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[H.A.S.C. No. 108–2]



FOR FISCAL YEAR 2004—H.R. 1588






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MAY 2, 2003



One Hundred Eighth Congress

DUNCAN HUNTER, California, Chairman
CURT WELDON, Pennsylvania
JIM SAXTON, New Jersey
JOHN M. McHUGH, New York
HOWARD P. ''BUCK'' McKEON, California
WALTER B. JONES, North Carolina
JIM RYUN, Kansas
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ROBIN HAYES, North Carolina
KEN CALVERT, California
ROB SIMMONS, Connecticut
JO ANN DAVIS, Virginia
ED SCHROCK, Virginia
W. TODD AKIN, Missouri
JOE WILSON, South Carolina
TOM COLE, Oklahoma
JEB BRADLEY, New Hampshire
JOHN KLINE, Minnesota

JOHN SPRATT, South Carolina
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LANE EVANS, Illinois
GENE TAYLOR, Mississippi
MARTY MEEHAN, Massachusetts
VIC SNYDER, Arkansas
ADAM SMITH, Washington
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
RICK LARSEN, Washington
JIM COOPER, Tennessee
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Robert S. Rangel, Staff Director
James M. Lariviere, Professional Staff Member
Justin Bernier, Research Assistant




    Friday, March 2, 2003, Fiscal Year 2004 National Defense Authorization Act—The Defense Transformation for the 21st Century Act


    Friday, March 2, 2003



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    Hunter, Hon. Duncan, a Representative from California, Chairman, Committee on Armed Services

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


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

    Clark, Adm. Vernon E., Chief of Naval Operations

    Korb, Lawrence J., Director of National Security Studies, Council of Foreign Relations

    Stroup, Lt. Gen. Theodore G., USA, (Ret.)

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

Hunter, Hon. Duncan

Skelton, Hon. Ike
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[There were no Documents submitted.]

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


House of Representatives,
Committee on Armed Services,
Washington, DC, Friday, March 2, 2003.

    The committee met, pursuant to call, at 9:07 a.m., in room 2118, Rayburn House Office Building, Hon. Duncan Hunter (chairman of the committee) presiding.


    The CHAIRMAN. The committee will come to order. The Committee on Armed Services will hear testimony for the second day from the Department of Defense and other interested third parties to consider their views on the Defense Transformation for the 21st Century Act submitted by the Department of Defense to the Committee on Armed Services for inclusion in the National Defense Authorization Act for fiscal year 2004. Yesterday we heard testimony on DOD's civilian personnel transformation proposals. Today we will focus on the military personnel proposals contained in the act.
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    Department officials have advised us the Department needs to change its organization and operating procedures in order to meet the new threats of the 21st century. The Department's transformation proposal for military personnel will make changes in four areas: Active and Reserve component; general and flag officer management; increased access to the Reserve components; joint officer management and joint professional military education, and revised military manpower management.

    The Honorable David S.C. Chu, the Under Secretary of Defense for Personnel and Readiness, will be testifying again today, and joining him on the first panel will be Admiral Vernon E. Clark, Chief of Naval Operations.

    Testifying on the second panel this morning will be Dr. Lawrence J. Korb, Director of National Security Studies, Council on Foreign Relations; and Lieutenant General Theodore G. Stroup, Jr., U.S. Army, retired, Vice President for Education, Association of the United States Army.

    And at this time—we had a good hearing yesterday, had a very extensive hearing, and I think raised a lot of issues, some of which are challenging, but which I think can be met as we move to consider and mark up this legislation. And it has been a pleasure to work with everyone in the committee on this, and at this time I would like to turn to my partner on the Armed Services Committee, the Ranking Democrat, the gentleman from Missouri Mr. Skelton for any remarks he wants to make.

    [The prepared statement of Mr. Hunter can be viewed in the hard copy.]
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    Mr. SKELTON. Mr. Chairman, thank you so much, and appreciate your calling this hearing today. It is very important that we discuss the issues. And I think we had a full and thorough hearing yesterday. So let me join you in welcoming Dr. Chu again and Admiral Clark.

    I mentioned yesterday that it took 5 years to develop the Goldwater-Nichols legislation. The many hearings and briefings and meetings that this committee had helped develop a more thoughtful and superior product. I think that had we acted hastily like in the first or second year—as I mentioned, Mr. Chairman, yesterday was 5 legislative years that went into Goldwater-Nichols, and had we acted hastily, we might have ended up with something that wasn't very good.

    I have pointed out to the chairman yesterday, Admiral Clark, you will appreciate this, that Dick Clark—excuse me, Dick White introduced legislation at the behest of Sean Myer and Dave Jones that the Joint Chiefs of Staff were working. And he, through a series of hearings, put a bill together and retired, and I picked up the gauntlet and introduced legislation the following year that abolished the Joint Chiefs of Staff. And I found out very quickly, Admiral, that not one member of the Joint Chiefs of Staff had a sense of humor. But it evolved from that, as you know. We did good stuff, and ended up in 1986, as opposed to my 1983 proposal of abolishing the Joint Chiefs of Staff.
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    Now, 56 years ago, a response to over 100 years of managing our officers by patronage and political intervention, Congress enacted the Officer Personnel Act, 1947, during Harry Truman's era. Then that introduced the current approach to the officer personnel system, and, as a result, today's officers rise to the ranks in a predictable, stable and timely manner.

