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[H.A.S.C. No. 107–13]







MARCH 21, 2001


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One Hundred Seventh Congress

BOB STUMP, Arizona, Chairman

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

JOHN SPRATT, South Carolina
LANE EVANS, Illinois
GENE TAYLOR, Mississippi
MARTY MEEHAN, Massachusetts
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VIC SNYDER, Arkansas
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California

Robert S. Rangel, Staff Director
David Trachtenberg, Professional Staff Member
Laura Truesdell, Staff Assistant

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    Wednesday, March 21, 2001, U.S. National Security Strategy


    Wednesday, March 21, 2001



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

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


    Gingrich, Hon. Newt, Member, U.S. Commission on National Security

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    Hamre, Hon. John, President and Chief Executive Officer, Center for Strategic and International Studies

    Hart, Hon. Gary, Co-Chairman, U.S. Commission on National Security

    Kristol, William, Chairman, Project for the New American Century


Gingrich, Hon. Newt

Hamre, Dr. John J.

Hart, Hon. Gary

Kristol, William

Skelton, Hon. Ike

Stump, Hon. Bob

[There were no Documents submitted for the Record.]

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[There were no Questions and Answers submitted for the Record.]


House of Representatives,

Committee on Armed Services,

Washington, DC, Wednesday, March 21, 2001.

    The committee met, pursuant to call, at 10:03 a.m., in room 2118, Rayburn House Office Building, Hon. Bob Stump (chairman of the committee) presiding.


    The CHAIRMAN. The meeting will please come to order.

    Good morning.

    Today the committee meets to hear testimony regarding America's national security for the next decade and beyond. Because budgets must flow from and support strategy, this hearing is intended to begin laying the groundwork for the consideration of the fiscal 2002 defense budget. This will be the first defense budget presented by the new Administration and will reflect its views on how best to prepare our military forces to meet the challenges of the 21st century.
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    Ten years after the demise of the Soviet Union and the end of the Cold War, we are still grappling on how to characterize this period in history. Most analysts continue to refer to it as a post-Cold War period. I believe this reflects uncertainty regarding the nature of today's threats and how to deal with them.

    The last Administration's national security strategy was characterized by the term ''engagement and enlargement.'' In implementing this strategy, the U.S. military was called upon to keep the peace in many volatile regions of the world. U.S. military deployments abroad increased dramatically while the size of our forces declined. The resulting strain on our military's war-fighting capability led to significant shortfalls in readiness, deferred equipment and modernization, and decline in the quality of life for our nation's finest and brightest.

    Currently, the Bush Administration is conducting a strategic review of U.S. defense policies and programs. There has been much speculation about what this review will conclude. One thing, however, is certain: The results of that review and the policies and programs that it recommends will play a major part in reshaping America's proper role in the world.

    America's role in the world and the circumstances which we use military force to accomplish our strategic objectives and protect our national interests will remain the subject of considerable debate. Should our strategy be expansive? Should we use military might to keep peace and foster freedom and democracy around the world? Or should we focus on our efforts to defend our homeland and allow our allies and friends to carry more of the burden of managing the crises abroad?

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    Some analysts have referred to this point in history as the period of strategic pause that gives us the opportunity to accept more near-term risk in order to transform and adopt our military to future challenges. There has been some talk recently about skipping a generation of technology. In light of the uncertainty in today's international security environment and the growth of the new threats, is this a realistic option? Do we need to retain the capacity to fight nearly two simultaneous major theater wars? This committee will need to debate this issue as we consider the adequacy of the Administration's defense budget request.

    To help us grapple with these issues, our witnesses this morning are Newt Gingrich, former speaker of the House and member of the U.S. Commission on National Security in the 21st Century; Gary Hart, former United States senator and co-chairman of the commission; John Hamre, president and chief executive officer of the Center for Strategic and International Studies; and William Kristol, chairman of the Project for the New American Century.

    Gentlemen, I welcome you. The committee looks forward to your presentation. But before you begin, I would like to turn to our committee's ranking member, Mr. Skelton, for any remarks he may wish to make.

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

    The CHAIRMAN. Mr. Skelton.

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    Mr. SKELTON. Mr. Chairman, thank you very much, and I join you in welcoming our very distinguished witnesses. We look forward to hearing from them.

    Before turning to today's subject, however, I want to sound a note of strong concern over the welfare of our soldiers, sailors, airmen and marines. I do not believe that the President's defense budget, which is barely above the level of the Clinton Administration for fiscal year 2002, can accommodate his announced priorities for missile defense, research and development, and quality of life improvements without cutting other vital programs, and I sincerely hope we will see a request from the Administration for a supplemental appropriations in the very near future. I will say more about that in a moment.

    The debate over America's national security and national military strategy is perhaps as intense now as at any time in our nation's history, and it should be. Since the demise of the Soviet Union, no true peer competitor to the United States has emerged on the global stage. Instead, there are many varied threats to our national security, and they tend to be more numerous and less well-defined than during the Cold War.

    The current strategy, based on the Quadrennial Defense Review (QDR), calls for our military to be prepared to fight and win two nearly simultaneous major theater wars. With the change in Administrations, the start of another QDR, Secretary Rumsfeld's new independent review of our defense policy and recommendations from the Hart-Rudman commission, all prompt us to reexamine both our national security strategy and our national military strategy.

    From our perspective, there are certain responsibilities that go along with being the world's lone superpower. We can't shirk them. I don't believe we can simply withdraw from our global commitments and ignore requests from other countries for assistance when our presence in the region can foster peace, advance democratic principles of government or increase geopolitical stability.
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    But the increase in unconventional and terrorist threats argues in favor of a more restrained national security policy, more focus on real threats to our homeland and more measured American presence on the global stage.

    At this time, Mr. Chairman, I want to acknowledge the good work that the Hart-Rudman commission has done in articulating these domestically oriented threats and for making constructive suggestions for how we might address them as a nation.

    As to our national military strategy, regardless of whether all the new studies recommend that we adhere to the two major theater war strategy or not, as I see it, the fundamental and overriding issue is the mismatch between strategy and resources.

    The greatest military strategy in the world won't matter if we don't provide enough resources to execute it. I know that we aren't adequately resourcing the Department of Defense to execute our current national military strategy, and the President's budget for the coming fiscal year won't get the job done either. I said that last year, and it is still true today.

    Adjust the Bush Administration defense proposal for fiscal year 2002 for inflation, take into account the $3.9 billion must-pay bill for military retiree health care, and it comes out just $100 million more than the budget projected by the Clinton Administration for the fiscal year 2002. In the context of a $310.5 billion defense budget, a $100 million increase is just the Clinton budget plus a nickel.

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    $100 million will buy only one-forty-fifth of an aircraft carrier. It will barely cover the cost of a badly needed new gymnasium at West Point. The cost of repairing U.S.S. Cole alone is $243 million.

    This marginal increase for defense budget falls short of the Bush Administration's promise that help is on the way. It would make executing almost any national military strategy difficult at best. This isn't an enlargement or an engagement. It isn't even shape, prepare, respond. The strategy this budget supports is stay home all the time.

    The other aspect of the military strategy debate that I have to note is the new Administration's priorities. President Bush has announced that his defense budget priorities include $1 billion for military compensation, $400 million for an across-the-board pay raise, $400 million for military housing, and $2.6 billion for research and development programs.

    While we have no Administration figure yet for funding national missile defense, the Ballistic Missile Defense Office estimates that the cost of the current program for fiscal years 2002 through 2007 is about $30 billion. The General Accounting Office (GAO), estimates the 10-year cost is $60 billion.

    But all this is somehow supposed to fit into a $100 million increase in the top line. I am from Missouri, the ''Show Me'' state. I wish someone in the Administration would show me what we are going to cut. What important programs are we going to sacrifice in order to accommodate these new priorities?

    And finally, it is beyond dispute that we have vitality important defense needs going unmet right now. We don't need a review to tell us about it.
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    Family housing roofs are leaking. Spare part bins are empty. Training is being canceled or curtailed.

    The Joint Chiefs have already told us that our national ability to continue full military operations is in jeopardy. They have at least $7 billion in unfunded requirements for fiscal year 2001; that was testified to right here in this room last year. The cost of meeting the real property repair and maintenance backlog for all the Department of Defense facilities approaches $27 billion. Where is the request for supplemental appropriations from the Administration?

    Norm Dicks, Norm Sisisky, John Spratt and I have introduced a bill, H.R. 576, calling for badly needed supplemental appropriation for this fiscal year, so that we will be able to execute our national military strategy, of which we speak about today.

    But it should not come to this. The Administration should make good on its promises and show leadership, so that we will be able to meet our national security and national military strategy requirements.

    Mr. Chairman, I welcome and look forward to the testimony of our very distinguished witnesses. I know they will be able to shed some light on how we can develop appropriate strategies for the future. I hope that, just as importantly, they will tell us how to ensure that we have resources to implement those important strategies.

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

    The CHAIRMAN. Thank you, Ike.

    Gentlemen, let me thank you once again for agreeing to appear before us today, and also for all the time and effort that you put into producing these reports, and we appreciate it very much.

    As usual, your entire statement will be printed in the record. If you care to summarize to 10 or 15 minutes, we would appreciate it very much. I think it would help maximize the question-and-answer period, and, therefore, the younger people—the newer people, I should say—would probably get a lot more out of it. I thank you very much.

    Mr. Gingrich, the floor is all yours.


    Mr. GINGRICH. Thank you very much, Mr. Chairman.

    And I thank the ranking member for his statements. We spent a good bit of time together over the years, trying to work on a stronger defense.

    I also want to thank the committee. I remember testifying here 16 years ago, on what became, ultimately, the Goldwater-Nichols reform bill and the effort by the Congress to modernize the military, sometimes against the opposition of some of the senior leadership.
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    The Hart-Rudman commission grew out of an effort to create an intellectual framework, much like that which led to the Goldwater-Nichols reform, which was driven in part, I might say, by the Center for Strategic and International Studies. I am glad to see Dr. Hamre here today.

    The Hart-Rudman commission was created out of a conversation that President Clinton and I had in 1997, and then strongly supported by Secretary Cohen, to bring together 14 Americans from a very diverse bipartisan background.

    We spent three years looking at the world and looking at the future. All of our materials are available at nssg.gov. And in fact, over 200,000 people have downloaded our last report on structures and strategies.

    Let me start by saying that Gary Hart and Warren Rudman gave us great leadership, and that I think that the commission, by meeting for three years, really grew into a common understanding about very serious things.

    I want to start, however, by just stating my own personal view, which other commissioners may or may not agree with, but I believe in reinforcing what Mr. Skelton said, that if we are serious about leading around the world, we are a minimum of $40 to $60 billion dollars a year short of where we need to be in the defense budget, and that assumes very major reforms.

    I don't think money alone will buy the solution, but the commission didn't agree on a specific dollar value; this commission did agree we would need more resources.
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    My personal view is it is somewhere in the $40 to $60 billion a year level, assuming you reform procurement, assuming you reform the reporting requirements that Congress has put, I think some 500 reports, now, on the Defense Department, which surely should be shrinkable to 30 or 40. Some reform has to occur in this building, not just across the river.

    But even assuming all the reforms, you cannot sustain both modernizing the military, the operations tempo, the personnel requirements, simultaneously as the leading power of the world, within anything like the current budget. That is my personal view.

    Let me come back and also say that I believe, and I think the commission would agree, that President Bush and Secretary Rumsfeld were exactly right to move, first, to review before money. We think that taking a serious look at the entire system is the right way to go. We also believe that the reforms that were announced by National Security Advisor Rice, in moving the National Security Council to more of a coordinating nature and less of an operational nature, was, in fact, precisely what the commission recommended. And we think that that is exactly the right direction.

    The commission also believes that you, the Congress, should legally move the QDR to the second year of an Administration. If you think about it, it is sort of nutty to have the services work from the bottom up to justify their current structure, their current budget, their current programs, and then have a brand new Administration come in and try to paper over whatever its strategic direction is in part of a document that has essentially been written from the bottom up by people who do not have any strategic goals.

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    And, in fact, it should be the opposite. A new Administration ought to have a full year to design a strategy from the top down; to suggest how they want to meet America's role in the world, what structures they want for that; and then to say to the services, ''Given this direction from the Commander in Chief, what do you need and how should you review the defense system?'' But right now we do it exactly backwards and I think get a result which is, at best, slightly destructive and, at worst, locks the systems into obsolete models.

    The commission itself came up with a series of very specific recommendations. First, that homeland security, for the first time, is a major American concern. We have to expect the possibility of a weapon of mass destruction or a weapon of mass disruption being used in the United States.

    Mass destruction can be chemical, biological or nuclear. We are not, today, prepared to deal with the consequences of a city having a weapon, probably delivered by a terrorist, to go off in one of our cities.

    Second, none of us have any real experience today—in fact, there is an article in the paper this morning about the FBI's concerns that none of us understand what a weapon of mass disruption, in terms of cybernetics, the taking down, let's say, our telephone system, or taking down our electricity system or the Federal Aviation Administration (FAA) system—what that effect would be.

    Second, the commission unanimously agreed that the challenge to us in scientific research and in math and science education is a greater national security problem than any likely conventional war in the foreseeable future.
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    And I really want to emphasize this. It is something Eisenhower said in the 1950s under the impetus of Sputnik. I think we are right back at the same stand.

    The revolution in science requires larger investments in basic research. We are not getting the money today.

    Second, the inability of the United States today to produce enough high school graduates who can do math and science is a long-term national security issue. We cannot assume that we will be able to import enough people to meet our science and technology demands in the next generation. The report is pretty clear that it is a very major challenge for us.

    And I would hope that this committee would look at the National Science Foundation budget, the National Aeronautics and Space Administration (NASA) budget, the Department of Energy labs, as integral national security investments, over and above the Department of Defense, but as literally integral to our ability a decade from now to produce high-technology capabilities.

