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[H.A.S.C. No. 108–6]



FOR FISCAL YEAR 2004—H.R. 1588






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MARCH 13, 2003




JOHN M. McHUGH, New York, Chairman
TOM COLE, Oklahoma
JIM SAXTON, New Jersey
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
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VIC SNYDER, Arkansas
MARTY MEEHAN, Massachusetts
JIM COOPER, Tennessee

John D. Chapla, Professional Staff Member
Michael R. Higgins, Professional Staff Member
Lynn W. Henselman, Professional Staff Member
Debra S. Wada, Professional Staff Member
Dudley L. Tademy, Professional Staff Member
Mary Petrella, Research Assistant



    Thursday, March 13, 2003, Fiscal Year 2004 National Defense Authorization Act—Department of Defense Total Force Transformation Initiatives and Overview of the Fiscal Year 2004 Military Personnel Budget Request

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    Thursday, March 13, 2003



    McHugh, Hon. John M., a Representative from New York, Chairman, Total Force Subcommittee

    Sanchez, Hon. Loretta, a Representative from California


    Brown, Lt. Gen. Richard E., (Tex) III, Deputy Chief of Staff, Personnel, U.S. Air Force

    Chu, Hon. David S.C., Under Secretary of Defense for Personnel and Readiness

    Hoewing, Vice Adm. Gerald L., Chief of Naval Personnel, U.S. Navy

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    Le Moyne, Lt. Gen. John M., Deputy Chief of Staff, G–1, U.S. Army

    Parks, Lt. Gen. Garry L., Deputy Commandant for Manpower and Reserve Affairs, USMC


[The Prepared Statements can be viewed in the hard copy.]

Brown, Lt. Gen. Richard E., (Tex) III

Chu, Hon. David S.C.

Hoewing, Vice Adm. Gerald L.

Le Moyne, Lt. Gen. John M.

Parks, Lt. Gen. Garry L.

Sanchez, Hon. Loretta

The Military Coalition (TMC)

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[There were no Documents submitted.]

[The Questions and Answers submitted can be viewed in the hard copy.]

Mr. Hayes
Mr. Meehan
Mr. Ryun


House of Representatives,
Committee on Armed Services,
Total Force Subcommittee,
Washington, DC, Thursday, March 13, 2003.

    The subcommittee met, pursuant to call, at 3:19 p.m. in room 2216, Rayburn House Office Building, Hon. John M. McHugh (chairman of the subcommittee) presiding.


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    Mr. MCHUGH. The subcommittee of the hearing will come to order.

    Let me begin by welcoming you all. And by the standards of our subcommittee hearing last night, which commenced about 6 o'clock in the evening, we are ahead of Washington's schedule, but we are a little bit behind the assigned schedule. We had some votes, and appreciate your patience and forbearance.

    Today's hearing takes place in the context of an extraordinarily complex, challenging environment for the military personnel of both the active and reserve component interwoven elements of the Total Force. The complexity and challenge in part is due to three interwoven developments:

    First, the employment of the Total Force has fundamentally changed since the policy was first put into place and crafted in the 1970s in the wake of the Vietnam War. Then the policies stipulated the close integration of active and reserve components to ensure the American military would never again go to war without the reserve components. Today, there is a new reality. Because the strikes of the active components in the last several years have been reduced to their lowest levels since 1940, the U.S. military peacetime operations in support of the National Security Strategy cannot be accomplished without significant reserve component involvement.

    As a result, the reserve components have, for the last seven years, provided annual, again, peacetime support equivalent to 33,000 units active duty personnel and replaced active components in carrying out missions that previously had been the exclusive domain of the active forces.
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    Second, the global war on terrorism and open-ended commitment to U.S. Military resources worldwide to eliminate terrorist threats and to actively defend the U.S. homeland has, number one, added new dimensions, missions, and manpower requirements for both the active and the reserve components.

    Revealed imbalances and shortfalls in the mix of active and reserve component manpower enforced structures.

    And, third, made clear that increased heavy reliance on the reserve components in peacetime will continue indefinitely. For example, in January, 15 months after the start of the global war on terrorism and just prior to mobilizations to support possible war with Iraq, more than 56,000 Reservists remain on active duty worldwide, committed to fighting global war on terrorism with thousands entering a second year of active duty.

    The deployment of more than 220,000 military personnel to the Persian Gulf with the accompanying mobilization of more than 188,000 reserve component personnel for a potential second war with Iraq differs materially than the mobilization of Desert Shield/Desert Storm in 1990, 1991. Current mobilization comes in the context of a Total Force that is significantly committed to requiring sustaining ongoing peacetime support requirements while simultaneously prosecuting the war on terrorism.

    In short, the Total Force is being employed in ways never anticipated by those who articulated and implemented the policy some 30 years ago.

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    As a result of the current substantial unremitting open-ended three-way pull on the Total Force, there are extraordinary management and resource challenges for the Department of Defense (DOD) and the military services, as well as significant stresses on the individual members of the active and reserve components and their families, and, of course, on the employers of Reservists.

    In recognition of the new challenges of the Total Force, the Department of Defense is proposing several active and reserve component transformational initiatives in its fiscal year 2004 budget requests. These initiatives, I understand, are, quote, first steps, end quote, so to speak, in a long-term multi-year reform of active and reserve component personnel management.

    One objective of this hearing is to provide the Department an opportunity to explain them and their rationale behind them. The second objective of this hearing is to better understand how the Department intends to address active and reserve component manpower that has long been inadequate for the missions the Nation has assigned them. To that end, I am particularly interested in the aggressiveness of the military service's fiscal year 2004 budgets and future year's plans and funding in implementing the conversions of military personnel to fill higher priority requirements.

    These conversions and their ability to produce sufficient military manpower to meet active and reserve manning shortfalls are at the heart of the Secretary of Defense's net zero policy in opposition to this point to active end strength growth.

    I also want to understand, and I am sure we all would, more about the high deployment data the Department has been collecting and what it says not only about the stresses being endured by various segments of the active and reserve components, but also for the need for changes in the active and reserve component mix.
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    Finally, I am sure we would all like to hear how DOD and the military services will improve the ability of active and reserve component personnel, as well as their families' employers in the case of the Reserve Components, to sustain the pace of operations until planned conversions of military personnel can address known shortfalls.

    I thank you all for being here, particularly to of course our panelists, who I will introduce in a moment. But now, with the preface of the fact that the officially designated ranking member, Dr. Vic Snyder, is recuperating from a medical procedure, and we are told is doing well, and I know all of us wish his continued recovery from that and look forward to his return.

    But in the meantime, we are pleased to have the gentlelady from California, Ms. Sanchez, who is a veteran of both the Personnel Subcommittee, as we were formally known, and now the Total Force subcommittee.

    So Loretta, thank you for being here, and the floor is yours.


    Ms. SANCHEZ. Thank you, Mr. Chairman.

    I did speak to Dr. Snyder last night, and he anticipates he will hopefully be back next week, so he will get to resume his duties, I hope.
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    But it is a pleasure to be here, and thank you gentlemen for all being here today to testify. In the interest of time, because I actually am going to try to get to the floor to do some speaking tonight. I will submit my comments for the record, and hopefully we can move right into hearing from these gentlemen.

    Mr. MCHUGH. Thank you very much. Very eloquently said.

    [The prepared statement of Ms. Sanchez can be viewed in the hard copy.]

    Mr. MCHUGH. Let me, before I introduce our witnesses, apologize in the near term. As some of you, if not all of you, may have heard, we had a tragic incident in my district at Fort Drumm, New York, where a Blackhawk in a training mission went down with the loss of 11 lives. There is a memorial service scheduled, and I will need, I suspect, to leave a little bit early. So I beg your forbearance on that. But I am hopeful that we can cover a lot of the main material while I am here. And we do expect we will have the vice chairman, Mr. Cole from Oklahoma, here to carry forward at that time.

    So, let me get right to the panel.

    First, let me introduce the Honorable David S.C. Chu, Under Secretary of the Defense for Personnel and Readiness; lieutenant General John Le Moyne, Deputy Chief of Staff G–1 in the United States Army; Vice Admiral Hoewing, Chief of Navy Personnel, United States Navy; Lieutenant General Richard E. Brown, III, Deputy Chief of Staff, Personnel, of the United States Air Force; and Lieutenant General Gary Parks, Deputy Commandant for Manpower and Reserve Affairs, United States Marine Corps.
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    Mr. MCHUGH. Admiral Hoewing, let me say to you particularly, I want to extend our special welcome. This is your first appearance——

    Mr. HOEWING. Yes, sir.

    Mr. MCHUGH [continuing]. Before the subcommittee. We hope it is not too painful, and that you will come back again.

    But to all of our panelists, as I said, you are welcome, and we look forward to your testimony.

    Let me just advise you that we have received all of your testimony in its entirety. I have read much of it. Some of it arrived a little late, so we haven't reviewed it in its entirety. But will be entered into the record. And given the constraints of time and the time of afternoon, I would ask you, to the extent it is possible, if you could summarize your comments so we can get back as quickly as we can to the dialogue.

    So, with that, let me yield. Oh. Thank you, John. I would also note we have received a statement for this hearing from the Military Coalition, and without objection, we would ask that be entered into the record in its entirety. Hearing none, so ordered.

    [The information referred to can be viewed in the hard copy.]

    Mr. MCHUGH. With that, we would be happy to now yield our attention to the floor to Secretary Chu. David, welcome.
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    Dr. CHU. Thank you, Mr. Chairman, and members of the subcommittee. It is a privilege to appear before you.

    This committee and its antecedents, I would argue, have already taken the United States military through one of the great transformations of the late 20th century, and that was the inauguration of the volunteer force and its ultimate success. It had a rocky beginning, but thanks to the support from you and your colleagues, it has now earned the envy of the world, and many nations seek to emulate the American experience in that regard. You have built on that record, I would argue, with your willingness, in the last several years to rethink how we target the pay for our personnel, our military personnel, and I think with great success in terms of the improved retention results that we have as a result achieved.

