boards
    forcing us to involuntarily separate quality soldiers, some while
    serving in combat zones.
        Again, this is just a sample of what we have already done before
    sequestration kicks in again in fiscal year 2016. When it returns, we
    will be forced to reduce another 70,000 out of the Active component,
    another 35,000 out of the National Guard, and another 10,000 out of the
    Army Reserves by fiscal year 2020. We will cut 10-12 additional combat
    brigades. We will be forced to further reduce modernization and
    readiness levels over the next 5 years because we simply can't drawdown
    end strength any quicker to generate the required savings.
        The impacts will be much more severe across our acquisition
    programs requiring us to end, restructure, or delay every program with
    an overall modernization investment decrease of 40 percent. Home
    station training will be severely underfunded, resulting in decreased
    training levels. Within our institutional support, we will be forced to
    drop over 5,000 seats from Initial Military Training, 85,000 seats from
    specialized training, and over 1,000 seats in our pilot training
    programs. Our soldier and family readiness programs will be weakened,
    and our investments in installation training and readiness facility
    upgrades will be affected impacting our long-term readiness strategies.
    Therefore, sustainable readiness will remain out of reach with our
    individual and unit readiness rapidly deteriorating between 2016-2020.
        Additionally, overall the mechanism of sequestration has and will
    continue to reduce our ability to efficiently manage the dollars we in
    fact do have. The system itself has proven to be very inefficient and
    increases costs across the board, whether it be in acquisitions or
    training.
        How does all of this translate strategically? It will challenge us
    to meet even our current level of commitments to our allies and
    partners around the world. It will eliminate our capability, on any
    scale, to conduct simultaneous operations, specifically deterring in
    one region while defeating in another. Essentially, for ground forces,
    sequestration even puts into question our ability to conduct even one
    prolonged multiphase, combined arms, campaign against a determined
    enemy. We would significantly degrade our capability to shape the
    security environment in multiple regions simultaneously. It puts into
    question our ability to deter and compel multiple adversaries
    simultaneously. Ultimately, sequestration limits strategic flexibility
    and requires us to hope we are able to predict the future with great
    accuracy. Something we have never been able to do.
        Admiral Greenert. Critics fail to understand how much damage was
    actually done. Sequestration in fiscal year 2013 resulted in a $9
    billion shortfall in Navy's budget, as compared to the fiscal year 2013
    President's budget. This instance of sequestration was not just a
    disruption, it created readiness consequences from which we are still
    recovering, particularly in ship and aircraft maintenance, fleet
    response capacity, and excessive carrier strike group and amphibious
    ready group (ARG) deployment lengths. As I testified before this
    committee in November 2013, the continuing resolution and sequestration
    reductions in fiscal year 2013 compelled us to reduce both afloat and
    ashore operations, which created ship and aircraft maintenance and
    training backlogs. To budget for the procurement of ships and aircraft
    appropriated in fiscal year 2013, Navy was compelled to defer some
    purchases to future years and use prior-year investment balances to
    mitigate impacts to programs in fiscal year 2013 execution.
        While the Navy was able to reprioritize within available resources
    to continue to operate in fiscal year 2013, those actions we took to
    mitigate sequestration only served to transfer bills amounting to over
    $2 billion to future years for many procurement programs--those
    carryover bills were addressed in Navy's fiscal year 2014 and fiscal
    year 2015 budgets. If we were sequestered again, we would be forced to
    degrade current and future fleet readiness since sources available to
    mitigate in fiscal year 2013 are no longer available.
        Shortfalls caused by the fiscal year 2013 sequestration remain in a
    number of areas and the Navy is still working to recover from them.
    Even with a stable budget and no major contingencies for the
    foreseeable future, I estimate that we might be able to recover from
    the maintenance backlogs that have accumulated from the high OPTEMPO
    over the last decade of war and the additional effects of sequestration
    by approximately 2018 at the earliest for CVN and 2020 for large deck
    amphibious ships, 5 years after the first round of sequestration. This
    is a small glimpse of the readiness ``price'' of sequestration
        General Welsh. The dangers are not exaggerated. Sequestration will
    further reduce our readiness instead of spurring recovery from more
    than a decade of war and the most recent sequestration. It will impact
    our ability to respond to the next crisis, make us more vulnerable to
    emerging threats, and limit our ability to exploit the next
    technological revolution. If we lag behind near-peer threats, it could
    take decades to catch up.
        Allowing another sequestration will give allies reason for doubt
    and potential adversaries cause for opportunism.
        General Dunford. Today, approximately half of the Marine Corps'
    home station units are at an unacceptable level of readiness.
    Investment in the future is less than what is required, and
    infrastructure sustainment is being funded below the DOD standard. The
    Marine Corps has significantly reduced many of the programs that have
    helped to maintain morale and family readiness through over a decade of
    war. Additionally, the deployment-to-dwell time ratio is being
    maintained at a very challenging level. The operating forces are
    deploying for up to 7 months and returning home for 14 or less months
    before redeploying. These are some of the damages to date caused by
    sequestration and lower funding levels.
        The fiscal year 2016 President's budget is the bare bones budget
    for the Marine Corps that can meet the current DSG. The budget
    prioritizes near-term readiness at the expense of modernization and
    facilities, and only achieves a 1:2 deployment-to-dwell ratio, which is
    unsustainable over the long term. Another round of sequestration would
    force the Marine Corps to significantly degrade the readiness of our
    home station units, which is the Marine Corps' Ready Force to respond
    to crises or major combat operations. The fiscal challenges we face
    today will be further exacerbated by assuming even more risk in long-
    term modernization and infrastructure in order to maintain ready forces
    forward. This is not sustainable and degrades our capacity as the
    Nation's force-in-readiness.

                                force structure
        8. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, what is your assessment of the current
    global security environment?
        General Odierno. In my 38 years of service, I have never seen a
    more dynamic and rapidly changing security environment than the one we
    face now. We no longer live in a world where we have the luxury of time
    and distance to respond to threats facing our Nation. Instead, we face
    a diverse range of threats operating across domains and along seams--
    threats that are rapidly changing and adapting in response to our
    posture.
        We continue to experience a diverse and complex array of threats
    through a combination of transnational extremist organizations and the
    aggressive actions of several Nation-States. We continue to witness an
    increase in the velocity of instability that was unforeseen just a few
    years ago.
        In Iraq and Syria, we continue to see the ruthless behavior of
    Islamic State of Iraq and the Levant (ISIL) and the smoldering of
    sectarian conflict; which is threatening regional stability and has the
    potential to escalate international terrorism. Order within Yemen has
    fully collapsed with the country now facing civil war. Anarchy,
    extremism, and terrorism are running rampant in Libya and other parts
    of North and Central Africa. Transnational terrorist groups are
    exporting violence from new safe havens where they intimidate
    populations, prepare for future attacks, and foment instability to
    secure their influence.
        In Europe, Russian aggression and its intervention in Ukraine
    challenges the resolve of both the European Union and the North
    Atlantic Treaty Organization. Across the Pacific, China's military
    modernization efforts alarm our allies and concern our regional
    interests, while North Korean belligerence continues. We continue to
    have ever-evolving threats against our Homeland.
        In my opinion, this should not be the time to divest of our
    military capability and capacity, but that is what we are doing.
        Admiral Greenert. Today's world is more complex, uncertain, and
    turbulent, and this trend will likely continue. We face an environment
    in which our adversaries' capabilities are modernizing and expanding,
    and the ongoing development and fielding of A2/AD capabilities
    challenge our global maritime access. The environment is also marked
    by: continued threats from expanding and evolving terrorist and
    criminal networks; nation-wide upheavals as a consequence of the Arab
    Spring; climate change that increases natural disasters and
    humanitarian crises; revanchist nation-states; tensions as a result of
    maritime territorial disputes; and threats to maritime commerce from
    piracy.
        General Welsh. The instability arising from internal unrest in
    other nations poses a threat to U.S. interests and places continued
    demands on our limited resources. Potential adversaries will
    increasingly incorporate technologies and capabilities to create A2/AD
    environments and use unconventional and hybrid approaches to compete
    with U.S. power and influence. Furthermore, individuals and non-state
    actors continue their efforts to acquire weapons and other technologies
    that were once the exclusive Reserve of technologically advanced
    nation-states. The broad range of threats facing the U.S. suggests the
    time and place of the next crisis is unpredictable. Further, today's
    challenging fiscal environment threatens the Air Force's ability to
    meet DSG and combatant commander demands. National security objectives
    require an Air Force that is flexible, precise, lethal, and rapidly
    deployable anywhere on the globe.
        General Dunford. [Deleted.]

        9. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, do your Services have the force structure
    required to meet all U.S. national security requirements given the
    current global environment?
        General Odierno. As the Army draws down, we have had to reduce and
    reorganize our force structure and involuntarily separate quality
    soldiers, including some while they were serving in a combat zone. In
    the last 12 months, we reduced the size of the Active component (AC)
    from 532,000 to 503,000, with end strength set to fall to 490,000 in
    fiscal year 2015; and then to 450,000. Similarly, the end strength in
    our Army National Guard is set to fall to 335,000 and the Army Reserve
    to 195,000. But if sequestration returns, we will need to reduce end
    strength even further to 420,000 in the AC by fiscal year 2020; and
    315,000 in the National Guard and 185,000 in the Army Reserve. Yet, the
    reality we face is that the demand for Army forces throughout the world
    is growing while the size of the force is shrinking.
        Today, we are increasingly called upon to meet the demands of
    combatant commanders. We continue to support our partners in
    Afghanistan. We have returned to Iraq to advise and assist Iraqi
    Security Forces as they fight ISIL. We have deployed forces to Jordan
    and throughout the Middle East, where terrorism continues to spread and
    destabilize the region. In West Africa, more than 2,000 soldiers are
    just returning from providing humanitarian assistance to combat the
    Ebola epidemic, while another 1,000 soldiers are actively engaged in
    supporting partners as they combat extremism in the Horn of Africa. In
    Europe, Army forces have been deployed to Poland, Estonia, Latvia, and
    Lithuania since last spring to counter Russian aggression and assure
    our European allies. Across the Pacific, thousands of Army forces are
    supporting operations whether in Thailand, the Philippines, or
    Malaysia; Australia, Indonesia, or Korea. Around the world, we are
    training alongside allies and partners to help them develop
    professional and capable armies; and at home, we are supporting civil
    authorities while defending our critical networks against cyber
    attacks.
        With each one of these diverse missions, units rely on tailored
    teams of experts, logistics capabilities, transportation, intelligence,
    and communication support to accomplish the mission. In sum, we remain
    fully engaged with nearly 140,000 soldiers committed, deployed, or
    forward-stationed conducting 5 named operations on 6 continents in
    nearly 140 countries, with 9 of our 10 division headquarters employed
    across the globe. But in spite of the range of threats facing our
    Nation, sequestration remains the law of land, and we are reducing our
    capacity and capability.
        The President's fiscal year 2016 budget represents the bare minimum
    needed for us to carry out our missions and execute and meet the
    requirements of our defense strategy.
        Admiral Greenert. The 2014 update to the ``2012 Force Structure
    Assessment'' (FSA) and other Navy analysis describe the objective force
    needed to support the primary missions of the DSG. Provided sufficient
    readiness is maintained throughout the Fleet, our fiscal year 2016
    President's budget puts Navy on a path to procure the right mix of
    ships as defined by the FSA. However, fiscal constraints have
    necessitated reduced procurement of weapons and deferral of air and
    missile defense capabilities, which, when coupled with joint force
    deficiencies in wartime information transport, C2 resiliency, and
    airborne ISR, result in high risk in conducting 2 of the 10 DSG primary
    missions, specifically Deter and Defeat Aggression and Power Projection
    Despite Anti-Access/Area Denial Challenges.
        General Welsh. Because of the current uncertain fiscal environment,
    the Air Force has been forced to make difficult choices within an
    incredibly complex security environment. Air Force readiness and
    capacity are degraded to the point where our core capabilities are at
    risk. To correct this, the fiscal year 2016 President's budget (PB)
    preserves the minimum capability to sustain current warfighting efforts
    and places the Air Force on a path toward balancing readiness with the
    modernization needed to meet evolving threats. That path toward
    rebalance included divesting some capacity to make room for the next
    generation of capability required for the future.
        The 2012 DSG--``Sustaining U.S. Global Leadership''--(as updated by
    the 2014 QDR) requires healthy and sustainable Air Force combat
    readiness, modernization, and recapitalization programs. Since passage
    of the 2011 BCA, the Air Force has been forced to trade capacity in an
    attempt to preserve capability. With the fiscal year 2016 PB proposal,
    we have reached the point where any further reduction in capacity
    equals a reduction in capability--the two are inextricably linked.
    Combatant commanders require Air Force support on a 24/7 basis, and the
    Air Force does not have excess capacity to trade away.
        General Dunford. A discussion of required force structure to meet
    U.S. national security requirements must be viewed from the lens of the
    five pillars of readiness. At PB16 funding levels, the Marine Corps
    meets current Crisis and contingency response force levels, but with
    some risk. We will meet the Nation's requirements, the question is, how
    well can we prepare those troops for deployment? In order to make
    continuous and long-term readiness a reality, we have to be able to
    train personnel and perform maintenance on equipment. Right now, we
    have about a 1:2 deployment to dwell ratio. That is, marines are
    deployed for 7 months and home for 14. This allows a proper unit
    rotation to ensure that each time a unit deploys they are fully ready.
    If we are forced to take further cuts, that level will decrease closer
    to 1:1.5 or 1:1. What this means is that units have less time between
    deployments to conduct the required training prior to their next
    deployment.
        The same discussion must be had with regard to equipment. As our
    inventory of equipment decreases our ability to perform depot
    maintenance also decreases because items must stay engaged in either
    training or operations. This has negative and compounding effects
    because equipment gets worn out more quickly, ultimately must be
    retired, and further decreases the inventory, which creates an
    accelerating spiral. We must maintain our equipment levels to avoid
    this reality.

