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[H.A.S.C. No. 106–5]



FOR FISCAL YEAR 2000—H.R. 1401






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February 24, 1999


House of Representatives,

Committee on Armed Services,

Military Readiness Subcommittee,

Washington, DC. Wednesday, February 24, 1999

    The subcommittee met, pursuant to notice, at 2:03 p.m., in room 2212, Rayburn House Office Building, Hon. Herbert H. Bateman (chairman of the subcommittee) presiding.

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    Mr. BATEMAN [presiding]. I'll ask that the subcommittee come to order.

    This afternoon the Subcommittee on Military Readiness begins its review of the President's Fiscal Year 2000 budget request and the adequacy of that budget request to sufficiently support the critical readiness needs of our Armed Forces.

    Shortfalls in readiness and the migration of funds from readiness accounts to fund unbudgeted contingencies have been a problem for several years. This subcommittee has been in the forefront of identifying readiness problems. Only last fall did the senior leadership of DOD publicly recognize that which this subcommittee had discovered much earlier, the readiness of our armed forces has been degraded and will continue to decline until it is adequately funded. And those funds must not come from modernization accounts, which are an essential part of the readiness equation, nor can they be funded by the quality of life funds.

    I and many other members of this subcommittee have been sounding the alarm on declining readiness for the past several years. At long last the Administration has finally admitted that there are, indeed, readiness problems in the military services. With much fanfare and media attention, the administration claims that readiness problems have been addressed in the budget request.

    At this point, I must express my deep concern that the budget request before us may be long on rhetoric but woefully short in real terms. I feel this budget may only slow down the decline, but much more than that is needed.
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    The Administration's budget request reports that there is an additional $12 billion in the fiscal year 2000 budget request for overall defense needs. We now know that over $8 billion of that ''increase'' is based on funding adjustments, such as lower inflation rates, lower prices for fuel, favorable foreign currency accounts, and other adjustments, from 1 year to the next. That $8 billion will not buy additional training time on combat training ranges, additional spare parts, more flying hours or more steaming days for our combat ships. Nor will it begin to reduce the staggering backlog of facilities' maintenance in all of the services.

    Of the remaining $4 billion, if you deduct the funding for programs that are not supposed to be in the normal defense budget, such as commissary operations and Pentagon renovation funding, there is not much left to improve readiness. When you level the playing field by stripping out all of the funding gimmicks found in some of the operation and maintenance accounts, funding for some of the military services may actually decline.

    If we are to reverse the decline in military readiness, the Administration will have to budget real dollars and abandon the tactic of trying to pay for real needs with mythical savings and assumptions.

    This committee and, indeed, the entire Congress, has long recognized the under funding by the Administration of critical readiness accounts. These critical readiness accounts include base operations, combat vehicle, ship and aircraft depot maintenance, funding for increased operations, such as flying hours and combat vehicle tread miles, facility and infrastructure repairs, and mobility enhancement funds.

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    In fact, between 1994 and 1995, this committee alone has added over $7.2 billion to the Administration's annual request in just these areas. Some make the charge that increases—these increases represent pork-barrel additions—and say that the Pentagon did not ask for the increased funding. I would argue that additions to these accounts are not Congressional district specific and certainly cannot be categorized as pork.

    The fact that the Pentagon did not ask for the additions is one of the primary reasons why we have readiness problems today. I've been asked why, with the level of support Congress places on these specific accounts, that we continue to have readiness problems. The answer is simple: much of the originally-requested and the additional funding for these accounts has diverted to other purposes to fund a series of unscheduled and unfunded contingencies and deployments.

    We are fortunate this afternoon—and I sincerely mean that—to have as our lead-off witness the principal senior executive of the Department of Defense in charge in readiness, Mr. Rudy de Leon, the Under Secretary of Defense for Readiness and Personnel.

    As readiness and personnel issues are closely related, especially in the area of quality of life issues, it is my hope that Secretary de Leon will be able to enlighten us on the direction the Department has taken in these areas and will be able to provide us with the Department's vision on how we are to permanently fix our readiness problems.

    Mr. de Leon is no stranger to this committee, and we certainly do warmly welcome him today.

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    Also appearing before the subcommittee is a panel of senior officers from each of the military service, who are responsible for the formulation of their respective budget proposals. We look forward to their testimony on how each of the military departments will address readiness problems with the funds that have been made available.

    For the past 2 years, this committee has initiated legislation that would change the way in which readiness is measured. It is my belief that the current system does not truly depict a real-world picture of the state of readiness of our military forces.

    In numerous field hearings at bases around the country and personal visits to the troops in the field, there is a different view of readiness from those that have to live it everyday to that view which is expressed by the senior leadership in Washington. Only by reporting readiness consistently, at all levels, will be able to get a true picture of military readiness.

    It is my hope that our witnesses today will be able to update the committee on its efforts to revise their readiness reporting systems. Before we get into hearing from our panel, I would like now to yield to the Honorable Solomon Ortiz, the Ranking Democrat on our Readiness Subcommittee, for any statement he would care to make.


    Mr. ORTIZ. Thank you, Mr. Chairman. I join Chairman Bateman in welcoming our witnesses to this Readiness Subcommittee hearing today. And I welcome my colleagues to another challenging and, hopefully, productive session for the Readiness Subcommittee.
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    To my colleagues serving on the Readiness Subcommittee for the first time, I want to assure you that the Readiness Subcommittee acknowledges the readiness problem and has attempted to seek solutions in a most cooperative and nonpartisan manner.

    Mr. Chairman, as I have done in the past, I will not take much time with opening remarks so that we receive the testimony from our witnesses.

    Also, I want to reserve as a much time as possible for all of our Members present to ask questions after the presentations have been made. But I do want to share with our distinguished and my colleagues some of my concerns about the fiscal year 2000 readiness budget.

    It is great to see the Administration acknowledge the readiness problems that we have been telling them existed, and their budget request is supposed to fix the problem. The readiness dollars in the Administration's budget request, if they are real and if they do not get migrated to pay for contingencies on some other activities, reflect on only some of the actions I believe are necessary to provide the resources our forces deserve and must have to do all the things that we require of them.

    But I am not confident that the dollars are real. I am concerned about the budget assumptions regarding inflation as well as the budget dependence on underdetermined rescissions, stability of future fuel prices, savings from outsourcing inefficiencies, and the willingness of the Congress to enact legislation that supports the increased revenues.

    I would prefer to see real additions to the budget that did not put the readiness of the force at risk. I also remain uncomfortable with the failure of the budget to address programs in a comprehensive manner that would contribute to the stability of our civilian workforce. We continue to ask them to remain productive, while at the same time the Department appears to be trying to take away their jobs. I hope that perception changes soon.
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    Mr. Chairman, with those brief comments, I yield back the balance of my time.

    Mr. BATEMAN. Thank you, Mr. Ortiz. And at this point, we're very happy to hear from Secretary de Leon, and let me just mention that he is accompanied today by Mr. Thomas K. Longstreth, who's the Deputy Under Secretary of Defense for Readiness. And we're pleased to have you with us. Rudy.


    Secretary DE LEON. Mr. Bateman, Mr. Ortiz, other Members, I have a more lengthy statement that we've submitted. I have just some brief excepts, if I may read them.

    Mr. BATEMAN. We'd be happy to take the full statement for the record. You may proceed, as you like.

    Secretary DE LEON. Thank you.

    Mr. Chairman and members of the Subcommittee on Readiness, I welcome this opportunity to discuss with you the fiscal year 2000 budget request, and how it addresses our most pressing readiness needs. I would like to take this opportunity to introduce Tom Longstreth, my Deputy Under Secretary of Defense for Readiness.
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    Ensuring the readiness of our armed forces to defend the nation's interests is the highest priority of the civilian and military leadership in the Department of Defense. America's armed forces remain the best trained, best equipped, most effective military in the world. They are fully capable of executing our national military strategy and are carrying out the diverse missions with pride and professionalism.

    Despite the enormous capability of our forces, there are indications that we face a significant challenge to the current high readiness of our armed forces. Today, I'd like to explain the processes the Department uses to monitor and address readiness concerns, the readiness issues these processes indicate are the most critical, and how the President's budget addresses these concerns.

    Over the past decade, the Department has implemented a number of initiatives to improve our ability to measure readiness, bring readiness issues quickly to the attention of senior DOD leadership, and take action to eliminate them. For example, the Joint Monthly Readiness Review, the JMRR as it's called, and the Senior Readiness Oversight Council, the SROC, are the key forums that meet monthly to assess the military's readiness to execute the National Military Strategy and its associated missions and tasks.

    The key findings of the JMRR and the SROC are the included in the Department's Quarterly Readiness Report to Congress, which I sign out and send up to the Hill. We are within a few days of sending you, Mr. Chairman, our next installment. Our purpose is to call it like it is. And I think for those who have read these reports, we do put the details in there. We put the green lights, as well as the reds and the yellows.
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    These reports provide detailed information on the current readiness status of our forces as well as readiness problems detected through our internal reviews. We have been working hard to make these reports as comprehensive and accurate as possible.

    As directed by the Fiscal Year 1999 DOD Authorization Conference Report, we are also in the process of enhancing our readiness assessment and implementing the changes that Congress directed. We will forward our implementation plan to you in the near future, as mandated by the 1999 Act.

    Last year, the Department's readiness assessment process clearly indicated that strains were developing. As we began preparing the fiscal year 2000 budget, Secretary Cohen and Dr. Hamre held a series of meetings with the Joint Chiefs as well as the CINCs who discussed whether further funding increases were necessary to address readiness concerns.

    Based on these discussions, the President significantly increased the defense budget in fiscal year 2000 and beyond, requesting an additional $12.6 billion for fiscal year 2000 and $112 billion over the next 6 years.

    The principal purpose for this increase was to meet what U.S. military leaders told the senior leadership, including the President, were their most urgent near and long-term readiness needs. They include recruiting and retention.

    The budget recognizes the recruiting and retention challenges and funds several key initiatives targeted to maintain the quality and talent of our all-volunteer force. The budget adds $2.5 billion in fiscal year 2000 and over $35 billion over the next 6 years to increase pay and retirement benefits by providing a 4.4 percent pay raise in fiscal year 2000, reforming the pay table to reflect performance over longevity, and reinstating the 50 percent retirement for all military members.
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    Training. Because of the fiscal pressures, we have seen some trends toward the migration of training funds to pay ''must pay'' bills, such as base operations support or real property maintenance on installations, precisely the issues that Mr. Chairman and Mr. Ortiz raised in their opening statement.

    The fiscal year 2000 budget not only increases funding it will do more: it not only increases funding for training, but also adds funds for base operations and maintenance to prevent migration of these dollars.

    Material Readiness. We've been working hard over the past several years to remedy spare parts and equipment problems, and with your support added considerable funds in fiscal year 1998 and fiscal year 1999 for more spare parts. We have not yet seen a measurable, across-the-board impact from this influx of funds, because of the production lag from the time a part is identified as needed until it comes off the production line and is sent to the depot or to the field—often 18 to 24 months.

    To ensure our forces have equipment that is mission ready, the fiscal year 2000 budget request has again increased funding to procure spare parts, arrest depot backlogs, and purchase other critical items for our war reserve stock. The fiscal year 2000 budget request will have a significant impact on both near-term readiness needs and longer-term requirements and will improve our ability to carry out our defense strategy and its associated missions and tasks.

