    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

    .
                             [H.A.S.C. No. 117-54]

                                    HEARING

                                       ON

                       NATIONAL DEFENSE AUTHORIZATION ACT

                              FOR FISCAL YEAR 2022

                                      AND

                  OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                                   BEFORE THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                             FULL COMMITTEE HEARING

                                       ON

                          NONGOVERNMENTAL VIEWS ON THE

                          FISCAL YEAR 2022 DEPARTMENT

                               OF DEFENSE BUDGET

                                   __________

                                  HEARING HELD

                                 JULY 20, 2021

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    48-452                     WASHINGTON : 2023

    -----------------------------------------------------------------------------------

                          COMMITTEE ON ARMED SERVICES

                        One Hundred Seventeenth Congress

                        ADAM SMITH, Washington, Chairman

    JAMES R. LANGEVIN, Rhode Island      MIKE ROGERS, Alabama
    RICK LARSEN, Washington              JOE WILSON, South Carolina
    JIM COOPER, Tennessee                MICHAEL R. TURNER, Ohio
    JOE COURTNEY, Connecticut            DOUG LAMBORN, Colorado
    JOHN GARAMENDI, California           ROBERT J. WITTMAN, Virginia
    JACKIE SPEIER, California            VICKY HARTZLER, Missouri
    DONALD NORCROSS, New Jersey          AUSTIN SCOTT, Georgia
    RUBEN GALLEGO, Arizona               MO BROOKS, Alabama
    SETH MOULTON, Massachusetts          SAM GRAVES, Missouri
    SALUD O. CARBAJAL, California        ELISE M. STEFANIK, New York
    ANTHONY G. BROWN, Maryland,          SCOTT DesJARLAIS, Tennessee
    RO KHANNA, California                TRENT KELLY, Mississippi
    WILLIAM R. KEATING, Massachusetts    MIKE GALLAGHER, Wisconsin
    FILEMON VELA, Texas                  MATT GAETZ, Florida
    ANDY KIM, New Jersey                 DON BACON, Nebraska
    CHRISSY HOULAHAN, Pennsylvania       JIM BANKS, Indiana
    JASON CROW, Colorado                 LIZ CHENEY, Wyoming
    ELISSA SLOTKIN, Michigan             JACK BERGMAN, Michigan
    MIKIE SHERRILL, New Jersey           MICHAEL WALTZ, Florida
    VERONICA ESCOBAR, Texas              MIKE JOHNSON, Louisiana
    JARED F. GOLDEN, Maine               MARK E. GREEN, Tennessee
    ELAINE G. LURIA, Virginia, Vice      STEPHANIE I. BICE, Oklahoma
        Chair                            C. SCOTT FRANKLIN, Florida
    JOSEPH D. MORELLE, New York          LISA C. McCLAIN, Michigan
    SARA JACOBS, California              RONNY JACKSON, Texas
    KAIALI'I KAHELE, Hawaii              JERRY L. CARL, Alabama
    MARILYN STRICKLAND, Washington       BLAKE D. MOORE, Utah
    MARC A. VEASEY, Texas                PAT FALLON, Texas
    JIMMY PANETTA, California
    STEPHANIE N. MURPHY, Florida
    STEVEN HORSFORD, Nevada

                         Paul Arcangeli, Staff Director
                    Will Metzger, Professional Staff Member
                   Geoff Gosselin, Professional Staff Member
                              Emma Morrison, Clerk

                                C O N T E N T S

                                  ----------
                                                                       Page

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Rogers, Hon. Mike, a Representative from Alabama, Ranking Member,
      Committee on Armed Services....................................     4
    Smith, Hon. Adam, a Representative from Washington, Chairman,
      Committee on Armed Services....................................     1

                                   WITNESSES

    Pettyjohn, Dr. Stacie, Senior Fellow and Director, Defense
      Program, Center for a New American Security....................     5
    Smithberger, Mandy, Director, Center for Defense Information,
      Project on Government Oversight................................     7
    Zakheim, Roger, Washington Director, Ronald Reagan Presidential
      Foundation and Institute.......................................     9

                                    APPENDIX

    Prepared Statements:

        Pettyjohn, Dr. Stacie........................................    49
        Smithberger, Mandy...........................................    66
        Zakheim, Roger...............................................    80

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        [There were no Questions submitted during the hearing.]

    Questions Submitted by Members Post Hearing:

        Mr. Langevin.................................................    97

                    NONGOVERNMENTAL VIEWS ON THE FISCAL YEAR

                       2022 DEPARTMENT OF DEFENSE BUDGET

                                  ----------

                              House of Representatives,
                                   Committee on Armed Services,
                                Washington, DC, Tuesday, July 20, 2021.
        The committee met, pursuant to call, at 10:00 a.m., in room
    2118, Rayburn House Office Building, Hon. Adam Smith (chairman
    of the committee) presiding.

      OPENING STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM
           WASHINGTON, CHAIRMAN, COMMITTEE ON ARMED SERVICES

        The Chairman. Good morning. I will call the meeting to
    order. Once again, we still have a hybrid hearing, so some
    members are participating virtually, and there are rules for
    that, which I will read to you to get us started here.
        Members who are joining remotely must be visible on screen
    for the purposes of identity verification, establishing and
    maintaining a quorum, participating in the proceeding, and
    voting. Those members must continue to use the software
    platform's video function while in attendance unless they
    experience connectivity issues or other technical problems that
    render them unable to participate on camera. If a member
    experiences technical difficulties, they should contact the
    committee staff for assistance.
        Video of members' participation will be broadcast in the
    room and via the television and internet feeds. Members
    participating remotely must seek recognition verbally, and they
    are asked to mute their microphones when they are not speaking.
    Members who are not participating remotely are reminded--
    sorry--who are participating remotely are reminded to keep the
    software platform's video function on the entire time they
    attend. The preceding members may leave and rejoin the
    proceeding. If members depart for a short while for reasons
    other than joining a different proceeding, they should leave
    the video function on. If members will be absent for a
    significant period or depart to join a different proceeding,
    they should exit the software platform entirely and then rejoin
    it if they return. Members may use the software platform's chat
    feature to communicate with staff regarding technical or
    logistical support issues only.
        Finally, I have designated a committee staff member to, if
    necessary, mute unrecognized members' microphones to cancel any
    inadvertent background noise that may disrupt that proceeding.
    Thank you.
        So, this morning, we are having a hearing basically to
    discuss the budget, you know. Part of that is certainly the top
    line, the overall number, but I am also really hopeful that our
    witnesses will get into the issues of where we spend that
    money, how things are changing and evolving, you know, and how
    we spend the money, what capabilities. Obsessively focusing on
    numbers misses the point that it really matters where we spend
    it.
        We have three witnesses this morning. We have Dr. Stacie
    Pettyjohn, who is the senior fellow and director for the
    Defense Program for the Center for a New American Security,
    represented on the rather awesome-looking screen, if I may say.
    Kudos to my staff. You know, it is almost like she is actually
    here. It looks awesome. So welcome. We have Ms. Mandy
    Smithberger, who is the director of the Center for Defense
    Information Project on Government Oversight, and Mr. Roger
    Zakheim, well known to the committee as former HASC [House
    Armed Services Committee] staffer. Good to have you back. He is
    now the director of The Ronald Reagan Presidential Foundation
    and Institute.
        Well, as I mentioned in my opening remarks, the purpose of
    this hearing is to talk about the budget, the numbers, how much
    money we should be spending on defense, and where we should be
    spending it. This is something that is going to play out a
    great deal in the next 4 or 5 months. There are obviously
    differences of opinion in, you know, appropriators, House,
    Senate, Republican, Democrat, on exactly what that number
    should be. I have said publicly and will continue to say I
    support President Biden's budget. I think the number is right.
    I think there is absolutely no reason on Earth why we cannot
    adequately defend the country for $753 billion. It is actually
    a larger increase than the increase we got from President
    Trump's budget last year, and I think we worked those numbers
    out perfectly fine.
        But part of discussion is if you think the number should be
    higher, tell us why; if you think the number should be lower,
    tell us why. But the other part of it that is really important
    is, where do those numbers come from? And those numbers come
    from the National Defense Strategy. That is where it all
    starts. And from the National Defense Strategy, we build down a
    series of requirements, things that we think we have to be able
    to do. And most of the numbers that I have seen during my 25
    years on this committee don't think too much further than that.
    Okay. Well, it is in the National Defense Strategy. It is a
    requirement. Therefore, we have to spend the money.
        But the job that I want to see this committee do is to look
    at that. Why is that a requirement? Does that requirement make
    sense? Does it actually meet our needs? Was that a requirement
    that we came up with 25 years ago and just decided never to
    change our minds so we keep moving forward? We need to really
    think seriously about those requirements all the time but now
    in particular because of the changing nature of our defense
    strategy and of the threats we face.
        We are all, you know, very much familiar with the fact that
    Russia and China now are our rising peer competitors at a
    minimum, and certainly there is a distinct possibility of them
    being threats. For the last 20 years, much of our focus has
    been on asymmetric warfare, transnational terrorist groups and
    their threat. That is a different set of priorities than having
    to figure out how to deter adversaries with the size and
    capability of Russia, China, and then even emerging, you know,
    countries like Iran and North Korea. That requires us to
    rethink a number of those requirements.
        But, also, the nature of warfare has changed in that how
    important information has become. In order to be successful, we
    have to, number one, be able to access a large amount of
    information. That part we have gotten fairly good at, but,
    number two, we have got to figure out, within that incredible
    morass, what do we really need to know? How do we find the
    information in that pile, you know. People often refer to it as
    trying to find a needle in a haystack. I always liked the way a
    counterterrorism guy said: No, it is like trying to find a
    needle in a needle stack. They are all important, but which one
    is the one we are looking for today and in this moment, and how
    do we find it?
        And then how do you get that information out to the people
    who need it in real time? It is great if some analysts, you
    know, back at the Pentagon can see it. But what about the
    pilot, the ship captain, the infantryman out there? And,
    finally, does he or she have that information in that moment,
    and how do we do that?
        And, as we have all learned, how do you protect all of that
    so that an adversary cannot disrupt it or cut it off? We are
    not as good at that as we need to be.
        And, also, there is the survivability question. Large
    platforms are simply not as survivable as they used to be. And
    I am really struck by the swarm of drones issue, a weapon of
    war that is being used increasingly in the Middle East, was
    used in the Armenian conflict where for a relatively small
    amount of money, I think it is south of a million dollars, you
    can put together a swarm of drones that could pack an
    incredible punch. And the truly interesting thing about it is
    you can't see them coming.
        And I know I have been picking on the F-35 of late. The
    program is incredibly important, but it also deserves to be
    picked upon given the amount of money it has gone over budget
    and the difficulties we have had with it, but think about this:
    A $75 million airplane, the F-35, can't get into some areas
    that a swarm of drones that cost several hundred thousands can.
    How does that change what systems we need, what requirements we
    have in order to get in and attack these places? So I really
    want to get into that examination of requirements, and I will
    close with something that I have complained about a great deal.
        I mentioned that requirements get built. Once the
    requirement gets built, we accept that as, therefore, we must
    spend the money. I also see this in the combatant commander
    issue. Whenever a member is trying to advocate for spending
    more money on a given program, inevitably they will point to
    the fact that, you know, only 60 percent of the combatant
    commander's request for this particular platform were met last
    year. If you really look at that, we never meet the combatant
    commander's request. We never even come close. All right. Now,
    does that mean that we are desperately in jeopardy and are way
    underspending, or might it also mean that we don't have the
    right requirement set, that we don't have the right mission
    statement for what we truly need to accomplish? And I think
    that is the question I am really interested in. At the end of
    that, it may well come out that we need a little bit more
    money, or it may come out that we need a little bit less. But
    we really have to understand what we are spending it on and how
    much we are getting for those dollars spent, not just focus on,
    well, we need more. Isn't more always better? No, actually. In
    many instances, it is not. We have got to make sure we have the
    right capabilities.
        So I look forward to the testimony and the questions and
    answers. And, with that, I yield to Mr. Rogers for his opening
    statement.

     STATEMENT OF HON. MIKE ROGERS, A REPRESENTATIVE FROM ALABAMA,
              RANKING MEMBER, COMMITTEE ON ARMED SERVICES

        Mr. Rogers. Thank you. And I would point out that from the
    beginning, my friend, the chairman, likes to emphasize that
    this year's increase is larger than the President's last budget
    increase. However, it is basically a $4 billion cut in real
    dollars. And the last President over 4 years increased defense
    spending 13 percent over the rate of inflation. So, if this
    President's budget proposal were carried over 4 years, it would
    be half of what Trump did over his 4 years.
        But I want to thank our witnesses for being here. Today,
    the committee is hearing the views of nongovernmental
    stakeholders on the President's defense budget. Over the past
    month, we have heard budget presentations from Secretary
    Austin, Chairman Milley, and each of the service chiefs and
    secretaries. To date, no one has been able to successfully put
    lipstick on this pig.
        Now, the fact remains this budget is woefully inadequate.
    It doesn't keep pace with China. It doesn't even keep pace with
    inflation. In fact, it constitutes a cut of over $4 billion in
    real dollars. The budget cuts the number of Navy ships and
    destabilizes the shipbuilding industry. It slashes procurement
    across the board. It guts missile defense. It leaves unfunded
    over $25 billion in combatant commanders' priorities. It
    accelerates the divestment of critical capabilities for
    replacements before replacements are available, and it cuts the
    size of the Army, Navy, Air Force, and Marine Corps.
        We have heard a lot about this budget, how this budget
    invests in modernization while maintaining readiness, but it
    actually does neither. Accelerating divestments and slashing
    the budget for new ships, aircraft, and combatant vehicles
    saves $13 billion, but it undermines readiness by creating
    dangerous gaps in near-term capability. To make matters worse,
    the $13 billion savings are not being reinvested in the
    development of next-generation capability. In fact, those
    savings are not being reinvested anywhere in the DOD
    [Department of Defense]. Instead, they are being used to pay
    for a colossal list of far left priorities.
        The President is proposing to swell nondefense spending by
    a massive 16 percent, and that doesn't count the nearly $2
    trillion already wasted on a so-called COVID [coronavirus
    disease] stimulus bill earlier this year that less than 10
    percent dealt with COVID or the $4 trillion in new mandatory
    spending the President and Democrats are intending to ram
    through Congress later this summer. None of that money, not a
    single dollar, will be spent on the defense of this Nation.
        We are going to talk a lot about the National Defense
    Strategy today and how to properly resource it, but by the
    looks of this budget, it appears that President Biden has
    already settled on the new strategy, and it is a stark
    departure from the past. Instead of deterring conflict with
    China through strength, we are inviting conflict through
    weakness. And if the President continues to underfund national
    security, we will lose that conflict. That is unacceptable, but
    it doesn't have to be that way. I urge my colleagues to reject
    this budget and work in a bipartisan manner to make necessary
    investments for our national defense.
        With that, Mr. Chairman, I yield back.
        The Chairman. Thank you.
        And, Dr. Pettyjohn, you are recognized. We will see if it
    is working in a second, but I am confident it will be. Go
    ahead.

