[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
U.S. DEPARTMENT OF DEFENSE'S
FISCAL YEAR 2023 BUDGET
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, D.C., APRIL 27, 2022
__________
Serial No. 117-10
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Printed for the use of the Committee on the Budget
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on the Internet:
www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
49-421 WASHINGTON : 2022
COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
HAKEEM S. JEFFRIES, New York JASON SMITH, Missouri,
BRIAN HIGGINS, New York Ranking Member
BRENDAN F. BOYLE, Pennsylvania, TRENT KELLY, Mississippi
Vice Chairman TOM McCLINTOCK, California
LLOYD DOGGETT, Texas GLENN GROTHMAN, Wisconsin
DAVID E. PRICE, North Carolina LLOYD SMUCKER, Pennsylvania
JANICE D. SCHAKOWSKY, Illinois CHRIS JACOBS, New York
DANIEL T. KILDEE, Michigan MICHAEL BURGESS, Texas
JOSEPH D. MORELLE, New York BUDDY CARTER, Georgia
STEVEN HORSFORD, Nevada BEN CLINE, Virginia
BARBARA LEE, California LAUREN BOEBERT, Colorado
JUDY CHU, California BYRON DONALDS, Florida
STACEY E. PLASKETT, Virgin Islands RANDY FEENSTRA, Iowa
JENNIFER WEXTON, Virginia BOB GOOD, Virginia
ROBERT C. ``BOBBY'' SCOTT, Virginia ASHLEY HINSON, Iowa
SHEILA JACKSON LEE, Texas JAY OBERNOLTE, California
JIM COOPER, Tennessee MIKE CAREY, Ohio
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
SETH MOULTON, Massachusetts
PRAMILA JAYAPAL, Washington
Professional Staff
Diana Meredith, Staff Director
Mark Roman, Minority Staff Director
CONTENTS
Page
Hearing held in Washington, D.C., April 27, 2022................. 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Prepared statement of.................................... 4
Hon. Jason Smith, Ranking Member, Committee on the Budget.... 6
Prepared statement of.................................... 8
Letter submitted for the record.......................... 29
Michael McCord, Under Secretary of Defense, U.S. Department
of Defense................................................. 11
Prepared statement of.................................... 14
Hon. Janice D. Schakowsky, Member, Committee on the Budget,
article submitted for the record........................... 37
Hon. Lauren Boebert, Member, Committee on the Budget, report
submitted for the record................................... 57
Letter submitted for the record.......................... 68
Questions and Responses for the record....................... 92
U.S. DEPARTMENT OF DEFENSE'S
FISCAL YEAR 2023 BUDGET
----------
WEDNESDAY, APRIL 27, 2022
House of Representatives
Committee on the Budget
Washington, DC.
The Committee met, pursuant to notice, at 10:30 a.m., in
Room 210, Cannon Building, Hon. John A. Yarmuth [Chairman of
the Committee] presiding.
Present: Representatives Yarmuth, Jeffries, Higgins, Boyle,
Doggett, Schakowsky, Horsford, Wexton, Scott, Jackson Lee,
Cooper, Sires, Moulton, Jayapal; Smith, Kelly, McClintock,
Grothman, Smucker, Jacobs, Burgess, Carter, Cline, Boebert,
Donalds, Feenstra, Good, and Obernolte.
Chairman Yarmuth. This hearing will come to order. Good
morning, and welcome to the Budget Committee's hearing on the
Department of Defense's Fiscal Year 2023 Budget. At the outset,
I ask unanimous consent that the Chair be authorized to declare
a recess at a time. Without objection, so ordered.
I will start by going over a few housekeeping matters. The
Committee is holding a hybrid hearing. Members may participate
remotely or in person. For individuals participating remotely,
the Chair or staff designated by the Chair may mute a
participant's microphone when the participant is not under
recognition for the purpose of eliminating inadvertent
background noise. If you are participating remotely and are
experiencing connectivity issues, please contact staff
immediately so those issues can be resolved.
Members participating in the hearing room or on the remote
platform are responsible for unmuting themselves when they seek
recognition. We are not permitted to unmute Members unless they
explicitly request assistance. If you are participating
remotely and I notice that you have not unmuted yourself, I
will ask if you would like staff to unmute you. If you indicate
approval by nodding, staff will unmute your microphone. They
will not unmute your microphone under any other conditions.
I would like to remind Members participating remotely in
this proceeding to keep your camera on at all times, even if
you are not under recognition by the Chair. Members may not
participate in more than one Committee proceeding
simultaneously. If you are on the remote platform and choose to
participate in a different proceeding, please turn your camera
off. Finally, we have established an email inbox for submitting
documents before and during Committee proceedings and we have
distributed that email address to everyone's staff.
Now, I will introduce our witness. This morning, we will be
hearing from the Honorable Michael J. McCord, Under Secretary
of Defense Comptroller and Chief Financial Officer at the U.S.
Department of Defense. Welcome, Under Secretary. I now yield
myself five minutes for an opening statement.
Good morning, everyone. I want to welcome back Under
Secretary Michael McCord to our Committee. Thank you for
joining us today for this hearing on the Department of Defense
Fiscal Year 2023 budget. As the first person to be comptroller
at DoD twice, and with your decades-long career of service
including time on the staff of the House Budget Committee, your
insights are particularly helpful to the work of the Committee.
I would like to begin this hearing by acknowledging our
deep and enduring gratitude to those who serve our nation in
uniform. We understand that Congress has a constitutional and
moral responsibility to ensure that our servicemembers are
supported, on and off the battlefield and that their families
are cared for every step of the way.
That is why the Biden budget provides members of our
military with the largest pay increase in a generation. It
funds a newly authorized basic needs allowance. It invests
$12.2 billion to build more housing and medical facilities for
military families, and it prioritizes programs that directly
support military spouses, children, and other dependents. And
it dedicates nearly $500 million to fully fund and implement
vital programs to prevent and respond to sexual assault in the
military.
The Biden budget also ensures that the Department of
Defense has the resources necessary to uphold our national
security and protect our people at home and abroad. It does not
aimlessly increase spending for its own sake without
accountability or strategic rationale. It provides the smart
investments that will make our country safer and meet the
requests of the experts in charge.
This budget is also forward-looking. It provides more than
$130 billion for research and development to harness next-
generation defense capabilities, the largest request on record.
It invests in new technologies and includes $3.1 billion in
funding to combat the destabilizing effects of the climate
crisis and ensure our military installations are resilient
against climate disasters. This is critical to our national
defense. In a 2019 report, the Pentagon found that 46 of our
nation's 79 high-priority military installations are vulnerable
to climate change-related flooding, drought, desertification,
and wildfires.
President Biden also recognizes that ensuring America's
national security extends far beyond our efforts to build
weapons and military might. It is also about leveraging our
power through diplomacy and deterrence. While these investments
are not directly part of DoD's budget, they are a crucial part
of the President's overall National Defense Strategy, and
rightly so.
As General James Mattis said in response to former
President Trump's budget that slashed funding for the State
Department, ``If you don't fund the State Department fully,
then I need to buy more ammunition ultimately.'' He was
President Trump's Secretary of Defense when he said that. And I
would add that we don't just save money by investing in
diplomacy, we save lives by keeping members of our armed forces
out of harm's way.
This is a whole-of-government approach to national
security. It is a budget that increases funding for the State
Department and includes vital investments to strengthen NATO
and support our European allies in the face of Russian
aggression, to advance cybersecurity, and to maintain strong
and credible deterrents.
On all counts, President Biden's budget reflects the much-
needed return of U.S. global leadership, a commitment not only
to our democratic allies, but the democratic values our nation
was founded upon, and the assurance that no dictator will have
a foothold in this White House.
Finally, let me stress again that this budget meets the
needs articulated by the experts in charge of our national
defense. If your argument is that we should fund the military
at a level higher than Pentagon leaders say they need, then you
have the burden of making the case that the world's most
renowned defense experts are inept or intentionally
undercutting our military. I don't think anyone here today can
come close to making that point.
To close, I will quote Defense Secretary Austin. He said,
``We need resources matched to strategy, strategy matched to
policy, and policy matched to the will of the American people.
This budget gives us the resources we need to deliver on that
promise.''
Under Secretary McCord, I look forward to hearing how the
budget accomplishes this. I thank you again for your testimony
and for appearing before our Committee today.
Now, I recognize the Ranking Member, Mr. Smith, for five
minutes, for his opening statement.
[The prepared statement of Chairman Yarmuth follows:]
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Mr. Smith. Thank you, Mr. Chairman. Welcome Under Secretary
McCord. Thank you for being here today. The last time you were
here, America was facing a number of crises at the border, at
the checkout line, at the gas pump, and Republicans warned that
the agenda President Biden was pursuing would only make these
crises worse. Sadly, it turns out that we were right.
Prices have spiked to the highest level in 40 years, 10.4
percent of an increase since Joe Biden took the oath of office.
The cost of gas is through the roof--increase of 88.9 percent
since Joe Biden took the oath of office. We have seen 2.9
million encounters at the southern border since Biden took
office.
These crises did not happen overnight or when Putin invaded
Ukraine, as the White House is fond of arguing. They are the
direct result of the policies being pursued by this
Administration. This year's budget from President Biden
promotes the same failed policies and the defense budget is not
immune from the Administration's misplaced priorities. At a
time when inflation is 8.5 percent, 10.4 percent since Joe
Biden took the oath of office, robbing the wallets of American
families and eroding the purchasing power of federal agencies.
It is critical that tax dollars go to their best possible
use. But the President's defense budget does not do that. For
example, the defense budget dedicates $3.1 billion to climate
projects. Europe is experiencing the largest land invasion
since World War II. President Biden executed a horrific
withdrawal from Afghanistan that cost Americans' lives,
including a Missourian, and emboldened our enemies.
China has an aggressive eye focused on Taiwan. Iran
continues its march toward a nuclear weapon--but the President
wants to spend finite taxpayer resources for butterflies and
snakes. The request for Iron Dome funding is the bare minimum
and 92 percent lower than what Congress just agreed to spend to
support our ally--Israel. The only mention of Iron Dome in the
budget is buried in an appendix. Meanwhile, the President wants
to spend $34 million to address ``extremism'' in the military.
If we are going to talk about extremism, let's talk about the
42 individuals on the terror watch list that have been
apprehended at our southern border since President Biden took
office.
With the President set to end Title 42 border policy and
likely it will double to 18,000 the number of illegal
immigrants trying to cross the border every day, I hope our
military leaders are talking to the President about how this is
not just an immigration problem--it is a national security
crisis.
We know DHS will need to continue calling DoD for help.
That is going to impact the military's bottom line while at the
same time the President in his budget, is telling our military
to be sure it funds implementation of a DoD report on
``equity.'' These are funds that will not be used to arm and
protect our men and women in uniform. Given these
circumstances, we must have as much transparency on the part of
DoD and the Administration about where funds are going and how
they are being spent. We need accounting of resources like
those left behind in Afghanistan that are now arming the
Taliban. We need the Biden Administration to maintain the
commitment we saw under President Trump to have the Defense
Department conduct an audit so that Congress and the American
people know how and where tax dollars are being spent so we can
ensure resources are getting to the places they are needed the
most.
The national security threats at our border and around the
world, the highest spike in prices in 40 years, skyrocketing
energy costs--President Biden may see these as an inconvenient
political problem, but American families, they see them as a
crisis. I fear our enemies will see them as weakness. We need a
budget that takes these problems seriously. I yield back.
[The prepared statement of Jason Smith follows:]
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Chairman Yarmuth. I thank the Ranking Member for his
opening remarks. In the interest of time, I ask that any other
Members who wish to make a statement submit their written
statements for the record to the email inbox we established for
receiving documents before and during committee proceedings.
Once again, we have distributed that email address to the
staffs. I will hold the record open until the end of the day to
accommodate those Members who may not yet have prepared written
statements.
Once again, I want to thank Under Secretary McCord for
being here this morning. The Committee has received your
written statement and it will be made part of the formal
hearing record. You will have five minutes to give your oral
remarks and you may begin when you are ready.
STATEMENT OF MICHAEL MCCORD, UNDER SECRETARY OF DEFENSE, U.S.
DEPARTMENT OF DEFENSE
Mr. McCord. Thank you, Chairman Yarmuth, Ranking Member
Smith, and distinguished Members of the Committee. Thank you
for this opportunity to testify on the President's Fiscal Year
2023 budget request for the Department of Defense. First, Mr.
Chairman, I want to thank you for your service to the people of
Kentucky, and the House, and to our country, and wish you all
the best as you prepare to retire at the end of this Congress.
It is a pleasure to be here nearly 20 years since I served
on the staff of this Committee in a very luxurious cubicle in
the basement of this building, alongside your staff director
and the three others who remain on the Committee staff today
from that time. I appreciate the key role this Committee plays
in addressing our nation's priorities.
Last month, President Biden released his Fiscal Year 2023
budget request, as you know, which includes $773 billion in
discretionary funding for the Department of Defense, which is a
4 percent increase over the Fiscal Year 2022 enacted amount and
an 8 percent increase over what we requested last year. The
represents the largest budget request ever in nominal terms in
the history of the Department. Our request for the entire
national defense function for Fiscal Year 2023 totals $813.4
billion in discretionary funding and $827 billion for the
function when mandatory spending is included.
Given the size and scope of our department with 3 million
employees, $3 trillion in assets, and worldwide missions, it is
hard to summarize our goals and programs and operations
briefly, but I want to highlight a few key items from our
budget. Our budget was submitted to Congress alongside our new
National Defense Strategy, which was designed to fill Secretary
Austin's direction to match resources to strategy and strategy
to policy. In both the strategy and the budget, we prioritize
China as our long-term pacing challenge, but we recognize
Russia as an acute and dangerous threat to our interests as
well.
The budget advances our goal through three primary
channels, which you may have heard the Secretary describe,
integrated deterrence, campaigning, and actions to build
enduring advantages. These three approaches are the heart of
the strategy and the organizing framework for our budget.
First, integrated deterrence entails developing and
combining the strengths that we have for maximum effect by
working across different war fighting domains, different
geographic regions, different spectrums of conflict, with our
other agencies, other instruments of national power, and our
network of allies and partners.
Campaigning is something that is more done by combatant
commanders. It means well-planned, well-sequenced activities
and initiatives around the world that are meant to advance our
priorities and gain us advantage over our competitors. For
example, most notably, there is a Pacific deterrence initiative
and a European deterrence initiative that I think are well-
known to members. Those are probably the two best examples of
that.
The third axis of our strategy is to build enduring
advantages. And this is investments in policies that make our
institutions stronger and capable for the long haul. So, this
is both our own people, primarily our own people, but also our
industrial base partners to make them more agile and resilient.
Chairman, you mentioned some of the things. It is focused on
our own people, the basic needs allowance, which we are rolling
out on based on the NDAA, and also, the 4.6 percent pay raise
for military and civilians, and implementation of the $15
minimum wage for our federal employees and federal contractors
contained in the President's executive order.
In the budget in our programs, our focus wasn't on
enhancing our capabilities in ways that would make the most
difference, first and foremost, against China, but also against
Russia. While China's our largest challenger across the
military, diplomatic, and economic dimensions, I want to be
clear that many of the high priority investments in this budget
do not fall neatly into a China-only box or a Russia-only box.
Virtually all of our most important investments help us on both
fronts, starting with the modernization of our nuclear triad
and also our investments in more distributed and resilient
space architecture that recognizes this space is no longer a
sanctuary to operate in.
Likewise, our investments in cyber capability and the
quality of our service members, in submarines, in our
industrial base, are all examples of capabilities we need to
build to keep strong for all the challenges we face. And that
is the logic of the idea of building and maintaining enduring
advantages. Let me give one particular example that we have $3
billion in this budget for microelectronics both in terms of
lifetime buy procurement of chips that exist today and in
research. This funding is meant to be complementary to the
CHIPS Act, which we hope this Congress will pass soon.
I also want to highlight in this budget, some of which you
touched on, Chairman, to implement both the recommendations of
our own independent review, Commission on Countering Sexual
Assault, and the landmark changes in military justice in this
area enacted in last year's Defense Authorization bill. Due to
the lengthy CR, we were not able to move out as quickly as we
wanted to last year because it was a new start activity. But we
are moving to accelerate and catch up in Fiscal Year 2023 in
this budget on this issue.