    This is the first cold war defense budget which implements a real and sustained increase, $112 billion over a 6-year period. That's a sizable amount. It may not resolve every readiness problem, but it will correct those that are considered to be the most urgent.
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    In closing, let me thank you for your support of armed forces. I know that many of you spend a lot of time in the field meeting with our people. You know their concerns, as well as we who are serving in the Department of Defense do. I look forward to continuing to work with the subcommittee so that we can be responsive to our people in the field as well as the subcommittee.

    Let me just point out that we try in the JMRR and the SROC to be timely, to deal with the issues that are most relevant to the field, such as the SROCs that we have had in the last few months, including procurement of precision-guided munitions and other ammunition.—that was our SROC topic last Thursday, the critical capabilities that are required to support a second major theater conflict, recruiting and retention, aviation readiness, OPTEMPO, particularly the high-demand, low-density units that have and break the goals of 120 days for the Air Force, 180 days for our other forces, and then continually hear from the CINCs on what their JMRR capabilities are. So, I think we try to reflect this in the reports that we send up. I think over the last year, these reports have improved considerably, because my focus in the Department of Defense is to report to the senior leadership and, by law, to the Congress on the assessments.

    So, that's really not a political issue. That comes from the CINCs. It comes from the Joint Staff as well as the OPs deputies that each of the services has. And we are going to continue to try to reflect this in the product that we send you quarterly.

    So, Mr. Chairman, Mr. Ortiz, other Members, I thank you for this chance to testify and look forward to answering your questions.
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    [The prepared statement of Secretary de Leon can be found in the appendix.]

    Mr. BATEMAN. Thank you very much, Mr. Secretary.

    For the members of the subcommittee, we have a vote on with something less than 10 minutes to go. It is a vote on H.R. 409, the Federal Financial Assistance Management Improvement Act of 1999. I think we better go vote for it, and we will get back just as quickly as we can.


    Mr. BATEMAN. The subcommittee will come to order.

    Mr. Secretary, in my opening statement, I made some observations about the assumptions underlying the hoped for availability of an additional $12 billion. And maybe I am overly critical, but focus for me, if you would, on what the specifics of those assumptions are. Some of it relates to fuel cost. Some of it relates to inflation, currency exchange. Can you give me what those factors, because, you know, we can't just say they are false assumptions if we don't even know what the actual assumptions are, can you, not necessarily off the top of your head, but send us something that speaks to what those assumptions are predicated upon and how much of the $20—of the $12 billion is represented by each of those assumptions?

    Secretary DE LEON. I'd be happy to provide that for the record, because I realize that is an important issue to the subcommittee.
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    Mr. BATEMAN. One other thing that is bothersome. I haven't seen this level of detail of the budget personally, but I am led to believe that this year, again, the budget as proposed contemplates that the cost of commissary operations be absorbed by the three military departments rather than by the Department of Defense. That was the request last year, and we rejected it. And, frankly, it's a little disappointing to see that happen again, because I don't think we can or should change and take the commissary costs out of the hides of the services. I think it is a generic Department of Defense cost that ought to be borne there and not passed on to the services. Could you comment on that?

    Secretary DE LEON. I would. I would say I find myself more in sync with your thinking. And, frankly, I thought that this issue had been resolved to the satisfaction of both the Congress as well as the Department. The proposal was never the commissaries come out of hide, but that rather the funds which support the operation of Defense Commissary Agency [DeCA] would be apportioned among the three services. That was the proposal last year.

    In fact, we heard the Congress. We have moved in a different direction. We have set up a board of directors. It's currently chaired by a three-star general in the Air Force, but that will rotate. In fact, as we went through the—this budget process, some of the savings that were there on the table that would normally be recouped and invested elsewhere were left with the Commissary Board, which is chaired by Lieutenant General John Handy to be reinvested in a process that the board feels is pertinent, which may, in some cases, mean improved infrastructure. In other cases, it may mean longer hours. But I think that we have come a long way since the discussion last year.
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    It may have been a mistake on my part not to scrub the draft materials better. But I believe we have progressed further; and that, in essence, Dr. Hamre is now fully committed to the process that we've put on the table, which is to have a board of directors, if you will, that oversees DeCA that reports to me. Because I am, by law, responsible to the committee in terms of the performance of DeCA; but that I think we have a board of directors that is really in tune with the needs of the people in terms of accessibility of hours, things like that, that they get to make some of the critical decisions in terms of how to invest dollars; and that this process is working well and one that I am proud of.

    So, I will get to the bottom of this issue that is discussed in the budget, and I will respond to the record for you on that. But my belief is that we have come a long way since last year.

    Mr. BATEMAN. Well, the thing that is of particular sensitivity is if we all know that the commissaries operate at a deficit that has to be funded out of the Treasury, and if historically that's been done from this pot of money, but suddenly you say, no, it's no longer going to come from this pot of money. It's going to come from another pot of money, and it's the pot of money that's the O&M budget of the three services: that's money they can't spend for things they used to spend it for, or may have even more compelling needs for.

    So, what I want to know is at the end of the day, are we presenting a decrement to the O&M funds available to the services to meet their readiness and other needs? Mr. Ortiz.

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    Mr. ORTIZ. Mr. Chairman, I seem to have the same concerns that you have because of the experiences that we've had in the past; that we had to use fundings from other services to provide funding for Bosnia. And this left some of the depots without enough money to do maintenance work on some of the—and I was just wondering do you have something to fall on now—something that's coming up and what I read in the paper is that we might go into Kosovo. And if we do that, there's no funding for that. So, in case we do that and use funding to go to Kosovo, where are we going to get the money, from what area? I mean, somebody's going to be deprived of funding, and are we prepared to do that, and how would we do it?

    Secretary DE LEON. I am sure you appreciate my intent is not here to speak to the Kosovo mission. There are many other people——

    Mr. ORTIZ. Just what I read in the paper, you know.

    Secretary DE LEON. But on that, I think it's critical for operations to be paid for in a real time basis. We do not fund that in our O&M budgets. There have been considerable discussions with OMB to ensure that we really do pay as you go. Congress has been very helpful in supplementals; and just as an example, there is pending right now a supplemental to cover Hurricane Mitch and its costs, which were obviously critical because when the emergency occurred in Central America, both CINC South as well as the National Guard and Reserve, became engaged and supported the humanitarian effort there. Those dollars need to be replenished, and I believe we're in the process for working that out between OMB and the Appropriations Committees right now.

    In addition, Congress has moved and been very helpful with the supplemental appropriations that have funded Bosnia as well as the operations in the Persian Gulf. It is critical that those operations be paid for, and we have worked very hard to make sure we have accountable financial procedures in place so that we can accurately give you the cost of peacekeeping in Bosnia, of the operation in southwest Asia, as current as Operation Desert Fox and the expenditure of precision-guided munitions there.
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    So, it's something that we are very mindful of. Secretary Cohen has been very vigorous in terms of working both the Congress and the other departments of the executive branch to make sure that these mission requirements are funded; and, in fact, we have worked hard to make sure that there are additional dollars for depot; that there are additional dollars for real property maintenance, as well as the training accounts so that those accounts don't see their dollars migrating to other places.

    Mr. ORTIZ. Thank you, Mr. Secretary. I have no questions. Mr. Pickett.

    Mr. PICKETT. Thank you, Mr. Chairman. Mr. Secretary, could you maybe go into a little more detail on the morale welfare and recreation [MWR] aspect of funding. And I am thinking about the peripheral programs, like housing and—not the construction—but the housing allowances and things of this kind that impact on the quality of life?

    Secretary DE LEON. Yes, because in my turf the allowances are really part of my turf. Building new housing falls in the acquisition frame; but, nonetheless, there is a careful integration.

    On a recent trip to the West Coast, housing and the basic allowance for housing emerged as a very critical issue to ensure one, that people who live off base get an adequate allowance for buying housing on the commercial economy and so that they don't have long commute—as a person who has to commute through 25 mile traffic is going to have other things on his mind other than his or her mission responsibilities. But we are looking at housing allowances right now.
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    We're also working carefully with the acquisition people to make sure that the program that we have for improving on-base housing, the upgrades, that that program stays in place, as well as the broader program of working the public-private ventures. In the San Diego area, in particular, this is one of the critical missions. As other Navy facilities close and as units migrate into Miramar and to other stations there, for example, it's important that we have the housing and support there for the people, because if, again they've made this move, and there are job responsibilities, and yet they have trouble getting their families settled, then they are going to be dissatisfied, and their family is going to be dissatisfied and their quality of life is going to suffer.

    So, it's really three elements. To make sure that the basic allowance for housing is adequate. Second, to make sure that the upgrades on base, for the upgrades of existing housing stock is there. And then, three, to make sure that the public-private ventures that are in discussion proceed forward, because that allows the housing allowance really to become the down payment for buying housing stock that is available to all service members.

    Mr. PICKETT. I know you've been very diligent in trying to work on the health care issue by first hand knowledge. Any remarks you want to make? I am not going to——

    Secretary DE LEON. Actually, I do. Since our last session there at Tidewater, we continue to do other sessions in other regions. The program office has instituted a withhold against our contractor in region two. Additionally, there are new people who are reporting for business, both in terms of supporting Dr. Bailey, Admiral Sears, but also retired Admiral McDaniel, who is my eyes and ears on TRICARE. And, second, some of the new people that both the Navy and the contractor are bringing to replace. We want to make sure that we're responsive to our beneficiaries. We want to make sure that the health care providers, that provide health care to our beneficiaries, are there. And third, we want to make sure we've got adequate funding for the military treatment facilities typified by the new hospital that will be opening or that is really in the process of opening there in the Tidewater.
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    So, this is a major—health care and their confidence in the accessibility of health care is a major quality of life issue. I read that loud and clear and have a team that's focused, and, in fact, there's been a team that since our Tidewater session has been in place near continuously at Camp LeJeune to resolve this area.

    Mr. PICKETT. OK, thank you. Thank you, Mr. Chairman.

    Mr. BATEMAN. Next, Mr. Chambliss.

    Mr. CHAMBLISS. Thank you, Mr. Chairman. Rudy, it's always good to see you, and you keep thinking you're going to avoid depot guys like Solomon and me, but you can't do it. We show up everywhere.


    I want to tag on to what Mr. Ortiz said there with respect to Kosovo. I think the only person in the world that knows right now whether we're going or not is probably the President, since that's—looks like it's going to be his decision. And we have fought this battle for 4 years now, since I've been here, over the supplemental appropriation for the funding of Bosnia. And it looks like where we're heading with Kosovo, which has always had a direct effect on readiness.

    And it seems that O&M gets hit first, even though we come back with a supplemental maybe. But, and that means that our depots are the ones that get hit early on. And nobody doubts that we're in a critical stage right now with our military, and particularly from a readiness perspective. And I hope, even though I understand this is not your major area, that I hope that you and other folks will impress upon the White House that we just can't continue to come back with those supplemental fundings; because if we took the President's budget today, passed it, implemented it, if we come back with a supplemental, what we're going to do is take money out of Social Security and put it in a supplemental to pay for Kosovo. And there should, and I think there would be, a revolution and an uprising in this country if that happened.
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    So, we need to emphasize that, and the President's got an opportunity right now. He can come back and amend this budget proposal to try to provide for Kosovo in there. And frankly, I wish he would do it. He has only got funding for Bosnia for like a year and a half, and I am hoping that means he thinks we will be out of Bosnia by then. But frankly, I don't' have great hopes that we will.