        10. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, are all your forces being provided the
    training required to meet combatant commander requirements?
        General Odierno. Today, only 33 percent of our brigades are ready,
    when our sustained readiness rate should be closer to 70 percent. We
    are taking a small portion of the Army and are giving them the money
    and train to the highest level, while the rest of the Army is training
    at a significantly lower level. This really concerns me.
        Under our current budget, Army readiness will, at best, flat-line
    over the next 3 to 4 years. We are generating just enough readiness to
    meet our day-to-day needs for immediate consumption. We are unable to
    generate any residual readiness to respond to unknown contingencies or
    to even reinforce ongoing operations.
        Admiral Greenert. Navy forces that have deployed and will deploy in
    the near term to meet global presence requirements defined by the
    Global Force Management Allocation Plan are trained to meet combatant
    commander requirements. We are confident in this assessment. It is
    informed by: (1) a continuous feedback loop between Navy component
    commanders and training commands; and (2) post deployment briefs.
        General Welsh. Units are generally trained and ready for those
    portions of the mission necessary for current operations.
        The unrelenting OPTEMPO, coupled with fewer resources to fund,
    coordinate, and execute training and exercises, has resulted in units
    trained in only subsets of their mission and not full spectrum
    operations. This narrow training focus causes atrophy of critical
    mission skills and leaves our forces ill-prepared for the high-end
    threats the Nation may have to face in the near future. Right now, more
    than 50 percent of our Combat Air Force units are not fully combat
    ready.
        General Dunford. We are able to meet our current training
    requirements. However, in order to make continuous and long-term
    readiness a reality, we have to strike the right balance between
    deployment for operations and training time here at home. Right now, we
    have about a 1:2 deployment to dwell ratio. That is, marines are
    deployed for 7 months and home for 14. This allows a proper unit
    rotation to ensure that each time a unit deploys they are fully ready.
    If we are forced to take further cuts, that level will decrease closer
    to 1:1.5 or 1:1. What this means is that units have less time between
    deployments to conduct the required training prior to their next
    deployment.
        More specifically, home station readiness is at risk when personnel
    and equipment are sourced to protect the readiness of deployed and
    next-to-deploy units. This is a logical decision when validated
    operational requirements exceed resource availability. Home station
    units are expected to be in a higher state of readiness since the
    Marine Corps is charged to be the Nations' force in readiness. The way
    they preserve this readiness is through training. By way of example,
    five of the last six infantry battalions assigned to Marine
    Expeditionary Units were not prepared until 30 days before deployment.
    This is sufficient for planned deployments, but becomes problematic and
    dangerous as conflicts extend or the need to respond to unexpended
    crises arises.
        The other aspect of training readiness is equipment availability.
    It isn't enough just to have a sufficient inventory with which to
    fight. You must also have sufficient inventory to train here at home.
    Examples of this are myriad, but one of the most salient, is the
    availability of amphibious shipping. Conducting amphibious operations
    with our joint Services is not just a matter of putting marines on Navy
    ships. Those units must have the opportunity to operate with each other
    during their workup to establish relationships, tactics, techniques,
    procedures, and build interoperability. This is one of the reasons why
    the shortfalls in amphibious shipping are so concerning. Maintaining
    enough equipment to meet combatant commander requirements is only part
    of the equation.

        11. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, do you have tiered readiness?
        General Odierno. In 2014, I testified that fiscal shortfalls have
    caused the Army to implement tiered readiness. Today, only 33 percent
    of our brigades are ready, when our sustained readiness rate should be
    closer to 70 percent. We are taking a small portion of the Army and are
    giving them the money and train to the highest level, while the rest of
    the Army is training at a significantly lower level. This really
    concerns me.
        Under our current budget, Army readiness will, at best, flat-line
    over the next 3 to 4 years. We are generating just enough readiness to
    meet our day-to-day needs for immediate consumption. We are unable to
    generate any residual readiness to respond to unknown contingencies or
    to even reinforce ongoing operations.
        Admiral Greenert. Yes. Navy has historically used a tiered
    readiness approach to balance the need for major maintenance and
    modernization on our capital intensive platforms while sustaining our
    forward presence commitments with fully-trained, ready, and capable
    rotational forces and maintaining an ability to surge forces for
    contingency response. Navy's force generation process, the Optimized
    Fleet Response Plan (O-FRP), steps units/groups through increasing
    levels of readiness and operational certifications to support both
    deployment and contingency response requirements.
        General Welsh. The Air Force does not use tiered readiness. Tiered
    readiness does not support the requirement for the Air Force to provide
    forces with the immediacy combatant commanders require. We have
    structured and resourced our forces to meet the demands and timelines
    of the joint fight.
        General Dunford. As the Nation's ready force, Marine units are
    expected to be in high states of readiness to respond to current and
    unforeseen crises and major contingencies. Tiered readiness is
    incompatible with being the Nation's ready force. My priority remains
    those rotational Marine units that are forward deployed and engaged.
    These Marine units are ready and responsive to meet combatant commander
    requirements. Marine rotational units follow a cyclical scheme where
    units returning from deployments typically experience reduced readiness
    levels as personnel rotate and equipment is repaired; but, those
    readiness levels are increased as soon as possible. Tiered readiness is
    when units are purposely programmed at varying degrees of readiness,
    based on how long it would take them to be ready to deploy. The Marine
    Corps does not program some units at lower readiness levels than
    others. Further budget cuts under sequestration, however, would force
    the Marine Corps into adopting some variation of a less ready, tiered
    status, within the next few years--the makings of a hollow force we
    have fought so hard to avoid.

        12. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, are we still headed for a hollowing of the
    force, or have we already arrived there?
        General Odierno. Today, only 33 percent of our brigades are ready,
    when our sustained readiness rate should be closer to 70 percent. In
    the last 3 years, the Army's Active component end strength has been
    reduced by 80,000; the Reserve component by 18,000. We have 13 less
    Active component Brigade Combat Teams. We have eliminated three active
    aviation brigades. We are removing over 800 rotary wing aircraft from
    the Army inventory. We have already slashed investments in
    modernization by 25 percent, and we have significantly delayed other
    upgrades for many of our systems and aging platforms.
        For the last 3 to 5 years, we have been moving towards a hollow
    Army which I define as one where our soldiers are not properly trained;
    where our soldiers won't be able to do the exercises that they need;
    where our soldiers won't have the equipment they need; and the
    equipment that they do have, they will not be able to sustain.
        The choices we must make to meet sequestration-level funding are
    forcing us to reduce our Army to a size and with limited capabilities
    that I am not comfortable with. If we follow this path to its end, we
    will find a hollow Army. For those that present the choice as one
    between capacity and capability, I want to remind them that for the
    Army, soldiers are our capability. The Army must train and equip
    soldiers to achieve decisive strategic results on the ground. If the
    funding dictates a smaller Army, then we must be prepared for both
    reduced capacity and reduced capability.
        Admiral Greenert. After a decade of war, the Navy is faced with
    many readiness challenges, but we are not a ``hollow force.'' Of
    particular concern is our capacity to complete maintenance on our ships
    and aircraft in a timely manner. This is precisely why we need the
    funding requested in the Navy budget submission to achieve the
    necessary readiness of both our platforms and our personnel to execute
    our missions. Funding below this submission or a return to
    sequestration would put us on a path to ``hollowness.'' This year, Navy
    began implementing the O-FRP to focus on preserving the time required
    to maintain its capital-intensive platforms, train the force and align
    other readiness enablers to sustain persistent presence globally while
    retaining contingency response capacity. We continue to provide ready,
    operationally certified forces forward to the combatant commanders, but
    at best, it will take us 3 to 5 years to recover the required
    contingency response capacity for major crises.
        General Welsh. By almost any means or measure, we are certainly
    teetering on the edge of a hollow force due to the effects of budgeting
    uncertainty, high OPTEMPO affecting ability to train, decades-long
    overseas engagement, and steady funding cuts. Let me be clear that a
    return to the 2013 BCA funding level will require extensive measures
    and years to recover readiness and capability.
        General Dunford. Yes. We continue to head to a hollowing of the
    entire force and currently a portion of the force is hollow. A hollow
    force is typically the result of reductions in defense spending without
    concomitant reductions in forces; thus, there is not enough equipment
    to train to those levels of manning. Declining defense budgets,
    operational commitments that exceed capacity, and having to mortgage
    modernization and investments to meet current operational requirements
    are corrosive factors that degrade readiness and contribute directly to
    the onset of internal decay-a hollowing of the force.
        Approximately half of Marine Corps units are insufficiently
    resourced to achieve those readiness levels needed for a major
    contingency. Using Marine aviation as an example, approximately 80
    percent of Marine aviation lack the minimum required Ready Basic
    Aircraft (RBA) to train to the minimum readiness levels. Lack of
    procurement (future readiness) and aging legacy aircraft negatively
    impact aircraft availability for training and meeting operational
    demands. A significant training and warfighting requirement gap of RBA
    exists. Operational commitments have increased while the overall number
    of available aircraft for operations and training has decreased.
    Shallow procurement ramps (not buying aircraft fast enough) directly
    increase both the cost and complexity of maintaining legacy systems
    beyond their projected life. Marine aviation is 106 aircraft short of
    the training requirement or 158 aircraft (10-squadron equivalent) short
    of the wartime formations. Of the remaining 31 squadrons, 22 are below
    the minimum training level required to go to combat in the event of a
    contingency.
        Our metrics to monitor manning, equipment, and training levels, and
    assessment process provides near-term analysis of readiness of the
    Marine Corps' ability to execute operational plans. The full weight of
    the BCA would preclude the Marine Corps from meeting its full statutory
    and regulatory obligations, and adequately prepare for the future.
    Under sustained sequestration for forces not deploying, the fuel,
    ammunition, and other support necessary for training would be reduced
    thus inhibiting our ability to provide fully-trained marines and ready
    units to meet emerging crises or unexpected contingencies. We would see
    real impacts to all home station units, then our next-to-deploy and
    some deploy forces.this constitutes the internal decay, the beginnings
    of the hollow force we have fought so hard to avoid.

        13. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, what are the tangible indicators of a
    hollow force?
        General Odierno. I define a hollow force as one where our soldiers
    are not properly trained; where our soldiers won't be able to do the
    exercises that they need; where our soldiers won't have the equipment
    they need; and the equipment that they do have, they will not be able
    to sustain.
        The choices we must make to meet sequestration-level funding are
    forcing us to reduce our Army to a size and with limited capabilities
    that I am not comfortable with. If we follow this path to its end, we
    will find a hollow Army. For those that present the choice as one
    between capacity and capability, I want to remind them that for the
    Army, soldiers are our capability. The Army must train and equip
    soldiers to achieve decisive strategic results on the ground. If the
    funding dictates a smaller Army, then we must be prepared for both
    reduced capacity and reduced capability.
        Admiral Greenert. The term ``hollow force'' has been used
    differently by many speakers and authors over a number of years. From
    the Navy perspective, ``hollow force'' generally means maintaining a
    certain capacity, but not having sufficient manning, training, or
    equipment to complete assigned missions or exercise the full capability
    of a unit. This does not translate into a specific quantitative
    criterion with a threshold that specifies whether the Navy is hollow or
    not because the many dimensions of readiness interact with each other.
    For example, a moderate readiness problem in one dimension can be
    compensated by strength in another dimension. Thus, in our view, it is
    not possible in any practical sense to provide a definition of a
    ``hollow force.'' However, we can describe degrees of ``hollowness'' in
    terms of the significance and impact of that dimension on the
    capability and capacity of the Navy as a whole, or individual Navy
    units, to perform their assigned missions.
        General Welsh. The current DOD readiness systems, Defense Readiness
    Reporting System, and the Status of Training and Resources System
    provide the first and most ``tangible'' indication of a hollow force.
    These systems provide readiness assessments that analyze our capability
    to meet the demands of the National Military Strategy and Defense
    Planning Guidance. Given our current low readiness levels (less than 50
    percent of Combat Air Force squadrons are currently ready), these
    reporting systems were the first indicators that directed our attention
    to the issue of force readiness and the problems we are experiencing.
        Other indicators are the shortfalls we have experienced over the
    last several years in our Weapon System Sustainment accounts, shortages
    of flight line maintenance personnel, and imbalances in experience
    levels, all of which contribute to our inability to fully execute
    planned flying training in some weapons systems. OSD Cost Assessment
    and Program Evaluation validated maintenance manning shortfalls in the
    NDAA for Fiscal Year 2015 directed report, ``Analysis on Air Force
    Fighter Manning.'' These constraints limit our production to
    approximately 95 percent of the minimum requirements for our training
    and readiness needs.
        Furthermore, the current low state of readiness is a direct result
    of the persistent global demands placed on our force amidst significant
    declines in both force structure and manpower. The result is an Air
    Force that is deployed on a demanding rotation schedule but engaged in
    operations that encompass only a small subset of combat skills that are
    required to meet operation plan (OPLAN) demands for full-spectrum
    operations.
        General Dunford. There are many indicators that point to a hollow
    force. Our challenge is to recognize such indicators before the onset
    of hollowing versus recognizing hollowness once decay has set.
    Underfunding readiness leads to a hollow force. Budgetary uncertainty
    that results in a mismatch between end strength and force structure is
    another leading indicator to a hollow force. Sequestration would
    produce irreversible impacts to readiness that would lead to the
    hollowing of the force. We are already seeing indicators of a hollowing
    of the force-approximately half of Marine Corps units are not resourced
    to be at the readiness levels needed for a major contingency. A hollow
    force is typically the result of reductions in defense spending without
    concomitant reductions in forces; thus, there is not enough equipment
    to train to those levels of manning. Other tangible indicators include:
    (1) insufficient manning to meet force structure for organizational and
    operational requirements; (2) inability to train due to shortages of
    equipment, lack of maintenance, and insufficient Operations and
    Maintenance funds; (3) resultant limitations on the ability to respond
    to contingencies or be forward deployed per operational requirements;
    and (4) transferring funds among accounts to support increased planned
    and unexpected operational requirements that results in planned
    maintenance, training, or logistics support activities having to be
    decreased, cancelled, or deferred.