Finally, I just want to highlight, there is $1 billion in
this budget to respond to the fuel spill at our Red Hill
facility in Hawaii. And that is a strong sign of this
Administration's commitment to do the right thing both by our
own people in Hawaii and our neighbors in Honolulu. As
Secretary Austin announced last month, we plan to shut this
facility down and disburse our fuel operations in the region
going forward.
Let me also say a word about inflation. When we saw prices
changing last year, we took all the information that we could
gather up to the time we finished the budget late in the
calendar year and built that into our Fiscal Year 2023 pricing.
We worked with OMB to add about $20 billion a year to this
program from 2023 through 2027, to reflect higher inflation for
goods and services and the compensation--increased compensation
cost for our own service members.
In terms of a general inflation rate, I know a lot of
people focus on this consumer price index. That is not what we
use at DoD. We use the chain-weighted price index for the GDP
deflater, which is required by law, first of all, but also more
reflective of what we buy. We also use a number of specific
price indices for fuel, for housing costs, for our healthcare.
As you know, prices have continued to evolve since we finalized
our budget. We recognize the impact of global economic
conditions on our ability to deliver the capabilities in this
budget. And we are prepared to work with Congress to find the
best solutions to address these challenges as we move forward
toward the congressional oversight of this budget.
To conclude, Mr. Chairman, the people of our department are
working hard every day to protect and advance our security and
advance the security of our allies and partners. We are doing
everything we can to assist the people of Ukraine in their
struggle against Russian aggression, which we could not do
without your strong support in Congress. I am ready to discuss
that issue further during our session today.
Along the lines of the whole-of-government approach that
you mentioned, our department is serving as--is ready to serve
as an important instrument of national power whenever called
on, and sometimes in ways that are not particularly visible to
the American people. For example, we played an important
support role in the effort to control the COVID-19 pandemic
using our contracting and logistics capabilities to award over
$30 billion of contracts for vaccines and delivered 297 million
syringes to put shots in arms on behalf of HHS. Likewise,
working with HHS and AID, we have awarded $7 billion in
contracts to procure a billion doses of vaccine for global
distribution. So, this is not something we are doing with our
defense budget but doing with our capabilities to help out our
interagency partners.
Our budget is grounded in our strategy and our primary
focus is on making--increasing our capability to make our force
better, not to make it a larger force. Given the security
challenges we face, I urge the Committee to fully support the
President's budget request for national defense. Thank you. And
I look forward to your questions about this budget.
[The prepared statement of Michael McCord follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. Thank you very much for your statement. I
figured I would give you the liberty of a few--a couple more
minutes since we are talking about an awful lot of money.
We will now begin our question-and-answer session. As a
reminder, Members can submit written questions to be answered
later in writing. Those questions and responses will be made
part of the formal hearing record. Any Members who wish to
submit questions for the record, may do so by sending them
electronically to the email inbox we have established within
seven days of the hearing.
As is my habit, I will defer my questioning to the end. So,
I now recognize the gentleman from New York, Mr. Higgins, for
five minutes.
Mr. Higgins. Thank you, Mr. Chairman. And thank you
Secretary McCord for being here today. I just want to focus on
the issue of America and the rest of the world's addiction to
Russian oil and refined petroleum products. The world gives
Vladimir Putin $1 billion every single day for the gas and oil
that Russia provides to European Union countries, to the United
States, and to Germany. Our addiction to oil has weaponized the
war in Ukraine and to take advantage of the fact that the
United States is not energy independent. In fact, according to
the Energy Information Agency last year, the United States
imported 672,000 barrels every single day or 22 million barrels
a month of Russian crude oil and refined petroleum products.
You know, we just spent $6 trillion in three Middle East
wars primarily because of our addiction to their oil. Despite
what we say, we are not energy independent. Today in the world,
there are 211 lithium-ion battery factories. Batteries make up
30 to 40 percent of the entire cost of an electric vehicle. Two
hundred 11 lithium-ion batteries worldwide, 156 are in China,
22 are in Europe, and 12 are in the United States. Americans,
75 percent say they want an electric vehicle, 50 percent are
reluctant to pursue purchase of an electric vehicle because of
lack of confidence about charging infrastructure. So, how does
the Department of Defense assess the importance of developing
electric vehicles to become energy independent and to combat
climate change and to our national defense strategy?
Mr. McCord. Excuse me, thank you. Probably the primary area
we feel like we can make a difference more quickly is on
vehicles and aircraft I should say. Aircraft are what consume
most of our energy in the Defense Department. And we do have
some programs that are going to take longer to deliver.
Something called a blended wing body, which is something that
will benefit both our longer-range aircraft like a tanker, but
also of interest on the commercial side. So, hopefully a win-
win for the Department and the private sector.
On the climate side, in the Department, one of the key
factors that we thought about here in this past year building
this budget was trying to, as you say, look at where the market
is moving so that we are not wedding ourselves to technology
that industry is not going to be producing in a few years. So,
that we are not in the situation we are in with something like
a submarine where we are buying some--we are the only one who
buys something. So, we are looking for wins that will keep us
in sync with the market, that will reduce our logistic tail. It
is something you look at today in Russia-Ukraine. The Russians
are suffering greatly by their poor logistics. This is
something--not to say that their capabilities are anywhere near
ours, but this is a situation you don't want to be in where you
are tied down by your logistics frame.
Mr. Higgins. Well, let me say this.
Mr. McCord. So, we are looking to making ourselves more
agile as well as market friendly with these investments.
Mr. Higgins. Without Russian oil and gas exports, the Putin
regime would collapse. It is estimated that 300,000 young
people under the age of 40 that are tech savvy, Russia produces
more software engineers than any country in the world and twice
that of the United States. The problem for Russia is it is an
economy that is shrinking. Its population is shrinking. And all
the people that are leaving are the young people that are
looking for a better way of life somewhere else.
So, when you look at, you know, 35 to 40 percent of the
entire economy is gas and oil, and we, and in Western Europe,
are addicted to that gas and oil, that empowers Putin. Then he
steals the money from the Russian people, gives it to oligarchs
that puts that money in rule of law nations. So, it is harder
to sanction those moneys because in rule of law nations, people
that have money have rights.
So, it just seems to me that this all comes down to the
very same conclusion. We are stuck in a bad situation, not
entirely, but primarily because we and the rest of the world
are addicted to oil and gas that Vladmir Putin drills into the
ground, doesn't diversify his economy. People don't have
rights. The Russian economy is tanking. And, you know, that
economy and that country is getting older and poorer because
all the young people are leaving. Now, maybe the silver lining
here is that they will come to the United States and use their
skills that they can't, you know, realize their full potential
in a country like Russia. So, thank you for being here.
Chairman Yarmuth. The gentleman's time has expired. I now
yield 10 minutes to the Ranking Member, Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman. Mr. McCord, President
Biden's defense budget spends $3.1 billion on climate programs.
It is five times more than the Administration requested last
year. How does the Administration justify funneling billions of
dollars to the Green New Deal agenda rather than protecting our
men and women in uniform?
Mr. McCord. Mr. Smith, we feel that these investments are
things primarily that we need to happen anyway. We are always
going to invest in our facilities. We are always going to
invest in some kind of vehicle, some kind of aircraft. So, we
are trying to have them be ones that are going to move us in
the right direction to reduce our dependence on logistic trains
when we are moving, on the tactical side--on the non-tactical
side, normal vehicles that are moved around for other things.
Again, we are trying to be where the market is so that we
are investing in vehicles and batteries that industry is going
to be producing. So, we don't feel that it is an either/or that
it is taking away from things that we would be otherwise
needed. We are always going to invest in vehicles and always
going to invest in our facilities.
Mr. Smith. You have a funding stream in here that implement
a DoD equity report. You also include $34 million for DoD to
address extremism within the ranks. DoD has identified fewer
than 100 instances of confirmed extremist activity in 2021. And
investigators have turned up no more than a handful of so-
called extremists within a military of 2.1 million people. Why
does the Administration believe our military is full of
extremists? Or is this just furthering a narrative of political
convenience?
Mr. McCord. Mr. Smith, I think the Secretary does not
believe, and I am sure he is convinced, that our military is
not full of extremists. He is concerned that, you know, one is
too many. And, therefore, that he feels strongly about the need
for both to address extremism and prevent it from being an
issue in our force, but also on the broader issue of diversity.
As he well knows, our military, as you know, is very diverse.
But when you get to the top, the leadership looks less diverse
and looks less like the force that it leads. And so, he is
concerned about both of these things as making the team as
strong as possible that it be a diverse team from the bottom to
the top. And that extremism, while rare, is very divisive and,
you know, corrosive of good order and discipline.
Mr. Smith. For $34 million, the military could purchase
over 100 tactical vehicles. It could purchase a couple of
additional Abrams Tanks, items far more beneficial to our
troops in the field, and to the success of their missions. What
exactly are you planning to spend this $34 million on?
Mr. McCord. Mr. Smith, I would have to get you the details
for the record down below line, at line level.
Mr. Smith. I definitely would love the details and so would
the American people. Well, it seems this idea that the military
has somehow been infiltrated by extremists, white nationalists,
and neo-Nazi sympathizers won't go away because just this week,
the Democrats, they had planned to move a bill calling for
investigations into the military and law enforcement for
terrorist activity, something I find deeply offensive.
When you testified last year, I asked you about the cost of
the President's decision to cancel the border wall. We have
estimates that the government is spending $6 million per day to
DoD contractors to essentially babysit $350 million in unused
border wall material. We sent you a letter as well to which we
have yet to hear back. Mr. Chairman, I ask unanimous consent to
submit the letter for the record.
Chairman Yarmuth. Without objection.
[Letter submitted for the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Smith. Thank you, Mr. Chairman. How much funding has
DoD spent on litigation and settling disputes related to
contracts for the border wall?
Mr. McCord. Mr. Smith, we can get you that for the record.
I don't believe that the total was very high because, of
course, on litigation we don't----
Mr. Smith. If you can get me that. We have been asking for
a year, I would appreciate that. And I love that you said that
here in Committee. How many border wall contracts has DoD
canceled since the start of the Biden Administration?
Mr. McCord. I don't have that number at my fingertips. I
don't believe the number of contracts was large. The dollar
amount may have been larger. But I don't think there were that
many different contracts.
Mr. Smith. Can you give us that information?
Mr. McCord. The number of contracts?
Mr. Smith. Hopefully, in a timely fashion too. And how much
more of DoD funds does the Administration intend to spend on
settling these contracts?
Mr. McCord. I am not aware that we have spent anything to
settle yet, but.
Mr. Smith. How much are you intending to set aside to
settle?
Mr. McCord. We don't have funds set aside for border wall
litigation in the Department budget.
Mr. Smith. So, you won't be able to settle any contracts if
you have no money set aside.
Mr. McCord. Well, we at the Department of Defense would
work in consort with the Department of Justice who is always
the lead for litigation for the Executive, so.
Mr. Smith. As soon as you have any settlements, I would
love to have that information and I think the Budget Committee
Members would love that as well.
We know DHS has had to request assistance from DoD to aide
in dealing with the border crisis. Does DoD support the
President's plan to lift the Title 42 border policy and double
the number of illegal immigrants, roughly 18,000 folks
attempting to enter the U.S. each day?
Mr. McCord. I don't know that the Department of Defense was
asked or has provided a view on that policy matter. I will say
on support to the border, that is something that has occurred
every year that I have been associated with the Department. So,
for at least a dozen years in a row, the Department of Homeland
Security asked us to provide security. I think many members are
familiar with, we are not directly in contact with illegal
immigrants. But we are on the intelligence side and the support
side that would be continuing this year. The Secretary has
already responded to Secretary Mayorkas' request that we be
prepared to provide support again this year.
Mr. Smith. Is DoD planning for the contingency that it will
have to fund some sort of effort to assist DHS with the border
crisis? And how much of its budget does DoD believe will need
to be allocated to assist DHS?
Mr. McCord. In recent years, the average has been about 1/
10 of a percent, about $5 or $600 million a year is the bill
that we have tended to run up each year in providing support to
the border wall.
Mr. Smith. OK.
Mr. McCord. I am sorry, support on the border, not the
border wall, excuse me.
Mr. Smith. Last year, I asked you about what areas of the
defense budget are impacted the most by increases in inflation.
You said, ``Probably the thing that we noticed the most rapidly
in the Defense Department is when fuel prices change because we
are such a large consumer of fuel.'' We have seen a dramatic
rise in fuel prices since President Biden took office, in fact,
88.9 percent increase. How have these higher fuel prices
affected DoD?
Mr. McCord. What we discussed last year is still the case
today, that fuel is our most volatile and easily recognizable
price increase when prices change. This year, in Fiscal Year
2022, we have already seen a fuel price increase in the first
couple months of $1.5 billion. That cost increase was made
known to the Appropriations Committees who provided funding for
that in the omnibus appropriations bill that was signed six
weeks ago.
Mr. Smith. Wow.
Mr. McCord. Since that time, largely due to the price spike
after the Russian invasion of Ukraine, we estimated a bill of
$1.8 billion for the rest of this fiscal year. So, over $3
billion across the course of this Fiscal Year in increased fuel
prices if the situation remains as we see it today.
Mr. Smith. Wow, $3 billion is a lot. And, you know, in
fact, in an exchange between Chairman Yarmuth and the OMB
Director Shalanda Young last month, they suggested that since
DoD can lock in prices in advance with contracts, DoD's budget
is not particularly impacted by inflationary increases or fuel
cost. Do you agree with the Chairman and Director Young? Or do
you disagree and see that as a real concern? Three billion
dollars seems like a real concern.
Mr. McCord. Mr. Smith, we do have contracts, but we are--
although we are a very large consumer of fuel, we are still at
the 1 percent level in terms of the fuel market.
Mr. Smith. But it is a concern.
Mr. McCord. We cannot move the markets ourselves. We don't
have an ability to buy long-term contracts that completely
insulate us from--we do buy by contract, but they only go so
far out.
Mr. Smith. So, the President's budget proposes the bare
minimum of funding for the Iron Dome defense system for our
ally Israel. The funding level is 92 percent less than what was
recently adopted in the bipartisan fashion by Congress. The
Administration also buries any mention of Iron Dome in an
appendix to the budget. Does DoD believe the bare minimum of
funding is enough to support Israel? And what sort of signal
does that send to our ally Israel and to Israel's enemies about
U.S.'s commitments when it is obvious Iran is charging full
speed ahead to a nuclear weapon?
Mr. McCord. I would say the Department has a pretty long
history of cooperative programs with Israel, including Arrow
and David's Sling. The Iron Dome funding last year, of course,
was a spike because of the rocket attacks and the request from
the Government of Israel for $1 billion was over and above the
normal support. So, we are continuing the normal support, but
we don't have anything. You know, that was a one-time $1
billion last year request from Israel based on this specific
incident.
Mr. Smith. Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Texas, Mr. Doggett, for five
minutes.
Mr. Doggett. Thank you so much. And thank you for your
service and your testimony. This budget request unifies the
Army's modernization strategy under the Army Futures Command,
which is based in Austin, Texas, with almost an additional $1
billion over the current budget and after a year that Army
Futures has described as a standout year. So, I am pleased to
see that provision though I remain concerned that a commanding
general, a permanent commanding general has not yet been
submitted to the Senate.
Particularly important in the cooperation with Army Futures
Command, which is so unique, is the involvement and engagement
with the private sector, with the University of Texas on trauma
care, which promises great benefits to the civilian sector, as
well, and the work with Austin Community College in opening the
doors on an Army software factory. So, I am very pleased to see
that that is happening.
I am a little amazed but perhaps those who view the events
that occurred here that culminated with the attempt to
overthrow the government on January the 6, dismissed the need
to focus on domestic extremism. I think all those who don't
believe in the fantasy that this was a legitimate political
discourse would have to applaud the portion of this budget that
is allocated to concerns about domestic extremism.
Likewise, I find the Ranking Member's criticism of the
portion of this budget allocated to addressing the existential
challenge of the climate crisis, I think they would be shocking
were they not repeated so frequently. The climate crisis is one
of our most serious national security challenges, as not only
this budget, but one former national security leader after
another, people like Admiral Dennis Blair have recognized that
we need to be dealing with this and that we are already facing
the dangers to our families of not addressing the climate
crisis. So, I think the real danger to our families, security
wise, is not from this budget, but from those who continue to
be climate deniers.