    Let me just, with one or two sentences each, mention what I think are six specific challenges that evolved out of our discussions.

    One, the United States has to learn to do a much better job of leading coalitions, and I think we should be very concerned about the European rapid reaction force as a symptom of the beginning of the drifting apart of the U.S. and Europe, and we need to think both in our industrial-based strategy and in our diplomatic style about how to bring our allies together with us.
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    I mean, our great strength, in part, is not just technology, but the fact that we have the widest alliance in human history. Sustaining that alliance without a Soviet Union is a real challenge.

    When we were bad in the past and we were clumsy in the past, people could put up with us because the Soviets were always worse. There is now no natural pressure to remain allied with the United States, and I think we have to really think about how we develop a much more sophisticated alliance coalition policy.

    Second, terrorism is a much more profound threat than we have responded to. It should trouble every American that we have been trying to get bin Laden since 1993. You just mentioned the cost of repairing an American warship damaged by terrorists.

    We should all be concerned that we don't have the intelligence to know where they are, the ability to preempt or the capacity to punish. And in fact, we have people who routinely go around the world holding press conferences explaining they are at war with the United States. This is a serious strategic challenge to us.

    Third, the Defense Department refuses to engage in developing conflict below the theater level. We are brilliant at air-land battle doctrine on a theater-wide basis. Colombia does not require that; Rwanda does not require that; Kosovo does not require that.

    We suggested that part of the problem with the two major theater war requirement was blocking the development of the kind of forces you need for the kind of conflicts that are the most likely. And here, I think, oversight is necessary.
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    Fourth, we have a genuine problem, starting at the national command authority, with the reality that you have simultaneous real-time worldwide requirements, where the President has to be worried, on the one hand, about the Argentine economy, on the other hand, about negotiations between the Palestinians and Israel, with whatever Saddam is doing, whatever the problems are this morning between Macedonia and the Albanians, whatever is happening in Colombia. We don't have a mechanism today for integrating that many different things simultaneously, and it is a very, very real challenge.

    Fifth, there is a true revolution in scientific affairs, starting with nano-scale science and technology, quantum mechanics and physics and biology, which will swamp the current revolution in military affairs. And I think it is very important for this committee to work with Defense Advanced Research Projects Agency (DARPA) to understand the basic research level and to get briefed by the National Science Foundation on the scale of the change which is coming, which, in my judgment, after 2–1/2 years of being out of this body and going out and listening to people, is probably as much change in the next 25 years as in the entire 20th century.

    And I would particularly commend to the committee to go the Ames NASA laboratory and just spend a half day getting briefed on what they are doing, combining supercomputing, nano-scale science and technology and biology, which is, I think, the most interesting single facility in the United States. It is at Moffett Field near Stanford.

    Finally, I think that it is important for this committee to look at the service budgets and to insist on deep experimentation now with new technologies.
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    One example, we have a capacity in remotely piloted vehicle technology which should empower every ship to know several hundred miles inland what is going on by using non-piloted vehicles with a very long loiter capability in a way which just dramatically expands our intelligence capability.

    The services continue to finance the systems that they are comfortable with, continue to finance the systems that maintain the rhythm of the past, and it is very difficult to get them to push money into these systems.

    And let me just say, before anyone starts complaining about the tight budgets, go back and look at experimentation in the 1930s with budgets that were literally 15 to 20 times tighter than these budgets. The system simply has to force itself to set aside a significant percentage of each annual budget to finance military-oriented, real experimentation with the technology of the future.

    In conclusion, let me just say: The challenges are different; the technologies will be different; the strategies must be different; and, therefore, the structures have to be different. And I think if you look at our report at nssg.gov, you will see how much after three years we put into beginning to lay out that scale of difference.

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

    The CHAIRMAN. Senator Hart.

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    Mr. HART. Mr. Chairman, may I, on behalf of the commission, thank you and the members of this committee for the opportunity to be here today.

    I think to understand the work of this commission, you have to put it in context. This is the most far-reaching and broad and deep review of U.S. national security since 1946–1947. That is why it took 2–1/2 years and a tremendous amount of person hours, not only on behalf of commission members themselves, but a very large staff of full-time and part-time advisers.

    Of course, the reviews that went on post-World War II and up to and the beginning of the Cold War led to the passage of the National Security Act of 1947, which has been the statutory basis for the defense of this country for the past half century. We took note of the fact that the world in which we are living today and will live for the next 25 years is not the world of 1947.

    As much as we would like to hope that we could continue on with the same kind of force structures, same kind of strategies, tactics and doctrines, the circumstances of the world simply won't permit it. We are in the middle of enormous revolutions simultaneously, globalization of the economy, internationalization of finance, a technological revolution, continuing post-colonial disintegration of artificial nation-states, and all of these things happening virtually simultaneously.

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    What we tried to do was look a quarter of a century out. And that was arbitrarily about as far as anyone that we could talk to could look. And in the context of that new world, we then attempted in—and that was Phase I of our effort.

    Phase II was, in this small document, to lay out the principles of a new national security strategy, given all those new realities. And then, of course, Phase III, which just came out January 31, is in fact filling in the implementation of the principles of this strategy.

    Our approach was to create the perspective, by looking at what kind of world we were going to be dealing with. Second, to lay out the principles, as I have said. And then, in fact, plan the implementation of how to carry out this new strategy.

    Let me quote from just two sentences of the prepared statement, because I think it is important. ''No U.S. national security strategy that meets the needs of the world we now live in can be designed and implemented without significant changes to the national security apparatus itself.''

    That is to say, we could not devise a new national security strategy without also looking at the institutions of our government—Department of State, Department of Defense, National Security Council and the homeland security agencies, and others, as well—and imagining how those have to be changed to deal with this new world.

    The topic of this hearing today really relates to Phase II of this report, and, therefore, Mr. Chairman, with your permission, we would like to submit that for the record. It is just a 15-, 16-page document. We would encourage all members of the committee to review it.
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    This was a bipartisan commission. We concluded with 50 specific recommendations, not only for institutional reform, but as Speaker Gingrich has said, for creation of a new national homeland security agency, investment in the industrial and scientific base of this nation and the human capital of this country. And every one of those recommendations was supported, albeit in varying degrees of intensity, by all 14 members of this commission.

    I did see literature saying that we were equally divided between seven Democrats and seven Republicans. I am still looking for one or two of those Democrats.

    We feel that what this government has to do is think strategically, and that starts in the Oval Office and works downward and outward. This is not just a slogan; thinking strategically has some content to it. It means in traditional and classic definitions of strategic thinking, first of all, setting priorities and then matching resources to those priorities.

    We feel, certainly, in the post-Cold War decade that has passed, that that activity has not taken place. It has not been driven by the White House or the President. It has certainly not been incorporated into the thinking of previous Administrations. We are not, today, thinking about what our priorities are and how to match resources to them.

    We see the world of the next 25 years as one of both benefits and instabilities. And quoting from our statement, may I say that the same ideas that are spreading free minds and free markets in the world today are the cause of much of the tumult we witness as well.

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    It seems like a paradox, but in fact it is a core central reality that the more we open up the world, both to markets and democracy and so on, the more, in a way, we destabilize old regimes and old institutions. Now, that is not all bad, but it simply means we have to be prepared to try to manage that change. We do not feel that we are currently prepared to do that.

    Speaker Gingrich has mentioned the absolute need to seek greater cooperation of other nations. We specifically focus on Russia, China and India as major players in their regions and powers, to some degree, to be dealt with in perhaps different ways than we would deal with ordinary nations. Of course, two of those powers, and arguably part of the third, are in the same region of Asia.

    We think that global markets, the opening up of economies, the internationalization of finance, offer us tremendous strategic opportunities that we should be prepared to take advantage of, both by incorporating economic thinking into strategy, but also using diplomacy differently and better than we have in the past.

    Speaker Gingrich has focused on the danger of terrorism. In our first report, we said something rather dramatic that I don't think the media quite picked up on. We said that sometime in the next 25 years, Americans will lose their lives on American soil, possibly in large numbers; that has not happened since 1812. This is a startling and striking threat to this nation's security, and we know this committee and the Congress will focus upon it.

    Finally, we identify five kinds of military capabilities. Those include the strategic deterrent, our nuclear capability; the homeland security agency, which we advocate creating; conventional capabilities of some size, to be determined after debate; expeditionary or intervention capabilities, such as we used in the Gulf War; and then, finally, a constabulary force that is prepared to help other nations in the world and our allies in peacekeeping.
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    Mr. Chairman, in Phase III of our commission that came out in January, we gave very detailed recommendations for the reform of the Defense Department, not simply the traditional focus upon procurement and so on, which, obviously, needs to be changed, but institutional changes in the Defense Department that will almost mandate that planners in the department begin to think strategically in a way that they have not been doing, at least for the last decade.

    For 45 to 50 years, we had the luxury of having a very simple foreign and national security policy that could fit on a bumper strip. It was called ''containment of communism.'' We no longer have that luxury.

    Thank you very much.

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

    The CHAIRMAN. Thank you.

    Dr. Hamre.


    Dr. HAMRE. Good morning, Mr. Chairman, and to all members of the committee. Thank you for inviting me.
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    If I say something stupid today, which is likely, I have a good excuse. I fly coach on CattleAir these days and flew on a red-eye through the night, coming back from California. But I wanted to be here because I have told my parents for several years that I hung out with guys like Newt Gingrich and Gary Hart and Bill Kristol. They never believed it, but now I can prove it, so that is why I wanted to be here.

    Mr. Chairman, I will be very brief to say, I think we are starting to enter the sixth epoch of American national security history. We have had five distinct epochs or periods in the past. I think we are now entering the sixth distinct period. I think the transition is over.

    While it is still a little foggy as to say what the character of this new epoch is going to be like, I think we know the major landscape features. I think it is one where we aren't threatened with an existential opponent, like we did during the Cold War, but I think we now have lots of very nagging, very difficult skirmishes, none of which represents a threat to the existence of America, but all of which—not all—but many of which have the ability to unseat and unhinge the international order that we really depend on for the health and vitality of our economy.

    Second, and as the speaker and senator have said, we are living now with the residue of the Cold War. You know, our opponent built enormous inventories of chemical and biological and nuclear weapons, and built an industrial and a scientific infrastructure to build all these terrible things, and it is all left.

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    And what we have is this terrible cocktail of privation and knowledge—dangerous knowledge. We have people that know how to build very bad things, and they don't know how to make a living. And that is a very dangerous environment for us to live in.

    I totally agree with the observations of the two previous witnesses that we are going to have a terrorist incident in this country involving a chemical or biological or—I hope not, but fear—a nuclear event.

    We should remind the committee, we have had biological terrorism in this country. It was seven years ago when a goofy group spread salmonella on a salad bar in the Pacific Northwest. You know, it has happened already in this country.

    It is going to happen, and we have to get ready for that. And I think it is this residue of the Cold War that we are going to have to live with, especially when you combine it with the emergence of nonstate transnational actors that have resources that rival what some states in the past used to have.

    And the whole issue about how do you deter entities like that in this new era, this is a very problematic feature of this new epoch.

    Finally, I think we—and this is something that Senator Hart referred to—we have evolved a set of business practices over the last 10 and 15 years that, frankly, create enormous opportunity for American productivity, but also create a great deal of vulnerability. The best way to attack America's infrastructure is to become a customer to an American company, because that company is going to give you the tools it takes to enter into your ordering system, your scheduling system, whatever, so that they can lower their transaction costs.
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    But the easiest way that you are going to get in, if you want to redirect trains to a new destination or if you want to ship new packages or if you want to bollix up the transshipment, we are going to give you the opportunity by opening up the infrastructure, and you do that by becoming a customer now in America.

    Now, you can't stop that, because we are not going to change our business practices. So we have to be much more clever and inventive in the way we think about our national security. And it requires a partnership between the national security and intelligence instruments and the private sector that really doesn't exist today. So we need to focus on that.

    Now, I have laid out four things that I think ought to be an element of a new national strategy, and I will be very brief.

    First, and both of the speakers have said this, we have to have a strong economy. If we don't have a strong economy, we will not have a strong defense, period. Now, I think that is so obvious that we don't think about it.

    Now, there are two sub-elements that I would like to bring to your attention and hope the committee will focus on this year. Our defense industry, its financial health is very fragile. And when you talk to Wall Street right now, they would rate our defense companies—these are enormously sophisticated companies in terms of the technology—but they rate them as being somewhat more than farm equipment manufacturers and somewhat less than being machine tool manufacturers.

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    The capitalization rate for our defense industry is less than 1 percent of the Standard & Poor's 500. That is the industrial underpinning for our defense, and it is too fragile. And frankly, you all need to spend some time thinking about what we need to do about that.

    Second thing, I am of the view that our Cold War technology control and export control procedures are now starting to become counterproductive. They are driving a wedge between us and our allies. They are forcing our allies to find sources of goods other than the United States, because it is too darn hard to get a license for goods in the United States.

    We are creating a protected enclave, a market for foreign competitors, that we are denying U.S. companies for competing because of our approach right now. We need to start tackling this problem. And frankly, this is one that you all have to lead on.

    Second, I think we need to have a full-spectrum defense capability. I totally agree with the five features that Senator Hart laid out. I would add a sixth, which is we always have to make sure our side has superior equipment in every contingency. And that is the one thing that is at risk right now with the budget we have; we are not buying enough new equipment.

    Third, I think it is crucial, and I can't tell you how gratified I was to hear Speaker Gingrich, with his ringing endorsement, we have got to find more sophisticated ways to stay connected to our allies. That is at great risk right now. We are drifting apart. And if we do drift apart, it is going to be to our loss.