    Indeed, I know you will be interested to learn that the government as a whole is trying to emulate what you have done by proposing a central fund, $500 million, that would be prorated across the Federal agencies warranted to civil personnel based upon performance in a targeted manner.

    We are here, of course, to advance our case for many of the kinds of programs that you have dealt with year in and year out, including the issue of another targeted pay raise. But I would like to take my time this afternoon to focus, as you suggest, Mr. Chairman, on the transformational goals that we have set for ourselves, and which we would like to seek your partnership since many will require legislative challenges.
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    Let me summarize very briefly.

    On the active military side, we seek the ability to encourage longer careers, particularly for our most senior officers, those serving in the flag and general officer ranks. And we believe that that would be enhanced by raising the maximum age limit, now applicable to those officers, and by steps that would celebrate their service by allowing accumulation of annuity credit to continue beyond 30 years, and it would be based on their uncapped base pay.

    At the same time, we would like authority for those officers who retire before they reach the current minimum, which is three years, waiverable down this year to two years in grade, to be able to do so as long as the Secretary of Defense certifies the service has been honorable and satisfactory. We think that will substantially enhance our ability to manage this force as we seek to keep the most senior officers for a longer period of time.

    We would like authority to streamline the management of joint specialty officers. We think this is a very important concept. But the current rules, which require that education assignment occur in a specific sequence, make it difficult sometimes to actually use these officers in the way the Nation might best benefit.

    And we do believe that it would be helpful to have a few other steps that would likewise streamline management of these officers.

    For the reserves, I think the continuum, as your comments suggest, Mr. Chairman, has demonstrated to the Nation that it, like the active force, is indeed a true volunteer force. It is really one force now that the Nation has. Not all of our procedures, internal of the Department of the Defense and the statutes that undergird those procedures, however, are quite in that spirit. Many of them set up a dichotomy between the active and reserve forces that is neither healthy nor useful.
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    We seek to promote a continuum of service, and the notion that it should be relatively seamless to move from active to reserve status, or reserve to active status, and back again, without a great deal of the problems that now occur. And in that regard, we will take every step the present law permits. We are just this week deciding that as part of the effort to make the benefits standard, as long as you are serving 30 days or more on active service, to offer TRICARE Prime to the families of those reservists who are currently being mobilized. That is a change from our past practice.

    We also think of a continuum in terms of how you are able to serve across a career. We would like enough flexibility so that those individuals who would like to step out of active service for a few years because of personal responsibilities might be able to do so and rejoin without penalty another cohort several years down the pike.

    On the civilian side, the Secretary of Defense will be seeking legislative authority to create a national security personnel system. There are I think a variety of reasons for this, but the most important is our need for agility as we confront the challenges of the early 21st century. Agility so we can, as you suggest, Mr. Chairman, convert military to civil service billets, agility so we can replace the current generation of fellow workers, many of whom are slated for retirement within the next decade.

    Agility to adjust the responsibility of individual jobs. We want to stay away from what sometimes occurs in a rigid institutional system where people's response when we ask them to do something extra is, that is not in my job description. That is not the kind of system that will protect the Nation's security interests.
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    What we seek is hiring flexibility, greater hiring flexibility than the civil service system permits today. We will respect in the proposed legislation veterans preference and merit principles. We think categorical ranking plus some other powers will get us from where we are to where we need to be.

    Just as one example. If I send someone, as we do, to a college job fair today and our person is sitting next to the human resource agent for Microsoft, the Microsoft person will say: The job is yours, subject to a few background checks; you just sign on the dotted line. We have to say: Here are our forms, take our tests, and you will hear from us in 90 days or more. Our average at the Department of Defense in terms of hiring civilians is 90 days. That is not acceptable in the present situation.

    We would like to emulate what China Lake has done in its much heralded demonstration over the last couple of decades, and that is adopt the pay vending as we compensate the civil servants of the Department of Defense. This enhances our ability to adjust people's duties, because then you can change their compensation as new duties might direct, which is not possible now, without recomputing that position. And we would like the right for key human resource issues to approach these as far as our relationship with the union community is concerned on a national level as opposed to at the local level. Just, as example, the difficulty of dealing at the local level. Two years ago, as you know, a great deal of attention was devoted to abuses of travel cards. We still are negotiating with our local unions on how we are going to collect from people's salaries if they abuse their travel cards. We do not have that negotiation complete.

    We think there is a lot of evidence for the practices that we will advance in this proposed legislation. Evidence from the last 20 years of demonstrations as to what works. You and the Congress have given us that authority. It has touched the lives of 30,000 Defense Department civilians, and I think the evidence is in the results that it has produced.
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    Our objective here, sir, is the objective we all share, and that is to sustain the American military as the finest military the world has ever seen. And that is centrally because of the excellence of the people, active, reserve, and civilian in its ranks. Thank you.

    Mr. MCHUGH. Thank you, Mr. Secretary.

    [The prepared statement of Dr. Chu can be viewed in the hard copy.]

    Mr. MCHUGH. General Le Moyne, welcome.


    General LE MOYNE. Mr. Chairman, Congresswoman Sanchez, and distinguished members of the committee. Thank you for the opportunity to give you an update on America's Army today. Let me start, sir, by expressing our thanks for your assistance in the major successes we have had in the human resources environment of your Army this past year. Today, more than 220,000 soldiers are deployed or forward stationed in 120 countries. Soldiers from both the active and reserve components remain on point for your Nation. And, sir, they are committed, they are disciplined, and they are focused on their missions.

    Today's threat to security and commitments throughout the world highlight the critical importance of men in our forces, and this mainly begins with recruiting. We have been very successful in the past three years in both the numbers and quality of our new soldiers. And our retention goals in all categories also reflect the same success. This year, for the fourth year in a row, we are on track to fill our succession missions and retention goals again. At the same time, our attrition rates continue to show improvements. And at this time, sir, the officer attrition is the lowest in over 15 years.
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    Sir, the Army appreciates Congress' continued support for our Army, and survey after survey reflects the positive aspects of Congressional initiatives to increase our pay, the benefits, and to improve the quality of lives for our soldiers and their families. These increases not only improve the quality of life and retention, but they greatly enhance our recruiting effort, particularly when we compete against the private sector.

    Sir, our current active reserve force mix continues to provide the capabilities consistent with our defense strategy as of today. This force mix also reflects the numerous adjustments as a result of 11 September and the increasing demands that you pointed out, due to the global war on terrorism. We are continuing to adjust to meet these demands, and our missions have increased on a daily basis. We are proud of our progress. We are grateful to the strong congressional support you have shown us to offer these opportunities to America's youth. The resources you provided to the Army for these missions are some of the most important reasons for our continued success.

    In the past, when manpower programs were successful, resources have been cut to the point of hurting the manning efforts. Sir, we are asking you that, together, we need to avoid this pitfall, and carefully manage our resources to ensure the long-term continued success that we have worked hard to gain these past five years. We ask for continued assistance as we demonstrate our commitment to restoring the manpower needs for your Army, the active, the Guard, the Reserve, the Department of the Army (DA) civilians, and our retirees.

    Sir, thank you for the opportunity to appear before you today. I look forward to your questions.
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    Mr. MCHUGH. Thank you, General.

    [The prepared statement of General Le Moyne can be viewed in the hard copy.]

    Mr. MCHUGH. Admiral Hoewing. Welcome, sir.


    Admiral HOEWING. Thank you, Mr. Chairman, Ms. Sanchez, and distinguished members of the subcommittee. It is truly an honor to be here to appear before you and represent those men and women in the Navy out there serving our Nation today. We are very proud of what they are doing.

    Our Chief of Naval Operations (CNO) number one priority is manpower; and as a direct result of this commitment, the Navy commands the war on terror with incredible levels of readiness. As I speak to you today, more than two thirds of our active ships are underway. Over 76,000 active-duty sailors are currently forward deployed, 164 ships and submarines, and we have seven carrier battle groups out there underway right now, as well as three quarters of our amphibious force. Every single one of those units is fully manned for combat in direct support of the operations in Southwest Asia.

    I would like to express on their behalf our gratitude for the sustained and unwavering support of the United States Congress, especially during this unprecedented time in history. Your commitment to enhancing military compensation, improving housing, reducing out-of-pocket expenses, ensuring quality medical care for life, and implementing retirement reforms continue to contribute significantly to our unprecedented retention rates. And many of our young sailors will be our leadership in the future.
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    The Navy's budget this year will continue the momentum established over the last two years under Admiral Clark's leadership, and we will continue to be positioned to respond in the future.

    Our CNO challenge goes, in the manpower and personnel business, to improve retention, reduce attrition, and create a positive environment with opportunities for growth and development for every one of our sailors including their families. As a result of those challenges, we have improved our retention to the highest we have seen in the history of our institution. Our attrition is the lowest that it has been in a decade. Our recruiting, our joint recruiting, both reserve and active duty, now merged together, have met their mission for four consecutive years and, in fact, have met the higher new contract objective for 19 consecutive months while simultaneously improving quality.

    These are fairly impressive accomplishments, but we can and will do better in the future. Our highest priority for fiscal year 2004 is to shape the force, to make sure that we have the skills mix correct to meet the mission requirements of the future.

    We have established a new program called Perform to Serve. You gave us authorization for assignment incentive pay in order to fill those hard-to-fill jobs to meet our missions. We will be asking for an Senior Review Board (SRB) ceiling increase for very narrow skill sets where the technical requirements require us to maintain and sustain at a higher rate. And we will continue to shape the force by increasing our top six to make our force not only more experienced, but more technically capable.

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    Simultaneously, we will transform the way we manage the careers of our sailors. We call it Sea Warrior. This is the implementing opportunity to put the people into our CNO's transformational concept called Sea Power 21.

    At the same time, we want to make sure that our sailors and their families have meaningful and positive Navy experiences while they are associated with the Navy. We call it quality of service. Quality of service is the quality of life programs, plus the quality of work environment where our sailors live. Pay raises, both targeted and across the board, bonus programs, incentives, Basic Allowance for Housing (BAH) buy-down to reduce the out-of-pocket expenses, spouse employment opportunities, MWR, all of those will help establish that positive Navy experience.