    Now, the general officer management proposals are being asked by the Department of Defense to authorize our significant, in some cases—I have got to say they are puzzling, and I hope we can parse this out in our hearing today. For example, the mandatory retirement age is currently 62, which we all know. We already have the ability to keep exceptional general officers, to keep them in uniform longer without the changes being sought by the Department. For instance, does the name Hyman Rickover mean anything to you? He was kept on past the age of Methusaleh, if you will remember, and it was Secretary Lehman who ended his long and illustrious career. Does the name Wayne Meyer mean anything to you from Brunswick, Missouri, Admiral, who was the father of the DDG–51 series of ships, and he was kept on—I have no idea how many years. He may still be out there, but far past the age of 62. And I know there are other examples that I don't know about, because the current system already allows outstanding officers to be retained, so I ask whether it is really a key consideration of the Department that this proposal be permitted to serve longer.

    Will the addition of 6 years to a retirement age of 68 really provide a dramatic improvement in the quality of leadership that we have? I think we have exceptional leaders now and the ability to keep them on board if need be.

    I would note that General Tommy Franks, who is on everybody's lips today, who commanded our forces in Operation Iraqi Freedom, is only 56 years old. We have means to keep him until 62 or past if we want to.
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    So I ask is—that is it realistic to propose allowing general officers to remain on Active Duty longer without also providing change to the career management of every other officer below that? That is the key question today. A research in history will tell us that there are—through the years the seniority system ruled, and the general stayed on. Winfield Scott was 75 years old at the beginning of the War Between the States, for instance, and many others in that era and later; General John Joseph Pershing; Admiral Clark from Missouri, who was picked up as a brigadier general and passed over all of the older ones who were still there because of the seniority system.

    The system we have today seems to be working, and I question why fix it if it isn't broken. Well, we need to know what is the intended result of the general officer changes; and second, how does the current policy prevent the result that you seek from happening? Like I say, again, you can't fix a problem until you really know it is broken. And from what I see from my vantage point, I haven't seen that the system is broken.

    Now, as the Chairman knows, I spent over 20 years studying military personnel policies, and it is compelling, it is challenging, it is complex. Unlike procurement issues that are pretty much black and white, the personnel issues are really shades of gray.

    So I look forward to your testimony. I hope we can be helpful on this committee, but these are questions that really need to be answered. I hope you can supply good answers for us.

    The current law currently allows the Department to waive the age requirement for up to 10 flag officers. Now, does that waiver needed to be provided yearly? I don't know. And how is the waiver currently being used? I point out those two examples that I personally know about, Admiral Rickover, Admiral Meyer, and I am sure there are others floating around out there.
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    I will tell you one thing I do agree on. I think that the 30-year cap should be seriously looked at, and I think that that type of officer that you have, you would like to keep—and I know he was far younger than 62—that you would like to keep someone like that on board.

    So I look forward to the discussion, Mr. Chairman. Enough said.

    [The prepared statement of Mr. Skelton can be viewed in the hard copy.]

    The CHAIRMAN. Well, let me just say to my friend that the defense, Mr. Skelton, that you bring to this discussion is invaluable, because there is nobody who is more of an expert on this aspect of personnel issues than you are, and I especially think it is important for us as a committee that follows and has a high regard for tradition and for history. It is appropriate that we follow you, your historic sense of what has happened in this area. So I want to thank my colleague for a very, very fine opening statement.

    At this time I just want to remind my colleagues we have today two panels of witnesses, and we are going to request that each of the witnesses summarize their testimony in 5 minutes following our 10 hours of hearings yesterday. But it was important, I think, to have a really good back and forth with our members. We will try to accomplish that here today also.

    But after that, we will permit the Members to ask questions, and let me once again just welcome our witnesses and thank all of you for being here on what really was relatively short notice.
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    So without delay, let's turn to our first panel, and, Dr. Chu, once again, thank you for being with us and for being ready, willing and able to take this issue apart in some detail. The floor is yours, sir.


    Dr. CHU. Thank you very much, Mr. Chairman. It is great to be here and——

    The CHAIRMAN. Oh, we have one other statement. I apologize.

    Mr. SKELTON. I just might mention it shows the courage of Dr. Chu to come back a second day after the throes of yesterday that he went through. So we welcome you and thank you.

    Dr. CHU. Thank you, sir.

    The CHAIRMAN. There is nothing like a fine-wire brushing to liven up the morning.

    Dr. CHU. Absolutely. Wakes you up. Thank you, Mr. Chairman. It is a great pleasure to be here and have the opportunity to present to the full committee what I discussed on March 13th with Mr. McHugh's force subcommittee, and that is our proposed changes to the management of both Active and Reserve personnel in the Department of Defense. This is, again, part of the large transformation package. It has been discussed in many meetings with individual Members and also, of course, with your staffs.
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    Let me very briefly summarize the important provisions related to our flag officers, to the joint specialty officers and to the Reserve community.

    For general flag officers, it is the intent of the Secretary of Defense going forward to be more purposive about the tenure these individuals have in their particular posts. As you know, the behavior of the Department today is that typically these officers turn over about every 2 years. That is frequently much too short to effect meaningful change, and we are looking forward to future assignments that would probably last 3, 4, 5 years in typical case.