    Now, we can't use the old formula just because we helped—well, frankly, won, World War II. They are tired of hearing that excuse. We have now got to find new reasons to be leading this alliance, and I think that is crucial. I strongly agree with his characterization of that.
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    Finally, I think it is crucial that we find ways to modulate the security environment that we live in. Well, obviously, by going with security alliances, that changes and shapes the security alignments around the world to our advantage.

    We have to keep forward-deployed forces. And I know there is a lot of pressure to, say, pull the troops back from Asia, for example. That is providing stability that is crucial for our future. So don't give in to those that say, ''Bring the troops home. We don't need to spend money to keep them overseas.'' It is shaping our international environment that is so important right now.

    Third, dollar for dollar, the best money we spend is military-to-military exchanges. And that is not adequately appreciated, I think. I think it is not seen for what it is, which is, we have the world's gold standard when it comes to the military. I believe we have perfected the way that civil society, democratic society, manages the instruments of violence in a society.

    It has never been done better than this, and this ought to be the model for the world. And we ought to proudly show it as the model to the world. And I think military-to-military exchange is a fine way to do that, and it should really enjoy stronger support from the committee.

    Finally, and I know this is a theme that the speaker brought up, and slightly different, I, frankly, hope that we encourage more foreign students to come to school in the United States. I go around when I travel now, and I am amazed at how many of the executives for international corporations and the leaders of other countries went to graduate school in the U.S. It is a tremendous advantage for them to have had a chance to see what this society is like.
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    I mean, we won the Cold War, not because we fielded a bigger military, but because we had superior values. And that is partly what we ought to be promoting now, in this new era, and I think we could do that by resuscitating and bringing back a great imperative to invite the world's best and brightest to come and study here. And I would just offer that as a final concluding comment.

    Thank you very much, Mr. Chairman.

    [The prepared statement of Dr. Hamre can be found in the Appendix.]

    The CHAIRMAN. Thank you, Doctor.

    Mr. Kristol.


    Mr. KRISTOL. Thank you, Mr. Chairman, for the invitation to appear today, and to appear with such distinguished colleagues. I have learned something from each of their remarks, though I am particularly struck by Dr. Hamre's account of the salmonella on the salad bar, which since I tend to get lunch from a grungy salad bar right near our office, I have sort of lost my appetite for the next couple of days.

    I am appearing as chairman of the Project for the New American Century, a think tank that I started, along with two veterans of the Reagan Administration, Bob Kagan and Gary Schmitt, in 1997. Our goal has been to defend and advocate a Reaganite foreign and defense policy, one of military strength, and a forceful advancement of American interests and principles around the world.
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    The initial document setting out the principles of our project was signed by, among others, Dick Cheney, Don Rumsfeld and Paul Wolfowitz. And I am gratified by that fact. And they have gone onto better or worse things, I suppose.

    John Bolton, our project director, is joining the Administration, assuming he is confirmed on the other side, as undersecretary of state for arms control and nonproliferation.

    My remarks today and the statement I have submitted are based on the project defense report, the principal author of which is Tom Donnelly, someone we stole from your committee staff a couple of years ago.

    The report, which I ask to be submitted into the record, was published last September. This report actually followed the advice everyone gives the Defense Department, which is to act quickly and cheaply, and it was done in only a year, I think, and without any government money, and I think lays out a sound, broad strategic approach, along with specific policies and programs that would allow us to execute that approach in the Defense Department, in our military and in the world.

    The fundamental premise underlying the report and the main point I would make today is one that I think my colleges have made: We are in a position of American global leadership. It is good that we are in such a position of leadership. We acquired that position of leadership, in large part, because of being willing to spend what we needed to spend on the military, and, in large part, because we had a foreign policy that stood strong in the world for American principles and interests.
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    It is in our interest and in the world's interest for us to preserve that position of leadership and to extend it as far into the future as possible. This was articulated quite well in 1992 in the draft defense policy guidance, prepared under Paul Wolfowitz's direction for Secretary Cheney.

    Unfortunately, in my view, and I say this as someone who was in the Bush White House, the Bush White House backed off that guidance, under some pressure, political pressure of the campaign and other things. We might have saved everyone a lot of trouble if we had embraced it enthusiastically and laid the groundwork, perhaps, for the Clinton Administration and for the Congress to move forward and I think to have a clear understanding of what the principles guiding our foreign policy and our defense policy should have been for these past eight years.

    But we have made it through the past eight years, not without cost, I would say. We have let our military budget go far too low and let our military be dragged down, as Mr. Skelton said, to an almost irresponsible level. We are now below 3 percent of gross domestic product in spending on defense, the lowest level since Pearl Harbor.

    And the main point I would make is simply that it is not enough, and I think there is agreement in this panel. I was very happy to have Newt Gingrich's endorsement of the $40 to $60 billion figure. Bob Cain and I wrote a piece in Foreign Affairs five years ago saying we needed to spend, I think, $60 to $80 billion more, but we can compromise on $60 billion. That would take us up to, what, 3.4 percent or something like that, of Gross Domestic Product (GDP), which is amazingly low, by historical standards. But it is good that there is this consensus, if maybe a slightly belated one, on the need to spend more on defense.
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    The Clinton Administration, in my view, lived off the Reagan build-up, and particularly was able to do some of the things that needed to be done in the world. I support many of the interventions they did lead, but we did so at great cost in terms of procurement and research and development for the future.

    The current tendency, I think, might be to make the opposite mistake, which is to try to skip a generation of weapons, embrace a revolution in military affairs, a transformation in the military. These are all good things, but they should not be embraced at the cost of meeting our responsibilities today and tomorrow and for the rest of this decade. And those are real responsibilities.

    And it is very nice to imagine a world of 2020, with all kinds of wonderful technological weapons, a totally revamped Defense Department, 20 reports to Congress a year instead of 500, and all of those things. But the fact is, if we don't adequately defend ourselves, our allies, and advance our interests in the world, this year, next year, for the next five years, for the next 10 years, we will be in such trouble 15 or 20 years from now that whatever now looks like ambitious spending programs on research and development and procurement won't be enough, and the price we will have paid will be very, very great.

    We cannot shortchange the present at the expense of the future. We can't shortchange the future at the expense of the present. We need to do both. We could afford to do both. If we were to spend 3.5 percent gross domestic product on defense, that would give us the $60 billion that Newt Gingrich mentioned and that I have previously talked about, that our defense report talks about; 3.5 percent is an incredibly low percentage, as I say, by post-World War II standards of spending on defense.
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    I believe we can talk about $60 billion of increases, you know, phased in, presumably, over a few years, but there is no time like the present. And I do believe that one can judge the seriousness of the Administration and the Congress, and, therefore, of this nation, about whether we are really going to meet our defense needs or not by what we do now.

    Will there be a defense supplemental this year? There is now no quarrel that it is needed. It is needed simply to keep ongoing operations going at a responsible level, leave aside all the interesting disputes we can have about what weapons systems could be canceled or changed, or what new ones should be invested in.

    I believe that it will be hard to say that we are really serious about meeting our responsibilities on defense if we shirk the responsibility to adequately fund the Defense Department in this year, and certainly if we shirk the responsibility to adequately fund it for next year.

    I think the Budget Committee is meeting today. And I don't know what number they will stick on defense in the budget resolution, but there needs to be a substantial increase of defense spending. We say in the report, $15 to $20 billion minimum over the Clinton-Bush number, which is, of course, identical at this point for fiscal year 2002.

    And I am deeply dubious of talk about transformation and talk about future increases if there is no present increase. We are not going to have a bigger budget surplus, I don't think, two or three or fours years from now. It is not going to be easier to do it next year or in 2003 or 2004.
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    We are not going to learn anything from the defense review—and I am happy that Secretary Rumsfeld is conducting the review—but we are not going to learn anything that is going to save us from having to spend this money. We know what much of the money needs to be spent on, and we need to do it now.

    I think it is a real test of our seriousness, frankly, of the Bush Administration's seriousness and of this Congress's seriousness and of our nation's seriousness, about meeting our role and responsibility as a world leader.

    Now, if we want to step away from that role and responsibility, that is a debate we can have and should have as a nation. I think the consequences would be disastrous for us and for the world, but that is what we would be doing, and we should face up to that.

    I commend this committee for consistently, over the past few years, trying to get your colleagues here on the Hill and members of the Administration to face up to this fact that you have faced up to. And I hope to have more success this year, and I think you probably will have more success this year than in the recent past.

    I endorse much of what has been said about the need for new thinking, and, obviously, for transforming the Defense Department. The report lays out certain programs we think can be canceled, others that need to be intensified and backed up much more seriously. I won't go into that here.

    Again, I just say there is no way to do it, there is no way to be a world leader on the cheap. And the cost of giving up global leadership would be very, very substantial.
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    Secretary Cheney actually said it very well in 1992 when he was defending the defense policy guidance against its critics then, and this was nine years ago. He said, ''We can either sustain the armed forces we require and remain in a position to help shape things for the better, or we can throw that advantage away. But that would only hasten the day when we face greater threats at higher cost and further risks to American lives.''

    Thank you.

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

    The CHAIRMAN. Thank you.

    The Chair recognizes the ranking member, Mr. Skelton.

    Mr. SKELTON. Thank you very much.

    I will do my best to be brief, because I know others have questions. But Senator Hart mentioned that you are looking forward to the next 25 years in your recommendations. I might point out that I counted the significant military engagements that we have had. The last 25 years we have had 13 of them, which means, as we look to the future, there are going to be a handful of bumps along the way, which, number one, will cost money, number two, will strain whatever strategies we think we have.

    I have two quick questions. And, Speaker Gingrich, if I may address them to you?
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    The first is, you mentioned terrorism and how—and you are correct on this—how we should all be concerned. And you mentioned that we don't presently have the intelligence that we should have. Do you have, in unclassified manner, recommendations along the line of how we can increase our intelligence capability?

    Mr. GINGRICH. Well, let me thank you for your concern. Let me first of all say, I want to repeat what Senator Hart said, and I want to thank General Boyd and the staff, because I do think the depth of the effort was substantial and was not sustainable by the commissioners. It was an entire team effort.

    I think the easiest thing to look at, and I know that you know this very well from a classified standpoint, is that we, for the last 20 years, have had a bias in favor of satellites and against human intelligence. We have also had a legal structure and a pattern of staffing, particularly the Central Intelligence Agency, which has made it harder rather than easier to penetrate groups that are very, very dangerous and often very, very closed.

    This is a very hard problem. It is a hard problem for the British in Northern Ireland. It is a hard problem for the Israelis. It is a hard problem for anybody who has ever tried to deal with it. And so, I don't think we should view it as something we can wave a magic wand. I will just give you one example, and this is not an attack on the last Administration.

    But when I was speaker, we were up in the intelligence room, and one of the senior members of the Administration told me with enormous pride that as part of their cost cutting they had dramatically reduced what they called the CIA's overemphasis on Afghanistan. This was about three months before they announced that bin Laden was hiding in Afghanistan.
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    And to me, it was a reminder of the point that Bill Kristol just made, and that is, we are a nation with worldwide interests. We need an intelligence capability that is worldwide. That requires, frankly, a substantial investment and a significant amount, I mean, a small percentage of the $60 billion that Bill Kristol and I have now compromised on, but a significant percent of that, probably in the neighborhood of $3 to $5 billion, ought to be in intelligence.

    We do not today have the capacities. We don't have enough interpreters. We literally can't read much of the traffic. We don't have enough analysts. And we don't have enough deep agents, who go out and spend the time to acquire the capabilities. And I just think this is an area that we absolutely have to look at.

    And I want to come back to the fact, it is a fact that for eight years we have said bin Laden is a major force against us. And at the end of eight years, which is twice the length of our participation in the Second World War, at the end of the eight years, he held a press conference recently. Now, this should say to us, if we are truly the leading power in the world, there is a zone here we are not doing very well, and it requires a new focus on it.

    And I know those of you who served in the Intelligence Committee can in private kind of comment to your colleagues about how much we need more resources, better structures and a revision of the anti-intelligence legislation of the last quarter of a century.

    Mr. SKELTON. Thank you. I will come back to you for my short second question.
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    Let me ask Dr. Hamre, would you comment on the intelligence aspect?

    Dr. HAMRE. The world isn't getting any smaller. Unfortunately, our combat forces are, so we have to be much more efficient in how we use them, and I think that means we have to have better intelligence.

    I agree with what the speaker said. I also would say I think that there is an enormous amount of information that is available through open sources, which we tend to not give enough attention to, because we are preoccupied with the security.

    I mean, the first thing you do when you set up an intelligence program is get a bigot list and say who I am not going to talk to and who I will talk to; that limits knowledge. And frankly, there is an astounding amount of information that is now available through open sources.

    And I would add, through an amendment to his comment, that we really should be augmenting in ways that utilize much more of the open material that is widely available. But there needs to be more money, I believe.

    Mr. SKELTON. Thank you.

    Speaker Gingrich, you mentioned, I am not sure I caught it correctly, but that the Department of Defense does not concentrate its efforts on below the theater level. You don't mean education-wise, professionals or—
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    Mr. GINGRICH. No, what I mean is that the number one focus coming out of containing the Soviet empire was winning a theater-level conflict with very sophisticated equipment, integrated across an entire theater. And what we proved in Desert Storm is a remarkably elegant capacity to defeat opponents with a mismatch that was historic.

    We do that better than anybody in the world. There is zero reason to believe in the next 10 years anybody will be as good at that as we are. And it is what makes us feel comfortable. That is what we think of as the American way of war.

    It had no real effect in Mogadishu. It has no real effect in Kosovo and Bosnia. It has no capacity to deliver victory in Colombia. It has not been able to find bin Laden in Afghanistan. I am just suggesting that there is a zone of conflict that is smaller, slower and, at least in the technologies of theater war, not applicable.

    That doesn't mean you can't have a lot of technological fixes, because technological fixes would be more at a light infantry level, more at a ''helping local people help themselves'' level, which, actually, we have done historically pretty well when we pay attention to it. But it doesn't fit our current promotion structure, it doesn't fit our current investment structure, it is not what the military likes to do.

