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[H.A.S.C. No. 107–28]








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FEBRUARY 6, 2002




One Hundred Seventh Congress

BOB STUMP, Arizona, Chairman

CURT WELDON, Pennsylvania
JIM SAXTON, New Jersey
JOHN M. McHUGH, New York
HOWARD P. ''BUCK'' McKEON, California
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J.C. WATTS, Jr., Oklahoma
WALTER B. JONES, North Carolina
LINDSEY O. GRAHAM, South Carolina
JIM RYUN, Kansas
BOB RILEY, Alabama
ROBIN HAYES, North Carolina
KEN CALVERT, California
ROB SIMMONS, Connecticut
JO ANN DAVIS, Virginia
W. TODD AKIN, Missouri
JOE WILSON, South Carolina

JOHN SPRATT, Jr., South Carolina
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LANE EVANS, Illinois
GENE TAYLOR, Mississippi
MARTIN T. MEEHAN, Massachusetts
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
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RICK LARSEN, Washington
Robert S. Rangel, Staff Director
Christian Zur, Professional Staff Member
Jarrod Tisdell, Research Assistant
Alexis Lasselle, Staff Assistant
Daniel Hilton, Staff Assistant






    Wednesday, February 6, 2002, Fiscal Year 2003 National Defense Authorization Act—Secretary of Defense, Chairman of the Joint Chiefs of Staff, Under Secretary of Defense (Comptroller)


    Wednesday, February 6, 2002

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    Skelton, Hon. Ike, a Representative from Missouri, Ranking Member, Committee on Armed Services

    Stump, Hon. Bob, a Representative from Arizona, Chairman, Committee on Armed Services


    Myers, Gen. Richard B., (USAF), Chairman of the Joint Chiefs of Staff
    Rumsfeld, Donald H., U.S. Secretary of Defense


Myers, Gen. Richard B.

Rumsfeld, Secretary of Defense Donald H.

Skelton, Hon. Ike
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Stump, Hon. Bob

[There were no Documents submitted for the Record.]

Mr. Skelton
Mr. Taylor
Mr. Allen
Mr. Snyder
Mr. Hostettler
Mr. Riley
Mr. Calvert


House of Representatives,
Committee on Armed Services,
Washington, DC, Wednesday, February 6, 2002.

    The committee met, pursuant to call, at 10:05 a.m., in room 2118, Rayburn House Office Building, Hon. Bob Stump (chairman of the committee) presiding.

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    The CHAIRMAN. Will the meeting please come to order.
    Today the committee meets to receive testimony on the Administration's defense budget for fiscal year 2003.
    It is with great pleasure that we welcome back Secretary of Defense Donald Rumsfeld and Undersecretary Zakheim and also General Richard Myers, who will be testifying before the committee for the first time as Chairman of the Joint Chiefs.
    Before proceeding, I would like to take a couple of moments and recognize some very special guests we have with us this morning: the Honorable Colin Kenny, Chairman of the Committee on National Security and Defense of the Canadian Senate, along with seven of his colleagues.
    Welcome, Mr. Chairman. We are very pleased to have you with us today and look forward to many more discussions. Thank you for taking time out of your busy schedule.
    I invited Senator Kenny and his delegation to sit in on this hearing, and I understand they will have to leave shortly. So hopefully they can do it, Mr. Secretary, after your remarks without any interruption.
    Finally, I want to take this opportunity to introduce our two new members of the committee, Jeff Miller of Florida and Joe Wilson from South Carolina.
    Jeff was elected to the House last October to fill the seat left vacant by Representative Joe Scarborough. Jeff came to Congress from the Florida legislature, where he served as Chairman of the Utilities and Communications Subcommittee. Jeff has a strong interest in military matters, which coincides with the considerable military presence in Florida's First District.
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    Jeff, we welcome you to the committee.
    Our most recent addition is Joe Wilson, who was recently elected to fill the vacancy left by the untimely death of our former chairman and friend, Floyd Spence. Joe comes to us after a lengthy career in the South Carolina State Senate, where he last served as Chairman of the Committee on Transportation. Joe has also served in the Army Reserve and is currently a colonel in the South Carolina National Guard, serving as staff judge advocate. His family is also following in their father's footsteps. Joe's sons are in the National Guard, the Navy, and in the Army ROTC.
    Joe and Jeff, we welcome you both to the committee this morning.
    Mr. Secretary, we have a lot of ground to cover today. I am sure most of the 60 members here would like to engage you in some questions. I am going to dispense with a lengthy statement and try to get right down to it.
    We are here today to discuss the budget. The context for today's hearing and the debate to follow has to be the war on terrorism and the goals and objectives laid out by the Administration for winning it. While it may seem fairly obvious to most of us in this room, I fear that the Nation in general is struggling to grasp the enormity and significance of what this war means for the Nation and our customary debate over national politics and priorities.
    I personally believe that the President has established the proper balance and necessary vision for the Nation to effectively pursue this difficult task. However, our challenge as policy makers will be to resist the impulse to resort to business as usual due to the long-term and unconventional nature of this conflict.
    With this in mind, I commend and congratulate the President and Secretary Rumsfeld for putting together a budget proposal that properly recognizes that the overriding priority facing our Nation, and thus our government, is to provide for our national security.
    We can and will debate on whether this is precisely the right number, whether the right trade-offs were made within the proposed budget. However, there should be no question that we collectively have a duty to ensure that during this time of crisis we are providing the President and our men and women in uniform with the necessary tools and resources to defeat the scourge of terrorism across the globe.
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    Let me remind the members that we will strictly enforce the 5-minute rule today.
    Before we proceed further, let me recognize the ranking member of the Committee, Mr. Skelton, for any remarks he may wish to make.
    [The statement of Chairman Stump can be found in the Appendix.]


    Mr. SKELTON. Mr. Chairman, thank you.
    Before I begin, let me also welcome our distinguished group of Senators from Canada. Senator Kenny, we thank you so much. I enjoyed our discussion earlier.
    I join you, Mr. Chairman, in welcoming our two newest Members, Joe Wilson of South Carolina and Jeff Miller of Florida, and look forward to working with both of them.
    It is rather ironic how things happen, Mr. Chairman, that Joe Wilson has a good friend in South Carolina who was my role model when I was a young boy, a retired Army Colonel, and I find that old friendships do match up years and years later.
    Mr. Secretary, thank you for being with us. General Myers, Undersecretary Zakheim, we appreciate your joining us today. I want to commend all of you for your leadership in the ongoing war on terrorism. I commend you on your commitment to the men and women of the Armed Forces.
    We are all very proud of what our troops have accomplished in such a short time. Their courage, their determination, their agility in adapting to new fighting environments is a testimony to the strength of our Nation's spirit. We are all very proud of them.
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    Thank you for your efforts, your leadership efforts.
    I want to talk a bit about the President's budget request. Before I do so, let me briefly comment on where we find ourselves today.
    America is effectively a nation at war. We find ourselves engaged in a global war against terrorism where the first battlefields have been in remote Afghanistan and now the jungles of the Philippines, and this course of events was unimaginable some 6 months ago.
    If I may digress, Mr. Secretary, you and I had a very, brief discussion a moment ago. You have an example citing Missouri's favorite son, Harry Truman, regarding defense budgets. You might know, having known him as a student and knowing him as a young lawyer, I am a bit sensitive regarding the Trumans and the Truman family.
    You say, ''It is a tragedy repeated throughout history that free nations seem to have difficulty recognizing the need to invest in their armed forces until a crisis has already arrived.'' Then you go on to say, ''In 1950, President Truman wanted a budget $3 billion less than General Omar Bradley.''
    There are a couple of other examples. One is a speech given in 1923 by Major George C. Marshall where he decried the doing and undoing of national security, and of course his words fell on deaf ears. Not too long thereafter we found ourselves engulfed in the Second World War.
    Another example, and this is to your credit, if press reports are to be believed, that you recommended a higher budget last year, and the President and the Office of Management and Budget (OMB) turned you down on your request. That, of course, is not the case now, since we have been at war.
    Let us put all that behind us and strive on, because we have serious work to do. Given the unexpected, unprecedented dimensions of this conflict, it is critically important that our global actions be driven by a coherent national strategy.
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    The President is required to submit a national security strategy to us in Congress within 150 days of entering office, and I am disappointed that this strategy has yet to be submitted to the Congress by the President. It should pull together the various elements of national power.
    I appreciate your timely submission of the Quadrennial Defense Review (QDR), although I hope that the details required, particularly regarding force structure, will soon be provided.
    Now, turning to the budget, let me first compliment you, Mr. Secretary, for succeeding in convincing the Administration this year to submit a defense budget that reflects real growth in spending. This is long overdue. I have been advocating this for several years.
    In particular, there are a couple of great strides in the budget request. The quality of life commitments remain central, procurement funding is near $70 billion, research and development investment is in excess of $50 billion. That is good.
    Having said that, I do have a couple of concerns, if I may voice them.
    This committee must take its constitutional budgetary role seriously in considering the $10 billion war reserve included in this budget request. I know I do. Instead of expecting a blank check, the Pentagon should present Congress with a well-thought-out proposal.
    It is interesting to note that a contingency fund, in my recollection, was requested by George H. W. Bush and was turned down by Congress. A contingency fund was requested by Bill Clinton and turned down by Congress. I think that we should use that and look at a number of high priority needs.
    Given the range of the Nation's strategic imperatives, we must also look seriously at our force structure and look at our end strength. Our troops are performing well in Afghanistan and now in the Philippines, but we are heavily stressed, both our active duty and reserves, and I think you reflect that in your prepared statement.
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    The QDR did not address the issue of force structure, as I had hoped, and recent reports claimed the services believed they needed an additional end strength of 55,000 troops.
    General Shinseki and Secretary White testified right in this room last year before we were engaged in this global war against terrorism that the Army alone needs 40,000 more troops. Mr. Secretary, your testimony indicates that you will not consider adding troop strength, the end strength, and General Myers, your prepared testimony says that you are continuing to study the end strength issue. What additional study is needed to know that we need additional troops?
    My recollection is that the Army recommends 40,000 more, the Air Force 8,000 more, the Navy 3,000 more, the Marines 2,400 more; and my understanding is that you have agreed to recommend 2,000 additional Marines to that service.
    Now, in a year when the President is requesting the largest defense budget increase in recent memory and when our troops are fighting a global threat, I cannot believe that the current end strengths are adequate, and some of the $10 billion contingency funds should be dedicated to increasing the Army end strength at least by 5,000 soldiers this year, with subsequent increases to follow.
    Beyond force structure, the pay raise included in the budget is 4.1 percent. It falls half a percentage short of what we did last year. I know you share a commitment to our troops, and I think we should strive to find a raise comparable to last year's.
    Now, at a time when the overall budget is increasing dramatically, when we have heard so much about the disrepair of military facilities, I cannot believe that the funds for military construction actually declined by $1.7 billion.
    Mr. Secretary, you may recall our distinguished colleague, the gentleman from Pennsylvania, Mr. Weldon, and others—Mr. Ortiz I know was with him—convincingly documented the tremendous state of disrepair of our military facilities last year, and we must continue our efforts to improve the quality of the service and the quality of life for our personnel if we expect to retain and recruit the best and the brightest.
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    In my view, Mr. Secretary, the trend in shipbuilding worsens in this budget. We have discussed this briefly. The request for five new ships falls well below the replacement rates and continues the dangerous trend that will soon bring the United States of America to a 200-ship Navy, a level totally inadequate for the protection of the sea lanes and other Americans interests.
    We need to build seven ships, in my opinion, in fiscal year 2003 and nine ships in fiscal year 2004 to reverse the downward trend transported in our Navy shipbuilding.
    At a time for such pressing needs for continued shipbuilding and force structure and for continued transformation, which I know you will touch upon, I think we may be devoting a great deal of money that we may not be able to spend as we had hoped in the missile defense area. It is unclear to me whether the Department can wisely execute all of the money that is requested in that area, $7.8 billion.
    According to the Congressional Budget Office estimates of $238 billion over 15 to 25 years in that area, it could well come to pass. Both theater and national missile defense are worthy programs that counter a potential threat on our Nation, but just as the Germans rounded the Maginot Line in France, September 11 proved that terrorists will find unexpected ways to get around or avoid a single costly defense system.
    Mr. Secretary, General Myers, Dr. Zakheim, we remain deeply proud of our troops. We want you to know we will work with you to make sure they have everything that they need to succeed, both now and in the future.
    Again, we thank you for your leadership. Yours is not an easy job, but we want you to know that we want to walk hand in hand with you. Please understand our concerns, and we hope we will have an open ear to yours. While we have a number of concerns in our budget, we hope that this committee will do an excellent job, under the leadership of our Chairman, to support the global fight against terrorism.
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    Again, we thank you, General and Dr. Zakheim, for being with us.

    [The prepared statement of Mr. Skelton can be found in Appendix.]

    The CHAIRMAN. Mr. Secretary, the floor is yours. You may proceed in any way that you see fit.