    And finally, sir, we will place greater emphasis on the broader H.R. Approach to the way we do our manpower and the personnel business, including recruitment, growth, development, and retention of our civilian workforce.

    We operate under a strategic principle called: Mission first, sailors always. Everything, from a manpower and personnel perspective, that we do is focused on improving our mission accomplishment, and, in doing so, improve the lot for our sailors and their families at the same time.

    I look forward to the challenges that lie ahead in working with the Navy defense leadership under the direction of our Commander in Chief, and with the guidance and support for Congress. The challenges are many, but the potential for success abounds.

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    Mr. Chairman, this completes my statement, and I have included the direct responses to your questions in my written statement. Thank you, sir.

    Mr. MCHUGH. Thank you very much, Admiral.

    [The prepared statement of Admiral Hoewing can be viewed in the hard copy.]

    Mr. MCHUGH. Next, General Brown.


    General BROWN. Mr. Chairman, Congresswoman Sanchez, distinguished members of the committee. It is an honor to come before you and address our current challenges and key initiatives on behalf of the dedicated men and women in the United States Air Force.

    First and foremost, you need to know our airmen are ready, willing, and able to meet any contingency. Patriotism is high, morale is up, in spite of a very increased tempo.

    We exceeded our enlisted recruiting goals and line officer session targets this past year in FY 2002, and we expect to do so again here in FY 2003. We found that the high ops tempo in response to the global war on terrorism has not impacted retention as one might think. Our retention, in fact, is actually healthier than the past two or three years.
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    Now, much of the credit for this goes to this committee, your staunch support for improved military pay and compensation, and continued support of bonus authorities. So I want to thank you on behalf of every airman.

    Today, we continue to face one of our greatest challenges: How do we adapt to what we see is the new steady state of accelerated operations in personnel tempo? We cannot conduct business as usual, and we must transform our forces to be successful.

    One of our top priorities is shaping our force mix with the skills required to make optimal use of our finite personnel resources, which is our greatest asset. This is a complicated and difficult task. We are actively pursuing many options to relieve our stress career fields. For example, we recently partnered with the Army to deploy Army National Guardsmen and Reserve forces to augment our force protection operation. And we thank the Army for their support, an excellent example of joint effort.

    And we continue to develop programs and initiatives that are helping us now and in the future as we change our force to the demands of the global war on terrorism. We greatly appreciate the Congress and especially this committee's tremendous support and recognition of our troops by providing them a top notch quality of life.

    I look forward to discussing our challenges and our progress with you. Thank you.

    Mr. MCHUGH. Thank you, General.
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    [The prepared statement of General Brown can be viewed in the hard copy.]

    Mr. MCHUGH. General Parks.


    General PARKS. Thank you, Mr. Chairman, Congresswoman Sanchez, distinguished members of the subcommittee.

    It is my pleasure to report to you on the personnel status and future manpower picture of your Marine Corps. And I thank you for the support that you provide to our Marines and to their families.

    Today's Corps is comprised of young men and women of character, with a strong work ethic who joined to be challenged. As you mentioned, Mr. Chairman, in the opening comments, these are busy and demanding times for America's Armed Forces. Today, like my colleagues, our services are stretched and fully committed. Sixty three percent of our operating forces are forward deployed. We have mobilized 18,000 plus Reserve Marines in support of the global war on terrorism. Our selected Marine Corps Reserve and individual ready reserve Marines are integral to our Total Force requirements. We currently have 1,832 active and nearly 3,000 Reserve Marines on stop loss. However, only 259 of those Marines have been mobilized.

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    In response to your earlier question, although it is contained in my written testimony, 402 Marines exceed the 400-day threshold of Personnel Tempo (PERSTEMPO).

    The indicators of the health of our organization are very strong. Our superb recruiters have met their mission in both quality and quantity for 7-1/2 years. Our career retention is a new program; in fact, it is going to finish up its mission for the second year, and our first-term alignment plan of retention will make its tenth year of consecutive success.

    Similarly, our officer program is at an 18-year high of retention success. Congressional approval last year of 2,400 additional Marines could not have come at a better time, and with the accession and retention success I have previously addressed, has positioned us well for the challenging times we are currently enduring.

    Marines join and remain in large part, because of the institutional values and core values of our Corps, but the environment must be supportive. Congressional support that you have provided in the past, and I am confident will continue to in the future, have ensured reasonable pay and compensation improvements. This provides the environment that will assure our continued success.

    The fiscal year 2004 budget continues to appropriately raise basic pay and reduce out-of-pocket expenses for housing and provides valuable funding for foundational areas of recruiting and retention.

    During these current deployments, we concurrently remain focused on the Marines and the families left behind. Addressing their needs and requirements is paramount to those that are forward deployed.
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    Mr. Chairman, thank you for your support through ensuring appropriate pay, benefits, and quality of life enhancements for your Marines and their families. And I look forward to answering your questions.

    [The prepared statement of General Parks can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you, General. Thank you, all, gentlemen. I appreciate the very comprehensive nature of your written responses and the very brief and concise nature of your oral responses.

    We have got a lot of challenges here. Let me just start by saying—and I think I can speak for the entire subcommittee, the entire committee, and I hope for all the people of this great country. The forces over which you are charged, both in the Department and the branches of the military, are amazing men and women and are doing amazing things. And I know you are, but you have every right to be very proud of them. We certainly are. And certainly from the Congressional perspective, we want to do everything we can to be a proactive and productive piece of the joint effort to continue to do an even better job by them as we call upon them to do some extraordinarily difficult things on behalf of our homeland, on behalf of our freedoms, and the principles upon which this Nation was built.

    Recently, a number of us—in fact, Mr. Hayes is here, Mr. Chapla. I see a couple folks in the audience who also staff the Congressional delegation trip to various bases in Europe specifically, to meet with guard and reservists who are there forward deployed, most of them in volunteer status, to talk to them after we asked, as gently as we could the officers to leave the room, about the challenges that they see the system is placing before them. We heard a lot of different things, but certainly one of the things we heard about was the short-term notifications with respect to their activations and call-ups. We heard a week. On more than a few occasions we heard of two-day call-up notices.
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    Now, I know, Mr. Secretary, this is an issue that you are attempting to address, and it is a very important one obviously. An activation is always a difficult challenge, a lot of things to take care of, employers and spouses and families and such. But I wonder if you could update the subcommittee as to where you are in that process of trying to provide the greatest possible amount of call-up time so these folks have some opportunity to get their lives in order.

    Dr. CHU. Thank you, Mr. Chairman.

    Our policy, as you know, our guideline is we would seek to give people 30 days notice. That is not always realized. We do work very closely with the commanders and units when we anticipate that an alert could occur. And I think you will find in many cases that the commanders will acknowledge that they did know that it was likely they could be alerted somewhat earlier than the formal alert notice might have provided. I do think this is one of those items that is a careful balance between mission needs, particularly as we try to confront an unusual set of threats here and are using units, active and reserve, in very different ways from those in which they were originally designed to serve, that those mission needs may, in some cases, imply very short notice times.

    We recognize that, and we try to work with the issue. I know my colleagues may be able to respond in greater detail how they try to minimize that burden. We recognize this burden. We are doing everything in our power to be sure that people have a reasonable time before they are actually called up.

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    Mr. MCHUGH. Would the gentleman like to add a little bit from the Army perspective?

    General LE MOYNE. Well, sir, if I may add, as the Secretary says there, our goal is 30 days. We would like to have 45 or more. When we sense that we are getting inside that time frame, we start to give alert notification to the units that are on the mobilization list to try to mitigate some of the pain that you mentioned here today. And I think in most cases, that was successful, but there are some cases, sir, where I know that, in fact, the soldiers didn't get the word. And we are very conscious of that, sir. That has an impact down the road that we are very concerned about.

    Mr. MCHUGH. It does, because—and we have talked a lot about recruiting, retention. And my opportunity to serve as subcommittee chairman in previous years, and I am thrilled that all of you are doing not just adequately, but very well there. But at some point that kind of cycle is going to have a toll, it would seem to me. Certainly many of the individuals we spoke with felt that it would have a toll on them and their decisions as to their continued service and such.

    I would say as well that obviously it is just not the right thing to do. When you are in a national emergency situation, sometimes those things can't be avoided. But I would certainly be happy to hear from any of the other chiefs, if they care to comment on that. So, gentlemen.

    General BROWN. Sir, I would make a comment that within the Air Force, we have attempted in the last—it has probably been about a two or three year look now—to organize ourselves in more of an Air Expeditionary Force (AEF) kind of structure. Where we realize we are doing more and more of deployment contingency kind of activity, and we are trying to organize ourselves, both the active and our Air Guard and Air Reserve Components who have been a very active part of our force for many years, now into this AEF concept, where there is predictability for our people. And one of the goals of that is that when one deploys and they return, then they will know with quite a bit of time ahead when it is their turn to go deploy again.
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    That is a great concept in steady state operations. I am sure there are some cases where we have had airmen who have got fairly short notice in the recent times where we have been building up. We have had new contingency, new mission, and the situation today is not a real steady state.

    So our goal absolutely is to give notice and let folks plan ahead, plan their family time and the conditions that they leave at home. But there are certainly conditions today where there are some folks who got fairly short notice, and we just bless the fact that they have been ready to go and do the mission for us.

    Mr. MCHUGH. We had a good week, but maybe we had a bad week in terms of having clusterings of those who apparently had bad experiences in that regard. And gentlemen, let me be very clear. I understand that no one in either the Department of the Military Services wants to give anyone a day or two or a week or ten days or anything less than 30-day minimum notice. The point, I suppose of the question, maybe I could have put it much more succinctly, is that problems continue to exist. I expect you know that. We need to do everything we can, given the extraordinary demands that all of you are facing, to minimize those.

    And I was going to ask one more question in one regard, but the General's last comment talked about predictability. So let me ask another, and then I want to yield to my colleagues who made time out of their busy schedules to be here.