    STATEMENT OF DR. STACIE PETTYJOHN, SENIOR FELLOW AND DIRECTOR,
          DEFENSE PROGRAM, CENTER FOR A NEW AMERICAN SECURITY

        Dr. Pettyjohn. Thank you. Chairman Smith, Ranking Member
    Rogers, distinguished members of the committee, and the staff,
    thank you for inviting me to testify today on the fiscal year
    2022 defense budget.
        My remarks draw on a new Center for a New American Security
    report that I co-authored with Becca Wasser and Jennie
    Matuschak. According to Secretary of Defense Lloyd Austin, the
    $715 billion fiscal year 2022 defense budget is focused on
    deterring China, the Department's pacing challenge, and is
    biased towards the future. There are, however, signs in the
    fiscal year 2022 budget that the next National Defense Strategy
    might not sufficiently prioritize deterring great power
    aggression, which requires developing a military capable of
    defeating a conventional attack and strengthening strategic
    stability.
        This is disconcerting because, absent significant changes
    to the current U.S. force structure, considerable investments
    in emerging technologies, and the development of new operating
    concepts, the U.S. military could lose a war against a great
    power like China or Russia.
        For too long, the Pentagon has ignored the problem, and as
    a result, the U.S. military edge is eroding. An example is the
    fiscal year 2022 budget, which simultaneously funds advanced
    capabilities to counter China and Russia, sustains a high level
    of readiness, and maintains service end strength. This suggests
    that the administration is trying to do too much with too
    little. There are serious risks with this approach. Addressing
    today's needs will likely continue to prevent investments in
    the future. And as the military tries to do more with less, it
    might find itself trying to do everything but doing few things
    well.
        This is because it is unclear how the next National Defense
    Strategy will handle two critical issues. The first is the
    prioritization of threats. Will the Department explicitly
    preference China and, secondarily, Russia, over other
    challenges, or will it balance among an expanded list that
    includes persistent threats, climate change, and bio threats?
        Second, what is the primary role for the Department of
    Defense and the level of urgency associated with the China
    challenge? Should the U.S. military compete below the threshold
    of armed conflict today, or should the Pentagon focus on
    building a future force capable of defeating a great power
    adversary and a large-scale war tomorrow. It is unlikely that
    the United States can build a force for competition and
    warfighting within any credible top line budget.
        In our CNAS [Center for a New American Security] report, we
    developed three strategies and associated force structures and
    tested them in a series of tabletop exercises on daily
    competition, subconventional territorial aggression, and large-
    scale conventional attacks. We found that the strategy we call
    full-spectrum competition most closely resembles the Biden
    administration's current approach of balancing near-term
    competition with modernization and high-end deterrence.
    Notably, this strategy performed poorly against priority
    threats. It cannot defeat a large-scale conventional invasion
    of Taiwan or the Baltics, nor can it halt subconventional
    aggression. It also risks significant overstretch and
    technological overmatch. Similarly, a competition-focused
    strategy that builds a large visible force to actively contest
    daily military provocations and expects to deter through
    presence also fails to defeat both subconventional land grabs
    and conventional aggression.
        More optimistically, our analysis suggests that it is
    possible to build a force capable of winning one big conflict
    and overturning subconventional aggression within the current
    top line budget but only by accepting some near-term risks in
    subconventional competition, against other threats, and in
    other regions.
        It is important to remember that the fiscal year 2022
    budget is largely a legacy one. Although this budget makes some
    significant investments that align with the high-end deterrence
    strategy, it does not go far enough. As the Pentagon is still
    developing the next NDS [National Defense Strategy], there is
    still an opportunity to course correct. For more than a decade,
    analysts have been warning the Department of Defense that the
    U.S. military could lose a war against a great power adversary
    if it does not significantly change the size and composition of
    its force and the way that it fights. Too much time has been
    lost. The Pentagon must prioritize the future now. Divestments
    are necessary to fund modernization, but alone, they are not
    sufficient. The dual conventional and nuclear modernization
    bill that is now due requires larger trades among capacity,
    capability, and readiness. Because military personnel costs are
    growing more than the overall budget, they reduce the resources
    available for modernization. Shrinking the size of the Active
    Duty force, particularly the Army, which plays an important but
    supporting role in the Indo-Pacific theater, frees up resources
    to focus on high-end deterrence against China.
        The 2022 National Defense Strategy and the fiscal year 2023
    budget will need to accept more risk and further prioritize to
    prepare the force for the most challenging and consequential
    threats. If the Biden administration does not make these hard
    choices or Congress chooses not to support this strategy, it
    risks losing the United States' military technological edge and
    the ability to win a war against a great power.
        Thank you. I look forward to your questions.
        [The prepared statement of Ms. Pettyjohn can be found in
    the Appendix on page 49.]
        The Chairman. Thank you.
        Ms. Smithberger, you are recognized.

     STATEMENT OF MANDY SMITHBERGER, DIRECTOR, CENTER FOR DEFENSE
              INFORMATION, PROJECT ON GOVERNMENT OVERSIGHT

        Ms. Smithberger. Thank you, Chairman Smith, Ranking Member
    Rogers, and members of the committee for inviting me to testify
    before you today. My name is Mandy Smithberger, and I am the
    Director of the Center for Defense Information at the Project
    on Government Oversight. I want to thank the committee for
    holding this hearing today.
        We think that Pentagon spending is continuing to rise at an
    unsustainable rate, now more than at the peak of the Reagan
    buildup. But too often we are paying too much money for too
    little capability. Throwing even more money at the Department
    will only make the problems worse and undermine the kinds of
    reforms we need to see at the Department. We have to have
    accountability for failed programs and wasted funds, including
    real budget consequences.
        The Biden administration's budget proposes cutting a number
    of legacy programs to fund modernization. The Department must
    make tradeoffs and set priorities. But we worry that in too
    many instances the Department proposes getting rid of proven
    and usually cheaper systems in favor of immature technology
    that costs significantly more. The cost of failed or delayed
    modernization programs can be substantial. Over the course of a
    decade, the Department had to cancel programs we had already
    sunk $46 billion into. Many of those canceled programs promised
    leaps in technology that ultimately could not be affordably
    achieved.
        It is also vital that we understand the human cost of
    failed modernization programs. Delays can contribute to
    preventable accidents and loss of life. The National Commission
    on Military Aviation Safety found that maintenance and safety
    of legacy systems across the services deteriorated as leaders
    took resources from them for new programs. When there were
    delays in those new programs, the lives of the now
    underserviced legacy systems had to be extended for years.
        While many have blamed readiness shortfalls on insufficient
    funding, the Commission made clear this was not the case. Their
    primary fiscal concern is not the amount of money but that they
    couldn't count on it. We have a responsibility to change course
    and save lives.
        I want to give you an example of a program in this budget
    that shows that new systems that are too expensive to maintain
    or upgrade can quickly become irrelevant legacies. This budget
    proposes retiring four littoral combat ships. We support this
    cut, but it is emblematic of wasteful spending that could and
    should have been avoided at the outset.
        It is not difficult to imagine a similar fate for the F-35.
    Low readiness rates and high maintenance costs have turned what
    should be a workhorse into something the Air Force Chief of
    Staff called a Ferrari to be used sparingly. This is a case
    study of the massive waste caused by buying before we fly.
        If there is only one thing you take away from what I say
    today, we must make sure we fly before we buy. We understand
    the need to speed up the acquisition process, but rushing
    unproven technology into production increases costs and
    undermines readiness. Programs should start with a process that
    meaningfully analyzes alternatives for new systems, leverages
    competition and prototyping, and enables oversight and
    transparency throughout the process.
        There are a number of areas ripe for cuts without
    compromising military effectiveness, and I am going to tell you
    about three: the shadow workforce, the Department's wish list,
    and nuclear spending. First, the shadow workforce. Last year,
    the Department spent nearly $204 billion on service contracts.
    POGO's [The Project On Government Oversight] review of
    government data found that contractor employees cost nearly
    three times more than the average civilian employee. The
    Defense Business Board and the Pentagon have found similar
    trends. We urge more transparency and enhanced reporting to
    improve oversight and inform smart cuts.
        Second, the Department's wish list. Giving services and
    components two bites at the apple increase the already palpable
    pressure to increase spending. Congress should eliminate the
    statutory requirement and all wish lists, whether they are
    submitted by statute or by request, and should include
    recommended offsets within the component's own budget.
        Finally, nuclear weapon spending. In a single year,
    projected spending on nuclear weapons activities increased by
    29 percent or $113 billion. The upcoming Nuclear Posture Review
    is an important opportunity to consider ways to reduce these
    costs. This year's budget also includes reforms we hope the
    committee will support, most notably, eliminating the Overseas
    Contingency Operations account. We urge the committee not to
    resurrect this account or create new ones.
        The Department of Defense budget aims to address a number
    of major emerging national security challenges. Responding to
    many of these future challenges cannot be fully or even
    principally led by the Department. Ensuring our security for
    the future will require balancing resources to enable the
    United States to make the best use of the power of our economy,
    the power of our diplomacy, and our capacity for innovation.
    For example, addressing China, climate change, and
    cybersecurity will all require whole-of-government approaches.
    We must rein in Pentagon spending and ensure that every dollar
    improves our national security and supports all of those who
    serve and protect us.
        Thank you again for the opportunity to testify. I am happy
    to answer any questions you may have.
        [The prepared statement of Ms. Smithberger can be found in
    the Appendix on page 66.]
        The Chairman. Thank you.
        Mr. Zakheim.