    And I could find you a number of documents—I am sure Dr. Hamre has seen them—in which the basic response to the Pentagon is to analytically wish the problem away: ''Gee, we would like to restrict ourselves to fighting the wars we do really well.''

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    Well, I agree with your point. Of the 13 engagements you described, one was a theater-level conflict which we won elegantly. The other 12 weren't. And guess which kind are more likely in the next 10 years?

    Mr. SKELTON. Thank you very much, Mr. Chairman.

    The CHAIRMAN. The gentleman from New Jersey, Mr. Saxton.

    Mr. SAXTON. Thank you, Mr. Chairman.

    First, let me say how good it is to see all of you here and to hear your observations of our current situation, vis-a-vis our national security.

    Mr. Speaker, it is the first time I have seen you in a few months, and I enjoyed hearing your thoughts very much. Let me make an observation and then let me ask a question.

    The observation is this, that all of you articulated very well, I believe, your concerns and the direction that you think we ought to take. I would add one thing to the list of needs or the list of concerns that you all articulated, and that is that, in a very real sense, the American people and their representatives here in Congress perhaps are, in a sense, in a kind of a cloistered society. Very few of us take the opportunity to go understand other people. And with the little travel that I have done, had some experiences that have taught me that the first thing that we all need to know is that everybody doesn't think like we do.

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    A few months ago—I guess it was a year ago now; time flies when you are having fun—about a year ago some of my colleagues and I from this committee decided that we were going to go see what happened to the International Monetary Fund (IMF) monies. We felt we were doing the right thing, the IMF thought they were doing the right in sending the monies to Russia. So off we went to Russia to try to be helpful.

    When we got to Russia, we agreed to hold a public hearing with some members of the Duma, who spent the entire afternoon trying to embarrass the American members of Congress by suggesting that it was really the American banks who stole the money, not the Russian politicians.

    And then, as I observe the situation in the Middle East, I find another whole set of interesting questions that I think most Americans probably don't have a great understanding of, and that is exemplified by the fact that I recently read that the per capita income of the Palestinian people has been diminished by approximately 50 percent since the time that we started sending money to the Palestinian leadership. That raises an interesting question about the motives of the Palestinian leadership, which we all assume the motives would be of a peaceful intent and productive and to try to do well for their people. And so, we have a different concept of their pattern of thinking.

    And I recently had a conversation with a colleague from the other body, who spent a week in North Korea recently, telling a whole story about a whole different people and a whole different set of values.

    And so my observation is that one of the things that we really need to do is to understand that other folks are different than we are, that while we haven't been attacked for 200 years on the homeland, that that is today a real possibility and that there are those who have the motives to carry out that kind of an attack.
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    So, as we move forward, I think that is one very basic thing that we need to look at.

    I would like to ask a short-term question, particularly of the senator and the speaker, and that is that we face a short-term issue here, relatively short-term: We are supposed to be about the business of putting together the 2002 defense budget. And as Bill Kristol pointed out, we find ourselves with a budget request and a process that we are going to move through in the next few months that should take into consideration two tracks, one track being the maintenance of our current force, which we need to do, and the second track being what you have all talked about, developing a program or a set of programs to meet our needs over the next quarter of a century. We need to do both those things at once.

    And I am curious, given where we are, what you think over the next four, five months this process ought to look like, in getting to step one and maintaining our current force, and getting to step two, perhaps putting together a real legislative program that will take us into the next 25 years.

    Mr. HART. Congressman, if you use the 1947 analogy—and I went back and read, I think there were probably close to half a dozen reports from various commissions of one kind or another that came together to form the recommendations that became the National Security Act of 1947.

    What those commissions tried to do, and what we tried to do was not solve the immediate problem. They focused on the threat, which, of course, at that time became communism, and establishing the institutions to deal with that—the Central Intelligence Agency, the United States Air Force, a permanent Department of Defense, and so forth—and then got to the budgetary issues.
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    Speaker Gingrich and I were part of a movement in Congress 20 years ago called the military reform movement, the principles of which were focus first on people. People win wars, weapons don't. Second, get your strategy tactics and doctrines straight. And then, third, look at the weapons you need to implement that strategy and support those people, instead of the way it usually happens in the Congress: focus on the budget, focus on the money, focus on the weapons, and then fill in the strategy behind that.

    So what we tried to do was not get involved in the short-term effort, because I think, frankly, the commission could not have stayed together. Different people would have wanted to pursue one kind of airplane and others a different kind of ship.

    So what we have tried to do is provide you a framework for the mid-and long term. And I think if you adopt the principles of the framework, then that will automatically affect your short-term decisions.

    I would simply conclude by saying, I think the commission would recommend that major procurement decisions, if that is what is at issue here, and I think it is, not be made in a way that would lock us into an outdated strategy; that it would preclude the possibility of reforming and refining our strategy for a different world. So you might simply keep that in mind.

    And one final comment: I couldn't agree more about the need to understand the world. This commission has been criticized for spending too much money.

    Members of the commission went to 25 or 30 countries; we obviously couldn't go to all. We tried to cover Europe, much of Asia, Middle East, former Soviet Union.
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    The interesting thing is, when members came back and reported on their trip, the one common theme that everybody reported on was resentment. And this included from countries who are, at least nominally, our allies.

    It is a nameless resentment. It is our power, it is our popular culture, it is the way in which we deal with other countries. And none of us, being loyal Americans, was willing to accept this without comment.

    I remember standing before a hundred leaders of the Cairo community, getting my brains beat out by people who were taking our money with their left hand while they criticized us. Much of the criticism was unfocused. They simply resented the United States.

    Now, we don't need to form our foreign policy based on that resentment, but it is a powerful force in the world that we need to take account of.

    Mr. GINGRICH. And let me build on that.

    Let me say, first of all, that I think Bill Kristol and I are in agreement, but we reverse the emphasis. I think you have to have more money, but I think in the absence of profound change, the money will be wasted. So I think you have to do both; I don't think it is either/or.

    Having said that, let me also say that when we talk budgets, the committee should go back and find out, at its peak in constant dollars, how much did DARPA have? If you will remember, it was originally called ARPA, the Advanced Research Projects Agency. It is the base of the Internet. It had vastly more money in real value 20 years ago. It had more freedom, and it was more basic research. Over the last 20 years, we have gradually shoved it into basically supporting much more short-term goals. So part of the budgeting should include getting DARPA back up to its constant-dollar value at its peak.
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    In addition, as I said awhile ago, intelligence should be part of the dollar value.

    Having said that, I think you ask a very pertinent, practical question: If this committee does not include a significant increase in next year's funding, you are guaranteeing that you are going to have to have some kind of supplemental. And all of you know that, and the White House knows that.

    And it seems to me that sometime between now and taking a bill to the floor, there ought to be an agreement. I mean, a practical, minimalist position, if you take seriously trying to get a $60 billion increase over the next few years, would be to try to get $20 billion in this year, and then to send a signal downtown that you want at least $20 billion more next year and $20 billion the following year. And that probably gets you to a sustainable minimum world leadership budget, taking into account both the research and the defense needs.

    Let me also say, I will be writing a letter to Chairman Boehlert, making the same point in terms of basic science. I think it was clearly not correct for the long-term security of this country to not increase the basic science funding in the budget that was sent up recently.

    But I would hope you could convince the Administration to work with you to get into next year's budget, in regular order, what the amount ought to be. Because I think otherwise you are just guaranteeing that sometime this fall or next spring, you are just going to have to write a supplemental to make up the difference, just from the operational churning process that we are trapped into around the world.
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    The CHAIRMAN. The gentleman from Texas, Mr. Reyes.

    Mr. REYES. Thank you very much, Mr. Chairman.

    I would like to welcome all the members of the panel. And of course, thank you all for being here this morning, but also for your interest in this very vital issue that we are all, I think, very much concerned about.

    I was struck by some of the comments, and I guess my first question I would ask of the former speaker and Mr. Kristol. And the reason I ask it is because, last year in the presidential campaign, one of the severest criticisms of the past Administration was the issue of deployment for nation-building. And what I am hearing, at least what I think I am hearing here this morning, is a support for some of that that was vital to the national security of our country. Can you comment on that, just so that I can clearly understand what your position is on that?

    Mr. GINGRICH. My view, and then I will give it to Bill, is pretty straightforward: You are not going to get out of it. I mean, you are not going to get out of it in Europe because the Europeans won't let you. It would be very, very dangerous for us to decide to pull out of the Iraqi situation unilaterally, so you are going to retain involvement there. We are, if anything, getting more involved in Colombia. And it is a tragedy that we don't have a Commander in Chief (CINC) for sub-Saharan Africa and that we don't see sub-Saharan Africa as an entire system.

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    It is the most violent place on the planet. It has the least human rights, the least security. It has an AIDS epidemic of enormous proportions. And we should, in fact, be proactively trying to find ways to leverage not ourselves—I am not suggesting we have some huge American expeditionary force—but we should at least be thinking methodically, as the leading power in the planet, about a regional set of solutions for sub-Saharan Africa, because there are going to be continuing, devastating attacks on human beings in ways that I think are intolerable for us as a planet as we become more wealthy.

    So I think we ought to be prudent and careful. We ought to use other people as often as we can. East Timor was a very successful experiment in getting something done with American support, but without American help.

    I think, frankly, the last Administration's initial steps at training some African units and facilitating their capacity to get things done was a step in the right direction. We don't always have to be there. But we have to actively be thinking worldwide. We are going to be involved almost everywhere. And that is the downside of being the leading power on the planet.

    Mr. REYES. Mr. Kristol.

    Mr. KRISTOL. Yes, I agree with—and I am not even sure it is a downside, since it is an upside if we can shape other nations to be free and democratic nations.

    And I think, obviously, there are prudential issues about exactly whether we have done the right thing in every instance and how you best do it. But it would be a tragedy, for example, now having intervened too late, in my view, in Bosnia and then too late in Kosovo, but successfully in getting rid of Milosevic, who was this terrible dictator and the source of instability in Europe, to now be so timid in Macedonia as to let the whole, for example, to let an example of a reasonably successful intervention—there is still much more that needs to be done—but a reasonably successful foreign policy intervention that has stabilized what could have been a very dangerous situation, it would be terrible if we were spooked by the notion that, ''We can't do that, that is nation-building,'' not to do some modest steps to preserve and build on the gains we have made there.
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    Mr. REYES. Thank you.

    The other question that I have is that I happen to feel like that we are at a crossroads right now, in terms of our ability to respond—and not just militarily, because as all of us recognize and realize, the infrastructure of our nation is deteriorating. When you see the national air traffic control system at its end, in terms of functionality; when you see our highways and bridges at advanced state of deterioration; when you see our schools certainly in desperate need of remodeling and reconstruction monies; when you see our railroads—just last Sunday, we had another train that was derailed—and, again, the military component, as well.

    Shouldn't you be speaking out about the nation being at a crossroads? And shouldn't we be rethinking the size of a tax cut that is going to virtually guarantee our inability to address this nation's infrastructure system?

    I am very much concerned about that. And I think it should be a bipartisan effort to understand that the decisions we make with that size of a tax cut are going to severely limit our ability to do the kinds of things that you gentlemen are advocating today in our defense system, but more than that, our infrastructure and the kinds of things that we are not going to be able to have the money to devote to those areas.

    So I would like for all of you to comment on that, if you could.

    Mr. GINGRICH. Let me just comment for a second. And take the example of the air traffic control system, on which we spent—I used to be the ranking Republican on the Aviation Subcommittee. We spent billions of dollars in a failed effort to modernize it. And it is a perfect example of the need to both have money and transformation.
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    The air traffic control system, in part, is creaking toward a breakdown, because we have added two major airports since 1978. We have added six major runways in the last 12 years. We have had about a 65 percent increase in air traffic, with no government increase in the structure.

    The number one problem is not money. The number one problem is we have now adopted so many complex rules and regulations that it is a 10-year project to get something approved.

    If you watched the California electricity problem, even if the state approves the plant, you then get a local referendum on blocking the location of the plant. And there has been no leadership to find a statewide solution.

    So I would start with the idea of, having helped pass a major infrastructure bill just a few years ago, I think we can find the funding for much of the infrastructure needs of this country, if, in fact, we could also make it possible to get through the regulatory maze we have invented to block ourselves from being effective.

    On education, I think the President has proposed an increase in education funding, which I strongly support. And I would have to look at the total numbers, but I believe that the budget projections indicate that you could sustain the kind of defense budget we are talking about in a tax cut somewhere in the range of a $1.2 trillion to a $1.8 trillion, which is what I think you will end up with. But I think, you know, people can argue over that, but I don't think that they are necessarily a direct conflict.
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    And I do think you will find, if you look at the extra cost government imposes on itself in trying to get infrastructure done, you would find we could reduce the cost of that infrastructure investment by at least 40 percent by regulatory reform.

    Mr. HART. Congressman, I would just make three observations.

    One, the more systems become internationalized, and those include banking and financial systems, communication systems, transportation systems, and so on, the more vulnerable they will become, particularly to the cyber-threat. And that is happening even as we speak. That is to say, nation-states, including our own, no longer can control these systems. They are being internationalized. So we need to seek, I think, international security for those systems. We are not going to be able to guarantee the security of international systems by ourselves.

    Second, and I have to pay, I want to pay, tremendous credit to Speaker Gingrich on the issue of increasing the human capital of this country, investing in the human capital of this country, took the lead on this commission on this issue, and in rather bold ways. And I think he forced all of us to think about the way our nation approaches the value of the human mind and the importance of that human mind to our nation's security. He made education, if you will, but particularly scientific and technical education, he forced that onto the agenda of the national security mix.