    Mr. Secretary, you talk in your oral testimony and also in your written comments about the proposed authority to involuntarily mobilize Reservists and call-up rights and how that time does not—for training doesn't count against their active duty limits. How would that additional potential time of service—potentially pretty significant—add to that sense of predictability? Because—and again, they are mostly volunteers, but I came away with a real sense that these folks wanted to be there and they wanted to continue to serve. One of the biggest challenges they had was not knowing when.
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    A number of them had been called up for well over a year, or they would get back and be called upon again immediately. And then that goes back to, as the General said, predictability. Certainly one of the concerns this proposal at least on the surface, would cause one to contemplate would be added, not less, predictability. Is there something you would like to say to respond to that concern?

    Dr. CHU. Yes, sir, I would be delighted to. It is intended, in fact, to smooth a way for reservists to make it easier for them to be called up in a timely manner. As you know, as things now stand, we have limited authority to bring them to active duty for training purpose if we are not actually going to mobilize them. And I think one of the issues that you find that detracts from reserve mobilization excellence is if you call people prematurely, and then there is a period of dead time when they don't, in fact, have an opportunity to apply their skills correctly. The military has often driven to that, made sure the unit is ready, has its training in place, and has the personal, medical, dental and other elements of readiness in place so that the individual is indeed ready to deploy. And what these powers are that we seek from you are intended to allow is to be sure that we can, in fact, bring the unit to the right readiness level in advance of a full-scale mobilization decision. It is to get them ready, get them up on the step.

    The issue of predictability is ultimately, I would argue, a management issue. However, we convey accurately to these individuals what the expectations will be, what will happen, how it will happen, and what the sequence will be. I think, in many ways, the United States Air Force should be congratulated because it has been achieved this de facto with some authorities that it already has. But it is not something that is very easy for the Department to do across the board.
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    As an example, there are limits in terms of how we can pay, under current statutes, for dental care for our reservists who haven't been mobilized yet, ready to go. We would like to get some of those limits relaxed.

    Mr. MCHUGH. And a lot of that makes very apparent and, I think, very good sense. It does raise the question, and I would not debate the normal standard right now that training days 38 is excessive. And certainly, you make a good case that in today's environment, it is not sufficient. But today's reserve have been predicated upon that premise, which obviously has at least some part in a person's willingness to join. The proposal would potentially extend that to 270 days with more, 200, two years beyond. What kind of consideration calculations were done to bring into play and weigh the analysis with respect to what does that do to people's willingness to join? I don't know the answer to that. I suspect it may find you wanting amongst some potential recruits. But as you suggest, maybe to others it would be more enticing to them. I don't know.

    Dr. CHU. Part of what we are after, sir, with the flexibility we seek, is to move away from the cookie cutter view that it is 39 days a year for everybody, and it is 39 days a year every year. In some years—this now becomes very much an individual unit, individual member issue, but it sometimes in someone's career, depending upon the skill involved, we might not need to have a lot of training time or service in that particular year. And there is no particular reason to force it to 39 days just because that is the paradigm we employ.

    I have in mind, for example, our effort, which is already beginning with the field inspector management to think about using individual ready reserve status for people in skill areas where the civil sector really is the source of the Nation's top information technology, medical talent, as well as linguists. So individuals like this, we do not necessarily need to see them every year for long periods of time, but there will be periods of time when we do need a great deal of service from them. And so tailoring this, much more to an expectation that is serviced, might vary over time within some boundaries that are acceptably mutual that does not have them serve when we don't actually need their services, is the objective that we seek.
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    I think commanders will also find this helpful. I have spoken with some of the ensigns general about the issue of how much—how would you use 39 days a year if you could use it differently? Some of them tell me that they would much rather have a little bit longer time in the summer; they would give up some time during the year, because in the summer training period, they get the unit together, get the unit back up on the step. It takes ten days, sir, to do that. And if it is a two week limit in summer training, you then disband the unit. They would rather have a little longer period in the summer and give up some of the during-the-year training days to achieve that.

    And it is that flexibility to tailor the time the Reservists are to what the mission requires and to what is comfortable for the individual to devote that we are seeking in these legislative changes.

    Mr. MCHUGH. Thank you. And I appreciate my colleagues and their patience.

    Ms. Sanchez.

    Ms. SANCHEZ. Good question.

    Thank you gentlemen once again for coming before us. I have a question for Dr. Chu, and then I have a question to direct to all of the personnel chiefs.

    The first question for Dr. Chu is the whole idea of the Secretary of Defense asking for a review of the reserve component versus the active component, and what changes needed to be made to that of the ratio with respect to the new requirements we are looking at? Where are those reviews? How does that roll into the strategic overview for transformation? And, when will we get to see the strategic transformation plan that you are working on?
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    Dr. CHU. Well, we are trying to make as much of that available as we can as soon as it is completed. This issue of the balance between active and Reserve forces is one that is really ahead of us. We just started work on this question. It, in part, is to deal with the issue Mr. McHugh raised, and that is short notice recall of Reservists who aren't volunteers.

    Our principle is that if you are a volunteer and agree to that short notice and put yourself in that box in advance, that is fine; but we are reluctant on such short notice to be calling up other elements of the reserve community. Yet, in some contingencies we need to reach the reserves at a very early stage, and I think that argues we should rebalance the force with perhaps a bit more of that capacity in the active force, and some different capacities in the reserve forces than we have—than we have today.

    I am hopeful that the first elements, first significant elements of these changes will be part of the Department's fiscal 2005 presentation which will come to the Congress next year about this time. But we are delighted to share these conclusions later this year as they begin to emerge, and to maintain a dialogue with the Congress about implications of these changes for our force structure.

    Ms. SANCHEZ. So the earliest we might be able to start receiving some of this draft that you all have might be towards the end of this fiscal year? Is that my interpretation?

    Dr. CHU. Well, we have already begun briefing members of your staff, and would be delighted to speak directly to you about the overall structure that we are using, which is the result of the review the Secretary directed coming out of the Quadrennial Defense Review that was conducted in 2001.
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    The specific traits, the specific changes in the force structure, how we might rebalance active and reserve forces better to meet today's needs, I anticipate those will be addressed in a significant measure as the 2005 budget comes before you. We have essentially made the strategic decision that during the current mobilization, it would be inappropriate to suddenly start changing the structure in a major way.

    Ms. SANCHEZ. For all the personnel chiefs, I have the question of the whole issue that, in fiscal year 2004, the budget submitted by the President on the war on terrorism in particular, is not in there. You know, of course, we don't know about Iraq or we haven't released the information on that, but how—what is the shortfall in the personnel accounts for the war on terrorism? Or can you estimate how short you are coming up? And where are you getting that money from at this particular point?

    General LE MOYNE. Congresswoman Sanchez, if I may for the Army. We have a formal process, and I think all the services do, that each year we formally analyze the current missions we have been given, the national defense strategy that is published and the defense planning guidance that goes with that. And then we forecast out for five years to six years. So, this spring we will be looking from 2004 to 2009. And we call that the total Army analysis. And each year, we make adjustments.

    Currently, we have got a plan to where we have identified over 19,000 soldier spaces in our structure, that is active, the Guard, and the Reserve—that we feel we can convert to other specialties that have a higher priority and a more current need today based upon today's missions that we had not anticipated two years, three years ago. In general, those areas fall into military police, military intelligence, special operations and nuclear biological chemical (NBC) defense. Each year, ma'am, we will review this again and again and make those adjustments. That is 19,000 internal from Army structure that we have made changes.
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    Some of those we will look at to convert to civilian positions. If that passes the test, then we will look for the budget authority to pay those down the road to do that inside that structure.

    Admiral HOEWING. Yes, ma'am. In the same process that we go through in the Navy and with the five year process regarding Palm 04, we have planned our end strength based on what we have determined to be the true requirements based on normal operations for the Navy.

    Ms. SANCHEZ. Now, Admiral, you also have something about you are retiring, what, some 18 ships as I recall.

    Admiral HOEWING. Yes, ma'am.

    Ms. SANCHEZ. And so you are actually downsizing in strength for this?

    Admiral HOEWING. That is true. Our actual end strength will go down very slightly on the program of record based on the decommissioning of nine destroyers and three cruisers, four landing platform dock (LPDs), and some aviation squadrons and some restructuring. So, based on that reduced structure, the actual numbers and end strength will go down about 1,900. What we will most likely potentially need, depending on how this year unfolds as we move into Palm 04 is the two percent authority that Congress has given us, plus the three percent if needed as authorized by the Secretary of Defense. If we operate at the same type of levels that we are this year, we will need to be able to operate at that two percent capacity.
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    So, right now our program that is presented in the President's budget reflects the true requirement does not yet—is not funded for that 2 percent above the 100 percent requirement.

    Ms. SANCHEZ. General.

    General BROWN. Yes, ma'am. Clearly there is going to be a cost with the global war on terrorism. And we go through the same structure the other services do as we plan and budget and put in our requests. I will tell you that as we pay for today at higher costs, because we have more activated or more mission, then we will be looking for a supplemental. And we track those things that were not part of the program that we added, and then we will be seeking a way to pay that back because we are using tomorrow's dollars to pay today within our service.

    We are also doing some things from a transformational standpoint to try to look at how to accomplish this new mission, our skill mix, do we have the right people in the right places. And that is not only within the active duty force, but also across our Total Force, active, Guard, and Reserve. So we are looking at ways to reposition mission, if need be, based on the new mission that has been given to us rather than settle on the mission that we accomplished in the past.

    Ms. SANCHEZ. General.

    General PARKS. Ma'am, much of what my colleagues have discussed applies to us as well. Obviously, the same cycle time. We continue to look as well, as I addressed in my opening comments and in my prepared statement. We asked for additional end strength last year and Congress provided that. We have asked for a very modest increase of 42 in our reserve establishment for this current year. All that is a part of us looking internally and reorganizing and evaluating our Marine Forces Reserve to establish a comprehensive review group to look internally at how they would review, evaluate, look at the missions and continue on.
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    As far as the second part of the question in regard to current strength, current requirements, we were operating in very selective stop loss for the first 15—14, 15 months of the global war on terrorism using a very limited number of people. In fact, I think in that entire time, we only retained 337 Marines beyond those that would otherwise have remained.