    But talking about his budget and its effect on readiness, the President has been very vocal about the fact that there's some $12 billion in additional defense spending over the current baseline, when, in fact, we all know and understand that really we're talking about $4 billion in new money. And he wants to basically reprogram some $8 billion in current approved projects and have part of the approved projects even rescinded, which is going to have a difficult time flying within our committee. So I am not sure where we're headed there.

    But my question is, even if you took the $12 billion, the President has said that he wants to beef up the defense budget because the Chiefs have come to him and said that we're on a downslope and we've got to put more money in there over a sustained period of years in order to get to where we need to be from a readiness standpoint. And what they are saying is they need approximately $22 billion a year for 5 years.

    The President is proposing, even if you take his best number, $12 billion. Why aren't we listening to the Chiefs? Why are we doing what they say they need to get our military forces up to where they need to be?

    Secretary DE LEON. Can I give you a two-part response? First, could I ask Mr. Longstreth to discuss the issue of how we track and make sure that there are funding for the contingencies? And then the broader question——
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    Secretary LONGSTRETH. Well, I don't know how much I can add on the contingency funding, Congressman, other than to say I think you won the battle on Bosnia and the Gulf. As you know, we're finally putting those up front so that at least those two contingencies that in the past we've had to get funded late in the year, we're finally stepping up to that. So I think, in large part, because of the pressure from the Hill, you've won that battle.

    I would just reiterate what Rudy said on the issue of Kosovo. We're a long way toward—I mean we've got a 3-week hiatus here, and we know that there are numbers being thrown around for what a K–4 would look like and what the U.S. contribution to that might look like. But that planning is still in its very early stages, so I don't think anybody has a good handle on what the cost of that might be. The numbers that have been bandied about of $1.5 billion to $2.0 billion are really just WAGs based on some of our prior experience in Bosnia. And I know that there's a lot of deliberation going inside on just the issues you've raised. But other than that, I am not sure that there's much I can add.

    Secretary DE LEON. It was a long process. There were a series of sessions with the President on readiness. There was the September session at the National Defense University where the CINCs were brought in to really raise their readiness appearance with the President directly. And there was a meeting with the Joint Chiefs. I think if Secretary Cohen were here, he would tell you that the 5-year defense budget that is on the table really does move forward to $112 billion in new program content for the Department of Defense; that he being in the field as well as the members of the subcommittee listening to the troops knew that you've got to fund readiness and at the same time a key piece of readiness is new equipment in the field. Old cars need more maintenance than new cars. And we need to get new pieces of equipment into the field.
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    And so as the Secretary worked with the Chairman and the Joint Chiefs—you know the bill payer in many cases has been O&M—but equally to replenish O&M in the fourth quarter, the dollars migrate from procurement to O&M. This is a budget that the Secretary would tell you funds plus up for missile defense as well as moves us to $53 billion on procurement, and the Secretary expects to be at the $60 billion number on procurement next year and still meet the critical readiness needs.

    Now, in addition, we're in a balanced budget environment, and so we will need help from the respective budget committees to ensure that the caps are adjusted as necessary and appropriate. But I think that the—that Secretary Cohen feels, as well as the Chairman, but speaking as one of Secretary Cohen's key people, that he thinks that this budget clearly moves us in the right direction, that this really takes us away from migrating dollars from procurement to O&M to contingency, and that we can start not only to cover today's readiness requirements, and whether it's one of our depots or whether it's the National Training Center, readiness is perishable. It has to be replenished constantly so that on one hand, we can pay the must-pay readiness bills, and at the same time start to replenish the longer-term investment, which is procurement in military equipment. But as we get further into the five year defense plan [FYDP] also reinvestments in base life, including housing and other critical items.

    Mr. BATEMAN. Mr. Underwood.

    Mr. UNDERWOOD. Thank you, Mr. Chairman. Much has been made in the media about the services going to non high school graduates for recruitment, for initial recruitment. And I am just wondering if—it seems to me that would, that could possibly further complicate and additional costs for training and actually degrade readiness overall.
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    So, what are you exploring in terms—what are you doing about that issue? Or how would you respond to that issue? And are you exploring any kind of alternative—I know we had this discussion briefly—are you exploring any kind of alternative recruitment offers in order to get more young people to come into the services? You've mentioned the possibility of different enlistment time periods.

    Secretary DE LEON. That's an excellent question. At the heart of our military today is the high caliber of the men and women who wear the uniform. So I would start with our first essential requirement is to make sure that we retain our capable people. And that's at the heart of the pay package, of the across the board the pay table reform, and the retirement improvements that are in this package. So, retention is the key piece.

    The next piece is the fact that while the economy is booming, the major competition that the military has in the recruiting area is the fact that many more kids have the chance to go to college today without using any of the GI Bill benefits. All of the states have very, very competitive programs. One program that I was most recently briefed on is the State of Georgia has a program that potentially a high school grad is guaranteed some type of continued, state-supported college in Georgia if he's—if he or she has the grades and the wherewithal.

    So, where once the GI Bill and earning dollars to go to college was really a gold standard of military recruiting, that is changing. So we've got to look not only at qualified, capable high school grads, I think, Mr. Underwood, we need to look on college campuses as well for the high school grad who maybe goes to the community college for a year or two and gets an associate of arts degree; besides that, they want to try something else before they go on and get a 4-year degree; that we need to look at potentially shorter enlistments that would allow people to serve, earn some benefits so that when they go back to school, they've got some resources to fall upon. So, recruiting is a very dynamic. People that have been working recruiting seriously, which are largely our recruiters and our recruiting commands, have been working this issue vigorously for the last 2 years, but I would say in all truthfulness this budget right now, 1999, is the first year that each of the services have funded recruiting to the level of pre-1989, when we started the draw down. So we have some real challenges on the recruiting side. People are working very, very hard, though. But this is singularly one of our greatest tasks for 1999.
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    Mr. UNDERWOOD. OK, on that the issues of A–76, one of the statements that's frequently made is that the in-house employees win 50 percent of the competition. And I always find that a curious statistic. Is there a way that you could answer for the record what percentage of those competitions relate to the actual number of jobs that are being saved? I think that statistic is a little misleading sometimes. And also, could you, for the record, include information as to the record of the, of in-house competitions by service? Thank you.

    Mr. BATEMAN. Thank you, Mr. Underwood. Next, Mr. Sherwood. Any questions?

    Mr. SHERWOOD. Thank you. Secretary de Leon, the description in your testimony of the spare parts problem, we know with aging equipment and extra OPSTEMPO work all the time, plus reduced maintenance budgets, I am concerned with the availability of repair parts. I am concerned with the availability of training ammunition and real ammunition. And how are you—how are you able to address this conundrum in your budget?

    Secretary DE LEON. I think you're right on aviation spare parts. In some cases, you know, you need the parts there in the bin to repair the equipment physically. Of course, the frustration at the depot—this is the source of frustration out in the field. We have put several billion dollars, but most notably a billion eight hundred million in last year's bill, with the help of the committee, in aviation spare parts period. Generally, the—from start to—that is ordering of parts in the bins is from 18 to 24 months. We're not 12 months through this process. General Ryan has reported he has started to see some improvement in terms of availability of parts. But General DeKok, who will follow me, may be able to give you more specifics. But one of my responsibilities in our readiness oversight meetings with the chiefs and vice chiefs is to track these spare parts to make sure that when you approve a billion eight hundred million for spare parts or when our budget or your authorization includes additional dollars for depot reparables that the end of the day, those dollars are there and are spent in that area. So, we have put money into the pipeline. This budget puts more dollars into aviation spare parts and spare parts generally.
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    Our responsibility now is to be able to report to you regularly on where we are with that pipeline so that if you visit one of our forward deployments, whether it's Osan in South Korea or Dhahran in the Persian Gulf—that—or one of our training facilities here in CONUS that you see the spare parts and that the dollars that we've invested are reflected there.

    Mr. SHERWOOD. My military experience long ago was that there was nothing more demoralizing to the young people who had their careers and involved in their lives on the line than the thought that the brass—and that's you and us in this carry—the people that got the money didn't get enough for spare parts. It was one of the most demoralizing things, and I am glad you're tracking it, and we want to stay on it.

    Mr. BATEMAN. Thank you, Mr. Sherwood. Mr. Riley.

    Mr. RILEY. Thank you, Mr. Chairman. Gentlemen, in the last few weeks I've had an opportunity to travel in—we went to Kuwait. We went out on the Benson last week. And since I first came to Congress 2 years ago and went out with the chairman to a field hearing, what I keep hearing from every member of every service is that the OPTEMPO level is too high.

    You talk to a pilot that flies off of one these carriers, and they are great guys. And they'll tell you in a minute. You know, pay is important to them; that family conditions are important. But the one thing that they cannot resolve in their own mind is the OPTEMPO level.
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    We've committed troops all over the world. It looks like we're going to send additional troops now to Kosovo. General Reimer testified before our committee this morning that it won't be 4,000 troops, it will be 12,000 troops, because it takes three units to keep this going. I visited this last weekend with some AWACS men and women, who are flying every day. And everywhere I go, I keep hearing the same thing: pay is important. Retirement is important. Living conditions are important. But the one thing that is killing our forces in every service today is the OPTEMPO level.

    And I read with interest here that what seems to be your plan for taking care of this—and it says that we're going to establish tighter standards and better management procedures. And we will develop a set of metrics to establish lower and acceptable thresholds. I just don't see how setting management practices or metric standards are going to have any—are going to offer any relief to these soldiers and sailors all over the world.

    We either are going to have to make a decision that we're going to increase the force level, or we have got to make a fundamental decision in this Congress that we are not going to deploy all over the world. I think what it's doing is demoralizing our troops. I think it's showing up now in our retention levels and in our recruitment. And I think we've got to make a choice here, other than just saying we're going to have better management practices. I think we have to make a choice on where we're going to go in the next 10 years, because I don't believe that you can go from 18 Army divisions to 10, cut your leadership in half, your air wings in half, and expect them to do twice as much work. It's just not going to work.

    Secretary DE LEON. Some of those metrics are in place and have become significant tools that the Joint Chiefs use in measuring the OPTEMPO of their individual troops. For an Army and an Air Force that was forward deployed for several decades, they have become more contingency oriented. That is the nature of the business they face in the 1990's, and you're correct: it's a radical change from how they did business in the 1960's and 1970's, and 1980's, when there was a cold war.
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    General Ryan has taken a number of initiatives on the Air Force side, some of it reflected from the metric. As we started to track who was away from home more than 120 days, you'd see the patterns of the deployment. Now, with the Army, when we saw that there were persons who were being deployed to Bosnia a second or a third time, that flashed some red lights. And the Army has now used its guard and Reserve units on the Bosnia rotation. It has pulled units in from Army CONUS divisions to support Bosnia operations.

    So, with respect to Army OPTEMPO, it's no longer that some folks are being deployed continuously. It's a deeper bench that the Army is now using, and I think the Army has made great strides on OPTEMPO.

    In the Air Force, it's a somewhat different issue, because they have become contingency oriented. They deploy as composite wings. And it has created a lot of wear and tear in terms of multiple deployment. The Air Force does not have the predictability—Air Force members do not have the predictability that the carriers do. When the carriers pull into the Gulf to deal with Iraq, they know with fair regularity what carrier is going to rotate in and replace them, and within a given week, when they'll be on the way out of the Gulf and on the way home. We don't have that same predictability with the air units. That's a part of what the metrics give, and that's part of why General Ryan has moved to establish an air expeditionary force that has a more robust capability to respond to the contingency.