                                  assumptions
        14. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, our military budget appears to be based on
    assumptions developed to cut the size and funding for our military, not
    to protect this Nation against potential future threats. Assumptions
    such as accepting increased risk in Europe, short duration of future
    conflicts, end of operations in Iraq and Afghanistan, and a more stable
    global security environment do not appear grounded in past, present or
    future reality. What is the impact to national security if these
    assumptions are wrong?
        General Odierno. With an increase in threats around the world that
    have rendered some of our planning assumptions optimistic, we must
    acknowledge that the fiscal year 2016 post-sequestration spending cap,
    which was set almost 4 years ago, has not kept pace or accounted for an
    increasingly complex and dangerous world. If we are forced to take
    further endstrength reductions beyond the planned levels in the
    President's budget due to sequestration, our flexibility deteriorates,
    as does our ability to react to strategic surprise. We are witnessing
    firsthand mistaken assumptions about the number, duration, location,
    and size of future conflicts and the need to conduct post-stability
    operations. These miscalculations translate directly into increased
    military risk while the President's budget represents the bare minimum
    needed for us to carry out our missions and execute and meet the
    requirements of our defense strategy.
        Admiral Greenert. In developing the Navy's budget submission Navy
    evaluated its warfighting requirements to execute the primary missions
    of the DSG. These were informed by the current and projected threat,
    global presence requirements as defined by the Global Force Management
    Allocation Plan, and warfighting scenarios as described in the
    Combatant Commanders' Operation Plans and the Secretary of Defense-
    approved Defense Planning Scenarios. To arrive at a balanced program
    within fiscal guidance, Navy focused on first building appropriate
    capability, then delivering it at a capacity Navy could afford. Navy
    used the following six budget priorities:

        1.  Maintain a credible, modern, and survivable sea-based deterrent
        2.  Sustain forward presence of ready forces distributed globally
    to be where it matters, when it matters
        3.  Strengthen the means (capability and capacity) to win in one
    multi-phase contingency operation and deny the objectives of--or impose
    unacceptable costs on--another aggressor in another region
        4.  Focus on critical afloat and ashore readiness
        5.  Sustain or enhance Navy's asymmetric capabilities in the
    physical domains, as well as in cyberspace and the electromagnetic
    spectrum
        6.  Sustain a relevant industrial base, particularly in
    shipbuilding

        The Navy's budget submission does protect the Nation against
    foreseeable future threats. However, the cumulative effect of budget
    shortfalls over these years has forced the Navy to accept significant
    risk in key mission areas, notably if the military is confronted with a
    technologically advanced adversary or forced to deny the objectives of
    an opportunistic aggressor in a second region while engaged in a major
    contingency. If assumptions are wrong, and we are not able to enact PB-
    16 as submitted, we would put at risk our ability to sufficiently meet
    the missions stated in the DSG.
        General Welsh. If our assumptions are incorrect, we will lack the
    capability, capacity and readiness to fully execute the DSG as
    articulated in the 2014 QDR and current Defense Planning Guidance (DPG)
    under current plans and Concepts of Operation.
        The United States continues to face a rapidly changing security
    environment as the nature of conflict evolves across all domains and
    the information environment. The Department must maintain ready forces
    with superior capabilities to ensure the Nation has the ability to
    defeat and deny or impose costs across the full spectrum of conflict
    and to address a wide range of security challenges and risks. The 2014
    QDR outlines three mutually supportive and interdependent pillars that
    shape our defense priorities: protect the homeland; build security
    globally; and project power and win decisively. Further, the strategy
    emphasizes key tenets that the future joint force will continue to
    support including: rebalancing to the Asia-Pacific region to preserve
    peace and stability; maintaining a strong commitment to security and
    stability in Europe and the Middle East; sustaining a global approach
    to countering violent extremists and terrorist threats, with an
    emphasis on the Middle East and Africa; continuing to protect and
    prioritize key investments in technology while our forces overall grow
    smaller and leaner; and, invigorating efforts to build innovative
    partnerships and strengthen key alliances and partnerships.
        Following the fiscal year 2017-2021 DPG, the Air Force fiscal year
    2016 President's budget submission seeks balance across the Air Force's
    capability, capacity, and readiness, facilitating a smaller but more
    ready and modern force by fiscal year 2023. The Air Force funds
    readiness recovery and sheds capacity in legacy force structure in
    order to invest in modernization, especially in mid- to high-end
    aircraft, advanced munitions, ISR, nuclear, and space enhancements. We
    also must continue to strengthen the nuclear enterprise, recapitalize
    aging aircraft, expand ISR capabilities, increase cyberspace
    capability, and provide capability to address A2/AD environments. This
    will require making tradeoffs to ensure the Air Force builds and
    sustains a force able to meet the DSG and combatant command
    requirements.
        General Dunford. The impact to the Marine Corps under an
    increasingly unstable global security environment is an increase in
    demand for forces. This will result in increased risk to our national
    security and increased risk to the force; the Marine Corps is currently
    operating near a 1:2 deployment to dwell ratio, which is unsustainable
    for the long-term.
        Executing current requirements at President's budget 2016 levels
    already puts the Marine Corps at the limits of acceptable risk. BCA
    level funding and/or sequestration will render the current defense
    strategy unexecutable.

                 short- and long-term impacts of sequestration
        15. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, what are the short- and long-term impacts
    of each of your Services training and modernization cuts and delays?
    Why should Congress and the American public care?
        General Odierno. Sequestration cuts have had a detrimental impact
    on training and modernization. In fiscal year 2013, the Army cancelled
    combat training center rotations for seven brigade combat teams, the
    equivalent of two divisions. Additionally, the lingering effects of
    cuts in fiscal year 2014 left the Army just nine brigade combat teams
    that are both available and have the training necessary to conduct
    decisive action. We estimate that sequestration will affect over 80
    Army programs; for example, approximately $716 million of fiscal year
    2013 reset (maintenance) was deferred into fiscal year 2014 and fiscal
    year 2015 and contributed to a backlog of 172 aircraft awaiting
    maintenance, directly impacting the ability of combat aviation brigades
    to conduct higher echelon collective training. Similarly, reset was
    postponed for 700 vehicles, almost 2,000 weapons, over 10,000 pieces of
    communications equipment, equipment destined for Army Prepositioned
    Stocks and other soldier equipment. Within aviation, the procurement of
    a new Armed Aerial Scout helicopter had to be cancelled, requiring the
    development of new organizational concepts, which ultimately
    contributed to the implementation of the Aviation Restructure
    Initiative (ARI). Modernization of Air Defense Command and Control
    systems were delayed at a time of increased instability in North East
    Asia. Finally, sequestration delayed the modernization of our Apache
    helicopters from fiscal year 2013 to fiscal year 2014 and fiscal year
    2015.
        If sequestration returns in fiscal year 2016, the impacts will be
    much more severe across our acquisition programs requiring us to end,
    restructure, or delay every program with an overall modernization
    investment decrease of 40 percent. Home station training will be
    severely underfunded, resulting in decreased training levels. Within
    our institutional support, we will be forced to drop over 5,000 seats
    from Initial Military Training, 85,000 seats from specialized training,
    and over 1,000 seats in our pilot training programs. Our soldier and
    family readiness programs will be weakened, and our investments in
    installation training and readiness facility upgrades will be affected
    impacting our long-term readiness strategies. Therefore, sustainable
    readiness will remain out of reach with our individual and unit
    readiness rapidly deteriorating between 2016-2020.
        The lack of consistent and predictable funding for training and
    modernization impacts the decisions that Army leaders have to make
    today and tomorrow. To the extent that those decisions may unduly
    burden our soldiers in their mission accomplishment in garrison and in
    contingency operations, the American public should be very concerned
    that their Army may be less than fully prepared when called upon.
        Admiral Greenert. Navy has prioritized training for deploying
    units, even through sequestration, to ensure our crews do not bear the
    brunt of budget shortfalls and were as fully prepared as possible for
    deployment. The same was not true in training for units not next in
    line to deploy, which has contributed to our reduced contingency
    response capacity today. A return to sequestration would disrupt our
    plan to complete reset of our Fleet and to restore training necessary
    for full contingency operations capacity.
        Modernization of the Fleet is both a priority and a concern. The
    pace of modernization is slower than I desire. However, modernization
    efforts do continue with new ships and technology coming online each
    year of the FYDP. A return to sequestration would further slow
    modernization, parts, and ordnance procurement needed to keep pace with
    the evolving threat.
        General Welsh. If the Air Force cannot meet the demands of the DSG,
    it means lives will be lost and the United States might not win the
    next high-end conflict.
        At BCA level funding, the Air Force will not be able to recover
    readiness, and modernization investment will take a substantial hit.
        In training and readiness: BCA-level funding will further cut the
    Air Force's flying hour program, which currently only meets
    approximately 95 percent of our established requirements. All units
    will be forced to fly a reduced program that falls further below the
    minimum training requirements. The cuts truncate our ability to offer
    key opportunities that provide full-spectrum training, such as Red Flag
    exercises. The Air Force will lose two of four annual Red Flag
    exercises at Nellis Air Force Base. Additionally, the Air Force will
    lose 6 of 12 Green Flag exercises, which is the capstone event for pre-
    deployment joint training, and 1 of 2 Weapons Instructor Courses, which
    is the premier school developing our future tacticians and warfighting
    experts. Those cuts, coupled with a demanding deploy-to-dwell, will
    result in a significant readiness decline that will take years to
    recover.
        In modernization: Cuts and delays mean an Air Force less able to
    meet combatant commander capability and capacity requirements now and
    into the future. The capability gap is closing and many of our systems
    are outdated and do not fully meet the demands of modern warfare. For
    example, when systems like the B-2 Defensive Management System and the
    F-15 Eagle Passive/Active Survivability and Warning System are delayed,
    our aircrews are increasingly at risk when operating in hostile
    airspace against increasing numbers of very capable air defense
    systems. Additionally, as modernization is delayed, economies of scale
    in unit production are not realized, resulting in higher system costs
    over time.
        To sustain U.S. global leadership, the Nation must field a military
    more advanced, more ready, and more modern than the enemy. Training
    cuts and delayed modernization continue to contribute to substandard
    and declining readiness. This will create substantial risk to mission
    success, protracted and prolonged combat operations, and higher
    casualty rates of our men and women in uniform.
        General Dunford. A discussion of the impacts of the cuts to
    training and modernization must be had through the lens of the Five
    Pillars of Readiness. But first, the American people should care
    because this affects the ability of their marines to be ready to be
    ready for today's conflicts and throws into serious doubt their
    preparedness for future conflicts. History has proven that failure to
    appropriately train and modernize the force will result in larger
    numbers of casualties and deaths.
        With regard to training, marines must have the appropriate time to
    reset from one deployment and be train for their next deployment. In
    order to make continuous and long-term readiness a reality, we have to
    be able to train personnel and perform maintenance on equipment. Right
    now, we have about a 1:2 deployment to dwell ratio. That is, marines
    are deployed for 7 months and home for 14. This allows a proper unit
    rotation to ensure that each time a unit deploys they are fully ready.
    If we are forced to take further cuts, that level will decrease closer
    to 1:1.5 or 1:1. What this means is that units have less time between
    deployments to conduct the required training prior to their next
    deployment. Further cuts will also negatively affect the quality of
    that training.
        More specifically, home station readiness is at risk when personnel
    and equipment are sourced to protect the readiness of deployed and
    next-to deploy units. This is a logical decision when validated
    operational requirements exceed resource availability. Home station
    units are expected to be in a higher state of readiness since the
    Marine Corps is charged to be the Nations' force in readiness. The way
    they preserve this readiness is through training. By way of example,
    five of the last six infantry battalions assigned to Marine
    Expeditionary Units were not prepared until 30 days before deployment.
    This is sufficient for planned deployments, but becomes problematic and
    dangerous as conflicts extend or the need to respond to unexpended
    crises arises.
        As for modernization, delays and cuts mean that marines will have
    to deploy today with legacy equipment that requires more maintenance
    and puts them in danger of deploying in the future with obsolete
    equipment that will be outclassed by that of our adversary, putting
    both mission accomplishment and the safety of your marines in jeopardy.

        16. Senator Inhofe. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, I know each of your Services have
    transferred bills to the out years in hope that there will be more
    funding in the future. How much funding for modernization, sustainment
    and training has each of your Services pushed into the future years?
    What is the cost increase by postponing this funding?
        General Odierno. We have pushed several billions of dollars for
    equipment modernization, equipment maintenance, facilities maintenance,
    and leader development into the future in order to sustain a minimal
    level of readiness in our current force. Under the effects of
    sequestration, the readiness portfolio takes a severe reduction that
    the Army will be unable to recover from until fiscal year 2023. The
    cumulative effect of this is that we will have a less ready future
    force that will require a dramatic infusion of funds when called to
    war, much like we faced in the 2003-2005 period where our troops had
    insufficient equipment. Some of the costs are not possible to quantify,
    such as the inability to retain our technological overmatch, reduced
    leader development, and training opportunities. Other costs are easier
    to quantify, such as deferring reset and maintenance funding of nearly
    700 vehicles, almost 2,000 weapons, over 10,000 pieces of
    communications equipment, and Army Prepositioned Stocks, as well as a
    backlog of facilities maintenance due to the chronic underfunding of
    our facilities maintenance accounts. In the end, the entire cost will
    be placed on the back of the soldier, who will to deploy with
    inadequate equipment and training--that cost can never be quantified.
        Admiral Greenert. The Navy mitigated the impacts of sequestration
    in fiscal year 2013 by reducing afloat and ashore operations, deferring
    some purchases to future years, and using prior-year investment
    balances to mitigate impacts to programs in fiscal year 2013 execution.
    The actions we took in 2013 to mitigate sequestration only served to
    transfer bills amounting to over $2 billion to future years for many
    procurement programs. In addition, the Navy deferred about $1 billion
    in facilities sustainment projects that will need to be executed,
    likely at an increased cost because of further deterioration.
        Our PB-14 FYDP submission represented the baseline required by the
    Navy to carry out all ten DSG missions. Over the last 3 years, though,
    Navy funding under sequestration and the BBA was $25,000 less than the
    PB-13/14 submissions, shortfalls that manifest in the continued erosion
    of our warfighting advantages in many areas relative to potential
    adversaries. We were compelled to delay modernization in air-to-air
    warfare, antisurface warfare, antisubmarine warfare, and integrated air
    and missile defense. If sequestered, the Navy's modernization,
    sustainment, and training would be further impacted, exacerbating an
    already high risk situation.
        Finally, sequestration in fiscal year 2013 also compelled us to
    reduce operations which cannot be recovered in future years.
    Deployments and training were cancelled, USS Miami was inactivated
    instead of repaired, and furloughs and a hiring freeze resulted in lost
    production. Maintenance and training backlogs have reduced Navy's
    ability to maintain required forces for contingency response to meet
    combatant command operational plan requirements. Assuming a stable
    budget and no major contingencies for the foreseeable future, I
    estimate it is possible to recover from the maintenance backlogs that
    have accumulated from the high OPTEMPO over the last decade of war and
    the additional effects of sequestration by approximately 2018 for CSGs
    and approximately 2020 for ARGs, 5 plus years after the first round of
    sequestration. This is a small glimpse of the qualitative readiness
    ``price'' of sequestration that is pushed into the future years.
        General Welsh. The Air Force pushed approximately $3.8 billion out
    of fiscal year 2016 during the fiscal year 2016 President's budget
    build. The cost increase is currently unknown as not every item removed
    from fiscal year 2016 was replaced in a FYDP year. Beyond inflation, it
    would be difficult to estimate the cost without coordination through
    all affected program offices. Below is a list of items and the amount
    of money pushed from fiscal year 2016 to future years.

