[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

                               __________

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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.