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[H.A.S.C. No. 108–4]



FOR FISCAL YEAR 2004—H.R. 1588







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MARCH 18, 2003




JOEL HEFLEY, Colorado, Chairman
HOWARD P. ''BUCK'' McKEON, California
WALTER B. JONES, North Carolina
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
KEN CALVERT, California
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TOM COLE, Oklahoma
JOHN M. McHUGH, New York

LANE EVANS, Illinois
GENE TAYLOR, Mississippi
VIC SNYDER, Arkansas
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
RICK LARSEN, Washington

Richard I. Stark, Jr., Professional Staff Member
Mary Ellen Fraser, Counsel
Virginia H. Johnson, Counsel
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Diane W. Bowman, Staff Assistant
Danleigh S. Halfast, Staff Assistant




    Tuesday, March 18, 2003, Fiscal Year 2004 National Defense Authorization Act—State of Military Readiness: Review of the President's Budget for Fiscal Year 2004

    Tuesday, March 18, 2003



    Hefley, Hon. Joel, a Representative from Colorado, Chairman, Readiness Subcommittee

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    Ortiz, Hon. Solomon P., a Representative from Texas, Ranking Member, Readiness Subcommittee


    Fallon, Adm. William J., Vice Chief of Naval Operations, United States Navy

    Foglesong, Gen. Robert H., Vice Chief of Staff, United States Air Force

    Keane, Gen. John M., Vice Chief of Staff, United States Army

    Nyland, Gen. William L., Assistant Commandant of the Marine Corps, United States Marine Corps


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

Fallon, Adm. William J.
Foglesong, Gen. Robert H.
Keane, Gen. John M.
Nyland Gen. William L.

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[The Documents can be viewed in the hard copy.]

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


House of Representatives,
Committee on Armed Services,
Readiness Subcommittee,
Washington, DC, Tuesday, March 18, 2003.

    The subcommittee met, pursuant to call, at 2:03 p.m. in room 2118, Rayburn House Office Building, Hon. Joel Hefley (chairman of the subcommittee) presiding.


    Mr. HEFLEY. The hearing will come to order. Welcome to this afternoon's hearing on the military services' current state of readiness and review of the fiscal year 2004 operation and maintenance proposed budget.
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    I am pleased to have here with us General Keane, Vice Chief of Staff of the United States Army; Admiral Fallon, Vice Chief of Naval Operations; General Foglesong, Vice Chief of Staff of the United States Air Force; and General Nyland, Assistant Commandant of the Marine Corps, United States Marine Corps.

    Today I can't imagine a more important topic than the readiness of our military forces. They are in the midst of executing a global war on terrorism, and are poised to carry out the President's order, should it be necessary, to disarm Iraq through force. The funding and management of operation and maintenance operations could not be more important.

    O&M is the underpinning of readiness and sustainability; and I have some concerns about how well the military services are balancing the training, readiness, and quality of life of our forces.

    Despite the current state of world affairs, the President's budget for fiscal year 2004 is really a peacetime budget. The Administration requests $117 billion in O&M to sustain a peacetime force, but we are not at peace. The funding necessary to reconstitute our troops in the next fiscal year is unknown. I would expect priorities to change and new decisions to be made as more information is available. I expect, therefore, for each of the military services to keep this subcommittee aware of changes as they become apparent.

    I would describe this peacetime budget as one that takes many risks and perhaps too many risks. I recognize that with limited funding, priorities need to be made and some level of risk needs to be taken. I have asked each of the witnesses to be prepared to discuss the risks within their budget and to address how that risk will be managed.
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    Let me highlight some particular areas of concern that I hope to address during this hearing.

    First, the Army is short $148 million in consumable repair parts; and its flying hour program could not be executed at the desired level. Also, the Navy is reducing its ship depot maintenance accounts $600 million; yet, we are told that the Navy is funding its maintenance requirements to goal. The Air Force will need to do more with less. Funding for the Air Force flying hour program is down, and this year the Air Force unfunded requirement for depot maintenance is $516 million. Finally, the Marine Corps cannot fully fund its initial issue requirement and can only fulfill 67 percent of its depot maintenance requirements.

    Before turning to my good friend and Ranking Member of this subcommittee, the Honorable Solomon Ortiz, I would like to address with this panel the importance of providing timely and accurate information to this subcommittee. Your written statements submitted for the record should be accurate and responsive. We rely on these statements for your assessment of your states of readiness and to identify where additional funding might be required. I do not consider a written statement that fails to address risk and funding challenges to be an accurate or complete statement.

    In addition, the subcommittee will submit questions for the record. I expect these questions to be answered in a timely fashion. Last year, one service did not submit its answers until seven months after the hearing; and I think all of you—because I have known most of you for some time—those at the table here understand that we are part of the same team. We are all part of the same team. You can do things we can't do, but we can do things that you can't do in the overall role of defending the United States of America. So we need to work as team members and not in any way, in any kind of an adversarial proceeding or role.
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    Now I would like to turn to Mr. Ortiz.


    Mr. ORTIZ. Thank you, Mr. Chairman. I join you in welcoming all of our distinguished witnesses today to this Readiness Subcommittee hearing on the fiscal year 2004 budget request for military construction and family housing.

    I think I have got the wrong statement, Mr. Chairman. We have got two committees, one right after the other, today.

    I still welcome you here today.

    I recognize that we do not have much time available today and that the committee's projected schedule does not permit time to revisit this project or subject prior to putting this bill together. For that reason, I will not spend much time with opening remarks.

    This is indeed a perilous time for our Nation. There is no doubt that we have embarked on a new national strategy, and the support involving military strategy has already placed increased demands on military readiness, our military forces, to include Active and Reserve components. And dedicated civilian employees are deployed more today than at any time in Desert Storm.
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    Mr. Chairman, as they face the likelihood of war with Iraq, they should know that we recognize their professionalism and appreciate the sacrifices made by them and their families. I would ask our distinguished witnesses to convey my expression of appreciation to them and their sacrifices.

    I am concerned, Mr. Chairman, about our ability to sustain the readiness of our force. Based on my personal military experience and my tenure in the Congress, looking at readiness issues, I am convinced that our forces have never been more prepared to perform what we demand of them. But today, we find a number of activities that will degrade that readiness. This Nation is engaged in a nondefinitive war on terrorism. There is no exit strategy, and the cost, we understand, will be significant.

    This subcommittee is conducting a hearing on the fiscal year 2004 budget that we know will not be executed as requested. We are also on the brink of a war with Iraq that the Administration has projected as being of short duration, using high-technology weapons and systems in support of a large number of deployed personnel. Additionally, the postwar occupation and nation-building activities will place additional stresses on the DOD budget.

    To make matters worse, the ongoing war preparations and deployments are being financed using fiscal year 2003 appropriations that were intended for other purposes, with the anticipation that the Administration will replace them after the Congress approves a supplemental that has not yet been submitted.

    We are all aware that there is a negative impact on readiness when the replacement funds do not match the amount of funds taken or are not available in a timely manner.
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    Mr. Chairman, I noted that there is an overall increase in the O&M budget request this year. But most of it is not in direct readiness activities. In some cases, in those accounts, there is a decrease in the planned expenditures. An example of that is the Army's request for funds for spare parts. I hope that the witnesses will tell us how they intend to compensate for the shortfalls in the direct readiness accounts and at the same time plan on continued high OPTEMPO, deployments, and requirements for replenishing high-cost weaponry, ammunitions weaponry, and the Nation's expanded involvement related to the probable war with Iraq.

    I am also concerned about the heavy reliance on contractors in conflict areas. I have been unsuccessful in getting an estimate of the number of contractors in the potential theater of conflict from the Department, but a recent article in print media suggests that we could have as many as one contractor for every 10 uniformed personnel. We need not be reminded of some of the issues and adverse consequences that surfaced during Desert Storm regarding the use of contractors.

    There is too much ambiguity at a time when we and our forces are facing this great, great risk. And, in fact, it wasn't too long ago that in Colombia three contractors were kidnapped.

    Last, Mr. Chairman, another year has passed, and we have done very little to improve the readiness of our dedicated civilian work force. There continues to be much talk about the looming personnel crisis, but little progress has been made to develop a comprehensive civilian personnel strategy. Such strategy is needed to provide a basis for determination of future needs and to identify the actions necessary to recruit, train, and retrain the quantity and quality of civilian personnel needed. I hope that the Department has not decided to rely on outsourcing as a solution to solve the civilian personnel problem.
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    I look forward to hearing your testimony today in light of the significant, unfounded lists submitted by the services and the still-not-submitted supplemental request to replace fiscal year 2003 funds that are now being used to make these deployments and moving of the troops, to see what the answer will be so that we can be ready, you know, with the funding that we so necessarily need.

    Thank you so much, Mr. Chairman.

    Mr. HEFLEY. Thank you, Mr. Ortiz.

    And I would request that the witnesses, insofar as possible, kind of keep your statements to about five minutes so that we will have time for the questions and so forth. At the same time, we don't want to constrain you so much that you can't tell us what we need to know. So keep that in mind, and without objection, your entire statement will be put into the record.

    Let us start, I believe, from left to right here, General Keane.


    General KEANE. Thank you. Thank you, Mr. Chairman, Congressman Ortiz, distinguished members of the committee. I am honored to be here today with my fellow vice chiefs, and appreciate the opportunity to again appear before this committee to discuss the readiness of our Army.
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    I would first like to thank you for your support of the 2003 budget. It is another payment on critical requirements and sustains fundings of the Army's three priorities: winning the war on terrorism; preparing for a future war, which is transformation; and taking care of our people and their readiness.

    Today, we are a nation at war. I cannot recall a time in our history, not since World War II, when our Army has been engaged in more places than it is today. The Army is in Kuwait, Kosovo, Bosnia, the Sinai, Korea, the Philippines, Colombia, and Europe. We are on the edge of war in Iraq, and we are already at war in Afghanistan.

    More than 260,000 soldiers are deployed and forward stationed in 120 countries around the world; and to support these efforts, we have mobilized nearly 148,000 Reserve component soldiers. Our simultaneous commitment to these operations and the successes we have received—we have achieved, excuse me—present the best evidence I can offer on the Army's readiness. We are clearly ready, we are succeeding at our missions, and we are today ready to respond to the President's orders.

    As for our future readiness and the President's 2004 budget, for the Army it represents a $2.9 billion increase over the 2003 appropriation. Most of that increase is reflected in needed pay raises, pricing, and missile program transfers. In general, it is a balance-based program that will allow the Army to remain trained and ready throughout 2004 while ensuring our force is protected as we war on terrorism.