    STATEMENT OF ROGER ZAKHEIM, WASHINGTON DIRECTOR, RONALD REAGAN
                 PRESIDENTIAL FOUNDATION AND INSTITUTE

        Mr. Zakheim. Chairman Smith, Ranking Member Rogers, and
    distinguished members of the committee, thank you for inviting
    me to testify today. It is truly an honor to be back before
    this committee.
        My testimony, which I will summarize here, considers the
    strategic and budgetary requirements necessary to compete with
    the Chinese Communist Party as well as other significant
    threats, notably Russia, Iran, North Korea, as well as
    terrorism to cyber and digital threats. My approach reflects a
    peace-through-strength strategy that aligns with the findings
    and recommendations of the bipartisan National Defense Strategy
    Commission, on which I have the privilege to serve.
        Most relevant to today's hearing, I reaffirm the NDS
    Commission's endorsement of the 2018 National Defense Strategy
    as well as the recommendation of a 3 to 5 percent real growth
    annum increase in the DOD budget.
        The Biden administration's fiscal year 2022 budget request
    falls short of what is required to support the National Defense
    Strategy. The $715 billion request represents a real cut as it
    fails to keep pace with inflation. This departs significantly
    with the NDS Commission's recommendation of this 3 to 5 percent
    real growth that was generally viewed as the minimum necessary
    to sustain the NDS and keep pace with both current and future
    threats. The fiscal year 2022 budget is below the $37 billion
    required to get 3 percent and $52 billion below what would get
    you to the 5 percent growth. Indeed, both represent substantial
    sums of money. But given the strategic environment, as well as
    resources our government is spending on other priorities, it is
    a prudent investment towards sustaining our peace and
    prosperity. This was true in 2019 when the Commission issued
    its recommendation. It is even more critical today with
    inflationary forces on the rise.
        Now, there are some, including thoughtful voices on this
    committee, who reject the NDS Commission recommendation on the
    grounds that it fails to make real strategic choices or come to
    terms with fiscal realities. To those skeptics, I would point
    to the NDS Commission's recommendation, an admonition really,
    that anything short of this recommendation will require the
    Pentagon to, quote, alter the expectations of the U.S. defense
    strategy and our global strategic objectives. In other words,
    the choice is really binary. We either need to resource this
    strategy or change that strategy. If this Congress will not
    fund the current National Defense Strategy, then our civilian
    and military leaders owe you a new strategy that reduces our
    military missions and global posture. In my view, changing the
    strategy in such a manner would have a detrimental and dramatic
    effect on our national security. And the best I can discern
    from the Biden administration's nascent strategy and the first
    budget request is that military missions and mandates will
    increase, not shrink.
        As the Congress considers the defense budget, it ought to
    consider the conduct of its primary competitor, the Chinese
    Communist Party. The White House's Interim National Strategic
    Guidance rightly reaffirmed the Trump administration's
    assertion that the United States faces, quote, a growing
    rivalry with a more assertive and authoritarian China. And
    Secretary Austin correctly described before this committee the
    Chinese Communist Party's People's Liberation Army as, quote,
    the pacing threat. In March of this year, Beijing announced a
    6.8 percent increase in its defense spending despite the
    economic toll of the pandemic. And recent analysis revealed the
    annual dollar value of the PLA [People's Liberation Army]
    procurement is on course to eclipse that of the United States
    military by 2024. If this occurs, then by 2030, the United
    States will no longer boast the world's most advanced fighting
    force in total inventory value. This spending allows the CCP
    [Chinese Communist Party] to fund an active force of 2 million
    and a navy which commissions about 14 ships each year,
    including a new cutting-edge aircraft carrier.
        As the Pentagon's China military power report outlined, the
    CCP is on its way to becoming, quote, a world-class military by
    marshaling the resources, technology, and political will, which
    over the past few decades has allowed them to strengthen and
    modernize the PLA in nearly every respect.
        Advocates of a strong U.S. national security posture often
    invoke President Reagan's peace-through-strength philosophy,
    but it is worth reflecting on the meaning of that core
    principle. At the height of the 1980s military buildup,
    President Reagan argued peace is not the absence of conflict
    but the ability to cope with conflict by peaceful means.
        Now, while this hearing is nominally about the defense
    budget, at its core it is a debate about strategy, and the
    choices before you are clear: option one, resourcing a strategy
    that would seek to prevail in the competition with China while
    holding off adversaries and spoilers in other regions; option
    two, maintaining that strategy but not resourcing adequately
    and absorbing risk; option three, as was laid out, more
    dramatically choosing a more modest strategy that would cede
    our military supremacy and really shrink to a regional power.
    The choice will determine the nature of our peace and the
    likelihood of us prevailing in conflict.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Zakheim can be found in the
    Appendix on page 80.]
        The Chairman. Thank you.
        I appreciate all the testimony. So, as I look at this, I
    mean, there is clear consensus on one point, and that is that,
    you know, strategy and the resources have been bit misaligned
    for a little while. And then the question is, do we change the
    strategy? Do we change the resources? And a lot of what is
    driving this is I think what Ms. Pettyjohn focused on, which
    is, you know, Russia and China. Could we go to, you know, the
    Baltics States, the Balkans and win a war with Russia? Could we
    go to Taiwan and win a war with China?
        So put that aside for a moment. We have a wide range of
    other national security interests, you know. We are still
    dealing with transnational terrorist threats. You know, the
    great power competition is taking place in many instances in
    Africa, in Latin America, and elsewhere. It is not just in
    Russia and--sorry, in China and Eastern Europe. So there is a
    wide range of things we are trying to do. And, also, as we have
    seen, global pandemics are definitely a threat to our national
    security. Climate change is definitely a threat to our national
    security. So we have got all that stuff over here that we are
    doing.
        But it seems to me that the construct that I find--well,
    struggle with, that I don't necessarily agree with is we have
    to be able to win an all-out war with China. We have to be able
    to win an all-out war with Russia. That seems to be what is
    driving the requirements. And I don't think there is any fiscal
    way to guarantee that because China and Russia, they are big
    powers. If that is our mission, then, yes. We ought to have a
    defense budget that is a lot bigger than it currently is. I
    think it is an unachievable mission past a certain point, and
    it is also unnecessary. We have to be able to deter China and
    Russia. But to think that we have to build our military in an
    era when China and--well, China more than Russia, they are
    rising up economically, you know. Our post-Cold War utter and
    complete dominance just simply wasn't going to last. It is not
    the way the world works. Other countries will get up off the
    ground and begin growing and building.
        So we basically set up--you know, we are chasing our tail
    here, trying to be able to defeat them in a war on the road,
    basically, and that is not necessary. Okay. We need to be able
    to deter them. And, by the way, the military is not the only
    way to deter adversaries from doing things that we don't want.
    But once you set that premise up, once you say China and Russia
    are terrible, awful, and doing all of these things, we have to
    stop them, and the only way to stop them is to be prepared to
    win an all-out war, well, then, yeah, you may as well push the
    button to infinity on how much money we could spend on defense.
        So I guess I will start with Ms. Pettyjohn as an answer to
    this question. Why do we have to win an all-out war with China
    and Russia? Why is it--I mean, adversaries far smaller than us
    have successfully deterred us for years for a heck of a lot
    less money. Why can't we do the same thing with China and
    Russia and not buy into this, like, endless expense?
        Dr. Pettyjohn. Thank you for that question. I agree that
    competition with China and Russia spans the whole spectrum of
    government and that, actually, other departments and agencies
    should take the lead in the peacetime competition that is going
    on. But what the Department of Defense does and does best is
    deter wars, and you don't deter wars by hoping that you have
    the capability to stop them. You actually need to have the
    forces to prevent them from achieving their objective, what we
    call deterrence by denial.
        The Chairman. Let me just focus my question a little bit on
    that. What you have to be able to do is you have to make sure
    that your adversary decides that there is too much pain
    involved in starting the conflict. It is not a matter,
    necessarily, of winning. It is a matter of they look at this
    and say: Okay, maybe I can win, but it is going to be too high
    a price. Am I wrong about that?
        Dr. Pettyjohn. Correct. You need to change their calculus
    where they wonder whether they can win or if they are willing
    to bear the costs. And it sounds like you are suggesting a
    punishment strategy, which one could rely on, but it--the sort
    of gold standard of deterrence is deterrence by denial, and it
    doesn't require infinite resources and capabilities. You focus
    on specific missions that are related to the particular threat
    and scenario that you are focusing on. And if you narrow it
    down, it is something that our analysis suggests that we can do
    where we can build a force that is capable of deterring by
    denial.
        The Chairman. What specifically aren't we spending money on
    now that, in your analysis, do we need more aircraft carriers?
    Do we need more ships? Do we need more planes? What aren't we
    spending money on that could get us to this magical place of
    complete deterrence?
        Dr. Pettyjohn. It is not complete deterrence. Deterrence is
    always, you know, a process and something that is in the eye of
    the beholder. In the near term, I think the biggest areas where
    we could improve are long-range munitions of various types.
    There are some of these in the fiscal year 2022 budget but not
    enough, in my opinion. Anti-ship missiles, anti-radiation
    missiles, anti-armor area effects weapons, and they make the
    capabilities that we have much more effective. We also could
    improve the resiliency of our forces through relatively
    inexpensive measures in terms of passive defenses on the bases
    that we have.
        As we look forward, I think we do need to invest in
    emerging technologies like artificial intelligence and autonomy
    and use those capabilities to help to ensure that we retain
    this edge over the long run, whether it is for conducting all-
    domain operations or--and just to reduce our personnel costs,
    which are one of the biggest parts of the defense budget.
        The Chairman. Okay. Thanks. And just quickly, Roger has a
    comment----
        Mr. Zakheim. Mr. Chairman, I always enjoy discussing this
    question. I would just add to Dr. Pettyjohn's list by adding
    undersea capabilities. And I think part of what the National
    Defense Strategy got wrong is that it was ambiguous in terms of
    what we are trying to deter and specifically where we are
    trying to prevail and was looking to invade mainland China. At
    least I am not aware of it. But if you are looking at a Taiwan
    scenario, for example, there are real things we have to do. And
    we can wrap our arms around that in terms of real budget
    priorities by emphasizing the list that was just outlined by my
    colleague, and I would add undersea capabilities there as well.
        The Chairman. Thanks.
        Ms. Smithberger, do you have any comment?
        Ms. Smithberger. The only other thing I would emphasize is
    as you were saying in your remarks, I think we need to be
    focusing on hardening our systems when it comes to
    cybersecurity risks as well. I think that is where we have
    dividends in helping our whole economy.
        The Chairman. Thank you.
        Mr. Rogers.
        Mr. Rogers. Thank you, Mr. Chairman. I have never met Dr.
    Pettyjohn before, but I like the way she thinks. I agree with
    her opening statement and answers to her questions, so I am
    going to leave her alone. I got no place to go but down when it
    comes to what she was saying.
        Roger Zakheim, do you believe the President's budget
    request is sufficient to prevail in a conflict with China?
        Mr. Zakheim. I do not, Mr. Chairman.
        Mr. Rogers. And, Ms. Smithberger----
        Mr. Zakheim. Mr. Ranking Member. Excuse me.
        Mr. Rogers. I like the way it sounds, though. Go ahead.
        Ms. Smithberger, you made the comment that you--and I
    understand there are a lot of critics of the LCS [littoral
    combat ship] on both ends of the Capitol. But you made the
    point that you thought it should have been a project that was
    killed earlier. But we have been talking here about the real
    threat in Taiwan with China trying to militarily take control.
    Were that to happen, what would we do in those shallow waters
    if we didn't have the LCS? What other option would there be?
        Ms. Smithberger. So I think what we learned very early in
    the LCS program is that a lot of our assumptions about how it
    was going to function weren't going to work, that we weren't
    getting the kinds of manning concepts that we were expecting to
    have, that we weren't getting the kind of survivability and
    reliability. So it is not that it is not a capability that we
    need but that this was not a platform that was actually serving
    our needs.
        Mr. Rogers. So you don't think it would have achieved that
    goal in shallow waters around Taiwan with its shortcomings. Is
    that what I am hearing?
        Ms. Smithberger. That is something I have concerns about,
    particularly I think across the platforms that we are buying
    when we have so much complexity, that we are not having the
    kind of reliability that we need to be as lethal as we should
    be.
        Mr. Rogers. Yeah. And I agree with that observation, but
    until we get it, I think we have got to have that platform
    because what we are hearing from our COCOMs [combatant
    commands] is pretty ominous, particularly when it comes to that
    area, and I think it is imminent. So I think we have to be able
    to use that capability until we have got something better to
    replace it.
        You heard the chairman, Mr. Zakheim, make the point that we
    have either got to alter our strategy or alter our spending. Do
    you believe we have the right strategy now, and if not, what is
    the alternative?
        Mr. Zakheim. I believe the 2018 National Defense Strategy
    is the right strategy. The Pentagon, as was outlined by me and
    others here, needs to do a better job of executing against that
    strategy, both in terms of the operational concepts that would
    develop it and the resources and capabilities that we are
    discussing here. I agree with the chairman that if you aren't
    willing to resource that strategy, then come up with an
    alternative. My own view is that we got it right in 2018, and
    we need to execute.
        Mr. Rogers. Great. That is all I have got, Mr. Chairman. I
    yield back.
        The Chairman. Thank you.
        Mr. Larsen.
        Mr. Larsen. Thank you. Thank you, Mr. Chairman.
        I think for Dr. Pettyjohn, on the budget, is this an
    everything problem, or is it the right investment in talent, in
    people, in skills, or emerging technology, or is it surface
    ships? Is it subsurface ships? Is it aviation? Is it an
    everything problem with the budget, or are there just--are
    there gaps, in your view, in the defense budget based on your
    exercises? You know, we ought to be doing X but not Y, more of
    X and less of Y.
        Dr. Pettyjohn. Thank you. It is not an everything problem.
    There are gaps, and there are a lot of things that I think are
    worth commending within this budget. There just need to be
    further shifts to bring it in align with a high-end deterrence
    strategy which would be consistent largely with the 2018 NDS if
    that is the direction the Biden administration goes in. They
    need to continue to, as my colleague on the panel suggested,
    expand undersea capabilities, invest in unmanned systems for
    the future, next-generation air dominance, figuring out how
    they are going to develop intelligence, surveillance, and
    reconnaissance [isr] systems to operate in highly contested and
    denied environments. Some people have ideas for autonomous
    networks of mesh UAVs [unmanned aerial vehicles] that would do
    this, or perhaps you need a penetrating ISR aircraft, but that
    is a critical piece of helping the service to close kill
    chains, in addition to buying a lot more munitions than we
    have. If we have the right munitions on a lot of the platforms
    that we have today, they are much more effective.
        Mr. Larsen. Yeah. Thank you.
        Ms. Smithberger, your testimony is more of a criticism,
    which is all legit. But on the same question, where do you
    think we ought to be investing in the budget?
        Ms. Smithberger. I would agree with the number of the areas
    that some of my colleagues have emphasized, but I think a lot
    of what we focus on is really, how are these systems acquired?
    And I think we just want to make sure that we are doing this in
    a way that we are buying systems that are going to be reliable
    in serving our needs. I think the Department has had a lot of
    trouble acquiring technology over the years that it has made it
    difficult for us to have the kind of insights that we want to
    have.
        Mr. Larsen. Yeah. Thinking ahead, I am not trying to make
    the ranking member's argument, but let's assume that the budget
    is too low and that we need to invest in sort of things that we
    don't want to invest in in order to get to where we want to be.
    Anyone on the panel believe that Congress would allow--after we
    achieve that magical state, anyone on the panel believe that
    Congress would allow us to cut the things that are legacy?
    Roger. I am sorry. Mr. Zakheim.
        Mr. Zakheim. Congressman----
        Mr. Larsen. Because I don't, by the way.
        Mr. Zakheim. I know better than to opine what the Congress
    would and would not allow for. That is based on some years
    working for Members like you. But I do think you have a better
    shot that when you take platforms out of the inventory, there
    is a real capability that you can point to you will replace it
    with. And I think the problem we are facing, and I know the
    chairman doesn't like the language of legacy systems, which I
    agree with, is that we talk about things we--capabilities we
    want to remove, and we don't have a clear idea of what is going
    to take its place. And if we do, it often only exists on a
    PowerPoint slide. I think if we can get after that problem, you
    might have more support in this body for those changes.
        Mr. Larsen. I would note in your testimony, in footnote 18
    on your PowerPoint slide, you said rarely does the Pentagon
    deliver the replacement on time or on cost, which is actually
    the problem that we are faced with, not that it is on a
    PowerPoint slide. That should be--should have been the headline
    in your testimony.
        Mr. Zakheim. Congressman, I am heartened that the footnotes
    were read, especially by a Member of Congress, but I----
        Mr. Larsen. Be careful about what you put in a footnote.
        Mr. Zakheim. Well, no. I stand by it. But the reality is,
    for all the problems the Pentagon has with doing things on time
    and well, it is the best we have got in the U.S. Government,
    and it is the only pathway we have.
        Mr. Larsen. All right. I have other questions, and I
    apologize for not getting to them. I would just note--and I
    made this point before--my definition of a legacy system is
    something that the Pentagon doesn't want to do, but Congress
    won't let them stop doing it.
        The Chairman. Thank you. The gentleman's time has expired.
        Mr. Wilson is recognized.
        Mr. Wilson. Thank you, Mr. Chairman, and welcome back,
    Roger Zakheim. I thank the other witnesses too, but you need to
    be aware: Roger was a very effective staff person here advising
    many of us on key issues and making such a positive difference.
    And so we are very happy for your success to be director of the
    Ronald Reagan Presidential Foundation and Institute, and I am
    confident you will bring the same level of success as you have
    from your service here.
        With that, a question for you. And that is: The Biden
    administration budget request continues the trend of biasing
    air and naval resources at the cost of the Army, despite the
    reality that any near-peer conflict would be all-domain. If
    left unchanged, the Biden budget request would force another
    cut of 1,000 soldiers to the Army's Active Duty force and
    cancel 9 combat training center rotations. If this trend
    continues as the result of the inadequate top lines, what are
    the likely consequences to Army readiness?
        Mr. Zakheim. Thank you, Congressman, and it is great to be
    with you. I always enjoyed sitting behind you and bantering
    during a hearing.
        You know, you are hitting on a key point, which is the so-
    called choices they have to make in this budget because the
    ceiling on top line is going to take end strength and
    capability out, particularly the Army. And I will make two
    points here, Mr. Wilson. Number one, you know, this is
    something that we all experienced during the operations in Iraq
    and Afghanistan where, at that point, whatever reason, we did
    not have end strength to sustain what the President [inaudible]
    needed.
        Now, nobody wants to get into another Iraq and Afghanistan,
    and I think the culture and wisdom is one that we should avoid
    that at all costs, but to at least have an Army that could
    deploy if you need it and sustain it in such a fashion that we
    are not asking too much of those who serve I think is a
    responsible approach. A 3 to 5 percent growth would allow you,
    perhaps, to maintain that number.
        The second thing I would say, and then I will wrap up, is
    the Chairman of the Joint Chiefs before this committee said
    that the budget has a bias toward future operating environment,
    and I think this committee needs to unpack those words, which
    is we are absorbing risk in the near- and midterm through this
    request, and in some ways, it reflects the concern you outlined