    Secretary RUMSFELD. Thank you very much, Mr. Chairman and members of the Committee. I thank you and Congressman Skelton for those words, those thoughtful words.
    I have submitted a rather lengthy statement which I would request be included in the record.
    The CHAIRMAN. It will be in its entirety, Mr. Secretary.
    Secretary RUMSFELD. I also want to join in welcoming our friends from Canada. We had an opportunity to visit earlier this morning, and we are very pleased they are here and thank them and their country for their fine contributions to the war on terrorism and for the very healthy and close working relationship that our two militaries have had now for any number of years. I know you all have to leave in a few minutes, and I just wanted to join in welcoming you.
    The other thing I would like to do is join the Chairman and the Ranking Member about their comments about the men and women in uniform and the wonderful job they are doing across the globe. Anyone who does, as the members of this committee do and the people at this table do, travel and meet with the troops on a fairly regular basis cannot help but come away with just enormous confidence in their dedication, their patriotism, their confidence, the training they have had, and the very high state of morale that they bring to the important work that they are doing. They put their lives at risk for our country, and we all are deeply appreciative and grateful to them.
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    Mr. Chairman, the events of September 11 shattered some myths, among them the illusion that the post-Cold War world would be one of extended peace where our country and friends and allies could stand down, reduce defense spending, and focus our resources on domestic issues. We learned on September 11 that that is simply not the case.
    Now, through the prism of September 11, we can see that our challenge today is not simply to fix the past but to accomplish several difficult missions at once: to win the worldwide war on terrorism; to restore capabilities by making delayed investments in procurement, people, and modernization and infrastructure, as was mentioned by the Chairman and the Ranking Member; and to prepare for the future by transforming for the 21st century.
    There are some who say it is too much to ask that you try to undertake all three of those challenges at once, that it is impossible. I do not agree. I think it is not only possible, but we have to do it. Our adversaries are transforming. They are watching the way we were successfully attacked, how we respond, how we may be vulnerable in the future, and I suggest that we stand still at our peril.
    The 2003 budget for these reasons is a large one, $379 billion, a $48 billion increase from 2002. This includes about $19 billion for the war on terrorism. It has, as was mentioned, a $10 billion contingency fund plus $9.4 billion for a variety of programs related to the war, both internationally as well as a fairly substantial portion for homeland security.
    That is a great deal of money. It is hard-earned tax dollars. But let me try to put it in context.
    Last year before this committee I said that a decade of overuse and underfunding had left us in a hole that regrettably the President's 2002 budget, while also a significant increase, still left shortfalls in a number of critical areas such as infrastructure, procurement, operations, and maintenance. We knew that.
    Moreover, I advised this committee that just to keep the Department going in 2003 on a straight line basis, with no improvements, simply covering the cost of inflation, realistic budgeting, making up for past overruns in shipbuilding, it would require a budget of $347 billion, an increase of $18 billion over the 2002 request.
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    As high as that may have sounded when I said it last year, it turns out that the estimate was somewhat low. If one combines the costs of inflation plus the ''must pay'' bills like health care, which is a breathtaking $18.8 billion in this budget, retirement benefits and pay, plus the realistic costs for weapons—that is to say, going back into the forward-year defense plan and correcting those numbers so that they are realistic—readiness, depot maintenance, the correct figure is not $347 billion, it is $359 billion.
    When one adds that to the $19 billion for the cost of the war on terrorism, the total comes to $378 billion out of a $379 billion budget request.
    That is a significant investment of taxpayers' money, and we are investing it differently. We are accelerating programs we consider transformational.
    We have made program adjustments to achieve some $9 plus billion in proposed savings to be used for transformation and other pressing requirements. At the same time, we are fully funding those areas that we believe we must to continue trying to reverse years of underinvestment in people, readiness, and modernization.
    The 2003 budget was built, developed, and guided by the results of last year's strategy review. Given the questions that were posed last year, I must say, when we look back at it, it is really remarkable what the people in the Department of Defense accomplished.
    In one year, 2001, the Department developed and adopted a new defense strategy. We replaced the decades-old ''two major theater war'' construct for sizing our forces with a new approach which we are convinced is more appropriate to the 21st century. We adopted a new approach for balancing the risks, the risks of wars, the various war plans against not just other war plans but against the risk of not investing in people, of not modernizing, of not transforming.
    The Department does a pretty good job of balancing apples and apples against each other, but it has not done a very good job of balancing these different types of risks, which is a very difficult thing to do. I am not going to suggest for a moment that we are going to do it perfectly this year, but we have forced that up on the table continuously, and I think you will see that this budget reflects that fact.
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    We have reorganized and revitalized the missile defense research and testing program, free of the constraints of the Anti-Ballistic Missile (ABM) treaty after this summer. We have reorganized the Department to better focus on space capabilities. We have conducted a nuclear posture review and adopted a new approach to strategic nuclear deterrence that increases our security while permitting what we believe will prove to be deep reductions in strategic offensive forces.
    Within a week or so, we will present to the President and begin consulting with the Congress about a new unified command structure. All that was done when we had about half of our Presidential appointees confirmed by the Senate during the first half of the year and while conducting a war on terrorism in the second half of the year, not a bad start for a Department of Defense—that is, military and civilian, public and private, congressional as well as executive—not a bad start for a Department that is constantly characterized as being impossibly resistent to change. It seems to me that is an enormous amount of change in 1 year.
    When I look back on what has been a challenging year, I feel we have made good progress, thanks to the wonderful work of the men and women in the Department. They have put forth an enormous effort.
    In the course of the defense reviews, we identified six key transformational goals around which we have focused our defense strategy:
    First, to protect the U.S. Homeland and forces overseas. That was before September 11;
    Second, to project and sustain power in distant theaters;
Third, to deny enemy sanctuaries, so we know that we can reach where we need to reach in the world;
    Fourth, to protect information networks;
    Fifth, to use information technology to link up U.S. Forces so they can fight jointly, as they must;
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    And, sixth, to maintain unhindered access to space and protect U.S. space capabilities from enemy attack.
    The President's 2003 budget request advances each of those six transformational goals. With respect to homeland defense and protecting bases of operation, we have an increase of some 47 percent; denying enemy sanctuary, an increase of about 157 percent; projecting power into denied areas, an increase of 21 percent; leveraging information technology, an increase of about 125 percent; conducting effective information operations, an increase of 28 percent; and strengthening space operations, an increase of 145 percent.
    Of course, we cannot transform the military in 1 year, or even a decade, nor would it be wise to do so, nor are we trying to. Rather, we intend to try to transform some portion of the force as we move forward each year, turning that leading edge of change that will over time lead the rest of the force into the decades ahead.
    Moreover, investments in transformation cannot be measured in numbers alone. I get asked, what portion of the budget is transformational? If you define it one way, people say it is about $20 billion. Another way, people say it is $50 billion. We can show you the list of things that will fit in each of those categories.
    From my standpoint, I think numbers almost are distracting. All the high-tech weapons in the world will not transform our Armed Forces unless we also transform the way we think, the way we train, the way we exercise, and the way we fight.
    On modernization, as we transform for the threats we face, we also have to prepare for the conflicts that we may have to fight in this decade, so we have to be attentive to today and tomorrow as well as the next decade. That means improving readiness, increasing procurement, and selective modernization.
    To deal with the backlog that resulted from the overshooting, if I can put it that way, from the last decade where the drawdown resulted in an overshooting, or a procurement holiday, some called it, we have requested $68.7 billion for procurement, an increase of 10 percent over 2002. It is projected to grow steadily over the 5-year forward defense plan to more than $98 billion in 2007. Each year it will increasingly fund things that I think can properly be characterized as transformational.
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    We have requested $150 billion for operations and maintenance in 2003, including substantial funding for the so-called readiness accounts of tank miles and steaming days, flying hours.
    With regard to people, if we are to win the war on terror and prepare for tomorrow, we have to take care of our greatest assets, the people in the Department. We are competing with the private sector for the best young people in our country. We cannot simply count on their patriotism and their willingness to sacrifice alone. That is why the President's budget request has $94 billion for military pay and allowances, including a 4.1 percent across-the-board pay increase, and $300 million in addition for targeted pay increases to probably be focused in the mid-grades; $4.2 billion to improve military housing, putting the Department on a track to eliminate most substandard housing by 2007; funds to lower out-of-pocket housing costs for those living off base from 11.3 percent today down to 7.5 percent in 2003, putting us on the track to eliminate it by 2005; $10 billion for education, training, and recruitment; and a breathtaking $18.8 billion to cover realistic costs for military health care.
    Smart weapons are worthless unless they are in the hands of smart, well-trained, highly motivated soldiers, sailors, airmen, and Marines.
    While this budget includes proposed increases in a number of areas that I have mentioned, it also includes a number of areas where we have not been able to fund increases and where we have had cost savings. We are committed to pursuing what works and stopping doing what does not work. For example, we terminated the Navy's area missile defense program because of delays, poor performance, and cost overruns.
    We are proceeding towards our goal of a 15 percent reduction in headquarters staff, and the Senior Executive Council is seeking ways to ensure that we manage the Department more efficiently.
    The force structure subject came up. We made a decision not to make reductions in force structure last year. In the midst of this war on terror whose final dimension is still unknown, it certainly is clear that it was not the time to be reducing force structure. We now have something like 60,000 Guard and Reserve on active duty. We have another 10,000 people that are being held in the service, so a total of 70,000 people. This is truly a total force situation.
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    I do not know, I would have to go back and discuss it with the people that were mentioned in terms of the force structure comments that were made earlier this morning, but if one thinks about the changes in the force size and construct from two major regional conflicts where you would occupy two countries and proceed to capitals and occupy them for a period and the shift to winning two major theater conflicts but occupying and invading and holding the capital of only one country and stopping and winning the other conflict and still being allowed to engage in a variety of lesser contingencies, it has changed the force mix we need and the demands on the force in a way that we believe has been very constructive.
    I must say that that force sizing construct did not consider 70,000 people on active duty in addition to what we had at that time.
    Trade-offs. After counting the costs of keeping the Department moving in a straight line and the cost of the war and the savings, we are left with about $9.8 billion. That is a lot of money, but it still required us to make a lot of trade-offs.
    We were not able to meet our objective of lowering the average age of tactical aircraft. However, we are investing in the F-22 and the Joint Strike Fighter, which requires substantial upfront investments and will be coming online in the years ahead which will have the effect of lowering the average age of aircraft.
    While the budget grows faster in science and technology, we were not able to meet our goal of 3 percent; and, clearly, we were not able to meet the shipbuilding replacement rates, as has been already mentioned in the year 2003. We must in the future.
    As with every Department, the Navy had to make choices. The shipbuilding budget is $8.67 billion. It procures five ships in 2003. This is for several reasons.
    First, there are a number of problems, including contractor problems and also past shipbuilding cost estimates that were off and which we need to fund. We are spending something like $600-plus million to pay for past shipbuilding bills that had been underestimated in the forward year defense plan.
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    Second, the Navy made a calculation that, in the short term, we can maintain the desired force level at the proposed procurement rate because of the relatively young age of our fleet. That is more important now to deal with significant needs that have been underfunded in recent years, such as the shortfalls in munitions, spare parts, and steaming hours for the men and women at sea, which are fully funded in this budget.
    Further, we are investing significant sums in Nuclear-Powered Cruise Missile Attack Submarine (SSGN) conversion, which add capability to the Navy but do not add to the number of ships being built in the year 2003; and, therefore, they do not count in the ship numbers, while they do give us these capabilities.
    The Navy's forward year defense plan budgets five ships in 2004, seven in 2005, seven in 2006, and ten in 2007.
    Congressman Skelton is correct. If we continued at a level of five, it would run us down to an unacceptably low number of total ships. Fortunately, the average age of the ships is relatively young at 15 or 16 years. We will not drop off a cliff in the next period of years as we build up to the proper number of seven or eight ships a year, and the key is we are going to have to fulfill that commitment in the outyears and not let them slip. So I want it understood that I recognize that.
    $379 billion dollars is a lot of money. On the other hand, New York City's comptroller's office estimated that the local economic cost of September 11 attacks on New York City alone will add up to $100 billion over the next 3 years. Estimates of the cost to the national economy range about $170 billion last year alone, and almost $250 billion a year in lost productivity, sales, jobs, airline revenues, media and advertising, and costlier insurance for homes and businesses. That is not to mention the loss of human life, the pain and suffering of so many thousands of Americans who lost husbands and wives and fathers and mothers, sons, daughters, sisters, brothers, on a terrible day.
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    The President's proposed defense budget amounts to about 3.3 percent of gross national product. When I came to Washington in the Kennedy and Eisenhower years, it was 10 percent of gross national product, and we afforded it just fine. In the mid-seventies when I was Secretary of Defense, it was around 5 or 6 percent. Today it is down to 3.3 percent is what we are devoting and investing to national security. It is a lot of total dollars, but it is a relatively modest percentage of our gross domestic product. We have gone from over 50 percent of the Federal budget going for defense and national security issues and today it is down to I believe 16.9 percent proposed in this budget, so it has been on a steady downward slope.
    Congressman Skelton mentioned my point about the 1950s. The truth is that there was a big debate in the Congress and the country as to whether we should have a $15 billion defense budget or an $18 billion defense budget or a $23 billion defense budget, and the country concluded that we could not afford more than $15 billion. Six months later, when it was not a $15 or an $18 billion defense budget, it was a $48 billion defense budget, we could afford it just fine because we were in the Korean War.
    I think the point of this is to underline that the task for us is to invest before the fact. The goal is not just to win wars, the goal is to invest before the fact so we deter wars, so we can contribute to peace and stability which underpins all of the things that we want as human beings for our families, for our jobs, for our opportunities, for freedoms. It is those investments by this committee and this Congress and this country year after year that contribute to peace and stability in the world and that makes all of those things possible.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, Mr. Secretary.

    [The prepared statement of Secretary Rumsfeld can be found in the Appendix.]
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    The CHAIRMAN. We thank our Canadian Senators here, and thanks for being with us again.
    Secretary RUMSFELD. As they go out, Mr. Chairman, it is worth remembering that it was Canada that housed those hostages in Tehran, Iran, back in the late 1970s, at great risk to all of them.
    The CHAIRMAN. We appreciate that very much. Thank you.
    The CHAIRMAN. General Myers.