    Mr. RILEY. Mr. Chairman, if I could. One of the problems we have is just not the deployments, though. It's the amount of work that these men and women have to do when they are back stateside. So, unless we address the real problem, that we don't have enough soldiers and sailors to carry on this mission, then I think we're burying our head in the sand, because all of us understand it's going to take a certain force structure to be able to accomplish all of these missions. We were in the Golan Heights last week. Someone said now that there's even talk about eventually, if there's a peace there, that we may deploy American troops along the Golan to separate Syria and Israel. There has to be a stopping point or we need to make a fundamental decision that we are going to increase the force level, because it's not just the deployments. When these men and women, again, when they come back home, the ability to spend any quality time with their family is very remote, because they have to go through all of the things that we're asking them to do to get to the point that they can redeploy again. So, I hope we can do more. I hope that each one of you can spend some time trying to develop a force structure that will deal with the OPTEMPO problem, and not through management practices. And I applaud you for doing that. I understand you have a very difficult job. But this world is not predictable. We don't know when a hurricane is going to go through, and we've got to deploy troops. And it's hard to have any predictability about some of the terrorists actions that are going to go on.
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    So, if we can—I don't believe that we can base these decisions on predictability and on management practices. I think you need to develop a policy that we as a Congress can look at and see then whether we want to make the decision to continue to deploy or increase the force level.

    Secretary LONGSTRETH. Mr. Chairman, would it be all right if I just followed briefly on the answer?

    Mr. BATEMAN. Certainly.

    Secretary LONGSTRETH. Congressman, I think you're absolutely right about the need to look longer term at force structure adjustments and other policy adjustments. But in the near term, by and large, and I can assure that the senior civilian and military leadership in the Department is focused like a laser beam on the TEMPO problem.

    In the near term, better management can have an impact, and I would urge you to ask Admiral Lautenbacher, when our colleagues follow us to talk about some of the things his service is doing to address that very issue you described. Naval aviators know that there's going to be times when they have to go to sea, but it's that when they return from the 6-month deployment and when Navy personnel return, you know, it's what are the things they are having to do in that inter-deployment cycle that are taking time away from leave and from family leave. And I think the Navy, at least in some of the briefings I've been getting out in San Diego and elsewhere, is looking at a number of ways they can reduce inspections, produce other shore side requirements to give sailors some extra leave there, and alleviate some of that aspect of PERSTEMPO and OPTEMPO problem. Each of the services I think is looking at ways to make deployments at least more predictable—the Air Force, through the expeditionary air force [EAF] concept, and otherwise.
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    On the real TEMPO problem, or at least the most acute TEMPO problem we have right now, is what we call the HD-LD assets, those high demand, low density assets, like AWACS, like EA–6B's, and the like. And as you know, the chairman monitors those. The secretary monitors those every day. We now have 32 different items on that list. And before any one of those is deployed, once they are requested from a war fighting CINC, that goes up to the very senior leadership to say is there an alternative capability? Can we use something else to accomplish the same purpose so that we can alleviate some of the OPTEMPO problem of these assets? Admittedly, it has not solved the problem. I was just on—out with an AWACS crew at Red Flag, saw the same things you see. And I didn't see a single one of them that hadn't deployed more than—less than 200 days last year. But we are trying to manage it better. Excuse me, Mr. Chairman.

    Mr. BATEMAN. Thank you, Mr. Riley. Mr. McIntyre.

    Mr. MCINTYRE. Thank you very much. I was in another subcommittee hearing, which is why I was late. On our concern about our aging of our military aircraft and equipment and between that concern and this concern, I think we've kind of got a double whammy of concerns.

    My district was composed of, and with some redistricting, is now on the border of all or some of the installations, including Camp LeJeune, Pope Air Force Base, and Fort Bragg in southeastern North Carolina. But I would defer at this time with any questions in honor of the time of day, Mr. Chairman. Thank you very much.

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    Mr. BATEMAN. Thank you, Mr. McIntyre. Mrs. Fowler.

    Mrs. FOWLER. Thank you, Mr. Chairman, and I apologize for being late. We had a mark up in another subcommittee trying to get a bill to the floor for next week. So I want to thank the secretary for being here, and I just had a question. I know part of this I think has been covered, but I have, along I think with most members of the subcommittee, concerns about these creeping ball conditions and their impact on our readiness. And I am concerned with—now that we are looking at possibly going into Kosovo and staying in Bosnia for Lord knows how long. And if I could have stayed longer this morning at our hearing with General Reimer, I had planned to ask him this, but I'll ask you instead.

    In talking with some of our forces and looking at the state of the Army and the commitments that we are asking them to make, I am very concerned because we are looking at this K–4 for Kosovo being somewhere from 2,000 to 4,000 soldiers, I gather, some sort of reduced division headquarters, and one of a kind type of units and specialists—I don't know how many Albanian speakers we've got in our Army intelligence community, but whoever they can find. And this was supposed to go to the first Army or first Infantry Division, who was supposed to be recovering from repeated Bosnia deployments, but I gather can handle this if they don't get too stressed out. But they are kept at a lower war fighting requirement capability—I understand usually C–2 is about the best they can get, so they are going to be, you know, going from Bosnia to Kosovo: but if we had something happen, they wouldn't have their war fighting readiness rating where it needs to be.

    And then I look over at Kuwait, and we've got this intrinsic action going on over there that now is full-time. It used to be part-time, and now it's going on full-time. And we've got both the First Cavalry and the Third Infantry divisions that are supposed to be rotating with that. But First Cavalry now has a Bosnia mission, though now you've got them split between Fort Stewart and Europe, but now you've got—maybe they are going to Kosova, so someone else is going to have to do Kuwait or is there going to be a gap. And it gets pretty complicated. And I had to ask someone from the Army. I said, walk me through if we go to Kosovo, who's going to be where, because if something happens in Korea—and I think that's probably the most likely—but if something happened there or somewhere else widening this region, what are we going to do? Who is there available to call on, and as was noted earlier, the impact this is having on our personnel, on our readiness, on our dollars, you know, on our accounts made impacts across the board. What is the planning for this? Without more bodies, which is what Mr. Riley was just talking about, we can't—we can only stretch them so far. What is the planning from the Department of Defense on how we're going to handle this?
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    Secretary DE LEON. As I testified earlier, Ms. Fowler, we don't yet have a—my shop is not going to be the shop that is going to put together the details of Kosovo plan. I know that the Secretary is fully engaged on this issue, clearly one of the major issues on his radar screen. But you raise the follow-ons appropriately to questions that Mr. Riley asked in terms of the OPTEMPO.

    Mrs. FOWLER. Yes.

    Secretary DE LEON. How do we manage the force, and how do we give people predictability? When they were forward deployed, they knew what their day was going to be like, and they were able to do all of things that in addition to training are essential to good quality of life in the military, which is time—appropriate time with their families, as well as the opportunity to engage in the professional military education that is required for a promotion—things that take time and take a substantial amount of effort.

    So, OPTEMPO is there. OPTEMPO comes up in the Joint Chief sessions in terms of how we manage the force. You're correct, Mr. Riley, it is times three, because you're going to have a force that's there, another force that will be training to go in, and then the force that has just come out will have to go and refresh its combat training as well. And so this puts additional demands on the troops. At the same time, we have things that we can learn from the Navy, because this is—they have built this and perfected this in terms of carrier rotations over the years. But everything goes back to having good people, capable people, that are well trained, well paid, highly motivated.

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    So I think I've probably skirted your question as delicately as I can.

    Mrs. FOWLER. You have. Good politician.

    Secretary DE LEON. Without getting into Kosovo, but we certainly understand the sentiments that the gentlelady makes.

    Mrs. FOWLER. Well, I mean, it will be your shop that bears the brunt of the decision of the decision that's made in another shop as to who goes and where, and it's our subcommittee that has these problems we have to deal with. And we have capable people serving who do need to be paid more, but what I hear from them, it isn't a matter of pay. I mean, they can only take so much, and they can only go so many times or places. And if we did have—I mean, I consider that our U.S. military is in a crisis today. And we need to take care of it first, before we start trying to be peacekeepers of the world and intervene in civil wars, because if something happened that did imperil our national security, then we're not going to have the people, the resources, the training, the equipment to deal with it. And I haven't seen some magic solution from—coming out of the Defense Department yet on that. I mean, I—these people sit there and say, oh, yeah, we got an OPTEMPO problem. But they are the ones sitting here working 8 to 10 hour days in air-conditioned, heated places, not the ones over there doing it. And maybe if they spend a little time over there with them, maybe that would help them understand the real world. I don't know, but I worry about it, because I am like Mr. Riley—we get out—we all go out and meet with them and talk to them. And it's difficult.

    Secretary DE LEON. It's going to Secretary Longstreth.

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    Secretary LONGSTRETH. Well, I think, Congresswoman, that, again, a lot of the talk about our commitment to K–4 and how many troops, and when they'd go, and how long they'd be there is speculative. But, to answer your question, would a deployment to Kosovo have an impact on our readiness to carry out our strategy? Undoubtedly. The real dilemma for decisionmakers in the building is how do we manage that? How do we mitigate the risk? And I can just, you know, to fall back on our Bosnia experience, we've had to do the same thing when we deployed troops to Bosnia. Now, of course, our commitment in Bosnia has come way down from our initial force of about 20,000 down—it's heading toward 6,000 now.

    But how have we mitigated the risk? Well, first of all, we've spread the burden. And because the 1st armor division [AD] and the other European-based forces were carrying the bulk of the burden, the Army elected to spread that burden out. It's now using a CONUS-based unit, the First Cav—we're moving toward a very innovative approach of using an Army National Guard Division, the 49th from Texas, so that's one way you mitigate the risk.

    You also, through the Joint Strategic Capabilities plan, you know, in large part, the impact depends on where this unit would fall in your time line for deployment if you had a major theater war. And the way you do that is you substitute another unit. And so planners in the Pentagon do that everyday. Does it eliminate all risk? Absolutely not. But it helps us manage it better. It helps us look at ways to ensure that we can continue to carry out the military strategy even while taking on these contingency ops. And I assume we will do the same thing depending on what the commitment to Kosovo might be.

    Mr. BATEMAN. Thank you, Ms. Fowler. Mr. Talent.

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    Mr. TALENT. Thank you, Mr. Chairman. Let me just ask you all why we don't just increase force structure, at least to the high-demand units?

    Secretary DE LEON. I think that's a legitimate question. That's something that we're looking at with respect to C–17's, for example, right now, because the C–17's are coming on line. They are critical to supporting contingency ops, as well as the major regional conflicts. And I see a very high OPTEMPO for a brand new system—I see a very high OPTEMPO developing. So the question becomes, how to manage one of our new and very capable systems that's coming on the inventory. One answer may be, you need to buy more assets, that is, more transport planes. The other is you may have to change the way that you man the aircraft. You may have two have to teams of crews that support the aircraft. That's one of the reasons why they pilot demand of the airlines is so great with some of these new airplanes that A–320 Airbus, it flies transcontinental three times, so that the platform itself is flying three missions a day. It would have three separate crews. So we are looking at the high-demand units, and our first priority is to develop more pilots, more people who are capable of operating the systems so that the demand does not fall purely on the incumbent. C–17's is in that category. AH–64 Apache pilots is in that category. The U–2 is in that category. So, we're looking at ways of one, how do we expand the number of crews that support that; and then second, looking at long-term, do we have the right number of platforms.

    Mr. TALENT. What about the Army? Are we doing with the Army?