    Specifically, in terms of operational readiness, OPTEMPO was fully funded for 913 tank-miles and 13.1 flying hours per crew per month, and we fully fund 25 brigade rotations through our combat training centers. Sustainment, restoration, and modernization, or SRM, is funded at 78 percent of our requirements, $2.34 billion, which is about straight line from 2003.
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    In order to fund sustainment, the sustainment portion of SRM, at 93 percent of requirements, we will be required to reduce funding to restoration and modernization.

    We have also taken some risk in base operation support in order to help generate more than $1.406 billion in the 2003 budget and $658 million in the 2004 to replenish our depleted spare inventories and eliminate a significant readiness issue.

    Base operations support funding for fiscal year 2004 is $5.22 billion, and represents 75 percent of our requirements. In the 2003, we have funded base operations at a higher rate, 82 percent, and it was $6.2 billion. Obviously, we have taken some risk here.

    In terms of people readiness, in 2002, all three components of the Army achieved their overall recruiting mission for the third consecutive year, and Active and Reserve components made the 2002 quality goals. We exceeded our retention objectives.

    Recruiting and retention is adequately funded in the 2004 budget at approximately 85 percent of our requirements; and all incentive programs, both enlisted and reenlistment, are fully funded.

    In this budget, we will fund four housing privatization projects totaling 6,290 military housing units, and will expand this program through the 2005 to include another 28 projects, or 71,790 units, which will equate to approximately 82 percent of our worldwide total. Our goal is to eliminate inadequate housing by 2007, and we are on target.

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    For our single soldiers, the 2004 budget reflects $738 million, MILCON, for barracks renewal; and we have committed to completing the barracks upgrade program by 2010, and we are on target for that as well.

    The 2004 budget provides $300 million to increase housing allowances, and reduces a soldier's out-of-pocket expenses to 3.5 percent; and we are on track to eliminate the out-of-pocket expenses entirely by the 2005.

    The 2004 budget also provides, as you know, an average MILPAY raise of 4.1 percent and a higher targeted pay increase for specific rates in specialties.

    In terms of personnel readiness, the budget is in good shape. In terms of readiness for future war, the Army has fundamentally changed in the way it fights and the way it deploys. This budget fully funds transformation with almost $2 billion for the objective force, RDT&E, and funds the fourth Stryker Brigade of the six brigades we are fielding.

    While this budget reflects balanced funding of our top priorities, it does not fund everything. We had to make some hard choices in addition to the ones I have already mentioned. We terminated 24 systems and restructured 24 others to generate over $2 billion in the 2004 for transformation, and $22 billion across the future years defense program (FYDP). We reduced the recapitalization program of our counterattack corps from three and a third divisions to two divisions to generate $385 million in the 2004 budget.

    In conclusion, just let me say that maintaining a trained and ready Army is a shared responsibility. With your help, our Army is trained. With your help, our Army is ready. And, with your help, today, our Army is fighting and it is winning.
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    We appreciate your continued support, and I look forward to your questions. Thank you.

    Mr. HEFLEY. Thank you, General.

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

    Mr. HEFLEY. Admiral Fallon.


    Admiral FALLON. Mr. Chairman, Mr. Ortiz, other distinguished members of the committee, it is truly an honor and a pleasure to be before again you this year with my fellow vices. And I want to report to you that today your Navy, our Navy, is demonstrating its true readiness around the world.

    As we sit here this afternoon, we have 70 percent of the 306 ships in the Navy underway, the majority of them forward deployed. Seven aircraft carrier battle groups and 10 of our 12 amphibious ready groups are forward deployed in the theater of operations in and about Iraq today, which is a pretty remarkable testament to the amount of fantastic work that has been done, much of that resourced by this committee through your insistent push on the other Members of the Congress; and due to some hard work on behalf of the leadership, we have been able to undergo remarkable increase in readiness.
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    We have today the most capable force that I have ever seen us put to sea in more than 36 years of service. They are ready to serve, and they are ready to prevail should we be faced with a conflict here in the coming days.

    This didn't happen by magic. There are many foundations for this readiness. I would like to highlight a couple.

    First is manning. Today, the ships that are forward deployed are essentially fully manned, 99 percent across the board. That is a huge increase from where we were just three or four years ago. That wouldn't be possible without sustained investment by the Navy, by increases in compensation, by medical and retirement benefits, and by many other incentives provided by the Congress that have done a large—had a large part in convincing our sailors, our young men and women, to remain in the Navy and to enhance their skills to serve the Nation.

    The second area is in the business of operational funding. Today, our people are ready because they have the appropriate number of steaming days and flying hours to hone their skills and to make them truly ready for what lies ahead.

    Material condition: The parts, ammunition, maintenance of the ships and aircraft have been increased substantially and have put them in the position they are in.

    Of course, without people that have the appropriate training, none of this is worth very much. And, in fact, they are well trained. The improvements in manning and the material readiness of the equipment have probably been the most important factors in allowing us to provide the surge in readiness.
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    Now, we are going to need your support and help. Clearly, we are eating into this year's budget, and we are going to need help with the supplemental to sustain us through the rest of the year.

    Probably one of the biggest challenges we have facing us in the Navy, and I believe the other services as well, is how we are going to reconstitute the force when these current events are completed. We have to recap, we have to continue to recapitalize our Navy. We have made strides. As you know, in this year's budget, we were able to increase the number of ships we have planned and the number of aircraft we would like to build, but we need to sustain those increases.

    We have made some strides in sustainment, restoration and modernization (SRM). In facilities in particular, I am happy to report that we have gone in this year's budget from 84 to 93 percent of the total requirement. We are not all the way there, but we are making progress.

    We have other things to do. We are trying to transform this service. In areas that particularly pertain to readiness, I would like to highlight a few things.

    First, we have an initiative to mission fund our shipyards. We have one that is operating under mission funding, a second that is in the process of conversion. We have two more of our public shipyards that are, in fact, still working under the Navy working capital fund. We believe it is to the benefit of the Nation and the Navy if we could convert to mission funding.
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    We have initiatives having to do with the way we operate our forces. We have a thing called ''Sea Swap''. We have just executed the first installment of that in the western Pacific. And the idea is that once we forward deploy a ship, that we might be able to sustain that ship in a forward deployed status without the transit back and forth to CONUS in some circumstances; and we are doing experiments in that line right now.

    There are other challenges in the future. We are going to need your help. We appreciate all that you have given us. We are attempting to balance the risks to provide—to put us in the best position we can to be able to sustain today's current challenges and look to the future. We very much appreciate all that you have done for us, and look forward to working with you.

    I have my written statement, Mr. Chairman, which I would like to have entered in the record, if you would, please. And I stand ready and pleased to try to answer your questions. Thank you very much.

    Mr. HEFLEY. Thank you.

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

    Mr. HEFLEY. General Foglesong.

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    General FOGLESONG. Mr. Chairman, Mr. Ortiz, delegates, thank you very much; Congressmen, Congresswomen, thank you very much for letting us come over today.

    I would like to echo what has been said earlier about the support you have given us. This is my second or third time, I can't remember, testifying over here; and each year I have kind of said the same thing. I blame you all for a lot of the good things that I am going to tell you about later on. So, we do appreciate your assistance.

    It has been a busy year for the Air Force, and if you listen quietly at night, you will hear the 388th from Hill Air Force Base flying a couple F-16s over the Capitol 24 hours a day. And we have flown over 25,000 sorties over the CONUS in the last year, over 70,000 joint sorties with our comrades in arms in Afghanistan; and as this committee knows, there is not a day that goes by when we fly in southern Iraq and northern Iraq that we don't get shot at. So readiness is absolutely critical to us. We have got 42,000 airmen deployed as we speak, poised somewhere around the globe to do whatever the President is going to ask us to do.

    I am also here to report today an anecdotal story about how important it is that we get this right. Air retention and air recruiting is up this year; I am happy to tell you that. One of the reasons for that, I remain convinced, being a maintainer myself, is it is much easier to recruit and retain, especially retain those crew chiefs, when they have the parts to go fix their airplanes.

    So part of air recruiting and part of air retention is based in no small part on how satisfied our airmen are in doing their jobs. And when they have an airplane, an A-10 or an F-16, that is sitting out there ready to go, they feel a lot better about what they are doing. And that is one of the reasons that what you all are doing over here is so critical and important to us.
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    I will also tell you that there is good news in our supply rates. Our nonmission-capable-for-supply rates are down this year from last year when we were over here. Air cannibalization rates are down from last year when we—when I testified. Our mission-capable rates, and all these in aggregate, are up from last year when I came over to testify.

    But I will tell you that our nonmission-capable rates for maintenance, the time we have to work on airplanes, is about level from last year. We attribute that to the fact that our airplanes are a year older. We have an aging fleet right now. And as I said last year, we have found new ways to break old airplanes, and so it just takes a little more maintenance on them every year. So we are concerned about that.

    We have come in with a budget this year that has a reasonable amount of money, we believe, for spares or a reasonable amount of money, we believe, for depot maintenance; and I will explain that by telling you that we had an unusual last year and we anticipate having an unusual next several years in that our missions are much longer. We are trying now to establish a new baseline for what our spares and what our depot maintenance should be. In essence, if you don't have to start that engine so much, you don't break the starter so much. So we are trying to figure out what our new baseline is.

    We think we have adequately funded our spares and our depot maintenance, but I will tell you that we are going to have to worry about that as we execute. And we are committed to flying our flying hour program. We are absolutely committed to flying that flying hour program; that is essential to our readiness.

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    Now, having said all that, we also know that we have got some roadblocks ahead of us here, and Admiral Fallon just mentioned one of them. We have got a reconstitution issue facing us. Whether we go to war or we don't go to war, we have got a tremendous number of people deployed now. We have curtailed in many cases and substantially impacted in many cases our formal training programs to make sure that we deploy the right people. We will have to reconstitute from that as well.

    We have people who are going to miss recurrency training requirements because they are deployed now. We will have to address that as they come back home as well. Eighteen out of 20 of our low-density, high-demand assets are either in surge or operating above surge. And we are going to have to do the math on that when those assets return.

    Now, we are having our first meeting in two weeks to try to get our arms at a macro level around how to do that. But that is going to have a direct impact on our readiness, and we want to make sure that we have the right process and we have resourced right to make sure that all works out for us.

    I would ask you to consider just in general two things that we think are very important for help, and I know the Department will be over to talk to you about these things.