    in your question.
        Mr. Wilson. And thank you for that response. And I am very
    grateful to represent the training facilities of Fort Jackson,
    and I know what great work is done there to protect American
    families.
        And, Mr. Zakheim, there is bipartisan commitment that
    countering China's military buildup, the largest peacetime
    military buildup in history, this requires historic investment
    in the Pacific theater. Yet the Biden defense budget halves
    INDOPACOM's [U.S. Indo-Pacific Command's] top priority,
    reducing the crucial missile defense system to protect Guam, to
    protect American families of the patriotic American territory.
    It also omits funding for the Hawaii Homeland Defense Radar. It
    appears that the Pacific defense initiative funding in this
    budget request fails to adequately fund critical joint and
    enabling capabilities and, instead, prioritizes platform-
    centric procurement that should be funded elsewhere in the
    budget. How should the committee redirect this Pacific
    Deterrence Initiative spending provided that the budget request
    to ensure it meets the threats?
        Mr. Zakheim. Thanks for that question. First, this
    committee, the chairman and the ranking member, really deserve
    a lot of credit for pushing the Pacific defense initiative. PDI
    [Pacific Deterrence Initiative] is something that--classic case
    where the Congress put forward an important project, and the
    Pentagon adopted it.
        In terms of what the Pentagon was thinking by not funding
    those key priorities like you have highlighted, Guam and Hawaii
    and the missile defense there, it could be they were betting
    that the Congress would do it for them, and they could shoehorn
    in other programs that they thought they might not have room
    for in the budget. I am sure the members here have seen that
    once or twice in previous requests. It happens both in
    Republican and Democratic administrations. The short answer is,
    Mr. Wilson, I would recommend maintaining what the
    administration requested and making sure we have those
    investments to protect Guam and Hawaii.
        Mr. Wilson. And I would like to point out that you have
    already indicated that the 2018 National Defense Strategy
    should be followed through to address the instability that we
    see around the world, whether it be the instability, the hasty
    withdrawal, the potential for mass slaughter in Afghanistan. We
    have got the circumstance of China expanding its influence in
    the South China Sea, threatening Taiwan, and then Russia sadly
    occupying parts of Moldova and Georgia and occupying parts of
    Ukraine with 14,000 persons killed. We need to be ever
    vigilant. And I want to thank you for your efforts, and I yield
    back.
        The Chairman. Thank you.
        Mr. Langevin is recognized.
        Mr. Langevin. Thank you, Mr. Chairman. I want to thank our
    witnesses for your testimony today; in particular, Mr. Zakheim.
    Great to see you again. I appreciate the work that you do at
    the Reagan Institute.
        Let me begin on an issue that is important to our national
    security relating to climate change. So, in last year's NDAA
    [National Defense Authorization Act], we directed the DOD to
    update its 2014 climate change adaptation roadmap and include
    an implementation plan to mitigate nine previously identified
    effects of extreme weather and rising sea levels will have on
    military installations. So this plan would address changing
    energy demands, installation resilience, and the resilience of
    strategic assets.
        So, Ms. Smithberger, how could a climate change adaptation
    and implementation plan reduce the DOD's financial pressure?
        Ms. Smithberger. It is a great question. So I think this is
    going to be pivotal. We are already seeing the billions of
    costs that we are seeing to our different installations by not
    adequately addressing climate change, so I think this is one of
    the instrumental areas where the Department really needs to be
    planning for the future because these are the last things that
    we want to be losing money on. We want to be, you know,
    prioritizing as many dollars as possible to our capabilities
    and not to rebuilding things that we could have protected.
        Mr. Langevin. Yeah. Couldn't agree more. And for the
    record, I really do applaud the Department for its plan to
    release a climate change plan soon, but it still needs to
    update the adaptation roadmap and provide an implementation
    plan so that we can act now to mitigate the effects of extreme
    weather down the road.
        So I want to look at another area I see a disturbing trend
    that really deeply concerns me on research and development
    [R&D] spending. So, in 1996, the U.S. spent $8 for every $1
    that Russia and China spent on research and development. Now,
    we outspend our adversaries by 6 cents. So while I am happy
    that the administration is investing in R&D with the highest
    funding level to date, I have to say that I am disappointed
    that within that top line, we have actually cut basic and
    applied R&D accounts. That is that early-stage research that is
    done, for example, at DARPA [Defense Advanced Research Projects
    Agency] and also at colleges and universities.
        So, Dr. Pettyjohn, should we invest more in early-stage
    research? And, if so, by how much? And what are the effects of
    not properly funding R&D?
        Dr. Pettyjohn. Thank you, Mr. Congressman. Yes, I think we
    do need to be investing in R&D and, in particular, science and
    technology, which are the most advanced capabilities. It will
    lead to that. So that is incredibly important for the
    Department, as it looks to the future, and the Department also
    needs to work on continuing with the process that has been
    underway in terms of reforming acquisition and potentially even
    the PPBE [planning, programming, budgeting, and execution]
    process so that it can better tap into the private sector,
    where a lot of this research is undergoing as well, and bring
    in new capabilities at speed and scale, overcoming the valley
    of death problem that exists today.
        Mr. Langevin. Dr. Zakheim, did you want to add something?
        Mr. Zakheim. Just real quick. I agree with what has been
    said, but it happens to be what you are focusing on. Those S&T
    [science and technology] accounts, the basic research, is where
    the private sector is not operating. That is fundamentally the
    place where government is able to make investments and are
    willing to take some risk in a way that private entities will
    not be able to do because it is too much risk and unsure
    whether they will be able to return a profit. So I think you
    are right to highlight this reduction because no one else will
    do it.
        Mr. Langevin. Yeah. In addition to that though I would say
    that if the private sector knew that government would be
    purchasers of the capabilities that they would develop, I think
    they would be more likely to venture into those areas, which
    would help get and buy commercial-off-the-shelf, while at the
    same time serve as supporting private sector R&D enhanced
    capabilities.
        Mr. Zakheim. Completely agree.
        Mr. Langevin. So thank you for that input.
        Ms. Spanberger--Ms. Smithberger, in your testimony, you
    mention that newer weapons systems are too expensive to upgrade
    and will quickly become irrelevant legacies. How can building
    open software architecture systems avoid costly upgrades? I
    think we are too hardware centric right now, and we really do
    need to be more software centric, but what is your perspective?
        Ms. Smithberger. I think that is a major opportunity for us
    to be able to have cost savings to encourage competition down
    the line and for us to take as many market forces as possible
    to help reduce costs.
        Mr. Langevin. Very good. I am not going to have time to get
    to my next question, so, at this point, I will yield back and
    submit the other one for the record, but thank you all to your
    testimony. I yield back, Mr. Chairman.
        The Chairman. Thank you.
        Mr. Lamborn is recognized.
        Mr. Lamborn. Thank you, Mr. Chairman.
        Mr. Zakheim, it is great to see you, and I remember when
    your father would testify here in committee, so like father,
    like son.
        Mr. Zakheim. I hope so, but thank you for that.
        Mr. Lamborn. My colleague and friend, Joe Wilson, already
    did a great job of addressing the needs with the west Pacific.
    The Indo-Pacific region the last three administrations,
    including this one, are now concentrating more on, but we are
    not really funding everything that is required, and he
    mentioned some examples of what is not being funded. But do you
    think we could be doing a better job of working to make sure
    that Taiwan, which is probably a flashpoint, if there is one
    anywhere in the world, of potential for World War III, you
    know, God forbid. It is one of several flashpoints. That we can
    do a better job of partnering with them so that they could at
    least give a credible, if not prevent completely, at least
    prevent a huge cost deterrent to China for any kind of
    threatened invasion.
        Mr. Zakheim. Thank you, Congressman. The short answer to
    your question is yes, and this----
        Mr. Lamborn. And what would that specifically be?
        Mr. Zakheim. Sure. First, I think it is not just hard
    power, but it is a soft power too. Very important for the Biden
    administration to continue to support Taiwan in terms of policy
    statements and the like.
        On the military side, you have got to be cognizant of what
    Admiral Davidson said, that this is a near-term problem.
    Someone on this committee has characterized this as the
    Davidson window, and so making sure that we have capability
    today, and we're not taking capability out of our Navy and that
    it is present; it is kind of peacetime missions, but we know it
    is--this is the center of gravity for the competition is the
    key piece that we need to invest in. So making sure our assets
    are present in the region and making sure we are exercising in
    the region, demonstrating that we have the capability and the
    will to defend Taiwan should such a scenario be required, but,
    most importantly, to convince the Chinese Communist Party that
    they shouldn't exploit this window that Admiral Davidson shared
    with this committee.
        Mr. Lamborn. Well, I want to be real specific about how we
    actually get that job done. Ms. Pettyjohn talked about long-
    range munitions. I think that that is a piece of the puzzle.
    You mentioned earlier underwater capabilities. I think that is
    a piece of the puzzle. What about anti-ship mining technology,
    can we do better there? Anti-ship missiles, can we do better
    there? And short-range air power?
        Mr. Zakheim. I think all of that is important. I mean, the
    anti-access aerial denial issue has only become more
    complicated since the time I had the chance to work with you
    when I was on the staff of this committee. It is one that is
    quite a complicated thicket. Our fighter aircraft is challenged
    in the Taiwan scenario. That is no secret. We need to be able
    to have long-range munitions to deter any Chinese aggression
    there. So all the things that you have outlined are spot-on,
    but I want to emphasize it is so important that this is not
    something we are communicating that we can handle in 5 years'
    time or 7 years' time outside the FYDP [Future Years Defense
    Program]. We need to demonstrate we have the will and
    capability today, and the budget put forward before this
    committee needs to reflect that too.
        Mr. Lamborn. And, lastly, changing gears entirely, NATO
    [North Atlantic Treaty Organization] and Russia. Can we be
    doing a better job of providing to our partners and allies in
    Europe, Eastern and Western Europe, what it takes to give a
    huge, credible deterrent against an aggressive Russia?
        Mr. Zakheim. Congressman, I am glad you raised Russia. It
    seems, you know, to be a far second, and it should be kind of a
    closer second in conversations, particularly in this window
    that I am discussing. Yes. You know, there seems to be this
    kind of incongruence between allies that have the will but
    don't have the capability and allies that have, let's say, the
    capability or the means but don't have the will to defend
    themselves, and that is really the challenge within NATO.
    Poland should be able to have land-based capabilities that we
    sell to them. We need to do more with the Balts in the same
    vein. There are foreign military sales opportunities that I am
    hopeful this administration will deliver for those allies
    willing to defend themselves. And then, of course, particularly
    when it comes to Russia, exercises, joint exercises in that
    region, are a very important message and form of deterrence.
        Mr. Lamborn. Thank you, Mr. Chairman. I yield back.
        The Chairman. Thank you.
        Mr. Khanna is recognized. Is he here? You need to unmute
    yourself, Mr. Khanna. At least that is what my staff is telling
    me. Actually, I don't think we have Mr. Khanna. I think I am
    misinformed there.
        So Ms. Slotkin is recognized for 5 minutes.
        Ms. Slotkin. Pardon. I apologize.
        Mr. Khanna. I am here.
        Ms. Slotkin. Oh.
        The Chairman. Sorry. A voice from beyond.
        Mr. Khanna, you are with us?
        Mr. Khanna. Yes. I have been here. Was I not on--was I on
    mute?
        The Chairman. Yeah. I believe you were, but you are now
    recognized for 5 minutes. Go ahead.
        Mr. Khanna. Okay. Sorry about that.
        Mr. Chairman, thank you for convening this hearing. I would
    like to start by noting that, you know, we have one person from
    the Reagan Institute who wants an increase in the defense
    budget; another witness who is saying, well, we want more
    money, not calling for an increase specifically; and only one
    really witness who is calling for a decrease. So I hope for
    future hearings that we will have a greater diversity.
        The Chairman. Will the gentleman yield for just one moment?
        Mr. Khanna. Sure.
        The Chairman. Just for the record, that was not our intent.
    Okay?
        Mr. Khanna. I am not questioning your intent.
        The Chairman. I am sorry. We are pausing your time. I will
    just get through this. I can't exactly say how that played out,
    but it was not our expectation. Our expectation actually was to
    have one person who said we could reduce it, one person said we
    increase it, one person to defend President Biden's budget. We
    had a heck of a time finding anyone to defend President Biden's
    budget, just as you would have had a heck of a time finding
    anyone to defend President Trump's budget.
        Nobody--I have been through four Presidents in 25 years.
    Nobody ever supports the budget that you actually have to write
    down. Okay? You know, we could all theoretically talk about
    this, that, and the other stuff, but if you are the unfortunate
    soul who has to actually put it in writing, you know, we have
    done this back and forth. Nobody has ever defended any
    President's budget. So, for the new Republicans on the
    committee who think, oh, see, that proves that Biden's budget
    is terrible. No. It proves that every single President's
    budget, because it actually has to be written down, it has to
    add up, you have to have the details, you don't have all of
    that comfortable gray space to play around in gets more
    difficult. So it was our hope to have this be more balanced.
    And I do apologize to the committee for not having achieved
    that, but it was not our intent for this to play out the way it
    did.
        But that is why we have got you, Ro. You can carry all the
    weight on the other side right now. So we will restart your
    time.
        Mr. Khanna. Mr. Chairman, I have great respect for your
    integrity and your leadership, and I certainly don't want to
    imply that you or the staff would not have a balanced hearing.
    That was not my intent. My intent is just that somehow we don't
    agree on the President's budgets, but the defense budget keeps
    going up and up and up. It is sort of like the law of gravity,
    an immutable rule in Washington other than when President
    Clinton was there and President Bush, Sr., and I do think there
    are many organizations who are about strategic ways of reducing
    the defense while maintaining a strong national security.
        Let me begin with Mr. Zakheim. Mr. Zakheim, I appreciate
    your testimony. I have read your statement very carefully. What
    was President Reagan's budget inflation adjusted at the peak of
    the Cold War for defense?
        Mr. Zakheim. Well, what I have here in my notes is, in
    1985, it was about 5.7 percent of GDP [gross domestic product].
    That is the best I can answer you now.
        Mr. Khanna. So $610 billion inflation adjusted; that would
    be about $110 billion. One of the things--I disagree very
    strongly with President Reagan, but one of the things I often
    say is that he confronted a challenges that were unprecedented
    with the Cold War and had a huge challenge of national
    security.
        Do you really believe that we have more national security
    challenges today than President Reagan confronted in 1985?
        Mr. Zakheim. I do, sir. And here is why: The challenge with
    Soviet Union best I can understand was fundamentally military
    challenge. We have a similar military challenge facing the
    Chinese Communist Party, but what the Chinese Communist Party
    has that the Soviet Union does not have or did not have is this
    overwhelming economy that is rivaling and will potentially
    outpace the U.S. economy.
        So they have the combination of economic power and military
    power that the Soviet Union did not possess. In fact, as you
    know----
        Mr. Khanna. I don't want to cut you off because I have a
    time limit and I would love to engage in the conversation more
    broadly. I disagree that China poses a more serious military
    threat than the Soviet Union did in the 1980s. I think George
    Shultz would disagree. Unfortunately, he has passed.
    Economically, I agree with you, but I think the--to think that
    China either is spending as much militarily as the Soviet Union
    was or poses a greater threat than what the Soviet Union did I
    think is to underestimate actually what President Reagan
    confronted, but it is a longer conversation.
        I just do want to point out that the budget is about $110
    billion more that it was at the peak and height of the Cold
    War. And, you know, I want to turn to Ms. Mandy Smithberger
    because you have done a lot of work, you were very helpful with
    our TransDigm hearing where we had a company that was basically
    ripping off taxpayers in a bipartisan way with the chairman's
    leadership, at the time Representative Meadows and
    Representative Jordan's leadership. We got them to pay back $16
    million to the U.S. Government because they were monopolizing
    industry parts and then charging a thousand percent more to the
    American taxpayers.
        Could you talk about the defense contractors? People often
    say, where can we cut? And I agree; look, there are people on
    the committee who disagree with my view on not needing to
    modernize nuclear weapons. But could you talk about the place
    where we can cut, which is the defense contractors? The CEOs
    [chief executive officers] there make $20 million a year. They
    are not the ones wearing the uniform, risking their lives, you
    know. It reminds me of ``All My Sons,'' the Arthur Miller
    novel. The people who are making the money aren't the ones
    risking their lives. There are a lot of Members on this
    committee, Honorable Members, who have risked their lives. I
    have tremendous admiration for them, but the defense
    contractors making $20 million a year, CEOs; average executive,
    $5 million a year. Why can't we cut that? It is outrageous, and
    how much would we save?
        Ms. Smithberger. So we could save tens of billions of
    dollars if we reduced our reliance on the what we refer to as
    the shadow workforce or service contractors. And I think if we
    had a goal of trying to acquire systems that are less complex,
    that are easier to maintain so that our own personnel can
    maintain them, that we would be both more lethal and more
    effective as a consequence. And in the TransDigm instance, I
    would say that we really do need to strengthen our acquisition
    laws so that taxpayers don't continue to get ripped off, that
    we want to make sure that when something is considered a
    commercial item that is truly commercial that is sold in like
    quantities on the market in too many instances, suddenly
    something is characterized as commercial, then the price goes
    up a 100 percent, and we are not able to challenge that
    information to make sure that we are paying a fair price. These
    are small things that add up, and these are not areas that we
    should be wasting money.
        Mr. Khanna. Thank you. Thank you, Mr. Chairman.
        The Chairman. Thank you.
        Mr. Wittman is recognized.
        Mr. Wittman. Thank you, Mr. Chairman. I would like to thank
    our witnesses for joining us today.
        Mr. Zakheim, I would like to start with you. I look at this
    year's fiscal year 2022 budget and see that all four of the
    service branches have a reduction in end strength. And, listen,
    we know the Air Force because of personnel moving over to Space
    Force, their reduction is smaller, but they still have
    exacerbated issues with pilots and maintainers to make sure
    they have what they need.
        The Marine Corps has kind of accepted a smaller and leaner
    force, but, listen, the Commandant still, I think, speaks about
    how the Marine Corps has to reconstitute itself in order to
    make sure they are relevant in the areas that they need to be
    today. We talk all the time about a Navy that has to grow in
    capability and capacity, yet we see a shorting of at-sea
    billets in the Navy. So, you know, we are seeing the two curves
    going in different directions. More platforms, fewer people
    operating those platforms. We see that exacerbated with
    collisions and also the problem of burning out our most
    talented with long deployments, and we have seen double-pumping
    deployments.
        I mean, I can go on and on about those particular issues,
    and up until this year, the Army's billets continue to grow. So
    the question is, is in relation to what we face, the challenges
    in the Indo-Pacific, are the budget priorities right with where
    we are in reducing end strength in these different areas? Are
    we truly tailoring our forces based on end strength for the
    next fight? And do we maybe need a little more drastic resource
    reallocation based on us still hanging over from a CENTCOM
    [U.S. Central Command]-centric directive that the Department of
    Defense has continued to put in place for now almost two
    decades?
        Mr. Zakheim. Congressman, great question. I think when it
    comes to the CENTCOM-centric mentality, it is one that this
    committee I know has exercised oversight over, and it needs to
    continue. And that plays out both on the issues you have
    outlined in terms of the demand for ground forces, for example,
    versus investing in end strength across the Marine Corps, Navy,