    General MYERS. Chairman Stump, Congressman Skelton, other distinguished members of the Committee, thank you for the opportunity to appear before you today. It is really an honor to report on the state of our Nation's Armed Forces.
    We are a military force and a nation at war, as Congressman Skelton said. As the Secretary said, the attacks of September 11 shattered the prism through which we looked at the world. In the span of a few minutes, we confronted the stark reality that our adversaries could strike at us anywhere in the world, even inside our own borders.
    President Bush came to the Pentagon the following day. The assembled troops told him ''We are ready, Mr. President,'' and they spoke for themselves and for all the men and women of our Armed Forces, and they were right.
    You can take the crew of the U.S.S. Enterprise, on their way home from a 6-month deployment. When they learned of the attacks, I think each man and woman on board felt a shudder as the captain threw the rudder hard over, increased the flank speed and came to a new heading to arrive off the Pakistani coast the next morning.
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    Or take the young Marines of the 15th Marine Expeditionary Unit (MEU) aboard the U.S.S. Peleliu off the coast of Australia as they began cleaning their weapons, knowing they could soon be fired in combat. Our bombing crews, in receipt of the orders, began planning their strike missions a few days later, and our Army Rangers and Green Berets began to collect detailed intelligence as they received their orders to go to a place called Afghanistan.
    And they were all ready, ready to defend our freedom and to strike back against our Nation's enemies. Fighting together as a joint team, they have achieved much in the first phase of this global war against international terrorism.
    I visited some of them. I saw them working hard on the front lines, getting the mission done, regardless of the formidable obstacles there were asked to overcome. I saw them proudly wearing the U.S. Flag on their battle dress uniforms (BDUs) or flight suits. I saw in their eyes strength, courage, and commitment, and I knew these young Americans would get the job done.
    As I talked with them, one message came through loud and clear: This is truly a total force effort. Unless you ask, you probably do not know whether you are talking to someone from the reserve or active component.
    Many of our reservists and Guardsmen did not wait to be called up, they volunteered. I heard about one Navy reservist who sold his business so he could serve without distraction.
    I think you will all agree that these American heroes are unmatched in the world, and we have every reason to be very proud of them.
    When I was a young fighter pilot I never imagined that some day we would have to fly combat air patrols over places like Detroit, New York, and many other locations here at home. But that, along with other defensive actions, is exactly what we have done in the 5 months since this war began.
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    These actions on the home front are called Operation Noble Eagle, and they include more than 13,000 combat air patrol sorties over the United States flown by National Guard, reserve, active duty, and North Atlantic Treaty Organization (NATO) air crews. The Air Force alone has committed 260 planes and 1,200 airmen flying almost 57,000 hours from 29 different bases.
    We have also established a homeland security joint task force to provide command and control from the homeland security task. As you know, we are helping our busy Coast Guard by augmenting port security. We also have 7,200 National Guard troops at 444 airports, and we are protecting many critical infrastructure sites.
    Our overseas offensive actions have included air, land, and maritime operations with three primary objectives: to disrupt and destroy global terrorist organizations, to eliminate safe havens for terrorists, and to prevent access to weapons of mass destruction from terrorist groups.
    General Tommy Franks and his entire team have done a tremendous job in Afghanistan with Operation Enduring Freedom, and the results so far I think speak for themselves. Working closely with our coalition partners and Afghan opposition forces, we drove the Taliban from power and severely degraded the al-Qaeda network. The plan worked, and it continues to work. The Taliban surrendered major cities to opposition forces, and a number of Taliban and al-Qaeda leadership were either killed or captured. We destroyed their terrorist training camps and centers and the command and control sites as well.
    For the first time, we combined humanitarian operations with combat operations as we airdropped rations and medical supplies and shelters, thus helping avert a humanitarian disaster of potentially extraordinary proportions. Our efforts have helped the Afghan people regain their lives.
    These results have been achieved with about 60,000 deployed troops in central command area and about 4,000 on the ground in Afghanistan.
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    I think our success has been enabled by many factors. The following are the key factors: by clear and well-established national security goals; by the overwhelming support of the American people; by the outstanding leadership from President Bush, Secretary of Defense Rumsfeld, great support from Congress, and the close interagency coordination, particularly in this town; by patience in formulating our response to the attacks; by great support from our coalition partners and anti-Taliban forces.
    And I was going to mention, for our Canadian visitors, that I think they now have over 200 soldiers on the ground in Afghanistan as we speak; by a good plan from central command that was well executed; by superb assistance from the services in supporting Unified Commanders, especially transportation command; by flexibility and adaptability at the tactical level; and, ultimately, our great soldiers, sailors, airmen, Marines, Coast Guardsmen who have made this all happen.
    Having said all that, though, there remains much to do. Even as we continue the long-term effort to win this global war, we must also sustain other global commitments such as Operations Northern Watch, Southern Watch, and other responsibilities in the Persian Gulf region; the Balkans peacekeeping mission; and the defense of the Korean Peninsula.
    To fulfill our range of commitments and protect our global interests, we must make the investments necessary to maintain the quality of our force while preparing for future challenges of the 21st century.
    The best means of accomplishing these goals in my mind are to, one, improve our joint warfighting capabilities and, two, to transform the Armed Forces of America into a 21st century force.
    With the help of Congress we have come a long way in recent years toward improving our joint warfighting capabilities. Certainly, the operations in Afghanistan are proof of our progress, but there is much more to be done.
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    Let us talk about the issue of interoperability. In recent years, we have gotten pretty good at making sure our Legacy systems worked together. For example, we took a Cold War antisubmarine platform, the Navy's venerable P-3. We put on it some different data links and centers and used it to support ground units to hunt for Taliban and al-Qaeda forces in Afghanistan. We also flew the P-3s in conjunction with Air Force AC-130 gunships and the Joint Stars aircraft and Marine Corps attack helicopters.
    That they all worked together is a tribute to the ingenuity of all the people involved. But we need to take the next step. We must make sure that new systems are conceived, designed, produced with joint warfighting requirements in mind. To do that, we have to change our thinking, to look at new systems as interchangeable modules to plug and play in any situation and any command environment.
    We have put a lot of effort into interoperability on the tactical level, like the modifications of the P-3s that I just described, but we must also concentrate on the operational level as well, where organizational and process improvements are just as important.
    In my view, the area with the greatest potential payoff here in the current focus of our efforts is in the command, control, communications, computers, intelligence, surveillance and reconnaissance, or what we call for short C4ISR. By improving our C4ISR we can ensure our commanders have the best information available for rapid decision-making.
    We have made progress in recent years, but we still have stovepipes that continue to cause gaps and seams between our combatant commands and the forces provided by our services. These gaps and seams must be eliminated. Close collaboration across the services, combatant commands and with other government departments is key to success in achieving our national security objectives.
    Additionally, we are developing a command and control architecture in our unified commands that will lead to an improved ability to accept and employ forces. We call this architecture the Standing Joint Force Headquarters. This headquarters will provide the combatant commanders the ability to deploy an agile and lethal force using the integrated C4ISR network that I described earlier and further enhancing our joint warfighting capabilities.
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    The second key to maintaining the quality of our forces and preparing for future challenges is transformation. The Secretary has already laid out for you our transformational goals for the 21st century, and I would like to follow through with a couple of points.
    First, for me transformation is simply fostering changes that will hopefully result in a dramatic improvement over time in the way a combatant commander wages war. I am convinced that our force requires greater flexibility and adaptability to achieve our national security objectives in this new international security environment. Such dramatic improvement requires not only technological change but also changes in the way we think and also changes in how we employ our capabilities to achieve more effective results in less time with fewer lives lost and hopefully at less cost. True transformation must include training and education, doctrine and organizational changes.
    The second point on transformation is that while sudden technical organizational or doctrinal breakthroughs are possible and we should pursue them vigorously, it is important to note that transformation often results from an accumulation of incremental improvements. Let me give you an example.
    When I was flying F-4s in Vietnam, we lost a lot of airplanes and pilots trying to destroy single targets like bridges and anti-aircraft sites. We had to put a lot of people and equipment in harm's way to get the job done because our weapons systems were not very accurate. So out of that conflict and during that conflict we designed laser-guided bombs, and we found a way to steer them to their target.
    But as we found out in Desert Storm there were still shortfalls with laser-guided bombs because you needed relatively good weather to be able to acquire the target and see the target. We still had to put aircraft in harm's way to put the bomb on target. But we had achieved a significant improvement in bombing accuracy.
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    Now, today we have bombs that are impervious to weather conditions. They steer themselves using satellite-generated global positioning systems.
    Let me also point out that when we were fielding the global positioning system no one was talking about using it for bombing at that time. It was seen merely as a better a navigational tool. What we have done is linked incremental improvements in several technologies to achieve today's precision strike capabilities with accuracy that amounts to a truly transformational change.
    But the transformation is not just about more accurate bombs. The real transformation is in the target set where we have advanced from needing multiple sorties to strike one target to using one sortie to strike multiple targets.
    There has also been a transformation in our thinking. Bombs are not merely regarded anymore as area weapons. Instead, they can be used like bullets from a rifle aimed precisely and individually.
    The foundation for that breakthrough was laid over 30 years ago. It was a tactical innovation in the midst of war, and on that foundation we built successive improvements to get where we are today.
    We are laying that same foundation for future breakthroughs in the midst of today's war. For example, the arming of unmanned aerial vehicles (UAVs) is a tactical innovation that we are just beginning to explore. We can't accurately foresee the future, but I am confident we are working on the capabilities that, when coupled with improvements in armed unmanned vehicles, have the potential to change significantly the way we fight and perhaps the nature of warfare itself.
    That and similar possibilities is why I believe the service recapitalization and modernization programs are so important to transformation.
    Members of the committee, I am pleased to say that our forces remain the most powerful and best trained in the world. Their excellence is due in no small part to your unwavering support for our troops. We have made tremendous strides in recent years, providing our people a comprehensive set of quality of life improvements, especially in the areas of pay, housing and health care. The quality of life also includes adequate training, modern equipment, modern infrastructure and spare parts.
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    I ask that we continue to keep faith with both our active and reserve component members as well as our retirees. Sustaining the quality of life of our people is crucial to recruiting, crucial for retention and crucial to our readiness to fight. But, more importantly, it is the right thing to do for our heroes who at this very minute are serving in harm's way to defend our freedom. They are the practitioners of joint warfighting and the creators of transformation. They make things happen and should always be our top priority.
    The men and women of your Armed Forces are committed to achieving victory, no matter how long it takes, no matter where it takes us; and they are counting on all of us to provide them the tools they need for success today and success tomorrow. They deserve our best effort.
    Mr. Chairman, I welcome the opportunity to work with you and the committee as we continue to fight against global terrorism. I thank you again for the opportunity to be before you today, and I look forward to your questions.
    The CHAIRMAN. Thank you, General Myers.

    [The prepared statement of General Myers can be found in the Appendix.]