    Moreover, I believe the Secretary has frequently mentioned to Members of the Congress his concern that the most senior officers, our most successful executives, leave after just one period of 3 or 4 years at their grade of 09 or 010, and I think going forward, we would like to exploit fully the leeway the Congress gave us some years ago to retain 09s to 38 years of service and 010s to 40 years of service, authority the Department, quite candidly, has not been using.

    In order to do that, and in order to permit us to exploit that authority and to benefit from the expertise, experience and abilities of these most senior officers, it will be necessary to raise the maximum age of service, currently, as Mr. Skelton noted, 62 years of age, with 10 officers, waivable any one time to 64. But 64 is currently the hard stop, and if you think about that situation and you keep 010s to 40 years or 41 years on average, something in that range, you are quickly going to run into the age limit. And so we propose that that age limit be modestly increased.

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    We are very mindful that you wish to maintain promotion opportunity for younger officers, and, therefore, one of the key provisions in this package is the request that we be allowed to retire general and flag officers at the grade in which he or she might be serving, provided that service is honorable and satisfactory, notwithstanding the length of tenure in that grade.

    That is really the key provision to ensure that we keep up the current promotion opportunity from 06 to 07. We have carefully simulated how a system will behave under the changed conditions I have described, and we are confident if we receive that power, we will not only maintain the promotion activities through 07, but actually in some cases very modestly increase it.

    We do wish to honor the service of—the much longer service of these senior leaders, and that is why there was a series of provisions that Mr. Skelton has referred to that will have their annuity increase as they give that longer service to the country.

    The second set of provisions relates to the management of joint specialty officers. We would like to make two modest changes in that regard. One is to allow qualification to occur as long as you both meet the educational and the tour assignment provisions of current law, but not make the qualification the sequence of those events. Sometimes as the exigencies of current operations such as we are currently conducting dictate, they originally had the assignment first and then the schooling. Present law requires you first have the schooling and then the assignment. Occasionally it doesn't work out that way. We think those other officers should be allowed to achieve that important qualification.

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    Second, we would like to have some of our shorter tours qualify as a joint specialty officer tour. Specifically those tours were—as a matter of policy, we do not allow dependents to accompany the member, and the tours are for only one year. Korea particularly is the primary example of that situation.

    We at the same time would like to be sure that we allow officers who accumulate experience in Joint Task Force headquarters, which we would argue is among the most educational of the joint tours that we have available, to be able to achieve a joint specialty officer tour if they complete 365 days of that—in that mode.

    Finally, with the Reserve components, we have a series of provisions in this package paralleled with some provisions in our original transmission for the authorization bill—the underlying authorization bill itself that would enhance the notion of a continuum of service for our Reserve members, make it easier for them to move from Active to Reserve status and Reserve to Active status back again, make it easier to use the Reserves. And specifically we believe it is important to keep these Reserve units in a trained and ready condition. We would like authority to reach units for up to 90 days of training without the necessary mobilization to ensure they have that readiness. We would like authority to be able to correct medical and dental problems in a unit that has been alerted for mobilization, but not necessarily yet mobilized. And we would like the ability to have the Reserve service specified in the statute as 38 days a year, not specifically necessarily one weekend a month—one weekend drill a month and 14 days in the summer, 12 hours to mix and match in that regard.

    Finally, we would like flexibility to allow us to draw on skills developed in the civil sector. We have in mind technology, we have in mind medical specialties, we also have in mind linguistic capabilities. Current law requires that reservists who are deployed have to have 12 weeks training before they go. It is a provision that relates back to some unhappy experiences in the Second World War. We would like that provision relaxed.
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    In order, for example, to be able to carry forward a program that the Secretary has directed, we initiate to point directly to the intelligence requirement (IR) people with linguistics skills, in Arabic, Pashtu and Dari, whose need, as you know, is urgent, at the moment we could not send individuals overseas until he or she had completed 12 weeks training. We want to ensure such individuals do get the training they need, but it may not necessarily take 12 weeks in order to achieve it.

    These provisions, we believe, Mr. Chairman, will allow us not only to sustain what everyone I know agrees is the finest military this country, any country, has ever seen, but indeed to enhance its capabilities as we move forward in the 21st century.

    Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you, Dr. Chu.

    The CHAIRMAN. And, Admiral Clark, great to have you here with us. What do you think here?


    Admiral CLARK. Thank you very much, Mr. Chairman, Mr. Skelton. It is a privilege to be before this committee again today. And I was thinking back. It was in February I was here before the full committee and talking about the 2004 submission and the fundamentals of sustaining the gains that we have made the last couple of years with regard to current readiness and manpower, and I talked that day about the requirement to move on and transforming tomorrow's Navy. And we talked a little bit about Seapower 21, and I remember that I said that data transformation is more than just buying new hardware. And the subject for today and the topics on the table in part of this bill, I believe, are a key part of our ability to transform to create the 21st century military.
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    Transformation is certainly more than just capabilities and hardware and equipment. If we are going to transform, we have to address our organizational processes, and the way we recruit, and the way we train, and the way we incentivize for our people, the way we reward the kind of behavior that best serves the organization.

    To me, transformation is about the way we speed innovation and bring it online for our people, and it to me is certainly about the way we manage the resources that the Nation has given us, the taxpayers have given us. And I will just say that as a service chief, Title 10 spells out my requirements, my job, very clearly to me. I am in the business of organizing it, training it and equipping it, making sure that we have a Navy that is ready to fight and win.