    One is, we have an incredibly useful and dedicated civilian work force. That work force is migrating its way through, agewise, in the Air Force; and within the next five years, 40 percent of air civilians will be eligible for retirement. And the Department will be over to talk to you about initiatives to help us with new hiring, to be able to expedite hiring, to be able to pay people appropriately; and to be able do those kinds of things will be fundamental to our recruiting and retaining that civilian work force.
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    And the second consideration I would ask is that—the Department will also be over, and we testified just last week, with some initiatives on environment. We all remain concerned with the way that we need to have clarified some of the laws that have to do with air environment, so that we are able to continue training on our ranges and do the testing that we need to do today, tomorrow, well into the future as well.

    So I would ask you if you would consider those two things as that legislation comes over to you.

    And then, finally, I am willing to take any questions you may have. Thank you very much.

    Mr. HEFLEY. Thank you very much, General.

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

    Mr. HEFLEY. General Nyland.


    General NYLAND. Chairman Hefley, Congressman Ortiz, distinguished members of the committee, it is an honor for me to be here today, as well, and represent your Marine Corps. I too would like to thank you very much for this committee's strong support for the issues and programs that are of such vital importance to the readiness of the Marine Corps; and similarly, I would ask that my formal statement be included in the record.
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    Today about 66 percent of the Marine Corps' operating forces are forward deployed, and Marine Corps operations throughout the past year have highlighted diversity and utility of expeditionary forces. This has been one of our busiest years in terms of operational deployments, participation, and realistic worldwide exercises and training events. To that end, we have ensured a trained, ready, and capable force for the Nation.

    That said, I do believe that we have some challenges ahead. Like my colleagues, I see three close at hand: One will be the supplemental funding, the second will ultimately be reconstitution, and the third is encroachment.

    As you are well aware, our current contingency requirements have grown beyond anyone's expectation and, consequently, significantly exceed the funding available. We appreciate your continued support and ask for timely passage of the Administration's upcoming supplemental request to provide the funding that will be essential to our accomplishment of mission.

    Encroachment on our ranges and training areas is both an immediate and a future concern to providing realistic training for our Marines. I believe that this is truly a national issue that requires applying the proper balance to ensure that we are able to meet our Title 10 requirements. We greatly appreciate the interest and involvement of Congress in this issue, as you alone bring the holistic view that will be essential to address the significant impact of encroachment on our ability to provide training for our soldiers, sailors, airmen, and Marines.

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    We are currently doing what we are trained to do, and we are ready to support our Nation through whatever challenges may lie ahead. We remain your only sea-based, rotational, truly expeditionary combined armed force. We are ready to answer the call as part of an integrated joint force.

    I thank you again for your continued support of your corps of Marines, as well as for soldiers, sailors, airmen across this great Nation. I stand ready to answer any questions you might have.

    Mr. HEFLEY. Thank you very much.

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

    Mr. Ortiz.

    Mr. ORTIZ. General Keane, I have a question for you, and this has do with the Reserve components.

    You know, more than at any other time since the Korean War, our National Guard forces are being asked to serve in some capacity; and since 9/11, we find them serving in a variety of situations. In addition to state missions, I know that they recently agreed to perform base security missions for the Active Air Force.

    We have asked them to perform security screening at airports. I can remember going through the airport, and it was the National Guard that would do the screening. And last night I heard the President encourage their mobilization for enhanced security at other critical infrastructure locations here in the United States.
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    I am concerned about their readiness to perform some of the missions that they are being assigned to. General, I would like for you to address the following questions:

    Are Guard units organized and trained to perform the variety of tasks we now find them being assigned? And what is the general scheme for determining if the mission is appropriate for the National Guard? And how do you decide which National Guard unit will be tasked?

    And the reason I ask you these questions is because I—in my district alone, I have seen both Reserve units and National Guard units being activated. I just want to be sure that they have the training to perform the necessary task at whatever they are asked to perform. And maybe you can help me enlighten this a little bit.

    General KEANE. Well, that is a very good question, Congressman. Thank you for it.

    Certainly the missions that we are receiving, the numbers of those missions, the scale and magnitude, exceed anything that we have had in our recent history. And it is true, we are asking a lot of our Reserve components.

    And let me just say up front, despite how short the alert-to-mobilization time that we have given them is, and some of it has been woefully inadequate; some of them have received only a matter of days that we have alerted them to mobilize, and that is certainly not enough time for an employer to react; and truth be known, it is not enough time psychologically for a family to react. But I have seen hundreds and hundreds of them, and they don't complain about it. They are absolutely remarkable about the call to duty and the sense of patriotism they feel about doing something that is important.
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    The tasks are different. One of those tasks you mentioned is the Army guarding Air Force bases, most of them here in the United States. General Foglesong and his staff asked us if we would consider doing that, and we have provided close to 9,000 to that mission, because that would have meant Reserve components in the United States Air Force would have been asked to do a second year of duty. And the people that we are asking of the 9,000 are doing a first year of duty. And that is just the team working together here, to burden-share the responsibilities and missions that we have out there.

    Are they trained to do the mission? I think—I believe they are. In some cases, we have asked people to guard installations who are not military policemen. They are combat support troops or they are engineers or artillery or they are infantry, and we have been giving them some training to do that. The Air Force has also been working with us to make sure that they can handle those missions. Most of the other missions have been along their functional lines, obviously in the missions that they performed in Afghanistan and the missions that we may perform in Iraq.

    You asked another good question about, are we organized properly—I don't think we are—to do homeland security and also to do the warfight. Those two missions.

    I think homeland security was a mission that was always there, but it was clearly a secondary mission and didn't receive a lot of prominence from us if we are just up front with ourselves about it. And I know we have taken a hard look at it, and we have put together what we call the Army Guard Restructuring Initiative to take a look at our Army divisions and restructure them so that they can do homeland security and warfight. And fundamentally what that means is that we are going to—we will put together multifunctional divisions which will have general purpose brigades inside of them; and we will take out of every heavy division two heavy brigades and put in a general purpose brigade or a multifunctional brigade, so it would be a little bit easier for them to do homeland security. That means they will probably have more infantry soldiers, and they will have more wheeled vehicles to be able to do that, and also perform functions overseas in that capacity as well.
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    So we do think we have to reorganize somewhat to be able to better perform homeland security missions and also do the warfight.

    But the mission, the missions have been demanding, the scale has been demanding, and the performance of the soldiers has just been nothing less than remarkable. We are real proud of them.

    Does that answer your question, sir? Did I get out all of it?

    Mr. ORTIZ. May I just—of the National Guard and Reserves that are being activated, do they stay domestically replacing Active Duty personnel, or will some of them see action in Iraq?

    General KEANE. It is both, sir. Some of them are replacing Active Duty here in the United States, and some are also deploying overseas. Many are in Kuwait, as we speak, by the thousands, and also there are a number of them supporting our operations in Afghanistan.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Rogers.

    Mr. Evans.

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    Mr. Taylor.

    Mr. TAYLOR. General, I was looking at the numbers given to us by our staffs, and I noticed in several instances there were actually reductions in O&M funding for the Guard and Reserve; in many instances, there were no numbers available at all. Given the high rate of deployment, given the high number of call-ups, that doesn't make any sense at all, unless someone is trying to disguise the true nature of the cost of this conflict. But I would give each of you an opportunity to respond to that.

    I would certainly hope that is not the case. I think the American people are supportive of what we are doing, but they also need to know the costs.

    General KEANE. I am not sure I understand the question. The——

    Mr. TAYLOR. Well, sir, would you—I guess the question is, the Army Reserve, Army National Guard O&M account, in millions, has been reduced by $29 million. Given the large number of units that have been called up, how in the heck do you do that for less money than just having them doing their normal two weeks a year and one weekend a month?

    General KEANE. Well, two answers to that question. First of all, I am not familiar with the $29 million reduction. And I know you have got the facts in front of you, and I will take it at face value.

    Mr. TAYLOR. Okay.
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    General KEANE. We did move money around in our O&M account, and it was a readiness issue that was driving it. The Army had a serious spares issue that we had to resolve, and that is what I alluded to in my oral statement. We moved some money around to take care of that spares issue. I don't know if that is the reason for the $29 million reduction in the Reserves. I would have to check it.

    Mr. TAYLOR. This is in the Guard, sir.

    General KEANE. Excuse me?

    Mr. TAYLOR. You have a slight increase in your Reserve budget of $8 million, but you have a $29 million reduction in the Guard O&M account.

    General KEANE. Right. The way we are accounting for the increased operational expenses, as is reflective of the global war on terrorism and also of our preparations for war in Iraq, will occur in a supplemental; and we are trying not to take all of that money out of operating accounts.

    Now, the way we are paying for it—the way we are budgeting it is not out of operating accounts. The way we are paying for it, obviously, we are doing just that. I mean, we are taking third and fourth quarter money in the 2003 to pay for the global war on terrorism and also to pay for our preparation in Iraq. But we have not budgeted the operational expenses for the global war on terrorism or for our preparation in Iraq; and that is arguable.

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    I mean, probably some of us would like to see in the 2004 budget the expenses for the global war on terrorism, at least as it pertains to Afghanistan; and I hope it will be in the next budget as we are now budgeting for Bosnia and Kosovo. I personally would like to have seen it in this budget, and then you wouldn't have to deal with it in the supplemental.

    So, for 2003, we are going to have to deal with the global war on terrorism, operational expenses for Reserve components as well as Active, as well as our preparation for war in Iraq as a supplemental as well.

    Mr. TAYLOR. I would like to open this up to the panel, given the high rate of usage of the Guard and Reserve.

    General FOGLESONG. I will take a running shot.

    Mr. TAYLOR. I guess my question would be, given that, and that there are, according to published reports, some hawks within the Administration who think that Iran ought to be next, and there is certainly some talk that Korea could be next, at what point do you gentlemen make the point that you don't have enough people? And who do you make the point to? Because I don't think you have a friendly ear in the Secretary of Defense.

    So with that as a given, here is your opportunity if you feel like you are undermanned in your services.

    General FOGLESONG. I was going to answer your first question, but I will go to the second one first if you would like.
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    Let me address your first question you asked about. And I am not sure this is the right answer, but I know in our case, as far as funding for Reserve component forces, it depends to a degree on how much new iron—because we are pretty iron intensive—that we flow into our Reserve components. So as newer airplanes and assets flow into Air Reserve components, we tend to find they are more efficient. We tend to be replacing older equipment with newer equipment, and on occasion that will drive air costs down.

    And the other factor, in our particular case, we find we have Reserve component units that are funded two ways. One is through O&M, and the other part of the funding for flying hours comes from industrial funding. Some customer pays for them to fly their assets and deliver something somewhere; and that industrial fund has been pretty significantly tapped over the last year, and we anticipate that continuing to happen.