    The CHAIRMAN. The Chair recognizes the gentleman from California, Mr. Hunter.
    Mr. HUNTER. Thank you very much, Mr. Chairman.
    Mr. Secretary and General Myers, Dr. Zakheim, thank you for a very solid presentation.
    This is a marked increase in last year's defense budget. In my estimation, it is not enough. The reason I have come to that conclusion is simply because I have looked at the requirements.
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    If we look at the requirement analysis, whether it is the Joint Chiefs' analysis that was done or the Congressional Budget Office (CBO) analysis, where they simply took our fleet of trucks, tanks, ships, planes, estimated the life expectancy of each platform, given an optimistic expectation analysis and a pessimistic one for each platform and tried to figure out how many of those we needed to replace each year, if you look at aircraft alone, everything from small helicopters to the heavy stuff, we need to build 450 aircraft a year to keep the Air Force, the aircraft fleet in the services halfway modern. We are building about 100 if you look through the tables.
    So the Joint Chiefs' recommendation was that we spend in excess of $100 billion on procurement—$100 to $110 billion. CBO said, just looking at it dispassionately with an optimistic view, you need to spend about $90 billion. We are spending about $70 billion.
    If you look at ammunition down the line, the $3 billion shortage that the Army has and other shortages that are manifest in the precision munitions charts and other analyses, we are short on munitions by in excess of $10 billion. Operations and training, we are short, according to CBO, about $5 billion a year. If we look at the pay gap that exists between the civilian sector and the military sector, we still have a pay gap; and if you close that pay gap, it is going to cost us $10 billion a year for the next 5 or 6 years. If you add those together, you come up with a $50 billion delta between last year, $343 billion, and what I think a reasonable analysis says we need to be spending.
    Nonetheless, we are going in the right direction. This is a marked increase. My recommendation, though, would be that we take another lesson out of the Korean War scenario. There were a couple of lessons to be learned there.
    One was that, while we thought we had reached transformation because we then had a monopoly on nuclear weapons, we found out when our force was driven down the Korean Peninsula that our bazookas bounced off of Russian-made tanks at Chosin Pass. While we thought we had high technology that would deter others from attacking us, we found out that we neglected the ham and eggs, the ability to build armor piercers to stop this newly minted Russian armor.
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    As we look across the force this budget acknowledges and, Mr. Secretary, you have been candid that we haven't been able to replace tactical aircraft, in fact, aircraft across the board that are getting remarkably aged. Two-thirds of your Navy aircraft are over 15 years old. The Army choppers are now—average being 17 and a half years old. They were 10 years old on average 20 years ago. We have a lot of platforms that need to be replaced, and I know you understand that.
    Let me just put my marker in that I think we need to spend more, and I would like to see this 5-year plan go up and certainly not down. Nonetheless, I want to congratulate you on turning this ship in the right direction.
    The CHAIRMAN. Thank you, sir.
    The gentleman from Missouri, Mr. Skelton, is recognized.
    Mr. SKELTON. Thank you, Mr. Chairman.
    Thank you both for your remarks and testimony.
    Let me mention first, if I may, Mr. Secretary, the phrase ''occupation forces'' is a relatively new one to me regarding sizing and end strength. We will note that we fought a significant war against Iraq and did not choose to occupy that country, as you know. So I just wonder if that is a very good phrase to use. No need to respond on that, but I just raise that issue.
    Secretary RUMSFELD. I would like to respond just very briefly.
    The reason I used the phrase is when one looked at war plans and went underneath to the details, it was very clear that the force-sizing construct of two major theater conflicts had evolved over time into a capability, a quote, requirement, unquote, that would have enabled essentially a force to not just win the war and stop it but to, in fact, move into the country towards the capital. That is a different force requirement than is the case if you do it in one case—one theater and then the other simply stop and win the war without having that additional requirement of moving into the country and taking the capital.
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    Mr. SKELTON. Thank you very much.
    General Myers, the Army Chief of Staff and Secretary testified right where you are sitting last year for the need for 40,000 additional soldiers. My understanding is the Air Force Chief of Staff requested—this is secondhand to me, but I believe it is correct—8,000 additional Navy, 3,000 Marines—2,400—do you support the views of your service chiefs on this issue?
    General MYERS. As the Secretary said, I think a couple of points pertain. One is that we do have a new force-sizing construct that came out of the Quadrennial Defense Review. I don't know when they testified, but my guess is they testified before that was final.
    Mr. SKELTON. They did.
    General MYERS. That is one point to keep in mind.
    The other point is what Secretary Rumsfeld said earlier. When they testified we hadn't started this global war on terrorism. So we have some requirements that were not foreseen when they testified. I think what we need to do is look at those requirements. I am aware of them, but I have not seen the analysis from the services at this point, and I think we need to look at those in light of both of those issues and—.
    Mr. SKELTON. When you look at them, would you be kind enough to share them with this committee?
    General MYERS. Absolutely.
    Mr. SKELTON. Mr. Secretary, one question, if I may. Would you give us your thoughts or positions on the American presence in the Sinai, Bosnia, and Kosovo, please?
    Secretary RUMSFELD. Yes. You asked for my personal views, and I am happy to provide them.
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    Mr. SKELTON. Yes, please.
    Secretary RUMSFELD. We have been in the Sinai with a force of hundreds of service people for about 20, 22 years. That strikes me as a long time. There is no question it was prudent to put them in at the outset. There probably is no question that it would be advisable for us to keep a presence today of some sort.
    I have been working with the folks in Egypt and Israel and the U.S. Government to see if we can't fashion a way to begin drawing down some of the U.S. forces that are currently in the Sinai, simply because I am convinced that we have got a lot to do that involves warfighters and training to be warfighters and that that role is something that can be done by others and with our help and encouragement.
    We also provide some Intel in that Sinai area, and that is a perfectly proper thing to do.
    Everyone always says, well, it is not a good time to do that. Well, it is never a good time to do that; and my attitude is we need to get about it.
    With respect to Bosnia, General Ralston, the Commander-in-Chief (CINC) over there, is doing a very good job as Supreme Allied Commender, Europe (SACEUR) and working with the NATO allies. The saying goes: In together, out together. That is fine. But my attitude is, it isn't in together and stay forever. It is in together and out together. At some point, we need to substitute warfighters for the people that can do the police work that is necessary; and the people who indicated that they had a responsibility to provide that police and civil structure capability ought to get about the task so that we can, in fact, draw down some of those forces.
    We have come down quite a distance. I don't recall the numbers, but it would be like 4- or 5,000 heading down towards 1,800 I think over the next 6, 8 months. I think general Ralston and NATO have done a good job, and we are moving in that direction.
    The problem is you are not going to get the rest of the way out until you get the civil side built up and they can—we do not want to go in, create a stable situation, come out and leave an unstable situation. Nor do we want to go in and stay forever. It is unnatural to have foreign forces in other countries. At some point the institutional capabilities of those countries have got to be expected to provide stability for themselves and we can move out.
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    Kosovo is a more complicated situation, but I think that over time we ought to be able to find ways for all of the participating countries to bring those forces down as well.
    Mr. SKELTON. Thank you very much.
    Secretary RUMSFELD. Yes, sir.
    The CHAIRMAN. The gentleman from Colorado, Mr. Hefley.
    Mr. HEFLEY. Thank you, Mr. Chairman; and thank you all for the job you are doing for America. It is a tough time, and I can't think of anybody I would rather have there than the people we see before us here.
    As Mr. Hunter said, we are going in the right direction I think on this budget, but I am a little confused as to how much actually the increase is.
    I know in the press reports it is thrown around as a $48 billion increase. But if I look at page 3 of this document we have here, and I assume that is what you have before you, I see military over 65 health care accrual and civilian requirement and health care accrual and that is $11.4 billion. And my understanding is that that is not any new dollars. That is dollars that are shifted to your budget that you have to take care of now but it was in somebody else's budget last year. So I wouldn't call that new defense spending.
    I am not quite sure what ''realistic weapons costing'' is. But when we get to the bottom line there, it says that we have almost $10 billion for everything else besides what is on this page.
    For instance, I look at your military construction budget—and Mr. Saxton will speak in more detail about this I am sure, but we go down in military construction. We hold it almost stable in housing. We have been working very hard in recent years to try to provide these young people that dedicate themselves to serving their country with a decent place to live and a decent place to work, and yet in this budget we are making no progress on that. Everywhere I go I find bright, dedicated, patriotic young people willing to serve their country, and I am ashamed at the type of conditions we put them in and the type of equipment we give them to operate on.
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    I was at Pendleton last week, and you look at the trucks that the Marines have out there, just trucks, something as common as trucks—that is not high-tech—and the age of those trucks. It is disgraceful. You look at the airplanes. You look at what they are doing in the depots. They are doing amazing things in the depots to keep some of these old aircraft running. But you rarely find aircraft that are younger then the people that are flying them.
    So I guess I would have to conclude with Mr. Hunter that this is going in the right direction, but we are not near there yet.
    I wonder if you could comment on what the real number—maybe Dr. Zakheim can do that, I don't know—what the real number of increase is. So when we talk to our colleagues and when we talk to the press, we can tell them what the real increase is, not the accounting shifts and so forth, but what the real increase is. If it is $48 billion, that is what I want to say. If it is not $48 billion, I want to be more accurate.
    Secretary RUMSFELD. Let me just briefly comment on your question. It is an important one.
    The military over 65 health care accrual, which was passed by the Congress and was not funded by the Congress, was not in the outyears, that is the $8.1 billion that you mentioned as part of the $1.1 or $2 billion. The civilian retirement and health care accrual is another $3.1 billion, and I think that is where you get to the $11.4 billion. Military and civilian pay raises, that is another $2.7 billion. That is—I don't know which basket you put that in. Is that a real increase? Sure is to them.
    Mr. HEFLEY. I think it is a real increase.
    Secretary RUMSFELD. Realistic weapons costing you asked about. That is simply the fact that, for example, the shipbuilding budgets of prior years were not enough to pay the contractors for the contracts that we legally signed and we owed them the money for. Is that right?
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    Dr. ZAKHEIM. Actually, that is not even counted in that one. It is not even in that one. It is separate.
    Secretary RUMSFELD. The realistic figures were when we looked out in the forward year defense plan last year, we looked at how the estimates had been made. And where there were two estimates, one by the service and one by the so-called Cost Analysis Improvement Group (CAIG) as I recall, we looked at history and the history was that the services had always—not always, I shouldn't say that—in many instances had underestimated the cost, and the CAIG had a higher number.
    Dr. Zakheim and Paul Wolfowitz and I decided to go through and fund it at the CAIG level because it had been closer over time, and it will prove to be very accurate, and we call that realistic weapons costing.
    Unusually—well, it is a bit unusual—we think we are fulling funding readiness and Operations tempo (OPTEMPO). In prior years there seemed to be a pattern to somewhat underfund it with the understanding that it would get lopped into a supplemental later. Our budget this year and last year was designed to be presented to the Congress without the need for a supplemental except for costs of war, and therefore we have that number.
    What does it all come out to? It comes out to the fact that it looks like to me we are just about at a wash with this new budget if you consider the pay raise, you consider the realistic budgeting, you consider the military health care that is now going up like mad, and all those things, except for the fact that we have terminated some programs and moved some things around, and we have, therefore, one could say, something like $9 or $10 billion dollars out of the $49 billion to work with as new money.
    However, then you have to exclude the cost of the war, $19.4 billion, as I recall. That is not really quite right, though, because there is a lot we can do within those numbers to save money. There is a lot we can do, and we believe we are getting a much better effect than simply the $9.8 billion. So I think it would be a little misleading to say that that is the number.
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    Let me just elaborate on the question that Congressman Hunter asked, and it goes to your question as well. He mentioned the CBO report and the so-called requirements to replace platforms. That is a useful way to look at it, but it is not the only way to look at it. It seems to me we have to also recognize that if you have 10 weapons—bombs for the sake of argument—and there are 10 dumb bombs and we buy 10 precision-guided munitions, the lethality and the effectiveness is notably different. It is still 10 things.
    If we have a soldier on the ground and he does not have a laser-guided targeting capability and you have one that does, you have got a very different effect on the ground. If you have got an aircraft that is dropping X numbers of bombs and the new aircraft can drop 10X bombs, you have got a very different capability in lethality.
    It seems to me if you have an unarmed Predator that is out there gathering intelligence information and you replace it with an armed Predator that can not only gather intelligence information but can also fire a Hellfire or an upgraded Hellfire with a better warhead, you have different lethality.
    I think we have to keep that in mind as we look at the platform question.
    The CHAIRMAN. The gentleman from Texas, Mr. Ortiz.
    Mr. ORTIZ. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. I noticed the absence of any consideration for the civilian personnel who contribute so much to our readiness. Maybe it was my oversight or somebody's oversight, but we all know they contribute a lot and they keep our equipment and they fly to many places to be sure that the equipment is ready and flying and moving. And maybe that was just an oversight or maybe it was my oversight, but maybe you all can address it later.
    But you know a recent Department press release noted that the budget reflected over $90 billion in savings from acquisition programs. Some of those changes—management improvements and other initiatives—these were savings that were used to fund transformation and other pressing requirements.