    and Air Force, as you have outlined. And, of course, it is not
    limited to that.
        ISR requirements, the movement of assets, aircraft carrier
    comes to mind, out of INDOPACOM into CENTCOM, all of that needs
    to be revisited. And it is an area of the National Defense
    Strategy that the Pentagon has not done enough work on, which
    is not how do we reduce our presence or capability in the
    Middle East, for example; how do we do it differently so the
    high end assets go to INDOPACOM? I would align with what you
    are saying and highlight that point.
        Mr. Wittman. Very good. Thank you, Mr. Zakheim. I want to
    now talk a little bit more in depth about the issue of the
    total picture of our Nation's defense. President Eisenhower
    once said, you will not find it difficult to prove that
    battles, campaigns, and even wars have been won or lost
    primarily because of logistics. You know, we all get focused on
    combat systems and all those fancy elements, but in order to
    make things work, logistics is key.
        We have a regular Army now nearing 481,000 soldiers, and
    there is not a proper sealift capacity. So, if you have the
    best Army in the world and you can't get them to the fight, the
    question is, are we really doing the things necessary to
    achieve our strategic goals to deter China?
        And I know that sealift is technically a Navy requirement,
    but the Navy never really has been interested in that. It is
    kind of like: Hey, we are in the warship business. You know, we
    are going to be at the fight. We really don't care how
    everybody else gets to the fight.
        And I am just being brutally honest about what I think
    things are. The question now becomes, shouldn't the Army be a
    little more involved in advocating to say, whoa, whoa, wait a
    minute. What are we doing about logistics? What are we doing
    about making sure that we can get to the fight, that we have
    our soldiers at the fight, that we have our equipment at the
    fight? Because it seems like, you know, everybody is pointing
    fingers at each other. You know, logistics is yours. Sealift is
    yours. Airlift is yours. And nobody seems to really be focused
    on it, yet the service branch that is most at risk to me is the
    Army. Can you comment on that?
        Mr. Zakheim. I think it is a great point. When I was on the
    NDS [National Defense Strategy] Commission, the most impactful
    briefing didn't come from Central Command, didn't come from at
    the time PACOM [U.S. Pacific Command]; it came from TRANSCOM
    [U.S. Transportation Command]. Because as you pointed out, they
    have to figure out how to get our capability to the fight. That
    is why forward presence is so important, but I think--yes, I
    agree with you. I think the Army needs to internalize it, but
    TRANSCOM is where I would go. And in the end, we rely on
    contractors to do this. I mean, as you know, it is something
    that the military departments have looked outside the force to
    answer.
        Mr. Wittman. Yeah. Thank you, Mr. Chairman.
        I yield back.
        The Chairman. Thank you.
        Mr. Carbajal is recognized.
        Mr. Carbajal. Thank you, Mr. Chair. And I want to thank all
    the witnesses for being here today.
        When I came to Congress, I was appalled at how little
    comprehensive audits had been done for the Department over the
    years, and oftentimes, over the years, I would hear about all
    these skirmishes about wanting to get audits for various
    agencies for the Federal Government, and it was just appalling
    for me to hear all the spending we do in our military, but yet
    we weren't as committed to making sure all our spending was
    being done in the most appropriate way. So it did catch my
    attention.
        Ms. Smithberger, with the Department having undergone its
    third annual audit in 2020, I would like to know from your
    independent analysis the most important lessons learned so far?
    In addition, could you speak further to the recommendation in
    your testimony on how the Department can make changes to
    service contracting that would result in cost savings without
    compromising military readiness? And I know you touched on that
    a little bit, but if you could elaborate a little bit more,
    that would be great.
        Ms. Smithberger. Thank you so much for the question. So, on
    the audit, I think one of the things that we are learning is
    that we actually have very weak internal controls, that we are
    not always able to keep track of everything that we have
    purchased. And I think--a theme that we have seen throughout
    this hearing is that we focus so much on platforms, that we
    often forget about the other management issues that need to be
    a priority at the Department to make sure that we are being
    responsible stewards of taxpayer dollars.
        When it comes to service contracting, one of the biggest
    challenges that we have is that we actually don't track the
    data about how much we spend on service contracts, and we
    haven't set up a good process for the Department to make smart
    decisions about when to outsource something versus when to do
    something else. And never mind having a process; what if we
    just shouldn't do it period?
        I think the other thing we are seeing over and over is that
    we are asking the Department to do too much, and I would be
    happy to work with you on some of the ways--we thought the Army
    was doing a lot of great work on helping to build systems where
    we could make smarter decisions about service contracting, and,
    unfortunately, those have really fallen apart.
        Mr. Carbajal. Thank you. I would submit that as committed
    as we all are to our national security, we are remiss in not
    being as committed to making sure that we have more
    accountability and transparency in how we go about our
    spending. So I really appreciate your feedback.
        Dr. Pettyjohn, what are the most important investments in
    fiscal year 2022 budget that provide assurances to our allies?
        Dr. Pettyjohn. There are a number of investments that
    provide assurances to our allies, and I think you have to think
    of assurance as across time, not just immediately. Our allies
    have become accustomed to the fact that we assure them by being
    there with bases or military forces that rotate forward. And we
    are doing that, and we are taking steps in the fiscal year 2022
    budget to improve the resiliency and capabilities of the
    posture in Europe to a lesser extent than I would like to see
    in the Pacific as well, but our allies should also be assured
    by the fact that we are taking steps to modernize and to put in
    place a force that would be able to prevail in a conflict
    should one occur because that strengthens deterrence.
        Having forces that are not capable that are forward have
    been shown, what is often called a trip wire, are not actually
    effective deterrence. So there are a number of steps that we
    are taking here that should be quite reassuring to our allies.
        Mr. Carbajal. Thank you.
        Mr. Zakheim.
        Mr. Zakheim. Quick addition, sir. Resiliency, right,
    distributing the force. So not pocketing in one area, and I
    think our nuclear modernization is key. The extended deterrence
    we provide both to our allies in Europe and in Asia is critical
    for assurance.
        Mr. Carbajal. Thank you.
        Dr. Pettyjohn, in your perspective, how can fiscal year
    2022 budget better balance the needs to preserve present
    readiness with long-term goals, including investments in
    emerging technologies? In addition, are there any programs or
    areas that you think the Department is overinvesting in?
        Dr. Pettyjohn. Thank you, Congressman. I do think
    preserving readiness is important. You have heard Generals
    Berger and Brown argue that we need to shift our mindset about
    readiness. We obviously don't want a force that is not prepared
    for the potential missions that it might be called on to fight,
    but we have gotten in the habit of considering ready forces
    ready to deploy and sending them on purely presence missions or
    to the Middle East to deal with insurgents or terrorists, and
    as we look to focus on great power competitors----
        The Chairman. I do apologize. The gentleman's time has
    expired. So we will move on.
        Dr. Pettyjohn. Sure.
        The Chairman. Mr. Kelly is recognized for 5 minutes.
        Mr. Kelly. Thank you, Mr. Chairman. And thank all you
    witness for being here.
        I just want to go back to an earlier point that you made,
    Mr. Zakheim. China is much more dangerous in my opinion than
    Russia ever was, and it is not just because of their economy;
    it is also because of their diplomatic efforts. Russia never
    had good allies that weren't forced to be allies. China is
    doing a much better job at at least trying to incorporate
    allies. We are still way ahead in that game, but China is
    improving.
        Information, which is part of the DIME [diplomatic,
    informational, military, and economic], they also are very far
    advanced in that area, much farther and greater, I think, than
    Russia was in the height of the Soviet Union. Also, their
    military and obviously their economic.
        I do want to talk just a little bit--in this budget, the
    President's budget, there is $617 million for climate change. I
    am a climate change--I am all for climate change, but not in
    the military budget. That is $617 million that does not go to
    building ships, to research and development, to paying
    soldiers, to maintaining equipment.
        So do you consider that part of the defense budget when it
    is not for defense?
        Mr. Zakheim. Thanks for that question. I don't know
    specifically where that $600 million is going. I do think it is
    important, like, when you think about the case of the Arctic,
    that if climate change is having an impact there, which it is,
    that our military needs to be ready to make that another area
    for the competition. It is clear that is where Russia is
    seeking to exploit. That to me is an important nexus point
    between climate change and the U.S. military.
        Last point on climate change, sir, it is a new mission. It
    is one that this administration wants to emphasize. So we need
    to be clear in how that is going to impact policy and budgets.
        Mr. Kelly. And I am fine with doing that. I just think that
    the defense budget is not the place to do that. There are other
    places. I want to talk a little bit--we have always fought the
    last war, been prepared to fight the last war. If you go back
    to World War II--I mean, World War I, you know, we didn't want
    to use tanks. We didn't want to use planes because they were
    unproven. We just wanted to use grunts on the ground. If you go
    back to World War II, we had all these great battleships, but
    we were not prepared for the carrier war. If you look--every
    one we transfer, and so my question is, we have to be ready and
    prepared to fight tonight. That is maintaining legacy systems,
    the systems we have. We cannot divest in those until we have a
    true product that replaces them. I see right now we are
    managing that risk, but I think people are talking about the
    future about things that we may have, but we don't have yet. We
    have to build real ships, real airplanes, real drones, real--
    all those things, but we are talking about concepts that people
    aren't doing.
        So are we really preparing for the future? Are we investing
    in the right things? Are we replacing systems--are we replacing
    them when we have something to replace them with, or are we
    replacing them with ideas that may or may not come to fruition?
        Mr. Zakheim. I agree with those comments, sir, and I think
    you have to--I will bring up General Milley's testimony before
    this committee that this budget has a bias towards future
    operating environments, that is to say that they are going to
    absorb risk. This budget absorbs risk in the near-term. And
    when you think about the Davidson window, that could be a
    strategic mistake on our part because that may be where the
    Chinese Communist Party would seek to exploit. And if they do
    seek to exploit in that window, we are going to need the types
    of capabilities that are in the inventory today, and we ought
    to be careful not to remove them unless, as you point out,
    there is something else that can be in the inventory to replace
    it.
        Mr. Kelly. And the final point I just want to make is I
    think we have to be prepared to fight today. I think that is
    necessary, but I also think we have got to redo the way we
    acquire stuff in the military. We acquire ideas. We need to go
    after capabilities, be very specific, and we need professional
    contract lawyers not generals running the acquisition program
    who take them to task and make them--if they say they are going
    to deliver this for X dollars, then they deliver that, or we
    don't pay the contract. But we also owe a duty to our
    industrial base that when we ask them to do something and
    commit for them to build something, we can't then withdraw the
    contract and lay people off by the thousands because we changed
    our mind or we want something new and more shiny.
        So how can we reinvent the acquisition system to get
    professionals who are doing the contracts who get us the
    products that we want and deserve at the cost that we agree to?
        Mr. Zakheim. Well, I am going to channel President Reagan
    here. Competition is the only thing that increases quality, all
    right, and increases the quantity, right, with the price going
    down. That is where I would go follow.
        The Chairman. Thank you.
        Ms. Slotkin.
        Ms. Slotkin. Thanks to the witnesses for being here. Mr.
    Zakheim, good to see you again. I guess if you can help me
    understand you're calling for this 3 to 5 percent increase in
    the top line. Can you fill in, show your math a little bit?
    Where did that number come from? What is the basis of that?
        Mr. Zakheim. Thank you. It is great to see you,
    Representative Slotkin. It is from General Dunford and
    Secretary Mattis, and it was actually their testimony before
    this committee what was required to sustain the previous
    defense program, that is the program before we had the 2018
    National Defense Strategy. On top of that for this year's
    budget, you have the unfunded requirement, as well as deeper
    investments in the RDT&E [research, development, test, and
    evaluation] accounts where I have emphasized and then holding
    off on the legacy platforms this budget would take out in terms
    of ships and aircraft and the like. You do that and you quickly
    go to the kind of end pocket of that 5 percent real growth. You
    are way beyond $50 billion.
        Ms. Slotkin. And so, you know, if the top line weren't
    raised--I mean, I think we can probably both agree and probably
    all of our witnesses agree that it is not like there is not fat
    in the Pentagon budget, right? There is fat in there. There is
    no way. So, given that you are not in government, you are not a
    HASC staffer any more, tell us what you would do if you were
    king for the day and had to make up that 3 to 5 percent by
    cutting from existing fat?
        Mr. Zakheim. First, I would thank you for the opportunity
    to be king for the day.
        Ms. Slotkin. You are welcome.
        Mr. Zakheim. It doesn't happen anywhere, especially my
    home. But it is manage radically inside the Department and let
    the Office of Management and Budget [OMB] and the President of
    the United States publicly tell the Secretary of Defense that
    whatever you find, you get to reinvest. And this has been a
    consistent failure--you have seen in your time in government
    where the Department of Defense was told to find savings that
    they could reuse, both Republican and Democratic
    administrations, and ultimately OMB said, ``I would like to
    take that back.''
        Where would I put it? R&E [research and engineering] is a
    key place. Obviously, some money towards readiness.
        Ms. Slotkin. No. Where would you take it from? We all have
    ideas of where we would put it. It is taking it that is the
    problem. So you are not up for re-election here, so why don't
    you tell us where you would take it from.
        Mr. Zakheim. All right. I would go into programs of record,
    and I would compete the hell out of them. The program of record
    is the single most--I think the biggest obstacle towards
    finding savings and introducing new capabilities. It hasn't
    been revisited in decades. So take it from the inefficiencies
    in programs of record. They block new ideas, and they drive
    inertia and ultimately waste.
        Ms. Slotkin. You know, I have kind of come to this idea
    when it comes to, for instance, competition with China. You
    know, it is sort of like it is them not us. Our system is so
    bureaucratic, so big, so slow to acquire new technology, so
    difficult to understand our supply chains, as Mr. Gallagher and
    I have been looking at, that we are more bureaucratic than
    China for various reasons. Of course, we are a democracy.
        Are there processes at the Defense Department that should
    be changed in order to save money, not just programs of record,
    right, a big system, for instance, but processes?
        Mr. Zakheim. I think the budget process needs to be changed
    radically. You have to go back to Secretary McNamara in terms
    of the process the Department follows today. Now, obviously, I
    am channeling a different Zakheim here in terms of expertise,
    but it is mind-boggling that we have $715 billion budget and we
    are using a budget process that comes from the 1960s. Fortune
    500 companies, small companies, would look at our process and
    laugh. I mean, the fact that you are preparing a budget 2 years
    in advance and it doesn't account for any changes in real time
    because it just doesn't allow for it, immediately to me screams
    out that that needs to be radically reformed.
        Ms. Slotkin. Great. Thank you.
        And I yield back, Mr. Chairman.
        The Chairman. Thank you. For the members' information, we
    have got the comptroller, Mr. McCord, coming over to talk to us
    tomorrow, 11 o'clock, for a briefing on precisely that issue,
    that 2-year budgeting process. Because when you are talking
    about innovation's happening a lot faster, and we are losing
    out on a lot. We do the R&D, we develop the technology, and it
    is okay, two years from now, we will tell you whether or not we
    are going to buy it, and it disappears. So we really need to
    reform that process. The appropriators are incredibly hostile
    to the idea of reforming that process. They like to control it.
    But here is where I think congressional control is undermining
    what we need to do to really spend money efficiently at the
    Pentagon. So that is a recommendation for tomorrow's briefing,
    11 a.m. with Mr. McCord.
        Mr. Gallagher, you are recognized.
        Mr. Gallagher. It has taken us an hour and a half, talking
    about threats to America, I am glad we finally identified that
    the appropriators are among them.
        The Chairman. For the record, that is not what I said.
        Mr. Gallagher. That is what I chose to hear.
        Let's talk a little bit about the Davidson window. I wish I
    would have trademarked the term, Mr. Zakheim, but I am glad
    that you mentioned it. I assume, based on your comments, that
    you agree with what Admiral Davidson said in terms of within
    the next 6 years, the Taiwan scenario could be likely and maybe
    talk specifically about how you think the Olympics plays in
    that?
        Mr. Zakheim. Thank you, Congressman. And I should have
    footnoted you on the Davidson window, but yeah. I defer to
    Admiral Davidson. He has seen it in the ops and intel more
    closely than I have, but I do think if I am China, the window
    is post-Olympics. 2022 is going to be a huge propaganda
    platform for the Chinese Communist Party. Once they get that,
    the endorsements, the participation, then they will feel the
    confidence and the risk profile goes down, given that they
    would have already achieved the Olympics. So I would look kind
    of after 2022. And I think it brings before this Congress
    perhaps not within jurisdiction of this committee to really
    think deeply about what the United States should or should not
    be doing vis-a-vis the Olympics in China.
        Mr. Gallagher. I guess for the rest of the panel, do you
    disagree with Admiral Davidson's assessment, or maybe put
    differently, do you disagree that it makes sense, regardless of
    how likely or unlikely you think an attempted invasion of
    Taiwan is, do you think it still makes sense to plan around
    that most dangerous course of action by the PLA, if that makes
    sense?
        Ms. Smithberger. Go ahead. Dr. Pettyjohn.
        Dr. Pettyjohn. I am sorry. Please.
        Mr. Gallagher. Go ahead.
        Ms. Smithberger. I think we need to make sure that we are
    not discounting the power of our allies in those kinds of
    circumstances, and I think particularly with the Olympics
    scenario that you are talking about that we should not forget
    about I think there are going to be a lot of opportunities for
    people to remember why China isn't their chosen ally for a lot
    of goals that we all share and how we want rule of law and our
    international system to work.
        So I think there are opportunities for us there in addition
    for things for us to be worried about.
        Mr. Gallagher. Dr. Pettyjohn.
        Dr. Pettyjohn. I agree that is a scenario we should be
    focused on and that we have to balance risk across time, but I
    think there are many ways to do that that don't mortgage the
    future because if we focus too much on the present right now,
    we won't be making the investments that we need to modernize
    our capabilities and get those leap-ahead technologies.
        Mr. Gallagher. Since we all agree we should be planning
    around that scenario, I mean, if you had a minute with the
    Secretary of Defense, and he asked, what is sort of the one
    thing we could do to deter, not win the conflict, deter the
    conflict over Taiwan from happening, what would be that one
    thing? We will start with Mr. Zakheim.
        Mr. Zakheim. In this respect, I think it is a combination
    of presence and policy. Statements that we are there to support
    Taiwan, the free people of Taiwan, and, third thing, weapons
    sales.
        Mr. Gallagher. Ms. Smithberger.
        Ms. Smithberger. I would just reemphasize the policy aspect
    in that, again, that we need to focus on hardening our systems
    so that we can show that we are going to be strong against
    them.
        Mr. Gallagher. Ms. Pettyjohn.
        Dr. Pettyjohn. Long-range munitions and improving the
    resiliency of our existing posture in the Pacific.
        Mr. Gallagher. Great. And, finally, Mr. Zakheim, I thought
    your response to Mr. Khanna was quite good in terms of, I
    think, what makes this competition more complex is just the
    economic component of it. My own view is slightly different. I
    think the primary threat is neither military nor economic per
    se, but rather ideological. I think--and I think if you sort of
    interrogate what the CCP has said recently, they have gone to
    school on the failures of the Soviet Union and concluded, Xi
    himself has concluded, that part of the reason they failed was