    And finally, let me just say, if our commission had undertaken debate about issues like tax cuts, there would have gone the consensus.
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    Dr. HAMRE. My worry is that, frankly, despite the consensus in this room, there is not much interest in the country in spending more money on defense.

    And, you know, I sit and I hear about this. When I go out and sit in airports, I try to strike up a conversation. ''What did you do?'' ''Well, I used to work for the Defense Department.'' And the conversation stops right there. I mean, there is just not that much interest.

    And unfortunately, people want tax cuts more and they want education more and they want Medicare more. And I happen to think there is more than enough money, you know, to be able to have a stronger defense. The problem is that it doesn't tend to get the kind of priority. I think it would be a mistake to say it is only the tax cut that puts defense spending at risk.

    But on the other hand, when I look at all the priorities and all the interest around the country, unfortunately, defense comes up short all the time. It has come up short for 12 years, you know, and we make marginal improvements. I mean, and I am not disparaging your efforts, and this committee is very insistent on adding our money for defense, but it is like 1 to 2 percent, is what it has been over the years.

    You know, you just don't have the consensus in the country. We are living in a dangerous time. And if we are going to protect the country, it is going to take more than what we have now, but it has to start with people believing that there really is a requirement for more. And I think that is why a hearing like this is so important.
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    Mr. KRISTOL. You know, there are, obviously, many important priorities for the nation, among them, education, scientific education. On the other hand, the Federal Government spends about 8 cents of every dollar spent in this country on education. It is primarily a state and local responsibility, as you know.

    The Bush Administration is proposing to increase federal spending by about 11 percent. I think the Clinton Administration was going to increase it, I don't know, 14 or 15, 20 percent, perhaps. It is a very small difference in the overall education spending in this country. I have no knowledge of whether the National Science Foundation (NSF), spent this money well or not, but as a percentage of overall scientific education in this country, the NSF budget is a small percentage.

    The Federal Government spends 100 percent of the money spent in this country for the military. And if one is looking at priorities, it seems to me, one has to first make sure that the one federal responsibility, one of the few federal responsibilities for which the Federal Government, one of the few national responsibilities for which the Federal Government is entirely and unambiguously responsible, one has to make sure that the Federal Government is fulfilling that responsibility and then, of course, look at the proper allocation of monies between tax cuts, education infrastructure and other issues, which reasonable people can obviously differ on.

    But if the Congress does not appropriate the money for defense, no one else is going to make it up.

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    The CHAIRMAN. The gentleman from South Carolina, Mr. Spence.

    Mr. SPENCE. Thank you, Mr. Chairman.

    And thank all you gentlemen for coming today. I know all of you, your background, your expertise, and I respect it, and I appreciate your coming to help us with the many problems we have.

    As you already know, we listen to people like yourselves all the time. All kinds of commissions we have set up, and Speaker Gingrich there help set up this one. And we have problems to deal with, though, in the future, and we rely on you to help us with those problems.

    I want to just make a few comments and maybe you can help me with what we are struggling with right now.

    First of all, Senator Hart, I have talked to General Boyd before and others, and I have read your report about the 21st century. And we are going to be vulnerable, as you just said a while ago, to attack in our homeland. We will lose large numbers of people.

    I have quoted that in my speeches throughout the country, but I amend it. I say, not in the future; that could have already happened. It can happen this very minute or the next minute.

    And so, I try to be realistic about it and not tell people we have a lot of time because that is in the future some time; it is right now, which brings me to what I want to talk about.
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    Right now, we have to make some decisions on this committee. We have to wait and listen to a review coming out by the new Administration and not knowing what that review is going to tell us. But in the meantime, we have to do some things.

    In your own review, you have suggested about changing the strategy of two major theater wars. I have had some problems all along. We have spent a lot of time in the last couple of years asking our military leadership if they could carry out the present strategy. And they said, ''Yes, it would take longer.'' And I said, ''What do you mean by taking longer?'' And they said, ''Well, it would take longer for us to meet our objectives, and we would have a higher rate of casualties.'' I said, ''Great.''

    So what is the risk involved in that? It started off being moderate, it ended up being high, high risk that we can carry out that strategy, a two-war strategy. So I guess the way to solve the problem is just change your strategy to a one-war strategy.

    It is kind of like when someone suggested one time about, we don't have enough people in the Navy and recruiting retention to man all of our ships, so the solution is just cut back on the number of ships. And I draw the same analogy about the threat that we have. We have threats all over the world, as many, if not more, than we have ever had, not just in the future, but right now.

    And I ask that question, how are we going to be able to deal with just a one-war, one-threat situation and disregard the rest of them? We have a lot of people out there who don't like us at all, and they aren't going to agree to our new strategy that we propose. So help me with that.
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    And skipping generations. I am all for looking to the future and seeing what we can do about the future and meet these threats in the future, but a lot of those future threats are threats right now.

    And some of my colleagues have said before me, I have heard, ''How are we going to deal with the two wars we are probably going to have before the 20 years that are going to lapse before we can deploy the system that we are going to work on skipping a generation?'' We need to answer these kind of questions.

    So if you would like to comment on some of those things, I would appreciate it.

    Mr. HART. Congressman, two brief comments. First on the homeland security, we talked earlier about intelligence, and I think nothing is more important, in terms of securing the homeland, than knowing when, where and how an attack might come, and the whole issue of—Speaker Gingrich has said—of vastly improving our human intelligence collection capability is key there.

    I would encourage you or your staffs to look at an article that appeared in Foreign Affairs, I think two or three months ago, by a Coast Guard officer talking about the volume of traffic coming into this country's poorest borders every day. As I recall, it was 55,000 sealed containers, 12,000 alone from the port of Long Beach, sealed; hundreds of thousands of people crossing our borders north and south and east and west; tens of thousands of vehicles uninspected. We simply can't look at all those capabilities of threat to us. But we have to do better and we have to consolidate the 40 or 50 government agencies that have some piece of this responsibility.
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    Very controversial. Something that all of you will have to deal with if you go down this path politically. We are talking about Customs, we are talking the Immigration and Naturalization Service, the Border Patrol, all these agencies that presently are dispersed throughout our government. A very, very serious problem.

    Second, on the two Major Theater War (MTW) construct, two MTWs is not a strategy; it is a force-structuring device. And what we have today, our commission concluded, was the worst of both worlds. We had that as our force-structuring device, but we weren't even meeting it. So we don't have a two major theater war capability today.

    Further, even if we had the resources to build it, our strong belief—and that belief included former flag officers, by the way, both inside and outside our commission—is not the kind of force structure needed for the world in the 21st century. We do need at least some capability for rapid, lightening-quick response to the threats of the 21st century. That is not a major theater war capability.

    Now, our belief is, even if you spent $60 billion more, you couldn't have both a two major theater war conventional capability and the rapid expeditionary capability we think is needed to address the threats of the future.

    The CHAIRMAN. Let me ask the members a question before we break, and before I recognize Dr. Snyder. Unfortunately, we have about three, maybe four, votes. It is going to take a minimum of probably 30, 40 minutes.

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    Are the witnesses willing to—would be able to stand by for us?

    How many members would come back? I don't want to have them come back and have an empty room.

    All right. We will go ahead for a couple more minutes.

    And the gentleman from Arkansas, Dr. Snyder, and then we will recess for about 30 minutes.

    Mr. SNYDER. Thank you, Mr. Chairman.

    Just one quick comment. We have talked a lot about homeland defense. I think, sometimes, we fall into talking—meaning the continental United States, when we say we haven't been attacked in 200 years and so. We neglect Pearl Harbor and the Aleutians.

    But even saying that, being a representative of Arkansas but having been raised in Oregon, and the chairman has heard me talk about this before, but Oregon was attacked three times in World War II, three different methods.

    A plane took off from the deck of a submarine and fire-bombed the forests above Brookings, Oregon; the intent was to set the woods on fire, put people out of the factories that were making ammo boxes and just disrupt things. The fires were put out.

    Another submarine surfaced near the mouth of the Columbia and fired 17 rounds or something at the battery there that was intended to defend the mouth of the Columbia.
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    And then, in an incident that killed people, they sent balloons from Japan with explosive devices, again, intended to ignite the forests of the West. And some kids on a Sunday school picnic found it, and I think the Sunday school teacher and several kids were killed.

    This was in World War II. Now, it takes on a different complexion if those had been biologicals or chemicals, you know. The technology was not difficult to drop those kinds of things.

    Mr. Hamre, I am having some jargon problems. And if you can give me a one-minute summary. We have talked about strategy versus resources. The senator said, ''Well, this is not a strategy. It is a force structuring device.'' I have heard some people say, ''Now, wait a minute, when you start talking about, you know, we need to know what the strategy is in order to know how to put the resources into it.'' But then other folks say, ''Now, wait a minute. You devise a strategy knowing that you have a finite resource,'' that the country of Ghana is going to have a different strategy and force structure than the United States because they know, wait, we could say, ''Yes, we should have 1.6 million men in uniform,'' or something, but we are not going to because we don't have the resources.

    Help me with the jargon when we are talking about strategy and resources and priorities and goals and objectives and, you know, what is it that we are looking for as a country to decide how much money to put into it?

    Dr. HAMRE. Representative Snyder, the reality is that they are very interconnected; how much money you have does shape what you decide you are going to try to do and vice versa.
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    I built seven budgets for the secretary when I was in the department. And in every case, you are guided by a blueprint that has been mapped out. And that blueprint was both designed to try to accomplish some major goals, but, frankly, all along the way, you were mindful of the amount of money you were likely to be able to have to spend on it.

    Nobody is ever given a chance just to, you know, write a clean slate and just go off and do whatever you want to do, much as I would like to.

    All budget building is, frankly, very incremental. And you get to make marginal changes off of where you were, which is why I think it is so important when you have a major inflection point, like we have had now with budget surpluses, that we not be trapped by the politics of the last 15 years to say, ''We only should be making marginal changes on defense budgets.'' I think we really ought to use this as a chance to step back and say, ''Is the aggregate level right?''

    But it is still going to be very much connected with how much you—because you are all the ones that are going to decide this—you want to spend on defense and how that is going to balance off against other priorities.

    My concern is that the way we do this, you tick off everything that everybody else wants, and when defense is—everyone lives in such a comfortable world and doesn't see a threat—it is just at the lowest end of the list.

    As a matter of fact, I don't even see polls any more asking ''Do you want to spend more on defense?'' It doesn't even show up on the polls anymore.
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    Mr. SNYDER. I agree that it is not as clean a process as we might like, that somehow you are going to come up with a strategy and then we will say, ''Okay, we will now fund that.'' They are interrelated.

    Mr. Speaker, I wanted to ask you, you made a comment in your introduction that—I think the comment was that some reform has to occur in this building, not just on the other side of the river. And I could come up with my list of things, but could you tick off eight or 10 things in our process in Congress that we ought to be doing differently, that you would consider reform that we need to do?

    Mr. GINGRICH. Well, I can think of just two. One I mentioned earlier that may seem like a small thing, but the fact is, over the last 20 or 25 years, this building has required more and more and more reporting. In fact, one of the standard negotiating ploys would be the department would say, ''Rather than write in a law, how about write in a requirement that we report to you,'' so they sort of maintained the flexibility. But if you were to actually look at the total number of reports, I think you would be surprised over the last 25 years how much they have grown and how many resources are now spent.

    And I think that just having some kind of review to say, ''All right, these 23 really matter; these are just sort of the detritus of the past, we could actually not necessarily get them,'' it is a marginal thing, but it is psychologically important.

    Second, I think that Mr. Spence raised a very important point about the concept of generation skipping. I remember when Secretary Weinberger first came in and the Reagan Administration was very worried and they thought war might be eminent and they were explaining in the middle of their buildup: Of course it takes 12 years to introduce a new major weapon. And he said, Both can't be true, if it is a real crisis, figure out a way to reform the process. But they couldn't do it. It was, literally, just too big a problem. It has been, consistently.
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    The Congress ought to take on the challenge of bringing in people like Jack Welch from General Electric and saying, ''If you were in the procurement business, given the speed of technological change, what would the new rules be?'' Because many of the things which make defense artificially expensive start in this building. And I will just give you two examples.

    We make it much too hard to test. Testing has become much too much a proof of the product rather than a genuine test. That is directly driven by the news media and the Congress colluding with each other. We ought to go back to the 1950's model of fly-and-buy and really try to get to prototypes very fast with much more happening outside of this cumbersome process.

    The second thing that I think that the Congress has to look at is, when you know you are going to buy a weapon system or a system, say the C–17, to take one that is not in my former district and not going to be controversial in the short run, you ought to find a way to write into the budgeting process a stable purchasing system that gives you a minimum run routinely, because the change in the cost structure is stunning.

    What we do know is, we are not honest up front, we end up in Bosnia, we have to pay for Bosnia, so you have these up-and-down patterns, because we take it out of procurement at the last minute. It is the most expensive possible way to purchase things.

    And those are the kind of systems approaches I think that the Congress ought to be using, and the Congress should force itself to rethink things.

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    I will give you one last too-bold idea. Get a list of how often a senior executive branch person has to testify to how many different subcommittees, and ask yourself, ''Shouldn't it be possible to have joint hearings?''

    This is treading on a lot of toes, and I served here 20 years and I know how radical this is. But the idea that some senior executives have 45 different testimonies is nuts. It makes no sense. And we ought to find some way to rationalize that process.

    Mr. SKELTON. Gentlemen, that was the second bell. It is now necessary for us to recess, until the sound of the gavel, approximately 30 minutes.

    Senator Hart, I think you want to comment? We will start with you when we get back, if you care to.

    Thank you.


    The CHAIRMAN. Gentlemen, I think we are going to proceed on.

    Senator Hart, did you want to respond to something that Dr. Snyder asked or are you ready to go?

    Mr. HART. No. I fully supported Speaker Gingrich's comments.

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    The CHAIRMAN. Thank you.