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    Remember that other than the cancellation of specific acquisition programs or systems, rarely do we really see any planned efficiency or savings materialize. My question is, how do you plan to fund the transformation? How do you fund it and other pressing programs if the savings do not materialize? Because many times we make assumptions that we are going to save so much money, but they do not materialize. How are we going to fund those programs, the transformation and other programs that we talk about?
    Secretary RUMSFELD. Two things, Congressman.
    First, I am advised that, as I recall, civilian pay is handled not department by department but across the government; and therefore it is not surprising it is not isolated out in this budget.
    Second, Dr. Zakheim advises me that I think in this budget is a 2.6 percent increase for the civilians across the board through the government.
    With respect to the savings, the savings that are specified in this budget that we believe are going towards transformation—and, as I indicated earlier, transformation is in the eye of the beholder, like beauty. And people can slice it round or slice it square, but the $9.3 billion of program adjustments are real. We know where they are and that money is available and is invested in what we believe to be important priorities for the Department.
    Mr. ORTIZ. I have another question that might seem parochial, but it is not because it ties into defense.
    There is an ever-increasing population of veterans in south Texas, Mr. Secretary. Of course, we have a lot of people who go south because of the great weather that we have. Some of these veterans, due to the lack of local facilities, are required to travel for 6 to 7 hours to go to the nearest hospital which is in San Antonio. And what is sad about this is that these veterans, including some from the Second World War and Korean War, they meet at a funeral home to get transportation to travel all the way to San Antonio.
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    Last year, Chairman Hobson of the Appropriations Military Construction (MILCON) Subcommittee visited the naval air base in Corpus Christi where we have a 195-bed hospital that is not being used. Today I am asking for your support for this demonstration project where the Veterans Administration (VA) and Department of Defense (DOD) to work together, and I know that we have other facilities in other parts where Veterans Administration (VA) and Department of Defense (DOD) work together and it can bring a lot of savings. I just hope that you can support this project—the DOD and VA project that they are starting at Corpus Christi naval station.
    Secretary RUMSFELD. I used to be stationed at Corpus Christi when I was a Navy pilot back a lot of years ago, and I know the location and like it.
    I will say this. I will support what you said. I will try it achieve it. I am constantly amazed at the number of prohibitions that exist, earmarks in our legislation, over 2,000 earmarks last year that get us tied up to the point where we are always amazed that we are not allowed to do this, we are not allowed to do that, we cannot manage this or manage that.
    But I will personally see what I can do to achieve what you are saying. I quite agree. When you have underutilized hospitals, forcing people to drive hundreds of miles is mindless; and we ought to do something about it.
    Congressman Kirk has been after me on the same subject and has been working the subject in Great Lakes where there is a VA hospital and a Headlight Hospital. I think there is going to be a memorandum of understanding or arrangement that is going to be signed some time later this month—this week.
    So occasionally we are able to bring rationality and coherence to these things, and we will give it a good go.
    Mr. ORTIZ. We appreciate that. This has a lot to do with retention. When these older veterans who have served tell the young ones they have not been able to deliver, you think I am going to encourage my young ones to stay in the military? I think this is very, very important; and I thank you, Mr. Secretary.
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    Secretary RUMSFELD. Thank you, sir.
    The CHAIRMAN. The gentleman from Texas, we have a commission taking place right now, Solomon, that would study the possibility in certain areas of the military and VA sharing. I think the report is due in about a year.
    The gentleman from New Jersey, Mr. Saxton.
    Mr. SAXTON. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here with us. It is a pleasure to be able to welcome you here today and General Myers and my friend Doug Zakheim.
    Mr. Secretary, let me follow up on the concerns expressed by Mr. Hunter and Mr. Hefley relative to—I guess the way to say it is that we are headed in the right direction, but we express our concern that perhaps we have not gone far enough.
    Let me concentrate on the military construction area in the budget that you have requested, you have submitted. I am actually kind of disappointed in it. In fact, I am very disappointed in it. The military construction budget has shrunk remarkably, and this is on the heels of what you laid out just last year when you were here at this time.
    You indicated to us that the recapitalization rate for military facilities was 192 years and that it was your goal to reduce it to 101 years by this year, which I believe in your testimony indicates that we are now—figure that we are about at a 121 year recapitalization rate, and our goal is to get to 67.
    Secretary Dubois came to visit with us on July 11th last year and said, I quote, our fiscal year 2002 budget initiates an aggressive program to renew facilities. And, as a matter of fact, the 2002 budget did just that. In fact, we increased military construction from $5.2 to $6.5 billion and family housing from $3.6 to $4.1 billion.
    This year, it is a different story, however. The military construction budget request shrunk from the $6.5 billion that we had last year to $4.8 billion, a 26 percent reduction, and family housing increased from $4.1 to $4.2 billion. A 1.7 percent increase adjusted for inflation, it is no increase at all.
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    Now I read in your testimony that you express a concern or a justification by saying that the investments in MILCON had to be delayed until the outyears when we know what facilities will be closed. Mr. Secretary, I don't think that dog hunts. I think we are putting the cart before the horse here, and I will tell you why.
    You have indicated also that you believe that we have cost the taxpayers money by delaying Base Realignment and Closure (BRAC). I think just the opposite is true. Here in the testimony this morning I have heard several times both by you and General Myers that our force structure requirements are still not fixed; and you indicated, Mr. Secretary, that we have 70,000 more people on active duty today than a year ago. You also spoke of the desire that you have, and I think perhaps rightly so, to bring troops home from the Sinai, and these are all indications that our force structure is far from settled.
    Therefore, one could logically ask the question, how can we fashion the facilities for a beddown when we do not know what our force structure is? So our thinking in delaying the BRAC from 2003 to 2005 was to allow us to operate effectively and cost-effectively and to know what it is that we are designing our beddown for. So to say that we are delaying the modernization of military facilities because we need to get the BRAC out of the way first is the dog that I don't think hunts.
    Secretary RUMSFELD. Well, Congressman, first let me correct something I said earlier. I think I said something like 60,000 Guard and reserve, plus holding 10- in for a total of 70—Dr. Zakheim tells me the number is actually closer to 76,000 Guard and reserve and holding in about 10-, so it is actually larger, which is a number that came in this morning from the services—I wanted to have the record correct—which makes your point even more strongly.
    Let me respond this way: You are right.
    On the military construction, last year we were hopeful we could keep running that recapitalization rate down toward something like 67 years. We were headed that way, and we did have a nice increase last year both in MILCON and in housing. Housing this year is up from $4.1 to $4.2 billion. Modestly. MILCON is down to $4.8 billion. Why? I think the dog does hunt.
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    If you are making choices—and in life we are always making choices—and we believe—all the chiefs, every former Secretary of Defense who is alive unanimously believes that we have a force structure that is somewhere around 20 to 25 percent larger than we need, that it costs us money. We decided that in terms of housing we should keep investing because of the needs of the men and women in uniform, but in terms of modernizing facilities why not ease up on that until we get the BRAC behind us and know where we are?
    It seems to me to be a reasonable thing to do. Not just that, but we also have to provide force protection for 100 percent of our bases when we honestly believe we only need 20 percent of our bases.
    Now is that number right for sure? I don't know. Only we will know after we work our way through the BRAC. But we do not need to delay BRAC for 2 years to find out—it seems to me to find out what we need.
    I think we are doing a great many things to stop using men and women in the Armed Forces for nonmilitary activities. I am starting to stop detailees that are sent all over this city, hundreds and hundreds of them. We are trying to do, as we said, bring the draw down in Bosnia and the Sinai. Every single use of men and women in uniform today for the homeland security, whether it is for Customs or Immigration and Naturalization Service (INS) or borders or airport work, we are requiring that there be an exit strategy for every one of those so that we know that the people that these forces are helping on an interim basis have a work plan to replace them with people who ought to be doing that work, as opposed to men and women who are being trained—.
    I am sorry, not 20 percent of our bases. We need 80 percent of our bases. I saw those faces—and I admit, I don't know that that is the right number, but we do believe that we have got somewhere around 20 to 22 percent more bases than we need.
    Mr. SAXTON. Mr. Chairman, if I could follow up and ask this question, wouldn't a more logical approach be to say to us in your budget submission, these are the facilities that we need to modernize, rather than to just put the brakes on and bring it all to—not a screeching halt, but it is a big reduction. You have the latitude to say, here is where we need to invest our money. You did not do that. You said, we will just stop.
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    Secretary RUMSFELD. Well, I mean, fortunately, the Congress decided to have a BRAC; and I think that is the right thing to do. As you know, I wished it had been 2 years earlier, but I understand people disagreed with that, and there was a negotiation, and an arrangement was made. The approach we have taken seemed to me to be reasonable.
    Mr. SAXTON. Okay, I will let it go at this. But if you can make reasonable decisions about what base structure you need before you have force structure, and if you can do that, that is fine, then just submit those needs in the budget, and we will do our best to accommodate your wishes.
    Secretary RUMSFELD. Thank you.
    The CHAIRMAN. We have a vote, a 15-minute vote and a 5-minute vote, Mr. Taylor. Do you want to squeeze your question in now or wait until we come back?
    Okay. The gentleman from Mississippi.
    Mr. TAYLOR. Mr. Secretary, General Myers, thank you for being here.
    Mr. Secretary, I have to express my extreme—let me start off with the good things. Congratulations on how good things are going in Afghanistan.
    Secretary RUMSFELD. I better zip up my pockets now, right?
    Mr. TAYLOR. It is like a cheap suit.
    Mr. Secretary, a year ago you warned about complacency—you warned this committee about complacency, that the American public was getting complacent. I fear that your budget tells me we are getting complacent as far as the need for the United States Navy.
    I do not quite buy your argument that our problem stems from—I am going to be a word or two off—prior year budget problems or contracting problems.
    Secretary RUMSFELD. The prior year budget was $600 million.
    Mr. TAYLOR. But the prior year budget problems was that there was not enough money in the prior year budgets. The contracting problems are that there are not enough contracts to keep our six major shipyards, whose only customer is the United States Navy, going. And when they go away, no one is going to invest $500 million to start a new shipyard. There is not enough return on investment.
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    You are a businessman. You have to understand that. And you are actually once again building less ships and asking for less ships in the budget than even the Clinton Administration. The fleet is the smallest it has been since 1938. You and I know that. You don't correct it by putting five ships in the budget. You correct it by putting 10 ships in the budget.
    We are on line for a 150-ship Navy, Mr. Chairman, because again we can only budget money 1 year at a time. That is in the Constitution. So all our plan is is for five ships, 150-ship Navy.
    The second thing I would hope you would touch on, I continue to watch and listen to what the President says and continue to watch our actions with regard to Colombia. In this year's President's budget he is asking for close to $100 million to train a battalion to protect the Oxidental Petroleum pipeline down in Colombia. My hunch is if we are going to get further involved militarily in Colombia, and we both know plans are being drawn up to do that, the President is not going to go before Congress and say it is to protect that pipeline. He is going to say it is about drugs, the same reason this Congress passed Plan Colombia, $1,300,000,000.
    I really have mixed feelings on that, because I do believe in the evil of drugs. I wish we would take stronger steps to go after drug users in America. I wish we would have drug testing not only for DOD employees but every single Federal employee, including us.
    The inconsistency I see, though, is I heard the President talk a lot about drug dealers in Afghanistan prior to the guys that we are for winning. Since then, I have not heard one word from our President or anyone else in the State Department saying, okay, now one of the things we are going to do to fix Afghanistan is to destroy the drug trade there.
    We changed Japan fundamentally after World War II. We gave the women the right to vote. We passed a constitution and did away with the king. We changed Germany fundamentally after World War II. We created labor unions and free press, all those things the Nazis never would have dreamt of. We have enjoyed 60 years of prosperity in both of those countries because of the fundamental changes.
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    That is a fundamental change that we have to make in Afghanistan if we expect any peace at all. Again, I see the incredible irony of we are going to send Americans down to Colombia because of drugs, but we are going to turn a blind eye on Afghanistan. It is one or the other. I would appreciate your comments on that.
    Secretary RUMSFELD. First of all, we are not going to a 150-ship Navy. It would be a harmful thing for this country. We happen to have a fleet that is relatively young. The reason is a lot of them were built in the 1980s.
    Second, if we look at the outyears, we do get to 10 per year.
    Third, you are quite right about the defense industrial base and the shipbuilding base. Dr. Zakheim and the Navy are working with the shipyards to see that a lot of the work that needs to be done that does not in a given year result in a digit of 1 or 2 ending up in the shipbuilding numbers of ships for that year. There is still a lot of work that needs to be done that it is balanced in a way to preserve that shipbuilding base.
    With respect to Afghanistan and drugs, you are right, it is a serious problem. They have been a major provider of heroin. It is something that I am aware of, I am attentive to. I guess Tom Franks is going to be testifying with you tomorrow, possibly. General Franks, he is sensitive to it. The Administration is.
    There is no question but—and there is no question but that there is a linkage between terror and drugs and crime in that country, and we need to take the kinds of steps that you are talking about to see that Afghanistan does not just simply revert back into a major exporter of heroin.
    The CHAIRMAN. Mr. Secretary, it is necessary for us to take a recess, 15 minutes, hopefully no longer than that.
    The Committee will stand in recess until the sound of the gavel.
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    The CHAIRMAN. The committee will please come to order.