        General Dunford. In order to preserve near-term readiness of
    deployed units, the Marine Corps assumed risk in home station unit
    readiness and investment in infrastructure and modernization. In an
    attempt to regain balance across the pillars of readiness, the fiscal
    year 2016 President's budget includes an increase to Marine Corps
    investment by 55 percent across the FYDP. However, this increase is
    based on the current budget's funding levels. Funding levels below the
    President's budget, either through a mechanical sequester or BCA-level
    caps, would significantly increase the assumed risk.
        The risks associated with training stem from a suboptimal
    deployment-to-dwell ratio, as this is more a matter of time than
    dollars. A lower deployment-to-dwell ratio means training is focused on
    the immediate deployment requirements based on the time available.
    Limited training time decreases the ability to build institutional
    readiness through training across the full range of military
    operations. The bottom line is that your Marine Corps will remain ready
    to respond to the Nation's call; however, our capacity to respond may
    be severely diminished.
                                     ______

                 Questions Submitted by Senator Roger F. Wicker
                             sequestration remedies
        17. Senator Wicker. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, would each of you welcome legislative
    authority that would enable DOD some flexibility as to where to make
    the budget cuts mandated by the sequester?
        General Odierno. The Army has made tough choices and needs
    congressional support for compensation reform, force restructuring to
    include the Aviation Restructuring Initiative, and a cost-saving Base
    Realignment and Closure (BRAC) eliminating a half a billion dollars per
    year of excess infrastructure capacity that is currently in the Army.
        Additionally, if Congress does not act to mitigate the magnitude
    and method of the reductions under the sequestration, the Army will be
    forced to make blunt reductions in end strength, readiness, and
    modernization. We cannot take the readiness of our force for granted.
    If we do not have the resources to train and equip the force, our
    soldiers, our young men and women, are the ones who will pay the price,
    potentially with their lives. It is our shared responsibility to ensure
    that we never send members of our military into harm's way who are not
    trained, equipped, well-led, and ready for any contingency to include
    war. We must come up with a better solution to avoid the path of a
    hollow army.
        Admiral Greenert. Our first hope is that Congress will be able to
    lift the spending caps set by the BCA. Our fiscal year 2016 President's
    budget represents the absolute minimum funding levels needed to execute
    our defense strategy. A return to sequestration would necessitate a
    revisit and revision of the defense strategy.
        General Welsh. Legislation providing flexibility during a
    sequestration is certainly welcome; however, BCA level funding
    constraints would jeopardize the Air Force's ability to meet the DSG.
        General Dunford. In order to ensure the Marine Corps receives the
    necessary resources to facilitate acceptable levels across troop
    readiness, equipment modernization, and facilities sustainment, further
    sequestering of the defense budgets must be avoided. If sequestration
    is again forced upon the Marine Corps, the fiscal challenges we
    currently face would be exacerbated, and additional risk would be
    assumed that would greatly reduce our capacity to meet operational
    requirements in the long term.

        18. Senator Wicker. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, what additional legislative authorizes do
    you requires to allow your Services the flexibility needed to avoid
    hollowing out the force?
        General Odierno. The Army has made tough choices and needs
    congressional support for compensation reform, force restructuring to
    include the Aviation Restructuring Initiative, and a cost-saving BRAC
    eliminating a half a billion dollars per year of excess infrastructure
    capacity that is currently in the Army.
        Additionally, if Congress does not act to mitigate the magnitude
    and method of the reductions under the sequestration, the Army will be
    forced to make blunt reductions in end strength, readiness, and
    modernization. We cannot take the readiness of our force for granted.
    If we do not have the resources to train and equip the force, our
    soldiers, our young men and women, are the ones who will pay the price,
    potentially with their lives. It is our shared responsibility to ensure
    that we never send members of our military into harm's way who are not
    trained, equipped, well-led, and ready for any contingency to include
    war. We must come up with a better solution to avoid the path of a
    hollow army.
        Admiral Greenert. Legislative action to lift the BCA spending caps
    and prevent sequestration would be the best path to avoid hollowing the
    force. Our fiscal year 2016 President's budget is the minimum funding
    needed to meet the current defense strategy. In conjunction with repeal
    of the BCA, approval of the fiscal year 2016 President's budget
    represents the best hope for our Nation's future defense.
        General Welsh. To prevent a hollowing of the Air Force, we need
    relief from BCA caps and we need relief from prohibitions and
    limitations associated with retirement and divestiture of aging force
    structure. Authorization to conduct a BRAC would also free up resources
    for our most important recapitalization and modernization programs.
        In addition to force structure divestiture and BRAC authority, we
    need reprogramming authority to allow flexibility to fund emerging
    mission requirements and cover must pay bills. Specifically, we need
    increased General Transfer Authority and fewer imposed floors. Current
    Secretary of Defense transfer approval authority does not provide
    adequate flexibility to support emergent warfighter requirements.
        General Dunford. The Marine Corps' current resource level
    represents a bare bones budget for the Marine Corps that can meet the
    current DSG. It allows the Marine Corps to protect near-term readiness;
    however, it does so at the expense of long-term modernization and
    infrastructure, threatening a balance across the Five Pillars of
    Readiness (high quality people, unit readiness, capacity to meet the
    combatant commanders' requirements, infrastructure sustainment, and
    equipment modernization). An imbalance amongst the Pillars will lead to
    conditions that could hollow the force and create unacceptable risk for
    our national defense. In order to ensure the Marine Corps receives the
    necessary resources to facilitate acceptable levels across troop
    readiness, equipment modernization, and facilities sustainment, further
    sequestering of the defense budgets must be avoided. If sequestration
    is again forced upon the Marine Corps, the fiscal challenges we
    currently face would be exacerbated, and additional risk would be
    assumed that would greatly reduce our capacity to meet operational
    requirements in the long-term.

        19. Senator Wicker. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, the return of sequestration is the law of
    the land. What are you doing differently this year when it comes to
    planning for sequestration?
        General Odierno. The President's budget represents the bare minimum
    needed for us to carry out our missions and execute and meet the
    requirements of our defense strategy. A return to sequestration-level
    funding would require the Army to size and equip the force based on
    what we can afford, not what we need, increasing the risk that when
    called to deploy, we will either not have enough soldiers or will send
    soldiers that are not properly trained and equipped. As I have stated
    before, if the discretionary cap reductions from sequestration occur,
    the Army will be at grave risk of being unable to fully execute the DSG
    requirements.
        If sequestration returns, we will need to reduce end strength even
    further to 420,000 in the AC by fiscal year 2020; and 315,000 in the
    National Guard and 185,000 in the Army Reserve. We will cut 10 to 12
    additional combat brigades. We will be forced to further reduce
    modernization and readiness levels over the next 5 years because we
    simply can't drawdown end strength any quicker to generate the required
    savings.
        The impacts will be much more severe across our acquisition
    programs requiring us to end, restructure, or delay every program with
    an overall modernization investment decrease of 40 percent. Home
    station training will be severely underfunded, resulting in decreased
    training levels. Within our institutional support, we will be forced to
    drop over 5,000 seats from Initial Military Training, 85,000 seats from
    specialized training, and over 1,000 seats in our pilot training
    programs. Our soldier and family readiness programs will be weakened,
    and our investments in installation training and readiness facility
    upgrades will be affected impacting our long-term readiness strategies.
    Therefore, sustainable readiness will remain out of reach with our
    individual and unit readiness rapidly deteriorating between 2016 to
    2020.
        It is our decisions, those that we make today and in the near
    future, that will impact our soldiers, our Army, the Joint Force, and
    our Nation's security posture for the next 10 years.
        Admiral Greenert. The fiscal year 2016 President's budget provides
    the funding and reforms needed to execute the defense strategy. The
    President has made clear that he is not going to accept a budget that
    locks in sequestration going forward, and he will not accept a budget
    that severs the vital link between our national security and our
    economic security, both of which are important to the Nation's safety,
    international standing, and long-term prosperity.
        I stand by the fiscal year 2016 President's budget as the
    investments needed to protect national security. A return to
    sequestration in fiscal year 2016 would necessitate a revisit and
    revision of the defense strategy. The required cuts would force us to
    further delay critical warfighting capabilities, reduce readiness of
    forces needed for contingency responses, further downsize weapons
    capacity, and forego or stretch procurement of force structure as a
    last resort. Because of funding shortfalls over the last 3 years, our
    fiscal year 2016 President's budget represents the absolute minimum
    funding levels needed to execute our defense strategy. We cannot
    provide a responsible way to budget for the defense strategy at
    sequester levels because there isn't one.
        General Welsh. The fiscal year 2016 President's budget supports our
    critical needs to execute the defense strategy, but we made tough
    choices in capacity and capability/modernization. OMB has provided
    direction through OSD that the Air Force does not support any
    reductions to the President's budget. Without a repeal of sequestration
    the Air Force will simply not have the capacity required to fully meet
    the current DSG. Therefore, support of the President's budget and
    repeal of 2013 BCA is essential. If forced into BCA funding levels in
    fiscal year 2016, we would, out of necessity divest entire fleets,
    reduce quantities for procurement of weapons systems, and reduce
    readiness accounts. Potential impacts include:

             Divest RQ-4 Block 40 fleet and cut Block 30
            modifications
             Reduce MQ-1/MQ-9 ISR capacity by 10 CAPs--equivalent
            to current operations in Iraq/Syria
             Retire KC-10 fleet--15 in fiscal year 2016 and 59
            total across FYDP
             Defer second Presidential Aircraft Recapitalization
             Reduce Flying Hours, Weapon System Sustainment, range
            support and munitions
             Reduce quantities for fighter recapitalization (F-
            35As) by 14 aircraft in fiscal year 2016
             Reduce investments in Space programs, Cyber Mission
            Areas, Nuclear Enterprise, and Science and Technology
             Terminate Adaptive Engine Program
             Divest 7 E-3s in fiscal year 2016
             Divest U-2

        Bottom line--stable budgets at a higher level than BCA are critical
    to long-term strategic planning, meeting the DSG, and protecting the
    Homeland.
        General Dunford. The President's budget represents the limit of
    acceptable risk for the Marine Corps in terms of both end strength and
    funding; while we can meet the requirements of the DSG today, there is
    no margin. A sequestered budget in fiscal year 2016 would preclude the
    Marine Corps from meeting these requirements and would result in a
    Marine Corps with fewer active duty battalions and squadrons than would
    be required for a single major contingency. It would also result in a
    much smaller forward deployed presence, lengthening response times to
    crises involving our diplomatic posts, American citizens, or other
    overseas interests. Furthermore, to protect our near-term readiness to
    the extent possible, we will be forced to take additional risk in
    infrastructure and equipment modernization, as well as the training and
    equipping of our home station units, exacerbating our current
    institutional readiness imbalances.

        20. Senator Wicker. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, are each of you prepared to execute a
    budget that incorporates sequestration through at least fiscal year
    2016?
        General Odierno. The President's fiscal year 2016 budget represents
    the bare minimum needed for us to carry out our missions and execute
    and meet the requirements of our defense strategy. It is in fact a
    tenuous House of Cards. In order for the President's fiscal year 2016
    budget to work, all of our proposed reforms in pay and compensation
    must be approved. All of our force structure reforms must be supported,
    to include the ARI. We must be allowed to eliminate $.5 billion per
    year of excess infrastructure that we have in the Army. We potentially
    face a $12 billion shortfall in our budget. If BBA caps remain, that
    adds another $6 billion in potential problems.
        Anything below the President's budget compromises our strategic
    flexibility. It would compel us to reduce end strength even further. It
    inadequately funds readiness. It further degrades an already under-
    funded modernization program. It impacts our ability to conduct
    simultaneous operations and shape regional security environments. It
    puts into question our capacity to deter and compel multiple
    adversaries. If the unpredictable does happen, we will no longer have
    the depth to react.
        Admiral Greenert. No. A return to sequestration-level funding would
    significantly reduce the military's ability to fully implement the
    President's defense strategy. The required cuts would force us to
    further delay critical warfighting capabilities, reduce readiness of
    forces needed for contingency responses, further downsize weapons
    capacity, and forego or stretch procurement of force structure as a
    last resort. We cannot provide a responsible way to budget for the
    current defense strategy at sequester levels because there isn't one.
    The Navy hopes that Congress will lift the spending caps of the BCA and
    avoid sequestration.
        General Welsh. The fiscal year 2016 President's budget supports our
    critical needs to execute the defense strategy, but we made tough
    choices in capacity and capability/modernization. OMB has provided
    direction through OSD that the Air Force does not support any
    reductions to the President's budget. Without a repeal of sequestration
    the Air Force will simply not have the capacity required to fully meet
    the current DSG. Therefore, support of the President's budget and
    repeal of 2013 BCA is essential. If forced into BCA funding levels in
    fiscal year 2016, we would, out of necessity divest entire fleets,
    reduce quantities for procurement of weapons systems, and reduce
    readiness accounts. Potential impacts include:

             Divest RQ-4 Block 40 fleet and cut Block 30
            modifications
             Reduce MQ-1/MQ-9 ISR capacity by 10 CAPs--equivalent
            to current operations in Iraq/Syria
             Retire KC-10 fleet--15 in fiscal year 2016 and 59
            total across FYDP
             Defer second Presidential Aircraft Recapitalization
             Reduce Flying Hours, Weapon System Sustainment, range
            support and munitions
             Reduce quantities for fighter recapitalization (F-
            35As) by 14 aircraft in fiscal year 2016
             Reduce investments in Space programs, Cyber Mission
            Areas, Nuclear Enterprise, and Science and Technology
             Terminate Adaptive Engine Program
             Divest 7 E-3s in fiscal year 2016
             Divest U-2

        Bottom line--stable budgets at a higher level than BCA are critical
    to long-term strategic planning, meeting the DSG, and protecting the
    Homeland.
        General Dunford. Sequestration would force the Marine Corps to
    significantly degrade the readiness of our home station units, which is
    the Marine Corps' Ready Force to respond to crises or major combat
    operations. The fiscal challenges we face today will be further
    exacerbated by assuming even more risk in long-term modernization and
    infrastructure in order to maintain ready forces forward. This is not
    sustainable and degrades our capacity as the Nation's force in
    readiness.