    As of January, our requirements went up markedly in order to maintain unit cohesion, unit readiness, to address the high density load demand jobs that we have, as well as the force protection requirements that we saw, and, finally, to limit the number of individual ready reserves that we might need to mobilize if we established stop loss across our institution.

    As General Brown alluded to, that is going to cost us more, but it is what is required in order to be ready. And, at the same point, we continually review that routinely in order to determine when we can curtail that and get back to normal operations.

    Ms. SANCHEZ. And if the chairman will indulge me one other question, which deals with one of the questions you had, and I think an answer that I heard from General Brown. Our reservists who find themselves continually called up and deployed, is it because they have certain skill sets that we require? Is that the biggest reason why we seem to be sending the same people and those are the people we are hearing from? Or are there other reasons why they might be caught in this continuous service?

    Dr. CHU. Let me offer an overview, if I may, and invite my colleagues to supplement it.

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    I think it is easy to overestimate how many people have been mobilized more than once. If you look at the entire period 1991 to 2003, we have done some estimates now, there is actually only a four percent chance that a person will be called the second time involuntarily. Now, you do have significant numbers of people who volunteer for service, and they are brought to active service in a variety of different statutory rubrics. And I think we don't want to mix that with the issue of involuntary mobilization. Volunteer service is a different kind of animal.

    To the extent there are groups that are being called up more than once, it is in my judgment concentrated in certain specific skills. General Le Moyne has already mentioned several of those in the Army cases, especially military police. That is, for obvious reasons, since September 11, 2001, a shortage skill in all the military departments.

    Likewise, there are similar skills in the other services. General Brown has a particular problem, for example, with intelligence skills in the Air Force, again, I think quite understandable in light of the September 11th aftermath.

    So it is concentrated in a small set of skill areas. It is not an across the board issue. To the extent that you see more people and you will encounter more people when you visit the field talking about multiple call-ups, many of the people are volunteers. The number who are involuntarily mobilized for a second time during this 12-year period is actually quite modest.

    Admiral HOEWING. Ms. Sanchez. Skills, yes. The short answer is yes. What I would like to address is how we are going at that in the Navy. As we—when we—well, first of all, when we saw that we mobilized sailors very rapidly after 9/11, we did that largely in the area of anti-terrorism force protection. Since that time, we have gone through a process of converting sailors from one skill set into the Anti-Terrorism/Force Protection (ATFP) skill set so that we can demobilize those reservists as fast as we possibly can. And in fact, we went from 10,000 down to about 2,000 as a result of that effort.
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    Another area that we will be looking at is what we call Navy coastal warfare, the guys that provide the harbor security. That effort went totally into the reserves, and now we are taking a look, should we bring that capability, or at least part of that capability, back into the active force so that we don't have to mobilize those reserves over and over.

    Regarding an earlier question, Mr. Chairman, when you talked about the non-volunteers and the short notice. What I would like to address is something that we stood up in the Navy as a result of that, we call it the NESAC, Noble Eagle Sailor Advocacy Cell. We wanted to be able to reach out and touch every single one of those mobilized reservists and find out what their situation was so that we could work with them. And, when it came time to demobilize, let us make the best institutional and personal decisions, mobilize those that were a—demobilize those that were of the greatest impact on them personally, and continue to keep those sailors that were volunteering and wanted to continue to serve in a mobilized capacity.

    So I believe that was the most effective way that we could go out and make sure that we minimize the impact on our mobilized reservists so that they would continue to want to serve in the future.

    Ms. SANCHEZ. Thank you, Mr. Chairman.

    Mr. MCHUGH. Thank you, Ms. Sanchez.

    As I explained, regretfully, from my perspective, at the beginning of the hearing, I do have to leave now. I am going to turn the gavel over to Mr. Cole, our vise chairman, the gentleman from Oklahoma. And let me just make a couple comments.
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    Mr. Secretary, I heard you talk about four percent involuntary, likelihood of being involuntarily recalled. And I don't disagree with that, but I think we have got to remember something else. And this in no way argues totally against your statistic, but it does come into consideration. During our trip we heard a lot of discussion from volunteer reservists—and I said before, I recognized you were going to make those comments, and they are very appropriate—that they were indeed mostly volunteers. Many of them volunteered the second time because they were fully convinced from past experiences that once they got home they would be involuntarily activated, so they volunteered. So the volunteer is like the word beauty; it is in the eye of the beholder sometimes. And we know in the service how volunteerism sometimes works. So I think we have got to remember that in the calculation.

    Ms. SANCHEZ. Mr. Chairman, I think also the length of the deployment—it starts off being a certain length, but they end up being kept there for a longer time. I think that is one of the things that we hear.

    Mr. MCHUGH. Absolutely. Absolutely.

    The other point—and she raised several excellent points, and I appreciate her doing so—was that, you know, the issue of rebalancing the force is a very difficult one; and I commend the services and the Secretary, Mr. Chu, Mr. Secretary, you and Secretary Rumsfeld for taking this up. I would rather do it right than do it quickly, if I had to choose. But the fact of the matter is, the Secretary of Defense has used this—used is the wrong word—has invoked this as one of several of his reasons for adopting his net zero policy with respect to end strength. And, again, I am delighted with your recruiting and retention numbers. I am deeply troubled how long that can last. I know you are concerned about it as well.
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    There is a real sense of urgency to get this done so we can assess as quickly as possible what that would mean in terms of very rightfully moving folks in military uniform into facility jobs. I think it is the right thing to do. But I just want to stress that we need to get that done as soon as is practical and as soon as it can be done well, and I know you share that concern.

    Dr. CHU. We do, indeed; and your characterization is gentle, as compared to Mr. Rumsfeld's.

    Mr. MCHUGH. High praise indeed.

    Admiral Hoewing, your first trip. You seem like a delightful man. I am looking forward to working with you. I am not sure I would join anything called a ''cell'' these days.

    But the second thing, just for your information—you do not make these calls. There are a lot of things in this town that are above my pay grade, and I know they are above your pay grade. I want you to know that the subcommittee and the committee are very concerned about end strength—certainly, I am—and concerned about it particularly from the Navy perspective. Because as, again, Ms. Sanchez pointed out, largely through decommissioning you have a scheduled big drop in Navy strength by almost 10,000 by the end of this fiscal year; and, under the budget proposal, you are going to continue to reduce active end strength to about 370,000, which is 5,700 below the 2003 authorizations, by 2006. And the 1,900, which sounds innocuous but is rather important to Members of Congress on occasion, is the fact that that is below the statutorily mandated minimum. So, in other words, you are breaking the law.
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    Now, I am not going to arrest you, and I understand how these things work, but I want you to understand in your very important job—and I fully expect you are going to do it extraordinarily well—that does cause some agitation here on the Hill.

    You do not need to respond. If you care to, knock yourself out.

    Admiral HOEWING. No, sir.

    Mr. MCHUGH. You are going to do great.

    With that, the ranking member, who, by the way, was gracious enough to come with us and help lead the trip overseas that I mentioned earlier, and a great American and a great leader, as you folks know, particularly on this subcommittee. Thanks, Ike.

    With that, as my parting gesture and one of the best things—I will not say the only thing—one of the best things that I have done today as subcommittee chairman, I will yield to Mr. Schrock and turn the gavel over to Mr. Cole. I will be submitting some questions for the record to fill that out.

    But thank you for your service, and again extend our deepest appreciation and admiration for the troops that you look over and care for. Thank you.

    Mr. SCHROCK. Thank you, Mr. Chairman.

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    I want to make a couple of comments on some of your opening statements, Dr. Chu, especially; and there is a theme that goes throughout this.

    Pay has certainly helped retention. There is no question about this. That is a good thing. As one of those of maximum age, I think it is a good idea to keep folks in longer because they leave just at the time that they are in their most productive years and that, I think, is a shame, and I think that is a mighty good thing.

    TRICARE Prime, that was something that we have been concerned about.

    Dental care is certainly another one that—a lot of people, I am told, are called up, and they haven't had dental care for several years, and it can certainly delay things.

    Your comment, ''not in my job description,'' I despised that when I was active duty. I despise it now. I don't think it has any place in our military or government, and I am glad to see you say that.

    And the credit card thing. I just came out of a 14-hour budget meeting yesterday, and when I saw some of the things where fraud, waste and abuse are rampant, and I saw the $97 million in credit card abuse at the Pentagon—I love the Pentagon and everybody there, but that has to stop, and you know that. When you talk about getting money to do some things, we need to cut down on some of that.

    General Le Moyne talked about quality of life. General Brown talked about the operating tempo (OPTEMPO) has hampered retention. I think it has enhanced it, because the battle that these folks are about to go into, they are finally doing what they were trained to do. When I was in Afghanistan I never saw so many upbeat people.
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    The reserves and the active duty are seamless. That is a good thing. That certainly proves that the training is working and the interoperability with the Air Force and the Army working together. I think that is what Secretary Rumsfeld is trying to initiate in his transformation. That is a great thing as well.

    Admiral, the Navy certainly has had remarkable success in recruiting and retention over the years; and we are very lucky to have some of the mighty fine young people in uniform that we do. After their first enlistment they choose to reenlist; and I frankly think, in the Navy's case, that is due to the great Chief of Naval Operations, Admiral Vern Clark. He inspires people in ways—it is amazing when you see him with the troops. They absolutely love him. But he loves them, too; and that accounts for the 68 percent retention rate. And that is a very good thing. I have watched him on the decks of ships, and it is absolutely amazing.

    A lot of people choose to stay in for various reasons. One of them is the selective reenlistment program. I am wondering, and I would like the Generals to answer this as well, if you have some thoughts about how this subcommittee, members of the whole subcommittee, Members of Congress in general, can help in your efforts to recruit and keep high-quality people. I think that is one of our jobs to help you in that so that we do have the best military that we can possibly have.

    Admiral HOEWING. Thank you, Mr. Schrock.

    In recruiting in the Navy, we call ourselves green. We are meeting all of those objectives. We have got this very large delayed entry program. But that is one of those areas that can turn red almost overnight. We know that our economy is going to change out there.
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    We are also not so naive to know that that one of the main reasons why we have such good recruiting success right now has to do with the economy. We have multiple programs that we want to focus on, one of which—in the Navy, one of our new initiatives is called Navy College First, similar to an Army program. This gives us the opportunity to not only enhance our recruiting opportunities but to penetrate the current college market even greater at the enlisted rank.