    So the units find that the requirement for O&M funding levels off pretty quickly, because they are not only flying the hours from O&M, but stacked on top of that will be other hours from some customer that is asking them to fly.

    So those are the balancing things that we try to do with our Reserve component. But I think all of us would tell you, the Reserve component is absolutely critical, absolutely critical to the way we are engaging today and will engage in the future; and we have all signed up to keeping them as ready as we can.

    Mr. TAYLOR. Well, seeing how all of you gentlemen have the equivalent of four stars on your shoulders and, therefore, the chances of being denied another one are pretty slim, I would welcome your thoughts on whether or not the force needs to be larger. If you can't speak freely, who can?
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    General FOGLESONG. Sure. And I also——

    Mr. TAYLOR. Go ahead.

    General FOGLESONG. I don't want to capture this; I will also address that.

    I believe the Secretary of Defense had this right last year when he asked us to review across all of our services where we have uniforms working now; and before we come to him and ask for a force structure increase, which we could conceivably do at some point, based on tasking that may come in the future—but before we do that, that we should look at where our uniforms are being assigned now and determine whether we have the right skill mix and whether we have—whether we have uniforms doing jobs that our civilians could do. Or do we have the right mix between the Reserve component and the Active component?

    We are in the process, each of our services is in the process of doing that. And I will tell you, we are all out mining uniforms to come back into the mainline part of our services. We are looking at agencies across DOD, not just within our service, but across DOD, to see where there are opportunities to bring those manpower positions back into our own services to get them in warfighting positions or combat support positions that we are going to need at some point.

    Now, that doesn't come free, of course, but we are in the process of establishing that baseline; and that will take some time. But we have identified a significant number, at least in my service, where we know that we can go out and convert to civilians, or we can buy a commercial service that could provide that service where some group of uniforms are doing it now and bring them back into the mainline of what we do for a living.
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    General NYLAND. Sir, I would comment on the end strength of the Marine Corps.

    Certainly, last year, we achieved great support from the Congress in growing ours by 2,400. That said, we are also participating in the same exercises that my good friend Doc Foglesong addressed, also looking to find ways to return more Marines to trigger-pulling jobs from other things. But right now, due to the increase of last year, we feel relatively comfortable with our number as we continue to look for ways to put trigger-pullers back in platoons.

    General KEANE. A couple of data points from the Army. Our Chief Shinseki, our Secretary Tom White, in the 2001 hearing and 2002, have both stated they thought the Army needed to be larger. We did not provide a number then.

    What were—a couple of data points for you: For the year and a half that we have been supporting the war in Afghanistan, Operation Enduring Freedom, we have probably had mobilized a steady state of about 30,000 Reserve component soldiers to help us do all the chores that we have to do. That is a pretty good data point right there. We have had people look at this, independent from the Army, to try to get some views on it from others who would maybe look at it a little more objectively than we do. And we have had some feedback as low as about 20,000 to fill some of the holes that we have, which is close to that 30,000 and as high as about 45,000 more, so that we would have an adequate rotation base to deal with all the peacetime requirements we have in Sinai, Bosnia, Kosovo, and add to that probably Afghanistan and even possibly in Iraq in years to come. So that is all out there.
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    What is in front of us is defense planning guidance that we have received to take a look at the AC/RC mix. And there is a study in the Department of Defense that is taking place right now, as we speak, and we are participating in that study. We have got to sort through that because we do think, based on the demands that have been placed on us, that the AC and the RC mix may not be right. So we have got to turn that page before we make a judgment as to the size of the Army and what that final end strength number would be.

    And then, you know, when you get down to it, Congressman, also there is an affordability issue with this. If you asked us, would you like to have 10,000 more soldiers versus transformation, we will tell you, no, because we believe the future readiness of the Army is transformation and we don't want to take some risk with that.

    Would you want to have 10,000 more soldiers versus provide the quality of life that we are attempting to provide to our soldiers currently in the Army? The answer to that is no.

    And so these are issues that we have to balance. And certainly the increased size of the Army is attractive to us. I think we will finally sort out a number at some point after we have done these studies, and we may find that the number is not as great as we think it is right now as a result of them.

    So we are not running from that question, Mr. Congressman. We deal with that issue on a regular basis, and we embrace it and deal with the results of it.

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    Admiral FALLON. Congressman Taylor, if I could make a few comments, back to your first question on Reserves.

    The Navy found itself, in the immediate aftermath of 9/11 in response to the general global war on terrorism, had gone to the Reserve Force and asked for some help; and we ended up coming up to about 7,500 people at one time. And we were in the process of drawing those numbers down as we did two things: One, switch some, and particularly force protection personnel, from the Reserve to the Active force because we saw a continuing need as we looked to the future for full-time personnel; the other one was getting back to less than the surge state we were originally.

    That has all changed now. With the current surge, we have increased the number back. We just went over 10,000 today of mobilized Reservists, and we are really grateful for them. They are filling specific skill sets and positions that we just don't have the capacity to do in the Active force today. That is one point.

    Regarding the major issue of end strength, I think the Navy finds itself in kind of a unique position among the services today. We are blessed with people the likes of which we haven't seen here in many years, the third straight year of absolutely phenomenal retention. We have just never been in this business. Two years in a row, the average was 57 percent first-term retention; and now this year the number is up over 70 percent for the year to date—absolutely phenomenal.

    We have been able to meet our accession requirements four straight years, month after month, and so we have got a really strong base of personnel.
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    As we look to the future and the realities of trying to balance our requirements for people to man the fleet at the current size and in what we see in the immediate future, we have to make trades, as General Keane alluded to. Where do we put the money? To bring on additional people, to pay for extra end strength certainly is not free.

    As we look to the future, we had several initiatives under way that we had hoped would—and we had planned this way; in fact, in the 2004 budget, as compared to 2003 in our submission—to actually decrease our end strength driven by two factors: One is as we bring on more modern systems, particularly platforms, that we design into these platforms a requirement for less people than we had in previous days.

    The second factor is that we have intentionally assumed some risk by decommissioning older units with higher manpower requirements for those crews than we would have. And so we thought we were going to be coming down.

    In fact, with the surge requirements, we are back up, and our end strength today is about 383 and some hundreds, which is about 9,000 above where we thought we would like to end up at the end of this year.

    So to directly answer your question, I don't see a need for additional personnel in the Navy at this time given the size of the fleet that we have today and what we project in the near years.

    We do have an issue with the number of people on board the service right now. We have to figure out how to pay for that, we have to retain additional people to meet the global surge plus the Reservists coming on board. And so we have a near-term challenge. But I can't honestly tell you that we need to have an additional end strength growth based on where we are and what we see in the next couple of years, sir.
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    Mr. TAYLOR. Thank you, gentlemen.

    Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman.

    I have got a couple of areas that I would like to ask some questions, but before I do that, thank you very much, gentlemen. I know it is a trying time, particularly in your line of work, with what has gone on this week. And perhaps my question may not—given the actions we are about to undertake, may not be, in some people's minds, be relevant. But I want to—I notice that General Foglesong commented on the civilian work force and the implications for the readiness factor, to be able to support the warfighting commanders. And I would want the other gentlemen to comment on that along the same lines, but also focusing on what you feel is the current state of readiness of our civilian work force.

    And, you know, we have had information that not only is it an aging work force, but it also represents a challenge for us because of the—at some point in the future, when they retire, when this aging work force retires, we are going to lose institutional memory, institutional expertise. And so one of the things I would like for you to comment on is, do we have any plans or are there any plans or possibilities that we would be able to provide surge capacity? That is, could we bring in a younger—prioritize bringing in a younger civilian work force to take the place of those that are going to retire? Because I think it is a real potential problem for us.
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    Mr. REYES. The other thing that I have heard is that the general consensus among the military is that you are more able to control contract employees than you are the civilian work force, and I was curious to get your opinion on that, and also under what circumstances would that apply?

    General KEANE. Well, in terms of the civilian work force, we feel very strongly about the quality of that work force and its commitment to us in the Army. You know, I never really spent a lot of time around our civilian work force until I got the rank of Colonel and I found them to have the same level of commitment that our soldiers have. And it was a remarkable experience and I have been working with them, you know, very close now for about 15 years, and I have a deep and abiding commitment to who they are and what they represent in the United States Army. They are definitely a part of the team. The problem we have is the personnel system that supports them is not nearly as good as they are. In fact, it is fundamentally flawed. They don't deserve it, frankly. That personnel system, it takes far too long to be able to hire somebody. There is no real incentives in the system to be able to reward performance the way we would like to. Even a simple thing like job descriptions when we—when it is natural for a boss to give an employee a little bit more responsibility, it takes forever to get credit for that and sometimes never do you realize a pay increase because of it. There is relatively no leadership training whatsoever that takes place in the civilian personnel system to give people the management skills that they need to grow and develop. The parallel system in the uniformed side, from our noncommissioned officers and our officers, we have a professional development education system to give them the additional skills that they need to meet added responsibility. There is no corollary for that in our personnel system; and what has happened is throughout the Army, you have islands of excellence where people are trying to do some of that themselves. I did it at Fort Bragg, North Carolina. I formed a thing called the Dragon University, where we did civilian management training for our work force. It was something we were just doing on our own out of our own funds because the personnel system as a whole was not responding.
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    The Department of Defense is going to propose some legislation eventually that will help, I think, correct some of this and we are very optimistic about it in the legislative package. And I hope I am not speaking out of school in reference to it, but it is just a dynamite program. What a novel thing it would do. It would permit people to hire youngsters out of college or who have graduate degrees at a work fair on the spot, something that is novel to the Federal Government, and the Department of Defense wants to experiment with that and let us run the pilot program for it. National security is just too important. Right now it takes six months for that person at that job fair to be hired, whereas all the competing companies are there, the people you are competing with can hire on the spot. We can't do things like that. We need pay banding so that we can provide people different salary scales based on their level of responsibilities. And we need to incentivize them so we can give them more money because of their performance or take money away from them because of their low performance. And we need to also remove from the work force those who are not performing a little bit more judiciously than what we need. So there are some things we need to do to fix the personnel management system, I think, which supports our civilian personnel.