    The gentleman from New York, Mr. McHugh, is recognized.
    Mr. MCHUGH. Thank you very much, Mr. Chairman.
    Mr. Secretary, General Myers, Dr. Zakheim, welcome.
    I should start off by saying that I have enormous respect for all of you as individuals. The job you have been doing has been incredible. I think I speak for all Americans when I say how deeply appreciative I am for all the work you have done behind our troops in this recent war on terrorism, and as such I am tempted to just say ''me, too.''
    I don't think there is a lot to be gained by subjecting you gentlemen and taking your valuable time simply recounting many of the concerns that have been expressed here this morning. But I did just want to briefly fill in some of the spaces on those concerns.
    Gentlemen, Mr. Secretary particularly, I continue to be troubled, and in my life I spent a lot more time worrying about what tomorrow may bring than what today has given me, and that is probably not the healthiest of attitudes, but I continue to be concerned about the issue of force structure and end strength.
    I compliment you, Mr. Secretary, for the reconfiguring of our national defense strategy. The two major theater war (MTW) had, in my opinion, outlived its efficacy, its realistic application; and I think to think more about what ways we will be fighting rather than whom we might be fighting is a much more sensible approach. But I listened very carefully to the President in his State of the Union message and he spoke about an axis, a triangle of terror. I was struck by that not because of the questionable validity of it, because I do not question it in the least, but by the unusual courage and forthright manner in which the President said it, and that kind of frank talk is something that we do not hear in this town so much.
    That I think, however, should cause us to reexamine where we might find ourselves in the future. We have abandoned a two MTW. I understand that. I think the President at least should cause us to consider three MTW. If you look at where we are today with respect to Afghanistan, with all of those other deployments that you have spoken about very eloquently, Mr. Secretary, that is far below the level of a two MTW. It is far below the level of the new analysis. And yet we are strained, as you have noted, Mr. Secretary, 76,000 reservists, stop loss on 10,000 and none of us want to see the military have to manage its force structure in that way.
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    So I join with my colleagues who have expressed the concern about ensuring, and particularly along with Ike Skelton I want to say that I am not certain that maintaining the current force structure is the answer. I happen to believe at the moment that a growth of that is probably not just appropriate but necessary. Nevertheless, as I said, that is a worry of tomorrow.
    I also want to associate myself with the comments of my Military Construction Subcommittee chairman on my immediate left here, Mr. Saxton, with respect to what many have said on the proposed cuts in that budget. I do not see how we could possibly do a BRAC in 2003 and approach military construction without having any idea as to what the shape in the forces and the troops ultimately will be. You try to work through those things. I understand that. But in spite of the comments, apparently the surprise by some, on page 25 that in some cases Congress either increased or cut requested programs in MILCON, I would hope that we would exercise that prerogative yet again.
    Nevertheless, as the Personnel Subcommittee chairman, I think you all have done more than a credible job, a very laudable job in carrying forward with the President's commitment to do better by our troops. I look at the health care costs, and they were significant, Mr. Secretary. You are absolutely right. That was a program that Congress magnanimously authorized and did not fund, and it is over $8 billion and the money is there, and I compliment you.
    The pay raise, holding to that promise that again Congress made that the President happens to believe in very strongly and providing the 4.1 percent; and I look forward in our subcommittee deliberations to having the completion of that formula on the targeted pay increase you spoke about. That follows on with a historic pay increase last year that the President initiated and, of course, you, Mr. Secretary. And just on and on and on.
    I had a chance about 2 weeks ago to go to Kosovo and Bosnia. I missed you by about a few hours in Uzbekistan, Mr. Secretary. I am not saying anything that you do not know. I have never done anything in my life that gave me more pride in my Nation and for the actions of others. And our troops—and I was there mainly to see the 10th Mountain Division. I am proud of them. I met Special Forces folks, Marines, Air Force, Navy. They are just incredible people.
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    I hope the American public truly understands over the long term, after the memory of September 11th does not fade but becomes hopefully somewhat gentler, that these folks are there for us still.
    So, Mr. Secretary, I look forward to, and General Myers, I look forward to working with all of you to try to continue this commitment. I don't think anybody I would hope on this committee—no one in this Congress reasonably expected that the deficiencies that have grown over the past decade or so in the United States military was going to turn around overnight, particularly when we were in a recession. And while I have troubling aspects about this budget, I think in balance it is a very positive one, and I thank you for your efforts, and I look forward to working with you. Certainly if you have any comments on anything I said, I would be appreciative.
    Secretary RUMSFELD. Thank you very much, Congressman.
    You are so right. The men and women in the 10th Mountain Division and also the total force that is involved in all the services over there, it is just a thrill to see and to talk to, and you can't do it without coming away with a great deal of energy and respect and admiration for what they are doing.
    General MYERS. If I could add, the 10th Mountain I believe is in 11 different locations right now—some in the Caucuses, the Balkans and so forth. They are spread out. Their division commander just graduated from the joint staff. I will see him in about 12 days. I will be over in his territory, and we will look at Uzbekistan and Afghanistan.
    Mr. MCHUGH. I thought you were telling me that he was coming home.
    I will quote a great American. I was not there, but I was told that the Secretary said—and I am not trying to be parochial, but he said in his comments in Uzbekistan that the sun never sets on the 10th Mountain Division.
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    General MYERS. He may be actually right.
    The CHAIRMAN. The gentleman from Hawaii, Mr. Abercrombie.
    Mr. ABERCROMBIE. Thank you very much.
    Mr. Secretary, I don't know if I distinguished myself exactly, but I think my remarks earlier in the session were distinguished by the fact that I found myself in agreement with you on many issues. I know this caused you great pause, and at the time Mr. Moore and I discussed this at some length. We wanted to kind of cushion the shock. But I assure you, after my comments today, things will get back to normal.
    Just following up very quickly on Mr. Saxton's—on the discussion with Mr. Saxton, as you know, I am a loyal soldier in his army on this. If the Department is cutting the military construction request because of uncertainty about which bases to invest in, it is not quite clear to me—and just looking at the budget summary and reading through your remarks and that of General Myers—then what exactly the rationale is for the projects that are being requested in relation to the general proposition put forward to you that if the Department has bases that it does think needs to remain open in order to accomplish the tasks that it sees either immediately before it or likely to be before it over the next few years, then you should say so, and then perhaps we can deal with the BRAC question.
    You do not necessarily need to answer that right now, but I do think at some point you need to make clear what your rationale is for the existing requests, as opposed to the admonition to Mr. Saxton and others that a BRAC needs to be more definitive.
    Secretary RUMSFELD. I would be happy to do it right now. I would prefer to, as a matter of fact.
    The Department, in the broadest sense, is without an opinion as to different bases. The services have to make choices; and I am advised that Doug Zakheim, who was in the meeting with these folks throughout the past months, indicated to me that they will very likely do it on the most urgent basis. Where the need is the most urgent, the service will do that.
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    The broader decision was a macro decision. It was simply that, given the fact that BRAC is coming in 2005 and we have to make choices between shipbuilding and aircraft building and one thing and another, that we favored in this general area housing for people and a slower increase or new money with respect to the modernization overall.
    Mr. ABERCROMBIE. I am sure you would agree that where that housing is going then the committee is liable to think that that is where you think the bases are liable to be staying open.
    Secretary RUMSFELD. If they are assuming that there is something in the Department of Defense, Office of the Secretary of Defense's (OSD) mind on this, that would be a misunderstanding of the situation.
    Mr. ABERCROMBIE. Does the doctor have anything in mind?
    Secretary RUMSFELD. Absolutely not. I have no—and no one in the OSD does. Whether someone in the services do, that is something you can discuss with them next week when they are here.
    Mr. ABERCROMBIE. Very good.
    If I could move on to a challenge here, I think; and it is—in fact, I will summarize your testimony in the grossest terms here, but it is not meant to be anything more than a generalization for purposes of illumination.
    You have three challenges there. The third one is transformation. You went on then to elucidate six major goals with respect to transformation. Yet all through the testimony there is no reference to the now infamous—I shouldn't say infamous but what the press has seized upon as a key element in the President's presentation in the State of the Union, this so-called ''axis of evil.''.
    I do not see any relationship in the summary of your testimony—that is why I say I realize this is a gross generalization, and your testimony is in fact a summary of your position—but I do not see—there is no—I do not see how the six major goals and especially the transformation challenge of the three challenges relate to this in any way that makes coherent sense, policy sense. And I bring it up for this reason: There is a proposal for a new CINC for homeland defense.
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    How that is supposed to work is beyond me. Why we are not using the Guard, reserve, the governors, the police and the fire departments and the coordination we already have is beyond me. I think that needs to be elucidated a lot more clearly before there is any new CINC approved for homeland defense. How that then relates to the question of transformation and these goals in the context of what to me—I want to be frank with you—is almost an incoherent enumerating of these—of Iran, Iraq, and North Korea. Then, all of a sudden, we find ourselves involved in the Philippines. What are called exercises are clearly not exercises. These are combat operations.
    Secretary RUMSFELD. I can't wait to get into this.
    Mr. ABERCROMBIE. That is fine, because we need to.
    Secretary RUMSFELD. Good.
    Mr. ABERCROMBIE. What I am concerned about is the thing that concerned me, and we are both old enough now to understand the circumstances that originated in the Vietnam conflicts, the consequences we are still dealing with today, which is military activity becomes our policy and becomes a substitute for a coherent foreign policy, a coherent foreign policy with respect to our relations with other countries and how we are to conduct ourselves. That is what concerns me. It concerned me back in the early 1960s when I was involved in trying to get a coherent understanding of it then.
    I don't want to see us in a situation where our military activity—and you and I have had this discussion on this committee and over at the Pentagon on precisely this point. That, I think, is something you want to avoid as well, and I am sure the President wants to avoid it. I am not sure the President is well served by those who are urging him to continue that kind of rhetoric.
    Now, I do not have either the time nor is this the proper forum—.
    The CHAIRMAN. The gentleman is right. You do not have the time.
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    Mr. ABERCROMBIE. —but if you could address that question, I would be very grateful.
    Secretary RUMSFELD. You bet. Let me take them in sequence here.
    First, the Philippines. It is a training exercise for us. Our forces are not engaged in combat. You are correct that there are 4- or 5,000 Philippine army people on Basilan Island that are going after the terrorist network that are holding Americans hostage and have killed a number of other hostages. Our people are there. The Philippines have a constitution that argues and says they shall not have foreign combat soldiers engaged in their country. We understand that. The President of the Philippines has said that.
    Our people are there for two reasons. One is to be engaged in the training process with the Philippine army on Basilan Island. There are a relatively small number, less than 600 as I understand, and we have involved some American soldiers in the Philippines on another part. It just happens to be occurring. I think it would not be a correct characterization to equate that with Vietnam.
    I recognize the sensitivity that you have, and I share it. We have a very clear chain of command and rules of engagement, and these people are not out there shooting up the place. They are there with the rules of engagement that are totally in self-defense. They are not there engaged in combat along with the—they are functioning basically at the battalion level, not down at the squad level.
    Second, the new CINC. You say, it is beyond me. What about the governors, the mayors and so forth?
    The short answer is, we understand posse comitatus. It is there. It is law. We are not proposing to change at this time. The first responders with respect to homeland security are in fact the people, the governors and the mayors at that level across the country.
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    The reality of it is that it is taking an enormous amount of time for the Department of Defense to deal with all of these different activities, and we need to do it in an orderly, coherent way. We have decided that we very likely will later this week be recommending to the President of the United States that there be a commander for the northern area. That will include the United States, and that individual will help to put some discipline and coherence into the multiplicity of requests and demands to use U.S. forces in different places like airports and INS and Customs and border guards and what have you and for special emergencies for use for the weapons of mass destruction program.
    Mr. ABERCROMBIE. I hope that will include the relationship of the reserve and Guard.
    Secretary RUMSFELD. It does. It does.
    Last, with respect to the President's State of the Union message, I think the way to look at his remarks about Iran, Iraq and North Korea is, as he put it, the nexus between the terrorist states that exist that are on the terrorist list and that have active weapons of mass destruction programs and the new risk that that poses for the world.
    And it was an important statement. It was a statement that had clarity, and I think that we ought to register it and recognize the fact that those are three nations that have active weapons of mass destruction activities and that it does create a situation for the United States of America and our friends and allies and deployed forces that reduces our margin for error. We best not be wrong when we are dealing with weapons of mass destruction.
    Thank you.
    The CHAIRMAN. The gentleman from Maryland, Mr. Bartlett.
    Mr. BARTLETT. Thank you very much.
    Mr. Secretary, I would like to take this opportunity to say hello to my fellow traveler to the Russian Duma during our debate on ballistic missile defense. Your served perhaps as the most effective voice there in trying to help our Russian counterparts there understand that our initiatives in this area do not represent a threat to them. Thank you very much for your help.
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    I have several questions I would like to get on the record, so if your answers are as short as my questions we can get them on.