    Secretary DE LEON. Well, we're doing that with the AH–64 units, and we're looking at that as well with the Patriot battalions, because, again, that's a high-demand asset that CINCs want to deploy. It turns out that this is particularly acute with the aircraft, because they are involved in information collection, which is critical to each CINC. So you have aircraft that are supporting Bosnia. You have aircraft that are supporting Persian Gulf. You have aircraft that are supporting CINC Korea, as well as the drug interdiction mission. So——
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    Mr. TALENT. How long have you been looking at it?

    Secretary DE LEON. Well, I think it has been an issue for several years, but I think the Apache units have been on the table at least for the last 6 months. The Army has a program to go and recruit more Apache pilots. C–17's showed up in our most recent JMRR as an issue, and so we've started that review, too.

    Secretary LONGSTRETH. If I could add, Congressman, I know that in the HD-LD category, where these 32 different types of capabilities are listed, I know of at least four areas in which we are at least making minor force structure changes in order to try to alleviate the TEMPO problem. One is AWACS. I know we're adding at least several Reserve crews I believe to alleviate PERSTEMPO. EA–6B's I believe we're adding a few aircraft.

    Mr. TALENT. May I just interrupt for a second, because you said Reserve. And you said, Mr. Secretary, you mentioned Guard and Reserve before, and that the Army is expanding its bench depth. And let me just tell you if you think you're going to get that added bench from the Guard and Reserve, I think you're kidding yourself, because I think they are going to leave too. And I've talked to people back home, and they did not sign into the Reserves to be going off every year to backfill for somebody in Europe who's getting deployed in the Balkan. I tell you what I think, I think we got a problem that isn't going to be solved by rearranging the deck chairs on the ship. And you guys are looking at it—this is something anybody could have seen a number of years ago. And I'd like to know when we're going to have concrete recommendations that are really going to make a difference, because we can sit here and dance around, and it's the people out there who really have to deal with this.
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    Pardon my frustration, but I just—I've just seen this coming since Ike Skelton had hearings on this in 1993, when I was a freshman. And it's just—it should be pretty clear to all of us. And I think either we ought to tell these people we're going to do something and what we're going to do, or we ought to tell them we're not going to do anything. I just—I think that's the only thing that's fair to do. Mr. Chairman, I thank you.

    Mr. BATEMAN. Thank you, Mr. Talent. That seems to have completed one round of questions. If I might, Mr. Secretary, before you're excused, tell me whether or not the budget that we're going to be looking at is assuming savings from privatization and whether or not those assumed savings have been passed on to various components of the armed services? For instance, in the training and doctrine command, I was told a year or two ago that there was an assumption that there would be X percent of their prior year's budget that would be saved as a result of privatization. And, consequently, the amount of funding available to the training and doctrine command was decreased by that amount. Now, of course, that's wonderful if the assumptions prove correct, but it's a heck of a devastating blow on what the training and doctrine command's mission is if, in fact, they aren't realized.

    Do you know whether or not this budget is allocating presumed savings on operational units and commands?

    Secretary DE LEON. I'd prefer to answer that one for the record so that I can do it in detail.

    Mr. BATEMAN. OK. We need to have that kind of detail. The second thing and this will probably be—I am sure it will be needed for the record, but we need it, and we need it sooner, not later. The macro budget submission is founded on the premise of a $1.6 billion in rescissions. But it doesn't identify where those rescissions are supposed to come from. We need those rescissions identified. It may be that the Congress will not be inclined to rescind that $1.6 billion in authorized and appropriated funding for the Department of Defense. And consequently, if it does not, then that's $1.6 billion that isn't available for this new increased ''2000 Budget.'' So we need early identification of proposed rescissions.
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    And with that, we do thank you for coming. And I think you sense there continues to be a level of frustration here that we're trying to do more and more with less and less. And maybe some of that WAG in the service somewhere who said, the next thing they'll be asking us to do everything with nothing. So, there is a very definite level of frustration. But we will try not to take it out on you. Thank you very much.

    Our second panel of witnesses, and they've certainly been very, very patient witnesses consists of Lieutenant General David K. Heebner, Assistance Vice Chief of Staff for the United States Army; Vice Admiral C.C. Lautenbacher, Deputy Chief of Staff of Naval Operations for Resources, Warfare Requirements and Assessments; Lieutenant General Roger G. DeKok, Deputy Chief of Staff, Plans and Programs for the United States Air Force; and Lieutenant General Michael J. Williams, Deputy Chief of Staff for Programs and Resources, United States Marine Corps.

    Gentleman, we welcome you, and thank you for your attendance today. And we will look forward to hearing from you starting with General Heebner.


    General HEEBNER. Thank you, Mr. Chairman. If I may speak for the other panelists, at this point, we'd like to submit statements for the record and make brief opening statements.

    Mr. BATEMAN. Yes, in each instance, that will be taken for the record. And you may proceed with whatever oral statement you chose to make.
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    General HEEBNER. Thank you, sir. Chairman Bateman, Representative Ortiz, distinguished members of the committee, it's a privilege to appear before you today, representing America's Army men and women, active and Reserve, uniformed and civilian. Today is the eighth anniversary of the counter-offensive in operation Desert Storm. The overwhelming victory in that 100-hour land, sea, and air counter-offensive was the result of more than a decade of effort, effort focused by strong visionary national and military leadership, including leadership provided by the Congress and specifically this committee in securing an extended period of adequate and stable resources. Strong leadership and adequate resources are no less important today as we prepare for the Desert Storms and the uncertainties of the next century. We thank you for your continuing support.

    This committee was instrumental also in supplementing the fiscal year 1999 President's budget, with funding for contingency operations and adding $375 million for the Army's most pressing readiness needs. That funding was much needed and is deeply appreciated. For the first time in 13 years, it arrested the continuous decline in Army buying power. But, as General Reimer has testified on numerous occasions, funding in fiscal year 1999 remains short of our total requirements.

    Today's Army is busier than ever in responding to the National Military Strategy of shape, respond, and prepare. That strategy, I believe, is the right strategy as we begin the 21st century. However, it is also clearly identifies the Army's challenge, the challenge to remain trained and ready for the full spectrum of capabilities the Nation expects of us today, while at the same time working to underwrite the most significant transformation of our land forces since World War II as we modernize for tomorrow.
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    The fiscal year 2000 President's budget is the Army's very best effort to balance these critically important near and future requirements with the resources made available to us today. This budget reflects important increases in soldier compensation in near-term readiness accounts. However, once again, these resources do not meet our total requirements. That means thin spots continue in our budget request. We have attempted to compensate for this shortfall in resources by becoming as efficient as we can possibly be. But even these extraordinary efforts are unable to close the gap between funding and requirements. There simply are no shock absorbers in this budget, which makes it critically important that you give full consideration to supporting this budget as submitted.

    Shifting resources into one area at the expense of another undermines the balance we have worked very hard to achieve. We believe this budget distributes risk as prudently as possible.

    While some improvements are being realized in the fiscal year 2000 budget for near-term readiness in programs like reserve component, OPTEMPO, flying hours, and base support for maintenance and supply operations, unfortunately, the same is not true for modernization. We recognize that tomorrow's victories begin with today's investment in modernization. However, achieving balance with near-term readiness requirements has meant limiting modernization investment to rough parity with our budget last year. We have an Army modernization plan. We have an institutionalized and disciplined process to manage its implementation—it's called Force 21—for proceeding at the pace dictated by available funding.

    I'd like to close by summarizing with eight short points.
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    One, the United States Army is busy—active, guard, and Reserve soldiers.

    Two, our soldiers continue to perform superbly around the world and at home.

    Three, we're in the midst of a major transformation in preparation for the 21st century.

    Four, we are getting the most out of every dollar we have.

    Five, the fiscal year 2000 President's budget does not meet out total requirements, but it is an important step in repairing the thin spots in our near-term readiness and in soldier compensation.

    Six, our budget reflects the fact that we're a total Army, active Army National Guard, United States Army Reserve—one team, one fight, one future is more than a slogan. Let me add that we have made significant improvements in readiness funding of our Reserve components. We have to do that. Our Reserves are 54 percent of our force.

    Seven, we're committed to effectively balancing near-term readiness needs with those of the future.

    And eight, we will work with this committee and others to be sure that the United States Army remains the world's best full-spectrum land force we can possibly make it.
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    Mr. Chairman, committee members, thank you very much for our attention and the opportunity to represent American soldiers here today. I look forward to your questions.

    [The prepared statement of Lt. Gen. Heebner can be found in the appendix.]

    Mr. BATEMAN. Thank you, General. Admiral Lautenbacher


    Admiral LAUTENBACHER. Yes, sir, thank you. Mr. Chairman, Mr. Ortiz, the distinguished members of the committee. It's a great privilege to have the opportunity to be able to appear before you today and discuss our fiscal year 2000 budget, and particularly the parts of that budget that deal with readiness.

    Readiness remains the Navy's No. 1 priority, as it has been in years past. Critical to that readiness are people. People remain the No. 1 focus for our readiness issues as with the other gentlemen here we support—fully support the across-the-board pay raise, the targeted pay raise for our critical performing mid-management levels in critical skills, and the retirement reform, the basis on which we believe the future will be maintained for the Navy in terms of capable, motivated people.

    We also have added resources to improve our recruiting position. Our recruiting force has increased 4,500. We have been able to with these extra resources meet our goals for the first quarter of fiscal year 1999, which is a good sign. We believe that the fiscal year 2000 budget has the right amount of dollars in each port in terms of advertising recruiters, college bonuses, enlisted bonuses. And also on the retention area, it has—contains initiatives to help our retention of our most critical skills in terms of the unrestricted line officers, pilots, surface warfare officers, special forces officers, submarine officers. It contains the improvements for their selective re-enlistment bonus for the critical skills in enlisted, which we believe are critical to the retention. And in the other pieces of our readiness program, we have included what I would call the near-term ''E'' critical elements for ship maintenance, aircraft maintenance, for flying hours for our aircraft, and ships OPTEMPO—all of those accounts have been increased to the goals of that we've set—everyone of them includes increases in dollars and in metrics. We believe that that would help us to improve our non-deployed readiness posture which has been a critical issue for the Navy, and to regain some of the ground that has been lost over the last several years by maintaining our deployed readiness at high levels.
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    We appreciate very much the support of this committee. Without it, we would not be able to launch the efforts that we have today. And I look forward to taking your questions. Thank you.

    [The prepared statement of Vice Adm. Lautenbacher can be found in the appendix.]

    Mr. BATEMAN. Thank you, Admiral. General, would you proceed?


    General DEKOK. Mr. Chairman, members of the committee, thank you for the opportunity to represent the Air Force before you today. I am Lieutenant General Roger DeKok, Deputy Chief of Staff for Air Force Plans and Programs.

    As you may know, this is my first appearance before a Congressional committee, and I look forward to discussing Air Force readiness issues with you.

    I too would like to take a moment today to thank all the members of the committee for your continued support of our Armed Forces. The additional funding that Congress provided in last year's omnibus appropriations legislation is helping us address some of the total Air Force's pressing readiness needs, as were outlined by our Chief of Staff in September of last year.
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    The Deputy Chief of Staff Plans and Programs team works for our Secretary and our Chief of Staff to balance and fulfill near-, mid-, and far-term Air Force requirements without compromising current capability. In this capacity, I view readiness from a forward looking perspective, trying to answer how the Air Force can best plan to contribute to the U.S. National Military Strategy under current projected fiscal constraints.