    We also know that sustained advertising and sustained recruiter support are absolutely essential so that we do not harvest too much in that particular area.

    Regarding retention, in the Navy, the Selective Reenlistment Bonus (SRB) Program is our most effective tool. This year we will be asking for an increase not necessarily in the amount total for the year but for the ceiling to raise in certain specific areas in order to meet those mission requirements.

    Another request that you will see in this year's submission is for what we call a lateral conversion bonus. We have some ratings in some skill sets where we have more sailors than we have requirements, and we have shortages in others. It is that balance of skills mix. We have a very good tool when we are reenlisting sailors called Perform to Serve. Lateral conversion bonus would be an opportunity to provide an incentive to change from one skill set into an area where you need that additional skill set, provide some training, and get them there sooner at very low cost. So you end up getting both mission first, sailors in the right areas and sailors—always we are taking care of them.

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    The last area I would like to mention—and I briefly mentioned it in my oral statement—is our Sea Warrior Program where we literally shape the growth and development of every sailor into the requirements of the job. Once we know those requirements very specifically and assess the capabilities of our sailors, then we can provide tailored, shaped training in order to be able to meet those mission needs.

    Those are three particular areas that I would like to highlight.

    I would also like to mention very quickly that we just got our February statistics in, and it was 79 percent first-term reenlistment rates for the United States Navy.

    Thank you, sir.

    General LE MOYNE. Sir, if I may add, from a viewpoint of in your lifetime you have seen the military draw down twice, after Vietnam and after Desert Storm; and in both cases, to paraphrase the term, we are looking for the peace dividends. There is a tendency, when the outside influences are there, to recruit soldiers and retain them. The bureaucracy and the budgeters have a way of slashing programs to get that peace dividend, and we damage our process, and it takes us three to five years to recover from that. What I would ask for, sir, as I said in my oral comments, is let's work together to manage this program by program, service by service. So, instead of breaking things, we can, in fact, as the Admiral said, carefully manage this to sustain the long-term health of the military services at the same time we make the adjustments to meet, as you pointed out, the needs that we will run into in the next year or two.

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    General BROWN. My words will be very similar to what Admiral Hoewing and General Le Moyne said. Our force is very healthy and very strong right now. Retention rate is the best we have seen in years. Even our pilot force, which has been understrength—and it is still a bit understrength. But the retention rate, the return of pilots to the Air Force since 9/11, we have brought over 300 pilots back into the Air Force who were Air Force members, separated. And I will grant you that they are probably furloughed airline pilots today, but they have put the blue suit back on and come back to us. So our pilot inventory is not fixed yet, but it is a whole lot closer than it was.

    But I would ask that we stay the course. Even though recruiting is in great shape, our retention is very high, what we cannot do is let ourselves slash that recruiting budget. We cannot go and slash our SRB program. It is a big part of why our retention is high. And we have got to avoid going through the sine curve and end up chasing ourselves as we miss the boat and we dip back down.

    Similar to the remarks of my colleagues, I would ask—and this committee has helped us immensely get to where we are today, but we must stay the course with the programs that we have. Let us have the flexibility in the SRB program to maneuver absolutely where there is a career field that is in good shape and we can reduce that absolutely. But if we stay steady, we will continue to go right through whatever economic swing might occur; and we all know it will swing.

    Thank you, sir.

    General PARKS. Sir, I will pick up on the back end of the retention side and reinforce the points that have been made by my colleagues from the standpoint of the SRB is critical to the success of our retention program. It is the factor that allows us to maintain the critical skills individuals that we need so valuable in our force.
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    The other two points I would make are on the front end. One is the legislation that was passed that allowed military services to compete in high schools with the same level of contact and visibility that open employers have to Americans. We have the largest employer in the country and the opportunity to present that.

    The final point I would make is from the standpoint of what can you do. Speak to the value of the all-volunteer force. The ladies and gentlemen of this subcommittee, Members of Congress, talk about the value of service to your Nation in your speeches, in your various opportunities across the country that you get asked to do so routinely.

    We have smarter people, better people, we have more high-technology, sophisticated members than we have ever had. What we find so often is not that people are anti-military. When you talk with the parent, they simply are uneducated about the value that our Chairman addressed earlier of what you see, the wonderful young men and women that are serving. I think that would do as much as anything that we can do to enhance our recruiting.

    Mr. SCHROCK. I am asked often if I think we need a draft again; and I say, no, because I am gathering that the all-volunteer force is working well and why mess with success? So I guess I am correct in that.

    General PARKS. From my standpoint, you are absolutely successful. I have made a comment in the past in a forum of saying we are far better off than 25 or now 30 years ago when I first came in, and you will have a fellow in the back of the room saying it was pretty darned good when I was in. And I would agree. I hope 30 years from now someone looks back and says we are the best that we have ever been, and we continue to move forward. We are so much better with the quality of the all-volunteer force.
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    Mr. SCHROCK. Mr. Chairman, one other question.

    Admiral, Ms. Sanchez said something that confused me. Ten thousand reduction this fiscal year; then there is the 1,900 figure. I am confused. I know the 963s are going away, some of the guided missile frigate (FFGs) are going away, and some of the squadrons are going away. Does that add up to 10,000?

    Admiral HOEWING. Right now, we are running two percent above our fiscal 2003 program of record. Our 2003 program of record is 375,700, and we are several thousand above that. What we will go to in fiscal 2004 is 373,800. So that is down 1,900 on the President's budget that the Navy has submitted. But our actual strength is higher than that.

    In my comments earlier I mentioned that our funded program right now is to the President's budget. What we would anticipate, depending on the amount of operations and the pace of operations and OPTEMPO, we may still need to operate at that two percent authority above that number.

    Mr. SCHROCK. Thank you. Thank you all.

    Thank you, Mr. Chairman.

    Mr. COLE. [presiding.] The Chair recognizes the gentleman from Georgia.

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    Dr. GINGREY. I hope these questions have not already been asked, and I apologize if they have. I came in a little bit late.

    I would like to address my comments and questions to each member. It pertains mainly to recruitment and retention.

    We just debated a bill in the House today, H.R. 5, regarding medical justice, medical malpractice, and the fact that many, many physicians—of which I am one—at my age are getting out of the practice of medicine. Not because they want to but because the climate which they are in is discouraging. We are losing some of the brightest and the best at a time when we desperately need them.

    I have been concerned that the same thing occurs for different reasons in the military. I guess it is mandatory at a certain age some of the brightest and the very best that we have spent a lot of money investing in—and I have heard testimony from the Under Secretary and others about this, but certainly would ask you your opinion about are we moving forward with trying to make sure that we are able to retain people and they are not automatically required to retire at a time when they are certainly physically and mentally qualified to continue to serve us?

    In my local community, Marietta, Georgia, the new chairman of our school board is a retired Air Force General. He is doing a great job. General Redden. He is doing a wonderful job.

    But I just wondered if the Air Force has not lost some great value there. So I wanted to mention that and ask each of you your opinion about that.
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    The other thing I wanted to mention, and it has already been mentioned and touched on in—and, General Parks, you mentioned this—in remarks to the all-volunteer force and the elimination of the draft. Of course, there are a number of folks on Capitol Hill, Members of Congress, who are talking about reinstituting the draft and describing the all-volunteer force as unfair because it seems to be predominated by members of society that maybe are not quite as affluent, can't afford to go to college or possibly are not encouraged to do so, and they join the military. The rest of the kids, middle and upper class, go on off to Princeton or Harvard or Yale or wherever.

    What can we do—what can we do to encourage all students at a younger age—I am talking now really high school, because once they get in college you have kind of missed the opportunity to make a military career attractive to them. I am wondering, in regards to Junior ROTC programs and the opportunity to reach down to these 15-, 16-year-old kids and let them know that, gee, being a Lieutenant General at the end of the day would not be such a bad way to spend your life, or a Vice Admiral or an Under Secretary of Defense. Pretty darned good.

    So I have thought about that a lot, and I just wondered about your comments in regard on that.

    General LE MOYNE. Sir, before I jump in, may I talk to you about an opportunity in the Army Medical Corps?

    Dr. GINGREY. Yes, you may. As you know, as a Member of Congress, we are not supposed to have a practice outside of this full-time job that we are enjoying up here making these big bucks. So you may be able to interest me in that, if it is permissible.
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    General LE MOYNE. Sir, I was not born in Georgia, but I got there as soon as I could.

    Sir, a couple of points. You touched on some things that many of the fellow Members have brought up to us, not only today but in months past. If I may, sir, I have heard also and I have read the commentaries about we are drawing an inappropriate share of America's military from a disproportionate parts of our society, and I disagree. Our military for 227 years has offered an opportunity for all of us to change our lifestyles and to change the niches that we are in. Most armies, air forces and navies do not offer that. Yours does. And we ought to be very proud of that.

    When you walk through those ranks and look at soldiers and sailors and marines and airmen's eyes, you see it when you are overseas. This volunteer force, because of the way you helped shape it, is a startling success in this world's history.

    Sir, when we tinker with this, let's tinker very, very gently, because we have proven to you that we can meet the standards that you have told us to meet. Today, sir, the Army is drawing 22 percent of its brand-new recruits out of the college market, astounding success and unheard of in public commentary. We have a quarter million high school students in Junior ROTC. The purpose is not to enlist them in the military. The purpose is to shape their citizenship, teach them self-esteem and keep them in high school; and they have a higher graduate rate and a higher grade point average than other students in American society. So we have made remarkable success in the last 30 years.

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    As Dr. Chu said, it is a success; and we must maintain it.

    Thank you.

    General BROWN. I would like to comment next.

    Since you brought up my good friend Joe Redden, I have got to tell you, Joe Redden and I have flown a lot of missions and a lot of sorties. He is one of the finest fighter pilots I have ever flown with. I know he is a great school board director, too. I have heard that. Georgia's gain was the Air Force's loss.