    The contractor business that you mentioned, Mr. Congressman, is certainly of concern to all of us. As you know, in the Federal Government there is an effort to privatize some of our functions and this has been going on for a number of years. And we have done some of it, and some of it does make sense. When I was a commanding general, it made sense for me to privatize our utilities at an installation and have somebody else run that utilities function rather than the United States Army. But some other things don't make sense because they are too much of a part of what we do. And here is what concerns me about the contractor business. When you have a civilian employee, that employee's loyalty is to you, the institution itself, the United States Army, and there is a bond that is created between that civilian work force and this institution called the Army, much as there is among our soldiers in the Army itself. When we hire contractors to do that, the loyalty is to the company. It is not to the institution called the United States Army. And that is one of the concerns I have, and we have probably gone too far with the amount of contractors that we have. I mean I am speaking for myself here. And we have done it too much in the Pentagon. We rely on them too much as we were downsizing our civilian work force. And it is easy to do, I think, and it has become a crutch for us. And we are attempting in the Army to get ahold of this and discipline ourselves; and the Secretary has provided us some guidance in that matter as well.
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    So I hope those points are able to give you some sense of how we feel about the civilian work force and also the relationship with contractors. Now, let me say something else about contractors. I mean, they provide valuable service to us, and some of the skills that they provide to us would be very difficult for us to get except through contractors, and so it is very appropriate for them to be with us.

    Congressman Ortiz mentioned contractors before, and we have literally thousands of contractors in Kuwait as we speak who are helping us work on aircraft and other vehicles, and they have been an important part of our deployment. So I hope those points answer your questions.

    Admiral FALLON. Mr. Reyes, if I could address a couple of those points. First, I certainly concur that we need some help, and certainly the Congress could be of great benefit to us in the business of the work rules and processes and procedures you have got to go through to deal with our civilian work force. They are antiquated, they are cumbersome and very, very challenging. That said, the Navy is committed to working to not only revitalize our civilian work force but to make them or try and encourage them to feel the same kind of affinity to the institution that is being demonstrated by our people with their reenlistment rates and the attractiveness of service now. One of the positive steps, the boss, Chief of Naval Operations, last year put the Chief of Naval Personnel in charge of all Naval personnel, not just the uniformed folks but the civilians, as a clear sign that we are going to put our money where our mouth is; and we are going to work with our civilians just as much as we work with our uniformed personnel.

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    In terms of areas of focus, shipyards are a big concern. We have got a significantly aged work force. Maybe not quite as aged as the group here in front of you, but clearly something needs to be done there. And—sorry, guys. One of the initiatives that we have undertaken with the shipyards is an apprentice program, which has basically jumped almost tenfold since its inception back in the late 1990s. We have got almost 700 new young people that are with our shipyards now that are learning trades on the job, and we think this is exactly the kind of thing we need to start building from the bottom. We also made—several individual shipyards have made arrangements with local colleges and tech institutes to feed the shipyards at the high end. We are making an investment in our most senior people. We are including our senior executive service (SES) people now in the same identical career development and professional development programs for our flag officers. We are including them in all of our key meetings, and we are actively recruiting interns into the higher levels of the civil service in jobs, not just in the blue collar trades in the shipyards and the high tech trades, but in the management and administration jobs in Washington and other places.

    So we are taking positive systems. We know there is work to be done. We know what the demographic lines look like and we have got some challenges. We need some help from you on that one, please.

    Mr. HEFLEY. Mr. Calvert.

    Mr. CALVERT. Thank you, Mr. Chairman. Gentlemen, I want to thank you for a recent operation in Afghanistan. Obviously that was a big success. All of the services coordinated that very well. But what concerns me is after the combat operations ended to secure that country, where did all the services find themselves, especially in the Air Force situation? Obviously you run an air cap around the United States. You have continuing air operations along with the Navy outside of the United States. Where did that leave us as far as ammunition, spare parts, and maintenance on equipment at that time? And what did we have to do since then in order to get to where we are at today hopefully?
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    I guess we could start with the Army and just kind of move on down.

    General KEANE. Well, first of all, sir, thank you for your compliment on Afghanistan, and let me emphasize that we are still in a war in Afghanistan, and I average two or three soldiers a week being wounded and two or three a month being killed. And I have got five or six of them in Walter Reed right now who have been wounded and lost their legs, and they are just tremendous soldiers. And I think we will be there for a while as we try to stabilize that country.

    Our commitment to Afghanistan in terms of the United States Army is about 7,000-plus soldiers. So it is a relatively small force by the size of the Army. We provide essentially a combat maneuver brigade to General McNeill to be able to conduct combat operations and also some support troops for him to be able to do that on the ground. He obviously has support from the air as well as from the sea. The supplemental last year addressed the needs that we had in terms of what our requirements were and certainly we are hopeful that the supplemental this year will address those needs.

    The problem we have, the problem all of us across this table have in terms of providing funding for an ongoing war and preparing for another one is that we are doing it out of the current budget that we are attempting to execute, whose monies were for another purpose. And so what we have all done is we had moved money from the third and fourth quarter to pay for ongoing operations in Afghanistan and also to pay for our preparations in Iraq. To give you a sense of it, in the Army we could not make—if we don't get a supplemental by mid-June, we cannot make the payroll at the end of June. We haven't been in a situation like that in many, many, many years. And we start to cut deeply into our operation and maintenance accounts in May. And we are obviously cash flowing an awful lot of money. The United States Army is close to a billion dollars a month that we are cash flowing, so the timing of the supplemental for us to pay for the replenishment of our funding is critical to us; and we certainly need your help in getting the supplemental approved as soon as possible.
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    Admiral FALLON. Congressman Calvert, from the Navy's viewpoint, the specific things that you mentioned, ammunition and spare parts and reconstituting the force from Afghanistan, we were able to parlay the Defense Emergency Response (DER) funding that was made available in the supplemental to target those areas specifically as the first priority; and so today I can tell you that as we stand on the brink of another potential conflict, we have just about maximized the investment possible into precision guided munitions; for example, particularly air-to-ground munitions, to the point that we just about have at capacity, and we have been running at capacity now for many months, and so we have put ourselves in a much better footing than we were before.

    Mr. CALVERT. Where were we? I am just curious. Right after the primary Afghanistan conflict, I should say, where was the Navy at?

    Admiral FALLON. Well, the facts were that we had just about run out of the joint direct attack munitions (JDAM) and that is a couple of factors there. One is the fact that it was a new munition just recently introduced and by the plans prior to Afghanistan, we had a—and we did this as a joint purchase with the Air Force. We had agreed a split of those weapons, and the Air Force had a larger number of the initial weapons.

    Mr. CALVERT. Would it be accurate to say if something happened somewhere else in the world, you would have been pretty hard pressed to come up with the additional ordnance?

    Admiral FALLON. Well, certainly for that weapon we would have been challenged. We did have greater stocks of laser guided bombs. We have since, now with both of those weapons pretty much gone to full facilitization with industry to crank those production lines up. We did have other weapons, substantial quantities of others. They wouldn't have been the preferred weapons based on the inputs we get from the unified commanders today.
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    Spare parts, the fact that we were making substantial investments with the goodwill and support of the Congress to make this happen, has paid off in spades because the demonstrated readiness surge today of seven battle groups forward deployed, and the readiness numbers look really good with those folks, I think is a clear indication of the payoff of the investment in parts.

    The challenge is going to be we are eating into this year's funding. We are taking it right off the back end, and we have opted to continue to do the things that we were planning to do up to this point in the year; but a couple of months down the road we are going to flat run out of money in all the things you wanted to do. And the problem with that is, as you are well aware, is as you get later into the year, the effectiveness of the expenditure of those dollars decreases. So we know we are going to need some help there.

    The other issue is when this is—even if something were to happen that would preclude the necessity to go into combat operations here in the near future, the expenditure of funds already to put this surge forward has been very substantial. So we are going to have to figure out a way to reconstitute the force and that is going to require some dollars.

    General FOGLESONG. On the verge of getting a personal foul for piling on I would like to ''me, too'' that. After Afghanistan, we were just about out of our preferred munitions, JDAM. But to a large degree it was because it was a new acquisition and since then we have been able, with the Navy, to increase the production rate substantially as a result of funding that we got this year; and so actually we are in pretty good shape and we do have a good exchange program. We know—Fox and I work together routinely to make sure that we have got the right amount of bombs in the right bins when either ships deploy or squadrons deploy somewhere, and the same with laser guided bombs. We have substantially increased our production there. But we are spending $27 million a day on ENDURING FREEDOM and on preparations for Iraq right now. We are cash flowing most of that and so, like General Keane said, we will be in a position here in the not too distant future where we are going to have to have some help, some supplemental help, to make sure that we can get through the rest of the year.
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    Mr. CALVERT. Just to add to that a cost that we don't really think about, the air cap cost of not just in the cost of operating that aircraft, but the number of hours those aircraft are operating. Where are we at as far as——

    General FOGLESONG. We were able to, thanks to the help of Congress, we got money to help pay for those air cap hours; and once again I will go back and say what I have said before. Incredibly valuable, the help we got from our Reserve component at the time. As this committee knows, after the 11th of September, the people who were flying over all of our cities in this great Nation of ours were volunteers from the Air National Guard, and those volunteers, a lot of them are still with us today; and so that has been of tremendous importance to us as well. And we also had a period of reconstitution after Afghanistan that we have been able to regenerate, bring some assets home to reformalize some training to catch up on currencies before we have had to redeploy them.

    General NYLAND. Sir, as the last one to get the ball, let me come through the same hole in the line. We were saved after Afghanistan quite honestly by the help of Congress. The aviation assets, most of ours fly off of Navy ships and you have heard the explanation for where we were and how we are better now. Our rotational forces were prepared to do it but it was costly. It is even more costly right now for us to continue OPERATION NOBLE EAGLE and ENDURING FREEDOM and, as General Keane indicated, we are taking money out of the fourth quarters and the third quarters to keep it flowing. And so I think that, as we said in our opening statements, we would continue to seek the great support of the Congress in a supplemental to keep this going, with or without any combat ops in the future.

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    Mr. CALVERT. Thank you.

    Mr. HEFLEY. Mr. Larsen.

    Mr. LARSEN OF WASHINGTON. Thank you, Mr. Chairman. And I want to first off, start off by thanking this committee and Congress for its efforts to support the Navy's efforts to ensure that the Prowler aircraft, the EA–6B Prowler, can continue to fly and be a continued viable platform for electronic aircraft, electronic warfare, until its time is replaced by the EA–18G. And I wanted to touch on Admiral Fallon's written comments on page 4, I think, of his written testimony, which indicates that the Prowlers continue to fly but there is still some outer wing panel issues that need to be dealt with. And it wasn't, you didn't outline it in your testimony, but do you expect Congress to address that through the supplemental, or is that something that we are going to be looking at as part of the 2004 budget and beyond? Just the wing panel issue.