                                    seapower
        21. Senator Wicker. Admiral Greenert and General Dunford, can you
    briefly elaborate on how as return to the defense sequester would
    threaten the Navy and Marine Corps' ability to decisively project power
    abroad?
        Admiral Greenert. Naval forces are more important than ever in
    building global security, projecting power, deterring foes, and rapidly
    responding to crises that affect our national security. A return to
    sequestration would force Navy to degrade current and future fleet
    readiness, significantly weakening our ability to respond to crises and
    project power overseas.
        The fiscal year 2015 budget represented another shortfall from the
    resources we indicated were necessary to fully resource the DSG
    missions, making Navy less ready to successfully Deter and Defeat
    Aggression and Project Power A2/AD Challenges. Continuing along this
    budget trajectory means that by 2020, the DSG benchmark year, Navy will
    have insufficient contingency response capacity to execute large-scale
    operations in one region while simultaneously deterring another
    adversary's aggression elsewhere. Also, we will lose our advantage over
    adversaries in key warfighting areas: air-to-air warfare, integrated
    air and missile defense, anti-submarine warfare, and anti-surface
    warfare.
        Carrier strike groups (CSGs) and ARGs possess significant power
    projection capabilities, and we are committed to keeping, on average,
    three CSGs and three ARGs in a contingency response status, ready to
    deploy within 30 days to meet combatant commander (COCOM) OPLANs
    requirements. However, if sequestered, we will unable to sustain the
    readiness of both our forward deployed forces and those forces in a
    contingency response status. We will prioritize the readiness of our
    forward deployed forces and only be able to provide a response force of
    one CSG and one ARG. This reduction in available contingency forces
    will impact COCOM OPLANs, which are predicated on our ability to
    respond rapidly. Less contingency response capacity means longer
    timelines to arrive and prevail, more ships and aircraft out of action
    in battle, more sailors, marines, and merchant mariners killed, and
    less credibility to deter adversaries and assure allies in the future.
        General Dunford. The Marine Corps, as the Nation's expeditionary
    force in readiness, defends the homeland with forward presence.
        BCA funding levels with sequester rules will preclude the Marine
    Corps from meeting the requirements of the Defense Strategy. While we
    can meet the requirements today, there is no margin. Even without
    sequestration, we will need several years to recover from over a decade
    of war and the last 3 years of flat budgets and fiscal uncertainty.
        Sequester will exacerbate the challenges we have today. We already
    assume risk in amphibious shipping from a requirement of 38 ships to
    fight a major combat operation, to a fiscally constrained objective of
    33. Sequestration will further impact the Navy's amphibious ship
    program, resulting in fewer marines and sailors being forward deployed
    in a position to immediately respond to crises involving our diplomatic
    posts, American citizens or interest overseas.
        Sequestration may also result in a Marine Corps with fewer total
    active duty battalions and squadrons than would be required for a
    single major contingency. Sequestration triggers the Nation to accept
    risk in the readiness of the strategic depth of its non-deployed
    forces. These non-deployed units are exactly the forces that allow us
    to globally project power beyond the capabilities of our forward-
    deployed forces.
        We will have fewer forces, arriving less trained, arriving later to
    the fight. This will delay the buildup of combat power, allowing the
    enemy more time to build its defenses and would likely prolong combat
    operations all together. The effect is more American lives lost.

        22. Senator Wicker. Admiral Greenert and General Dunford, what is
    your assessment of the impact sequestration would have on our
    amphibious forces and our Navy and Marine Corps' ability to execute the
    pivot to Asia?
        Admiral Greenert. A return to sequestration in fiscal year 2016
    would necessitate a revisit and revision of the DSG. Sequestration
    would force higher risk in our ability to provide a stabilizing
    presence. We will continue to deploy our most advanced units to the
    Asia-Pacific, but they may not have the sensors, weapons, and
    capabilities to deal with potential adversaries. The fiscal year 2015
    budget represented another shortfall from the resources we indicated
    were necessary to fully resource the DSG missions, making Navy less
    ready to successfully Deter and Defeat Aggression and Project Power
    Despite A2/AD Challenges. Continuing along this budget trajectory means
    that by 2020, the DSG benchmark year, Navy will have insufficient
    contingency response capacity to execute large-scale operations in one
    region while simultaneously deterring another adversary's aggression
    elsewhere. Also, we will lose our advantage over adversaries in key
    warfighting areas: air-to-air warfare, integrated air and missile
    defense, anti-submarine warfare, and anti-surface warfare.
        General Dunford. A return to sequestration in fiscal year 2016
    would impact the Marine Corps' ability to execute the pivot through its
    effect on military construction (MILCON), as the pivot relies on
    rebasing marines in Guam and Hawaii, and MILCON is an important part of
    those moves. Impacts to MILCON due to sequestration, including MILCON
    in the Pacific, would need to be part of a larger conversation about
    the priorities of the Department and the defense strategy under a
    sequestered budget. Specifically in fiscal year 2016 the construction
    of the Live Fire Training Range Complex, $126 million, would not
    commence.

                          shipbuilding industrial base
        23. Senator Wicker. Admiral Greenert, given sequestration's
    impending return, what is the Navy's near-term contingency plan to help
    protect and preserve the U.S. shipbuilding industry and its employees,
    and how do we keep them employed if we build fewer ships and perform
    less ship maintenance?
        Admiral Greenert. Sustaining our industrial base continues to be a
    budget priority for the Navy. Stability and predictability are critical
    to the health and sustainment of this vital sector of our Nation's
    industrial capacity. Disruptions in naval ship design and construction
    plans are significant because of the long-lead time, specialized
    skills, and extent of integration needed to build military ships. Any
    cancelled ship procurements in fiscal year 2016 will likely cause some
    suppliers and vendors of our shipbuilding industrial base to close
    their businesses. This skilled, experienced and innovative workforce
    cannot be easily replaced and it could take years to recover from
    layoffs and shutdowns; and even longer if critical infrastructure is
    lost. Because of its irreversibility, shipbuilding cuts represent
    options of last resort for the Navy. We would look elsewhere to absorb
    sequestration shortfalls to the greatest extent possible.
                                     ______

                    Questions Submitted by Senator Mike Lee
                                 sequestration
        24. Senator Lee. General Odierno, Admiral Greenert, General Welsh,
    and General Dunford, to give us a picture beyond some of the
    programmatic risks that would exist if defense sequestration fully
    starts October, can you please outline a potential contingency that you
    believe your respective branches will likely have to respond to in the
    coming years--such as an aggressive air or naval action against U.S.
    persons or preventing a terrorist attack on U.S. interests, and how
    your ability to respond to this contingency will be impacted under
    sequestration?
        General Odierno. For the past 3 years, we have developed several
    budget strategies in response to fiscal constraints that we knew we
    were going to face. We made some assumptions in that budget that must
    now be revisited.
        We assumed we could accept risks in Europe. Now, we face major
    security issues in Europe ranging from increasing Russian aggression to
    a rise in soft target attacks by terrorist networks. We made decisions
    based on the fact that we were coming out of Iraq and Afghanistan and
    did not anticipate sending people back into Iraq. We made an assumption
    that although we knew we had a long fight against extremist
    organizations around the world, we could focus our budget primarily on
    defeating al Qaeda. We now have emerging extremist networks that are
    destabilizing regions around the world in ways we did not foresee. Over
    the last year, we witnessed the growing threat and gruesome toll of
    ISIL.
        We assumed that future conflicts will be short in duration. But the
    threats we face today cannot be solved quickly. Defeating ISIL will
    require years of sustained international commitment. Without persistent
    pressure and focus, groups such as ISIL will continue to ravage
    populations and undermine regional stability. So we must recognize that
    the operating environment has changed.
        With an increase in threats around the world that have rendered
    some of our planning assumptions optimistic, we must acknowledge that
    the fiscal year 2016 post-sequestration spending cap, which was set
    almost 4 years ago, has not kept pace or accounted for an increasingly
    complex and dangerous world. If we are forced to take further
    endstrength reductions beyond the planned levels in the President's
    budget due to sequestration, our flexibility deteriorates, as does our
    ability to react to strategic surprise. We are witnessing firsthand
    mistaken assumptions about the number, duration, location, and size of
    future conflicts and the need to conduct post-stability operations.
    These miscalculations translate directly into increased military risk.
        Admiral Greenert. Potential scenarios, and the Navy's ability to
    respond to them, should be discussed at a classified level. Suffice it
    to say, a return to sequestration would significantly weaken the U.S.
    Navy's ability to contribute to United States and global security. If
    sequestered, we will prioritize the readiness of deployed forces at the
    expense of those in a contingency response status. We cannot do both.
    We will only be able to provide a 30-day contingency response force of
    one CSG and one ARG. Current OPLANs, which are predicated on our
    ability to rapidly surge forces, require a significantly more ready
    force than we can provide at sequestration levels of funding. Reduced
    contingency response capacity can mean higher casualties as wars are
    prolonged by the slow arrival of naval forces into a combat zone.
    Without the ability to respond rapidly, our forces could arrive too
    late to affect the outcome of a fight.
        General Welsh. In any contingency scenario involving aggressive air
    action against the United States or our interests, we will likely be
    forced to redistribute deployed Air Force forces due to the limited
    amount of available force structure. In the process of addressing an
    emerging threat, we would increase the risk to missions and forces in
    the areas that would be vacated.
        Regardless of the possible scenarios, as I have stated in the past,
    if we are not ready for all possible scenarios, we will be forced to
    accept what I believe is unnecessary risk, which means we may not get
    there in time, it may take the joint team longer to win, and our people
    will be placed at greater risk.
        General Dunford. The 2014 QDR and other Defense Department planning
    documents mandate ``.the U.S. Armed Forces will be capable of
    simultaneously defending the homeland; conducting sustained,
    distributed counterterrorist operations; and in multiple regions,
    deterring aggression and assuring allies through forward presence and
    engagement. If deterrence fails at any given time, U.S. forces will be
    capable of defeating a regional adversary in a large-scale multi-phased
    campaign, and denying the objectives of--or imposing unacceptable costs
    on--a second aggressor in another region.''
        This is known as the Defeat/Deny imperative--to defeat a regional
    adversary while simultaneously deterring another. Under sequestration,
    the Marine Corps would have fewer forces forward deployed than today to
    adequately assure allies and partners and to provide a deterrent
    effect. This also means we would have fewer forces than would be
    required to meet a single, major contingency (defeat imperative), not
    to mention imposing costs on a second adversary in a different theater
    of war (deny imperative).
        Also, please see the classified 2015 CRA and accompanying the
    Secretary of Defense's RMP for amplification, submitted to Congress in
    February.

        25. Senator Lee. General Odierno, Admiral Greenert, General Welsh,
    and General Dunford, as it currently stands in law, sequestration will
    take effect at the end of this fiscal year. In 2013, many in DOD and in
    Congress expected there would be a fix to defense sequester, and were
    not prepared as needed when sequestration started. Have you received
    any instruction from OMB to prepare for potential sequestration in
    fiscal year 2016? What have you done in your respective branches to
    start preparing for potential sequestration in fiscal year 2016?
        General Odierno. In preparation for fiscal year 2016, we worked
    closely with DOD and OMB in developing our budget request as part of
    the President's fiscal year 2016 budget request.
        The President's fiscal year 2016 budget represents the bare minimum
    needed for us to carry out our missions and execute and meet the
    requirements of our defense strategy. It is in fact a tenuous House of
    Cards. In order for the President's fiscal year 2016 budget to work,
    all of our proposed reforms in pay and compensation must be approved.
    All of our force structure reforms must be supported, to include the
    ARI. We must be allowed to eliminate $.5 billion per year of excess
    infrastructure that we have in the Army. We potentially face a $12
    billion shortfall in our budget. If BCA caps remain, that adds another
    $6 billion in potential problems.
        Anything below the President's budget compromises our strategic
    flexibility. It would compel us to reduce end strength even further. It
    inadequately funds readiness. It further degrades an already under-
    funded modernization program. It impacts our ability to conduct
    simultaneous operations and shape regional security environments. It
    puts into question our capacity to deter and compel multiple
    adversaries. If the unpredictable does happen, we will no longer have
    the depth to react.
        Admiral Greenert. The Department has not yet received direction
    from OMB to begin planning for sequestration in fiscal year 2016. While
    we are looking at the overall impacts of a sequester or reduced
    spending caps, we have not yet done any detailed planning for reduce
    spending to achieve the mandated caps in fiscal year 2016.
        General Welsh. The fiscal year 2016 President's budget supports our
    critical needs to execute the defense strategy, but we made tough
    choices in capacity and capability/modernization. OMB has provided
    direction through OSD that the Air Force does not support any
    reductions to the President's budget. Without a repeal of sequestration
    the Air Force will simply not have the capacity required to fully meet
    the current DSG. Therefore, support of the President's budget and
    repeal of 2013 BCA is essential. If forced into BCA funding levels in
    fiscal year 2016, we would, out of necessity divest entire fleets,
    reduce quantities for procurement of weapons systems, and reduce
    readiness accounts. Potential impacts include:

             Divest RQ-4 Block 40 fleet and cut Block 30
            modifications
             Reduce MQ-1/MQ-9 ISR capacity by 10 CAPs--equivalent
            to current operations in Iraq/Syria
             Retire KC-10 fleet--15 in fiscal year 2016 and 59
            total across FYDP
             Defer second Presidential Aircraft Recapitalization
             Reduce Flying Hours, Weapon System Sustainment, range
            support and munitions
             Reduce quantities for fighter recapitalization (F-
            35As) by 14 aircraft in fiscal year 2016
             Reduce investments in Space programs, Cyber Mission
            Areas, Nuclear Enterprise, and Science and Technology
             Terminate Adaptive Engine Program
             Divest seven E-3s in fiscal year 2016
             Divest U-2

        Bottom line--stable budgets at a higher level than BCA are critical
    to long-term strategic planning, meeting the DSG, and protecting the
    Homeland.
        General Dunford. The fiscal year 2016 President's budget is the
    bare bones budget for the Marine Corps that can meet the current DSG.
    The budget prioritizes near-term readiness at the expense of
    modernization and facilities, and only achieves a 1:2 deployment-to-
    dwell ratio, which is unsustainable over the long term. Sequestration
    would force the Marine Corps to significantly degrade the readiness of
    our home station units, which is the Marine Corps' Ready Force to
    respond to crises or major combat operations. The fiscal challenges we
    face today will be further exacerbated by assuming even more risk in
    long-term modernization and infrastructure in order to maintain ready
    forces forward. This is not sustainable and degrades our capacity as
    the Nation's force-in-readiness.