    And when we were here in February, the future about conflict was out in front of us. I sit here this morning, seven of my carriers are—carrier battle groups, one of them is almost home. The other six are in various stages of engagement around the world. Seventy percent of the elements of my force are committed globally. I have got a very ready Navy, and we are proud of it. But at the heart of my ability to have the kind of Navy that I believe this Nation needs in the 21st century is I need a personnel system that is able to compete in the 21st century marketplace. And so, frankly, I was pleased when I got the call we could come and talk about the elements of this bill, and I want to be on record that I am as supportive as I know how to be of the elements of this proposed legislation.

    When I started this tour, and I have been in this job now for almost three years now, at the top of my list on my priority list, my top—the Chief of Naval Operation's (CNO) top five was the battle for people. And so that is something that I had been working on since I have been in this job, and to me that is about ensuring that we have got the right people with the right capabilities in the right place, and the right management tools in place to make sure that we can compete and sustain the personnel system and have the kind of people we need to have a winning military. A personnel system that can compete in the 21st century marketplace, I believe, has to be agile. It has to be flexible, it has to allow us to attract and retain the best that our Nation has to offer. And so, I am supportive of this legislation, and to me it is all about our ability to fight and win in the future.
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    Mr. Chairman, I look forward to your questions and getting into the specifics that you all have for us today. Thank you.

    The CHAIRMAN. Thank you, Admiral and Dr. Chu. Thank you for being with us and getting right into this challenge.

    And let me just start off with a couple of questions here on what you are asking for and what we have now. You need this increased flexibility to extend talented officers, and the Ranking Member, who is our historian on this committee, went over a number of folks that we have kept on because of their extraordinary talent in the past and reminded you that you have that—you have that capability or authority to some degree right now.

    Talk about that a little bit and what you have now and why that is not sufficient to run the program in the future the way you would like to run it.

    Dr. CHU. Yes, sir. As Mr. Skelton noted, if an—we cannot give an officer beyond 62 years of age, except for 10, whom we keep to 64. If the typical O–10 is going to serve 40, 40 plus years, and if he or she is commissioned at, let's say, age 22, 23, which is typical, and you add 40 years to that, you can see we already easily hit 62. If the individual has a break in service, we can easily hit 64.

    Case in point, one individual—I don't want to use the particular name here—where if he had been nominated, the Congress had confirmed him to a particular post, he would have run out of room. There is a hard stop at age 64 under the law. So it takes special legislation to go beyond that age number.
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    Similarly, we have to have a set of facilitating steps to be sure, as Mr. Skelton has correctly said, that we do not create promotion stagnation; enhance the provision to allow us to retire more junior flag officers really at the grade in which they are serving promptly rather than have people stay on to meet a tenure requirement of three years of——

    The CHAIRMAN. Now, describe that tenure requirement right now. Give me an example.

    Dr. CHU. The tenure requirement now is that you must serve three years in grade in order to qualify for retirement at that grade. The President may waive it down to 2 years, and the Department has the authority to waive it down to 2 years through 31 December of this year. But situations will arise that make it appropriate for the retirement to occur even before two years in some cases. They are not necessarily numerous, but it is important to act promptly once it is clear the officer is going to leave so that you can keep up the promotion movement for the cohort as a whole.

    The CHAIRMAN. Well, so there is a—I guess you could call this a hard stop-off. So there is a hard stop as you are going down to two years. You have got to have a minimum today, even with the waiver of two years in grade?

    Dr. CHU. Yes, sir, you do, and we run into humanitarian situations, as well, that are sometimes an issue of a similar sort.

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    The CHAIRMAN. How many officers do you think that would affect—just a ballpark—annually?

    Dr. CHU. I don't think it would necessarily be large, sir, but it will be sufficiently numerous that without it, you would create the slowdown in promotions to O–7. That would, in fact, be discouraging to junior officers, and we don't want that to happen.

    The CHAIRMAN. Now, what you are really talking about, Dr. Chu and Admiral Clark, is that you don't want a situation where somebody is basically in place essentially marking time until they can accrue that tenure.

    Dr. CHU. That is correct, sir.

    The CHAIRMAN. On the other hand, you don't see an inequity in terms of allowing somebody to retire with that grade immediately upon receiving it?

    Dr. CHU. The intention is not to——

    The CHAIRMAN. You don't think that might not be the marking time, waiting until they get that grade and then their——

    Dr. CHU. No, sir. The retirement, of course, is still discretionary. We are not intending to use this to create tombstone promotions, as they used to be called. In terms of the annuity, by the end of this decade, all officers will be under the high three rule in any event. So this is not something that really affects their pension, per se—the fact that they could retire at the grade which they are serving even if they had achieved three years. This is a matter of recognizing their service, honoring their service. These are all very successful performers in our system. They have all reached flag rank.
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    The CHAIRMAN. So you are saying that this doesn't affect their retirement pay?

    Dr. CHU. Except for the days in which they are serving which count toward the 3-year average, officers beyond, I believe, it is 2006 or 2007 will all be under the high 3 rule in terms of computation of their pension.

    The CHAIRMAN. Then what is the force and effect of this?

    Dr. CHU. The effect of this is to allow them the honor of retiring with the grade in which they are currently serving so they don't have to take a step back in grade.