    First of all, when you last testified here you stated that you were considering privatizing the commissaries. I thought then and I continue to think that this is not a wise idea for any number of reasons, and I and a number of my colleagues would be happy to come and meet with you personally if you are still considering this. I would like to know what your present plans in this regard, and if you still think this is a good idea we would like to know how exactly would the business case work since the commissaries sell groceries at cost.
    Secretary RUMSFELD. Thank you. I am still considering it. It is not something that I would do at the OSD level. It is something that would be done by the services.
    Some commissaries have already been privatized, and they work very well. It is up to the services to make those judgments, and whether or not they will do in the period ahead I don't know, but I hope they are considering it. We would have to do it in a way that it provided as good or better service at the same or better prices for the men and women in uniform. Let there be no doubt.
    Mr. BARTLETT. With those caveats, sir, we won't do it, because I don't think there is any way to do it at lesser cost and maintain service to our military. We would be happy to make our case, and I have a number of my colleagues who would like to come and make that case to you or whoever else if your group needs to be convinced that what we have now is best for our service people.
    I want to thank you very much for the current level of funding for the Defense Commissary Agency, in spite of some rumors that it was going to be cut; and we would like your commitment, sir, that future year budgets will also contain adequate funding for this very important quality of life service.
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    Secretary RUMSFELD. Mr. Congressman, as you know, this is not my budget. This is the President's budget. And what he puts in it in future years and recommends to the Congress I can't say.
    Mr. BARTLETT. In this area you are going to be very persuasive.
    Secretary RUMSFELD. The President proposes and the Congress disposes.
    Mr. BARTLETT. We hope that means you are committed to adequate support in the future.
    Last, a few days ago I traveled to Pope Air Force Base, Fort Bragg Naval Station, Jacksonville Naval Air Station looking at our Morale, Welfare and Recreation (MWR) facilities. I was then, as I always have been, impressed with the commitment and dedication of our people there; and no profit motive could make them more committed to the service of their customers. They have had a pretty heavy hit because of increased security as a result of 9-11. We spent billions of dollars bailing out our airline industry. Sir, I wonder if you have in your budget some appropriated funds to help these very important services through these rough times, because their decrease in sales were not of their doing, sir, it was the result of increased security.
    If the appropriated funds are not there, I hope you would put them in, because this is a very important quality of life for our service personnel, and they have had a pretty heavy hit in some of these locations because of increased security. Customers just couldn't get there.
    Secretary RUMSFELD. I am not knowledgeable enough to answer your question, although I would be amazed if there were any funds in there for that purpose .
    Dr. ZAKHEIM. I think that is right.
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    Mr. BARTLETT. If they are not, they should be. This is a very important service for our people.
    A quick question about BRAC. I have had a BRAC closing in my district, sir. It did not save money. We would have spent less money if we had kept that base open.
    Also, I am not sure we know what size infrastructure we need since I and a lot of my colleagues believe that the present end strength, force strength is not adequate to our future needs. So I think that it would be a little wiser when we finally decide where we are going for base closings—I am not opposed to BRAC if we have excess facilities and we need to dispose of them. Sir, if a base is good enough for our military people to live on and families to play on, shouldn't it be good enough to give away without millions and millions of dollars—as a matter of fact, in the collective, billions of dollars of cleanup? And, sir, will you support legislation that says that a base that is good enough for our military people to live on and play on it is probably good enough to give away?
    Secretary RUMSFELD. I favor bases where people live to be appropriate for them and reflective of the respect we have for them. This idea of giving away bases, I do not know quite how to follow that. It seems that there are a variety of things that can be done with bases. One is, they can be kept and used for the men and women in the armed services to fit our force structure. Another is, they can be closed in part or in whole and kept in reserve in case they are needed for future force structure adjustments. Third, they can be disposed of, either through sale or gift to a public entity or a private entity. And all of these things have been done over time with excess facilities.
    Mr. BARTLETT. That was not a direct answer.
    Secretary RUMSFELD. I thought it was pretty good.
    Mr. BARTLETT. We are spending billions of dollars collectively cleaning up bases that were quite good enough for our military people. I think when we are doing that we are making a statement that our military personnel are second-class citizens and that they can live on a facility that is not even good enough to give away. I don't think that is the right statement to make, and I think that most of the money we spend for cleanup is not productively spent. If the pollutant is not migrating and does not present a clear and present danger, I do not support spending any money removing it. If our military could live there safely, then it ought to be good enough to give away.
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    Secretary RUMSFELD. Congressman, let me ask Dov Zakheim to offer some authoritative data.
    Dr. ZAKHEIM. Well, thank you, sir.
    Congressman, first of all, as you know, we are not the ones who set the environmental requirements.
    Mr. BARTLETT. I know you are not. I would just like your voice of reason to help us change what I think is a silly procedure in our country.
    Dr. ZAKHEIM. Well, again, this is not really up to us. We just try to do the best we can with what we are given by the law.
    Second, although in individual cases such as the one you are citing there may have been costs that seemed to be in excess of the savings at a given point, the latest estimates coming out of even the General Accounting Office (GAO) are indicating that we are now starting to realize saving from base closures. The savings are amounting to—it looks like it will amount to about $6 billion a year for the roughly 25 percent that we did close; and, therefore, ultimately you would see roughly the same order of magnitude of savings. So it really is a function of what—you know, a snapshot. If you look at it at a certain time, you may not yet see the savings, but ultimately you will.
    It is interesting that the entire analytical community—the Congressional Research Service (CRS), GAO, CBO, whoever you want to pick—all say the same thing as the Secretary indicated, as all other former Secretaries of Defense have said. It makes sense to close bases.
    Mr. BARTLETT. Mr. Chairman, I think a majority of our committee does not think there are savings, and if you have persuasive numbers we would appreciate it if you could give those to us.
    The CHAIRMAN. The gentleman from Texas, Mr. Reyes.
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    Mr. REYES. Thank you, Mr. Chairman.
    Mr. Secretary and General, good to see you here, welcome. We appreciate the job that both of you have been doing under very difficult circumstances. Thank you, again.
    Secretary RUMSFELD. Thank you, sir.
    Mr. REYES. As you are aware, Mr. Secretary, there are many of us on this committee that are very much concerned about the A-76 process. I certainly am one of those, and for many years we have been pointing out the many problems with those processes. Last fall, I learned of yet a new one.
    In November, I learned that the Ft. Bliss Directorate of Information Management is being reviewed for outsourcing. On November 5th I sent you a letter raising concerns from a national security perspective on this matter. To date, I have not received a reply to this letter, and I hope that that indicates that you are taking another look at this issue.
    Secretary RUMSFELD. What is the date of the letter?
    Mr. REYES. November 5th.
    Secretary RUMSFELD. I just got a bunch of mail from October and November and a number of Christmas cards this week.
    Mr. REYES. I am going to give you this this morning.
    Secretary RUMSFELD. Anyone who wants to write me, please fax me. The rest of it is not getting through very promptly.
    Mr. REYES. And I will give you a copy of it. Let me just kind of paraphrase the concerns that I raised.
    This new study—this new A-76 study covers all of communications which includes secure communications on the post. Some of the DOD functions I think should not be considered for outsourcing, including this very important one, certainly in light of the September 11th attacks on this country. The communications systems study was planned before the attacks. But as I understand it, based on the latest information, it is even continuing now.
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    A couple of areas that are critical. As you know, secure communications is paramount in terms of our ability to maintain the integrity and safety of our facilities and of our men and women in uniform. I hope that once I give you this letter that you can reassess the types of activities that are being considered under the A-76 process and that we would not move into an area again that would jeopardize the safety of our facilities and/or our men and women in uniform.
    In fact, when my colleague, Mr. Bartlett, talks about BRAC and other issues where we have been asking to see the number of or the amount of savings that have been involved, last spring Congressman Weldon held a hearing at our request on this very issue of the A-76 process. In that hearing, he asked the Deputy Under Secretary for Installations, Mr. Randall Yim, how much the A-76 process has saved to date. He gave us one figure. Then when we asked each of the service representatives for their figures in each service, they gave us yet another figure. Interestingly enough, they did not correlate.
    Those are the kinds of issues that I think we need to look at when we talk about the A-76 process. When we talk about a program that either jeopardizes national security or displaces loyal workers, that, when they leave a facility, all the institutional knowledge is gone. We, at a time of war, need to reassess that.
    So if you would answer that.
    Then the next—the other question that I have deals with what has already been asked on the Northern Command. As you know, Mr. Secretary, I spent 26 and a half years in the Border Patrol, the last 12 as the chief, and know and understand the importance of the integrity of our borders and doing a good job, especially under wartime conditions. I was the chief in McAllen during the Gulf War; and we actually, I think, stepped up the effort.
    But I am concerned because I have been in opposition to militarization of the border, and I am concerned and I would like for you to tell us what the role of this new command would be and how it interfaces with the United States Border Patrol, the Customs, the inspections process. There has not been enough information that has come out to give me a sense of necessity for this.
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    Secretary RUMSFELD. Congressman, thank you. We will certainly take a look at the letter, and we will pick it up before we leave today.
    With respect to the second part of your question, the reason there has not been much discussion is the unified command plan is still in its discussion phase with General Myers and the civilian side of the Pentagon. We haven't briefed the President, we have not started consulting Congress, we have not started consulting our allies except in the case of Canada because something leaked out. General Myers has talked to his counterpart up in Canada about how the North American Air Defense Command (NORAD) would work.
    In short answer, the United States military has no intention or plan of getting involved in INS or Customs or Border Patrol activities, except on a very short-time basis. We have been asked to supplement each of those three, and we have put a time limit on it. Each of those three has to have a plan as to how they are going to train up and get people to replace us. That should happen—I can't say how many months it will take, but Secretary White has been negotiating each of those memoranda of understandings and has a specific agreement on each one, and it will be very short term. The short answer—6 months through August 15th is the latest.
    The short answer on the command and how it would interface with the Border Patrol, anything that the U.S. military do is going to be in a supportive role, except for a couple of unique, distinctive things that involve weapons of mass destruction. As I recall—.
    General MYERS. That is correct.
    Secretary RUMSFELD. —where we are a first commander in, for example, the Capitol area on certain things, anything that the command for the United States would be involved in would be supporting other elements of the Federal Government or the State governments or the local governments at their request.
    The CHAIRMAN. Mr. Thornberry of Texas is recognized.
    Mr. THORNBERRY. Mr. Secretary, I think, thanks to your persistence, that we are getting some traction on transformation. As you said earlier, a lot of it is in the eye of the beholder, and even some folks from your department will use the label ''transformation'' when they are talking about some improvement of some sort. You have got some people that use that label when they are talking about any sort of high-tech weaponry.
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    But let me ask to you address two concerns that have been expressed by people who have been cheering your transformation efforts.
    One deals with what we buy. The concern that has been expressed is that what this budget does is just pile on some additional spending on some new technology, but it—and not really make any hard choices. And if you do not make hard choices you are not going to really affect the culture that makes transformation stick. So on the what we buy side, the argument is that we are not really making tough choices. I realize that you have a chart on some Army programs that are going away. The answer would be that is not significant. You did not cut anything that is high profile. Any way you can address that?
    The second concern that some have expressed is that what we buy does not really matter. As a matter of fact, you say yourself, I think today and in your speech last week, that all the high-tech weapons in the world does not transform the U.S. unless we also transform the way we think and train and exercise.
    So what some people would say is what matters is the organization, the personnel promotion system, professional military education, the doctrine, experimentation, that is really what is going to transform us and that there is not as much movement in that area as is necessary.
    So I will let you have at both of those aspects.
    Secretary RUMSFELD. Well, first, you are quite right. There are a cluster of people who fancy that transformation exists in firing some senior military officer who is not transformational, if you will, or canceling some major weapons system that they conclude is not transformational.
    We saw an editorial in one of the big newspapers this week talking about the Crusader weighing 70 tons. I don't want to put up a defense for the Crusader, but the last time I looked it had been reduced to about 40 tons.
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    But the vision of transformation being canceling a major weapons system or firing somebody I think is excessively simplistic.
    Second, it is a matter of culture, I think, and how people think. I honestly believe that probably as important as anything else we do will be the selection of the next 6, 8, 10 combatant commanders and chiefs and vice chiefs in the military and the people that they then put under them as they go forward over the next 4, 5, 6 years and the people after them go forward over the following 5 or 6 or 10 years.
    I suspect and, as a matter of fact, I told the President this the other day. We just sat down, and Dick Myers and I went over and said, we have got 8 or 10 major positions coming up, 4-star positions. Who we decide on those is so important in determining what this military is going to look like, what the culture will be, how people will think, how they will behave, how bold they will be and whether they are going to still be in the same mind-set of pre-September 11th. We are going to spend a good deal of time trying to do that right, and I think the business of canceling some big system or firing somebody as an answer to transformation is nonsense.
    General MYERS. Congressman, can I follow on for just a second?
    As I said in my opening statement, I think we are in agreement that transformation is more than things. It is also how you organize yourself, what your doctrine is and so forth. And you have got to be careful in this area about deciding what transformation is and what it is not. This is not a simple subject, because it is hard to predict the impact something might have on the future.
    I would offer the avionics upgrades to the venerable B-52. When those upgrades were approved by Congress and put on these aircraft, I don't think people thought that, gee, the B-52 would be providing close air support to Army forces on the ground in Afghanistan with joint direct attack munitions. I mean, that was not the concept, but that turns out to be, at least in some respects, a fairly transformational event.
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    This requires lots and lots of thought. We know some things in this budget will probably be more transformational than others, at least could lead to it, but sometimes the simple things can do the same things. So I think we are in agreement.
    The CHAIRMAN. The gentleman from Maine, Mr. Allen.
    Mr. ALLEN. Thank you, Mr. Chairman; and thank you, Mr. Secretary, both for being here and for your leadership in helping to guide this country through an extraordinarily difficult time.
    I want to simply echo what others have said about the men and women in our armed services who are making all of us very proud around the world. It is inspiring.
    I have to say, I do want to talk about shipbuilding. No surprise, I am sure, to you. Because back in Maine, the Bath Ironworks yard is 40 miles away from me; and when we look at the Administration's proposed budget on shipbuilding, it is profoundly discouraging. Profoundly discouraging.
    A year ago, Mr. Secretary, you came before this committee and basically said that the ship construction was way too low. You said, the right number is nine, and it has been going on for year after year after year and about ready to fall off a cliff in about 4 or 5 years. And Dr. Zakheim agreed that it was about to fall off a cliff.
    But when I look at the chart, instead of even the six ships that we were constructing in fiscal 2002, we have been—we have five in 2003, five in 2004, seven, seven, and 11 over the next 5 years. There is really no progress until you get out into, you know, a fifth year, which is so far away that none of us can predict. But the line for DDG-51s for the first time goes down to two in 2003, 2004, 2005, 2006, and 2007—every single year; and I think this is a real serious mistake.
    Now I know you have given a partial response. I just want to give you a reaction to two suggestions. One is, this year as last year you come and say, well, there are contractor difficulties, and that is why we can't spend all the money we would like. But, as Mr. Taylor has said, that is really hard to accept. I know there are some engineering problems with one yard on one program, and there has been others, but it is not an industry-wide phenomenon.
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    Second, I think the reason we know shipbuilding is at the bottom of the list is the suggestion that a $600 million cost overrun has prevented the construction of a third DDG in the fiscal 2003 period. You know, you have got a $331 billion last year, proposed $379 billion budget this year.
    And just to mention one thing, on $250 million, last year, Mr. Secretary, you said you needed every penny in the budget for missile defense. Then the day after the House and Senate voted on the conference report, the Department canceled the Navy aerial program and restructured Space-Based Infrared Radar System (SBIRS) low, saving I think about $250 million.
    I am just suggesting that, within this budget, I think it is possible to find the money you need for even one additional ship in the coming year.
    I just do not believe—when you look at what happened when we began in Afghanistan, the Navy gathered in the Gulf, and we moved 50 ships over there. They were how we began to get ready for this conflict. And it seems to me we are making a terrible mistake if we drive the Navy shipbuilding budget down as far as you have in this budget and if you keep, frankly, the missile defense number where it is last year. Because it does seem to me that we have to look at some of the priorities after September 11th.
    I think we should look hard at the missile defense, the national missile defense numbers. I think the Administration should make a major effort to negotiate North Korea's program away. And I think if did you that there would be savings there to find additional funds for shipbuilding.
    That is a long speech, and you knew it was coming, but I would appreciate your response, Mr. Secretary.
    Secretary RUMSFELD. Well, Congressman Allen, thank you very much for your kind words.
    I am for the Navy. I was in the Navy. When I said we needed every nickel of the last year's budget, I was right. I do not believe that I said we need every nickel for missile defense. I said we needed every nickel that was in the budget.
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    We will continue to cancel things that are not making it. And the program you mentioned, the Navy program, was not making it. We have no choice but to do that if it is that late, that far over, and that much not working. We will do it again and again if we have to.