    I am going to start with Mr. Thornberry. I will make the announcement that you gentlemen have to leave, a couple of you.

    The gentleman from Texas, Mr. Thornberry.

    Mr. THORNBERRY. Thank you, Mr. Chairman.

    I appreciate, as we all do, the witnesses being here. I think these kinds of bigger-picture hearings are very helpful to us, and, unfortunately, we don't have enough opportunity to talk about them.

    I also have to just say a word to commend the folks on the Commission for National Security of the 21st Century. I don't think that today you all blew your own horn quite enough. If you look at the experience and the diversity and, frankly, the gravitas of the commissioners here, and to think that they could work for three years together and come out unanimously with a report to talk about the threat, a report to talk about the strategy and a report to make recommendations, it is not a regular report, as Chairman Spence was talking about. This is something that is different, and I hope that we take it seriously.

    Today, I will introduce a bill to implement one of the recommendations which you have made, and that is to create a national homeland security agency, because I believe that trying to coordinate and get a better handle on protecting the United States homeland, with all of the traffic that you talked about earlier, is essential.
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    There is also, of course, a role for the Department of Defense, and I guess I would like to ask, first, for you all to give us a little flavor, at least, of your deliberations as to what is the proper role for these more civilian agencies, what is the proper role for the Department of Defense and how do they work together. Because when we are talking about terrorism, these are different kinds of threats that don't fit into neat categories like we have thought about national security before.

    Mr. HART. Congressman, first of all, congratulations on introducing the legislation. I think, as I recall, you were thinking about this problem even as we were and struggling with a way to address it. And so I think all of us who spent a lot of time thinking about this and deliberating about this want to congratulate you.

    I must say the only partisan comment I will make as a Democrat is, I hope you get very strong support from the Democratic side of the aisle, and I hope that the Senate will pursue this course as well.

    We struggled a lot, and it has got to do with American history, frankly, in balancing the role of the National Guard, the successor to the historic militia, and the regular forces. And some of that struggle took place in the open and some of it took place behind the scenes.

    And I could, because I have spent some time thinking and writing about this subject, could go on at some length about why the Guard is seeking to preserve its expeditionary mission, which is a 20th century mission, instead of pursuing its original 18th and 19th century mission, principal mission, which is defense of the homeland, and why the regular forces, in effect, do not want the Guard to have a lead role here at home. But that gets very political, and I think you are very well-aware of that problem.
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    We did essentially conclude, and I think it is a headline rather than an in-depth description, and I think Speaker Gingrich ought to supplement my remarks, that essentially the initial lead role in the uniform services should go to the Guard because, in effect, they are forward-deployed here at home. They are in 2,700 different locations. And if you look at the threat as one that might strike Denver, Colorado, but also might strike three other cities at the same time, you may not have time to get the 82nd Airborne Division there as quickly as you can, local guardspeople, who are members of the community, who do wear a civilian and a military hat.

    Clearly, if the worst possible thing happens, and we pray it does not, the Defense Department and every agency of the United States government will be involved somehow. You will have regular forces, you will have the Public Health Service, you will have everybody you can imagine. And the Defense Department will be playing a key response role together with the Guard. There is no doubt about that. We are not fencing off one service verses another.

    It is just a question, constitutionally and practically, of how you address the problem. And constitutionally, the role of the militia and the National Guard was to defend the homeland; that is why they exist. And, practically, they are in place. But if tragedy happens, the Defense Department and the regular forces will certainly be heavily, heavily, heavily involved.

    Mr. GINGRICH. Let me, first of all, second what Senator Hart said. I want to commend you, Mr. Thornberry, for introducing this bill. I think it is an extraordinarily important topic. I hope this committee will take a lead in hearings later on this year in looking at, if you take what Chairman Spence said earlier, which is that there will be the real danger today that something could happen in an American city, we are clearly unprepared for that contingency. And I would just add a couple of things to what Gary Hart said.
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    First, most of the actual assets would turn out to be civilian. If you look at your emergency crews, if you look at your fire departments, if you look at your hospitals, if you mobilize the doctors and nurses, most of those are civilian assets. That is why we thought the Federal Emergency Management Agency was the logical starting point for putting together this kind of a project.

    Second, the Defense Department is inherently split psychologically. The primary function of the Defense Department is outside the United States. It is to project power overseas, it is to protect the United States, it is to provide capability around the world. And, in the most dangerous situation, we could already be involved in a war overseas when an event went off in the United States. And now you would have a secretary of defense clearly split psychologically in how you are going to devote your energies every morning.

    We felt that a homeland security agency was a more appropriate response. We see the National Guard being, in a sense, divided into the expeditionary force capabilities. But if you look at the size of the current Guard, there are far more Guard elements available than would ever be mobilized for overseas duty, and we felt that it was the most appropriate place to embed the immediate response capability.

    Finally, we felt that, in terms of having a better grip on what happens around our coasts and around our borders, that the Coast Guard and the enforcement parts of the Customs Service and the Border Patrol are logically a coherent part of this kind of a homeland security agency, far more so than they are in the current agencies where they are embedded.

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    But I strongly commend what you have introduced. I do hope that all of your colleagues in both parties will look at it very carefully. And I do think we need some kind of systematic effort to develop a capacity to respond to an event of mass disruption or mass destruction in one of our major cities.

    The CHAIRMAN. Let me say to those members that Speaker Gingrich and Senator Hart have to leave at 12:40. If you could be a little more direct and brief in your questions, perhaps everybody will have an opportunity.

    The gentleman from Texas, Mr. Rodriguez.

    Mr. RODRIGUEZ. Thank you, Mr. Chairman.

    I need to mention this for the record, and I mentioned to you personally, the fact that in your report you also don't consider the fact that the new census also reflects a growing number of Hispanics and the Hispanic-serving institutions. You talk about new research and new monies just for the black-serving institutions and don't mention at all the Hispanic-serving institutions.

    I think one of the things, when I look at national defense, and you mentioned at the beginning the importance of the economy and the economy and how that plays in our role in the world, and part of that is education. I know Mr. Kristol talked about the fact that our priority is national defense and not education. I would disagree.

    One of the problems that we do is that we don't take into consideration—and I am hoping that from a Republican conservative perspective we start to look at the importance, because I know you look at it in business, and you recognize that the level of education of your employees has a direct correlation in terms of how much money and how successful you are going to be. So I am hoping that eventually that will come about, understanding the importance of education.
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    And I know Speaker Gingrich talked about research, and that is key and very important. And I know the last four years we have been fighting on this committee, trying to get more money on research. And we have been pulling teeth with the Democratic Administration also. And somehow we need to come to grips with that.

    But I want to share with you—and I know Speaker Gingrich and Senator Hart, you talked also about the fact that we fail to recognize that on the border—and I am just going to give you examples of Mexico, but this applies with the global economy—$50 billion was traded before North American Free Trade Association (NAFTA); $240 billion now. We are hoping that that will double and triple, and it will.

    Yet Customs almost remains stagnant. We doubled the Border Patrol, but Border Patrol doesn't deal with, they are not the ones that open your trunks and check.

    And so somehow you get there. Also, there is agency after agency, with Immigration and Naturalization Services (INS), Border Patrol, Customs, Federal Bureau of Investigation (FBI), Ag Department. We have to begin to consolidate that.

    And I know we created the Drug Enforcement Administration (DEA) to try to do some consolidation; that just created another agency. And now I hear my fellow Democrats and the President has recommended to spread out the Border Patrol to a separate agency. That is not going to help. That is going to create more problems.

    And so when you talk about the homeland security agency, hopefully we can begin to consolidate, because we asked the military for a military response to Colombia, and we got a military response. Yet in the operations of that, did we dialogue with the surrounding countries in terms of the impact that that is going to have on Ecuador and all the others? No.
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    And we talk about how people are resentful of us. So when we come to foreign policy, we have to act more in a multilateral way. Yes, when our national defense is endangered, then we act unilaterally, and we act quickly. But if that is not the case, we need to respond and act in a way that other countries will participate in an equitable and more equal manner.

    When we talk about certification of Mexico and everyone else, it is a way of us putting a little grade on them, not working together with them to come up with a response.

    So we have a long way to go. And I know in your report you mentioned that aspect of it. And I would like to get some feedback from you, because we have a long way to go there.

    Our bombing that we just did in Iraq, we don't need to tell the other Arab countries, but they don't need to be as surprised when it happens. We were surprised. And so somehow that communication needs to be there. And somehow we are not doing that.

    Mr. GINGRICH. Well, let me just go through your list, because I think it is a very important list.

    First, on education, I couldn't agree more. I am delighted the President has made it one of his top priorities. And I think his point, which is of leaving no child behind, is right.

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    I do agree with Mr. Kristol that most of that responsibility is at the state and local level. But the truth is, the Federal Government does play a significant role. And from a national security aspect, back to the Eisenhower Administration, there has been an understanding that having people trained well and educated well is a key component.

    Second, the Customs and the Border Patrol ought to be integrated, in our judgment, into a homeland security agency. It is absurd when one computer can't talk to the other, and they are sitting right on the border together, or when one union work rule blocks somebody from being practical. We ought to have the most efficient possible border, because we want the maximum flow of trade. And that cannot happen if there is great inefficiency.

    Third, I think we have to think in context of our neighbors. I think the recent experience of President Vicente Fox and President Bush meeting is the right direction. We want prosperous neighbors, because they make good neighbors.

    And that means, I think, that we ought to look at things like certification, where when I was speaker, I said, we either have to expand it to include certifying the U.S., in which case we would fail every year, or we have to quit judgmentally measuring everybody but ourselves, because they legitimately resent the idea that the largest purchaser of drugs then judges everybody else. If there wasn't American cash going into drugs, there wouldn't be people south of here who are raising them and shipping them. And we bear a very large part of that burden.

    Mr. KRISTOL. Can I just add two points?

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    Look, obviously, education is a huge priority. We do spend more, all three levels of government, on education than we spend on defense. That is appropriate. Education spending has gone up, both at the federal level and at the state and local level, in this past decade. Defense spending has gone down. One doesn't have to take money from one to satisfy the other. And we shouldn't, I think, speak as if one comes at the expense of the other.

    We are a much richer country now than we were 10 years ago, and we are spending one-third less on defense. And that is just a fact. We can clearly afford to spend much more.

    On the homeland security issue, I am no expert on the issue or on Mr. Thornberry's bill, but I would simply make a factual observation: Americans have died at the hands of terrorists in the last five years. Sailors have died aboard the Cole. Air Force men and women have died in Saudi Arabia. Foreign Service officers and civilians have died in Nairobi. So I am all for beefing up whatever we can do domestically, but the actual attacks have been abroad.

    Better intelligence would help, as Mr. Gingrich and Mr. Hart have said. But, you know, we have quite a lot of intelligence information about bin Laden. He is not exactly an entirely mysterious figure. We do see him quite often. We know where he lives. There is a fundamental question of will, I think, and of U.S. policy, which is: Are we serious about making people pay a price for attacking U.S. civilians and U.S. soldiers abroad?

    And we can talk about homeland defense and better integration of the computers, but until we are serious about making people pay a price and holding them accountable for killing Americans, I am not sure how much good all the other good things we have tried to do would make.
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    The CHAIRMAN. The Chair recognizes the gentleman from Maryland, Mr. Bartlett.

    Mr. BARTLETT. Thank you very much.

    First, Mr. Gingrich, and then several of you, mentioned terrorism as an emerging threat. A couple of years ago, at the instigation of this committee, the Live Fire Test Office in the Office of the Secretary of Defense (OSD) let a contract to a very small independent contractor, Schriner Engineering at China Lake. And the challenge was to pretend that you are a terrorist, use nothing but the open literature and materials that you can buy from RadioShack. What kind of an Radio Frequency (RF) weapon can you build?

    That weapon is now built. It is mounted on a Volkswagen bus. There is an extra skin on the top that opens up to make a horn, and they can produce, 20 times a second, a million volts per meter at the aperture of that horn. They believe this is powerful enough to bring down an airplane at the end of the runway. It is powerful enough to stop cars for a considerable distance on the road. And if you go down the street, you can wipe out all of the computers along the street with this device.

    It is going to be shipped east, which is the reason I am mentioning it, from China Lake. And it is going to be set up for a demonstration at Aberdeen, because it is the only facility we can find where we won't get in trouble with communications people, because this would shut down a lot of communications if we did this in an open area.

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    We would hope that you all would come. It is the 1st of May. We need your help in articulating the need for increased defenses against this kind of thing to the American people. This should be a very, very interesting demonstration.

    I wanted them to bring it here and shut down the building. I thought that would be a small enough price to pay to get the attention of the American people. We really do need to do something.

    Mr. Hamre, you mentioned that a terrorist attack could include a nuclear attack. I was reminded of sitting in a hotel room, and Mr. Saxton was there and nine other members of Congress, so we have lots of witnesses. This was during the Kosovo conflict, in Vienna, Austria. And several members of the Russian Duma were there, and one of them was Vladimir Lukin, ambassador here about a decade ago. And he said, during that meeting, that, ''If we really wanted to hurt you, the United States, we would launch an Sea-Launched Ballistic Missile (SLBM).'' If it came from the ocean, we wouldn't know for sure who did it. ''We would detonate a nuclear weapon high above your country and shut down your power grid and your communications for six months or so.''

    And if one weapon didn't do that, and it could very well, by the way, do that, apparently, he suggested they had several more that they could use to totally shut down the country.

    My question is, if an enemy had a nuclear weapon or two, is there any way they could do more harm to us than a simple Electromagnetic Pulse (EMP) laydown, which Saddam Hussein is capable of this afternoon with a Scud launcher on a tramp steamer. It has a 180-mile apogee. It would shut down all of the Northeast. Is there any way they could do us more harm than an EMP laydown?
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    Dr. HAMRE. Sir, my comment about nuclear was really more about the loose nuke, where there would be an actual physical detonation in the United States.