    Admiral FALLON. The answer is both. We have got in the budget a request for funds to do a certain number of those. I suspect that, given the wear and tear that is ongoing right now, that when we assess where we really have been that we are probably going to need some more help. This is a risk equation that we have to look at every day, frankly, Congressman. We have made a decision to recapitalize and replace that aircraft with a follow-on platform. It is still several years away, and we are going to try and balance expenditures so that we don't needlessly throw money at a machine that we know we are going to want to trade in here very shortly. On the other hand, we certainly aren't going to compromise safety; and we are going to try and ensure that we have the readiness we will require until we get the new machine.

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    But I would, on the Prowler, now this is an example of how quickly the system can respond and how, from a previous question, the civilian work force pulls together with the contractors and our uniformed people. We had a challenge with the EA–6B with a J52–408 engine that powers that machine. A little over a year ago we were in a pretty sorry state here with 40 some engines not in their respective places in aircraft. Everybody turned to. We put some substantial amount of money against it, and within six months have totally turned the corner. And so as we face the potential brink of war today, that force has been brought back up to speed, no bare fire walls; and we are really ready to go, and so it is an example of what can be done. We got it in the nick of time. I don't know what might have happened if we had let it slide any further. But this is really a problem. This aircraft has been a tried and true warrior for a lot of years. We are going to be looking at that risk equation every day.

    Mr. LARSEN OF WASHINGTON. And on that point, of the number of Prowler, Navy Prowler squadrons, how many of those are currently deployed in the Middle East theater now?

    Admiral FALLON. I don't think there are many left. I think somebody told me there are two or three squadrons left at Whidbey Island, but you have seven forward deployed with the airwings on the carriers. The Marines have the bulk of their assets forward deployed and then we have several expeditionary squadrons. I think there are only two and maybe three left at Whidbey.

    Mr. LARSEN OF WASHINGTON. I think so. So they will be working very hard in the event of a conflict?

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    Admiral FALLON. Actually, Mayor Cohen from Whidbey Island came by to see me last week and wanted to let us know that they were supporting our efforts, men and women, 100 percent, and that she took note of the fact the streets were kind of deserted back there.

    Mr. LARSEN OF WASHINGTON. Yes, they are. I want to follow up, and again for Admiral, the Lincoln, you know, is homeported in Everett, Washington, and you note in your testimony that when it comes back, it probably will have been deployed for nine months plus. And I think, at least in my eyes, the Lincoln is sort of the poster child for the maintenance schedule slippage and the poster child for the impact on families. I will say all the families understand, they appreciate, and they are looking forward to their husbands and wives coming home. Can you comment on—in your written testimony, you talk about what the Navy is thinking about with regard to dealings with maintenance schedules and with training; but you didn't go into too much detail in your verbal testimony. Can you give us some idea about that?

    Admiral FALLON. Yes, sir. First, let me say that this subject of the Lincoln and her schedule is a high interest item in my household since I have a son that is in a F–14 squadron on that ship. We don't know exactly when they are going to come back. We are going to have to see how things work here. But when she is released, the plan is to bring her back as fast as we can, put her in the shipyard for this deferred availability. The planners are already working on it. We think we have a pretty good idea what needs to be done. There have been some adjustments to the work force up at Puget Sound to accommodate what we know is going to be a late entry. We know there are some money adjustments we are going to have to make because this will now carry over into another fiscal year. But the idea is to get on it as quickly as we can, get the necessary work done, and be able to spin her out because we don't know when we are going to need her again for a surge. But there is going to be a changeout in airwings on that ship. Part of this availability will be to bring her up to speed so she can accommodate the Super Hornets and some other modifications, but that is the plan, and we just need to find out when she gets released from the current contingency and then we will be better able to suitcase that.
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    Mr. LARSEN OF WASHINGTON. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. McHugh.

    Mr. MCHUGH. Thank you, Mr. Chairman. Gentlemen, thank you for being here. We are now going on 11 years I have had the distinct honor to serve on this subcommittee; and particularly during my time of the past several years as chairman of the subject committee, formerly Personnel, now Total Force, I have had a chance to be in a lot of the places that you gentlemen have spoken about today. I have been on the DMZ in Korea. I have been to Qatar and Bahrain, I have been out with the mobile inshore undersea warfare (MIUW) in the Persian Gulf, and been to the Uzbeki-Afghan border with the 10th Mountain Division prior to Operation Anaconda, and on and on and on, Bosnia, Kosovo. And I most of all want to tell you, as I look at the budget realities of the past 11 years, what amazingly incredibly effective work you, your command staff, but most importantly, your Army and your airmen and women, Marine Corps, our sailors have done on behalf of the American people. I frankly don't know how you have achieved it.

    To my colleagues, I want to say I am heartened in one aspect that every hearing I have heard people, my colleagues, speak at this year, I have heard an understandable, I think very legitimate concern about the lack of resources, whether it be personnel, spare parts, or other such vitally important materials, that all the services are experiencing. But I think it is important for all of us to remind ourselves, particularly now after the President's very moving, very heartfelt speech last night, that it is this committee and this House's, the House of Representatives' primary responsibility to provide the funding that these good gentlemen need to do the very important and ever growing work that we have asked them to do.
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    Last year I was very proud of this committee and particularly its leadership, the chairman and others, when my subcommittee called for an increase in end strength. We weren't able to sustain that. And I would say as I have listened to these good folks and obviously as individuals in the military, they carry forward with the orders they are given. The fact of the matter—the challenge still is there. I mean, you heard General Keane, for example, say where we are, 7,000 in Afghanistan. If you assume a three to one rate, one soldier, an airman, Marine, sailor in, one just leaving and another preparing to arrive, and look at the deployment in Bosnia and Kosovo and the Sinai and Colombia, the Philippines, 37,000 in Korea, what are we going to need over the long term in Iraq? Two divisions? I think that is low, so that is six divisions. We have only got 10 in the United States Army, for God's sake. Prior to the Berlin Wall falling, we had one million active duty days annually from the total Guard and Reserve. It is 13 million active duty days today. During the Gulf War, it was 39 million active duty days. But 13 million has been the sustained average.

    How can we possibly expect these good folks to do what we are asking them to do with the resources we have been providing them? And I know I am on my high horse here and I haven't asked a question, but I didn't want to pass up the opportunity to just remind this great subcommittee and the committee on which we all work that this is our responsibility, and no matter what the distractions and the challenges may be we have got to do our job here. So I am looking forward to working with our colleagues.

    And just so I don't pass my time without asking a question, General Foglesong, you said that your cannibalization rates are down. Can you tell me what they are down to?
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    General FOGLESONG. They are down from 12 to 13 percent down to 10 to 11 percent, but that is an aggregate number and it really depends on the specific airframe. So while I would like to award ourselves a Meritorious Service Medal here for them going down, we would clearly like to see them go down more. So we have made progress and we are excited about that. But lower numbers would be better for us. There is nothing more discouraging to an airman to have to go out and take a part off of an airplane and put it onto another airplane.

    Mr. MCHUGH. And I assume—pardon me for interrupting the gentleman. I assume the reason it hasn't gone down more is not because your good folks have been derelict in your duty; you just haven't had the money to do it. Is that true?

    General FOGLESONG. I am sorry?

    Mr. MCHUGH. You just have not had the money to reduce that cannibalization rate further, is that true?

    General FOGLESONG. In part and in part because our airplanes are getting older and are breaking more often than we anticipated.

    Mr. MCHUGH. And we are not buying new airplanes because we haven't given you the money to accelerate your acquisition programs?

    General FOGLESONG. Yes, sir.

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    Mr. MCHUGH. Is that true?

    Admiral Fallon, are you aware that the United States Navy will be under the budget submission by the Administration, below the level of end strength set by law last year?

    Admiral FALLON. Yes, sir. By the budget, but as I mentioned earlier, we are about 9,000 above right now. So we are going to have to balance the reality of what we need today with what we had planned to do back a year or so ago when we——

    Mr. MCHUGH. Not just by the budget, Admiral, by the authorization bill as well. And my point is not to make an outlaw of you, believe me, sir. I know you are dealing with a number that you were given. My point again is to suggest to the colleagues we have got a real challenge here. Most of us, both sides of the aisle in this committee and subcommittee, have supported this President and I know all of us will support the troops. Well, if there is ever a time to put our money where our mouths is, this is it. And gentlemen, again I thank you for being here and I appreciate your forbearance as I rattled on here, but I happen to think that is pretty important stuff. God bless you all and your troops in the days ahead.

    Mr. HEFLEY. Mr. Jones.

    Mr. JONES. Mr. Chairman, thank you very much. And to each of the gentlemen, thank you for your service to our Nation. Thank you for your leadership for the military as well as our Nation. I would like very quickly to say that in the line of questioning of Mr. McHugh and Mr. Taylor, that I sincerely agree that we need to, in time, to really evaluate what we need to defend the national security of the American people as it relates to active duty.
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    Very quickly, Mr. Chairman, two weeks ago on a Saturday I had the pleasure of speaking to the Navy and Marine Reserve unit in Raleigh, North Carolina, and probably not the opportunity I had to speak, as much to stay for about 30 minutes afterwards and to talk to each one that had a reason to come up and talk with me. And my heart really went out because they want to serve this Nation. They are willing to die for this Nation. But truthfully, their lives over the last couple of years have really been somewhat in turmoil because of the fact that we as a nation are beginning to call more and more on our Reserves and our National Guard. So I am glad to hear some of your responses to Mr. Taylor and to a lesser degree to Mr. McHugh.

    What I want to touch on very briefly is that I really appreciate, General Keane, you and Admiral Fallon, your comments about the depots, the civilian work force and how important they are; and, as General Nyland knows, we have a depot system in my district at Cherry Point that I will always remember Commandant Krulak saying that if you want to ensure the 9/11 force of this Nation, then we have got to have the depot systems and they have got to be there for us. You said, General Keane, when they are called upon to provide the service that we can continue to fight and defend this Nation.

    Let me start, if I might, talking about the depot maintenance funding. If my information is correct from my staff, the Air Force is facing a $516 million unfunded depot maintenance requirement and the Navy accounts have an unfunded requirement of $739 million. I actually believe that the chairman and the ranking member touched on this as I was coming in. My question would be, would you inform the committee at the specific levels and nature of shortfalls, excuse me, in your depot maintenance and working capital accounts?

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    General KEANE. Mr. Congressman, this year we funded our depot maintenance at close to 73 percent and it is—dollarwise it is $1.89 billion. Last year we funded it at 1.09 billion, so we have obviously got $800 million more in there. We also obviously have a shortage against requirements. We are meeting about 73 percent of what we believe our stated requirements are. For us it is an affordability issue of trying to balance all of these readiness accounts, and with obviously taking some risk there, but we think it is acceptable that we wouldn't have it at that level.