    Joe Redden met MRD, mandatory retirement date. He would probably still be in uniform if he had had a choice, but he made mandatory, and he is Georgia's gain.

    Dr. Chu in his opening remarks talked about that very issue, that he and the Secretary of Defense, with the services' support, are putting forward the raising of some of those limits of time and service in order to keep some of the—especially the senior leaders who are at their peak of performance and we tell them they must leave.

    So we support trying to get that initiative forward. It would be helpful.

    I agree with General Le Moyne about the exposure of our young people in America. We have somewhere in the neighborhood of 600 Junior ROTC attachments, and we are raising that to about 900 next year. We are trying to have a 50 percent increase in the Air Force Junior ROTC program. And I think there is similar activity——
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    And I will admit there is some hope on our part that they will put the uniform on and be exposed to Air Force and think about Air Force. But the primary purpose is what the General expressed, and that is to make them better citizens, keep them in school, teach them some discipline and understanding. Then if the secondary benefit is they put a uniform on in high school and that appeals to them, they either join our service or go on to college and find our Senior ROTC outfits, we would love to have that, also.

    Admiral HOEWING. General Le Moyne's statement was wonderful, and he is spot on. We in the Navy are expending our Junior ROTC programs and will continue to do so because of the wonderful impact it has on those folks.

    I also want to go to the previous question when we started talking about medical, before the General jumped in and grabs you before I could, is that the special pays and bonuses and incentives are always a target when retention is high. We have had this discussion earlier with SRBs, but it is like SRB for our officer corps. They are absolutely critical to our success in sustaining the type forces that we do.

    One of the things that we have been doing quite a bit of over the last several months is retire-retain high-quality individuals. Many of them are in the medical field; and one of those is Dr. Freed, who is the optometrist for the Congress. We were just successful in continuing him in a retired-retained status for another 2 years in order to continue providing that support.

    The other area where we would not do the retired-retain is in areas where we already have adequate numbers and skill sets.
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    General PARKS. Sir, to pick it up, if our Navy brethren did not provide our doctors, I would be following up the same way to recruit you.

    From the standpoint of where Dr. Chu began his opening remarks on transformation, I think the Department and the discussions are spot on in doing the things that we need to look at, examine in a holistic way the potential to keep people for longer service, as was mentioned, at the peak of their careers, whether that be officer or enlisted. We have some wonderful people. We obviously cannot keep them all; we will stifle the system. But we have plenty of opportunity to selectively retain, and that is the approach that the Department is looking at.

    In remark to the all-volunteer force, clearly the recruiting side is the lifeblood of each of our institutions. We have got to continue those new people coming through the system to perpetuate the future.

    The American youngsters, in my opinion, are dedicated, devoted young people with tremendously bright futures; and again the opportunity to get in front of them has provided us access that we have not had in the past. The programs that were mentioned, the ROTCs, the Young Marines Program, all the various types of things are truly citizenship programs, but we are not disappointed if we get some benefit out of that.

    The early chance to influence them, an early chance to frame opportunities is provided through the access that we get to those young people. In my opinion, they do not think at that point about being a Lieutenant General or a Vice Admiral. They do not think about what a potential value is of a career in the military. They look at that person and say: Can I be like him or her? Here is an opportunity. I want to be like him. They come in, and they decide whether military service is for them.
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    The more we can do to educate people in that context, to expose them to the opportunity—we do not want all, we couldn't take all, but at the same juncture it would provide each of them a better opportunity if they had the chance to be exposed.

    Dr. GINGREY. Mr. Chairman, if I may make a closing remark, I am so uplifted to hear your responses, each of you, in regard to that line of questioning. I have already felt great about our armed services and our young people that serve and make military their career.

    Quite honestly, I personally would like to see the Junior ROTC program be just as mandatory as driver's ed or anything else that sometimes our citizens are crying out for, because it would be money well spent. It is not—the primary motive is not to recruit these youngsters, although when they have got a role model to look up to and that person that has them in uniform one day a week—I think it would be a great, great thing. I am just so appreciative of your attitude toward this, and I thank you for your testimony.

    Mr. COLE. The Chair recognizes the gentleman from Virginia.

    Mr. SCHROCK. Let me say something to Dr. Gingrey.

    I am a perfect example of that. I was born and raised in Ohio, never considered the military. I got drafted, and the day I got my draft notice I thought my life was over. I thought, I will do this three years, holding my nose, until I got in and realized the focus it gave me and the maturity it gave me, and I stayed for a whole career. When I was in Officer Candidate School (OCS), a Master Chief was a god, as you can imagine. They still are. That is exactly right. But it made me what I am today. There is no question. I hate to think where I would be today had I not had that experience in the Navy.
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    My son is a reservist. Tom Gordy, one of my key guys, is a reservist. I hope to get Recruiter of the Year award here. Everybody needs that experience, and they will look into those people.

    My son is an ensign, and I know he is as happy as if he were a four-star admiral. That is the key. He is getting the discipline, and that is vital. That is what it meant to my life, and it means that to a lot of people's lives as well.

    Thank you, Mr. Chairman.

    Mr. COLE. You are welcome.

    If the gentleman from Georgia will forgive me for an observation, if you left medicine and came into elective politics in pursuit of a better lifestyle, you better——

    Dr. GINGREY. Thank you, Mr. Chairman. Unfortunately, it is too late.

    Mr. COLE. I have a few questions.

    First, thank you very much for your service to your country. I can't tell you how appreciative I am and I know all of us on this panel and, frankly, in the Congress are for what you do each and every single day. And thank you for the product that you have produced for us.
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    We have just seen magnificent displays of the talent and the ability of our young people. But the leadership they have gotten is inspiring and exceptional, so thank you.

    Let me ask you this. I want to back up to just a really big question. Dr. Chu, it is probably better directed to you; and perhaps if the other gentlemen will respond as they see fit.

    At the beginning of the last decade, we had 2.1 million people in the service of our country, a magnificent force, obviously. We chose the course in the 1990s to draw that force down considerably. We thought we lived in one kind of a world. After 9/11, we found out in 2001, perhaps we should have known sooner, it was a different kind of world.

    I would like your reflections on whether or not—we know we have a superb military, but have we stretched it a little bit too thin? Are the numbers too low? If you were thinking ahead—and it is a very difficult world in which to make projections and predictions at the moment—where would you prefer to see the military at, if not at the size it is at today?

    Dr. CHU. I think, sir, we all appreciate that the military will need to change in the years ahead to meet these challenges. We think we have enough numbers of people on active service, but we are not convinced we are using all of those allocations in the best way. We have a significant number of military personnel who perform tasks that a civil servant could perform. That is one of the reasons we would like broadened, more flexible authority to manage our Civil Service better to make those conversions.
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    We also think that our way of using forces overseas may need to change. General Jones in Europe has already begun to talk about a different kind of forward stationing of American military power in Europe. The Secretary has opened the door, responding to the new President in South Korea, on rethinking how our forces are stationed in that country as well. I think we want to move away from the view of the Cold War as to how we used our people.

    I applaud the Navy, for example; and Admiral Hoewing might want to speak about the Sea Swap experiment. That is a way of using the same manpower in a manner that is much more effective, delivering military capability to the United States.

    The same thing is true of our reserve forces, which is why we are advancing this notion of continuing service. Many would like to serve more than the 39 days permitted. We would like to enhance that spirit of volunteerism and use those individuals, particularly in high technology and other areas, where they could help fill in where we in the active side ought not to try to grow our own information technology specialists, necessarily, or our own spectrum management specialists, because the cutting edge in many of those fields really is in the civil sector. We ought to draw from that civil sector in a more skillful way than we now do.

    We think we have enough aggregate authorization. The challenge is, how do we redeploy those authorizations better to meet the needs of the 21st century?

    Admiral HOEWING. Thank you, Dr. Chu.

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    To explain what Sea Swap is, this was the process of swapping out crews, as opposed to swapping out ships. What it does is dramatically reduce the transit time without any additional strain on the sailors involved. We fly them over into the theater, and we do it in a cycle of about three. When we send those ships over there, we send them in great condition so that they can sustain a full year or longer, year-and-a-half, of operations and do any maintenance that is required in order to sustain the ship on site.

    I would also agree with Dr. Chu that the numbers are just about right, as we talked about. It is all about skills, as we mentioned earlier. I believe that we have a responsibility to the Congress and the American taxpayer to deliver effectiveness first at the most efficient way that we possibly can.

    When we take a look at our acquisition of new programs, when you incorporate manpower from a human systems integration into the acquisition process, we can find that we can deliver even greater capability but reduce the life-cycle cost of the system by building technology into the systems and less manpower, and we are trying to do that in the Navy. In many ways you will see that is why some of the numbers will go down as we bring the Littoral Combat Ship and the CVN-21 and DD(X)—all use human systems integration into the acquisition process in order to make a smaller but more effective and more efficient Navy.

    General PARKS. I will pick up from there, sir.

    The active component Marine Corps, I mentioned perhaps before you arrived that we had increased 2,400 in 2003. That has been as a result of us looking at our own organization, but in direct response to 9/11 and the immediate need to stand up a capability that we felt would help the Nation in the anti-terrorism role.
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    The organization—our organization, the United States Marine Corps, is transformational by design; and we feel like that was simply another example of our Marine Forces Reserve doing a comprehensive review to look at where those skills can dovetail together. Their mission is to augment and reinforce and not to have independent capability but a mirror image capability of what is on the active component. So when we need to go to the reserve we literally have used up all the capability that is in the active component.

    Another one of the things that I think we did a number of years ago was the establishment of the Unit Deployment Program in Okinawa, where we build up a unit in the East or West Coast or Hawaii and we transition them to the forward-deployed base in Okinawa.

    From our standpoint of overall need and where we need to go with that, right now we are in surge mode; and we need to ensure that we wait until we assess what steady state is, look at that, analyze what we have got, and put into play some of the things that Dr. Chu spoke of earlier from a transformational standpoint to determine the usage of units versus individuals that we are now dealing with.