        26. Senator Lee. General Odierno, General Welsh, and General
    Dunford, the Reserve Forces Policy Board stated in their report last
    February that:
        ``The Department has built a stronger, more capable, better
    equipped, battled tested Guard and Reserve Force than we have had in
    any time in our recent history. Therefore, the Department should not
    squander the benefits derived from those investments and hard won
    experience gained in combat.''
        The board has also previously found that the fully burdened and
    life-cycle cost of a reservist or guardsman is less than a third of
    their Active-Duty counterpart. Whether sequestration continues or not,
    how do you intend to use these efficiencies and combat experience
    identified in your Guard and Reserve units to maintain readiness and
    combat experience and maximize combat power and depth?
        General Odierno. We recognize the significant contributions made by
    the Army National Guard (ARNG) as a part of the Total Force and can
    ill-afford to allow the skills and competencies atrophy. Our goal is to
    maintain the ARNG as an operational Reserve, a key component in meeting
    mission requirements at home and abroad. To accomplish this, the Army
    continues to increase the mix of ARNG formations at our Combat Training
    Centers and Warfighter events. We will partner Active component (AC)
    and ARNG formations during annual training and will conduct integrated
    pre-deployment collective training to capitalize on the experience and
    lessons learned during the last 13 years of war. The recent Bold Shift
    Initiative reorganized 1st U.S. Army to be more responsive to pre-
    mobilization training support for ARNG formations while retaining
    capability to conduct post-mobilization operations. The combined affect
    of these initiatives will enhance ARNG readiness. The Army considered
    the RFBP study on fully burdened soldier costs incomplete in that it
    did not fully address the impact of cost on soldier (or formation)
    capabilities. When activated for mobilization or operational support,
    RC forces cost the same as their AC counterparts but, based on the
    mission assigned, may require more extensive train-up, which costs
    additional dollars and time.
        General Welsh. The components which collectively comprise our Air
    Force--the Active and the Air Reserve Component (ARC) (which includes
    the Air National Guard and Air Force Reserve)--realize that only by
    working together, both internally as cohesive teammates and externally
    with our partners, can we mitigate risk, operate within budgetary
    constraints, and remove existing barriers impeding efficient operation
    of the Total Force.
        The Air Force fully embraces and continues its flight path toward
    being the best possible integrated Total Force. We are currently
    working to influence appropriate policy and legislative changes to
    reduce or eliminate Continuum of Service barriers, more effectively
    integrate our components from the Air Staff to the tactical level in
    order to garner operational and fiscal efficiencies, and ensure our
    Total Force is optimally balanced to minimize warfighting risk and
    increase effectiveness. Additionally, integration of Active and ARC
    units, currently underway through varying types of association
    constructs, offers a deliberate, proven, and effective approach to
    fully integrate our Air Force. Finally, using the Air Force's High
    Velocity Analysis toolkit, we are applying quantitative and qualitative
    analysis to derive optimal force mix options. This information enables
    senior leaders to maximize the use of the Total Force, while minimizing
    cost and expanding combat power.
        General Dunford. The Marine Corps fights with a Total Force
    Concept, seamlessly integrating Reserve units into active duty
    formations. This helps maintain the skills of Reserve units while
    enhancing depth, maximizing combat power, and providing OPTEMPO relief
    to Active Duty units. The Marine Corps has already planned the use of
    Reserve Forces to meet combatant commander requirements under 12304b
    mobilization authorities. Marine Corps Global Force Management seeks
    the goal of a mobilization-to-dwell ratio of 1:5 minimum for Reserve
    component units. This means that of those Reserve units mobilized,
    marines and their families can expect the unit will only be mobilized 1
    year out of every 5. This helps provide predictability and stability
    for our citizen-soldiers. In case of a major contingency operation, the
    Reserves will be mobilized as needed to best meet the Nation's
    requirements.

                                 weapon systems
        27. Senator Lee. General Welsh, after sequestration took place in
    2013, there was concern about the ``bow-wave'' effect on the
    maintenance of weapons systems in the Air Force and the years that it
    would take to recover from it. If the Air Force budget is sequestered
    in fiscal year 2016, what affects will this have on your logistics and
    sustainment programs, and how are you preparing these programs now in
    the event that sequestration does happen?
        General Welsh. Sequestration would have significant sustainment
    funding impacts, which would cause substantial disruptions across our
    logistics and sustainment programs. These disruptions include deferring
    critical maintenance, repair, and overhaul actions for combat and
    mobility forces, as well as cyber, space, and nuclear sustainment
    programs. Potential long-term aircraft groundings and workload bow
    waves could also occur. In preparation for sequestration, we will
    analyze our options, including potential overseas contingency operation
    supplements, and attempt to balance readiness risk and other Air Force
    priorities.

        28. Senator Lee. General Welsh, at the end of last year the Air
    Force was concerned that the inability to retire certain weapons
    systems combined with the increased tempo of operations in the Middle
    East and Europe would prevent the Air Force from having the necessary
    number of maintainers available to transition into new weapons programs
    in order for those programs to meet operational goals. Can you give the
    committee an update on this situation now that the NDAA for Fiscal Year
    2015 (P.L. 113-291) has passed, and what impact will sequestration have
    on Air Force's ability to generate the necessary number of persons to
    maintain the force?
        General Welsh. The situation has not improved. While the ability to
    place some A-10s into Backup Aircraft Inventory status as well as using
    contract support will help relieve some immediate pressure, Air Force
    Active-Duty maintenance manning levels continue to fall short as the
    Air Force adds new weapon systems such as the F-35, KC-46, and CV-22
    into the inventory without any force structure divestiture. Since 2004,
    Active-Duty maintenance personnel have decreased by 20 percent while
    aircraft inventory has decreased by 12 percent. The OSD Cost Assessment
    and Program Evaluation analysis on Air Force fighter manning confirmed
    that a limited supply of experienced fighter maintenance personnel is
    constraining legacy fleet readiness and the stand-up of the F35A
    squadrons.
        Without force structure divestiture, the Air Force will need to add
    maintenance accessions and increase end strength to support maintenance
    manning requirements that are currently unaffordable at BCA caps.
    Accessions, however, do not solve the Air Force's near-term maintenance
    experience deficit since maintenance experience can only be gained
    through time. If the Air Force cannot harvest experienced manpower from
    divestiture of the A-10 fleet, we risk further readiness degradation in
    the remaining legacy fleets. This puts at risk the ability to meet the
    current operational demand in the Middle East and Europe. Although the
    Air Force has taken some force management actions to minimize the
    readiness risk, including Reserve component activations, high year
    tenure extensions, and retention bonuses, these actions are
    insufficient to support Air Force readiness requirements.

                               civilian workforce
        29. Senator Lee. General Odierno, Admiral Greenert, General Welsh,
    and General Dunford, the Congressional Budget Office (CBO) reported in
    November of 2014 that the number of civilian employees employed by DOD
    grew by nearly 10 percent between 2000 and 2014 while the uniformed
    services shrank by 4 percent. CBO also reported that the per-person
    costs for civilian personnel increased at this time as well. This makes
    the civilian employee growth an issue that, like many others, warrants
    serious review in the context of any budgetary reductions and spending
    reforms. However, civilian employees fulfill a vital component of DOD,
    especially in areas like logistics and the maintenance of weapons
    systems and equipment. Please provide an update on how the cost-growth
    of the civilian workforce, including contractors, is being addressed in
    your respective branches, and how reforms are being implemented in a
    manner that doesn't harm the missions where civilian workers are
    uniquely needed?
        General Odierno. Civilian cost growth is being addressed primarily
    through reductions to the civilian workforce. The Army civilian
    workforce is and will be shaped to deliver the critical capabilities to
    support and enable our soldiers, but within the framework provided by
    diminishing funding, statutory guidance, and Departmental priorities.
    Investments in growth made to acquisition, science and technology,
    medical, special operations, intelligence, cyber, SHARP, and other
    capabilities have been identified as high priorities and will be
    maintained and in some cases expanded. The bulk of our civilian
    workforce reductions will fall in areas of logistics, personnel,
    training, and installation support activities and, importantly, in
    administrative headquarters.
        Programmed reductions for civilian Full-Time Equivalents (FTEs) in
    fiscal year 2015 and fiscal year 2016 are programmed at 3.4 percent and
    5.8 percent respectively. During that same time period, military end
    strength reductions will be 1 percent and 3.3 percent. All of these
    percentages are calculated from the fiscal year 2014 position. Deeper
    cuts are projected for some civilian jobs as a result of sequestration
    planning in which the Army is accepting greater risk in functions that
    support readiness and are primarily performed by civilians:
    Installations Services: -7.1 percent; Support of Forces: -7.9 percent
    and Training: -6.8 percent.
        Extending the projection out from fiscal year 2014 through fiscal
    year 2018 with BCA levels of funding will reduce military personnel
    from 1,049,200 to 980,000, a total reduction of 6.6 percent. During the
    same period civilian FTEs will reduce from 265,000 to 238,000, or 10.1
    percent.
        To date, most of the service contract reductions have been for
    overseas contingency operations. Opportunities for contract reductions
    exist in knowledge-based services where overhead costs have sometimes
    averaged an additional 50 percent above what is charged to us for the
    actual work in direct labor hours, as reflected in the Contractor
    Manpower Reporting Application (CMRA). We plan to leverage CMRA to
    provide program visibility of contract services in our program starting
    in fiscal year 2018.
        Admiral Greenert. The CBO report included data across all of DOD,
    not just at the DON level. Per-person changes in pay are often driven
    by changes across the Federal workforce. Benefit costs have grown
    commensurate with general increases in costs for health care; revised
    actuarial costs have increased FERS contributions; an aging workforce
    takes on additional benefits as they near retirement (e.g., Thrift
    Savings Plan matching contributions); pay raises have been held at or
    below inflation during the last decade, but over that time did grow.
        Much of what appears to be growth in civilian FTEs since 2000
    reflects mandated staffing adjustments. For example, 13,000 military
    positions were converted to civilian positions to reduce shore military
    staffing during the Iraqi conflict. Further, the fiscal year 2008 NDAA
    directed the Department to consider insourcing functions regularly
    performed by contractors, an action which increased the number of
    civilian employees but reduced reliance on contract employees.
    Congressional language prohibiting the contracting of security guard
    functions increased these insourcing requirements. The NDAA for Fiscal
    Year 2008 also established a development program for Acquisition
    Workforce recruitment, training, and retention, which increased FTEs in
    an area with critical shortages. We have also increased civilians to
    address critical shortfalls associated with the shipyards, cyber, and
    the nuclear enterprise posture review. At the same time, we are
    aggressively identifying reductions, particularly with the headquarters
    reductions.
        Within the DON, we conduct a thorough review of civilian FTEs and
    the cost of those FTEs as part of our budget preparation. Consistent
    with congressional direction, the Department is reducing contract
    support and is beginning to monitor contractor work years as it moves
    toward integration of contractors into the total workforce review.
        General Welsh. The Air Force civilian end strength was 161,000 in
    fiscal year 2000 and peaked in fiscal year 2011 at 192,000 as a result
    of the following actions: Resource Management Directive (RMD) 802,
    Competitive Sourcing/Insourcing (mandated contractor-to-civilian
    conversion); Working Capital Fund/Foreign Military Sales/COCOMs
    directed growth; Secretary of Defense-directed Joint Basing actions;
    military-to-civilian conversion; Total Force Initiative associations;
    Business-Based Analysis decision to insource Ministry of Defense United
    Kingdom civilians; and the Presidential-directed Veterans Employment
    Initiative.
        Since fiscal year 2011, the Air Force has taken action to reduce
    civilian end strength by approximately 24,000 positions. Major drivers
    were: RMD 703; Civilian Workforce Efficiencies (2012); Civilian
    Workforce Review (2013); and management headquarters reductions and
    force structure changes.
        The Air Force has implemented a series of Voluntary Early
    Retirement Authority programs designed to reduce overall manpower
    costs. In fiscal year 2014, the Air Force proposed three rounds of
    civilian voluntary separation programs: Round 1 targeted residual RMD
    703 actions; Round 2 targeted fiscal year 2014 Civilian Workforce
    Review positions; and Round 3 targeted the 20 percent Management HQs
    Staff reduction and the Air Force Installation and Mission Support
    Center (AFIMSC) consolidation.
        In fiscal year 2015, the Air Force is proposing two rounds of
    civilian voluntary separation programs as a continuation of the force
    shaping initiative to target a 20 percent management headquarters staff
    reduction and AFIMSC consolidation. Because our civilians are vital to
    the total workforce, every voluntary reduction opportunity is being
    exhausted and reductions in force will only be used as a last resort to
    efficiently and effectively manage mission and organizational changes.
        The Air Force manages the civilian requirements from a Total Force
    perspective. Unlike other Services, the Air Force looks at mission
    requirements to see if a uniformed member is required due to
    deployments and/or sustainability reasons. In the event that a
    uniformed member is not required, we look at the requirement for any
    inherently governmental functions. The Air Force evaluates the cost of
    the resources (military, civilian, or contractor) and chooses the most
    cost effective resource available that satisfies the requirements and
    is in the best interest of the public.
        To control the cost-growth of contractors, the Air Force
    implemented and closely monitors the contract ceiling restriction in
    accordance with section 808 of the NDAA for Fiscal Year 2012 and
    section 802 of the NDAA for Fiscal Year 2014. The cost-growth of our
    Air Force civilians are due to normal inflation factors, pay raises,
    increased retirement costs, and higher benefit rates imposed by OMB.
    The cost per person of Air Force civilians is not higher than the rest
    of DOD.
        The Air Force continues to look for new ways of accomplishing the
    mission. We examine the full spectrum of operations, from base-level to
    headquarters, to develop a wide range of efficiency initiatives to
    streamline and right size the organization and management staffs to
    forge a leaner, more effective Air Force. The fiscal year 2016
    President's budget submission represents the minimum essential
    workforce (civilian and military) requirements of the Air Force. In
    order for the Air Force to achieve any additional significant reduction
    in its civilian workforce, a BRAC action would be needed since the bulk
    of the positions are at installation level.
        General Dunford. The Marine Corps has taken a balanced approach to
    assessing and reshaping its collective workforce to ensure the right
    labor source and skill level supports the mission while also
    determining areas where risk can be taken without jeopardizing the
    mission. Managing that balance is a continuing effort.
    Civilian Workforce
        The Marine Corps' appropriated funded civilian workforce grew from
    2001 to 2009 due in large part to higher mandates, e.g., military-to-
    civilian conversions; insourcing; resumption of information network
    ownership/management; growth in the acquisition and cyber workforces;
    and establishment of a civilian police force to permit military police
    to support operational forces. In 2009, recognizing the changing fiscal
    climate, the Marine Corps began taking proactive measures to right-size
    the civilian and contractor workforce to include the establishment of
    an Executive Steering Group to strategically assess the size,
    composition, and allocation of civilian resources with the primary
    focus on mission requirements. This group recommended and the Marine
    Corps is now implementing the following:

             A reduction to the civilian labor budget by 10
            percent; 20 percent at headquarters. Only a 5 percent reduction
            was applied to our depots due to criticality of their mission.
             A reduction in FTEs from 17,500 civilians to 15,800
            by fiscal year 2017 (a savings of $761.5 million/1,675 FTEs).
             Strategic Total Force Management/Workforce Planning
            processes to ensure commands can manage their workforce within
            budget constraints.