    The CHAIRMAN. If a person is a two-star flag rank, if they retire as a—if they gain a two-star flag rank in the first of this year, and they want to retire the first of next year, they retire at a one-star flag rank. They don't——

    Dr. CHU. At current law, yes, sir.

    The CHAIRMAN. So you are not—so this will not have a fiscal effect?

    Dr. CHU. It——

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    The CHAIRMAN. But it will have the effect of relieving pressure from the top——

    Dr. CHU. Yes, sir.

    The CHAIRMAN [continuing]. And allowing the flow—the upper flow to accelerate a little bit.

    Dr. CHU. Yes, sir. There is a very modest effect between now and 2006, 2007, but it is——

    The CHAIRMAN. Admiral Clark, any comments on that?

    Admiral CLARK. I very much would like to comment on this. In the terms of what I—you know, I manage my flag force, here is what happens: An individual is selected for flag, and they frequently wait 12 to 18 months. In my case when I was selected for flag, it was 23 months before I actually got paid. We went through a process. We have a process where we frock officers. We give them the authority to wear the uniform and have the title, because we have got way more places we could put admirals than we have authorized billets. But you don't get paid.

    The Navy saw me working for almost two years as a frocked admiral. After all of the people in a given year group have been in the job one year, they go up to the two-star board. If they do not select, the law says they have to serve three years before they can retire. So now they have been wearing the uniform and working in the flag job for two to three years, and they did not select for the next grade. For me, managing the flag community, I now am in a position that I need to move that person to a new job or keep them in the job that they are in, and that might mean that they serve five years in the job, but they are not going to be promoted. The reality of their upward mobility is an issue inside the organization, and when this legislation——
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    The CHAIRMAN. They have gone as far as they are going to go.

    Admiral CLARK. They have gone as far as they are going to go, and I have to wait two years before I can get another flag officer in the door who is full of fire and the potential to greatly affect this institution, and I have operated by and large under a system that gave me the ability to waive two people a year, two, to waive them out before three years, and that down to two years.

    If I am going to make a system like this work, what I told Dr. Chu is that you have got to give me the flexibility to move people on that are not going to affect the organization at a high level.

    And, fundamentally, Mr. Chairman, these people love the Navy, they love what they have been able to do, but they have reached that point, and most of them are ready to move on at that point. I don't have the authorities to do it.

    The CHAIRMAN. And you think they would probably—they probably—in their equation when they are sitting there at the breakfast table with their wife figuring out what they are going to do, having not made that last cut, they probably consider the fact that they would like to see some of their colleagues have that upward mobility also.

    Admiral CLARK. That is correct.

    The CHAIRMAN. Let the new guy come in and take charge.
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    Admiral CLARK. This is fundamentally now about flexibility, an individual who has served and served loyally and faithfully, who decides it is time for me to move on to the next phase in my life. By the way, none of these people ever really retire, Mr. Chairman; none of them do, and we can get into the finances of that if you would like, but I can assure you that all of them have to go to a now—another stage of income-earning life in order to perpetuate their—take care of their family.

    And so they are caught in the middle here, and I will tell you that in the month of March, I have all of my flag officers together in the Navy, and I went over where this CNO is and how we are going to do this in the Navy, and we live in a challenging world, and it is a competitive world, and this is the way that we are going to support this legislation, because we believe that it is clearly in the best interest of the institution.

    The CHAIRMAN. Mr. Skelton.

    Mr. SKELTON. Mr. Chairman, I will try and be brief, but I do have a few questions.

    At the present time, an officer of flag rank is to retire at the age of 62; is that correct?

    Dr. CHU. Any officer must retire at age 62, yes, sir.

    Mr. SKELTON. Flag rank.
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    Dr. CHU. Certainly flag rank, also.

    Mr. SKELTON. And you can extend them up to the age of 64?

    Dr. CHU. The President may waive 10 to 64 at any one time.

    Mr. SKELTON. And truth in fact, you can do more than that.

    Does the name Grace Hopper mean anything to you?

    Dr. CHU. Yes, sir.

    Mr. SKELTON. She retired at the age of 80. Hyman Rickover, we can't count as old as he was when he was forced to retire by John Lehman. Wayne Meyer may still be on the roles, I don't know, but he was the——

    Admiral CLARK. To my knowledge, he served 38 years.

    Mr. SKELTON. So you have under section 688 of chapter 39, the ability to keep people on who are retired, a la Grace Hopper, and I have a little difficulty in understanding the need to fix it. But, Admiral, you said that your battle is for people, and my major concern is the younger sailors, officers, Army, Navy, Air Force, who know in their heart that they are competitive for a flag rank, as a commander, as a captain, and they see the flag—folks ahead of them, any number of them being reshuffled from job to job to job, when under today's system they probably would have been retired.
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    I wonder how that will sour them in staying in. I can see an Army lieutenant colonel, a Navy commander looking up and saying, my gosh, I think I am going to be competitive for a flag rank, but those guys keep changing chairs with each other, and the same old faces in the two, three and four shop, that is a major concern.

    Another one is those who become brigadier generals, the lower-half admirals. Would they not be on pins and needles with you picking up the phone someday after six months of service and saying, time to go home? On top of that, is that good for the taxpayer, having gotten only, say, six months or a year out of a brand new one-star?

    So this worries me. I would like to see it work. My main concern is souring the younger folks who may want to stay in and be competitive when they see the reshuffling, and there ain't no room in the inn, the inn being the flag rank, because those guys are sticking around so long.