Finally, Mr. McCord, as far as Ukraine is concerned, our
most immediate issue right now, it is very encouraging to see
what happened with the Secretaries going to Kyiv this week. And
with the developments yesterday, the fact that this
Administration doesn't take a go it alone approach but is
uniting both NATO and countries outside of NATO to help, can
you outline for us basically what this budget is doing
concerning our ongoing commitment to give the Ukrainians
everything that they need to defend their freedom and prevent
advances beyond Ukraine by Russian atrocities in Moldova or
elsewhere.
Mr. McCord. Thank you, Mr. Doggett. Our budget, per se, for
2023 was built before--it was finalized before the invasion
occurred. So, there is not a direct straight line from
invasion, therefore, the budget does X, Y, Z. What I will say
is that for 2022, we had a supplemental attached to the omnibus
appropriation bill with strong support for both the state and
the DoD sides of support to Ukraine.
We have, as of the end of this week, we will have pretty
much used all of that, the draw down and Ukraine Security
Initiative funding. We anticipate sending an additional
supplemental to Congress this week to continue to message that
we are in this with the Ukrainians, we, and our partners, to
make sure that they have what they need to continue their fight
against Russian aggression.
So, for 2023, we are going to be reviewing this summer to
what extent our posture in Europe should change. And then there
are a lot of variables there. It may seem obvious that the
answer would be we are going to have more troops stationed in
Europe. But given that Russia may emerge weaker, there needs to
be some analysis before we jump to that conclusion. We will be
doing that analysis this summer. I think that we will be able
to, after the NATO Summit this summer, and after that analysis,
be able to come back to Congress and say what we think needs to
happen in Europe over for our own posture as the U.S. anchor of
NATO, in addition then to what is the nature of the conflict?
Is it over? Is it turning into a frozen conflict? Is it still
an active conflict? But I anticipate that we will be continuing
to stand with the Ukrainians. And if we need to ask for
additional funding in 2023, specifically to assist the
Ukrainians, I would anticipate that we will--the Secretary will
be back before Congress to talk about that.
But the budget itself continues. The underlying framework
of European Deterrence Initiative and we look forward to seeing
how we can strengthen that in consort with our allies at the
NATO Summit this summer.
Mr. Doggett. Thank you so much. Thank you, Mr. Chairman. I
yield back.
Chairman Yarmuth. The gentleman yields back. I now yield
five minutes to the gentleman from Mississippi, Mr. Kelly.
Mr. Kelly. Thank you, Mr. Chairman, and thank you, Mr.
McCord, for being here today. The Biden budget includes several
misplaced priorities, while it fails to fund programs critical
to national security. The budget does not fund American air
power. The Air Force would be forced to cut 150 aircraft,
including 21 A-10's, 33 F-22 Raptors, 50 T-1 Jayhawks, and 13
KC-135 refuelers. The Air Force would also cut 15 F-35 jets
compared to last year's budget request. The Army troop levels,
if enacted this budget, would result in the smallest army we
have had since World War II. Navy ships, the Navy ships we
would reduce our total fleet by 24 to 280. China, meanwhile, is
continuing to have more ships and we say we need 350 ships. Not
to mention, we have sent numerous supplies to Ukraine whether
that be Javelin missiles or launchers, whether that be Stingers
or Stinger armaments, S-300 artillery, small arms. Is anything
in this budget replacing or replenishing our ammunition that we
would need to fight tomorrow should the need arise? We cannot
fight with weapon systems or ammunition that is produced in the
future. We have to fight with what we have in stock on deck.
So, all that being said, my first question is there are a
lot of different numbers and percentages being thrown around
regarding the defense budget. The Administration is claiming
this request is an increase, a 9.8 percent increase for DoD, to
be exact. But just to be clear, this is compared to Fiscal Year
2021, not Fiscal Year 2022. Is that correct? Which is only a
2.2 percent increase.
Mr. McCord. You are correct. The 2-year increase was 10
percent. And the reason that we had mentioned that was that up
until the time we were finishing, it wasn't clear what was
going to happen with Fiscal Year 2022. So, it was a good way to
sort of anchor from 2021 to 2023 before we knew where 2022 was
going to come out.
Mr. Kelly. Now, refresh my memory. This is also based on a
2 percent inflation rate, which we know is greater than 8
percent. Is that correct, this budget?
Mr. McCord. Our budget is a real increase with the
inflation rate that is in our budget. Obviously, inflation
continues to evolve and the numbers will be known for good a
year and a half from now, when Fiscal Year 2023 inflation is a
fact as opposed to a projection.
Mr. Kelly. But it is an 8 percent inflation rate now over
last, not a 2 percent inflation rate.
Mr. McCord. Not in terms of the deflaters that we use.
Mr. Kelly. OK.
Mr. McCord. In terms of the CPI going higher.
Mr. Kelly. Let me get to the next point. But even at a 2.2
percent increase over last year's budget, even the 2 percent
number you gave last year means defense spending is flat this
year under the Biden budget.
Mr. McCord. Again, our budget is a real increase over both
the enacted and the requested last year. But the exact numbers
will be fluctuating if inflation continues to be dynamic as it
is right now.
Mr. Kelly. And it continues to have $3.1 billion on climate
programs. Is that correct?
Mr. McCord. That is the figure that we have in the budget.
That is correct.
Mr. Kelly. And I haven't seen any electric tanks or
electric vehicles operating in the Ukraine theatre, have you?
Mr. McCord. No. And tanks are not a primary level, you
know, lever that we are trying to electrify.
Mr. Kelly. Are the cuts to the Air Force, fighter
procurement, total Navy ships, Army troop levels, due to the
Administration's insistence that we can spend more money on
green policies? If not, can you tell me why we are cutting
ships, airplanes, and troops?
Mr. McCord. Yes, thank you for that question. And I realize
this is an issue that the committees are going to grapple with
as they go through their markups on the Arms Services Committee
where you sit and elsewhere in the appropriations process. The
primary rationale for some of these reductions is that we are
trying to divest ourselves of older, less capable systems that
we don't think are going to cut it in a high-end fight with
China if it comes to that. So, the ships, in particular, the
older LCS are just not that capable. The A-10's are good
airplanes----
Mr. Kelly. OK. Let me----
Mr. McCord [continuing]. but they are not survivable----
Mr. Kelly [continuing]. let me be real quick because I only
have time for one more question.
Mr. McCord. That is the rationale.
Mr. Kelly. And I am sorry. I want the rest of your answer,
but I need to ask this one more question. Of the unfunded
requirements list, the UFRs, that every year we want to fill,
those are things that we need that we don't have funds for. How
many of those could be funded with the $3.1 billion--or
trillion--billion in green climate stuff?
Mr. McCord. I believe the total of all the combatant,
commander, chief unfunded lists are much higher than $3
billion. So, yes, you could fund--you could use the $3 billion
in another way if the committee's----
Mr. Kelly. With that I yield back.
Chairman Yarmuth. The gentleman yields back and now I yield
five minutes to the gentlewoman from Illinois, Ms. Schakowsky.
Ms. Schakowsky. Thank you so much, Mr. Chairman. Mr.
McCord, as the Chief Financial Officer, I am sure that you are
aware of the recent report with that was--including findings
from the Department of Defense Inspector General that
highlighted what I would say is the broken and wasteful sole
source contracting and spare parts equipment system,
acquisition system. The Pentagon and the American taxpayers, I
think, are really getting ripped off by many of these
contracts. Some of those contractors have raised prices on
essential items to the tune of more than 3,000 percent.
In 2021, officials said that the U.S. Air Force paid a
price of $10,000 to replace toilet seat covers. Now, I go way
back to a time when we talked about $1,000 toilet seats and for
a military cargo plane. And I ask unanimous consent to put into
the record this article, The Air Force's $10,000 toilet cover.
Chairman Yarmuth. Without objection.
[Article submitted for the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Schakowsky. And it seems to me that many of these small
but vital parts and components are necessary, but because they
can often be labeled commercial items, that contractors can
refuse to provide the information and the cost information and
prevents us from actually getting the best price.
So, I know that the Department itself at one point in 2012,
said that there ought to be legislation that would reform the
contracting process and lower the prices. So, I wanted to know
what you would say about these excessive prices that the
contractors are charging.
Mr. McCord. Thank you for that question. I would say I am
not familiar with the Air Force particular contract that you
are citing, but I would say, in general, you are correct that
we have a different standard for commercial items than we do
for non-commercial items. And that is a judgment that the
Department and the committees have made.
Ms. Schakowsky. Well, does that mean that we have a harder
time doing negotiations for a lower price?
Mr. McCord. Well, for a commercial item, yes, you are not
supposed to be spending the same amount of time negotiating or
doing contract auditing on the backend. And that is a tradeoff
that everybody has to make a judgment on as to whether if every
commercial item went through the same scrutiny as a submarine,
then you would have, you know, you would need a lot more
contract auditors. You would have additional costs and time
spent. So, that is, again, a tradeoff that people, we have
collectively have made that commercial items should live by a
different standard. Because we often hear it is too hard to do
business with the Department for smaller firms to compete and
have a balance.
Ms. Schakowsky. Well, let me just say though, the
Department of Defense apparently found that if you just use--
that there is a way to produce the same thing for $300 instead
of $10,000, it seems it might be worth checking out, whether
some of these commercial things are worth it.
Mr. McCord. Agree.
Ms. Schakowsky. Well, so tell me, how are we going to do
something about addressing this problem of contractors who may
be gouging----
Mr. McCord. Well, that----
Ms. Schakowsky [continuing]. taxpayers and the Department
of Defense?
Mr. McCord. Well, in terms of entering into the contract
itself, of course, that would be the responsibility of
contracting officers on the acquisitions side of the
Department. I am not an acquisition official myself. But there
is another line of defense, if you will, in the contracting
officers themselves deciding what to purchase and how they go
about entering into those contracts. But for the contract audit
piece that does report to me, again, we do have a different
standard for commercial items.
Ms. Schakowsky. Aside from the issue of commercial items,
the report that was made said that we are paying up to 3,000
times more for items from contractors. As the chief financial
officer, don't you think this is something that we have to
really look into?
Mr. McCord. I would agree that their pricing should be
looked at. And as you know, of course, there have been pricing
increases due to the supply chain problems in the last year or
two, and I don't know if the data time period that your report
is focusing on if it is during that supply chain issue or
before. But, yes, I agree that contract pricing is important.
Ms. Schakowsky. OK. This was done by the DoD Inspector
General. So, this is not my report. This is the DoD Inspector
General. And I hope you will look into it because we shouldn't
be paying these exorbitant prices. And I yield back.
Chairman Yarmuth. The gentlewoman's time has expired. I now
yield five minutes to the gentleman from California, Mr.
McClintock.
Mr. McClintock. First of all, I couldn't agree more with
Ms. Schakowsky's line of questioning. I am not as interested in
whether we are spending more or less on the military this year
as I am concerned about whether we are getting more or less for
what we are spending. I happen to agree with Ronald Reagan that
defense is not a budget issue. You spend what you need to spend
in order to protect the country. But, you know, as was pointed
out in a recent article on The Hill by Ben Freeman and William
Hartung, they noted that the budget would give the Pentagon
more money by far than at any time during the heights of the
Korean War, Vietnam War, or cold war, even when accounting for
inflation.
Despite this historically high-level of Pentagon spending,
the military has been shrinking. They point out that since
1985, our Navy fleet shrunk from 571 to 298 ships. Our Air
Force has declined from 10,458 planes to 5,217. And our
military force has shrunk from 2.1 million active-duty
personnel to just under 1.4 million. They go on to write, while
some might argue that while quantities of military equipment
are down, quality has gone up. But it is precisely the most
advanced weapons programs that have proven to be the biggest
budget blunders.
China is spending, according to independent analyses, about
$250 billion a year on its military. That is less than 1/3 of
what the Administration proposes. And yet, China seems to be
massively outbuilding us in terms of ships, weapons systems,
their armed force is twice the size of ours. What are you doing
about this? As the millennials would say, WTF?
Mr. McCord. Mr. McClintock, this is the same subject I
think Mr. Kelly was touching on quality versus quantity. We do
judge the, for example, the Army, the Army decided that the
numbers were telling them that they could not recruit to a
bigger number right now given the historically low unemployment
and other factors out there. So, rather than chase, you know, a
bigger army----
Mr. McClintock. Well, I am asking why are we spending so
much more and getting so much less?
Mr. McCord. I don't believe we are getting less. We have
very capable systems that----
Mr. McClintock. Well, again, we----
Mr. McCord [continuing]. are better than----
Mr. McClintock [continuing]. we come, we----
Mr. McCord [continuing]. the Chinese systems.
Mr. McClintock. We are spending more and yet we got half
the ships and half the planes we had in 1985. This is
unacceptable.
Mr. McCord. But, again, the number--just counting people or
counting ships,----
Mr. McClintock. What would you say are the----
Mr. McCord [continuing]. I mean, we all are able----
Mr. McClintock [continuing]. biggest sources----
Mr. McCord [continuing]. to count them but----
Mr. McClintock. Let me just ask you this. What would you
say are the biggest sources of waste in the defense budget?
Mr. McCord. I think probably one of the biggest sources of
high cost in the defense budget are the things that we buy that
are so, you know, unique to the military that there is no
commercial----
Mr. McClintock. No, no.
Mr. McCord [continuing]. market for.
Mr. McClintock. What are we--where are the biggest sources
of waste in the Defense Department or have we even turned your
attention to that?
Mr. McCord. I think----
Mr. McClintock. Let me go. On Earth Day this year,
President Biden said--I love this quote--``One of the things I
found out as President of the United States, I get to spend a
lot of that money. We are going to start the process where
every vehicle in the United States military, every vehicle is
going to be climate friendly. Every vehicle, I mean it. We are
spending billions of dollars to do it.''
A few years ago, the GAO reported that green energy
mandates under Obama cost the Navy as much as $150 per gallon
for jet fuel. That is high even for California standards. In
2012, the Navy was forced to purchase 450,000 gallons of
biofuel for its so-called green fleet at the cost of $26.60 per
gallon, when conventional petroleum cost just $2.50 per gallon.
These mandates forced the Air Force to pay $59 per gallon for
11,000 gallons of biofuel in 2012, 10 times more than regular
jet fuel costs. Is this a wise use of our defense dollars?
Mr. McCord. Well, I would say, as I said to Mr. Smith a few
minutes ago, we have a big price increase for conventional fuel
right now. So, I think there is wisdom in us to----
Mr. McClintock. Paying more for non-conventional petroleum.
Mr. McCord. There is wisdom in us diversifying----
Mr. McClintock. That is not----
Mr. McCord [continuing]. our sources of fuel.
Mr. McClintock. With all due respect, Mr. McCord, that is
nuts
Mr. McCord. Diversifying our sources of fuel and energy.
Mr. McClintock. And that is zapping our ability to
adequately field a defense force. One more thing, in 2010,
Admiral Mike Mullen, Chairman of the Joint Chiefs, said that in
his professional military judgment, our greatest national
security threat was the national debt. That year, that debt was
$13 trillion. Today, it is over $30 trillion. Does the
Administration agree that is still our biggest national
security threat?
Mr. McCord. If you say the Administration, I can't speak to
what the President----
Mr. McClintock. The military establishment.
Mr. McCord [continuing]. how the President would rank these
threats. But the debt is a threat. Climate is a threat. China
is. We have a number of issues. We don't get to focus on just
one.
Mr. McClintock. So, you would place the climate in the same
category as China or the national debt. You know, countries
that bankrupt themselves aren't around very long. And before
you can provide for the common defense, you have to be able to
pay for it. And don't tell me, oh, well, they have cut the
deficit in half this year. That is compared to the blowout
spending of the last two years. You go back to the last pre-
pandemic year, the deficit this year under this budget balloons
50 percent. And it wasn't the Republican tax cuts. Revenues
went up after those cuts, not down. The only reason the deficit
continued was because we couldn't say no to spending. I yield
back.