    Mr. COLE. During the 1990s, obviously, we did not only reduce uniformed military personnel, we reduced a substantial number of civilian personnel that were associated with DOD in that period. I know there is an emphasis now on making sure that uniformed personnel are pursuing the task of military personnel. Did we have a situation in the 1990s when perhaps we actually drew down too many of our civilian employees and started using uniformed personnel for functions that in the past we had confined to the civilian part of the DOD? Or not? I am just curious.
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    Dr. CHU. I do not want to cast aspersions on the recent past.

    Mr. COLE. And that is not the intent of my question.

    Dr. CHU. I understand. I think we do have a result where we have, as a country, sometimes turned to the uniform forces for a function because it is such a great team of people and because it is so flexible. So this question, for example, as I indicated in my opening remarks, of changing someone's duties in the civil side, as I indicated, if I change someone's duties I have to recompete that position. That is a lengthy process; and I have to hope that the incumbent, if that is the person I want in that job, wins the competition.

    On the military side, all the General needs to do is say: Sergeant, I need this. The Sergeant salutes, and it happens in five minutes. That flexibility leads people from all sorts of functions—from the highest levels of the government down —to prefer military solutions when a civil solution would not only suffice but it would be a better application of the taxpayers' dollars.

    That is what we are trying to correct here. It is not a recent phenomenon. It reaches back several decades in its origins. We think if the Congress is willing to give us these kinds of powers, we can make that change happen.

    General LE MOYNE. Sir, if I may, from a very limited point of view—and I am not a professional personnelist—but the last four or five years, what I have sensed, particularly with the change in Federal law that allows retirees to continue in Federal service, I have seen a growing propensity to hire retirees to do jobs they used to do in uniform but now they are civilian; and I found that to be very fortunate and healthy. I have not sensed that we have moved uniformed military personnel into those civilian positions.
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    Mr. COLE. Just so you understand the thrust of my questions, I look at the last decade and I see a Democratic President and a Republican Congress. This is not a partisan shot at anybody. I think everybody was trying to make the best decisions at the time. Circumstances change.

    Let me ask a couple more questions, if I may. Dr. Chu, you mentioned only four percent of folks that are being called up are being done involuntarily on second deployments. Just as an observation, and then I would like a response, I want to give you a perfect example—and what is the appropriate phrase—low-density, high-use unit.

    I have got an Airborne Warning and Control System (AWACS) unit at Tinker Air Force base in my district, and they do a terrific job. They are unbelievably talented. But, over the last decade, the regular service component of that has been continuously used very, very heavily; and, obviously, the reserve units have been used very, very heavily as well. I am wondering what is being done skill set by skill set, if you will, to try and bolster those areas that you see particularly vulnerable to overuse?

    Dr. CHU. At the top level, the Secretary of Defense has basically told us that he does not want to end his tenure having any more low-density, high-demand units on the books, at least the kind that we started out with. His characterization is that is a list of our mistakes that we need to correct.

    Now, the remedies in each case will differ. Some of the skills that you indicated, as General Brown can fill in here, it is a matter of opening our aperture in our training pipeline so that we have more crews. That takes time, and that is the kind of thing we can fix.
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    I am very pleased, in terms of the larger issue of not calling the same people up a second time, at the way the various military services have tried to examine the full set of units they have and have started to call up units that in the past they might not have turned to in these circumstances. So you are seeing stories in the news media of units being called for the first time since the Korean War or the first time since World War II. That is a tribute to the military services looking more carefully at the total inventory and asking, could somebody else do this job so we do not have to call the same people a second time?

    I particularly congratulate what General Brown touched on, and that is the Army's decision to step forward and by mobilizing, some of which had not been mobilized for long periods of time, relieve the Air Force of the need to extend security police personnel involuntarily for a second year. We have some on a second-year tour, but I believe the majority of those are indeed volunteers, even if carried in involuntary status.

    General BROWN. That is correct.

    Sir, let me comment especially on AWACS and other low density, high demand (LDHD). The AWAC'ers are the folks in our Air Force that tell the fighter pilots where to go. They take great pride in that. I say that as a fighter pilot who is often told where to go by the AWAC'er. They are critical assets to our mission of air superiority and covering the skies over wherever we are controlling.

    We have just this year for the first time initiated a retention bonus for this group called the air battle managers who are the folks who are the heart and soul of the AWAC business. That has been long overdue. I appreciate your efforts in allowing us to do that and the funding that goes with that.
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    But we have targeted very clearly in the enlisted side of our house with SRBs those low-density, high-demand, but now we are paying a lot more attention to the officer side on the AWACS. It is very much a training issue. In the rated community especially where airplanes are part of that operation, we have got to have force structure to accomplish the training to then grow those, more AWAC'ers. When they are constantly being deployed to the point where we sometimes cease training because we have so many commitments then it is hard to sustain that training. Within our Air Force that is what we try to do to grow and sustain that field.

    There are some great men and women, as you know. You have met them. They are out at Tinker, and that is the hub of all of our operations around the world. But that is one example, AWACS.

    We now have some bonus opportunity. Our retention is increasing, and it is much higher, and they are appreciative of the fact that we have shown appreciation as an Air Force of the job they do for us. So we are concentrating hard on paying attention to those LDHDs. If bonus money is what is needed in a way of incentive to retain, then applying some of that.

    I Think we are seeing a turnaround. Our figures in the AWACS community specifically are much stronger this year than last year and in other LDHDs.

    Dr. Chu is right. The Secretary of Defense has made it very clear he can't imagine an organization that has a known LDHD and just sits in that status year in and year out and makes no change. So we are dedicated to fixing the low-density, high-demand assets that we have in our Air Force.
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    Mr. COLE. Just a comment before I yield to my friend, the gentleman from Kansas. A great Civil War General once said, the secret of war was getting there the firstest with the mostest.

    We do a great job of getting there with the firstest, without a doubt. I would just ask you—you all have done collectively just a brilliant job of managing resources, vastly diminished manpower compared to what we had. Just don't be so efficient that you ever run the risk of not getting there with the mostest, however we want to define ''the mostest.'' I think that is something that certainly I as an individual, and probably this panel has a great deal of interest in. We do not want you to be so good that at some critical moment you are short of anything or anyone that you need in terms of personnel.

    So I applaud your efficiency. I appreciate it very much, and the Secretary, but I would just ask you to always keep that in your mind. I think you would find you have a great deal of support if you come to a collective decision that you need to have more in the way of personnel and resources.

    Now, if I may, I will yield to the gentleman from Kansas.

    Mr. RYUN. Thank you very much.

    I would like to begin by thanking our panel for being here today, for the service that you provide for our country and also the staff that is behind you, all the things that they do. I know that I couldn't do what I do without my staff, and I appreciate what they do as well as the service that you all have provided. When we are in these times, close to a potential conflict, your star shines very brightly; and I think it is obvious that you should be commended for the preparations that you have made.
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    Dr. Chu, I would like to address a question I have to you with regard to the possibility of consolidated personnel pay structures. It is my understanding in the fiscal year 2004 Defense budget the Office of Secretary of Defense has proposed to consolidate the active duty, National Guard and Reserves pay accounts into one military personnel account. That gives me concern, and I would like to raise the concerns that I have. As I see it, this would impact the National Guard in a negative way, allowing cuts in the Guard without representation perhaps in this process.

    Also, congressional intent requires that you have the Chief and the National Guard Bureau (NGB) to prepare, justify and execute military personnel operation instruction budgets. In other words, they will have to appear before us and justify a lot of this. If this process is true, it reduces congressional oversight of the National Guard Reserve military appropriations process.

    It gives me concern. Active duty, for example, uses an open allotment system and assumes each soldier draws full pay and benefits, whereas the reserve component system requires separate transactions. It is a positive way of controlling expenditures with regard to the National Guard. It has to be set up on a 365-day basis. Absence of this control with regard to appropriation, NGB, cannot accomplish what I think are its responsibilities.

    If enacted as we are looking at it now, my concern is that it may lead to siphoning off of funds, creating a shortfall for schools and training in each of the fiscal years. I would like to hear your response as to how you see this and what it might cause as a problem.

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    Dr. CHU. I recognize those concerns. I think they are actually ill-founded. The proposal, as I believe you may be aware, is to maintain separate so-called budget activity groups within the overall appropriation. What the change would do is actually enhance the Department's ability to respond to urgent circumstances.

    As you know, as things now stand, to move funds among these accounts, and as I pointed out to our reserve complement colleagues, this is as much an opportunity for them to benefit as vice versa. To move funds, for example, from the active to the reserve appropriation account, we have to not only get the Congress' sanction for the reprogramming that is involved, but we have to use the statutorily limited transfer authority that the Department holds to move funds from one appropriation title to another.

    What the consolidation into a single appropriation title does is it maintains Congress' oversight through the preprogramming process, but if that reprogramming is approved it allows us to do it without diminishing the leeway that the transfer authority limit otherwise imposes.

    In our judgment, it gives everybody the best in both worlds. You in the Congress still have the same oversight as you had before, as a practical matter. Once we agree on the changes that will be made, we have the ability to move funds without your having to pass additional statutory authority, which would be problematic in any kind of short-notice situation.

    One of the concerns, always in circumstances like the present ones is, can we pay everybody in an unrelated appropriations slot? This enhances that ability.

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    I do think—I recognize that the swiftness with which this was proposed did lead to some substantial misunderstanding both as to purpose and effects. I do not think that the ill effects that people fear are indeed there.

    Mr. RYUN. I appreciate your comments, and I am sure that will calm some fears. Again, the process, as it works out, will determine whether it really does provide that. I am pleased to hear your comments.

    I also want to ask, is it true that the Office of the Secretary of Defense (OSD) is planning to propose consolidating operation and maintenance procurement and military construction accounts in fiscal year 2005?

    Dr. CHU. I will tell you that is news to me.

    Mr. RYUN. Okay. You do not have an answer at this point, so we would like to continue pursuing it if we could. There is a rumor as well. Thank you much.

    Mr. COLE. I think, actually, that completes our questions for the day. Gentlemen, thank you very much again for testifying; and enjoyed having you here.

    [Whereupon, at 5:10 p.m., the subcommittee was adjourned.]