    I must tell you, I have spent some time looking at EMP, and this is one of those where the threat hasn't lived up to its promise. I mean, we spend a lot of money in this country trying to replicate EMP to find out, and harden things against it, and, frankly, the science isn't very good.

    We have spent a fortune on the trestle down in Kirtland, and we don't use it anymore, because we don't have confidence in the science. Now, I am a little dated, because I have been away from it for a while.

    The theory that we are vulnerable to EMP has been talked about for years. I don't know, because we have never found replicatable, predictable science to back it up. And so, I guess I would have to sit down with you and look at it again, because I have been away from it for awhile.

    Mr. BARTLETT. You know, of course, that this is one of the first actions in any Russian war game against us, an EMP. And I was struck that Vladimir Lukin, who is no fool, mentioned this as the way that they could hurt us. And he said ''with no fear of retaliation,'' was his response. Because if it comes from the sea, how do you know who did it? And even if you knew who did it, if all they have done is to shut down your computers—this is the ultimate in cyber-warfare, is it not—if all they have done is shut down your computers, are you not justified in incinerating their children and their grandmothers? I am not sure. It presents us, even if we knew who did it, with a very difficult decision to make.
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    And his statement that he would shut down our power grid and our communications for six months or so is a chilling potential.

    The CHAIRMAN. The gentlelady from Virginia, Mrs. Davis, is recognized.

    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

    And thank each one of you for coming today to testify.

    I think my first question is to Mr. Kristol. I believe you stated that there is a strong temptation to skip a generation. And when I am out and I speak to the pilots, the troops, the artillery men, I hear the same thing from them over and over again, that they are many times using equipment that has been around for 30 years. The pilots are flying planes that are as old as their dads. The artillery men, you know, they are using their computers to coordinate fires, but they are almost always doing it the same way their grandfathers did.

    And I am concerned because I believe we possess technology right now, today, to correct a lot of these problems. And I think we are ignoring our current abilities and for some reason are holding out for future solutions.

    My question is, what weapon systems currently that are in design would you consider most important to immediately address the needs of our armed forces today? And also, would you agree that by skipping what I consider to be another generation, that we are risking the safety of our troops today and basically rolling the dice as far as our security situation?
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    Mr. KRISTOL. I entirely agree with what you say, and I think it is a good formulation to say that we would be skipping a second generation of weapons. And it is one thing to take a procurement holiday, and for that matter a Research and Development (R&D) holiday for 10 years, it is another thing to take it for another few years.

    No, we need money now, we need money for current operations and for current procurement, in addition to all the transformational technologies that we should also be investing in. And I think the Administration understands this.

    I actually do believe it was a mistake to announce the review, because I am all for a review obviously, in terms of big think and big-ticket weapon systems that we haven't started on yet. But there is a lot that we know we have to do right now, and I am worried that weeks are now dragging by as this review is going on and actual current needs, as of now at least, the Administration is not proposing to fund adequately and in that respect is doing a disservice to the men and women of our armed services, doing a disservice to you all who have the appropriations process now that is going to be hard to manage, I expect, in terms of getting a supplemental for this year or an amendment to the budget proposal for next year. So I very much hope they move quickly to address current needs.

    Mrs. DAVIS OF VIRGINIA. What weapon systems that are currently in design do you think are most important for right now?

    Mr. KRISTOL. I honestly, don't—

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    Mrs. DAVIS OF VIRGINIA. Did I put you on the spot there?

    Mr. KRISTOL. Yes, I defer to those who are more expert on the details of that. There is material in our report on that, but I wouldn't presume to tell you. You all know more about this than I do.

    Mrs. DAVIS OF VIRGINIA. Anybody else want to comment?

    Mr. GINGRICH. Let me, if I might. Let me start by saying that you really put your finger on the core challenge, I think, to the Bush Administration and to the Congress, which is that there is no fancy, elegant way to avoid increasing the size of the budget. Because the truth is, if you try to do generation skipping, what will happen is, without a bigger budget, when you get around to procurement, you will decide to generation skipping again, because it will turn out procurement is too expensive.

    So I would start with that and say I think when you talk about, as we did earlier, a budget in the $60 billion increase range, getting there, say, over two or three years, you begin to have the resources to both develop the next generation and purchase the current generation.

    Second, I want to repeat what we said at the very end before the break. This Congress has an obligation—and I would suggest you bring in a group of the high-tech Chief Executive Officers (CEOs) who now refuse to bid on federal contracts, I suggest you bring in a group of the senior CEOs, starting with Jack Welch, to describe how they would procure, and that you ask the secretary of defense to submit a new model procurement budget. Mr. Hunter, who is here, we worked together on the number of shoppers, which outnumbered the Marine Corps, in the Defense Department. That is largely driven by the Congress. It is congressional law which has created this current monstrosity, which is impossible.
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    If you are at Intel or Microsoft or you are at any major corporation—Cisco, to take modern examples—generation skipping means what you buy next year; it doesn't mean what you buy in a generation.

    And so, I would argue you can do both. You can procure the most needed current weapon systems, but you should be fielding an initial next generation within three years, not within 10 years, and you should then be insisting on what I described earlier as the revolution in scientific affairs being applied to the revolution in military affairs by the end of the decade. And all of these should be waves of change which would further widen the gap between us and our competitors. Under the current budget and the current procurement laws, that is impossible.

    I am going to sidestep the opportunity you have given me very generously to speak out for the F–22, which is built in my former district, and simply say that I would rely pretty heavily on the senior military leadership in terms of current fulfillment, but I would be very tough-minded about how they design the generation after this and not allow them to automatically simply have follow-on systems beyond the current fulfillment.

    Mrs. DAVIS OF VIRGINIA. Thank you.

    Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you, Mr. Speaker. I know that it is 12:40. We thank you and appreciate your time here with us today. If you want to be excused, you are welcome to go.
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    Gentleman from Indiana, Mr. Hill.

    Mr. HILL. Thank you, Mr. Chairman.

    You all have been at your work now for two years, and you have published your reports. I guess the question I have is that, what is your perception about how you are being received by the new Administration about what you have come up with?

    Mr. HART. We have briefed, we met with Secretary of State Powell, Secretary of Defense Rumsfeld. We had a telephone conference with Dr. Rice before the Administration took over, and then a number of other contacts, as well. I think there has been great interest.

    I was impressed by the degree to which each of those individuals and their staffs were familiar with the work that we have done. They have and are taking it seriously and are very receptive to what should have gone on over the last decade, and that is a kind of new approach to national security, not just more of the same or just focusing on budget levels. In the briefing we gave Secretary Rumsfeld, he took 2–1/2 pages of legal-length notes. So they are taking the work that we have done seriously, and I think we are honored that that is happening.

    Mr. HILL. Okay. Do you have any idea of what is going on with the review of the military? I mean, do you have anything to offer us here? It just seems to me that we are kind of living in purgatory right now. We don't know what our national military strategy should be. Do you think there is going to be concrete results from these reviews? Are they going to combine your studies too?
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    Mr. HART. Well, I certainly think so. It hasn't been, I think, widely covered in the press, but our perception of the key leaders, the senior security team, if you will, of this Administration, is that they understand that we are living in a different world, not just post-Cold War, but the 21st century is going to look a lot different from the 20th century, and that simply spending more on what we used to do isn't the way to defend this country.

    I think, from what I can tell, we didn't get a lot of feedback from either Secretary Rumsfeld or Secretary Powell or others, but a great receptivity to the kind of new thinking that this approach represents. We didn't present to the Administration a detailed military budget. That wasn't our mandate. The mandate was to change the nature of the way we think about national security. And my impression is this Administration is taking that very seriously.

    Mr. HILL. Mr. Kristol, you look like you want to say something.

    Mr. KRISTOL. Well, we also briefed members of the Administration on this report, which is more detailed and programmatic, in terms of certain weapon systems and the orientation of forces in Europe to Asia and things like that.

    Spending more on what we have been doing is a good idea, actually, and would improve our national security. Should we be spending more on different things in the future? Sure. And I very much agree with Mr. Gingrich that you don't want to just do follow-ons of current systems. But, you know, we need to be secure next month and next year, not just 10 years from now. And we are not spending enough to be secure at home, and I particularly worry about our forces abroad.
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    There have been 13 conflicts in 25 years, I believe. We have had in this past decade, let's just talk post-Cold War, a half million troops in the Gulf, 200,000 troops ready to go into Kosovo, 40,000 or so into Bosnia in 1995, quite a few into Haiti. There is no reason to think this next decade will be more peaceful than the last. I rather think, unfortunately, that it is likely to be less peaceful.

    I am all for the revolution in military affairs, transformation of the military new-thinking, 21st century, all those things, but we live in the present and we owe ourselves and our allies, I think, the ability to do the job we need to do right now. And that just takes more spending on current systems as well as obviously moving ahead on R&D and procurements in the future.

    Mr. HILL. I guess the follow-up to my question is, besides the Administration, how is the military establishment reacting to your proposals? Have you met with them?

    Mr. HART. Oh, yes. Oh, yes. They also met with us, and sometimes not collectively, but individually. That is to say, they found occasion to criticize or critique things that we have said or that they felt that we would say, and I would say that is perhaps particularly true of the Army.

    Mr. HILL. Well, how did they feel, in particular, about your changing your strategy from fighting two wars on two fronts?

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    Mr. HART. The Army didn't like it. The other services didn't quarrel too much. But the Army would be the first one to tell you they are not prepared to fight two major theater wars right now themselves. And they find it very hard, given the diverse nature of the threat of the 21st century, to justify trying to go back to a two-MTW scenario.

    It is not a strategy; it is a force construct. It is certainly not a strategy.

    Mr. HILL. My time is up, but I want to get in one last question.

    Mr. Kristol, you indicated that there needs to be a price that our enemies have to pay for inflicting harm on our citizens. Do you have a recommendation of what that price should be?

    Mr. KRISTOL. Yes. People who are held accountable should be held as accountable as possible. I mean, the Clinton Administration tried to inflict a price. I don't know that we think it was very successful, in August of 1999, but they understood and have said—every president, whenever Americans are attacked, says we will hold people accountable and seek to punish them and deter others from following in their example. And we have not perhaps done as good a job as we could have in the last few years. It is hard to second-guess these things, in holding people accountable.

    But it is simply a fact, if you are a potential terrorist thinking of indulging in terrorism against Americans either in the homeland or abroad, unfortunately, and I really do mean unfortunately here, I am not sure you would be as scared as you should be to venture on this endeavor. And, therefore, I just think we have a huge interest in making it extremely worrisome for people who are thinking of committing terrorist acts.
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    Mr. HILL. Thank you, Mr. Chairman.

    The CHAIRMAN. The chairman of our R&D subcommittee, Mr. Hunter.

    Mr. HUNTER. Thank you, Mr. Chairman.

    And gentleman, thanks for being with us today, and I apologize for being at other conferences and other seminars and not having a chance to listen to your full testimony.

    You know, we have done a lot of analysis over the last several years, basically manifested in dozens of hearings in which we have had analyses, some rather sophisticated, others pretty basic, in terms of taking all the platforms we have—trucks, tanks, planes, ships, et cetera—looking at their projected lives and figuring out how old the current fleet is and, much in the manner of a taxicab owner who has a fleet of 100 taxicabs, figuring how many taxicabs you have to replace each year on a steady-state basis to keep your fleet halfway modern, no matter what types you use, or what brands.

    And Congressional Budget Office (CBO) did that. And their analysis was, using a very optimistic estimate for the ages, the projected lives of these platforms, came up with the statement that we are spending $30 billion a year too little in terms of basic modernization.

    And I would classify that as kind of a ham-and-eggs issue, something apart from the strategic whiz-bang stuff, simply replacing our old equipment with new equipment to equip this very reduced force structure, down from 18 Army divisions to 10, 546 ships to 316, and 24 fighter air wings to 13 active air wings. So we have this force which is roughly half the size of what it was during the Gulf War, and yet we have this analysis that we are not equipping the half a force that we have left adequately.
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    And if you take that $30 billion per year, that inadequacy, and you add to it the $3.5 billion critical ammo shortage that the Army has reported to us, and you add the 50 percent shortage of precision-guided munitions, which is a very effective modern, new age system, that all the services have reported to us, not only the Army, but Air Force and Navy report 50 percent shortages on their munitions load-outs, and then you add on top of that the personnel shortages—that is, we have approximately a 10 percent pay gap, like the 12.6 percent pay gap that Ronald Reagan faced when he took over for the Carter Administration. That is the gap between what our military people are paid and their civilian counterparts are paid. If you add those up, you come to a shortfall. If you take the $310 billion we spent last year as a baseline, you come to a shortfall of $50, $60 billion. And it looks to me like that is pretty independent, unless we are going to massively reduce force structure, that is pretty much independent of any gains that might be made by any new strategic changes, i.e., we are going to keep flying F–15s and F–16s.

    Their readiness rates are dropping off the charts. They have gone from an average mission combat capability of about 84 percent in the early 1990s to about a 74 percent today. You are still going to be needing fuel pumps for your trucks; you are still going to need all the basics. And no matter how sophisticated we become, you will probably still find an analyst in the Pentagon, who will say, ''Yes, we will still need ammunition.''

    So if you just do ammunition, the people problem, the operations and training problem—and CBO similarly analyzed that, that we are short $5 billion a year on training—if you want to allow your guys who are training to have the adequate number of flight hours each month, which is pretty important, you have to spend an extra $5 billion there. So if you just do people, ammo, equipment and training, no new systems, you come up with a $50 billion shortfall per year.
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    And so, apologizing for not making the first—almost the entirety of this hearing, because I know you spent a lot of time working this issue and we appreciate that, what do you think? Do you think we are $50 billion short?