    Mr. JONES. And Admiral.

    Admiral FALLON. Mr. Congressman, in aviation depot the number is actually up in the budget for 2004 by a couple of hundred million from the previous year's submission. And, of course, we are going to have to recalibrate after—when we pull back off of this surge. In the ship depot maintenance we are at about $3.6 billion in the budget this year, and frankly had taken a couple of—had gotten a couple of comments about the fact that it was essentially level and in some regard down a little bit. But I have to tell you that if you look back at what has gone on the last two years, we have been able to make substantial inroads into our backlog of maintenance. And I think that the facts pretty much speak to themselves today that we have been able to deploy more than two-thirds of our fleet simultaneously. That would have never happened if, in fact, we hadn't been in pretty darn good shape maintenance wise.

    So a couple of factors here that are in play: One, substantial investments in the last couple of years to get us to a level that we may not be at 100 percent, but this is kind of like my little 22-year-old car that I keep in the garage and tinker with. I guarantee you I can find something to spend money on every year if I keep looking hard enough. But frankly, I think we are in much better shape than we were. May not be perfect but we are making progress. We also have taken and are taking out of service some of those older ships that require more maintenance, and that has been a suppressant on keeping the requirement down. So we are obviously trying to balance. The CNO made a commitment this year, after a couple of years of consistent increases in readiness, we put over $6 billion additional readiness money in the last two years' budgets. But we wanted to move some of the available resources to the recapitalization in the 2004 budget. That is what we are doing. So we are increasing the number of new ships and aircraft that we are buying. We believe that we have, prior to the surge here, an adequate funding for both ship and aircraft depot maintenance; and, of course, now it remains to be seen after the surge where we end up.
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    General FOGLESONG. We will fund 79 percent this year for our depot maintenance, and that is down from about 92 percent of the requirement last year. We are taking some risk doing that. And in fact we are—we have made that our number one unfunded requirement this year, our depot maintenance requirements that is in for—two reasons that we are down. One is because we too have benefitted from reasonably good funding over the last number of years. We have been able to not get ahead of the curve so much as to catch up with where we would like to have been; and, two, we are trying to better assess what our strategy should be for when we put our aircraft in the depot and it has a little bit to do with what I mentioned earlier. We are flying our airplanes on longer missions now, rather than the short missions; and to a degree, that impacts how often things break in the airplanes. And that is going to be the way I think we are going to continue to fly over the next several years, and especially this year and next year, which drives the schedule in the depot. But we do remain concerned about that unfunded requirement, Mr. Congressman.

    Mr. JONES. Admiral, let me ask you, if the Army is at a 73 percent level and the Air Force 79, where would you say the Navy is percentagewise?

    Admiral FALLON. The percentage, if you balance the different platforms and communities, is in the high 90s. I believe it is about 96.5 percent across the board, and there are some trade-offs there. The nuclear work and the submarines and aircraft carriers is a little bit higher, about 98 percent on average; and the rest of the nonnuclear platform is down around a little under 92 percent.

    Mr. JONES. Mr. Chairman, can I make one statement before I close? I see my time is up. I really appreciate many of us on this committee, particularly this committee, that are very active with the Depot Caucus that is chaired by Congressman Ortiz from Texas; and it seems like each and every year, whether it be the Clinton Administration or now the Bush Administration, we always have ongoing issues of trying to find that balance between the private sector and the public sector. And I have been very interested and concerned also with your comments about the aging work force; and if we are going to maintain the depot system so that it can be part of the defense of this Nation, and that is really what they are, then we have got to, Mr. Chairman, as we go through this Congressional year, we have got to ensure that there is a balanced playing field, if you will, because too many times the morale of those at the depot feel when it comes to these bidding processes that they are at a disadvantage. And so I will close with that. But I hope that we will, and this is part of a very important part of the readiness, as all four of you gentlemen have said that and we know that as a Congress. And thank you for your comments, your service to this Nation and God bless you and God bless our men and women in uniform. Thank you.
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    Mr. HEFLEY. Ms. Bordallo.

    Ms. BORDALLO. Thank you very much, Mr. Chairman. Mr. Ortiz, members of the committee, and thank you, gentlemen, for your testimony. After hearing all of them, I feel that our country is ready for any confrontations. I want to, in particular, thank the Air Force for placing their B–1s and B–52 bombers on Guam, to the Navy for their nuclear subs, to the Marines for carrying out many training missions on our island, and of course to the Army. Although you do not have a presence in the Territory of Guam, you do have a presence in the surrounding islands.

    My question is directed to Admiral Fallon. The Navy is doing an outstanding job of bringing force to bear in the Middle East; and I assume that once operations underway are successfully concluded, there will be a large surge in the ship repair workload. Could you explain to the committee what plans the Navy has in place to address this surge in repair work, having reduced shipyard depot maintenance accounts by $600 million in fiscal year 2004, and could you also inform the committee whether the Navy plans to continue the repair of forward deployed Military Sealift Command (MSC) ships in foreign ports rather than employing American labor?

    For example, I understand the San Diego homeported USNS YUKON, that just left Guam, Admiral, is coming up for repair and that the Navy has asked for bids from Singapore, Korea and Japan; and no doubt she will go to Singapore from what I have heard. Admiral, unemployment on Guam, and these are U.S. citizens, is at 20 percent. Singapore has a thriving economy. What happened to Buy America?
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    Admiral FALLON. Ma'am, regarding the big picture of repairs and reconstitution, the plan is to attempt to execute as we roll to the future those availabilities that have been planned and scheduled as we can release the units from their combat duty today. Do we have this thing figured out? Of course not. We are just going to have to see and do the best job we can. We have made some adjustments. For example, one of your colleagues highlighted the ABRAHAM LINCOLN was supposed to have been back several months ago and enter shipyard period. It is not going to make it. Obviously, it will be late. Some of those funds that have been earmarked we have been able to apply to some other emerging work; and we will continue to do that to try to make best use of the resources regarding the YUKON, and, in particular, I don't have a specific answer. I don't know that we have that plan defined yet.

    I will make a couple of comments. One, the laws as they are currently written require us to do our maintenance in the United States or Guam, specifically written into law. However, there are some other factors that we would like the Congress to consider. One is that the persistent surge requirements for our forces today are putting a tremendous demand on those assets. We have a couple of initiatives that in the big scheme of things we are trying to leverage our force to be more efficient and more responsible for the taxpayers dollars. And so one of these initiatives I mentioned in my opening statement was the ''Sea Swap'' where we are taking, running a pilot with a couple of ships to deploy them—these are west coast ships in the initial endeavor here—deploy them to the Indian Ocean and instead of bringing them back—and it takes almost a month to do each of the transits back and forth—we keep them in the western Pacific, swap the crews out and keep them out there for 12 or 18 months instead of the standard six. We are certain that there are going to have to be some maintenance to keep these ships forward deployed. We would like to have a little bit of flexibility in those trade-offs. We don't envision major dry docking repairs unless there is some problem that has manifested itself. But we would like to have some help here.
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    Another reality is that with the limited number of ships, particularly in the combat logistics force of which YUKON is a member, as we continue to have requirements to support the fleet forward deployed, it may be that we would request in some instances to do some repair, to preclude having to lose the availability of that ship for some months to transit all the way back to the States. I think in Guam you are pretty well positioned now with the forward deployed status in the Pacific to reap some benefits of that; and so we will—if you will work with us, we will continue to work and see if we can come up with the best answer.

    Ms. BORDALLO. Thank you, Admiral. That is what I wanted to hear, so there can be, you know, some interest in this area, because we really do; and I will point out that the ship repair facility under the BRAC closures, it closed. It is under a private operator now. And as I said, there are 200 people employed there, U.S. citizens, and I know we can't match wages in Korea and Singapore and the other Asian countries. We are mandated by federal regulations. So I would appreciate anything you can do to give us that workload.

    Admiral FALLON. And I think the realities are, for example, moving the submarines recently forward to Guam, I would expect that there is going to be some activity that you will see.

    Ms. BORDALLO. Thank you very much and I appreciate everything you are doing and, like I said, I am always concerned; I represent Americans that are way out in the Pacific area. We are very vulnerable in case of any problems, especially North Korea, so I appreciate what the military is doing to protect and safeguard our people, many, and I thank you.

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    Mr. HEFLEY. We do have to close this hearing at 4:00. We have four more people who would like to ask questions. I would like to ask those of you who want to ask questions to keep your questions brief and the answers as brief as you possibly can. I hate to limit you, but we do have to close at four.

    Mrs. Davis.

    Ms. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. And a lot of my questions actually have been asked. I wanted to focus as well on the shipyard maintenance and I guess ask the question, as I think every one has suggested, if we know in fact that there is going to be a great deal of deferred maintenance, and we are assuming that that is going to be the case with so many forward deployed, then why wouldn't we be more specific or more realistic really in the 2004 budget when it comes to ship repair and depot maintenance budgets?

    Admiral FALLON. Mrs. Davis, look at me. I will take that one as we do ships. When we put the 2004 budgets together, we didn't have this current surge on the horizon. Of course, you are always trying to second guess contingencies. But this was not apparent. The reality is that we have some and we were able to eat substantially into that backlog of deferred maintenance over these last two years, and that is why we were able to deploy the fleet in the condition that it is right now. So as we look to the future, we are trying to anticipate those—there is a schedule laid out of which ships were planned to go for what availabilities. We would like to try and make as many of those as possible. We will have to make some decisions on deployments. We have made one with LINCOLN. We have opted to keep that battle group forward deployed for a pretty lengthy time.

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    Ms. DAVIS OF CALIFORNIA. Are we just going to always be looking at large supplementals then? Is there a point at which we can get to so that——

    Admiral FALLON. No, I think it was pretty clear to us that the Defense Department told us in pretty clear terms last year and the year before that we were to get off the supplemental kick. And we rogered up for that in spades. The challenge this year, of course, is we have got a global war of terror ongoing and now we have the surge to Iraq. I don't know how you budget for that. I wouldn't expect the Congress to just give us a gratuitous $20 billion or something just to——

    Ms. DAVIS OF CALIFORNIA. But we have been asking those questions.

    Admiral FALLON. I would expect that you will probably get a package pretty soon with that. But anyway, back to the ship business, we have made substantial progress and we are really happy with where we have come in the last couple of years. We know we are going to have some shuffling to do as these ships come back and we will attempt to—we will—we have given and the Defense I am sure will pass over to you those best estimates that we have to do the work we really need to do. And you know, the CNO is committed to doing 100 percent of the requirement. Defining 100 percent is sometimes the challenge, but in the days in the past where we took a percentage of a percentage, you never knew where you were. We are trying to nail this down, and we will give you the best number we can.