    insufficient commitment to the party and its ideology.
        And I think the real threat posed by China is that they are
    offering a model that we may not understand as attractive, but
    a lot of people around the world could understand as
    attractive. So that is less of a question, more of a comment,
    but I would be curious if there are any quick lessons based on
    your knowledge of Reagan that we can learn about the nature of
    ideological competition.
        Mr. Zakheim. I think it is actually our advantage because I
    think from the ideological standpoint, freedom wins. And I
    think that is a lesson from Reagan. He started everything with
    the Soviet Union talking about freedom and talking about the
    plights of dissidents before he got into the economic or the
    military issues.
        The Chairman. Ms. Sherrill.
        Ms. Sherrill. Thank you. And thank you to all our witnesses
    for being here today.
        Ms. Smithberger, I think it was really interesting you
    pointed out the cost of privatizing so many of the jobs in our
    military. I was in the military at a time when I think just
    about every flag officer made an extra star by privatizing some
    portion of our workforce, and I think we are seeing the results
    of that now. Over the past few months in talking to sustainment
    officers and acquisition officials about the amount of risk we
    are taking on with certain modernization priorities, there are
    places where we are spending so much time and money shoring up
    weaknesses today without enough attention being paid to the
    long-term sustainment costs that these programs are going to
    incur.
        So I think we can all agree that modernization is a
    critical effort, but I am starting to fear that we are boxing
    ourselves in by throwing all of our resources at programs that
    are effectively going to eat our innovation budget in years to
    come. So can all of you provide your assessment of the DOD's
    innovation enterprise? Are we investing in a cost-effective
    way? Are we prioritizing short-term gains at the cost of long-
    term sustainability?
        I just would be very interested in your thoughts in that
    area. Thank you.
        Ms. Smithberger. I will go ahead and go first. So I think
    one thing I would really underscore is, as we pursue this
    innovation, something that the Department is starting to
    emphasize more that I hope Congress will support, is that we
    get the intellectual property rights for some of these things
    because that is going to really be key to being able to control
    costs later down the line, and that is, again, where I think it
    is important to have some real budget consequences for some of
    these kinds of programs as well because I think that, without
    that, we are going to continue to see poor performance, to see
    programs have huge cost overruns, and that is going to eat into
    other priorities. I think accountability is just so important.
        Ms. Sherrill. And what do you see as the consequences in
    program areas that we do not have the IP [intellectual
    property] rights per our contract?
        Ms. Smithberger. So that is where you get the TransDigm
    kinds of situations where you get companies that are able to
    buy the suppliers for these different kinds of parts and where
    we see prices go hugely over cost where we aren't able to get
    cost or pricing information that we need to in order to be able
    to control those costs, where we don't have the kind of
    acquisition workforce that we need and have them be empowered,
    or probably underinvesting in the Defense Contract Audit Agency
    [DCAA] as well. I think if you know that there is going to be
    someone looking over your shoulder, you are going to be a much
    better steward.
        Mr. Zakheim. Just a little bit of disagreement there. I
    think if we are trying to modernize the force for the digital
    era, we need to introduce software. Software in the commercial
    sector is all about maintaining the IP. The way that I think we
    could incentivize those low prices or lower prices is by having
    competition in the program of record when it comes to software.
    I think that is a much better course of action than trying to
    own the IP and asking DCAA to enforce. I think that has failed
    us when hardware was the rule for acquisition. I would not
    recommend it when it comes to software.
        Dr. Pettyjohn. I would just add that, in terms of the
    innovation enterprise, you see that you want to innovate by
    encouraging the services to compete and fostering a healthy
    competition among them, and I think that Deputy Secretary Hicks
    is attempting to do that, to encourage them to--and reward them
    with a larger share of the budget if they come up with
    innovative and cost-effective ideas that make a difference on
    the battlefield.
        I would also point out that the operations and maintenance
    costs of our older weapons are growing significantly and are
    one of the big things that consumes a large portion of the
    budget today.
        Ms. Sherrill. Thank you. And, Dr. Pettyjohn, I can't help
    but ask if you would just expound a little bit upon your
    comment that we need to focus on long-range munitions,
    something really, I think, critical to our workforce in my
    district?
        Dr. Pettyjohn. Absolutely. In all of the war games I have
    run, we have run out of munitions, we don't have the right
    ones, which means we have to put our forces at risk. So we need
    long-range anti-ship missiles. We need long-range anti-surface
    missiles and anti-radiation and anti-armor munitions. That
    means we can launch strikes from farther away and enhance the
    survivability of our forces.
        Ms. Sherrill. Thank you so much.
        And I yield back, Mr. Chairman.
        The Chairman. Thank you.
        Mr. Bacon.
        Mr. Bacon. Thank you, Mr. Chairman. And appreciate our
    panelists today. My first question is to Mr. Zakheim, and then
    I have got some other general questions for the whole panel. I
    think the current administration and the previous one has made
    a very strong case why we need to have a military focused on
    China. The rising threat to include the economic side of it and
    the military side, and there is portions of their military that
    are more advanced than ours, like hypersonic weapons. What
    concerns me, though, is the actions do not match the words in
    this administration.
        This budget is a 1.7 percent increase in spending, and it
    was made at a time we had 2 to 2.5 percent inflation. So, Mr.
    Zakheim, to me, that equates to about a $5 billion cut. What is
    the analysis you have there?
        Mr. Zakheim. I think your numbers are accurate. If you are
    not growing, you are falling behind, and particularly in a
    competition. And that is why today I have advocated for the
    recommendation from the National Defense Strategy Commission to
    see that top line not only have real growth, but get this 3 or
    5 percent window, I think a lot of the capabilities that my
    colleagues today have said we need, not just to prevail in the
    strategy in the Middle East and Europe, we may absorb risk
    there even at a 5 percent increase scenario, but to at least do
    what we need to do in the Indo-Pacific, we are absolutely going
    to need real growth.
        Mr. Bacon. So, in reality, we are looking at about a 1
    percent cut in our defense budget at the time this budget was
    made. Now this month we are looking at 5 percent inflation, and
    I saw a number yesterday, 7 percent. We are talking a $30
    billion to $40 billion cut in real terms if those numbers hold
    true.
        Again, the actions of this administration is not matching
    the words of trying to get a budget that meets the Chinese
    threat, and I think we have to make that clear. One more
    question for Mr. Zakheim. Is our budget taking us in the right
    direction to sustain our nuclear modernization particularly in
    the ICBMs [intercontinental ballistic missiles]?
        Mr. Zakheim. Thanks for that question. This budget fully
    funds. It is a $28 billion towards modernization. I think this
    committee and no doubt the oversight will do this, look at this
    Nuclear Posture Review. There is some language in the Interim
    National Security Strategic Guidance which suggests that the
    administration wants to rely less on nuclear weapons. My own
    view from the National Defense Strategy Commission is that it
    plays an even more important role, given what we are trying to
    do by focusing on China.
        Mr. Bacon. Ms. Pettyjohn, you talk about long-range fires.
    Does the B-21 factor at large with your analysis there?
        Dr. Pettyjohn. Absolutely. Bombers, including the next-
    generation bomber, the B-21, are important in terms of being
    able to deliver some of those missiles, although we would be
    looking at finding better and preferred munitions for most of
    our platforms as a way of enhancing their capability.
        Mr. Bacon. I know the Army's been talking about long-range
    surface-to-surface missiles, there is a basing issue, but where
    do you see that piece fit into the puzzle?
        Dr. Pettyjohn. I do think that there is an access challenge
    in the Pacific right now with respect to Army missiles. You do
    imagine that they could be useful in some situations for
    hitting fixed targets early in a conflict, but they are
    reasonably expensive and need to have a lot of range in the
    Pacific because it is a very large theater.
        Mr. Bacon. I am the co-chair of the Baltic Security Caucus.
    So really to any one of the panelists here, are we doing enough
    to deter for our three Baltic countries? Is there more that we
    should be doing? Curious for your assessment.
        Mr. Zakheim. I had an opportunity to go to Lithuania pre-
    COVID. Seems like a long time ago, but it wasn't that long ago.
    Military sales are critical; cooperation on cyber, which this
    committee led on years ago, continues to be something that they
    focus on; and then the distributed force out of European
    Command, some level of presence there makes a huge difference
    not only in the straight up deterrence by denial concept, but
    also in the psychology and support and assurance of our allies.
        Mr. Bacon. Anyone else?
        Dr. Pettyjohn. I would just add that the Army is making
    improvements, and it is stocking the prepositioned heavy
    equipment in Europe, but it is still in Western Europe, and it
    has to get to the east in the event of a conflict. So we could
    do more in terms of putting heavy Army forces farther or
    forward to the east and make sure that they have the right
    enablers in terms of air defenses and rocket artillery that is
    long-range enough to allow them to overmatch the Russians.
        Mr. Bacon. I will just close on this point. I have asked
    the administration to consider some permanent basing options
    for the Baltics because, ultimately, U.S. flag is probably the
    most important thing for deterrence.
        So with that, Mr. Chairman, I yield back.
        The Chairman. Thank you.
        Ms. Jacobs is recognized for 5 minutes. You are muted, or
    at least we can't hear you at any rate. So, if there is a way
    to unmute there; thoughts? Go ahead. Nope. Sorry. You have
    technical problems, and we are not hearing you. We will attempt
    to resolve those technical problems here shortly.
        And, with that, I will recognize Mr. Courtney while we try
    to resolve those problems. We will get back to Ms. Jacobs if we
    can.
        Mr. Courtney. Great. Thank you, Mr. Chairman.
        So this year, actually, is the first year of full official
    production of what I think a lot of the leaders in the
    Department of Defense have described as the country's number
    one acquisition program, which is the Columbia program. And
    good news, Ms. Smithberger. The 85 percent design completion
    before production and lot of prototyping, knock on wood. You
    know, we are going to see some of the issues that you raised
    addressed, but, again, we are looking now, you know,
    prospectively between now and well into the 2030s of about $5
    billion to $6 billion a year. I mean, this is just a big
    program. And it is a must-do program, I think, is pretty
    widespread agreement across the board.
        Back in 2015, Congress passed the National Sea-Based
    Deterrence Fund [NSBDF], which was a piece of legislation
    recognizing the fact that this expenditure is just going to sit
    on the shipbuilding account year in and year out, even though
    it is a platform which carries about 70 percent of our nuclear
    stock--available stockpile and, frankly, isn't really part of
    the Navy. It reports to Strategic Command not to--through the
    channels there. It also created multiyear authorities that
    created efficiencies that, again, is one of the reasons why I
    think it appears to be a promising program in terms of avoiding
    wasteful funding and giving supply chain folks, you know,
    confidence that they can, you know, do the work that they need
    to do in terms of, you know, as I said, reducing unnecessary
    costs. You know, it is--the NSBDF, which, again, ran into a lot
    of opposition from the appropriators, was a recognition, again,
    that this is a once in a multigeneration moment to deal with a
    program where these boats are going to be on patrol till the
    2080s. I just was curious whether Mr. Zakheim or Pettyjohn have
    any comments regarding whether this approach that Congress
    enacted, it is law right now, but it has not been fully
    embraced by the Pentagon in terms of making it a special
    account recognizing what we thought was a strategic program as
    opposed to necessarily a shipbuilding program. Just curious
    what your take is if you can comment.
        Mr. Zakheim. Sure. And I remember when you and I think
    Congressman Forbes and others pushed this forward rightly
    seeing, looking around the corner knowing that this needed to
    be prioritized. I mean, your work on the Columbia class and
    then the fast boats Virginia class and demonstrating to
    everybody how multiyears helped the industrial base and
    actually helped bring costs down has been instrumental in the
    undersea capability. To me, whether you have--I would support
    any approach that maximizes shipbuilding in any form.
        Now, whether you go with the fund that you have proposed or
    doing it out of the shipbuilding accounts doesn't really matter
    to me other than we need to make sure we are getting maximal
    investment in what everybody agrees is a critical priority, and
    I think the multiyear authorities you put in there are
    absolutely critical. Industry needs that. It is a great message
    to allies and important message to adversaries alike, and we
    tend to get more capability for less money.
        Mr. Courtney. Ms. Pettyjohn, do you have any--
        Dr. Pettyjohn. Sure. I would just add that I think that
    there have been proposals, and I have seen beyond putting all
    of the nuclear forces into their own account to take them out
    of the services budget because we have the modernization bill
    coming due for all three legs of the triad right now, and that
    is taking up a significant portion of the investment budget;
    but that could be a sensible thing to do to pull that out so
    then you can see what is left for your conventional forces.
        Mr. Courtney. Great. I mean, the other advantage of the law
    is that it gives the Pentagon the ability to sweep up funds
    that are unobligated, and, you know, every penny that you can
    use, again, is a penny saved for, again, other shipbuilding
    programs, which, again, we are going through this, again, this
    year in terms of trying to figure out a way, you know, with a
    tight top line to make sure that we, again, address what I
    think is the National Defense Strategy call for maritime
    defense.
        So, with that, I yield back, Mr. Chairman.
        The Chairman. Thank you.
        Mr. Banks is recognized.
        Mr. Banks. Thank you, Mr. Chairman.
        Mr. Zakheim, in the last couple of years, you have been a
    part of two very significant efforts. One was the Future of
    Defense Task Force that was led by this committee that
    Representative Moulton and I both co-chaired. And the other
    effort was something that you led, something I think is very
    significant and deserves a lot more attention, the Reagan
    Institute's Task Force on 21st Century National Security
    Technology and Workforce.
        And in both of those efforts and in both of those reports,
    a lot of attention was drawn to something called the valley of
    death, and I wonder for purposes of this committee if you could
    spend a couple of minutes and explain what the valley of death
    is and provide us with some policy recommendations from the
    Reagan Institute on what we can do to solve it.
        Mr. Zakheim. Thank you, Congressman, and thanks so much for
    your participation on the Reagan Institute Task Force, and
    really kudos to you and Congressman Moulton on the work you did
    on the Future of Defense Task Force. The valley of death is one
    of those metaphors that is spot on accurate. You can't accuse
    it of being kind of overly dramatic. It is when you have
    investments in RDT&E, you have something that might get some
    pilot funding, but it can't enter a program of record. It just
    gets cut out. It can't kind of muscle its way in to where the
    real resources reward a program or an idea. And so it is kind
    of like early venture stage that doesn't get that late round
    funding that allows it to really go big time and get the
    support from an IPO [initial public offering] or private equity
    company. And so, if we can't get those new technologies that we
    are experimenting with to enter a program of record either to
    be a part of or to be its own program record, it will die in
    that valley of death.
        Mr. Banks. What can we do about it? I have heard the valley
    of death term for 5 years as a Member of Congress, and it
    doesn't seem like it is going away.
        Mr. Zakheim. A lot of ink has been spilled on this. The one
    I am thinking about today is integrating it into a program of
    record, competing elements within a program of record to
    introduce these new technologies and capabilities. So it is
    classic competition and really breaking down the stubbornness
    of a program of record not to allow new things in, as opposed
    to--one approach that we heard, you heard in the Future of
    Defense Task Force, which you ran which is, let's just go big
    on perhaps an RDT&E program and give them procurement authority
    is already met. I am fine with that. It just hasn't happened.
    Let's compete within a program of record is the other thing I
    would offer.
        Mr. Banks. And why don't you tell us for purposes of the
    committee, where can Members of Congress and those who are
    paying attention to this hearing today find the Reagan
    Institute's Task Force report?
        Mr. Zakheim. Thank you for that opportunity. Never walk
    away from self-promotion here for the Reagan Institute. Go into
    the Google machine and write ``Reagan Institute Task Force,''
    and you will see the recommendations there.
        Mr. Banks. I think it is really important, so I appreciate
    you drawing more attention to that. I know there has been a lot
    of attention today drawn toward the President's overall budget,
    and I wonder, Mr. Zakheim, can you--again, I know it is
    repetitive, but, again, give us a sense of how this budget
    lines up with our greatest and growing concern of a rising
    Chinese military, especially the Chinese Navy. Is this budget
    submission by the Biden administration, is it good enough for
    us to compete with the greatest adversary that we face on the
    globe today?
        Mr. Zakheim. Thank you for that, Congressman. I think I
    stand with the statement of the Chairman and Joint Chiefs who
    testified before this committee like I mentioned before that
    this budget has a bias toward future operating environments,
    and that bias to me, I understand it to mean, absorbing risk in
    this near-term window. When we think about the Davidson window,
    which I had a chance to discuss with Congressman Gallagher,
    right, we are exposing ourselves too much in the short term,
    and that is reflected in this budget by taking out inventory of
    platforms that could be useful within this 5-year window. So I
    would say that is the biggest highlight I have in terms of what
    the risk is.
        The good thing is, going forward, I think we could do more,
    but I like the investments in RDT&E. It should be celebrated. I
    like the investments in terms of nuclear modernization. But, as
    you know well, Congressman--you have done this work--the near-
    term window is one we have to pay very close attention to, and
    if we invite a vulnerability, it very well may be exploited.
        Mr. Banks. I have grave concerns we aren't doing enough,
    but I appreciate that feedback.
        Mr. Chairman, I yield back.
        The Chairman. Thank you. We will give Ms. Jacobs another
    try.
        Ms. Jacobs. All right. Can you hear me now?
        The Chairman. Yes, we can. Go ahead.
        Ms. Jacobs. All right. Victory. Thank you, Mr. Chair. And
    thank you to our witnesses for being here. I wanted to start
    with you, Ms. Smithberger. In your written testimony, you say
    you worry that, in too many instances, the proposed Biden
    budget proposes getting rid of proven and cheaper systems in
    favor of immature technology and costly ones. I know we have
    talked a little bit about this already here, but I was
    wondering if you could talk about some examples of that. I know
    on the committee we talk a lot about the question of the
    current Minuteman III system versus, you know, what could it
    come from that with modernization, but I was wondering if you
    could point out some other examples where you think the
    Department is pursuing costly new systems when the current
    systems are adequate?
        Ms. Smithberger. I think one system that we would really
    focus on is the A-10 in relation to the F-35. We already have
    so many of these fighter jets. We already are going through
    testing. There are so many retrofits that we are going to have
    to make based on problems that we are discovering that I don't
    think accelerating acquisition of the F-35 is beneficial to us.
    And while I hope we don't have to keep on fighting ground wars,
    we think the close air support capacity that the A-10 provides
    is an important one.
        Ms. Jacobs. Okay. Thank you so much.
        And, Dr. Pettyjohn, you talk a lot about the risks of
    overstretch and argue that the Biden administration's current
    approach performs poorly against priority threats. Yet you seem
    to support this divest in order to invest since retiring old
    and less capable weapons is necessary to fund modernization. I
    guess, you know, I know that what we have already asked you to
    talk about what places you would divest from, but do you agree
    that many of these new programs are coming in over cost and
    behind schedule? And, you know, in my short time here, we have
    seen a lot of failures whether it is the LCS delays in the DD-
    21 [Zumwalt-class land attack destroyer] program, or this
    recent abandonment of the electromagnetic rail gun, just
    examples that we end up spending a lot of money on things that
    don't end up working. And so the tradeoff is really a lot
    harder than just divest to invest because we are actually not