    As all of you are aware, military readiness is a complex topic, encompassing many different aspects of our armed forces. However, it is a critical issue, as we continued to witness the effects of high operations TEMPOS, aging equipment, and years of scarce resources on our ability to continue to provide unequaled military capability.

    At this time, I ask that my statement for the record be accepted, and I look forward to the questions that you might have. Thank you.

    [The prepared statement of Lt. Gen. DeKok can be found in the appendix.]

    Mr. BATEMAN. Thank you, General DeKok. Now, General Williams.


    General WILLIAMS. Mr. Chairman and members of the committee, I appreciate the opportunity to represent the Marine Corps here today. You have my written comments for the record. I would only like to add that your Marines appreciate what you do for them. I am looking forward to your questions.
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    [The prepared statement of Lt. Gen. Michael Williams can be found in the appendix.]

    Mr. BATEMAN. Thank you, General. That certainly set a model for brevity. I thank you all. Let me start the questions with this for each of the services. You've each commented, all save General Williams, that you are receiving more money in your budgets for the year 2000 in the recommended budget than you got before. In turn, General Heebner, how much more is the Army getting in the year 2000 proposed budget than what it received in fiscal year 1999, or is receiving in fiscal year 1999?

    General HEEBNER. Mr. Chairman, if I might structure my response one way, and then if you'd like me to go another way, I would.

    Mr. BATEMAN. Sure.

    General HEEBNER. It's always difficult to communicate effectively on what the baseline is—we're beginning with——

    Mr. BATEMAN. That's what we need to get to the heart of. What is the baseline?

    General HEEBNER. If I could initially, I'd begin with identifying the baseline as the fiscal year 2000 potential budget that was included in the fiscal year 1999 President's budget, all in for 2000.
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    Mr. BATEMAN. OK.

    General HEEBNER. From that baseline—and I believe that is the baseline that the President used in his announcement of $112 billion increase over the extent of the program—the Army has realized $1.7 billion increase in top-line funding between last year at this time and——

    Mr. BATEMAN. Let's clarify from there, if I may. It's $1.7 billion above what was the in the budget proposal submitted by the President last year for fiscal year 2000?

    General HEEBNER. That's correct.

    Mr. BATEMAN. What is it for the Army in the context of your fiscal year 1999 budget as ultimately enacted and approved by Congress, and whatever portion of the fiscal year 1999 supplemental came to the Army?

    General HEEBNER. It's $1.9 billion differential.

    Mr. BATEMAN. Measured against your actually Congressionally originally approved budget enhanced by the supplemental, this budget represents a $1.9 billion increase?

    General HEEBNER That's correct.
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    Mr. BATEMAN. OK. Admiral, for the Navy, what would the comparable figures be?

    Admiral LAUTENBACHER. Let me—what I have with me here today is the Department of the Navy budget increase, which includes——

    Mr. BATEMAN. The Marine Corps?

    Admiral LAUTENBACHER. The Navy and the Marine Corps, so the Navy's increase in fiscal year 2000, or the Department of the Navy's increase is $3.3 billion. That includes new programs and pay we received. That's the number for the baseline.

    Mr. BATEMAN. Now, that's $3.3 billion above the same baseline that General Heebner described? What is your baseline for the $3.3 billion increase?

    Admiral LAUTENBACHER. This is the baseline that takes into account the financing that we talked about earlier for the $12 billion spent. So this money—this is not all added to the line that you saw last year. And it includes inflation. It includes our share of decision money—parceled out that way at Department of Defense and the office of management and budget [OMB]. But basically, it includes that financing. But in terms of new programs and pay, the number is $3.3 billion.

    Mr. BATEMAN. New programs and pay? Give me an example——
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    Admiral LAUTENBACHER. The pay increases we asked for, the pay raises——

    Mr. BATEMAN. Yes, I understand the pay increase.

    Admiral LAUTENBACHER. Yes, sir.

    Mr. BATEMAN. But give me an example of new programs that are undertaken——

    Admiral LAUTENBACHER. Well, for the Navy in there, there is a request for a TADTX, a new ship in our shipbuilding. We have asked for an additional ship. That is a new program or an additional program that was not in last year's extension of the fiscal year 1999 budget. That was not in the 2000 line. So that is what I am talking about, new requirements being filled by funding 2000.

    Mr. BATEMAN. And this $3.3 billion enhancement is not depending upon the accuracy or the reality of the budget assumptions about fuel costs, inflation, currency exchanges, and so forth? This is money in the Navy's bank account.

    Admiral LAUTENBACHER. This is money in our bank account, but we must execute the program that we have been given. It must come in with the inflation that is in there. The fuel prices must be mixed in it, the same as we execute each year's budget. Those assumptions are fundamental to realizing the entire program.
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    Mr. BATEMAN. OK. General DeKok, what is the Air Force figure in terms of——

    General DEKOK. Mr. Chairman, the Air Force figure, we received an added topline of $2.5 billion exclusive of the pay and retirement add, which is approximately $700 million for the Air Force. So our total, to put it in the same context as the Department of Navy, would be $3.2 billion. But, again, that does include the assumptions that were made on both inflation, fuel adjustments, currency exchange, and the other budget assumptions that were made as part of the President's budget.

    Mr. BATEMAN. And this budget for each of the services would fully fund your service's recommended requirements for flying time, for aviation, treadmiles for combat vehicles, steaming hours for ships? It fully funds all of the training, all of the readiness accounts that you think are important?

    General HEEBNER. Mr. Chairman, speaking for the Army, the additions that come from this topline, when coupled with the assumptions involved with inflation savings, fuel savings, and so on, allow the Army to cover $2.4 billion of the $5 billion shortfall in requirements, leaving a balance of $2.6 billion that we have not yet been able to fund.

    Mr. BATEMAN. None of you are saying that this budget, as requested by the Administration, fully funds the unfunded requirements that your Chiefs previously identified to the committee?

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    General HEEBNER. That is correct.

    Admiral LAUTENBACHER. That is correct.

    Mr. BATEMAN. Do any of you feel like you are getting all that you need to take care of the accumulated problems of base operating support accounts and real property maintenance, or are you just, oh, sort of stopping the bleeding?

    General HEEBNER. From the Army's perspective, Mr. Chairman, I think your metaphor is probably accurate. It does allow us to make some advances in each of our critical readiness accounts that just a year ago we weren't able to see our way to. But it does not reach the full level of funding for those programs that we think are appropriate.

    Mr. BATEMAN. That would be a part of the $2.6 billion, or whatever that shortfall is that is identified for Army-wide requirements?

    General HEEBNER. That is correct, Mr. Chairman.

    Mr. BATEMAN. Admiral?

    Admiral LAUTENBACHER. For the Navy, it is the same situation. We are stemming the bleeding in our real property maintenance. If you look at our over-guidance request, you will see a substantial amount of money in there for real property maintenance and base operating support. We believe that that is connected directly to readiness. It is hard to show analytically, but I can tell you many anecdotes of how important that is to our folks and their quality of life when they are out there on the line.
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    Mr. BATEMAN. And becomes more crucial and more sensitive the longer it is allowed to fester?

    Admiral LAUTENBACHER. Yes, sir.

    Mr. BATEMAN. General DeKok?

    General DEKOK. Mr. Chairman, we believe the money included in the President's budget for readiness will, what we term, arrest the decline that we have been experiencing in readiness. But, as you know, in our unfunded priority list, we, too, have $2.6 billion which would be necessary to remedy shortfalls in both readiness and elsewhere, we believe, in the Air Force program.

    Mr. BATEMAN. General Williams?

    General WILLIAMS. Sir, to answer your earlier question first, the Marine Corps increase from 1999 to 2000 is approximately $530 million. To that you would have to add about $165 million in additional aviation support that is in the Navy budget.

    Like the other services, our readiness problems, including modernization—we make progress in every area, but, quite candidly, it is not enough to arrest the problems of the slide of the last 7 years.

    Mr. BATEMAN. Thank you, General.
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    Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    For General Heebner, I understand that since 1991 the Army has been attempting to complete the fielding of the modular sleeping bag system. I have also been informed that the Army is also shortfunded in trying to obtain the modernized, improved reserve parachute system. Why has it taken so long to complete the fielding of the new sleeping bag system? And how much money is required to complete the fielding? What is the impact of not having the improved reserve parachute system? How much money does this involve.

    I recently read that the Army Material Command was seriously underfunded in the President's fiscal year 2000 budget and could be forced to implement across-the-board cuts to separation and maintenance functions, if the gap is not closed. Maybe you can fill me into the questions—if you can just enlighten me a little bit on that?

    General HEEBNER. Yes, Mr. Ortiz, I will do the best I can. I am not personally familiar with some of the programs that you have described, but we will provide you for the record a status report on each of those programs.

    Mr. ORTIZ. OK.

    [The information referred to can be found in the appendix.]

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    General HEEBNER. In general terms, what I could describe for you is that in fiscal year 1998, just completed, our procurement program was $6.8 billion. That was the lowest level that we have been at since 1959 in procurement buying power. So you can imagine the stress on the system over the last decade to prioritize the procurement needs of the Army. Many programs, in fact, were not—in fact, in the 2000 budget; we had recognized some gain over the fiscal year 1998 levels, but pretty much in parity with 1999, because there simply was not enough money to increase the ramp in our modernization, as we would have desired.

    Now in the context of our Army Material Command [AMC], I think it is a fair statement that we have shared the risk across all of our combined commands throughout the Army in any resource shortfalls. For example, in that $2.4 billion increase that we have had, we were able to do some things for AMC. A good example is the depot maintenance program. fiscal year 1999, that we are in right now, we have about 72 percent of our depot maintenance requirements covered in aggregate. In 2000, we estimate we will be just over 80 percent. That is a significant improvement and will start to arrest the development of accumulation of backlog in maintenance and repair.

    The $2.6 billion though that I commented to the chairman just a moment ago that we continue to be short, has about $800 million in near-term readiness shortfalls. What the Army Material Command perhaps has referred to is their share of that larger shortfall.

    Mr. ORTIZ. I know there has been a shortfall only—you have been funded to the tune of 82 percent, only 82 percent of your funding. You are not adequately funded to carry out the work. I mean, you are not getting fully funded.

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    Mr. BATEMAN. Let me interject here, if I may.

    Mr. ORTIZ. Sure.

    Mr. BATEMAN. What I am hearing you say earlier, General, was that in the 1999 budget you got 72 percent of your requirements for depot maintenance. This year is a big improvement; you are getting 80 percent of your requirements?

    General HEEBNER. That is a correct statement.

    Mr. BATEMAN. That seems to be a marginal improvement.

    General HEEBNER. The issue is the qualifier, a ''big'' improvement; it is in the eye of the beholder. In fact, the 10 percent improvement is significant, as you look at what we have been living with, but it has not reached the levels that we have identified as the full requirement.

    Mr. ORTIZ. You know, we want to be in a position to help, and to help as much as we can. I understand that the system, the way the system and the way you work your hourly rate that you charge, I think it is $112 an hour, but when you distribute that—when you pay for electricity, you pay for this and this, and this and that—you are looking at the mechanics, only $32. That is what they get for the work that they do. When you look at it overall as to how they pay for it, it doesn't really balance out. Maybe we can work on that later on.

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    But we appreciate the work that you do. We will work with you, General.

    General HEEBNER. Mr. Ortiz, we live in a country that has the strongest economy in the world because our commercial sector has figured out how to produce economically. I think your point is well-taken, that at the levels that we must invest to keep the level of effort going, it is not the most economically efficient way to do it. We could be more efficient; but, believe me, the AMC soldiers are working just as hard as they can to keep the soldiers and civilians, to keep the processes as efficient as they can make them. They are doing the best with what we have been able to give them.