Chairman Yarmuth. The gentleman's time has expired. I am
going to give the Under Secretary the opportunity to finish
answering the question that Mr. McClintock asked if you want
to.
Mr. McCord. Mr. Chairman, let me just come back one more
time on the subject of quantity versus quality, which I think
is the part that you are referring to. We do have a reduction
the Navy proposed and we at OSD agreed with that some older,
less capable ships, those four combat ships, in particular.
Same on the aircraft side. The KC-135s that Mr. Kelly referred
to are being replaced by the new KC-46s. Just counting the
numbers, the things that we are divesting, are not equal, in
any sense, capable to the ones that we are buying. But they
cost you money to maintain them, speaking of what is perceived
to be wasteful.
So, ships that are not going to be effective in a high-end
contest with China that cost us money to maintain divert money
from the things that we think we do need to buy. And this is
something that any executive would look at, right? Is divesting
from older less capable things to move to newer technology. But
these are difficult tradeoffs for people. And it does lead to
quantity reductions, having fewer ships or fewer aircraft. But,
again, we think these are wise investments but there are things
that we need to persuade Congress of or not. I mean, that is a
big part of every annual defense authorization debate is
whether or not we will be allowed to retire older systems that
we propose to retire.
Chairman Yarmuth. Thank you for that answer. I now yield
five minutes to the gentleman from New Jersey, Mr. Sires.
Mr. Sires. Thank you, Mr. Chairman. Under Secretary McCord,
thank you very much for your service to this country. Mr.
McCord, I am the Chairman of the Western Hemisphere
Subcommittee and I am committed to ensuring our relationships
with countries in Central, South, and in the Caribbean are
always progressing. How does the Pentagon's requested budget
impact U.S. national security in the Western Hemisphere?
Mr. McCord. Thank you. As you know, the Western Hemisphere
particularly in Central and South America, our so-called
Southern Command area of responsibility continues to be an area
where we have minimal military force, minimal military
presence. And the whole-of-government center of gravity is more
diplomatic, economic, which is why we have our Southern Command
in Miami, which is sort of the financial and diplomatic capital
of the region.
We do continue to have a minimal economic force level there
because the military threats don't justify more. The primary
thing that we are continuing to look at here is the inroads
that China is attempting to make using all of their levers,
economic, loan, information. So, that is probably the number
one thing that we are looking at in addition to--and then
secondarily, the counter-narcotics issues are our big line of
effort in that region.
In the Western Hemisphere, writ large, in the Northern
Hemisphere, of course, we have the northern command and we are
looking at a wide range of issues from, you know, assisting our
homeland security with cyber protection of the United States in
our critical infrastructure. So, in that meaning of Western
Hemisphere, we have a lot going on.
Mr. Sires. What resources are being made available to
ensure our regional partners and allies, have support in
countering malign influences in the Western Hemisphere? I know
that we have different facts, let's say, with the Dominican
Republic or we have Costa Rica. Are we increasing our efforts
and our money to work with these countries to improve the
security of our country?
Mr. McCord. I would have to get you for the record whether
the--what specific budget levels that there are. We have
exercised budgets that are not always line item because we want
to let them unfold and we don't lock them in in advance in our
budget. But we are continuing the efforts that we have had in
Southern Command area of responsibility with exercises with all
of our partners.
Mr. Sires. You know, one rumor that is floating around in
my community is that Cuba is working with Russia in terms of
having another boatlift, you know, happen. I am just wondering
if we are defensively prepared for such an exodus, again, from
Cuba. Have you heard anything like that in your?
Mr. McCord. I have not. I would have to consult with
General Richardson, our commander at Southern Command as to
what operations and contingency plans are most prominent in
South Com's efforts and planning right now.
Mr. Sires. Thank you. And my last question it has to do
with the countries based in the Pacific. I am talking about
Argentina. I am talking about Chile. I am talking about Peru.
How are we working with these people to offset the China
influence?
Mr. McCord. Again, this gets back to, I know the Chairman
mentioned the whole-of-government approach, and as I did as
well. This is something that we cannot do by ourselves at the
Department of Defense. We are certainly keeping an eye on
Chinese and Russian attempts to buy influence, to buy friends,
to access resources in the region. But Southern Command by
themselves does not have the authority, does not have the
responsibility, really, of being the only way that we counter
Russian and Chinese inroads in Central and South America. We do
play a role and that is why, again, Southern Command is
collocated with so many other agencies in Miami because we have
connections to state and to Drug Enforcement Administration,
all the other levels of government, the Coast Guard. Again, I
would have to consult with General Richardson to get you a
better answer on exactly what all of her plans are for her
region.
Mr. Sires. Thank you, Chairman.
Chairman Yarmuth. The gentleman yields back. I now yield
five minutes to the gentleman from Pennsylvania, Mr. Smucker.
Mr. Smucker. Thank you, Mr. Chairman. Mr. McCord, good to
see you. You know, I listened very carefully to Mr. Higgins'
questions and I thought he hit the nail on the head in regards
to the impact of energy policies on what is happening in
Ukraine. And I just wondered if you agree with that? Do you
agree that energy policies were in many ways are linked to what
is happening in Ukraine?
Mr. McCord. I would say it is undeniable that the politics
and the policies of energy are very important from, I think, if
you look at Putin's history, he tends to make a move in winter
when he can--when he knows that his European, Western European
neighbors are probably most sensitive to his ability to cutoff
their natural gas or to threaten to do so. And that the revenue
that he gets from oil is hugely important to his economy.
Mr. Smucker. Yes, thank you. The fact of the matter is, and
I support. I think eventually we will be moving to cleaner
sources of energy. But the fact of the matter is today, the
world uses about 100, close to 100 million barrels of oil per
day and disrupting that supply would have devastating
consequences in many ways across the world. Do you believe that
whether or not our nation is energy independent is important
for our future security?
Mr. McCord. It is.
Mr. Smucker. And under the previous Administration, it was
widely seen that the--that we were as a country, energy
independent. Do you agree with that?
Mr. McCord. I am not an expert in this field. I don't know
that we have ever been energy independent in the industrial
era.
Mr. Smucker. But do you agree that some of the first
actions that President Biden has taken reduced our energy
production and our energy independence?
Mr. McCord. A little bit outside my area of expertise. I
couldn't comment on that.
Mr. Smucker. Well, I mean, clearly he did. In the first
week of his presidency, he stopped--he reduced production. He
has slowed up the permitting for new production of oil and gas
and, you know, just it makes no sense. Does that make any sense
to you if a president is making those kind of decisions?
Mr. McCord. Well, I know that, for example, the Keystone
Pipeline was a controversial decision under every
administration over several years. So, I think there was
arguments on both sides.
Mr. Smucker. But don't you think a president should be at
this point particularly as we are seeing and you already said
you agree that energy is linked to what is happening in
Ukraine, don't you think it would make sense for a president to
do everything that he can to produce our--to boost our
production right now?
Mr. McCord. Well, there would be boosting production and
boosting our climate resilience and boosting our electric
vehicle and other. I mean, there are multiple ways you would
want to attack this problem, I think.
Mr. Smucker. You know, I think it is very difficult to look
at the policies of this Administration and not see how they are
linked to what is happening in Ukraine. Even Zelenskyy and his
advisors have said that our energy policies and policies of
energy production in Europe have given Putin the opening to do.
He thought he had the leverage. We gave him leverage to do
that. And then as Mr. Higgins said, we helped to fund that war,
fund what he is doing by continuing to buy oil from them.
And then the other part of the energy policy is it has
resulted in the inflation that we have seen today. And earlier
this month, the House Armed Service--before the House Armed
Services Committee, Chairman of the Joint Chiefs of Staff Mark
Milley said this budget assumes an inflation rate of 2.2
percent, which is obviously now incorrect when we have seen
inflation of 8.5 percent, far outpacing what was predicted in
this budget. Why do you think the budget has missed the mark in
so many ways in regards to rising prices?
Mr. McCord. Well, I want to distinguish, the inflation rate
in the 2023 budget is for Fiscal Year 2023, which hasn't
started yet and won't end for a year and a half from now. So,
no one can conclude that we know that it is right or wrong. I
would concede that inflation today is higher than what it was
when we were locking the budget.
Mr. Smucker. Yes. So, you agree that they were wrong in the
prediction in the budget in regards to inflation.
Mr. McCord. I would, yes, I would agree that anyone who
predicts inflation in advance is going to be wrong. And I know
that we are going to get more data.
Mr. Smucker. Former Chairman of the Joint Chiefs of Staff
Admiral Michael Mullen said back in 2010 that the most
significant threat to our national security is our debt. At
that point, our debt was $13.5 trillion and now, as you know,
it is over $30 trillion. One of the consequences of rising
inflation that it is now forcing the Federal Reserve to raise
interest rates, which also raises the cost for the U.S. to pay
the interest on our debt. How do you think additional spending
on interest, which will absolutely be required as a result of
policies that have led to inflation, how will that additional
spending affect our--and perhaps undermine our national
defense?
Mr. McCord. Well, that would be a question that is, you
know, obviously, primarily in your wheelhouse here in the
Budget Committee as to whether--how you would assess whether
mandatory spending on debt is going to change your decisions on
discretionary spending or discretionary spending caps, should
caps exist. But it is an issue for all of us and especially for
those of you on the Budget Committee as to whether the
mandatory side, mandatory spending such as interest on the debt
is going to change what we think we can afford on the
discretionary side.
Mr. Smucker. Thank you.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Massachusetts, Mr. Moulton, for
five minutes.
Mr. Moulton. Thank you, Mr. Chairman. Mr. McCord, I would
just like to start by expressing my agreement with my colleague
here and my shared concerned for the impact of the deficit on
our ability to provide for our national defense. And that is
one of the many reasons why I voted against the Trump tax cut
that provided millions for millionaires at the expense of our
national security and ballooned the deficit to epic
proportions. I think that your budget here strikes the balance
right. I agree with your topline. I think that the
Administration is finding a way to balance the needs of the
military with also the importance of diplomacy.
As a marine veteran myself, I saw every single day in Iraq
the impact that diplomacy had on saving the lives of our
troops. I align myself strongly with Secretary Mattis, who as
Mr. Trump's Secretary of Defense, emphasized how important it
is to fund our diplomatic establishment, our State Department,
or else, he said, you will have to buy me more ammunition. Can
you talk for a minute about how your budget supports our allies
in Europe, meets the pacing threat with China, and balances all
of these things with the needs of the national security
establishment today.
Mr. McCord. Thank you, Mr. Moulton. Let me start with
China. As you know, we don't have the alliance framework of
multilateralism in Asia that we do in Europe. So, we continue
to do a lot of bilateral work there. But in both theatres we
lead by example. And the investments that we are making in this
budget are designed to show, designed to keep us in an
overmatched position versus China on the high end. I think a
number of Members have commented that what is happening in
Ukraine obviously has lessons, depending how this comes out for
calculations that President Xi may make. We are very cognizant
of that as well.
In Europe, we have talked a number--a little bit this
morning about energy. I think that is a great example.
Sanctions and whether sanctions should extend to Russian energy
and how much they should extend there are something that you
have to go together with your allies on. It doesn't work very
well, obviously, sanctions that are unilateral. So, I think
that is something that it is a good example of the steps that
Secretary Blinken and Secretary Austin have taken to move
together has been enormously helpful in Europe.
I think many of us, you may have better foresight than I,
many of us were surprised and heartened how responsive the
Germans, for example, have been on Nord Stream and on their
defense spending increase. Things that I think would not have
happened had we not taken the time to try and bring everybody
together. So, it think that, as you say, these--how we do this
is very important and we have tried to move together with and
lead the pack.
Mr. Moulton. Well, the fact that the Administration has
been able to coalesce our allies around this mission is
actually quite extraordinary. And, of course, Trump was working
at cross purposes to that every single day that he undermined
NATO.
Thinking about the future, when I co-led the Bipartisan
Future Defense Task Force, we spent a lot of time thinking
about how the Department can get the best equipment and newest
technologies into the hands of the war fighter at the speed of
relevance. That means they need to get the stuff today. We
can't wait until it becomes outdated. Do you think the DoD
acquisition system is efficient enough to address these
challenges and compete with China?
Mr. McCord. I think that all of us are looking for a way
that we can more agile, but still be accountable and
transparent----
Mr. Moulton. Well,----
Mr. McCord [continuing]. enough. And your Committee in the
NDA created a PPB Commission, so a planning, programming,
budgeting execution, which is that DoD centric part of the
larger federal budget process that commission is now underway
co-chaired by a former comptroller and by a former AT&L or ANS
executive.
Mr. Moulton. That was my amendment and I certainly hope it
will be successful. And one of our conclusions on the task
force is that the system that we have today is not sufficient.
That we have to reform it. But one of the other things we
determined is that in the meantime, we can empower and
reinforce the programs that are working. Deputy Secretary Hicks
has openly discussed concerns with the shrinking defense
industrial base. And the Department has taken funding away from
programs that are delivering critical capabilities such as the
Defense Innovation Unit. Now, DIU, in particular, has leveraged
$25 billion in private R&D, introduced 100 new suppliers to DoD
from 37 states in the face of a shrinking industrial base. And
yet, shockingly, the Department has cut its funding.
So, I agree with your topline. I agree with your strategy.
I am very proud of what the Administration is doing in Ukraine.
And yet, I cannot understand why on earth you would cut the
budget for DIU.
Mr. McCord. I will have to get you a good answer for that
one, Mr. Moulton.
Mr. Moulton. OK. Well, I hope the answer----
Mr. McCord. We have----
Mr. Moulton [continuing]. is that you will restore the
funding.
Mr. McCord. I would just say also that we have, as you
know, built a plan just onboard for a little more than a week.
So, we now have a full house in terms of our leadership in the
acquisition sustainment world to go along with Under Secretary
Shyu on the R&D side to help move us forward.
Mr. Moulton. Well, I certainly hope it was just an
oversight. Mr. Chairman, thank you.
Chairman Yarmuth. Thank you. The gentleman's time has
expired. I now recognize the gentleman from Virginia, Mr.
Cline, for five minutes.
Mr. Cline. Thank you, Mr. Chairman. I am going to go back
to China and your assertion that this budget provides us with
an overmatched position, vis-`-vis China. According to China's
Ministry of Finance, they have increased their defense spending
by 7.1 percent his year, its highest level since 2019. While we
truly don't know what China spends on its military, it could be
even higher, I think folks in the national security community
are concerned about China's military ambitions. As you said,
you consider China to be a threat on par with climate. Is that
an accurate assessment of your judgment?
Mr. McCord. Yes, I would say and I would echo what
Secretary Austin has said, we have threats that are very
important that are not identical in nature. So, COVID, for
example, was a near-term threat to the health of our force and
to the country. China is a longer-term threat, a more of a
military-centered threat. Climate is a more existential threat
to our whole society. So, there are important threats that are
not identical threats.
Mr. Cline. So, you are considering China a long-term
threat. Let me quote the former Commander of the Indo-Pacific
Command Admiral Philip Davidson who stressed that China might
try to forcibly annex Taiwan before 2027. That timeline
reflects China's massive investments in naval power and its
recent expansion of nuclear weapons. Are you aware of a report
to Congress in 2020, titled Military and Security Developments
Involving People's Republic of China?
Mr. McCord. Is this a Department of Defense report you are
referring to? I believe there is an annual report that has been
instituted in the last couple years that----
Mr. Cline. Yes.
Mr. McCord [continuing]. I don't know if that is the title
of it. It sounds like it is the same one.
Mr. Cline. This is a regular report submitted for the last
20 years. The 2020 report states that China has already
achieved parity with or even exceeded the United States in
several military modernization areas, correct?
Mr. McCord. I don't have the report in front of me. But I
don't dispute that it might----
Mr. Cline. OK.
Mr. McCord [continuing]. might have said that.
Mr. Cline. So, you don't know which areas the report stated
were of most concern?
Mr. McCord. I wasn't in the Department in 2020, so I am not
familiar with the 2020 report.
Mr. Cline. OK. The report states that China's ahead in the
areas of shipbuilding, land-based conventional ballistic, and
cruise missiles, and integrated air defense systems. So, do you
think that a budget that would decommission 24 ships just this
year while building nine and projected that in the next five
years, our naval fleet would shrink further to only 280 ships,
not meeting the legal requirement to field a fleet of 355
battleships. You think that would meet the needs of our
position versus China?