    Ms. DAVIS OF CALIFORNIA. Okay. Thank you. I appreciate that. I just wanted to thank you all as well for being here. Thank you for your service.
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    Mr. HEFLEY. Mr. Abercrombie.

    Mr. ABERCROMBIE. Thank you, Mr. Chairman. Mr. Chairman, it has been pointed out this subcommittee is the initial stopping place for readiness for authorization. And gentlemen, on this budget, in some respects I am a little disconcerted by this presentation today because Senator Byrd has said maybe we are sleepwalking through this time. We almost seem to be in brain lock here. This budget, if I understand it correctly, is totally and completely inadequate with respect to the likely spending that will take place in the next 12 months of the fiscal year that is being contemplated, is that correct?

    General KEANE. In terms of what we are executing in the war on terrorism?


    General KEANE. In 2003 and——

    Mr. ABERCROMBIE. Yes, and the surge in Iraq. This is totally inadequate to what is likely to be spent, is that correct?

    General KEANE. Well, the budget doesn't have anything in there that reflects for the war.

    Mr. ABERCROMBIE. Not a dime. Right. Now I recorded in my review of your budget submissions, all four services, 15 instances of cuts from 2003 to 2004. In Guard, Reserves, operating forces, mobilization, recruiting and training and administration and support, 15 instances of cuts. So not only do we have to deal with the surge, not only do we have to deal with the terrorism aspect, including whether or not we are going to repair ships in foreign ports, which to me is astounding given the fact that we are supposedly in a war against terrorism on a worldwide basis, are we or are we not anticipating the necessity of a supplemental budget or budgets that will be in the 10s of billions of dollars just to sustain what you are already operating under?
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    I am going to use you, General Keane, as an example, not because I am singling you out, but because of the clarity of your testimony. If I remember correctly, you said you are already into, and I expect the other services are into the same situation, the third and fourth quarter of this year in terms of your operating expenditures, isn't that correct?

    General KEANE. That is correct.

    Mr. ABERCROMBIE. And the other services I assume are somewhat similar, that you are already moving on into perhaps the third or fourth quarter of this year in terms of the spending. And so whatever we have by way of the supplemental budget, the question I have at this point is, will that also include, to the best of your knowledge, making up for the expenditures that we are already committed; in other words, we not only have to deal with whatever surge is involved with 2004, but we are going to have to deal with making up the money we have already spent by March 18?

    General KEANE. That is correct. The omnibus bill that was passed provided us some immediate relief into 2003. But certainly, you know, speaking for my service, I mean clearly we have got billions of dollars of sunk costs for 2003 in the global war on terror. And obviously that is the intent of the supplemental. That money is gone. It is spent and we obviously have other costs that we are incurring right now with our preparations for war in Iraq. The problem we have is we don't know what this supplemental bill number is. We are not hiding from you. We just don't know. We have heard ranges but we just don't know what that number is.

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    Mr. ABERCROMBIE. What I want to make clear is—I understand that. But all of you have the responsibility for making that presentation to us at some point.

    General KEANE. That is correct.

    Mr. ABERCROMBIE. I hope in the near future. But I don't see any heads shaking opposite of what you are saying, so I assume in the other three services you are also going to have to put forward and whatever supplemental comes forward, a makeup or a fill-in, a backfill if you will, to handle 2003?

    General FOGLESONG. We are led to believe that the money that we have cash flowed up to this point will be captured in the supplemental. We all have accounting processes and have been told——

    Mr. ABERCROMBIE. Okay. That is fine, just so it is clear that that is what we are going to deal with.

    Admiral FALLON. And, Congressman, we are talking about a 2003 supplemental to take care of the cash flows that we are pulling forwards for this year. In those estimates that we are submitting through the Defense Department, we are attempting to catalog those requirements, not just what we have already spent in terms of jet fuel burned out of tailpipes and stuff, but those wear and tear items that we anticipate we are going to have to replace.

    Mr. ABERCROMBIE. Well, I would regret to say, the reason that I bring this up, I regret to say that even if you could account for, in terms of the kinds of efficiencies that you have all stated during your testimony, for the 15 cuts that I was talking about, the 2004, and if I accepted that or the committee accepted that at face value, and no reason not to, that all of the things you have tried to deal with, including some of what General Keane I think would agree are some of the ill-considered impositions on the armed services that the Congress has helped to put forward in terms of privatization, contracting out, that I think all of you know I oppose, that those savings are going to be wiped out. They may already be wiped out as a result of what has taken place.
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    Now, that takes me to my last point here, because this is something—oh, you are right. I am sorry. You only have until 4:00. But, Mr. Chairman, I would like then your permission to ask questions about the Guard and Reserve and the costs associated with that because, Mr. Chairman, we are not going to be able to sustain, despite the professionalism and dedication of the Guard and Reserves, the present end strength in Guard and Reserves, and have these gentlemen be able to carry out their mission.

    Thank you very much.

    Mr. HEFLEY. Mr. Rodriguez.

    Mr. RODRIGUEZ. Let me—I think a lot of Congressmen asked about end strength and let me ask you, and I will share some concerns that I have. Our Secretary of Defense talked about a 23,000 cut in the military about 30 days prior to this whole start of Iraq, which really concerned us. March 6, you know, that is almost a week and a half ago, he talked about maybe getting rid of the troops in Korea. We have talked about a BRAC process that we are on. And there are some concerns about the whole issue that, you know, we had half a million troops in the Gulf War and that there was some talk about only 160 initially, we are at 200, although some people felt that we needed a lot more. You know, it really bothers me also that we have a lot of our reservists even prior to 9/11 that were in active duty, almost 80,000 of them reservists and Guard, you know, active duty. And so I am concerned that they may get burned out. I am concerned about the dialogue, you know, up to just a week ago about Korea and at the same time we are calling them the Evil Empire. How are we handling that situation?

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    But more important is I am concerned about the situation; I would rather have overwhelming force when we look at getting into Iraq and have more than what we need than not have sufficient. And I am also concerned that a lot of the dialogue that we are getting it seems like, it is the same story now. Everybody is on the same page. And you know, and I don't know, that bothers me a great deal that we really need to look at additional troops and manpower. I know that there is—we have been told that there are ships out there that are still out there with insufficient staff and not staffed the way they should be. And you tell me that is not the case. Okay, you tell me that that is not case.

    Admiral FALLON. That is not the case, sir. Our manning of our deployed forces today is about 99 percent across the board. There may be some individual skill sets areas. I think that is kind of reality of life. We may need an individual here or there, but the overall numbers are fantastic. And again, they are that way because of the great work of the Congress.

    Mr. RODRIGUEZ. Okay. Let me just share something with you from a political angle. You know, the politician who tells you that he is unbeatable is the one who gets beat. And I look at politicians as they engage in election to election, grow and develop, and I kind of see the generals doing the same. And if you assume that Congressman Reyes ran against me, for example, or if he had decided to run against me and if I had beat him and I assume that the next encounter is going to be the same, that is when I get beat. And I know that generals also grow from their experiences and from their engagements. And when you—and when a general is beaten is when they become arrogant just like a politician who becomes arrogant. And, I don't know; I get that feeling that, and I hope I am wrong, you know. And I really feel because we really need to make sure that we have the sufficient troops that are needed and the manpower that is needed there in order to make some things happen.
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    General KEANE. Can I respond to that, Mr. Congressman?

    Mr. RODRIGUEZ. Yes, please.

    General KEANE. Well, let me reassure you that the combatant commanders who have—and I am sure you are referring to this potential fight in Iraq—who have organized our plans and put together the troop list for what is about to take place if the President asks us to do it, they are thoughtful people and they don't take lightly risking the lives of American men and women.

    If we fight this war, it will be very different from the war we fought 12 years ago. Our technology has changed, our capacity to fight has improved rather significantly in these 12 years. We don't match ourselves an airplane against an airplane or a ship against a ship or a soldier against a soldier in terms of numbers; we match it in terms of combat effects. And we can do many things simultaneous today that we were not capable of doing 12 years ago. It is the synergism that comes from that simultaneity that can have a rather dramatic effect on an opponent.

    The other thing is, we never, ever take our opponents lightly. We do not do that. We look at our opponents and understand who they are. And all leaders who are dealing in a situation like that worst-case situation and start from there, worst-case it in terms of what the enemy could do, and look at that scenario and what that means for us—that is the start point—and then make the adjustments that are made based on recent intel updates and the like.

    So this force that stands ready in the Gulf today is ready to fight. It is highly skilled, it is exceptionally well led, and it has thoughtful plans that will drive that force forward. And it will—it will act differently than what it did 12 years ago.
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    I don't want to get into the details of that for all the obvious reasons.

    Mr. RODRIGUEZ. And I wouldn't expect you to do that. I am just looking at it from the perspective of making sure, because I don't feel comfortable when I hear comments—and I will be very blunt—from the Secretary of Defense regarding getting our troops out of Korea, you know, cutting our troops 23,000 prior to this situation. And even question—I even question the whole BRAC process, to this day. And so—and I would hope, and I know that you would come to us as quickly as possible if you find a situation where we really need to beef up.

    We need to be there for our troops. We need to be there to make it happen. And I know that the only time that a politician gets beat is when he becomes arrogant, and so—and it can happen to anyone. And so I don't want for it to happen to us, that we underestimate, because I also know how when someone is—when you put someone against the wall, it is a lot—a big difference from when you deal with them outside in a different setting. And we are going to put him against the wall.

    So it is—and we have already encountered him once, and we can make a serious mistake by underestimating what he can and cannot do, what he is capable of doing.

    But I would rather have 200,000 more troops out there, double what we got now, than what we have at this point in time just based on the principle—in terms of what we had in the Gulf War, you know, close to half a million.

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    So, thank you.

    Mr. HEFLEY. Well, thank you very much, gentlemen. We are going to have to recess the committee. But I appreciate so much your being here today. I mean, I know you have got a lot of other things that you have got your minds on today, and for spending your time with us, we really appreciate it, and it has been very, very helpful.

    The committee will stand in recess momentarily.

    Mr. ABERCROMBIE. Mr. Chairman, can we submit some questions then——

    Mr. HEFLEY. Certainly.

    Mr. ABERCROMBIE [continuing]. That we wouldn't have time for today?

    Mr. HEFLEY. Certainly.

    Mr. ABERCROMBIE. Thank you.

    Mr. HEFLEY. Thank you very much. The committee stands in recess. We will reconvene momentarily.

    [Whereupon, at 4:03 p.m., the subcommittee was adjourned, subject to the call of the Chair.]
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