    Mr. ORTIZ. We appreciate the fine work that you all do.

    I don't have any further questions, Mr. Chairman.

    Mr. BATEMAN. Thank you, Mr. Ortiz. Mr. Pickett.

    Mr. PICKETT. Thank you, Mr. Chairman.

    I would like to hear from each of you, just a quick answer to this question: Is your depot maintenance backlog going up or going down at the present time?

    Admiral LAUTENBACHER. Our depot maintenance backlog is going down, thanks to the help that we got last year from this committee. Our engine backlog for depot overhaul is going down. We are just about in our specifications for what we need for the pool. The airframe depot maintenance backlog is within our readiness metric at this point, and we have funded it in 2000 for that. Our ship overhaul levels are at 94 percent, which is our goal, and we are going to work with that this year and see if that is the right level.
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    Mr. PICKETT. General DeKok?

    General DEKOK. For the Air Force, in terms of depot maintenance, again, largely because of Congress' help last year, we were able to get our funding levels up to 92 percent. Actually, our goal is 90 percent. So it is going to help us work off some additional backlog. The President's budget allows us to fund, again, at the 90 percent level. We have in our unfunded priority list some additional funding for depot maintenance backlog, but, as with the Army, we are in substantially better shape as a result of the appropriation last year, as well as the funding levels that are——

    Mr. PICKETT. It is going down?

    General DEKOK. Yes, it actually will go down as a result of that, yes, sir.

    Mr. PICKETT. Yes, sir, General?

    General WILLIAMS. Sir, the Marine Corps' depot backlog is going to stay just about flat. In fact, it rises in 2000, but only by $7 million.

    Mr. PICKETT. Yes, sir, you will get an answer there, General? Are you going up or down?

    General HEEBNER. Actually, I haven't had time to read what they put before me, but I do have a response. I just didn't want to take the microphone each time——
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    Mr. PICKETT. Just tell me if it is going up or down.

    General HEEBNER. Two parts to this, sir: One is that the Army also received depot maintenance assistance in the supplemental to the fiscal year 1999 appropriation. It was also very useful. What it allowed us to do is in our three principal areas that are watched carefully in weapons, wheel-and-track vehicles, communication/electronics, and in our aviation support system, we have been able to hold the backlog at a steady level. In our other areas, the backlog has been building. With the budget in 2000, we think it is sufficient to hold the backlog at current levels.

    Mr. PICKETT. This past Monday the Personnel Subcommittee held a hearing at which we had representatives from all the services present to testify. The focus was the issue of recruitment and retention. Of course, all the general issues came up: the pay, we had families, we had some wives there that testified as a part of the hearing, too.

    But a couple of things that came out, it wasn't so much the operations TEMPO, when the military members were deployed overseas as it was when they came back home; they were still working 10, 12, 14 hours a day, and not having any time at home with their families. So that seemed to be as much of an irritant as the actual deployment overseas in many of the cases.

    Housing, family housing, was a subject of a lot of dissatisfaction among the families. Not picking on the Marine Corps, but this was particularly the response from a couple of the people there that were involved with Marine housing. They felt that the housing was tremendously inadequate.
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    And one other thing was that members were getting into MOS's they were not being able to advance, and for that reason, they were just going to get out.

    Would you all care to comment on the pay package that has been discussed and any comments you care to make about those issues I just raised?

    General HEEBNER. Mr. Pickett, I think there are a number of dimensions, that you have to look at the retention factors on the three big rocks that you have to get into the jar first—taking care of your people in the context of pay and quality of life.

    Second is readiness, also, and your investment in readiness, because soldiers join the Army to train and be trained, and to be effective at what they do. They notice right away when you are not doing that with them. So you have to cover that.

    They also are very sensitive to the equipment you give them. You have to modernize the force. They recognize when they are wasting a lot of time repairing old and obsolescent equipment, when there are newer opportunities available that wouldn't require such.

    So you have to address it on all three of those.

    In the context of the pay package, it is a two-dimensional issue. The first is giving them enough money to enhance their quality of life. Soldiers are not paid enough money. They certainly are perceiving today that they are not being paid to the same degree that the country is enjoying economic success and their contemporaries are enjoying the fruits of that success. It is fair enough to assert that they ought to paid at least at the levels of their counterparts, because of the sacrifices that they put in.
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    So there is that level, and then there is the second level, which is the perception that they have of their leadership. Frankly, that includes both those of us who are senior officers, but also the civilian leadership as well. They have to see that we think their jobs are important enough, that we are taking care of them and their quality of life. That has been a somewhat missing ingredient from the perspective of many of them.

    Now I know, for example, that this committee should be commended for what it did just last year. I know that all of the Chiefs came over here and recommended a 3.1 percent pay raise, and you raised it to 3.6. Well, good for you, because you are right——

    Mr. BATEMAN. General, I can't tell you how pleased I am to have you say what you just said. It boggles my mind that we last year gave more of an increase than was requested, and then found that there was almost an implied criticism that we had underfunded the pay and allowances of people in the military, when we gave more than the President requested, and the senior leadership of the armed services defended the President's request. Thank you for having clarified that.

    General HEEBNER. Mr. Chairman, some of us clearly recognize and express our gratitude for that. I am not sure that the average soldier understands exactly what has happened there.

    But I do think, at this critical point in time, that with this pay package in toto, that all of the service men and women are out there looking at the leadership we are going to exert in this. I think it is absolutely critical in the recruiting environment we are in, in the retention environment we are in, that we send a strong, positive signal to each and every one of them right now by endorsing a very good, positive pay and retirement package, much like was included in the President's budget.
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    Admiral LAUTENBACHER. I have to endorse everything General Heebner said about the pay. I would say that it is absolutely essential, the pay package, the three pieces of the pay package to raise the bar to the point where it is equitable. We need to put the right bonus structure in there to maintain then the specialties and the skills that we need to get us back to a par with the rest of our economy.

    The other side of it is the modernization side of it. We need to give our folks equipment which is maintainable, which is up-to-date, and equipment that keeps their professional quality of life satisfied, as well as their personal quality of life.

    As far as the workload—and I wanted to comment on the OPTEMPO issue—funding of the pieces will go a long way. The spare parts that we have asked for, the increase in spare parts, the increase in the maintenance, and the increase in modernization, the increases in base operating support, RPM, it is all in a full package. Obviously, we haven't met all of our needs there, but it is critical to get that online. Our people remain our most important asset, and we need to do everything that we can to get them back online.

    Now in terms of OPTEMPO, we mentioned earlier, the CNO and the four stars have gotten together. We are having a bottom-to-top review of all their nondeployed requirements. The goal is to cut 25 percent of them off the backs of the sailors. We are about halfway through that effort. We have canceled a lot of inspections which we believe are redundant or inefficient. We are trying to do this without reducing readiness, but increasing the quality of life for our sailors. So there is that dimension of it as well, and the leadership is taking that on their backs.
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    General DEKOK. Mr. Pickett, I would endorse what my colleagues have said regarding the compensation triad, both the pay raise itself, the pay table reform, and the retirement that is all part of the President's budget and the Senate bill.

    In terms of housing, I certainly accept what you say. We know that that is one of the irritants that gets in the way, particularly in retention, because while we recruit airmen, we do retain families. I think, as our Chief of Staff has testified, if we had one additional dollar, we would put it against our military family housing O&M. Of our 110,000 housing units, 61,000 of those housing units are what we consider to be below standard. Because of difficult funding choices that we have had over the last several years, we have just been unable to attack that problem. It does need to be worked.

    Finally, getting to operations TEMPO, as you know, the Air Force is well along in the way of implementing an expeditionary aerospace force concept which is designed to put some stability and predictability into the deployments that the Air Force has seen in the post-cold war world. As you know, we have two-thirds less forward-basing than we had during the cold war, and at the same time we are deployed at about 400 percent of the rate that we were deployed in the cold war. We in the Air Force believe it is important to add some predictability and stability in the schedules of our people who will bear the burden of the deployments that we make. We are well on the way to doing that.

    In addition, out of internal Air Force resources, we are going to add upwards of 5,000 people to work the problem for those who were left behind, because, Mr. Pickett, you are exactly right, the people who are left behind in some cases work harder than the people who are forward-deployed because they not only have to do their job they have to do the job of the people who are no longer there. We have taken out of hide, sourced out of other force structure reductions and other accounts, 5,000 additional manpower resources that we will put against those support areas for the people who deploy.
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    General WILLIAMS. Sir, as far as the pay package is concerned, we applaud it. Is it the right thing to do. It tells our Marines and our sailors and airmen and soldiers that we care and value their contributions.

    Your comment about family housing is on the money. In fact, family housing is one of the accounts that we made an explicit decision to underfund in order to continue to fund near-term rates. We are paying for that decision right now.

    As far as OPTEMPO is concerned, I think Marines like to deploy. We have the youngest of the four forces. What they don't like is the frustration of having to spend long hours in hangars trying to fetch together old gear. To the extent that their workday consists of that kind of work, we need to fix that. I think a way to go after it is to replace that equipment as quickly as we can.

    Mr. PICKETT. Thank you. Thank you, Mr. Chairman.

    Mr. BATEMAN. Thank you all. Mr. Riley.

    Mr. RILEY. Thank you, Mr. Chairman.

    Gentlemen, I am going to tell you one of the biggest problems you have. You do too good a job training. This last week has been just an unbelievable experience for me. I don't think I have ever been around 18-, 19-, 20-, 21-year-old kids that are as dedicated, as passionate about their job, as intense a group of people as I have ever met. That is the reason you are having a hard time retaining them. Once you train them to the level they are trained today, they are a marketable commodity. There are a lot of business people out there that would love to have them. So I think you are absolutely right, if we don't pay them—and you have built the type individuals that you have in your force today—we won't be able to retain them, because you do an excellent job training them.
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    I can't commend you enough—the type people that I saw on the Vinson, for the kids that I saw over in Kuwait. They are remarkable; they really are. I said that in a hearing a moment ago. When I was 20 years old, I don't remember having that level of dedication that they do. I think that is a testament to the training that you give all of them.

    General Heebner, and there is a lot that I would like to talk to you about today—but I would like your comments on the partnering arrangements that are going on now in Aniston, at the Aniston Army Base, Aniston Army Depot. To me, that seems like that should be a model, the way we should begin to handle all of our depots.

    It was a very traumatic situation to see Fort McClellan close in a small, rural Alabama county. But because of that, I think the workers that the Aniston Army Depot looked at the BRAC procedure in a totally different light than most people do at other depots today. They understood if they were going to be competitive long-term, they had to enter into some partnering agreements; they had to look at their job in a different light than they had historically. I believe it is working well, but I would like to have your comments on it.

    General HEEBNER. Well, I am certainly pleased, Mr. Riley, to hear your comments about that arrangement. I will have to look at that because I have not personally been familiar with it.

    In a larger context, what is happening right now, a partnering with the local communities is an absolutely essential form of our existence into the future. In fact, when you announce things like BRAC or the potentials for downsizing, generally, they are viewed with great trepidation. Frequently, they turn into opportunities. It sounds to me like what you have described in Aniston is, in fact, one of those occasions where it is an opportunity.
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    Mr. RILEY. Well, it is becoming opportunity with one caveat, and that is what I would like to discuss with you for just a moment, if I could. All of us understand the problems with the readiness, but when I looked at your unfunded requirements for the year 2000 budget, there was no mention of an unfunded requirement for the environmental cleanup under BRAC. There was no mention of an unfunded chemical DEMIL (Demilitarization of Chemicals) program. Eventually, we are going to have readiness and these accounts vying for the same dollars. What we have now is a community where two out of every five of the employees in that county are going to lose their job by October. The only way that that community can recover is to make sure that the environmental cleanup money is available; that we can move into that base, have some economic development.