Mr. McCord. That is exactly the intent that the ships that
the Navy proposes to decommission are ones that would not be
capable in a high-end contest with China. Whereas, the ones
that we are investing in would be.
Mr. Cline. All right. And at the same time, we are
proposing to spend $3.1 billion on climate programs while
cutting funding for ships, troops, and aircraft, $2 billion for
resiliency and military installations, $247 million for
operational energy and buying power, and $28 million for
contingency preparedness. I would argue that this budget
prioritizes Green New Deal initiatives over our military
readiness vis-`-vis China, which, as I stated, is a near-
threat, not a long-term threat as you earlier stated. Would you
care to comment on that?
Mr. McCord. Sure. First of all, just on the climate side,
the \1/2\ percent that is in our budget for this does not
detract from our military capabilities. These are investments
that we need to make anyway. We are always going to be
investing in our facilities. We are always going to be
investing in our vehicles, especially our non-combat vehicles.
So, we want to be investing in ones that are in the same
direction the market is moving.
With respect to China, again, China is a long-term threat
or a now and future threat. So, when I say long-term, I don't
mean to the exclusion of they are not of concern today. Just
that they are going to be with us. They are going to be an
influential economic power, influential military power for
decades to come. So, it is not a short-term issue. It is a
longer-term issue but that doesn't mean it doesn't--it hasn't
already--it is not already in the window of being a concern of
ours. And I am sorry if I didn't make that clear.
Mr. Cline. OK. I appreciate that. And as you said, Chairman
Xi is watching and watching how we conduct ourselves in the
Ukraine and is prepared to act if we are not showing strength.
So, I believe a stronger military budget focused on ships would
be appropriate and send the right message to the Chinese. So,
with that I yield back.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentlewoman from Washington, Ms. Jayapal, for
five minutes.
Ms. Jayapal. Thank you, Mr. Chairman. And thank you, Under
Secretary McCord for your service to our country, it is deeply
appreciated. To my colleagues, I wish we were spending more
within this budget on addressing climate change as a national
security threat. I am glad there is at least a little piece in
here that recognizes that because, certainly, it is extremely
important.
Mr. McCord, you probably know, I am not a fan of the
ballooning Department of Defense budget. You probably know that
I think there is a lot of waste, fraud, and abuse. And if the
Pentagon were to undergo a comprehensive audit as every other
agency has done, that would make an enormous difference. And it
might get me more interested in putting more money into the
defense budget. But at this point, the Department of Defense
budget has ballooned to $740 billion in 2022, more than double
the defense spending in 2000.
Our defense spending makes up about half of all federal
discretionary spending, even as we question our ability to pay
for critical investments like childcare or housing or things
that families across the country need. But I want to dive into
one of the factors driving that spending. And that is the
statutory requirement that DoD provide an unfunded priorities
list. A wish list of items that would be nice for DoD to have
but are not required to carry out its duties. This is on top of
the $773 billion requested by the White House for fiscal 2023.
Secretary of Defense Lloyd Austin said last year that the
President's budget request for fiscal 2022 met DoD
requirements. And yet, the law still requires DoD to provide
this unfunded priorities list. And that is why I have
persistently offered an amendment to the National Defense
Authorization Act to eliminate this wasteful practice. Mr.
McCord, how does DoD determine what goes into the White House
budget request versus the unfunded priorities list?
Mr. McCord. Thank you. The budget process is something that
is led from the top down, with input from the services up. And
especially this year when we had a new strategy under
development we were looking at it all through the lens of what
supports our strategy. So, what goes in the budget are our
highest priorities. I want to be clear about that. Nothing in
an unfunded priority list is a higher priority than anything in
our budget. So, I know that they sometimes get misunderstood as
somehow a service chief or a combatant commander saying this is
more important than what is in the budget. That is not the
case.
The law, as you said, I think for--they have been a
practice for about 25 years and they have been codified in law
more recently than that. They are the opinions of senior
military people. They are not vetted by civilians, including
the Secretary or myself, or the service chief. So, they are the
best professional military advice. If of a particular officer,
if in my area there were more funds, what would I choose to
spend them on. But they should not be confused with saying that
the budget is not adequate or that there are--that things in
the budget are less important than the things on those lists.
But I think that they are easily misunderstood to be saying
that they are must-haves that somehow trump the budget, which
is not the case.
Ms. Jayapal. That is such an important explanation. These
are just basically, wish I had this, nobody's really look at
it, we haven't looked at it in the context of the entire
department. They are completely separate from the process that
you go through as a department approved by the Secretary to say
these are the most important things that we need and must have.
So, in a June 2021 hearing before the Armed Services Committee,
House Armed Services Committee, General Milley said, of
unfunded priorities, if they were critical, then they need to
be higher on the priority list and in the base budget. Do you
agree with that statement, Mr. McCord?
Mr. McCord. I do.
Ms. Jayapal. Thank you. And these unfunded priorities,
again, are just a wish list that don't reflect the true needs
of the United States. I understand that we are living in
uncertain times with increasing global tensions because of the
war in Ukraine. I think the President and his team have done a
phenomenal job of really building a diplomatic coalition across
the world. In response, Congress has authorized $1.35 billion
in military assistance to Ukraine, and $3.5 billion to the
Defense Department to replenish its equipment stock. Is an
unfunded priorities list even necessary to provide flexibility
in military spending?
Mr. McCord. I would say the purpose of unfunded priority
list is not generally about flexibility. It is about in the
opinion of a senior military person, the Congress presumably by
virtue of the legislation,----
Ms. Jayapal. So, the answer is no.
Mr. McCord. No. The----
Ms. Jayapal. The answer is no.
Mr. McCord. Flexibility is a process that we have to go
through with the Congress and Ukraine's a perfect example of
how flexible the process can be when there is an emergent need
that everybody agrees is important to address. The evacuation
of Afghan interpreters was another one just in my time back in
office. Our own process is sadly far less flexible and we get
our appropriation bills months late, you know, every year.
Ms. Jayapal. Something I know the Chairman has been making
sure our side is not part of the problem here. But I thank you
for that Under Secretary. And I yield back, Mr. Chairman.
Chairman Yarmuth. The gentlewoman yields back. I now yield
five minutes to the gentlewoman from Colorado, Mrs. Boebert.
Mrs. Boebert. Thank you, Mr. Chairman. And thanks again,
Under Secretary McCord, for taking the time today to talk about
Mr. Biden's defense budget proposal. Sadly, this budget is a
continuation of the wokening and weakening of our military. And
I wish I could say that I am surprised, but I am really not.
Somehow, we are spending more on defense than we ever have, but
we are ignoring real national security threats like China,
Iran, the complete invasion at our southern border, with 2
million people coming into our country illegally, more than 2
million.
So, let's take a look at what Mr. Biden would like to spend
this money on. Under Secretary McCord, would you say that this
budget makes investments into making our military more green,
meaning does this budget allocate funds to reduce greenhouse
gas emissions?
Mr. McCord. The investments that we have in our budget on
climate resilience are not, the primary metric is not
greenhouse gas emissions, it is making us more climate
resilient to the----
Mrs. Boebert. More green.
Mr. McCord [continuing]. extreme weather events.
Mrs. Boebert. More green, electric vehicles and what not.
Mr. McCord. The electric vehicles----
Mrs. Boebert. OK.
Mr. McCord [continuing]. part, yes.
Mrs. Boebert. OK.
Mr. McCord. But the installation----
Mrs. Boebert. So,----
Mr. McCord [continuing]. part is not an emissions-based
metric.
Mrs. Boebert. Thank you, Mr. Under Secretary. Mr. Biden has
said that all federal agencies should be at net-zero greenhouse
gas emissions by 2050. Does this budget make investments toward
getting there?
Mr. McCord. This budget makes investments in all of the
President's priorities.
Mrs. Boebert. OK. Thank you.
Mr. McCord. There is a long time between now and 2050, so
the direct----
Mrs. Boebert. But this certainly----
Mr. McCord [continuing]. line is not----
Mrs. Boebert [continuing]. there was a mission put in place
by your commander-in-chief and this budget certainly gets the
ball rolling on that goal to be at net-zero greenhouse
emissions by 2050. This puts that plan by your commander-in-
chief into action, correct?
Mr. McCord. We would want to be moving in that direction.
But again,----
Mrs. Boebert. OK. Thank you, Mr. Under Secretary.
Mr. McCord [continuing]. this budget doesn't extend
anywhere near----
Mrs. Boebert. Well, frankly,----
Mr. McCord [continuing]. 2050.
Mrs. Boebert [continuing]. Mr. Under Secretary, it sounds
to me like you are burning the tax dollars at the altar of
environmental extremists because in this report that I have
here that I would like to seek unanimous consent to enter into
the record.
Chairman Yarmuth. Without objection.
[Report submitted for the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Boebert. Thank you. This report issued by your agency
is not, ``technically feasible for the DoD to achieve net-zero
greenhouse gas emissions.'' This is your report and it provides
an example of the impacts woke Green New Deal policies would
have in action saying, ``The DoD cannot for instance, risk an
armored brigade in combat running out of fuel because it is
only allowed to acquire net-zero fuel and none is readily
available.''
So, Mr. Under Secretary, why are we proposing to spend
billions and some estimates from this report say trillions of
tax dollars toward reaching net-zero greenhouse gas emissions
when the DoD has already said that this is not feasible?
Mr. McCord. Well, again, net-zero is a policy for a country
or an agency is one thing. Our budget is not a budget to 2050.
We could not possibly predict what kind of vehicles or aircraft
we are going to be using in 2050.
Mrs. Boebert. Well, you are certainly----
Mr. McCord. There is probably nothing----
Mrs. Boebert [continuing]. setting forward those goals to
reach that in 2050, when we know that it is not feasible. And I
am sorry to cut you off. My time is short here. According to
this report, I mean, it says trillions of dollars.
But instead of wasting our time and tax dollars on turning
our military green, let's talk about what really should be
focused on. Earlier this year, I joined my colleagues in
sending a letter to Secretary Austin asking for the
congressionally required report on U.S. equipment left in,
destroyed, or removed from Afghanistan during the disastrous
withdrawal. We sent this letter two weeks after it was already
due to Congress and we still have not received the complete
report or virtually any accountability for the surrender and
the total failure that was Afghanistan. Mr. Under Secretary, is
the DoD aware of this congressional request for the way overdue
report on the Afghanistan debacle?
Mr. McCord. On the issue of equipment that was left behind,
I--my understanding is I know I have seen draft reports. I
believe that those reports have been submitted. But there may
have been different requests----
Mrs. Boebert. Can you tell me----
Mr. McCord [continuing]. from different committees.
Mrs. Boebert [continuing]. how many tanks are currently in
Afghanistan?
Mr. McCord. No.
Mrs. Boebert. With all due respect, Mr. Under Secretary, I
have asked for a peanut butter and jelly sandwich and I am kind
of getting bread here. We don't have the full and complete
answers that we need. This is a congressional mandate that we
get this report. Can you tell me how many rifles are in
Afghanistan? If there has been reports that have been made, can
you tell me how many rifles are left behind?
Mr. McCord. I would have to get for the record for you the
reports that I have seen.
Mrs. Boebert. Do you know how much U.S. military ammunition
is left in Afghanistan at the hands of the Taliban?
Mr. McCord. I am sorry, ammunition?
Mrs. Boebert. Yes.
Mr. McCord. Again, I would have to refer you to the
reports. I don't prepare those reports myself.
Mrs. Boebert. Do you know how many night vision gear? How
much of our night vision equipment is left there? So, Mr. Under
Secretary, the point that I am getting at here is we can't tell
the American taxpayers how we have spent their money, how we
have funded and equipped the Taliban. And now we are asking for
more money. Mr. Under Secretary, do you think that Congress
deserves this report?
Chairman Yarmuth. The gentlewoman's time has expired. And
but you are entitled to submit questions for the record.
Mrs. Boebert. Thank you very much. And may I also ask
unanimous consent to enter this letter into the record?
Chairman Yarmuth. Yes.
Mrs. Boebert. I apologize, I thought I had 39 seconds.
Chairman Yarmuth. No. Now, your over 30.
Mrs. Boebert. I see that.
Chairman Yarmuth. Now, without objection, you may submit
that for the record.
Mrs. Boebert. Thank you, Mr. Chairman.
[Letter submitted for the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. I now yield five minutes to the gentleman
from Nevada, Mr. Horsford.
Mr. Horsford. Thank you, Mr. Chairman, for holding this
hearing. I want to thank Under Secretary McCord and all of the
leadership with the Department of Defense, and particularly,
our service members and their family members for their service
every single day in protecting our national security. Too often
in these hearings, we tend to get wound up in partisan talking
points and for some reason, we don't focus on the very people
that we are here to pass a budget to serve, and that is the
American people. And in this case, our service members who need
the resources to be successful when they need it.
So, I am sure I don't have to remind Under Secretary
McCord, Department of Defense acquisition and modernization
programs take years of planning and development. They require
consistent and reliable funding in follow-on years to meet the
needs of war fighters. Funding for our national defense is not
some political prop that can be held up to score cheap
political points. And, yet, for all the bluster that we are
hearing from some of my colleagues about the DoD's topline, it
was their side of the aisle that held up the omnibus spending
package for Fiscal Year 2022 for nearly six months. They
delayed putting critical, important major acquisition programs
at risk, prevented new programs from starting, and delayed pay
raises for service members.
Additionally, they degraded readiness at an extremely
dangerous moment. And for the record, Joe Biden is the
Commander-in-Chief. And when our allies needed this most, he is
the one who helped to bring them together to make sure that we
are holding Russia accountable. Inconsistent funding emboldens
our adversaries and undermines the trust of our allies. A trust
that we have had to fight harder to restore after the previous
Administration.
So, I want to be clear that the tactics are not just
partisan ploys. They have real life effects for my district,
for my constituents, and for service members around the world.
Now, last year, I supported an increased topline for DoD
spending. And this year, like every year, I will work hard in a
non-partisan way to ensure that the capabilities and systems
included in the Pentagon's budget request are reviewed. Only
after a careful assessment of the threat environment and our
capabilities can we decide if an increase is again necessary to
meet the complex challenges of our ever-evolving strategic
environment.
Under Secretary, McCord, in my previous discussion with
Department of Defense leaders, they have stressed to me that
continuing resolutions do far more damage to readiness and the
wellbeing of our service members than any of the hollow
complaints we have heard here today. Could you please speak to
the impacts that CRs have on military readiness and the
importance of consistent funding for our most critical
modernization programs?
Mr. McCord. Thank you for that question. Yes, this is
something I think that is not well understood and it has been
hard to translate to the public because the organism that is
the Department of Defense has adapted to perpetual CRs in a way
that, therefore, you don't see contracts expiring because
nobody tries to write a contract in the first quarter of a
Fiscal Year anymore because they know that you are going to be
under a CR and not going to be able to enter into new
contracts.
So, there is the issue, first of all, of delayed resources,
especially when there is inflation, but even when there is not.
You know, time is money and we lose--when we lose time, we lose
ability to be agile. We lose resources. This year was
particularly bad. As you say, sort of the threat to have a full
year CR, which has never happened to the Department of Defense
in history, was particularly troublesome to us. And we had a
hearing. I had a hearing with the service chiefs before the
House Appropriations Committee that spoke to this issue in some
detail in January to lay out the problems.
As you may know, we had a history beginning with sort of
the fall of the Berlin Wall for about 20 years where the
Department of Defense Appropriations bill got enacted on
average about 25 days into the fiscal year, which is
reasonable. But beginning with the threat of default in 2011,
that led to the Budget Control Act and continuing since that
day, that average has ballooned to 120 days into the Fiscal
Year on average over the last dozen years compared to 25 days
for the 20 years before that.
So, we have definitely gotten into a bad pattern that needs
to be broken. It does cost money. It does make us less agile
when a number of members have pointed out that China does move
fast and we need to be able--we can't afford to give away,
three, four, five months of a Fiscal Year every year to our
adversaries by hamstringing ourselves.
Mr. Horsford. Thank you. I know my time has expired. I just
hope that all of us can come together and make sure that
America succeeds by helping our service members and their
families in this budget. I yield back.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Virginia, Mr. Good, for five
minutes.