    good at that invest piece either.
        Dr. Pettyjohn. I would agree. We don't have a great track
    record lately of investing, and that is one area where the
    Pentagon needs to improve, and I know this administration is
    focused on improving and really pushing forward the defense
    innovation agenda and ensuring that they come up with ways to
    overcome the valley of death.
        So, yes, the recent track record is not great in many
    respects, but at the same time, the weapon systems that we
    have, many of them, are increasingly costly to operate. Every
    single hour that you fly or sail one of these costs more money,
    and that is eating up an increasingly large proportion of the
    budget, which means that we can't make any future investments
    and that we are locked in to these systems that eventually are
    going to go beyond their service life and that we are not going
    to be able to extend.
        So, at some point, we have to figure out how to perform the
    acquisition process and to acquire new platforms in a timely
    manner that perform as promised.
        Ms. Jacobs. Okay. Thank you.
        And, Ms. Smithberger, I don't know if you had anything to
    add around that question of these new programs.
        Ms. Smithberger. I think for a lot of this, it is about
    having discipline in our acquisition process. We don't need
    that many new laws; we need to actually follow the laws that we
    have. And when the Department issues waivers to those laws and
    it increases risk, they need to be reporting to these
    committees about why they are doing so, and that information
    should be made public so that we can make sure that we are
    making responsible decisions.
        Ms. Jacobs. Well, thank you. Thank you, all.
        And, Mr. Chair, I yield back.
        The Chairman. Mr. Johnson is recognized.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Zakheim, I haven't had the pleasure of working with
    you. Got out here a little late after you left. Glad you are
    back. In your testimony, you asserted that the fiscal year 2022
    budget's top line request is inadequate to support the National
    Defense Strategy, of course, and you correctly pointed out that
    the top line figure actually represents a cut from fiscal year
    2021 levels because it fails to keep pace with inflation, which
    is skyrocketing, and you have called for a 3 to 5 percent
    annual increase in line with the 2018 National Defense
    Strategy.
        So I was just going to see if you could expound a little
    bit more on what will be some of the real world impacts of not
    funding our military at that target level of 3 to 5 percent
    annual growth.
        Mr. Zakheim. Congressman, thanks for the opportunity to
    answer that question. What I have been trying to outline today
    is we are faced with a serious tension between deterring today
    and making investments, I think, everybody on this panel agrees
    we need to make to prevail in a conflict with China in the
    future and to deter them in the future and that the force needs
    to change. The question is, how much risk are we willing to
    absorb today and whether it will be self-defeating because it
    would invite an adversary to exploit that vulnerability?
        The $37 billion to $52 billion that you would get this
    fiscal year at a 3 to 5 percent would allow you to mitigate
    some of that risk while also increasing investments for the
    future. It is important, Congressman, to keep in mind that we
    are not just talking about a one-off for this year, but it
    actually would put you in trajectory that year over year would
    compound and give you additional dollars for investment.
        I just want to make one more point on 3 to 5 percent real
    growth. Even if this Congress were to fund this number, it
    would still be below the 4 percent GDP threshold that many
    people point to. A 3 percent growth would be 3.6 percent GDP, 5
    percent growth would be 3.7 percent GDP. By contrast, as I
    mentioned before in 1985, the Congress authorized and
    appropriated 5.7 percent GDP dealing with the challenge of the
    Soviet Union.
        Mr. Johnson. And speaking of the 1980s, you said earlier
    that China is really a greater threat than the Soviet Union was
    at the height of the Cold War because not only do they have
    this great military prowess now, but also the economic power as
    well. And so it occupies a lot of our attention for obvious
    reasons. Of course, their goal is to become a world-class
    military, and I think that is their term, by the end of 2049,
    but you note that the annual dollar value of the PLA
    procurement is on course to surpass ours by 2024. That is
    tomorrow in my estimation.
        So, in your view, where is China in this mission that they
    have stated to become world-class by 2049? Are they ahead of
    schedule?
        Mr. Zakheim. I mean, they are rapidly progressing. They are
    doing everything, as far as we can tell, to pursue that. That
    is not a hollow statement, but is something that they are
    actually trying to achieve. We will see if they realize it. We
    need a cost-imposing strategy. We need to demonstrate to them
    that their investments will be thwarted, that they need a new
    approach if they are going to challenge us or our allies, and
    that is the essence of the competition.
        But make no mistake, I am not trying to make them 10 feet
    tall, but they are in pursuit of becoming 10 feet tall, and we
    need to compete with them along the way.
        Mr. Johnson. And they are not exactly engaging in full
    transparency, so we don't know what is going on behind the
    closed doors and everything they are planning and plotting and
    spending. Despite its flaws, one of the areas in the budget
    request that I was pleased to see was the full funding of
    nuclear modernization efforts, and this has come up this
    morning. Because of some of the shortcomings elsewhere in the
    budget request, the inadequate top line, reductions in aircraft
    procurement, et cetera, does that give the nuclear
    modernization elements an even greater level of importance.
        Mr. Zakheim. Well, I think nuclear modernization has a
    heightened level of importance in this National Defense
    Strategy because as we try to shift investments to the future,
    as we recognize that we need to push platforms out of Europe or
    the Middle East into the Indo-Pacific, the way we assure and
    deter is through our nuclear weapons, full stop. So we need to
    modernize them because if they don't work, then we lose that
    deterrence. That is true. The administration does a great job
    in fiscal year 2022. I would encourage this committee to
    exercise a strict oversight of the Nuclear Posture Review
    because they may be going in a different direction, but those
    are facts not yet in evidence.
        Mr. Johnson. Very good.
        Mr. Chairman, I yield back.
        The Chairman. Thank you.
        Mr. Horsford is recognized.
        Mr. Horsford. Thank you, Mr. Chairman, and to our witnesses
    for your testimony.
        Ms. Smithberger, the fiscal year 2022 budget request fully
    funds all aspects of the Department's planned nuclear
    recapitalization efforts, including the Ground Based Strategic
    Deterrent. This funding is included even though the Nuclear
    Posture Review is ongoing. The current intercontinental
    ballistic system, the Minuteman III, was designed to operate
    for 10 years, but it is now over 50 years old. While multiple
    life extensions have kept the system safe and reliable, I
    understand the Air Force determined another such life extension
    would cost more than GBSD and would not meet system
    requirements. Yet, some continue to suggest another life
    extension.
        In your testimony, you argue that nuclear weapons spending
    is growing at an unsustainable rate. The spike in spending you
    highlight is largely due to the GBSD acquisition and other
    recapitalization efforts. I firmly believe that any delay in
    recapitalization to include another life extension of Minuteman
    III will lead to exponentially higher costs in the mid to long
    term and sacrifice critical strategic deterrent capabilities
    that cannot be brought back. Strategic deterrence underpins
    every Department of Defense mission and investment and is the
    most critical component of our national security. Ms.
    Smithberger, your testimony highlights concerns over the near-
    term spending increases caused by nuclear recapitalization but
    fails to consider the long-term impacts of delaying these
    investments.
        So putting the unthinkable risks of a failure of strategic
    deterrence aside, how do you consider the future financial
    risks of delayed recapitalization in your analysis of the 2022
    budget?
        Ms. Smithberger. I think these are going to be significant
    investments no matter what we make and that we have
    overwhelming nuclear superiority. I think it is important that
    we continue to maintain our deterrence, but I think as we look
    at the very--all the different kinds of national security
    threats that we are trying to address, we are not going to be
    able to pay for everything. And I think it is important for
    everything to be on the table to make sure that we are
    considering where there might be opportunities for cost savings
    so that we can be the most effective force that we can be.
        Mr. Horsford. Thank you.
        And, Ms. Smithberger, I do agree with your assessment of
    the risks of cuts to so-called legacy programs to fund unproven
    next-generation capabilities. You testified that in too many
    instances, the Department proposes getting rid of proven and
    usually cheaper systems in favor of immature technology and
    more costly systems. You write that these programs are nearly
    always over cost and behind schedule.
        For this reason, I am concerned by the Air Force's
    continued effort to end procurement of the MQ-9 Reaper. While I
    support the efforts the services may be making towards a next-
    generation ISR capability, we cannot overlook the incredible
    value the MQ-9 platform provides to commanders today. The MQ-9
    is the most effective--cost-effective platform the Air Force
    owns. It flies 11 percent of the total Air Force flying hours
    at only 2.6 percent of the Air Force's total flying hour cost
    and is needed more now than ever as we complete our withdrawal
    from Afghanistan.
        So, Ms. Smithberger, can you expand on your concerns
    related to an overreliance on new and immature systems when
    compared to proven and cost-effective platforms, such as the
    MQ-9 Reaper?
        Ms. Smithberger. Absolutely. So, as Mr. Zakheim was
    referring to, I think in too many instances, what we have being
    promised is a PowerPoint and that we don't have a proven
    capability to replace something. So I think for any proposal
    that comes before this body, it is important to look at whether
    we are willing to take the risk that is being proposed.
        Mr. Horsford. Thank you. Short, succinct, and to the point.
    I appreciate that, and I yield back.
        Thank you, Mr. Chairman.
        The Chairman. Thank you.
        Mr. Carl.
        Mr. Carl. Thank you, Mr. Chairman, Ranking Member Rogers.
        I would like to thank our witnesses, obviously, for joining
    us today and talking about this topic that is very important to
    all of us.
        By 2030, the Chinese Navy is expected to have about 425
    ships with the U.S. Navy at 350 ships. It is clear the Chinese
    will continue to invest large numbers, large amounts of money
    into the navy during this coming decade. Unfortunately, the
    Biden administration has submitted a budget request that does
    not adequately meet this threat. The Biden administration even
    fails to increase at a 3 to 5 percent above inflation as
    recommended by the bipartisan National Defense Strategy
    Commission.
        Mr. Zakheim, did I pronounce that correctly?
        Mr. Zakheim. It is Zakheim, sir, but I will respond to
    anything.
        Mr. Carl. Zakheim. Okay. Thank you. I appreciate the
    correction.
        In your written testimony, you highlighted your concern
    with the low top line numbers from the Biden administration and
    the impact this has on our Navy. Given the Chinese Navy is
    expected to be at 425 ships by the end of the decade, can you
    expand on what this budget request does to our readiness now
    and into the future?
        Mr. Zakheim. Thank you for that question, Congressman. And
    I think particularly when it comes to the Navy, quantity has a
    quality all of its own, and the number of ships matter. I think
    in this budget, the seven cruisers that this proposal would
    take out of the fleet is one that I think this committee needs
    to look at. And if you have the 3 to 5 percent real growth, you
    can mitigate and keep that in the Navy.
        With respect to what the Chinese are doing, you know, let
    them build ships. Just invest in our capabilities that my
    colleagues have spoken about to take those out. Let's make that
    part of our cost-imposing strategy, and I think that needs to
    be the mindset. We need to see what they are doing, learn from
    it, and then make those investments so we kind of turn this
    thing on them where we have some cost-imposing strategies. So
    yes, I think in the near-term window, this Davidson window that
    we have been discussing, we need to make sure that we keep
    those ships in the fleet and then also make those investments
    where we make the Chinese understand that they are wasting
    their money on their shipbuilding efforts.
        Mr. Carl. Thank you very much.
        Mr. Chairman, I will turn it back to you. Thank you.
        The Chairman. Mr. Waltz is recognized.
        Mr. Waltz. Thank you, Mr. Chairman.
        I wanted to talk about the Army for just a moment, and,
    again, thank you to all of the witnesses. You know, I think we
    have talked a lot about deterrence today, and I completely
    agree having a ship offshore, having long-range fires has a
    deterrent effect. I don't think we can lose sight of the fact
    that having an American soldier wake up in a foxhole next to
    its ally also has a very strong deterrent effect.
        But, Mr. Zakheim, or really, any of the witnesses, I am
    interested in what we can do, though, in terms of cost savings
    going forward. I am particularly interested in what we can do
    with the Guard. You look at particularly Army Guard formations,
    but both Army and Air Guard, you're looking at 30 to 40 percent
    of the cost, yet you do get that strategic deterrent value and
    capability. You also get a domestic capability that the Active
    Duty Army doesn't have. But you have the ability, particularly
    through the State Partnership Program, to also deploy and have
    that partnering and allied effect. So I think you get a lot of
    bang for the buck there. Do you see perhaps force structure
    transferring to the Guard as a way in a resource constrained
    environment that we can do a lot of those things that we still
    need to do, everything from hurricanes and wildfires to fight
    our land wars at less of a cost?
        Mr. Zakheim. Thank you, Congressman. It is great to see
    you.
        I think in terms of the Guard capability, we should make
    sure we are giving them assets that are valuable, both in how
    they would deploy overseas but also what they can use at home.
    To the extent that the Army can get that balance right, I think
    that is a wise investment.
        The State Partnership Program, which you highlighted, is
    absolutely critical as a form of assurance and, frankly,
    coordination with our allies and partners. I think that is a
    great initiative. And I think, overall, forward presence is
    something that is really critical for deterrence that we
    discussed today, and the American people, quite frankly,
    support this. When we have asked in our Reagan National Defense
    Survey, which I know you are familiar with, would you support
    having forces overseas to support kind of peace, they
    overwhelmingly stand behind that. And I think some of what you
    are describing here would be actions to support that objective.
        Mr. Waltz. So I completely agree. I could just foresee a
    construct in the future, again, in a budget constrained
    environment where our Active forces are primarily forward. But
    the strategic aspect, which is going to take weeks, if not
    months, to get on the civilian Reserve fleet that Mr. Wittman
    rightly pointed out is very lacking, you know. It is that kind
    of domestic force rather than having Active Duty armored
    divisions sitting in CONUS [continental United States]. I think
    we could get maybe perhaps a different mix.
        I just want to switch to the Navy. Frankly, I think a lot
    of the discussions are somewhat nibbling around the margins of
    LCS or retiring cruisers. The bottom line is we don't have the
    industrial base to compete. The Chinese are approaching an
    estimated 1,000 shipyards, yet we have around 24, many of which
    are a century old and are decrepit and falling apart. Yet there
    is not a single shipyard requested in President Biden's
    infrastructure package. Anywhere between $600 billion and $3.5
    trillion that we are debating here on the Hill, and none of it
    addresses shipyards, when we are a maritime nation, and with
    the Chinese building ships at a rate of 5 to 1, they are
    cranking out one every 6 weeks. Does anyone disagree? Speak up
    if you disagree that shipyards are considered infrastructure
    and should be in this infrastructure package.
        Ms. Smithberger. I think, when we are looking at the
    private shipyards, that we need to look at some of the moral
    hazard that occurs by giving handouts to some of these
    companies that have been underinvesting in their own
    infrastructure in this manner. And a lot of these--several of
    these companies have been engaging in stock buybacks at the
    kinds of levels that we are proposing to give to them to make
    these kinds of repairs. So I think we have to make sure that,
    if we are including shipyard funding, I think it is very hard
    to make a compelling case to the American people that the
    Department of Defense does not already have adequate resources
    to cover those needs.
        Mr. Zakheim. I just quickly disagree. I think the
    opportunity with the infrastructure bill is to incentivize not
    only the building and manufacturing of semiconductors in this
    country but also what you are talking about, shipbuilding, and
    it could be put in there.
        Mr. Waltz. Thank you Mr. Chairman. And I yield you back 5
    seconds.
        The Chairman. Okay. Thank you.
        We are about wrapped up. Mr. Fallon is going to be the last
    person to ask questions, and then we will adjourn.
        Mr. Fallon, you are recognized.
        Mr. Fallon. Mr. Chairman, thank you very much, and thank
    you to all the witnesses. It has been fascinating. I am just--I
    am new, a freshman, trying to learn and absorb and be a sponge.
    And a lot of very good questions have already been asked, and I
    don't want to rehash any of those.
        So Secretary Austin, he testified here in March, and he
    said that the number one threat that we face is--the U.S. that
    is, that it is China. And then they announced that they are
    going to increase their defense budget approximately 7 percent,
    I believe.
        And so the question for the panel, anybody who wants to
    jump in, is what kind of justification do the Chinese have?
    Granted, they have a lot of international frontiers, but what
    significant threat do they face from any of their neighbors in
    that theater to justify a 7 percent increase, or is it simply
    obviously because they are trying to pass us in the world
    stage? If anyone just wanted to--I guess I will go with Dr.
    Pettyjohn first.
        Dr. Pettyjohn. I think that they are clearly trying to
    supplant the United States in the Indo-Pacific and to establish
    themselves as the dominant power in the region. They don't have
    to justify their defense expenditures to a domestic audience
    like we do, given the different government that they have.
        Mr. Zakheim. I am just going to add that this is the number
    one--well, will be the largest economy in the world. To sustain
    that economy, they have to reach out beyond their region and
    extend globally. Energy interest is an example of why China is
    interested in the Middle East. So it is almost a natural course
    that they would seek to have this type of military and make
    this kind of investment.
        Ms. Smithberger. And I would just add that China has
    significant internal problems as well, and whenever you have
    significant internal problems, it is very helpful to focus
    outward----
        Mr. Fallon [continuing]. Yeah. We have seen that in the
    past.
        One of the things that I find concerning just with the
    budget is from a--just a real dollar perspective, or not real
    dollar, rather, just raw dollars, it is a 1.7 percent increase.
    But inflation, as we have talked about repeatedly in Congress,
    if it is just 3 percent this year, which it very well may be
    much higher than that, that would be--just to match inflation,
    it would be $22 billion. And if it was a 5 percent increase,
    inflation--inflationary increase, it would be $37 billion just
    to have a flat budget. So, you know, these seem to be real,
    real cuts.
        And one question I had for Mr. Zakheim is--pivoting a
    little bit is your assessment of the European Deterrence
    Initiative. We have been focusing a lot on the Pacific theater,
    and we have new allies in NATO. And I loved your comment about
    how certain allies have the will but not the capabilities, and
    others have the capabilities and not the will. And I thought in
    my head, not, you know, necessarily any order, Poland and
    Germany. And you mentioned Poland, so if you just want to touch
    on that.
        Mr. Zakheim. Yeah. I mean, the European Deterrence
    Initiative which, again, I believe this committee, along with
    elements in the European Command really led on, was critical in
    deterring Russia. And it was a responsible thing for the U.S.
    to do after Russia's invasions in Georgia and Ukraine, and I
    think it needs to be sustained but in a fashion that is
    proportionate to what needs to happen relative to the Indo-
    Pacific. And I think it is what we have been talking about
    today is the same theme, different variation, distributing the
    force, presence, exercises, and making sure that these are
    resilient.
        If I can, I will just add on to your point on inflation. I
    think something that this committee I am sure intuits but may
    want focus on is that inflationary forces are more dramatic in
    the defense industrial base than they are in the macro U.S.
    economy. In other words, whatever is happening in terms of
    inflation, it is going to be more acute for the Department of
    Defense, and they will get less bang for the buck.
        Mr. Fallon. Mr. Chairman, I yield back. Thank you.
        The Chairman. Thank you very much.
        I really want to thank our witnesses for a very informative
    discussion. I appreciate it.
        And, Mr. Rogers, do you have anything for the good of the
    order.
        He does not, so we are good, and we are adjourned. Thank
    you again.
        [Whereupon, at 12:16 p.m., the committee was adjourned.]
    =======================================================================