    How do you avoid that? Either one of you, how do you avoid that?

    Admiral CLARK. Well, here is the way you deal with it. And I wish you—it would have been very healthy for you to have observed Dr. Chu and I having our discussions about this—all of these issues. And I challenged the question how am I going to maintain flow. And frankly, Dr. Chu wargamed this out by having them analyze all of the moves that we have been making in the Navy, have specific data on the way we in the Navy have done this. And fundamentally, if you give me the kind of flexibility I need to deal with the one- and two-stars, we will have more opportunity, we will have more opportunity to O–7 than we have today.
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    The analysis shows that the opportunity is fundamentally even through one, two and three-stars, and slightly reduced with decimal points at the four-star level. And what that means is this doesn't mean that every humanoid that, you know, wears the uniform is going to end up staying until they are 42 years old. That is not what it means. But it does mean that you change the psyche of this—of our service and our psyche of our service today is up or out with a time line running against you that puts a certain level of pressure on you today and impacts whether you are going to be able to serve at the high level.

    Let me give you an example, and the only way I know how to do this is to give you my own experience. I was selected for flag in my 21st year of active service. The average today is closer to 27 years of service. When somebody is selected in the 27th year, it is very difficult with the time to develop, given the grades, for them to get to the level that we are talking about anyway. Sixty-two is a cap on them that is absolutely affecting their perception of how far they are going to be able to go anyway.

    My sense of this is that if you create a compensation system that makes it possible for officers to have longer careers, and who desire to serve and are the select few that the Nation wants to stay and serve, that we are going to change the psyche of this whole system. But the data shows specifically that the—and flow was my number one question about this—that we will have the same opportunities that we have today. That is absolutely mandatory that this legislation includes the flexibility that I am—that this legislation asks for that lets me manage the one and two-star flag numbers.

    Mr. SKELTON. I am not sure you have done a peer analysis of the history of the military and particular flag ranks in the Army. I have had that opportunity to do that, and how the seniority system ruled and how it did discourage people. I won't go into all of that, and the examples are real horror stories down through the years, and the system we have now works. There are exceptions, a la Grace Hopper, a la section 688. But I will not ask for questions now, I will come back later. But thank you very much.
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    The CHAIRMAN. Thank the gentleman.

    Mr. Saxton.

    Mr. SAXTON. Dr. Chu, let me ask you a quick question. The Department of Defense laboratories are obviously a critical part of maintaining our technological leadership. In 1999, the Congress included a provision in the authorization bill that permitted laboratories to hire technical staff, if you will, outside of the Civil Service System in order to be able to attract the kinds of people that we needed. That system seems to have worked pretty good. Defense Advanced Research Projects Agency (DARPA) is authorized for 40 positions, and each of the services are authorized for 30 positions.

    Your proposal appears to eliminate the ability of DARPA and the services to hire these folks outside of Civil Service. Is that true, and if so, how will you deal with it?

    Dr. CHU. I believe, sir, what the proposal really does is allow wider authority for everyone, which essentially replaces the authority that you are describing. We would actually, however, propose to extend the authority DARPA holds for appointing highly qualified experts as employees of the U.S. Government, which, again, I think has the effect that you are pointing to in terms of flexibility the laboratories need to get the best scientific engineering talent for the country.

    So the bottom line answer to your question is, we are basically replacing the authorities that are there with broader authorities for everyone, but we propose to expand the authority, which only DARPA now holds, for the so-called highly qualified experts to make it available to everyone. I think that will get us to the same bottom line.
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    The reason for replacing authorities is so that we are operating the entire Department on a similar system rather than having these stovepipes where each particular institution has a somewhat different personnel solution.

    Mr. SAXTON. So you feel comfortable with a provision that you have obviously thought through this process—the process, and that you are comfortable that we will be able to attract the right kinds of folks——

    Dr. CHU. Yes, sir. The key is being able to appoint promptly and be able to compensate competitively, and we think these provisions do so.

    Mr. SAXTON. Thank you.

    Admiral Clark, let me ask you what I think is a really tough question. It has to do with transformation and acquisition. It seems to me that we need to have some kind of a bridge that follows a more—perhaps a more logical path in the area of acquisition than the path that we have been on in transformation over the past few years, keeping in mind, for example, that the C–17, which was a transformational concept, took well over ten years to move from concept to first production model—first production aircraft. I think it was 13 years, actually. And, Chairman, I lived through it. It was kind of painful along the way.

    Now we are transforming—for example, in the Army the acquisition transformation issues are several, but one of the models is the transformation of the legacy force in the Army from the current laydown of force structure that we saw demonstrated very successfully over the last month or so in Iraq through the Stryker and into the Future Combat System. One of the things that I observe happening is that we have taken all or most of the modernization money from the legacy force and decided to invest it in Stryker and at the same time trying to develop the Future Combat System, which is more revolutionary and perhaps more time-consuming to develop than the C–17 was.
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    In the Navy we are moving in a number of areas, littoral ship and other things, but the example that I would like to use is moving from guided-missile destroyers (DDG) to DDX. And listening to the debate on DDX and how heavy it will be and how much ammunition, munitions, it will be able to carry, et cetera, this looks to me like a very long period—a very long, complicated process, as well, and I hear that maybe we are not spending enough on—we haven't devoted enough resources on modernization and evolution of Aegis and other DDG issues.