Mr. Good. Thank you, Mr. Chairman. Thank you, Mr.
Secretary, for being here. Mr. Secretary, your former boss,
Defense Secretary Robert Gates, said a few years ago that
President Biden, ``has been wrong on nearly every major foreign
policy and national security issue over the past four
decades.'' Even former President Obama tried to warn people
during the 2020 campaign and he said, don't underestimate Joe's
ability to screw things up. Americans seemed to agree as a
Gallup Poll in February showed that only 40 percent of
Americans approved of the way President Biden is handling
foreign policy affairs. And only 36 percent approve of the way
he is handling specifically, the Russian invasion of Ukraine.
I think this budget is further proof of this
Administration's misguided priorities. Would you say that
Americans are safer today than they were in January 2021?
Mr. McCord. I would.
Mr. Good. On what basis?
Mr. McCord. I think we have strengthened our alliances and
I think the unified response that we have seen in Europe to
Russian aggression has shown kind of a revitalized Western
response of democracies.
Mr. Good. If I may----
Mr. McCord. You would not have seen----
Mr. Good. Let me----
Mr. McCord [continuing]. the Germans----
Mr. Good. Thank you----
Mr. McCord [continuing]. Germans walk away from Nord
Stream----
Mr. Good [continuing]. Mr. Secretary.
Mr. McCord [continuing]. without----
Mr. Good. Thank you.
Mr. McCord [continuing]. this.
Mr. Good. Thank you. Reclaim my time. Can you explain why
the Department of Defense wants to spend $3.1 billion on
climate programs were four times what the $682 million
allocated for Ukraine? So, $3.1 billion on climate programs in
this budget, which is more than four times the $682 million
allocated for Ukraine.
Mr. McCord. First, I would say that we are in this fiscal
year, spending more on--spending more than that on Ukraine. And
we are about to ask for another supplemental to increase to
make sure that the Ukrainians have what they need to continue
the fight, so.
Mr. Good. From a military standpoint, what is the $3.1
billion for on climate programs?
Mr. McCord. That is both on--that has two basic parts. It
is the installation side, our facilities, our buildings, you
know, our bases. And then there is----
Mr. Good. How does----
Mr. McCord [continuing]. the vehicle side.
Mr. Good. Hoes does investing in climate programs help
military preparedness, military readiness, military
effectiveness?
Mr. McCord. Well, on the facilities side and the
resilience, it is to be better prepared for extreme weather
events, which are increasing in frequency. On the vehicle side,
the idea is to reduce our logistics footprints to have more
capability to be not tethered to a logistic train of fuel in
all cases.
Mr. Good. This President----
Mr. McCord. And to move where the market is going.
Mr. Good. Excuse me, thank you. This President told our
troops, of all people, our troops back in June that the
greatest threat to America is climate change. He even added his
typical, this is not a joke. I guess he needed to add the, hey,
this is not a joke because the soldiers were probably, I have
to presume, surprised to hear from the Commander-in-Chief that
the greatest threat to the country and telling them as military
personnel that the greatest threat is climate change. And then
just last week, and you have kind of alluded to it already, the
President stated that we are going to spend billions making
every military vehicle climate friendly.
I think that makes us the amusement of our adversaries
around the world that that is what we are focused on. You know,
it is as embarrassing as it was to send John Kerry to, you
know, to essentially beg the Russians to consider the climate
impact of the invasion if they were going to do that just
before the invasion took place, even days before.
But the President said, ``Every vehicle is going to be
climate friendly. Every vehicle, I mean it. We are spending
billions of dollars to do it.'' Do you think that climate
concerns should be the main priority for our military vehicles?
Mr. McCord. It is not the primary concern, their
effectiveness is, but----
Mr. Good. Well, the President said that we are going to
spend billions to do that. This budget--switching gears to
another topic--contains $34 million to address ``concerning
behaviors in extremism.'' What does this mean? What is the
purpose of that funding?
Mr. McCord. As Secretary Austin has stated the incidents of
extremism in the military is low but any amount is not
acceptable. And so, these efforts are----
Mr. Good. Well, I want to interject there on Secretary
Austin. I am glad you brought him up because he said, when we
were asked to give an exception to approve him in the House
because he didn't meet the 7-years of required retirement
between military and civilian service, he said that his self-
proclaimed mission, essentially, was to root out racism in the
military. Is that truly a significant problem? I mean, for him
to say that is one of the reasons why was there to root out
racism in the military. It seems to me the military has been an
example of integration, of merit-based performance, and
advancement, as evidenced by Secretary Austin and Secretary
Powell before him on the Secretary of State side. Is this truly
a significant problem for our heroes in the military?
Mr. McCord. Well, I would say first of all, racism exists
in society. It exists in every institution.
Mr. Good. Yes, but to spend $34 million to address it in
the military.
Mr. McCord. But racism and extremism are two different
topics. And you were--I think you were citing a figure about
addressing extremism. Racism is a different issue and I would
certainly say Secretary Austin probably has more experience
with this issue than I do. And so, I certainly would not
question his judgment.
Mr. Good. All right. My time has expired. Thank you, Mr.
Secretary.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize another gentleman from Virginia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. Mr. McCord, in the
Reagan Administration we were talking about a 600 ship Navy.
Without getting into classified information, can you tell us
what size Navy we could expect if this budget is approved and
how that compares to the size of other nations' navies?
Mr. McCord. Mr. Scott, I would say that our Navy, and a 30-
year ship building report was just sent to Congress. So, you
can look at different periods of years out to, you know, to
several decades out in the future, but we are in the 300-ship
range right now. We were not in the 600-ship range before.
There was talk of a 600 ship Navy, not the reality of a 600
ship Navy before. We are looking to have a very capable force,
the most capable Navy in the world by far, at about 300 ships.
Mr. Scott. And how does that compare to the size of navies
of other countries?
Mr. McCord. I don't have the figures of all the navies
around the world at my fingertips. We can get you----
Mr. Scott. What are the top----
Mr. McCord. We can get that information for the record.
Mr. Scott. The top of the others----
Mr. McCord. It is the most capable navy in the world.
Mr. Scott. If you are going to build ships, you have to
maintain them. What are we doing to upgrade the ship repair
facilities at public yards? How is that coming?
Mr. McCord. Well, we have some major investments in our
shipyard capability, primarily on the submarine side. You are
probably familiar with the so-called SYOP, S-Y-O-P, a navy
acronym for a shipyard investment plan that's a basically a 20-
year plan, $20 billion, 20-year plan for the four public
shipyards that have not been--seen the kind of maintenance they
need for a century. So, these are addressing our ability
primarily to take care of our nuclear force.
In addition, we have investments in the submarine work
force and those are probably the primary ship investments we
have is to keep our submarine industrial base in our
submarine--in our shipyards capable of moving through this
period where we are buying both the Columbia and the Virginia
class at the same time, which puts some additional stress on
that part of our industrial base.
Mr. Scott. And what kind of priority is made to make sure
that the private repair yards get enough work to stay in
business?
Mr. McCord. Well, in the private----
Mr. Scott. In----
Mr. McCord [continuing]. repair yards, which will----
Mr. Scott [continuing]. in minority-owned shipyards?
Mr. McCord. Yes, sir. The private yards, as you know, focus
much more on the surface side and they are, I think, one of the
best things we can do is have stable, predictable funding.
Getting to the point of the previous question about perpetual,
continuing resolutions, stable predicable funding will be of
great benefit to the private sector yards because they have
always, as you know, have always had to be more flexible than
the public yards because they flex up and down when funding is
unpredictable. So, that I think is probably the best thing we
can do.
In addition, we need to get our private sector yards
producing the ships on time. So, we have been putting more
money into say buying destroyers at two a year but they are not
able to produce two a year. That leads to all kinds of problems
in terms of maintenance cycles. If you can't get the ships out
of the yard, and we all know that the ship industrial base,
shipyard workers are one of the areas that has been, you know,
a supply/demand issue right now in terms of getting the skilled
workers you need is a big challenge----
Mr. Scott. Is----
Mr. McCord [continuing]. for the Navy.
Mr. Scott. Is the Army Corps of Engineers' budget in your
portfolio?
Mr. McCord. It is not. The Army Corps of Engineers is part
of the Department, but the----
Mr. Scott. OK. OK.
Mr. McCord [continuing]. their budget is on the civil side
and does not come through, does not come through me.
Mr. Scott. If you fail to do--we have had disparaging
remarks made about climate change. If you fail to invest in
resilience to protect against sea level rise, what will happen
to military assets like the naval station at Norfolk?
Mr. McCord. Well, that is one of the things that concerns
us is the Navy and the Marine Corps particularly are vulnerable
to the impacts of extreme weather and sea change. We alone, as
the Department of Defense, to be clear, cannot prevent, you
know, climate change. And we are not attempting to prevent it
by ourselves. We are trying to be responsive to it and look
ahead and get out ahead of changes so that our installations
are more capable of dealing with these events and doing what we
can to be part of the solution. But we are not going to solve
the problem by ourself.
Mr. Scott. And I introduced legislation that was signed
into law as part of the recent NDAA to allow mitigation of
storm water flooding around military bases. How is that going
to be implemented?
Mr. McCord. Mr. Scott, I would have to get you that for the
record from our installations community. I can't speak to that
from my own expertise.
Mr. Scott. Thank you, Mr. Chairman. I yield back.
Chairman Yarmuth. The gentleman yields back. I now yield
five minutes to the gentleman from California, Mr. Obernolte.
Mr. Obernolte. Thank you, Mr. Chair. Secretary McCord, I
would like to continue a line of questioning regarding
inflation. Obviously, that has been front of mind for many
Members of Congress and I imagine in the Department of Defense
as well. In your testimony, you mentioned that in preparing the
budget, you used a chain-weighted inflation index as a
benchmark, rather than consumer price index. Can you talk a
little bit more about the assumptions that were made in
preparing the budget and what rate of inflation for the chain-
weighted price index that you are assuming?
Mr. McCord. Yes, sir. The reason that we use the rate that
we use is that it is, first of all, in the U.S. code that that
is what we are supposed to be using. But also, because the
biggest single category of what we do is purchases of goods and
services from the private sector. And that is a pretty good
metric for GDP deflater to measure.
Mr. Obernolte. Sure.
Mr. McCord. If it is----
Mr. Obernolte. So, what number did you use in preparing the
budget?
Mr. McCord. For the budget for--what we did was the fiscal
year--if I can walk one step back. The Fiscal Year 2022 budget
was prepared assuming about 2.2 percent inflation for the year
that we are in now. What we did was we looked at the data. It
had doubled to 4.0 by the time we were wrapping our assumptions
in December. So, we built that price increase into our budget
for 2023. So, based on what was happening in the calendar year,
at the just end of calendar of 2021.
For the budget for Fiscal Year 2023, we used like as with
every administration, OMB produces one set of economic
assumptions that every agency uses. That inflation rate is 2.2
percent. And so that--the question that has been discussed this
morning and in other venues is whether that is the right
assumption for the Fiscal Year that is going to start this
September, you know, based on the fact that it is higher than
that right now.
But we don't get to decide what to use for 2023. We use
consistent assumptions across an administration as every
administration does. For 2022, we did our best working with OMB
and working with the President to up our price basing across
this five years so that we were not falling behind on what was
happening last year. But the situation has continued to change
most primarily, again, the spike in energy prices since the
Russian invasion of Ukraine was something that is not in our
budget, could not have been in our budget. We were already done
with our budget by then. So, this remains something we need to
work with the----
Mr. Obernolte. Sure.
Mr. McCord [continuing]. Congress on.
Mr. Obernolte. Yes, and I appreciate that you said that you
were prepared to work with Congress to address those impacts.
On a historical basis, if you look at our investment in the
Department of Defense in real dollars, how do we compare
historically right now to where we have been in the past?
Mr. McCord. We are at a relatively high level, especially
when you consider that the number of people in our force is
smaller. So, we have a smaller highly compensated force, which
has been true for a number of years and is true today. So, we
are somewhat at the higher end. And, of course, you could
always have debates with people about do you take the costs of
something like an Iraq or Afghanistan, do you include those or
do you exclude those as unique events. But our budget is on the
high side in real terms right now.
Mr. Obernolte. OK. So, I have seen measures, other measures
that disagree with that assessment. And I don't think it is
fair to measure it in terms of the number of people in our
armed forces because as you have described, the number of
people is declining, but our need for a robust Department of
Defense is certainly still very high. And I am concerned that
we can't fall behind the curve there on a real dollar basis.
With the time I have left, I wanted to ask about something
on a different topic. So, I understand that there has been a
debate in the Department of Defense about a change in
philosophy from a counter insurgency point of view toward more
of a response to near peers like Russia and China as
geopolitical events have shifted in the last few years. I
represent some of the largest training bases in the country. I
am honored to represent Fort Irwin, the Marine Air to Ground
Training Center in Twentynine Palms. Does this budget make the
necessary investments to shift our training philosophy in
response to the shift in DoD philosophy from counter insurgency
to near peer?
Mr. McCord. I would say that is the intent, but certainly
our Army and Marine Corps leadership could probably give you
better, and you probably already have better specific
information about the combat training centers and how they are
adapting. But, yes, we are trying to move our focus of both our
modernization and our training to the near peer or high-end
competitions, exactly as you said.
Mr. Obernolte. All right. Well, thank you. I see my time
has expired. I yield back, Mr. Chair.
Chairman Yarmuth. The gentleman yields back. I now
recognize the gentleman from Georgia, Mr. Carter, for five
minutes. He is not. Is he in virtual? Is he not? OK. I am
sorry. I skipped my friend, Mr. Grothman. I now yield five
minutes to the gentleman from Wisconsin, Mr. Grothman.
Mr. Grothman. Thank you very much. Looking through some
articles about your department, I notice here is an article
that was written last week and the plan is to decommission two
littoral combat ships. They were kind of big ships. I know
those ships are about 100 yards long. Big stuff, I have seen
them. One was built in, I believe, 2015 and one was built in
2016. So, these are rather large ships and I am sure very
expensive to build an over 100-yard ship. And we plan on
declassifying them less than 10 years in. I am glad you are
doing it if it is a waste of money. Do you have any comments on
how that could happen? How we could build a big ship and 10
years later we want to scrap it?
Mr. McCord. Thank you. Yes, the issue with those particular
ships is that the--first of all that as the strategies have
focused more as was just discussed toward the high-end peer
competitors, both the Mattis strategy and Secretary Austin's
strategy, these ships are not as consistent with these new
strategies that focus on a high-end fight against a very
capable military like China. Secondarily, on the littoral
combat ships, several of them, the mission packages for these
ships never delivered in a correct and usable form. So, the
ships basically do not have the capability that they were
supposed to have, even on top of the question of whether that
is the right capability for the future.
Mr. Grothman. OK. Would you say it is accurate if I say we
wasted money building the USS Jackson and the USS Montgomery?
Mr. McCord. The littoral combat ships that we are
decommissioning I would say were not our best use of funds.
Mr. Grothman. OK. So, I think a goal we should have is to
make sure we don't make anymore mistakes like these two big
100-yard ships that we are decommissioning almost right after
they were built. Do you think they were built, well, I don't
know at the time, were they things that were built because of
pressure from Congress when the Navy didn't want them that much
in their own right?
Mr. McCord. I think at the time, they was a desire to have
ships that would be more agile for a wider range of missions
that maybe wouldn't be so much on the high-end. But, again, as
the strategies have shifted to we do want to focus on the high-
end, they have a bit of a strategic mismatch and then there is
a particular problem of these ships' mission packages did not
deliver.
Mr. Grothman. Yes. I am afraid we don't have enough missile
defense, enough cyber defense. There are things that we aren't
looking at because to a degree, we may be fighting the last war
or maybe going about six wars, five wars. I remember reading
about, you know, the Battle of the Midway in World War II and
at the time, some people felt it showed that aircraft carriers
were overrated and that was proven in 1941 or was it 1942,
1942. Yes, it was 1942.
OK. Now, I have had people tell me that aircraft carriers
while there is nothing more beautiful and impressive looking
than an aircraft carrier, against a country like China or North
Korea in war games, they may last a day or two days. Are there
smart people who believe that against a country like Russia or
China or North Korea an aircraft carrier may only last one or
two days?