    The Navy was enormously important in the Afghan exercise. You are absolutely correct. No one here has said that it was the contractor problem that led to what we have proposed. No one has tied it to any one thing. We have mentioned a series of things. And the Navy made the decision that they felt that at this point, with the average age of the ships what it was, that we could do it this way and that they had higher priorities. They are going to be here next week, and you will have a chance to talk to them. But choices have to be made.
    The shipbuilding budget—you are right—is five, unless you count the two important conversions, which are not nothing.
    Fourth, with respect to Bath, Dr. Zakheim recognizes the importance of the industrial base. He has been discussing with people ways that we can see that the various needs of the Navy with respect to shipbuilding, not just whether or not a new ship arrives in a budget in a given year but the other activities, are arranged across the country in a way that we do preserve that base.
    We are aware of what you are saying. We are concerned about the Navy, and we intend to see that we do have an appropriately sized Navy. But I do think that the four or five things that relate to the shipbuilding budget here are not trivial. They are real.
    Dov, do you want to comment on that, particularly with respect to the allocation of activities?
    Dr. ZAKHEIM. Well, as the Secretary said, the issue is not just the number of ships, although that is clearly important. But given that the average age of ships is about 16 years, that is not really what is the fundamental challenge. It is how to maintain the shipbuilding base.
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    I remember when I came into this business we had about 27 yards functioning. Now we are down to a handful. It is important we keep them functioning and important that we keep the designers and the engineers and the production line people working, too. It is a question of how you balance that.
    What the Navy did, and they will explain this to you, they felt that, first and foremost, since the Secretary had said we were not going to come back with more supplementals for things we had underfunded, the Navy felt it had to be up front and fully fund readiness. Which it did. It funded all the personnel programs, including health care. It funded munitions to higher rates. When it came to shipbuilding, the concern was, could we be a little more flexible?
    We are looking as we speak—and I am personally involved in this, and I know you know this, Congressman, that to try to deal with the problem of maintaining the base in its widest sense, not just the number of yards but the people who are working in them, that is critical to this country. We do not disagree on this as all.
    The CHAIRMAN. The gentleman from Georgia, Mr. Chambliss.
    Mr. CHAMBLISS. Thank you very much, Mr. Chairman.
    Mr. Secretary, I told you privately before the meeting, but I want to tell both you and General Myers publicly what a great job you are doing at the Pentagon, not just in this current conflict, but you brought common sense and a business perspective to the Pentagon that has been long lacking. We appreciate the job you have done.
    I also appreciate the job you have done in informing the public about the war. I think the way you have dealt with the press has allowed the American people to really find out what is going to and have an appreciation for the job that our folks are doing. I hope you will continue those briefings that you have been giving. You and your people have done a super job there.
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    Secretary RUMSFELD. Thank you, sir.
    Mr. CHAMBLISS. I hate to ruin my reputation over at the building by saying nice things about people that come up here at budget time, but I am particularly encouraged about a couple of major decisions that you have made with respect to multiyear purchasing. I think this is again such a win-win situation for, in this case, the Air Force. But particularly our men and women who are flying and the American taxpayer—when we look at continuing with multiyear purchases on weapons systems like we are going to do with the C-130 and the additional buy that we are going to make on the C-17, the C-17 certainly has been a model program for multiyear buys, and I am pleased to see us moving in that direction on the 130s.
    Also, General Myers, I had a good conversation with General Lyles last week when he was at Robins Air Force Base about the long-term depot strategy that I know is in the final stages. I have been encouraged by some things said by staff on the briefing they have been given. I think we still have some kinks to be worked out there, but I am pleased to see that we are moving in the right direction on that. Partnering in the depot system is a win-win situation that helps the private sector, helps the public sector but, most importantly, helps the warfighter, and I look forward to visiting in detail with General Lyles about that.
    Mr. Secretary, last year when you came up here to talk with us about the budget, there had been a recent overnight decision with respect to the B-1s, and a couple of us were throwing some darts in your direction that day—.
    Secretary RUMSFELD. More than a couple.
    Mr. CHAMBLISS. —because of the recent decision. Yes, sir. I think we were right to question that decision, and we worked through that. As I told you early on, that it may be the right decision, but it sure needed to be handled in a much better way, and you recognize that, and all your people recognize that, and I thank you for the cooperation that you all have given us there.
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    But my question is, I do not see any long-term strategy for a long-range bomber program. Yet I look at what we have done with the B-1s after that decision was made to reduce the B-1Bs from 93 to 60. I guess it is 92 to 60 now. We are flying those over in Afghanistan. They have done a superb job.
    We are flying B-52s on a regular basis; and, gee whiz, if we have to talk about age of airplanes, I think it is the youngest B-52 is something like 40 years old, 35 maybe, and the B-2 performed magnanimously over there.
    I am wondering if there is any rethinking of the decision on B-1Bs, not necessarily with respect to where they are going but with respect to reducing the number of those airplanes. If we are, what are we going to talk about doing with respect to long-range bombers?
    I just asked Mr. Hunter if he had any problem with a multiyear buy on B-2s, which I think a lot of us would agree with, but we all know what an expensive system that is. I am just wondering if there is any thought being given to a long-range plan for long-range bombers.
    Secretary RUMSFELD. Well, let me respond very briefly and then ask General Myers to make a comment.
    We are pleased with the decision with respect to the B-1s. We do believe that the remaining B-1s will be more capable and more effective on behalf of our country.
    You are quite right. There is no question but that the long-range bombers, all three, have participated in the Afghan activity and done a good job.
    The long-range bombers do help, particularly with fixed targets; and the SSGNs, of course, will also, with the conversion, be helpful with respect to fixed targets.
    General, do you want to comment on the broader question?
    General MYERS. You bet.
    First of all, in the 2003 budget, I think, if you haven't seen already, Congressman, you are going to see hundreds of millions going to upgrades to our bomber threats, the B-2, the B-1 and the B-52, to keep them updated.
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    In addition, I believe the Air Force has started to look at what is the follow-on to the bomber fleet, what is the next thing we might want to do, and that is just beginning. We think we can sustain the current fleet in the time it will take them to do their analysis and come forward with perhaps another program. And I think they have opened their aperture up quite wide. It could be an air breathing system like the current bombers or it could be something else. That discussion inside the Air Force as I understand it has just begun.
    Mr. CHAMBLISS. I know in your thought process there are some B-1 hangars that are being vacated that B-2s will fit nicely into if you get to that point.
    The CHAIRMAN. The gentleman from Arkansas, Dr. Snyder, is recognized.
    Dr. SNYDER. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here.
    You know, Mr. Secretary, this is our first hearing in the beginning of this session, so we always come back and notice how we are all aging together, but it appears to me you appear younger than the last time you were here. You are probably both the right person for the job, and it agrees with you.
    I wanted to ask, in your written statement you state that defending the U.S. homeland from attack and protecting U.S. forward bases should be our top priority, and we are all trying to come up with ways to spend the $10 billion contingency fund. But one of my main concerns is not under the domain of this committee, but it is our embassies and—but look at the numbers that they have for strengthening the security of embassies. It is up a little bit, but not by much.
    But if your mandate had been to protect not only U.S. force bases but U.S. embassies, that that number would be higher. Eighty percent of our embassies needed substantial work to be safer. I wanted to encourage you to have some person on your staff to meet with General Williams, retired general of the Corps of Engineers. This may be one of those ways that, in order to protect U.S. military personnel and civilian personnel, there may be—perhaps would benefit from some shifting of funds around to try to do a better job with our embassies.
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    There is no myth about this. Our embassies will be attacked again. We better do the best job we can of protecting them.
    I wanted to ask a question about Iran and give you an opportunity to comment. The USA Today and New York Times had comments about the foreign minister of Iran acknowledging that their 560-mile border is porous. They have had a lot of problems with drug interdiction but acknowledge they have problems enforcing that border. Some were describing this as a conciliatory tone.
    Do you anticipate that you all will seek to sit down with Iranian officials and try to come up with some coordinated way of stopping the holes in that border?
    Secretary RUMSFELD. I have not had a chance to read what the Iranian official said, and I don't know what element of the government he is from—he or she.
    Dr. SNYDER. Foreign minister.
    Secretary RUMSFELD. It was the foreign minister?
    Dr. SNYDER. Yes.
    Secretary RUMSFELD. Clearly, Secretary Powell and the President will come to some judgments as to the interaction that we have with Iran—as opposed to the Department of Defense.
    It struck me that it would be useful to state the facts, and the facts are what I stated over the last day or two. It is a problem to have those porous borders. There is no question but that Al Qaeda and probably the Taliban as well have moved across those borders not just into Iran but other countries, and we do need help. We are getting a great deal of help from Pakistan. They have stepped up and put army forces and border forces along that border to try to help capture Al Qaeda that were moving across the border into Pakistan. That has not been the case in Iran, and I wish it were.
    Iran also has been active in other types of terrorist networks, with people moving into Damascus and down into the Bekaa Valley as a state that has been listed as a terrorist state. It strikes me that, given the pressure that exists in Iran between young people and women particularly and the unusual governmental agreement they have where it is not ever clear—it is very clear where the ultimate authority is, but it is not clear where the earlier authority is—it struck me that getting the facts up on the table and letting the world think about it and the people of Iran think about it would be useful; and from what you said it may have proved to be useful.
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    Dr. SNYDER. On the earlier comments made about BRAC, I agree with you. I may be the only member of the committee that agrees with you.
    But a comment was made about savings. It is not savings, but it is efficiency. And we always forget about the ''R'' part of it, the realignment portion. I think the documentation is there. The amounts may be iffy, but there have been savings.
    Just on Sinai, I appreciate you putting that on the table. We have a couple hundred Arkansans there, activated Guard unit now. But it is part of transformation. Surely once every 22 years we could sit down and say, has technology changed? Is the border situation stable enough? Do we have the ability to accomplish the mission?
    The message always is, we will always—whether it is in peace or war, regardless of what is going on with the situation—we will find ways for the most efficient and effective way to use our personnel and technology to accomplish the mission. You are not going to jerk several hundred people if the mission is not accomplished. But if you can do it and still accomplish the mission, I see it as part of the transformation.
    Secretary RUMSFELD. You are exactly right. Thank you.
    Dr. SNYDER. Thank you for your service.
    The CHAIRMAN. The gentleman from Illinois, Mr. Kirk.
    Mr. KIRK. Mr. Secretary, welcome.
    We are so thrilled to be able to move the VA-Navy sharing in north Chicago, and I think that is going to guarantee an estimated 25 percent reduction for both agencies as we improve the health care for people there.
    I want to touch on three things real quickly. Your $10 billion request, as I understand, is only about 4 months running time for combining the Noble Eagle and Enduring Freedom; and, given the direction of the ''axis of evil'' speech, I think that is prudent.
    Second, on base closings, we have got about 85,000 reservists called up and, one estimate, 8,000 of them on security detail. If we have 25 percent too many bases, that means at least 2,000 reservists were called up to protect bases that we do not need.
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    Secretary RUMSFELD. That is exactly right. Force protection is very expensive. And if you have base structure you do not need, you have to protect it, and that is expensive.
    Mr. KIRK. So it seems to be pulling us off of where we need to be.
    I very much support you on transformation, with a particular emphasis on Asia. When we decided that Europe was the priority on December 8th, 1941, it made sense. An overwhelming amount of U.S. trade was with Europe. But we now do 40 percent more trade with Asia, and my understanding is that three-quarters of our flag officers are related to European missions, as opposed to Asian, and that 85 percent of our language training in the military is European languages, not Asian. I wonder if you could talk about that in the context of transformation.
    Secretary RUMSFELD. We have looked at the language training, and you are quite right. The old pattern of favoring, fostering in your academies and war colleges and our graduate schools the so-called romance languages, it has had a tail. It has persisted. In recent years, there has been movement and change with respect to that, but you have certainly put your finger on something that is important.
    Part of the problem on Europe with respect to flag officers—and I would defer to General Myers on this—is NATO. The reality is that there is an awful lot of superstructure at NATO, and getting changes in that is not something we can do unilaterally. It requires us to work with our NATO allies. And it is—I suppose it is no understatement—to say that it is a sensitive question.
    General MYERS. I will leave it there. That is exactly right. It is something that the Secretary has been pushing on for all of us to look at that, and General Ralston over there as our supreme allied commander in Europe is working on bits and pieces of that as I speak.
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    Mr. KIRK. I will leave with you a chilling thought. The International Monetary Fund (IMF) projects that the Chinese economy will be larger than the U.S. economy in the 2020s. Quiz question: When is the last time the U.S. military fought a country with an economy larger than ours? Answer: 1813, and that military marched into Washington and burned the Capitol down.
    We are going to face a time when China has more resources at her command than the United States, and so this Asia focus I think cannot happen too quickly.
    Secretary RUMSFELD. I guess one hopeful aspect of that is that straight line projections tend to not prove out.
    Mr. KIRK. Correct. We hope. Thank you, Mr. Secretary.
    The CHAIRMAN. The gentlewoman from Virginia, Mrs. Davis. I believe you have a question—that is the second buzzer—and Mrs. Wilson, maybe we can get through before we go vote.
    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.
    I couldn't be any more prouder of our men and women in uniform than I am. They are out there working with less than poverty conditions.
    I will tell you, and you can correct me, General Myers, if I am wrong, but it is my understanding that 79.3 percent of the strike missions flown are credited to the aircraft carrier. And you had to know I was going to go there, Mr. Secretary.
    Given that, I have heard all along that we needed to have 15 aircraft carriers. The projected budget has us still down to 12, and I am quite concerned that we have now moved the CVNX out to 2007 and have even heard that we are talking of split funding 2007, 2008.
    Right now, I think we have some areas—the Mediterranean, I believe—where we have no presence, the first time in forever with an aircraft carrier; and I do hope this puts to rest any argument about the need for large deck carriers versus small deck carriers.
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    Having said that, I will say that there are two other areas of the budget that really concern me, and that is the elimination of the Navy aerial missile defense. I was at Dahlgren this past Monday, and that is something that I am not sure we should have eliminated, and that is something I can talk certainly talk to you about later.
    The other is the elimination of the DD-21, as I believe that technology is critical to the new CVNX. Although they tell me that the DDX is going to be the new technology, but the brains—and I am not an engineer—tells me it is not the same technology and that it could be a problem. I guess I would like you to comment on that.
    I know you have commented on shipbuilding. I have a concern about the industrial base, Dr. Zakheim. So that is a concern. Northrop Grummond, Newport News is a concern for me. We have problems right now even keeping the engineers and the designers that we need. It is a concern if we start slipping the aircraft carriers. If you would like to comment.
    Secretary RUMSFELD. Thank you very much.
    The Quadrennial Defense Review left the carriers at 12. We did move the carrier 1 year to the right in the 2003 budget.
    With respect to the missile defense decision, my recollection is that that was required by law under Nunn-McCurdy, that it had breached in several respects. Do you want to comment on that?
    Dr. ZAKHEIM. As you know, Nunn-McCurdy required that a program that breached 25 percent cost increase, that broke that ceiling, could only be continued if there was certification from my colleague, the Under Secretary for Acquisition, that not only was the program a national security requirement but that we could guarantee both that it was being managed properly and would continue to be managed properly.
    Nunn-McCurdy was passed in the 1980s. There had never been a program canceled under Nunn-McCurdy until now.
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    Mrs. DAVIS OF VIRGINIA. Well, correct me if I am wrong, I thought Nunn-McCurdy stated that you had to do a reporting. I do not believe it required that you had to eliminate the program.
    Dr. ZAKHEIM. You cannot continue to fund a program if you do not certify. The Under Secretary, Pete Aldridge, my colleague, could not certify because he was not convinced that we could manage this program in the future; and he has basically sent a message to all program managers that if they do not get programs under control and cannot convince him, Nunn-McCurdy is going to bite us as Congress intended it to.
    Mrs. DAVIS OF VIRGINIA. The problem that I see is that I hope we are not putting our Navy ships in danger by not continuing with this.
    General MYERS. Congressman Davis, let me just comment on that point. The requirement for the program did not go away with the cancellation of the efforts. There are two separate issues. One was the ability to fulfill the contract and the work that was going on, and that is the thing that Secretary Aldridge could not confirm. But the requirement is still valid, so we recognize that.
    Mrs. DAVIS OF VIRGINIA. If the requirement is there, where are we going with it?
    General MYERS. Well, it is going to have to be restructured.
    Dr. ZAKHEIM. You asked about the DDX as well. My understanding is that the DDX is going to be a true test bed. It is certainly not the first naval test bed we have had, and they are going to be testing out all sorts of technologies. The feeling was the DD-21 was not taking us in the direction in which we wished to go, but the Navy apparently is going to look at all sorts of technologies to test on the DDX.
    My understanding is that it by no means indicates—and I want to be very clear about this—that DDG-51 is our last surface class. It is just not to be. There should be no misunderstanding about that.
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    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    The CHAIRMAN. The gentlewoman from New Mexico, Mrs. Wilson.
    Mrs. WILSON. Thank you, Mr. Chairman.
    Mr. Secretary, you have probably endured enough today. I do have a number of substantive questions that we can deal with another day.
    But I would like to ask, I have some concerns about matters relating to women in the military, and I have asked to meet with a senior member of your staff, and we haven't been able to coordinate that. I would like to be able to do that with someone whom you designate, if you would agree to.
    Secretary RUMSFELD. We would be happy to do that.
    Mrs. WILSON. Thank you, Mr. Chairman.
    The CHAIRMAN. Mr. Secretary, if you do not have closing remarks, that concludes it.
    Secretary RUMSFELD. I do not. Thank you very much, Mr. Chairman.
    The CHAIRMAN. Thank you very much, sir, and, General, thank you.
    The meeting is adjourned. .
    [Whereupon, at 1:20 p.m., the committee was adjourned.]