    On the one hand, I want to see the money spent for readiness, but, on the other hand, from a parochial sense, we have to take care of that community. That community is counting on the U.S. Army to make sure that the environmental money is properly spent. Well, this year there was $160 million removed out of that account.

    One, what is the probability that that may happen again next year, or in the next 2 years? And if it does, where does that leave all of these communities all over the country that are desperately trying to work through this process?

    General HEEBNER. Mr. Riley, what you have characterized is, in one case, kind of a microcosm of a larger issue that we have, and that is balancing the resources available to us. On the one hand, I could say directly that we spend more on environmental cleanup than we spend on training 18 Army divisions. That is a significant factor, and we need to be mindful of that as we look at the fact that we could spend everything the United States Army has in the environmental cleanup around our country, but we have to first make sure that we preserve the fighting capabilities of the force, and when we do remove money from the environmental account, that it is done advisedly and it is always done in the context of making sure that we are delivering the readiness that is expected of us.
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    I will take a look at the specific case you are referring to at Aniston to see if there is something that has happened there relative to the priorities and how environmental dollars are spent.

    Mr. RILEY. Well, I guess my biggest concern is that it wasn't important enough to even be listed on your list of unfunded requirements for that year. But it is critically important to these small communities, where, again, when you start talking about losing two out of every five jobs in a community with a 20,000-acre base, we have to be able to develop that. Sometimes I question whether the BRAC process saves us nearly as much money as we had anticipated, and primarily because of these reasons. Again, that is a commitment we made to that community. We have also made commitments to a lot of other people, and we haven't lived up to them. But when you look at a community that has served this country for the last 75 years, and you go in and just say, we are going to close this base, but we will guarantee you we will do this, then somehow some way we have to live up to that commitment we made. We are not going to do it this year.

    But what really concerns me, is this going to be an ongoing process that we have to put up with for the next two or 3 years? If it does, some of these communities are going to be desperately hurt.

    General HEEBNER. I understand, sir.

    Mr. RILEY. Thank you.

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    Mr. BATEMAN. Mrs. Fowler.

    Mrs. FOWLER. Thank you, Mr. Chairman. I want to thank you, gentlemen, for being here this afternoon. I just have a couple of quick questions.

    One, Admiral, I want to follow up on what Mr. Pickett, and just ask you if you have the specific figures of the anticipated depot maintenance backlog for Navy aircraft and engines in the fiscal year 2000 budget submission? Do you have those figures, by chance?

    Admiral LAUTENBACHER. I do.

    Mrs. FOWLER. And you said they are within accepted whatever——

    Admiral LAUTENBACHER. If I can get it quickly enough, I do have.

    Mrs. FOWLER. While they get those, why don't I go on and ask General DeKok a question I have for him while they find those.


    Mrs. FOWLER. Thank you.

    General DeKok, I recently learned of a joint Air Force/FAA program through which Air Force pilot examiners will be certified by the FAA to provide airline transport pilot certifications for other Air Force pilots. Now I had originally been under the impression that the goal of this program was for retention, and that it was only going to apply to pilots in their 17th year of service, and then they would be eligible to participate in what has been called the Phoenix Aviator Program. But then I learned, after much digging and finally getting some information out of the Air Force, that this is another stand-alone Air Force/FAA program in the offering, under which Air Force pilots could more easily earn their ATP certificate, irrespective of any time and service requirements.
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    We have been hearing all day today about problems with pilot retention in the Air Force. So I am having a real difficult time understanding why the Air Force is apparently going to make it easier for its less senior pilots to obtain jobs in the private sector. Can you help me understand this?

    General DEKOK. Well, Mrs. Fowler, I think you have me at a bit of a disadvantage. I am not familiar with the specific program that you mentioned, but if you will allow me to take that for the record, we will certainly respond to that.

    Mrs. FOWLER. Would you, please? And I have got the answer I got back from the Air Force, and it is not satisfactory.

    [The information referred to can be found in the appendix.]

    Mrs. FOWLER. But this is a program in existence that the Air Force plans to do, and when I asked about retention, they said, well, it may have collateral effect on retention. I think we have a major problem as it is with retention of pilots in the Air Force. Now we are going to make it easier for these guys who have only been in a few years to get an ATP license and go, at the Air Force expense, and then go out and fly commercial quicker than they had been able to. I don't quite understand this. So if you could pursue it, I would appreciate it.

    General DEKOK. We certainly understand your concern.

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    Mrs. FOWLER. Thank you.

    Admiral, did you come up with something?

    Admiral LAUTENBACHER. Yes. The engine backlog at the end of fiscal year 1999 will be 291, and in the year 2000 it is 253. The airframe backlog, I don't have the specific number here, but it is less than 100.

    Mrs. FOWLER. Thank you.

    Admiral LAUTENBACHER. We will meet our readiness goals in the following way: All of our deployed squadrons will have full, 100 percent program aircraft authorization [PAA], all the airplanes they need. Ninety-seven percent of our nondeployed squadrons will be at the C–1 level. They will be at C–1 level for a number. That is gradually improving from 1998, 1999, and the year 2000.

    Mrs. FOWLER. Thank you.

    Admiral LAUTENBACHER. There is about a 30 percent improvement in that figure from 1999 to 2000.

    Mrs. FOWLER. That is much better than the 780 that was backed up a year ago.

    Admiral LAUTENBACHER. It is much better.
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    Mrs. FOWLER. But it is, I know, because we gave you the money.

    Admiral LAUTENBACHER. And you gave us the money, and we are very grateful.

    Mrs. FOWLER. The Defense Department hadn't done it, nor the administration, and we were concerned about all these planes that couldn't fly without their engine. So I am pleased to see that you are using it in the right manner, and that sounds much better than a year ago. Thank you very much.

    Thank you, Mr. Chairman.

    Mr. BATEMAN. Thank you, Mrs. Fowler.

    Are you all familiar with something called defense reform initiative directives [DRID]-20, D-R-I-D–20? Tell me about that and what its implications are for where you put military personnel who have been forward-deployed after their deployment is over.

    General DEKOK. Mr. Chairman, I will start off. I can at least answer the first part of your question. The second part of your question isn't quite as familiar to me.

    The DRID–20 process is a process to code the manpower positions of the service, all of them, on what we call whether or not they can be susceptible to be outsourced to a commercial activity. We go through and code, as a result of the DRID–20 process, every one of our manpower authorizations, whether it is military essential, what is the reason for the military essentiality, whether it has to be an inherently governmental function. We have done that for the first time this year. For the first time in our history, we have done that for every one of our manpower authorizations. That will then become the basis for the competitive sourcing and privatization effort that is underway within the Department of Defense to take a look at our ability to compete workload that isn't inherently governmental or military essential.
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    So that is the first time that I believe all the services have completed that inventory. In fact, we have discovered, as we have gone through that process, it is going to take us a while to reconcile the coding among the services to make sure that either we are consistent in the coding of our functions or we have sufficient rationale on why we are different.

    Mr. BATEMAN. Well, taking the Air Force as an example, what were the results of this process in terms of the number of military and/or civilian positions that would be eliminated through privatization?

    General DEKOK. Well, in the case of the Air Force, I think it is a fair statement to say that we didn't fulfill the expectations of some of the people in the Department of Defense that we would find thousands and thousands of additional candidates that could be subject, as a commercial activity, subject to competitive sourcing.

    Mr. BATEMAN. Well, this makes me a little bit nervous, what I am hearing you say, because it is somewhat suggestive of a mindset that I have come to a determination that ''X'' number of people can be removed from the government payroll, either military or civilian, and privatized, because that is the number I want to reach. If the services don't come back with the number that somebody had in mind, you are told to go out and do it again. Am I being paranoid, or is that something that is happening?

    General DEKOK. Well, Mr. Chairman, I think it is safe to say that there have been some concerns in that regard, but, speaking on behalf of the Air Force, we are trying to work this process as honestly as we can possibly can. We are not obligated in our sense—and our Chief has made this very clear—that we are not obligated to hit any predetermined target; that we will honestly and fairly categorize which of our functions are commercial activities susceptible to this competitive sourcing. We will resist any effort to do this beyond what we believe, in our best judgment, would be harmful to the United States Air Force.
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    Mr. BATEMAN. I am sure this committee would be very happy to hear from you as this process moves along.

    Admiral, what has the Navy experienced with this?

    Admiral LAUTENBACHER. We have generally the same experience as the Air Force has. Our numbers for the first round are somewhere around 80,000 folks, of which, roughly, 6,000 to 9,000 are military positions. There are very few military positions in there.

    And that ties into the second part of your first question: What do you do? We have a very definite sea/shore pattern rotation for our personnel because you really can't leave a person on sea duty for 20 years.

    Mr. BATEMAN. Yes.

    Admiral LAUTENBACHER. We have got to have positions for them.

    Mr. BATEMAN. If those positions, military positions, leave the Navy, what do they come back to? Nothing—or they stay at sea.

    Admiral LAUTENBACHER. Yes, sir, and we are extremely sensitive to that. Again, we are participating in the process fully, openly, and honestly. We are going to maintain faith with the system that we think we need to maintain the right kind of force levels.

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    Mr. BATEMAN. Well, explain this to me, and I don't mean to keep you all here unduly, but, on the first round, you came up with a number of 80,000. Why is there any need for a second round?

    Admiral LAUTENBACHER. Because this was the first time each service submitted their own internal deliberations. So, as they have looked across each service, well, one service did this; one service did that; can you come back and explain why? So I think it is more of a definitional issue, more of working out why there are discrepancies, understanding the differences between the services. So that is the process that I see happening right now. Nobody is trying to make the numbers come to a predetermined level. They are trying to sort out if there are any differences, and why.

    Mr. BATEMAN. General Heebner, General Williams, do you all have anything to add?

    General WILLIAMS. Yes, sir. I think the Marine Corps took a little bit different plan on this. We have declared that all Marines are inherently governmental, and we are not going to compete any. We are, however, going to compete about 6,000 civilian positions.

    Mr. BATEMAN. General Heebner?

    General HEEBNER. Mr. Chairman, I don't think I can top that.

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    Mr. BATEMAN. OK. Well, I hope you understand that there is a definite sensitivity here that we not go too far and certain that we not be adhering to any arbitrary, predetermined goals for elimination of positions. That is something that I think would ill-serve our national security requirements, and consequently, we are, and would be, very interested in knowing what this DRID–20—or maybe it ought to be ''DREAD–20''; I am not sure how you should pronounce it, but we would be most pleased to be kept informed as to how that process continues or how it evolves.

    Well, thank you all very much. We do appreciate you being here and your testimony today. It has been very helpful to the committee. We may have some further questions that we may submit for the record on any of that. I am sure, as we become much more fully acquainted with the details of the budget submission, we will have occasions to be raising other questions as we move forward.

    [The information referred to can be found in the appendix.]

    Mr. BATEMAN. But we do thank you very much.

    With that, yes, I just mentioned that we probably will have questions for the record.

    So, with that, the committee will be adjourned.

    [Whereupon, at 4:33 p.m., the subcommittee was adjourned.]
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February 24, 1999
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