Mr. McCord. I would say that they are absolutely--there
absolutely are analysts who believe that carriers are--have
questionable survivability in a high-end fight and the Navy
would strongly dispute that. So, that is something you could
have an entire good classified debate on. There are definitely
people who believe as you state.
Mr. Grothman. Yes, I run into them and it kind of bothers
me because I think we are short of missile defense and short of
cyber defense and we keep these big aircraft carrier groups out
here. And like I said, it was a very different time, but we
were able to sink some Japanese aircraft carriers very quickly
in 1942 and they do----
Mr. McCord. Mm-hmm.
Mr. Grothman [continuing]. compared to missiles are very
slow. And just----
Mr. McCord. I would also say that the Navy would say that
compared to a base on land that can't move at all, carriers are
much more agile than any other way to project power. So, again,
there are some different----
Mr. Grothman. I have heard that argument that by that
standard, nothing is worthwhile, right? Not only would they
sink an aircraft carrier right away, they would destroy an Air
Force base right away. But do you feel in your heart that if we
went to 10 aircraft carriers or nine aircraft carriers and used
that money for missile defense or cyber defense we would be
more in tune with the times if our real goal is to protect the
United States of America?
Mr. McCord. What we try to do in this budget, and it gets
exactly the point to do is try and address our challenges on a
number of fronts and not say we can only do a maritime threat
or only do missile defense or only do cyber. We try to put
chips on a number of places we want to put bets.
I think it is a continuing question what the future of
surface warfare is. Certainly, the movement in the maritime
world is more toward moving eventually toward unmanned, moving
toward more distributed sets of naval architecture. But we
are--it is not at the expense of missile defense. Missile
defense tends to be, if anything, technologically limited of
what is technologically capable to be done as quickly as you
would like it to be done, rather than funding constraint.
Mr. Grothman. OK. Well, I would like to thank the Chairman
for indulging me. I will point out if one of those aircraft
carriers gets sunk in addition to the huge waste of money,
there are 5,000 people on each of them who would die. So,
whether you want to take that into account, I don't know. But
thank you for giving me----
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentleman from Texas, Dr. Burgess, for five
minutes.
Dr. Burgess. I thank the Chair. Thanks to the Under
Secretary for being here today. Mr. Under Secretary, you are
familiar with the position of the comptroller at the Pentagon.
Is that correct?
Mr. McCord. Yes, sir. This is my second time I have been
back since the first of June, and I served in the position
previously.
Dr. Burgess. So, for several years, I have tried to get the
Pentagon to audit, as it is every agency was required to do
about 20 years ago. And to get the audit undertaken at the
Pentagon I think Fiscal Year 2018, the first audit was finally
undertaken. No great surprise, it wasn't passed. And what we
have been told is that by 2027, the clean audit will in fact be
done. Is that still, that is four years from now, is that still
the glide path that you are envisioning for the clean audit for
the Pentagon?
Mr. McCord. I think that is still the best estimate that we
have, yes.
Dr. Burgess. Are you able to implement any improvements of
problems that you find along the way? Like in a business there
would be continuous quality improvement in any lean
manufacturing process. Are you able to incorporate any of those
things as you are encountering them?
Mr. McCord. Yes. The main things that we are trying to
focus on are the systems controls. And probably the hardest
thing that we have to do is trying to get rid of older systems
that we still rely on every day to do our many business
processes. But, yes, we are implementing as we go. We are
finding that some of the notices we get from our auditors are
now more complex than the first round or two. So, they are
not--they are more difficult to get through. But we are making
progress but it is not fast enough.
Dr. Burgess. Sure. Well, I want you to continue to keep a
focus on that. Let me just ask you also in the process of
working on the NDAA, several years ago in 2020, severe problems
with base housing were uncovered. The privatization of base
housing that occurred back in the 1990's, trying to offload
that appropriation from the Department of Defense and farming
it out. Twenty years later, 30 years later, some of those
properties now are suffering and the maintenance has been
deferred. So, NBC News is reporting on the Senate report from
the Senate Homeland Security Committee of the problems that
still exist in base housing. So, can you do anything to assure
us that that is still a high priority for the Pentagon to bring
that base housing up to standard?
Mr. McCord. Yes, sir, I am familiar. I read a report of the
hearing that you describe on the Senate side this week. And I
would say that while not directly under my purview, we do have
a nominee pending for--that would really own that
responsibility.
The Tenant Bill of Rights, which I am sure you are familiar
with in the NDAA I would say if it is not proving--if there is
enough time to determine that it still needs further
improvement, then that is something the Department should work
with the Congress on. I know that it had, I believe, over 30
different aspects to it, some of which may not have been
completely rolled in yet.
But as you describe, I remember when housing privatization
started. It was always a bit of--it was, by Pentagon standards,
it was a bold move into privatization. And the rubber was
always going to meet the road not upfront when the houses are
being built, but later on into the middle of the deal, which is
where we are now. And I think it is important that we work with
the Congress to make sure that we stay on top of this within
the realm of things that are privatized and, you know, having
DoD have its appropriate share of responsibility and the
contractor having theirs.
Dr. Burgess. I am just going to have to reclaim my time
because I am going to run out. Let me just ask you, we are
going to be asked to provide a good deal more in the way of
military assistance to Ukraine. They have got a terrible
problem and it is horrifying what is going on over there. But
can you share with us, does the Administration kind of have an
overarching strategy about where they are going with this? We
keep hearing about Stinger missiles going over. We keep hearing
about Javelin missiles going over. Are these coming from our
existing stock? Are we replacing those? How is that all working
together right now?
Mr. McCord. Yes, thank you for that question. What we have
done is worked in consort with our allies. There are about 30
countries that are helping Ukraine. So, it is not all on us to
help them although we are, as is often the case, leading the
coalition and leading the effort. Yes, we are donating from our
own stocks.
We are also looking to find from any place that we can.
Secretary Austin and General Milley spend basically part of
every day on the phone with people from other countries trying
to get them to contribute as well. Especially Russian type
equipment that Ukrainians are more familiar with. So, there is
both the U.S. side of equipment, U.S. NATO standard equipment
that is being delivered to them, and especially from Eastern
Europe, European countries that have more familiarity with it,
Russian style ammunition and equipment. So, we are doing both.
We have done eight drawdown packages. Eight packages where we
have drawn down our own supplies and given to Ukraine.
Congress gave us funding to replenish those and we have
sent out two notices so far. So, we have sent about $3.2
billion out the door. We have started the clock on $2 billion
of that to start replenishing our own and to get our industrial
basement up to start replenishing those missiles for ourselves.
But we are now to the point of expending all of the
authority Congress gave us in the Ukraine supplemental attached
to the omnibus appropriations bill from six weeks ago. And we
anticipate sending another supplemental to Congress probably
this week to ask to continue to show that we are in this with
the Ukrainians to get them what they need to fight, to continue
the fight to defend themselves.
So, I think the overall message is we are not letting up on
the gas. The Ukrainians are fighting hard for their own country
and we want to continue to do what we can to support them.
Dr. Burgess. Yes. We would love to see the strategy though
that the Administration is pursuing. Right now, it just seems,
as a need comes up we fill it. As a need a comes up we fill it.
But where are we going? Where is this going to end up?
Chairman Yarmuth. All right.
Dr. Burgess. Because remember it was these folks that----
Chairman Yarmuth. The gentleman's time has long expired.
Dr. Burgess [continuing]. underestimated the resiliency of
the resolve the Ukrainian have. Everyone just said it would be
over in three days. Well, it wasn't. And I can't believe that
the geniuses in charge couldn't anticipate that. Thank you, Mr.
Chairman. I yield back.
Chairman Yarmuth. The gentleman's time has expired. I now
yield five minutes to the gentleman from New York, Mr. Jacobs.
Mr. Jacobs. Thank you, Mr. Chairman. Thank you, Under
Secretary for being here. As Congress is currently debating how
to provide additional military resources to the Ukraine, and it
seems quite possible the U.S. military on financial support for
Ukraine will continue to be a topic of discussion over an
extended period of time, is it your assessment and that of the
DoD that the Ukraine needs additional assistance and needs it
as soon as possible?
Mr. McCord. It is. The fight's ongoing and so, whatever we
can get them in the very near future could be hugely important
to them.
Mr. Jacobs. I agree wholeheartedly. Additionally, there are
concerns that the proposed--that proposing a defense budget
that is effectively a cut to our defense budget sends a signal
to our adversaries, especially Russia during the current
invasion of the Ukraine that we plan to be less robust on
national security. This also sends a signal to our allies that
we may not be able to support them in times of need. What are
the DoD plans to replenish our European partners' defense
systems since they have sent a bulk of theirs to the Ukraine?
How is the United States prepared to bolster, this is another
element of the question, the same question, bolster Sweden and
Finland's defenses if those countries decide to enter NATO or
be accepted into NATO? Thank you.
Mr. McCord. Thank you. Let me address the second part
first. I think we would be, we at the Defense Department and I
believe the Administration, would be very supportive of Sweden
and Finland's accession to NATO. And I personally would expect
that this may well be on the agenda for the late June summit
that it could be ready by then. I think that would be a welcome
development.
And one of the reasons it would be welcome is that they are
very capable already and shouldn't need a lot of help from us
to be contributing to the team immediately should they desire
to join the team. I believe they would be welcomed as very
capable partners without requiring a lot of assistance from us.
It probably would lead to discussions about interoperability
and maybe shared industrial base use, but not needing a lot of
direct help from us.
On your first question about other countries that have also
contributed equipment to Ukraine, I think that is going to have
to be a case-by-case basis. So, I mean, just to take--I don't
mean this to be an extreme sounding example, but if one person
is, or one country is sort of cleaning out their attic of
things that they never used and aren't going to miss, and
aren't going to really ask them to, you know, they are not
digging very deep and another country is maybe feeling is more
threatened by Russia and is digging deeply into things that
they really need replenished, I think you can imagine those are
pretty different cases as to whether or not it should be on us
and the American taxpayer to refill everybody's coffers or I
think more of a case-by-case basis would be more appropriate.
Mr. Jacobs. So, I hope it is not the case or is it that
some are just emptying out their attics and their weaponry that
is not worthwhile to the Ukraine. Is that the case?
Mr. McCord. I only posit that as an example that some
people are giving things that are less important to them than
others and are maybe less on the front lines than others.
Mr. Jacobs. Great.
Mr. McCord. Every contribution is important to the
Ukrainians, of course.
Mr. Jacobs. Thank you very much, and I yield back.
Chairman Yarmuth. I am sorry. The gentleman yields back. I
now recognize the gentleman from Florida, Mr. Donalds, for five
minutes.
Mr. Donalds. Thank you, Mr. Chairman. Mr. McCord, thanks
for being here and taking the time. I kind of want to delve a
little bit into defense contracting a little bit. Obviously, we
know how important defense contracting is to DoD. Our entire
military apparatus, especially when it comes to building and
maintaining ships and equipment for our men and women. But we
also do have to acknowledge it appears that there have been
real issues associated with prolonged timelines for maintenance
and/or new equipment to actually be put into service.
You know, when you guys are going through your cost
projections and the budget, does DoD take into account the
additional costs associated with potentially prolonged projects
because in any contract that ever exists, the longer it takes
to execute, typically the more expensive it becomes. So, does
DoD take in account for that in its budget?
Mr. McCord. That is a great question. I would say probably
not enough in that we--when we know that a contract is going to
take X amount of time to execute and for the service or the
good to be performed and delivered, that amount of time is
built into the cost estimate. So, if you know something is
going to take two years, you are going to have a different
inflation assumption, a different cost assumption than
something that is going to deliver much more quickly.
What I think we probably don't do well, even though I said
that we were used to continuing resolutions in a pattern of
delayed budgeting, in terms of knowing that we are not going to
be able to enter into contracts in the first quarter of a
fiscal year, I don't know that we have changed our cost
estimating to account for this pattern of delays as well we
could have.
Mr. Donalds. A real quick followup to that. I mean, is
there something that you believe, obviously outside of, you
know, consistent budgeting on Capitol Hill, which by the way, I
would agree with you on as something that Capitol Hill should
be doing is consistent budgeting. But is there anything outside
of that that the Administration is starting to look at with
respect to making sure that our contracts actually, that they
are actually executed on time? And that we actually are doing
everything we can with respect to a lot of equipment, a lot of
ships that are just sitting in drydock waiting for maintenance
to be completed?
Mr. McCord. Yes, those are probably the hardest examples
because when you get into something as complicated as a ship
and you maybe find different corrosion you inspected and/or you
have issues with your work force, has been a real big issue on
the ship side, is getting the skilled workers in those
particular trades when you need them, given the, you know, the
tight labor market.
I don't know that we have a systematic report for you. But
the issues that we are aware of and particularly on the ship
side, we do have attempts to address either the infrastructure
or the work force or both. But if you are asking about
contracting writ large, I would have to probably get you an
answer for the record from our acquisition and contracting
community----
Mr. Donalds. Yes, I would appreciate that.
Mr. McCord [continuing]. to get you a broader sense.
Mr. Donalds. Only reason why I am--and I don't mean to shut
you down. I know what you are saying is important but I am also
running out of time. I want to get somewhere else. But I would
appreciate, you know, a more detailed answer with respect to
that.
One thing I do want to highlight in our discussion right
now is really how important inflation and labor is to the
functioning, not just of DoD but our economy overall. I was
having a conversation with members of my--one of my city
councils and they were trying to address so many issues
affecting their city, but so many of those are impacted by
fiscal policy and monetary policy out of Washington,
specifically with inflation and how that does impact labor
markets.
So, obviously, you guys are feeling that at DoD as well. I
think it is important that the Administration takes a lot of
their future fiscal and monetary decisions into account of how
broad and widespread those impacts are when you are trying to
do simple things like, you know, finish a ship on time, get
equipment out where it needs to be, build an affordable housing
project, or even private contractors building single family
homes. It is universal the destructive impacts of inflation and
bad fiscal policy.
I do want to switch gears real quick and we are running out
of time. The President made a statement the other day that he
wants the military to essentially be all electric and to go
green. Let's just be perfectly honest. Is it even possible for
the miliary to do that, one? And then number two, can the
United States military completely survive on when solar and a
``green'' renewable energy matrix?
Mr. McCord. I appreciate your--on inflation, I will say
that, yes, that is something that we are very sensitive to as
well. Of course, we are subject to all the same pressures and
all the same factors in terms of labor prices and getting
skilled workers that you describe.
On vehicles and airplanes, again, airplanes are what
consume the vast majority of the energy that DoD consumes. I
don't think that there is any immediate prospect of us having a
fundamentally different type of airplanes that we are using,
whether they are manned or unmanned. They going to still rely
on the same type of fuels for the foreseeable future.
So, I don't think that we really should be focusing on
whether, you know, the non-tactical side is much easier to work
with in terms of getting that to be more electrified. The
combat vehicles, the combat side is going to be a much longer-
term prospect if it is possible.
Mr. Donalds. Mr. Chairman, if you give me leeway? A real
brief followup to that, Mr. Chairman?
Chairman Yarmuth. Go ahead.
Mr. Donalds. Thank you, Mr. Chairman. Mr. McCord, is it
possible to fly an F-16 or an F-35 on biofuels?
Mr. McCord. I am not aware that we have had biofuels
experiments on aircraft the way that we have on ships. So, I
don't know the answer to that.
Mr. Donalds. OK. And, thanks. Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired. I now
recognize the gentlewoman from Texas, Ms. Jackson Lee, for five
minutes.
Ms. Jackson Lee. Thank you very much, Mr. Chairman. I was
chairing in committee in judiciary. And thank you for your
courtesies. Secretary McCord, thank you for the time that you
have given us. Let me quickly go to personnel matters and I
have a boatload of questions and so, your typical defense
pithiness would be greatly appreciated. Again, thank you for
your service and the service of so many men and women in the
United States military.
Just coming back from Ukraine, I was with the 82d Airborne
all ready and serving and then previously was with the United
States Army as well on the Belarus-Lithuania border. So, thank
you so very much and I know our men and women are around the
world.