    Mr. HART. Happily, our commission was put together to look at the long term. As a member of the Senate Armed Services Committee, I struggled with these problems, the year-to-year, short-term force-structure problems that you are discussing, for a number of years.

    Our goal and our mandate was to look 25 years ahead. I think we can approach national security in two ways. One is, year-by-year, in which case it is simply addressing the problems that you have articulated very well and that some of us are very familiar with. The other is to think differently.

    Actually, if the country had been on its toes, this commission, its work should have begun 10 years ago, 1992–1993. We might be looking at a significantly different kind of force structure, one more in tune with the world of the 21st century, instead of continuing the force structure of the 20th century and figuring out how to pay for it and increase it or diminish it.

    What we have tried to do, it hasn't been done in half a century in this country, and that is look ahead, look at the world of the 21st century and not just the bow wave, if you will, of the 20th century and design our defenses around more of the same.

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    What we tried to do was to figure what the defense of this country would require in the next 25 years. We didn't do well in the short term, because we weren't mandated to look at the short term. What we did was look at the medium to long term.

    And frankly, you know, at a time when the Cold War ends, the basic construct of our national security for a half century dissolved, if you will. It doesn't mean the world is at peace; obviously it doesn't. But it does mean that the world is different from the world of 1945 to 1992. And it took us 10 years to get to the point where we have this look.

    Now, it doesn't satisfy everyone. It doesn't satisfy me. But it satisfied 14 people that ranged across the ideological spectrum. Or, it didn't satisfy them, I mean, we all agreed to it, unanimously.

    And it is the forward thinking that I think people interested in the long-term national security of this country ought to pay attention to, even as you are addressing the issue that you raise, which is this year, next year and so on. But if we just continue to do more of the same, we may be weaker rather than stronger. That is the whole point.

    Mr. HUNTER. Well, no problem there, because we are short on ammo, training, people and equipment. So if weakness is the key, we got it.

    Mr. KRISTOL. Mr. Hunter, before you were here, our report calls for $60 billion, says $60 billion is the minimum, 3.5 percent of GDP. Mr. Gingrich agreed with that today. So, sure, absolutely. And that doesn't actually, necessarily count missile defense and other bigger things that we need to do. Mr. Gingrich said today he thought a three-year ramp-up to $50 to $60 billion would be reasonable, which I actually think would be reasonable. And we can certainly afford it. So that is the short-term answer.
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    On the report, you know, it is not quite fair, I think, to say that no one has thought about this for the last 50 years or even 10 years. I would say that the Defense Planning Guidance (DPG) of 1992 was quite a prescient document. It was unfortunately not certified, or not carried through by the Bush Administration, but the Wolfowitz-Cheney defense policy guidance of 1992 has a pretty clear look and a look that stands up pretty well at the post-Cold War world, at the necessity of American power, at the necessity of American preeminence. So that the requirements that might be imposed by trying to maintain that preeminence—

    Mr. HUNTER. But that defense documents, that goes, though, Bill, to a top line that is a lot higher than what we are looking at today.

    Mr. KRISTOL. Well, that is right. Well, that is right. But, you know, we have drifted down now for nine years and it is hard to put it all back at once or even in two or three years.

    The only other point I would make is, look, your commission report is important and your model is the 1947 national security report, very famous one. I haven't looked at that report ever really, but I don't know that it envisioned—I mean, here's what happened after 1947, if we can talk about facts as opposed to reports.

    I believe in May or something of 1950, the U.S. Senate, the U.S. Congress was debating whether there should be a defense budget. And what was it, $16 billion or $17 billion? And we had unfortunately signaled that we were not ready to defend, necessarily, South Korea. The North Koreans invaded; the next year we had a defense budget of $51 billion—not, I believe, envisioned by that 1947 report.
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    I think the thing we need to look at is that model. What happens when you behave as we behaved in the late 1940s, which is allow your defenses to get wildly drawn down out of overconfidence? You end up having, of course, to spend the money anyway and you end up with very terrible things happening in the world as a result of being unprepared. So, you know, the planning is very important. But actually, being ready to deter people around the world and to respond is even more important.

    Mr. HART. Well, I would simply say that part of what the 1947 study and legislation did was to create an Air Force, which we didn't have; was to create a Central Intelligence Agency, which we didn't have. We had remnants coming out of World War II, but they weren't institutionalized.

    Now, from the day that Congress said, ''Let's have a Central Intelligence Agency,'' it wasn't up and running. You have to think ahead. You can't have, overnight, an Air Force or a Central Intelligence Agency. You have to reach consensus that this is what is necessary for the national defense and then begin to build it. And that is what we are trying to do, instead of just a year-by-year look.

    Mr. HUNTER. Mr. Chairman, just one fast answer to that, though. While we were doing those things, we had a national strategy put together by a lot of supposedly very smart people that said nobody is going to mess with this in the interim while we are building this stuff because we have a monopoly on nuclear systems. And as a result of that, in Korea, we had our bazookas bouncing off Russian-made tanks. We had a shortage of boots, we had a shortage of ammunition. Then we sent the 25th Infantry Division in, they got beat up at the Osan Pass. They captured our division commander.
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    So while the bean counters and the brains were coming up with this long-term vision, we had neglected the nuts and bolts of an operational-ready military. And so I would hope that that would be within your purview too, to comment on that. Because I think, to some degree over the last eight years we have adopted what I call the pre-Korea standard.

    Mr. HART. Well, we can't comment on it because we don't exist anymore. I guess statutorily we exist for the next four to six months to do activities like this. But I don't think there is anything in any of our three reports for the 2-1/2 years of work that we put into it that suggests any lessening of national commitment in the short term.

    But our mandate wasn't to look at the short term. It was to look at the medium and long term.

    The CHAIRMAN. Mr. Skelton.

    Mr. SKELTON. A historical footnote, that came out of the 1947 attempt to revolutionize—remember the revolt of the admirals. I just hope we would not go too far too fast, because you would hate to see that repeat itself.

    Dr. Hamre, did you cover thoroughly, as much as you wanted to, the declining state of American defense industry? I know you mentioned that, but did you cover that as much as you wanted to?

    Dr. HAMRE. Sir, I really do think this merits a very detailed review by the committee. We cannot defend this country without a strong industrial base. Our industrial base is very fragile. It is fragile for a range of reasons. We are not buying enough stuff, that is the first and foremost reason. But second, we have not reformed the acquisition process adequately so that they are free to adopt more commercial-like practices.
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    And so it is still a hot-house industry that is governed largely by government-mandated acquisition procedures. And what you have seen over the last eight years is most companies just want to get out of that line of work. And we are now down to a very fragile base. And I think you and we all need to be looking at is that base going to be economically viable, profitable and viable over the next 10 years.

    I just challenge the committee to devote some of its very talented staff time to look into that. Because I think you, like all of us, have an obligation to make sure that the industrial underpinnings, these partners that have to go to war with us, are going to be there in five years. And I think that is a pretty important challenge.

    Mr. SKELTON. Thanks, Mr. Chairman.

    The CHAIRMAN. Mr. Thornberry?

    Mr. THORNBERRY. Dr. Hamre, I would like to know where you come down on some of this debate that was swirling back and forth in front of you. Part of our challenge is we can't neglect our commitments of today, and yet we have to prepare for uncertainty. We don't know exactly what is going to be out there. We have to have a more flexible, adaptable military, certainly.

    One of the things that worries me is throughout history the losers of the last conflict have been the intellectual radicals. And the winners are complacent in their victory, and, therefore, they don't see the need to shake things up.
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    So France thought that offensive warfare was a thing of the past, and they had a state-of-the-art static defense system, but it was irrelevant to what was coming.

    So you have been in the inside. How can we get from here to there, make the changes that we have to make?

    Dr. HAMRE. This is the hardest job that I know I face and I know that Secretary Rumsfeld is going to face, is how do you strike a balance between the present and the future?

    You know, the secretary right now, he is building a budget. And he has to decide how much money he is going to put in to keep B–52s alive and for how much longer? How much money is he going to put into the next generation of reconnaissance satellites, and when is that going to be available? He has to make judgments on a span of 70 years worth of technology. And he has got to make a choice of balancing the risk I face today versus the threat I am going to have to deal with in the future. Every secretary has to do that. He has to decide what investment does he make in the guys that pull the triggers versus the guys that are back here supporting them?

    You know, you have to decide on the margin. Is the next dollar going to go for family housing or is it going to go for ammunition? I mean, it is just a hugely complex thing. And it ultimately comes down to human judgment.

    I have to tell you, I am a conservative in the classic, since I want to conserve what I know is valuable. And fault me for it, but I felt that we were at the risk of losing a lot of very valuable capabilities during this downsizing. And so we frankly tried to conserve that.
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    The critique that you have heard this morning from Speaker Gingrich and from Senator Hart was, in the desire to conserve the ability to fight today, that we put at risk our ability to think about the challenges of tomorrow. I don't think we were mindless of it, but you have to admit that a lot of what we have now for a military is a downsized version of what we had in the Cold War.

    And, you know, where do you strike that balance? I personally think that we need to break out and think a bit more about these new challenging missions, the homeland defense mission, the cyber-security question, things of that nature. But I don't want to give up the ability to fight a Desert Storm. I want to know I can always do that. I want to know that I can always deter a nuclear war. I want to know I can always go into a Zaire or to Rwanda or something and rescue Americans, you know. And that means that you got to keep stuff that you got now.

    Now, none of this is a problem that money can't solve, you know. But the real disconnect I feel is the passion in this room for spending more money and the lack of passion in the countryside for wanting to do it. And that is what, you know, that is what is on your plate. You know, that is what this committee has to do, is to create that sense of passion that we need more money, and in a convincing way that the American public buys it.

    I will just tell you, outside of this room the American public just doesn't get it, you know, what it is that we need to be doing here. And I think it is our fault for not having created a more compelling image of the need to protect this country, using a vocabulary that only the defense Mafia understands. You know, when we talk about Major Regional Contingency (MRCs). What does that mean outside of this room? Nothing. We got to find ways to talk to the average American that they understand. They knew what it meant to keep Europe free. Do we have a comparable vocabulary for today? No. We have to find that vocabulary, because we are losing connection with the public and the willingness to spend money.
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    You know, the talk about spending $60 billion more, are there votes in the House of Representatives to add $60 billion? No. I mean, because there isn't a demand in the countryside for it. We have to create that demand.

    And I hate to be pitted against: Do I give up my future in order to preserve today, or do I give up today's capability in order to invest in the future? I really think that is a very unfortunate tradeoff. I would rather avoid that. So I think we have to create an imperative that the public understands that we really do have to have more resources here.

    The CHAIRMAN. Mrs. Davis.

    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

    Dr. Hamre, I totally agree with you. And I think part of the problem is that the polls don't show defense up very high, and we have got to do something to change that. And I certainly would hope that it wouldn't be, you know, that we wouldn't have an incident that would wake up America. That is a concern of mine.

    You stated that you thought we needed to closely examine our alliances that we have made since the Cold War. And recently I have heard talk that the Europeans have talked about forming a Euro corps and having an independent military force, while our Administration is talking about drawing down the troops in the Balkans and I think just even this week talked about removing 705 of the troops.

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    Do you believe that the drawing down of our troops, that it will cause the Europeans to talk more about having independent military corps? If so, do you think it will harm North Atlantic Treaty Organization (NATO) in the short term or the long term? And if you agree with all that, how do you suggest the Administration have this balancing act of drawing down the troops, which I think America has spoken clearly they want us to do, and making sure that we keep our alliances?

    Dr. HAMRE. I am supposed to open a session at a conference this afternoon in a half hour, and so I can't really give you the answer that the quality of that question deserves. But if I could give you a couple of preliminary thoughts and then offer to come up, if I may.

    I don't want to comment on what the Administration should or should not do about troops in Kosovo or Bosnia. I think they need to go through a calculus and then consult with the allies and decide what that is. And they don't need a has-been like me giving them advice. They will decide it, and I am sure it will be a good decision when it is done.

    I personally don't think that it will so much directly affect the way the Europeans think about their European Security and Defense Initiative. I think there is a tremendous amount of momentum in European thinking about wanting to do this. It grows out of a pride that I think they feel was wounded by how they performed in Kosovo, and I think a desire that they no longer be just the weakling stepbrother of the United States.

    When I talk to European audiences, I always say exactly the same thing. I will say it here. I think there are two challenges. For Europe, the challenge is: Are you going to put beef in the bun? I mean, there is an expression we have down in Texas, ''Big hat, no cattle.'' And that is really a lot of what European Security and Defense Initiative (ESDI) is right now, big talk, you know, and they have got to put resources behind it.
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    Now, for the United States, I think the challenge is, are we going to be mature enough to let them have more autonomous capabilities? Or are we going to want to just rush in and take the ball away from them as soon as it looks like they can start to dribble? I think that that is going to be a challenge. And it is going to be hard for us, because we have kind of gotten a patronizing outlook toward the Europeans, that they can't act unless we lead them.

    And I think we are going to have to get comfortable with the idea that a stronger Europe is going to act more independently than we feel comfortable with sometimes. That is going to test our maturity.

    But they are a long ways off from having any capability to do that. And they have got to spend more money. There is not a single political party in any country in Europe right now that is campaigning on a platform of more defense spending, not one, period.

    So all this talk about a stronger European defense capability, which I actually think they need and I would support and do support, you have to resource it. You know, are we talking about a hamburger here, or is this just a dinner roll? They have got to put some resources to it.

    Mrs. DAVIS OF VIRGINIA. Thank you.

    The CHAIRMAN. Mr. Skelton, any other questions?

    Dr. Hamre, Mr. Kristol, thank you very much. It has been a long three hours. It has been a great meeting, I think, and I do kind of regret that they were not here. And we appreciate your willingness to participate. Thank you very much.
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    Meeting is adjourned.

    [Whereupon, at 1:10 p.m., the committee was adjourned.]