                                A P P E N D I X

                                 July 20, 2021

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

                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                 July 20, 2021

    =======================================================================
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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

                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 July 20, 2021

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

                      QUESTIONS SUBMITTED BY MR. LANGEVIN

        Mr. Langevin. The Department is moving forward on a number of key
    concepts that will be vital for competing with a peer competitor,
    especially Joint All-Domain Command and Control and electromagnetic
    spectrum operations. Do you believe we are adequately funding these
    programs for great power competition?
        Dr. Pettyjohn. In general, I believe that the Department is
    investing a reasonable amount of money in Joint All-Domain Command and
    Control (JADC2) in the fiscal year 2022 budget, but it remains to be
    seen whether these investments are sustained over time and how the
    different components of JADC2 fit together. Moreover, it is important
    to remember that taking steps to strengthen conventional deterrence
    against China and Russia extend beyond JADC2 and there is room for the
    Department to do more in other areas.
        There are several factors that make it difficult to discern whether
    the Department is adequately funding JADC2. The first factor is the
    absence of the future-year defense program (FYDP). Trends in spending
    are critical, especially for key advanced technologies, such as
    artificial intelligence (AI), that require a sustained level of long-
    term investment. When looking at the fiscal year 2022 budget, we simply
    do not know if current levels will be reduced, maintained, or expanded
    into the future.
        Second, each military department is pursuing its own approach to
    JADC2 and these are not fully integrated conceptually, bureaucratically
    or technically. The Army has Project Convergence, the Navy and Marine
    Corps have Project Overmatch, and the Air and Space Forces have the
    Advanced Battle Management System (ABMS). While all these concepts aim
    to create a domain agnostic network of sensors and shooters and to
    improve and accelerate U.S. decision making with the assistance of
    machine learning (ML) and AI, it is not clear how these separate battle
    networks will be integrated.
        Third, each of the Department's variants of JADC2 is not a single
    program or even type of capability. Instead, JADC2 includes
    technologies that enhance interoperability between different weapons
    systems; the digital infrastructure or network that forms the
    communications backbone; efforts to enhance data compatibility; and
    applications and algorithms that fuse and process data and accelerate
    decision making. In fact, the only program of record is the Air Force's
    ABMS. In the President's FY22 budget, the Air Force asks for $204
    million for ABMS, which is $245.4 million dollars less than what the
    FY21 FYDP had planned. Yet this does not indicate a lack of interest or
    investment in ABMS, but instead reflects the Air Force's effort to lay
    out a clear plan with tangible and executable steps to show how this
    unusual capability, which is not a singular weapons platform, will be
    developed. This includes Capability Release 1, a pod for the KC-46
    tanker, that will allow F-35 and F-22 stealth fighter aircraft to
    communicate, which is currently not possible. Additionally, the Air
    Force plans to develop cloud-based architecture that utilizes AI/ML
    applications to build a common operating picture for NORTHCOM [U.S.
    Northern Command].
        Moreover, JADC2 extends beyond ABMS. The Air Force has dozens of
    other program lines that total more than $800 million devoted to other
    elements necessary for JADC2, including investments in decision and
    information sciences, joint cyber command and control, and datalinks,
    among others. Additionally, the Air Force request asks for $811 million
    to modernize AF information technology infrastructure--a foundational
    element for all future operations.
        Similarly, the Departments of the Navy and the Army are making
    investments in their own battle networks. The Navy reportedly has three
    classified program lines related to Project Overmatch, but two of its
    highest priority unfunded requests were related to JADC2. The Navy
    asked for $53.9 million to fast-track naval tactical grid and $87
    million to improve the resiliency of communications and precision,
    navigation, and timing for its combat logistics fleet. Even though the
    Army's overall budgets for research and development and procurement
    have decreased, it is spending $537 million on its tactical network and
    more than a $100 million for Project Convergence demonstrations. The
    Army also makes other investments in AI, satellite communications, and
    data management.
        Thus, when taken together it appears that the Department is
    investing a considerable amount in JADC2, but that the Navy requires
    additional resources to fund all of its desired programs in this area.
    Nevertheless, as my recent CNAS report, Risky Business: Future Strategy
    and Force Options for the Department of Defense, concludes, overall the
    services could make further cuts in areas less relevant for great power
    competition and invest this money into capabilities relevant for JADC2
    and a high-end war fight. It remains to be seen whether these JADC2
    investments will be continued in the future and how all of these
    different pieces will fit together to enable the services to seamlessly
    implement all-domain operations as a joint force.
        Mr. Langevin. The Department is moving forward on a number of key
    concepts that will be vital for competing with a peer competitor,
    especially Joint All-Domain Command and Control and electromagnetic
    spectrum operations. Do you believe we are adequately funding these
    programs for great power competition?
        Ms. Smithberger. The current funding levels indicate that this is
    something the Department of Defense is taking seriously. We have some
    concerns about the wisdom, feasibility, and reliability of connecting
    all of these systems together. For example, a 2018 Government
    Accountability Office review found several instances where engineers
    failed to reset passwords for commercial and open source technologies,
    making it easy for cyber test teams break in and control those systems.
    The Department of Defense's Defense Science Board Task Force on Cyber
    Deterrence also raised concerns about the proliferation of
    vulnerabilities as we increasingly connect our sensors into a single
    network. Each system we add to the network is a calculated risk.
        It is clear that our adversaries are focused on opportunities to
    disrupt our networks. Protecting those operations will require much
    more vigilance and hardening those networks, and becomes even more
    important the more they are connected together. Unfortunately, we have
    seen in too many cases that the defense industry is resisting and
    failing to adequately invest in hardening our cyber security. We are
    glad to see the Department is continuing to push industry in this arena
    but its success will be dependent on the backing they receive from
    Congress, including requiring the Department to fully test the networks
    and systems of contractors to ensure they meet security requirements
    and include cybersecurity as part of the basic design of future weapons
    programs. The services also must maintain the ability to operate
    effectively without Joint All Domain Command and Control. There will be
    times when the U.S. military is unable to control the electromagnetic
    spectrum. When that happens, the force that can still fight well
    without their information and communications networks will likely win.
        Mr. Langevin. The Department is moving forward on a number of key
    concepts that will be vital for competing with a peer competitor,
    especially Joint All Domain Command and Control and electromagnetic
    spectrum operations. Do you believe we are adequately funding these
    programs for great power competition?
        Mr. Zakheim. Congress and the current administration have both
    rightfully prioritized developing and modernizing electronic warfare
    and cyber systems that allow the U.S. military to maintain supremacy in
    these constantly evolving domains of competition. Congress has
    emphasized the increasing importance of Joint All Domain Command and
    Control (JADC2) and electromagnetic spectrum operations for great power
    competition through RDT&E funding increases. The question now, however,
    is less about whether they are adequately funded--it is whether they
    are adequately defined.
        While I applaud the quick development and approval of the
    Department's JADC2 strategy, many of the programs and concepts within
    the new communications system continue to be ill-defined, making
    sufficient appropriations to fund the strategy a more complicated task.
    For example, critical data fabric and software definitions, which would
    specify funding requirements, have yet to be constructed. This includes
    identifying management solutions and institutionalizing versatile
    software for cross-service use. For electromagnetic operations, DARPA's
    funding request has continued to grow, while Defense-wide spending
    remains the same, signaling increased research interest in the field.
    The implementation of the 2017 Electronic Warfare Executive Committee
    strategy was restrained by its own portfolio constraints, including the
    Chief Information Officer's inability to influence the individual
    service budgets or actions on electromagnetic developments and
    acquisitions. Both JADC2 and electromagnetic operations are critical to
    great power competition, especially against a rising China that is
    rapidly developing next-generation technologies and malware. It is
    critical, therefore, that DOD address the shortfalls in concept
    development and key definitions about roles and strategy to provide the
    basis for properly funding their continued operations and driving
    innovation at DOD.

                                      [all]