    Civilian Cost
        While the Marine Corps is reducing the number of civilians, the
    cost per FTE continues to gradually increase, primarily due to
    restructuring lower graded, lower priority positions to accommodate the
    need for more specialized, higher graded positions (i.e., cyber,
    acquisition). As we reduce the number of civilians, we are also taking
    steps to lower the cost of civilian personnel by conducting reviews of
    position descriptions to re-assess grade levels, limiting funds
    available for performance awards and pay increases, limiting overtime,
    and monitoring payment of recruitment, relocation, and retention
    incentives at the headquarters level.
    Contractors
        Over the past few years, the Marine Corps has undertaken various
    steps to understand and accurately identify requirements for contract
    services. These efforts have been both fueled and challenged by
    numerous contract service reduction requirements, including:

             OSD directed headquarters contract reductions
            associated with Executive Order 13576, Delivering an Efficient,
            Effective, and Accountable Government
             NDAA for Fiscal Year 2012, section 808, Limits for
            Amounts Available for Contract Services as well as annual
            extensions in NDAA for Fiscal Year 2014, section 802, and NDAA
            for Fiscal Year 2015, section 813
             NDAA for Fiscal Year 2013, section 955, Savings to be
            Achieved in Civilian Personnel Workforce and Service Contractor
            Workforce of DOD
             Fiscal year 2015 Department of the Navy-directed
            Contracted Services Reduction to reduce dependence on
            contracted services

        Each of these efforts pressed the Marine Corps to assess its
    contract services and find reductions where possible, but from varying
    perspectives. In the early stages, the contract services data quality
    was not available to fully assess and identify areas of potential
    savings. As such, the Marine Corps is taking numerous steps to improve
    our data capacity to enable us to make informed reduction decisions as
    well as comply with reporting requirements contained in the PL 113-101
    Digital Accountability and Transparency Act of 2014 (DATA Act). Those
    efforts include:

             Rewriting of the Marine Corps Object Classification/
            Sub-Object Classification (OCSOC) manual to redefine and better
            align codes for capturing obligation classifications and
            aligning to budget justification materials
             Modifications to purchase request and contracting
            systems to incorporate product service code to object
            classification alignments at contract line item level vice
            document level
             Monthly command reporting of contract service
            obligations to determine the nature and priority of contract
            requirements, serving as a foundation for additional process
            changes and policy amendments
             Training for financial and non-financial personnel
            involved in the contracting process to improve data recording

        The Marine Corps continues to assess its contract services
    requirements to ensure the most prudent and efficient use of resources
    is utilized and will implement balanced reductions to the extent
    possible without jeopardizing mission accomplishment.
                                     ______

                   Question Submitted by Senator Bill Nelson
             test and evaluation and science and technology impacts
        30. Senator Nelson. General Odierno, Admiral Greenert, General
    Welsh, and General Dunford, please describe the impacts of
    sequestration on your ability to maintain and modernize the laboratory
    research and test and evaluation facilities, workforce, and
    capabilities you will need to meet Service needs. Are there specific
    capabilities or research initiatives that you will have to eliminate,
    mothball, or downsize if sequestration remains in effect?
        General Odierno. The Army has already undertaken significant cost
    cutting efforts and reduced personnel and equipment requirements during
    the first 2 years of sequestration. In the triad of impacts to
    sequestration, Army modernization suffers the most. Modernization
    accounts have been reduced by 25 percent and every program affected;
    maintenance deferred; and the defense industrial base increasingly
    skeptical about investing in future innovative systems needed to make
    the force more agile and adaptive.
        As part of the balancing process, the Army has already made
    difficult choices in dropping the Armed Aerial Scout, Unmanned Ground
    Vehicle upgrades, the Mounted Soldier System, and Ground Combat Vehicle
    program. Under sequestration, planned upgrades to our current systems,
    such as UH-60 Blackhawk, Abrams, Bradley, and Stryker would be reduced
    or slowed (e.g. Stryker DVH upgrades will cease) leaving our soldiers
    more vulnerable, especially if deploying as part of a smaller force
    where technology optimizes soldier performance and capabilities. Over
    270 acquisitions and modernization programs have already been impacted
    by sequestration, and more than 137 additional programs may also be
    affected under continued sequestration.
        The Army is unable to protect upgrades and procurement on top of an
    already depleted capital investments portfolio at sequestration level
    funding. These modernization disruptions will stop development and
    production in critical programs that enable a smaller force to
    accomplish diverse missions. Under sequestration, the Army will have to
    stop the 4th Double-V Hull Brigade conversion; slow the Patriot system
    upgrade; halt the procurement of one new MQ-1C Gray Eagle Company and
    the accelerated fielding of another, both of which are needed to
    address the increased UAV demand in Syria and Iraq; delay the Aerial
    Intelligence Surveillance and Reconnaissance 2020 strategy by several
    years; reduce and extend the Active Electronically Scanned Array (AESA)
    radar development; and delay development of Radar-on-the-Network for
    Patriot and Terminal High Altitude Area Defense-integration until
    fiscal year 2022, which is a vital capability protecting our homeland
    from missile threats.
        Fiscal year 2013 sequestration also had especially harmful impacts
    on our workforce and on laboratory research facilities, and we expect
    any future sequestration will be similar. For the workforce, attrition
    will likely increase as in fiscal year 2013, when the high risk of
    furloughs for the workforce more than doubled. Our bright talent will
    depart for better job security in industry and academia, while those
    who stay will be demoralized.
        In fiscal year 2013, the labs were only sustained to 35 percent of
    their needs. A new round of sequestration will result in laboratory
    facility sustainment reductions to support only life, health, and
    safety requirements. Routine maintenance will be deferred while
    laboratories and test and evaluation sites accept risk in facilities
    and equipment functions. Sequestration would also delay planned
    upgrades in capability, impacting not only our ability to do cutting
    edge research, but also our ability to attract the best and brightest
    to work within the Army labs.
        Modernization enables a smaller, agile, and more expeditionary Army
    to provide globally responsive and regionally engaged forces
    demonstrating unambiguous resolve. But sequestration adversely impacts
    the Army's ability to modernize and field critical capabilities that
    improve operational readiness of aging equipment. The cumulative cuts
    in modernization programs threaten to cede our current overmatch of
    potential adversaries while increasing future costs to regain or
    maintain parity if lost.
        Admiral Greenert. A return to sequestration in fiscal year 2016
    would necessitate a revisit and revision of the defense strategy.
    Sequestration would significantly reduce the Navy's ability to fully
    implement the President's defense strategy. The required cuts would
    force us to further delay critical warfighting capabilities, reduce
    readiness of forces needed for contingency responses, further downsize
    weapons capacity, and forego or stretch procurement of force structure
    as a last resort. Because of funding shortfalls over the last 3 years,
    our fiscal year 2016 President's budget represents the absolute minimum
    funding levels needed to execute our defense strategy. We cannot
    provide a responsible way to budget for the defense strategy at
    sequester levels because there isn't one.
        If sequestration is implemented, automatic percentage cuts will be
    required to be applied without regard to strategy, importance, or
    priorities, resulting in adverse impacts to almost every contract and
    program including laboratory research and test and evaluation
    facilities, workforce and capabilities.
        General Welsh. Investment in science and technology (S&T) is
    essential to innovation and ensuring the Nation's technological edge
    into the future. Airpower must innovate or it will become irrelevant.
    The 2011 BCA cut to the fiscal year 2016 budget would result in a $223
    million reduction in S&T. The cuts will cause the following impacts:

             Delay or terminate approximately 100 contracts across
            these technology areas: Air dominance, directed energy,
            manufacturing, human systems, munitions, propulsion,
            structures, cyber, sensors and space technologies.
             Eliminate approximately 200 university basic research
            grants which negatively impacts the defense industrial base and
            academia partnership because Air Force S&T has contracts or
            university grants in nearly every U.S. State.
             Terminate all Adaptive Engine Transition Program
            efforts.
             Negatively impact the Space Vehicles Component
            Development Lab MILCON project.

        If held to the BCA levels, Air Force S&T funding will be reduced by
    $1.08 billion over the FYDP. These reductions will result in schedule
    delays and terminations of key S&T programs needed to develop future
    Air Force capabilities. PB level funding is needed for the Air Force to
    remain the world's most technologically advanced in the world now and
    into the future.
        The Air Force S&T baseline supplemental budget request for fiscal
    year 2016-2020 includes requirements to fill existing and projected
    capability gaps. Funding for these capabilities is foundational to
    ``continuing the pursuit of game-changing technologies,'' a strategic
    vector for the future of the Air Force.
        General Dunford. The answer to this question has really been the
    story of sequestration writ large. We have deferred modernization for
    near-term readiness. The answer is yes, because we must prioritize
    near-term readiness to meet the National Security Strategy today.
        As with all discussions regarding how the Marine Corps would
    implement a sequester or reduce its budget request to a BCA level, this
    would need to be part of a larger conversation about what the
    priorities of the Department and the Defense Strategy. However, what is
    clear is that the effects would be detrimental to the Marine Corps
    ability to modernize and pursue future research. Our major procurement
    programs, including ACV, JLTV, G/ATOR, and AAV as well as our
    commitment to innovation through a robust Science and Technology (S&T)
    program are protected, however the possibility of sequestered budget's
    effects on modernization will impact even these programs. This will
    degrade our ability to maintain technical superiority over our
    adversaries. Many of our most important tactical mobility, combat
    aviation, and ground systems require significant maintenance to keep
    them operational. Modernizing our equipment is therefore essential to
    replace legacy systems which will soon be obsolete and outpaced by our
    adversaries. Doing nothing actually means going backwards.
        If we are forced to do this again, it will absolutely affect not
    only the current modernization programs being pursued, but also long-
    term transformational technologies we are researching.
                                     ______

                 Questions Submitted by Senator Joe Manchin III
                     active component/reserve component mix
        31. Senator Manchin. General Welsh, even before the Air Force
    Commission report, the Air Force has taken significant strides to
    adjust the Active component/Reserve component (AC/RC) mix to maintain
    combat capability at a reduced cost. How can Congress help you continue
    this effort and improve the total Air Force readiness capability?
        General Welsh. The fiscal year 2016 President's budget takes a
    critical step towards recovering the ready, equipped, and modernized
    Air Force the Nation needs. First, the Air Force cannot return to the
    2011 BCA-level funding and still meet the DSG requirements. Second, we
    need favorable consideration of legislative proposals that will
    eliminate barriers to integration among the three components. Finally,
    the Air Force strongly supports the Secretary of Defense's request that
    Congress allow us to comprehensively and transparently align
    infrastructure to operational needs through an authorization to conduct
    a BRAC.

        32. Senator Manchin. General Odierno, Admiral Greenert, and General
    Dunford, in this budget environment, how are your Services looking to
    adjust the AC/RC mix to maximize value?
        General Odierno. In the last 12 months, we reduced the size of the
    Active component (AC) from 532,000 to 503,000, with end strength set to
    fall to 490,000 in fiscal year 2015; and then to 450,000. Similarly,
    the end strength in our Army National Guard is set to fall to 335,000
    and the Army Reserve to 195,000. But if sequestration returns, we will
    need to reduce end strength even further to 420,000 in the AC by fiscal
    year 2020; and 315,000 in the National Guard and 185,000 in the Army
    Reserve. Yet, the reality we face is that the demand for Army forces
    throughout the world is growing while the size of the force is
    shrinking.
        The large majority of our cuts are coming out of the Active Army,
    and because of that, we are going to have to rely more on the National
    Guard and U.S. Army Reserves to provide us a depth to respond to
    complex problems. The issue is that we are going to have to rely on our
    Reserve Forces more in some areas, such as in logistics. In terms of
    the combat capability, our Reserve Forces are still going to have to
    provide us the depth. We might have to use that depth earlier because
    we are going to have less capability in the Active component. This all
    gets to this balance that we are trying to achieve.
        I worry about the fact that if we reduce the Active component too
    much, our ability to respond quickly is going to be affected because
    the world today spins much quicker than it used to. Instability happens
    quicker and the necessity for us to respond has to be quicker. I worry
    that we are going to lose that capability because that is what we
    expect our Active component to do, and then we expect our National
    Guard and Reserves to be right behind us helping us as we move forward
    with this.
        Admiral Greenert. We believe we have the AC/RC mix just about
    right. Cost is only one variable when determining the correct AC/RC
    force mix. Other factors include: sourcing for continuous operations
    for both forward deployed and homeland defense missions, surge and
    post-surge demands, mission duration, mission frequency, retention, and
    sustainment. Based on our annual assessment of the AC/RC mix, PB-16
    continues investments in the Reserve component by expanding several
    critical capabilities:

        (1)  surge maintenance, by selectively targeting reservists who
    bring specific, valuable, civilian skill sets to the Navy Total Force;
        (2)  intelligence support, by realigning end strength to support
    this vital mission;
        (3)  cyber warfare, by ensuring the appropriate mix of Reserve
    manning to augment the Active Navy capability; and,
        (4)  high value unit escort, by leveraging the Navy Reserve's
    ability to fill short notice requirements using Reserve Coastal
    Riverine Force units to assume high value unit escort missions within
    the continental United States from the Coast Guard.

        General Dunford. The link between the Active-Duty Marine Corps and
    the Marine Reserves has always been an important one. Over the past 3
    to 5 years, the Marine Corps has continually been reviewing and
    refining its force structure in order to maximize forward presence and
    crisis response capabilities, while accepting risk in major combat
    operations and stability operations. Our goal is to operate as a total
    force (Active and Reserve) as a matter of routine.
        The Marine Corps force structure is generally 75 percent Active
    component (AC) and 25 percent Reserve component (RC), which supports
    our crisis response orientation. Where possible, the Marine Corps
    leverages the RC to augment, reinforce, and/or sustain the AC. Mission
    requirements for Naval Expeditionary Forces and Marine Air Ground Task
    Forces (MAGTF) across the range of military operations guide AC/RC mix
    in the Marine Corps. AC/RC balance is based on OPLANs, contingencies,
    replacement and rotational base considerations, and the need to rapidly
    expand forces when transitioning from peace to war. Capabilities that
    must maintain high states of readiness and availability are retained in
    the AC. For instance, crisis response MAGTFs (MEU, MEB) are comprised
    of AC forces, while Marine Expeditionary Force (MEF) or MEF-Forward
    sized MAGTFs that are employed as part of a larger campaign are
    reinforced with RC forces. Further, selective use of the RC force
    during peacetime increases the capacity of the Marine Corps to meet
    global force demands.
        Marine Corps AC & RC forces are organized and equipped similarly
    and trained to the same standards based on their respective deployment
    to dwell cycles (AC 1:2, RC 1:5). The Marine Corps continues to review
    and manage end strength levels under prevailing budget constraints to
    provide the best balanced ready force the United States can afford in
    order to meet requirements across the range of military operations
    while meeting our objectives for operational and personnel tempo.
                                     ______

              Questions Submitted by Senator Kirsten E. Gillibrand
                          coordinating with the states
        33. Senator Gillibrand. General Odierno and General Welsh,
    representing a State that has to deal with being the number one terror
    target as well as natural disasters like Superstorm Sandy, I want to
    ensure that the needs of the States are part of any decisionmaking
    equation about how to deal with sequestration. How are you coordinating
    with the States to ensure that, as you deal with these cuts, you take
    into consideration the needs of the States for support from the
    National Guard?
        General Odierno. Sequestration will have serious impacts on the
    Active and Reserve components, so if we want to minimize the impact on
    the states, the first things we need to do is to enact the funding
    levels requested by the President. Within the Army, we take seriously
    the need to ensure that the support the National Guard provides to the
    states is taken into account and the National Guard Bureau provides us
    that input. Within our modernization accounts, we place a priority on
    ``dual-use'' equipment, those items that are needed for both the
    Federal and State missions. It is for these reasons that the Army ARI
    was proposed. Under ARI, the National Guard would divest its Apache
    Attack helicopters in order to ensure we have the modernization dollars
    to upgrade their UH-60 fleet and maintain trained and ready pilots. The
    National Guard will not be immune from reductions, but we ask your
    support in Congress for the reforms we propose that better protect the
    state missions for the National Guard.
        General Welsh. Since 2014, in addition to active participation and
    collaboration with the Council of Governors, the Air Force has included
    Adjutant General representation in the Air Force corporate process. As
    such, the needs of the states are being introduced to, and considered
    by, Air Force senior leadership during foundational conversations
    regarding budget cuts and changes to Air Force force structure. We have
    also included TAGs in comprehensive mission area planning efforts led
    by major commands responsible for our Combat Air Forces, Mobility Air
    Forces, Nuclear Forces, Cyber Forces, and Space Forces.