    And in the Air Force—and I don't mean this to be critical; it is just an observation—in the Air Force I go out and talk to people in the field. They are flying today the F–16s and F–15s and other aircraft in the Air Force, and some folks are telling me that the—not even the modernization, but the maintenance of these airplanes, which is very expensive now, is underresourced because we are spending all the money on F–22 and Joint Strike Fighter.

    It seems to me that there might be a more logical way, given the observation that we have all had over the last weeks and months of how well we have performed against a fairly serious threat and the recognition that maybe we need to do more in the terms of legacy modernization and maybe move slower with transformation.

    I guess maybe I am kind of wandering around here, but I think you get the point. And it is a tough question. I just wonder what your thoughts are on this.

    Admiral CLARK. Well, I can't address Striker. I just am not smart enough to—and tuned in to the specifics of the program, but let's talk about the principles that you are addressing.
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    I think one of the greatest challenges for a service chief is to bring forward the recommendations about how you put the puzzle together and make recommendations up the chain to create a—our term in the Navy is warfighting wholeness, and when we get down to the acid test for us—that is the term we put on it—are we creating the best warfighting wholeness?

    And it is different for every system, no doubt about it. I believe that—if you analyze the acquisition process, you can see some pitfalls that we have had over time. For example, every system that transitions from scientific and technical (S&T) to research and development (R&D) goes through real struggles. The struggle doesn't have anything to do with the development process. It has to do with the funding process. It has to do with the inflexibility of the—being able to move money from S&T to R&D, and vice versa, and so that you are—so you can proceed smoothly.

    So every little perturbation causes a big problem in industry, because industry has a team put together that something is developing, now it gets perturbed, sometimes for 2 years, because the budget proposal that is before you right now in 2004, you know, I was working on that 2 years ago. This is something that if we are going to—if we are going to modernize our acquisition system—and I absolutely believe we have to if we are going to have—if we are really going to do spiral development, we have got to have increased flexibility as we create the platforms for the future, and let me use the littoral combatant ship.

    There is a revolution right there. The revolution is—goes like this. I am not going to buy a combat system along with the keel of that platform that by the time the keel and the rest of the hull delivers, the combat system is already overtaken by events (OBE).
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    We have to change the way we think about this process, and there are pieces of this legislation that starts us down this path. If we are going to really be able to do spiral development, we have to have the authorities properly put in place to do this.

    Now, I will tell you that I have made decisions—the decisions I have made for my systems go like this. I cut the cord on modernization on DD–963s. There is more real hull life in the platform, but I cut the cord, and I did it for this reason. The 963—I could have modernized it, but it is already way over 20 years old. It was built to be a 30- to 32-year platform. It doesn't have an air defense system in it that will compete in the real world. It is a deepwater anti-submarine warfare (ASW) system. It does not have the kind of combat reach that I get with modern systems. I can't take it into the shallows, because it is too big a ship, and the crew is huge. And so I look at this and I work my business case, and then I come—and when you reverse it back and go back the other way, I go, too many resources to invest in that old platform. I am going to go put my money in—the taxpayers' money in the development of DDX, biggest transformation we have ever seen in terms of the potential that is in that platform with future rail guns and all electric and all of this. Now is the time to make the break and go that way.

    So it is a difficult challenge that every one of us face, and Mr. Saxton, every time we face it, every platform is different based on where it is and what it will cost to update it. These are tough, tough challenges.

    The CHAIRMAN. Dr. Snyder.

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    Dr. SNYDER. Thank you, Mr. Chairman, and thank you for holding this hearing today.

    Thank you, gentlemen, for being here. I think this has been helpful.

    Dr. Chu, I just want to pick at you a little bit. You made a statement in your introductory comments about that this had been discussed with staff members and Members up here for several months, and Mr. Wolfowitz made that comment briefly yesterday when he was here and was quoted in the paper saying that, but in fairness you have discussions but no paper. My understanding is, while you all may have had your formal written legislative proposal, that Office of Management and Budget (OMB) had not signed off on it, you were not given authority to release it to the Congress. And going back to Mr. Skelton's point yesterday, these are statutory legal changes that are words on paper, and we have no words on paper until April 10th.

    I think in our discussions it was an absolutely good faith effort on your part. If you could have given it to us earlier, you would have. Maybe OMB is slow readers, or they had to do their evaluation. As Mr. Hunter pointed out yesterday, these are fundamental changes, and maybe they wanted to review it. But discussions are one thing, but we got no words on paper until at the earliest, I guess, is April 10th.

    With regard to what we are discussing today, it seems to me that this is one of those efforts you look at some of these provisions and wonder why they are statutory to begin with, and I am sure there are good reasons for it. I suspect that some of it was because of some past history of abuse. Now, maybe it was 80 years ago. Maybe it was at a different time, but it seems to me as—if the policies, whether they are your decisions or statutory, can keep personality out of it, keep politics out of it, look at both the short-term and long-term effects, not just short-term during your 4 years or Dr. Chu's 4 years, but look at what the effects may be 4, 8 and 20 years down the line, not give up the constitutional responsibilities, I would think that Congress staying out of this as much as possible would be a good thing.
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    I had a few questions I wanted to ask, and I have not read the study, Dr. Chu, but I am told that there was a RAND study from 2001 that talked about increasing the tenures of general officers, and you have had a good exchange today, I think, with both Mr. Hunter and Mr. Skelton, but I thought one of their conclusions was that there would be problems with the trickle-down effect into the lower ranks in terms of concerns about their ability to be promoted.