Let me focus on the question of the quality of life. Wars
have been somewhat behind us. What kind of investment are you
making in PTSD, the issues dealing with women's health? I have
been an advocate for fighting against triple negative breast
cancer. I would like to see that program expanded. And then
personnel dollars--I am sorry--in terms of increased salary and
housing. If I could just take that package because I want to go
on to something else. But I am interested in quality-of-life
issues that you deal with the men and women in the United
States military.
Mr. McCord. Yes, in the interest of time, we will get you
an answer for the record on the PTSD and some of the particular
issues in the health budget that you mentioned, rather than me
trying to guess at them without all the facts at my fingertips.
I am sorry, Congresswoman, I can't hear you right now.
Chairman Yarmuth. Ms. Jackson Lee are you?
Ms. Jackson Lee. Yes. Can you generally, Secretary McCord,
give a general commitment to these quality of life issues and
making sure funding in your budget is there?
Mr. McCord. Absolutely. Secretary Austin has a huge focus
on taking care of our people. He talks about it with us all the
time as it is a very high priority of his.
Ms. Jackson Lee. Great. Let me ask you about the outcomes
of a study assessment program dealing with an officer's fitness
for command. Any future steps that the DoD and the Army might
be taking to implement a qualitative interview process in the
BCAP?
Mr. McCord. I will say that that is outside my area of
expertise. I have heard the Army describe what they are trying
to do to make that they make the best possible selections in
terms of fitness for command. But I would have to refer--I
would have to get you an answer from the Army on the status of
that program in more detail. I am familiar with it and I have
heard Army leadership discuss it.
Ms. Jackson Lee. All right. I will focus on that DoD has
requested $479 million to implement the 80-plus recommendation
from the review dealing with the sexual assault. In requesting
those dollars, what will be the oversight to make sure that
these dollars are implemented properly across the gamut of the
jurisdiction of the Pentagon and the various military branches?
Mr. McCord. Thank you. The primary oversight that I believe
we will see in that area is Deputy Secretary Hicks has
something called the Defense Workforce Council, which is meant
to sort of provide the same kind of oversight that we often see
on weapons programs and investments to have the same oversight
of our personnel-related programs. That is the venue that would
be vetting our efforts on sexual assault prevention, in
addition to the action officers, of course, at lower levels
that are actually running the programs. But the Deputy
Secretary would probably be the primary oversight of that.
Ms. Jackson Lee. Well, let me, overall defense budget comes
in many different forms. I want to make sure that there is
going to be strong focus on the infrastructure that the United
States military bases, housing, and that the Secretary and the
Defense Department will have a focus on that.
Let me just give you two questions so that you can answer.
That is number one. And secondarily, as I indicated, many of us
have been to the border dealing with the despotic violence that
President Putin is exhibiting against innocent human beings.
The question is we have given unanimous consent. The President
has offered some additional huge dollars coming from the
Defense Department for Ukraine in terms of weaponry. Do you
have a projected schedule of continuing that of those
particular ones that have just been issued in the last say, 48
hours, 72 hours, when their time would be reaching into the
region?
Mr. McCord. Yes, thank you for that question. In recent, in
the last week or two, the drawdown, as they are so-called, the
Presidential drawdown authority packages, once approved by the
Secretary and the President and announced, have been on
airplanes on their way to Europe within about 49421.hours. So,
from the time these decisions are made, the equipment is moving
very rapidly. There is no higher priority, I think, of General
Milley and Secretary Austin than keeping an eye on exactly what
is flowing and not only is it on an airplane, is it on a ship,
has it arrived in Europe, but is it across the border into the
hands of Ukrainians. So, that is being tracked on a daily basis
at very senior levels.
We have used, as of this week, we probably have used all
the authority that Congress gave us for additional drawdown.
And we anticipate coming back to Congress in the coming days to
get more authority to continue to help the Ukrainians.
Ms. Jackson Lee. I hope in the course of that you all will
have a classified briefing for Members of Congress so that
would add to their understanding. Our constituents have been
very supportive, but I know our overall perspective is that we
want peace so we know where we are in this raging, vicious war
against Ukraine. And so, we have got to provide defense as we
discuss ways of solution.
Mr. Secretary McCord, you have been--I know it is ended,
but very quickly the infrastructure bill was prepared----
Chairman Yarmuth. The gentlewoman's time has expired. You
can submit a question for the record.
Ms. Jackson Lee. Well, thank you. I yield back.
Chairman Yarmuth. All right. The gentlewoman's time has
expired. I now recognize the gentleman from Georgia, Mr.
Carter, for five minutes.
Mr. Carter. Thank you, Mr. Chairman. I appreciate it. Mr.
Under Secretary, thank you for being here. As you are aware,
Mr. Secretary, there is--there are four combat readiness
training centers in the United States. I have the honor and
privilege of representing one of those in Savannah, Georgia.
And it is proposed under this budget to be closed. Now, aside
from the lunacy, and I will refer to it as lunacy, of
considering closing any combat training center, combat
readiness training center at this point in world history where
we could potentially be on the brink of World War III, is just
insane to me. Especially when you take into consideration that
the Savannah facility is the most utilized and the most
efficient of any of the four combat readiness training centers
here in America.
Now only that, but, you know, the most frustrating thing--
it is all frustrating. But another frustrating part of this is
the fact that two years ago in 2019, I should say, in 2019,
there was $24 million allocated to build a new hangar for that
facility. Now, that hangar is under construction right now. The
ribbing cutting on it is slated to happen in September. I have
been invited and I look forward to being there. Twenty-four
million dollars, it should be completed by then and we will
have the ribbon cutting on it. And then it is slated to be
closed in April 2023.
Not only that, but the facility also about three weeks ago,
had $1.2 million worth of computer equipment installed there.
Computer equipment that is not available anywhere else in the
country at any of the other combat readiness training
facilities. That $1.2 million worth of computer equipment that
was installed, again, in April 2023, is going to be gone to
waste. No wonder taxpayers get so upset about wasteful spending
in the federal government.
Now, how important is that training center? Every F-22
pilot over the last two years has been trained at that
facility. I just have to ask you, Mr. Secretary, what is more
important to our readiness and ability to counter threats
across the world like Russia and China, climate and social
spending or an actual military asset like the Savannah combat
readiness training center?
Mr. McCord. Mr. Carter, it is clear that you know much more
about this particular training center than I do. So, I am not
going to offer you an explanation that is not as well informed
as your question is. I am going to have to get with my
colleagues for the record of what was the rationale on capacity
or other grounds for this particular proposal.
Mr. Carter. But you can understand particularly in the
environment, the world environment that we are in, we all know
what is going on. We see it every day on TV, on social media.
We have got a front row seat to a war that is going on here
that could potentially lead us into World War III.
You know, I just finished reading a book about World War
II, The Splendid and the Vile by Eric Larson. And, you know,
that when Germany invaded Great Britain, they never intended to
bomb London. It was actually a mistake made by one of the
generals, one of the Nazi generals. Can you imagine what a
mistake an errant missile would do it if were to hit a NATO
country right now? We would be in World War III.
And yet, we are talking about a budget that recommends
closing a combat readiness training center? The most efficient,
the most utilized that we have here, when we are just about to
complete a $24 million hangar, when we just installed $1.2
million in computer equipment. And yet, this budget includes
billions of dollars to go toward climate change. Why isn't that
money being used to keep these facilities open?
Mr. McCord. Mr. Carter, I agree that we owe you an
explanation of the proposal on the CRTC that you are
describing. I am not familiar with the details enough myself.
Mr. Carter. Obviously, this is very upsetting. It is
upsetting for me. It is upsetting for my constituents. It is
upsetting for Americans to even think that we would even
consider this. I look forward to your response, Mr. Secretary.
And I hope that you will be able to provide me with that and
provide some kind of explanation and consider doing away with
some of these climate change initiatives and keeping this much
needed facility open. Thank you, Mr. Chairman, and I will yield
back.
Chairman Yarmuth. The gentleman's time has expired. And I
now yield myself 10 minutes so, you only have to deal with me
now, Under Secretary.
I have kind of a rhetorical question, but I am going to ask
it. Are you aware of any time when the Department of Defense
has requested a budget that was less money than they thought
they needed?
Mr. McCord. I am not.
Chairman Yarmuth. And I think it is interesting to have
this discussion because we are hearing from a lot of people
that seem to be questioning whether we are providing enough
money for defense and that is always certainly a valid
question. We always have to ask that. Armed Services has to ask
that as well. But the experts are at the Pentagon. The people
who actually have the responsibility for defending the country.
And I assume that they are not going to be derelict in their
duties since they have given their life for the defense of--
their careers for the defense of this country and they are not
going to ask for less money than they think will be adequate to
defend the country.
And the question I have is we can argue about percentages.
We can argue about inflation. We can argue about declassifying
some equipment, reducing the number of service members. But can
you tell us today that with this budget, we have not in any way
diminished our capacity to defend the United States?
Mr. McCord. Chairman, I would say that far from it. We feel
like we have made--we are making progress, would make progress
in this budget across the board on any number of fronts to
keeping the triad strong, and modern, and capable to space
resilience, to the quality of our people. What I would say that
our budget does not do, no budget can do, is reduce all risk,
eliminate all risk. That is not the realistic standard by which
this, the Department leadership, or any department leadership
can present a budget to you that we have now eliminated all
security risk to the United States.
So, there will always be someone who could say I could use
more here for X, I think, you know, it would be helpful. But in
terms of balancing and addressing our risk across not only the
national security space, but in the whole-of-government
framework, as well as the defense specific framework, we feel
like we have a very strong budget that does everything that
Secretary Austin told the President we needed to accomplish,
and the President gave the Secretary what he asked for.
Chairman Yarmuth. Thank you for that answer. Now, I know
you don't want to answer the $3.1 billion climate change
question again, since it has been asked by virtually every
member of the Republican side. But can you give us some
examples of how climate change has already impacted the
military?
Mr. McCord. Yes, sir. The primary things that we look are
our own installations, especially those on the coast have
suffered significant financial impact of storm damage in recent
years and hundreds of millions of taxpayer dollars have gone to
repair extreme weather damage at places like Tindal Air Force
Base in Florida.
More importantly, perhaps, as we look out into the future,
is climate change is going to instigate societal change,
societal conflict, population migration, scarce resources, you
know, food problems. And those generate conflict. Those are, at
least, are a potential to generate conflict. And that is going
to change where we might be called on to intervene, what we
might be called on to do. So, that is the other aspect, I
think, in terms of what it does to the world security situation
when you inject that kind of new instability into the world is
to climate change that people, not everybody in the world can
move, right, to accommodate climate change. So, it is going to
create conflict.
Mr. Carter. You anticipated another part of the question
but I am going to ask a third part. Is there anybody you know
of in DoD going back through the Trump Administration, the
Obama Administration, go back pretty far, at least 10, 15
years, who doesn't think that climate change is a significant--
poses a significant risk to the U.S. military?
Mr. McCord. I have not heard any senior civilian or
military leader say that the issue is not there.
Mr. Carter. Thank you. I want to move on to the question of
the audit and, you know, I think everybody would like to see
the Pentagon have a comprehensive clean audit every year. But
it seems to me having been involved in the private sector with
some audits over the years, that auditing $700-plus billion is
not something that is easily done, no matter how well
intentioned the leadership of the Pentagon and the auditors
would be.
So, this is kind of one of those, let us help you, help us
help you questions. And that is are we expecting too much out
of the--when we talk about an audit of the Pentagon? Or is
there a way we can require it to be done that is helpful but
not as difficult to do? Because it seems to me that if you are
using normal standards for an audit where you have to take
inventory of every bullet and every piece of equipment that you
have and do appraisals of real estate values and all of the
things that you would normally do, I don't know how in the
world you could get it done on a timely basis.
Mr. McCord. Chairman, thank you for that question. I would
say that I understand why it is expected of us. It is the law
in the CFO Act. Other agencies do it and it is a reasonable
expectation of we should be able to do it too despite our size
and complexity. As you know, if we were our own country, our
budget would put us in about the 30th country biggest in the
world in terms of GDP. So, we are an enormous operation and we
not only have to audit a $700 billion annual budget, we have $3
trillion dollars in assets. And it is really on the balance
sheet side. If there is one thing that I think would be that we
could get there much faster with the least damage to public
interest would be if we didn't have to do the balance sheet
part of the audit but we are doing the other parts of an audit.
Because valuing all our property has been an enormous challenge
for us.
Whereas, for example, 40 percent of our budget,
approximately, is on the people side, is pay and benefits of
our troops. We have clean opinions on all the processes that
pay our military, pay our civilians, pay our retirees, which is
exactly what my boss, the Secretary, would want, you know,
taking care of people. We are not messing that up.
But on the trillions of dollars of assets that we have
accounting for it and valuing it is where we are struggling, as
well as on the IT systems. But we should not be getting a pass
on the IT system side because as we see every day with the
increasing degree of cyber threats, that if you don't have
secure systems, you have other problems besides not passing the
audit, right? So, that is something where I think we definitely
have a lot of work to do that we need to do.
But on what I would call the balance sheet side, I am not
sure that the payoff for the taxpayers is really there because
if I can take one more minute on this, I know you know this,
but it is easy to maybe for not everyone to understand it that
passing a financial audit means your obligations on the
financial side are being matched with all your contracting
decisions. It doesn't mean that the airplane that you bought
was the right airplane, that it performs well, that you paid a
fair price for it. There are any number of things that people
are rightly concerned about in terms of that might be called
waste or fraud or a poor use of money that passing an audit
does not prevent and is not designed to prevent.
It is, you know, it is matching up your numbers, but it
still doesn't, it doesn't guarantee that you made wise
decisions. And I know you know that, but that is just the other
caveat I make. It is still worth doing, and it is the law, but
I think, again, on the balance sheet side, I am not sure that
people at the end of the day will find the payoff is really
there.
Chairman Yarmuth. I appreciate that answer. One quick
question before I go. I may have asked you this before, but I
am not--I remember meeting with a group from the War College
and one of the things I asked them was do you all think a lot
about--this was probably three years ago--it was pre-pandemic
because they were in the office. And I said do you all think a
lot about how artificial intelligence is affecting military and
will? And their eyes all opened up and one of them said we talk
about it all the time. I don't think there will ever be a
strategic decision or tactical decision on a battlefield made
again without artificial intelligence. And I ask the question
because I am curious as to what--how much money is being spent
on researching how artificial intelligence can enhance our
military operations and whether that is a high priority.
Mr. McCord. It is a high priority. In terms of how much is
in the budget, it is a hard question to answer because like
software, it is in--it is not in everything yet, but it is in
many things and it is getting in more programs. It is part of
more programs every day. I would say it is something that we
could kind put our arms around to think about the $2 billion
range right now. But the importance is growing rapidly.
I would say along with quantum computing, it is one of two
sort of foundational technological changes that we are looking
in the national security world, not just the defense world, but
the national security world. I think you are correct that man-
machine teaming is already here and is going to grow. I know
people, some of these folks on something that is entirely
autonomous we are not going to be quick to take the person out
of the loop.
Chairman Yarmuth. Right.
Mr. McCord. I think in terms of especially in terms of the
use of lethal force. But the man-machine teaming and the speed
of decisionmaking it is already here and it is growing. It is a
huge interest item of our Deputy Secretary who serves as our
COO, basically. And there are a number of efforts that we have
had to increase the use of AI out in the combatant commands,
you know, where sort of processing in real time current
operations, but also on the back end in the Pentagon in terms
of decisionmaking processes. So, we are looking at sort of both
the business side and the operational side of AI. And she has
created a new office, the Chief Digital and AI Office to bring
together some of these areas that we were sort of in different
places in terms of a focus on AI and how it affects our
abilities.
Again, the Secretary, you know, obviously is focused on
this too, but the Deputy Secretary particularly has this sort
of for an action item under the Secretary as to how we can
really be much more agile than we are today in terms of
information flows. I think there are areas where we have
incredible situational awareness and real time awareness. But
AI is just increasing the need to this future decisionmaking
and that is something that we are very focused on how to get
better at that because it is clearly foundational for the
future.
Chairman Yarmuth. Great. Well, I appreciate that answer. My
time has expired. So, I thank you again for coming before the
Committee today to present the President's DoD budget and
appreciate your responses. And if there is no further business,
this hearing is adjourned.
[Whereupon, at 1:15 p.m., the Committee was adjourned.]
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