                         sequestration impacts on cyber
        34. Senator Gillibrand. General Odierno, Admiral Greenert, General
    Welsh and General Dunford, I am very concerned about ensuring that our
    military is prepared to address cyber threats to our country. How do
    you all assess the potential impact of sequester on your efforts to
    build cyber capacity by recruiting and retaining the best cyber
    warriors?
        General Odierno. Sequestration would have a significant impact on
    the Army's efforts to build cyber capacity. By shifting funding in
    2013, the Army addressed the effects of sequestration on the overall
    accession and retention missions, and these measures carried over to
    our efforts to build cyber capacity. In the current environment, the
    Army may not be able to mitigate the impacts of another round of
    sequestration on our cyber accession and retention programs.
        The cyber workforce is vital to the growth of cyber capabilities
    and is particularly vulnerable to funding cuts. To recruit this
    workforce, the Army has dedicated most of our current enlistment
    incentives to cyber and other information technology Military
    Occupational Specialties (MOS), and cyber retention incentives are
    among the highest we offer our soldiers upon reenlistment. Funding cuts
    would curtail these programs and others that train new cyber soldiers,
    transition current soldiers into the Cyber MOS and maintain the
    qualifications of our cyber professionals. When we start to curb
    training, retention will be affected. We cannot fund the development of
    our cyber warriors episodically. Cyber professionals--resourced with
    the right infrastructure, platforms, and tools--are the key to
    dominance in cyberspace.
        The Army must remain competitive to recruit and retain the cyber
    workforce. For anything longer than a brief interruption, the Army
    would be challenged to identify sufficient funding that could be
    shifted to these programs to continue to build and maintain our cyber
    capacity.
        Admiral Greenert. In the fiscal year 2016 budget, we continue to
    place priority on efforts to build Navy's portion of the DOD Cyber
    Mission Forces and strengthen cyber defense capabilities afloat and
    ashore. We have accessed about 80 percent of the 1,750 cyber operators
    who will form 40 cyber mission teams by the end of 2016 and we will
    continue to recruit, hire, and train to reach our full planned Force
    size. This is an aggressive timeline and, if sequester occurs, we will
    adjust resources as necessary to deliver the talent, capability, and
    capacity the Nation requires to perform our mission.
        General Welsh. Recruiting and retention of our cyber professionals
    is something we always monitor closely, and we do not currently have
    concerns with recruiting and retaining our cyber professionals (officer
    and enlisted) within the Air Force, given the incentives we currently
    have in place. We have an Initial Enlistment Bonus as well as a
    Selective Reenlistment Bonus in place for the 1B4X1 Cyber Defense
    Operator and 1N4X1A Digital Network Analyst enlisted career fields to
    mitigate the equitable pay gaps to entice personnel to enlist/reenlist
    with certain skills. We currently do not offer any incentive pays for
    our cyber officers as we are meeting our projected needs for both
    recruiting and retention. Resource adjustments due to sequestration
    could impact us in all areas.
        Without proper funding, the Air Force will be limited in our
    efforts to build cyber capacity by recruiting and retaining the best
    cyber-warriors. Sequestration will impact our already limited funding
    aimed at incentivizing recruits with special technical abilities and
    skills to enter the Air Force (via Initial Enlistment Bonuses) and then
    remain in the Air Force (via retention bonuses). We are competing with
    the interagency organizations and the private sector for the
    operational/technical skills and expertise that future recruits and our
    current airmen possess.
        General Dunford. If the BCA measures come to fruition, there will
    be wide spread impact on the Marine Corps' ability to conduct
    cyberspace operations. In particular, our current initiative to unify
    the Marine Corps Enterprise Network infrastructure would likely be
    delayed as would its technical refresh to keep pace with the rate of
    technology change. Additional impacts would likely be felt by our
    civilian workforce if sequestration furloughs become a fiscal reality
    again. Taking away a large portion of our cyber workforce through
    sequestration also places an additional burden on our military and
    contractor workforce--to work through their absences. The work tempo
    will not slow down . . . the importance of our operate and defend
    mission will not lessen . . . but the workforce will be reduced
    nonetheless.

        35. Senator Gillibrand. General Odierno, Admiral Greenert, General
    Welsh and General Dunford, what will be the biggest challenges in
    recruiting and retaining cyber warriors in light of sequestration?
        General Odierno. The Army views people, characterized by high
    degrees of competence and character, as the centerpiece of cyberspace.
    A significant element of our recruitment and retention programs is
    founded in an ethos, a culture of doing something that matters in
    service to the Nation. Our cyber warriors have opportunities to do
    interesting and amazing things, but we must first compete to recruit
    and retain them--a challenge in the best of fiscal environments.
        Most of our current enlistment incentives are dedicated to cyber
    and other information technology MOS, and our cyber retention
    incentives are among the highest we offer to soldiers upon
    reenlistment. The Army recently approved Special Duty Assignment Pay,
    Assignment Incentive Pay and bonuses for soldiers serving in
    operational cyber assignments. We have also expanded cyber educational
    programs, which include training with industry, fellowships, civilian
    graduate education and utilization of inter-service education programs
    (e.g., Air Force Institute of Technology and the Naval Postgraduate
    School).
        We are approaching the first wave of potential separation among the
    soldiers who entered the cyber force 3 to 4 years ago. While the Army
    has met accession and retention targets to date, there are clear
    indications that we need to holistically manage the cyber workforce. On
    September 1, 2014, the Secretary of the Army established a Cyber
    Branch. This distinction provides opportunities for promotion,
    alongside leader and professional development, in an enduring, cyber-
    focused construct that is central to retaining our best cyber warriors.
        We are confident that these efforts will serve as additional
    incentives in recruiting and retaining the best personnel for this
    highly technical field; however, these programs and initiatives are
    particularly vulnerable to funding cuts.
        Discussions are ongoing to determine how to unify the management of
    civilians supporting cyberspace operations. Recruiting and retaining
    Army civilian cyber talent is challenging, given internal Federal
    employment constraints regarding compensation and a comparatively slow
    hiring process. Current efforts to attract and retain top civilian
    talent include extensive marketing and leveraging existing programs and
    initiatives run by the National Security Agency, the Office of
    Personnel Management and the National Science Foundation. The targeted
    and enhanced use of recruiting, relocation and retention bonuses and
    repayment of student loans will improve efforts to attract, develop and
    retain an effective cyber civilian workforce. These authorities exist
    but require consistent and predictable long-term funding.
        Cyber is a rapidly developing domain that requires a workforce with
    significant technical training and education. It demands depth of skill
    in a time of exponentially increasing information technology advances.
    Sequestration would jeopardize the Army's ability to recruit and retain
    the workforce required to support cyberspace operations.
        Admiral Greenert. Currently, Navy recruiting and retention remain
    strong, although retaining personnel in certain critical skills
    continues to present a challenge, particularly as the demands we place
    on sailors and their families remain high. The threat of looming
    sequestration, along with a recovering economy, is a troubling
    combination. We are beginning to see downward trends in retention,
    particularly among highly-skilled sailors. We are using all tools at
    our disposal, including special and incentive pays, to motivate
    continued service in these critical fields.
        Our budget request continues to place priority on cyber efforts to
    build Navy's portion of the DOD Cyber Mission Forces and strengthen our
    cyber defense capabilities afloat and ashore. We have accessed about 80
    percent of the 1,750 cyber operators that will form 40 cyber mission
    teams by the end of 2016; we will continue to recruit, hire, and train
    this force. However, I expect a return to sequestration to have a
    significant negative impact on sailor and civilian quality of life/
    morale, which will challenge our ability to recruit and retain them.
        General Welsh. Anything below fiscal year 2016 PB-level funding
    reduces the Air Force's ability to meet requirements across all mission
    areas, and thus the ability to meet the DSG requirements which includes
    capabilities in cyber. BCA-level funding and trigger of sequestration
    will significantly reduce our ability to attract, recruit, and retain
    cyber-warriors. Budget uncertainty erodes confidence and trust within
    the Air Force and among its total force airmen. Potential recruits are
    paying attention.
        Sequestration gives no flexibility to logically adjust the funding
    reduction. It will constrain and likely reduce our already limited
    funding aimed at incentivizing recruits with special technical
    abilities and skills, to enter the Air Force (via initial enlistment
    bonuses) and then remain in the Air Force (via retention bonuses).
    These bonuses are judiciously and effectively targeted to provide the
    most return-on-investment in both dollars and capability. We compete
    with the interagency and the private sector for the operational and
    technical skills and expertise that future recruits and our current
    airmen possess. We currently do not offer any incentive pays for our
    cyber officers.
        In addition, sequestration reduces operating budgets that ensure
    our cyber warriors are properly trained and equipped to perform their
    critical mission.
        General Dunford. If the BCA measures come to fruition, impacts
    would likely be felt by our civilian workforce. The furloughs of 2013
    hit hard the civilians who felt they had job security and stability.
    These were the same civilian employees who passed up more lucrative
    employment in private industry in favor of remaining as civil service
    employees. In a way, the furloughs broke the social contract between
    employee and employer. Taking away a large portion of our cyber
    workforce through sequestration also put additional burden on our
    military and contractor workforce--to work through their absences. The
    work tempo did not slow down . . . the importance of our operate and
    defend mission did not lessen . . . but the workforce was reduced
    nonetheless.
                                     ______

                 Question Submitted by Senator Martin Heinrich
                     remotely piloted aircraft pilot fleet
        36. Senator Heinrich. General Welsh, recent media reports
    highlighted that the Remotely Piloted Aircraft (RPA) community is under
    strain to fly surveillance and combat missions all over the world. One
    report even indicated the Air Force's fleet of RPAs is being strained
    to its ``breaking point.'' This isn't the first time the Air Force has
    had difficulty matching its RPA pilot force with demand. In fact, the
    Government Accountability Office (GAO) has produced multiple reports
    documenting these challenges--dating all the way back to 2007--and the
    problems are becoming more worrisome as demand for Intelligence,
    Surveillance, and Reconnaissance and counterterrorism missions
    increases. Most recently, the GAO documented in 2014 that RPA pilots
    and crews are overworked and under promoted.
        General Welsh, on January 16, 2015 you explained:
        ``The biggest problem is training. We can only train about 180
    people a year and we need 300 a year trained--and we're losing about
    240 from the community each year. Training 180 and losing 240 is not a
    winning proposition for us.''
        What is the Air Force doing, and what can the Senate Armed Services
    Committee do, to help ensure the Air Force is able to recruit, train
    and retain RPA pilots to meet mission requirements?
        General Welsh. A Headquarters Air Force ``RPA Tiger Team'' has
    identified a number of initiatives to assist with current RPA pilot
    manning challenges and is engaged with stakeholders to implement,
    assess, or further explore these initiatives. In the near term, the Air
    Force elected to retain experienced RPA pilots within the RPA community
    instead of allowing them to return to their manned aircraft as
    originally planned, affecting approximately 30 RPA pilots. The Air
    Force is also soliciting previously qualified RPA pilots that have
    since returned to manned aircraft to determine whether they can return
    to the RPA community for 6 months. Additionally, the Air Force is
    leveraging short-term assistance from both the Air Force Reserve and
    Air National Guard (ANG) to augment the Active Duty community. Finally,
    the Air Force is implementing retention pay incentives for RPA-only
    pilots with expiring commitments, which will be an increase from $650/
    month to $1,500/month.
        In the longer term, the Air Force is exploring increased contractor
    support at the schoolhouses and downrange launch and recovery
    locations, retention bonuses for the most stressed platforms, potential
    ANG associations, and methods to increase the capacity of RPA
    schoolhouses.
        The Senate Armed Services Committee can assist Air Force efforts
    by:

        1.  Supporting the Air Force fiscal year 2016 budget request.
        2.  Supporting Air Force initiatives to grow the RPA schoolhouse to
    meet the steady state production requirements and correct the current
    RPA pilot shortage. The production requirements over the next 4 years
    will be nearly double the current output. The production requirements
    are necessary to become ``healthy'' within the FYDP. Supporting an Air
    Force request for $12.5 million to fund the contractor expansion
    initiatives at the schoolhouse is the first step.
        3.  Supporting Air Force efforts to incentivize RPA pilots with
    available authorities based on their specific skill (does not require
    additional assistance from Congress at this time). While these will be
    different authorities than those used to incentivize airmen who fly
    manned aircraft, they will be appropriate, and implemented during
    similar points in a career (e.g., when Active Duty Service Commitment
    associated with initial training is expiring).
        4.  Supporting Air Force efforts to seek an additional $10 million
    a year in funding to contract out a portion of downrange launch and
    recovery support.
        5.  Supporting Air Force initiatives to work with the ANG on
    potential RPA associations in the future.
        6.  Support the Air Force pursuit of technology initiatives which
    will decrease workload and increase productivity in the RPA enterprise.
        7.  Supporting the integration of RPAs into the national airspace.
        8.  Reviewing the language of the ``Ike Skelton National Defense
    Authorization Act'' as it pertains to the transfer of assets between
    the ANG and Active Duty RPAs. Specifically, the restriction to
    authorize the temporary transfer of mission-control element (MCE) and
    the deployed launch-and-recovery element (LRE) hardware between Active
    and Reserve components reduces flexibility and inhibits efficient RPA
    training.