    Are you familiar with that study? Was that one of their conclusions and concerns, and why do you think—have you specifically addressed that concern or with a different kind of proposal than they were looking at in 2001?

    Dr. CHU. I am not sure I am familiar with the specific conclusion of the one you mentioned. We have had RAND involved in doing the simulations that were described. That is the basis on which we reached the conclusion that we do need this power to retire flag and general officers at the grade in which they are serving without regard to tenure in that grade for just the reason Admiral Clark so eloquently explained.

    The real source of stagnation is not that the O–10s and O–9s might stay a bit longer. The real source of stagnation is how do you manage, as Admiral Clark described, the O–7s and O–8s.

    Under present statute—and certainly if we kept the O–10s and O–9s a bit longer as we would like to do, you do have a phenomenon that people have to stay on to three years in order to qualify for retirement at that grade. That is not healthy if that officer is really going to leave service really, and you need to allow him or her to do so promptly once that decision is made.
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    So that is the key insight that has come out of all of those studies. It is really the O–7, O–8 management that is critical to precluding stagnation. That is the issue that was so properly raised. This issue we are very concerned we do not create a problem with. We think, as I indicated, there were quite extensive simulations of how might the system behave under different rules of the game, that if we receive this power from the Congress, we can not only maintain, but, as Admiral Clark testified, in some cases marginally improve promotion from O–6 to O–7. That is really the key power to preclude that problem.

    Dr. SNYDER. Admiral Clark, I wanted to ask you several questions in five minutes. I am already on my yellow light, unfortunately, but you have given us a pretty enthusiastic endorsement of this today.

    Let me just run through my three or four questions. Have you had discussions with your colleagues on the Joint Chiefs, and are they as enthusiastic since they are not going to be testifying? I am sure that you have officers that have been involved in this kind of—that are experts in this whole area of who gets promoted, who doesn't get promoted. Have they also had ample opportunity over the last year to look at these proposals, and are you aware of any opposition through the formal proposal that has come before us?

    You gave your personal opinion just a short time ago that you are in very strong support of this. Are there any specific provisions that you personally disagree with in this proposal and which—that were not there that you think we ought to explore further?

    Admiral CLARK. Let me talk about the chiefs first. The chairman testified yesterday that the chiefs are all in support of this. I have had extensive discussions with Dr. Chu, one on one. I had then—you know, we don't talk about what goes on in the tank, but I will tell you that we had a very frank discussion about all of this in the tank with all the chiefs, with Dr. Chu, and I will tell—I align myself completely with the chairman's statement that the chiefs are on board and are supportive of this. All of the chiefs manage their flag community in ways that are unique to their service, and I haven't talked to the chiefs about the specifics of their case, but I have discussed this also with Secretary Rumsfeld. I laid down here and emphasized in the strongest terms that I have said, I have got to have certain pieces of this legislation to make it work, and this is the piece with regard to the—to one and two-star flags. In other words, you can't get pieces of it and not have that piece of it and make it work.
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    So we have had extensive discussions. The individual that full-time runs flag matters for me has reviewed this in detail. We have no red flags. We have no red flags. We have all green flags.

    With regard to things that I might be concerned about, I will tell you that I support this legislation. There were areas I would have gone further.

    Dr. SNYDER. Thank you, Mr. Chairman.

    Thank you, gentlemen, for being here this morning.

    The CHAIRMAN. I thank the gentleman.

    Mr. Thornberry.

    Mr. THORNBERRY. Thank you, Mr. Chairman.

    Because the world is changing so rapidly, I have tried to look at past military innovation and figure out what the key things are, and it seems to me, Admiral, that people are the key. You said that in your opening statement, that far more important than what we buy are our personnel policies and the incentives and other things that we have in that area.

    And it also seems to me that the exceptions Mr. Skelton talks about prove some of the points that you all are trying to make. Number one is that some of the greatest innovations in our military history have been by those who have been able to stay in their post more than two years. Rickover at Moffett, and there is a list.
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    Second, if you read some of the history of the Rickover case in particular, he had to go to extraordinary lengths to stay in the service. As a matter of fact, they had to create a special post where he had one hat in what is now the Department of Energy and the other in the Navy, and several powerful Senators had to go put enormous pressure on the White House every time he came up in order to stay on his job.

    Mr. THORNBERRY. Now, that shouldn't be the ordinary course of business. It is the exception that shows, it seems to me, that we can do a lot better. But the truth is all my book learning isn't work anything compared to, I think, the very persuasive real life experience that you have helped lay out for us, Admiral.

    Let me clarify just a couple points. Mr. Chu, the ten-person exception, is that per service or is that across all the services?

    Dr. CHU. That is the Department, sir.

    Mr. THORNBERRY. All services. Remind me what is the statutory limit on how many general and flag officers we have now.

    Dr. CHU. I would have to go get that number, but it is around 8 or 900.

    Mr. THORNBERRY. So we have roughly 8 or 900 flag officers and we can keep 10 for 2 more years and that is all the exceptions or the authorities that the statute gives you?
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    Dr. CHU. Yes, sir.

    Mr. THORNBERRY. Now, I think you mentioned briefly in your opening statement that part of what we have got to figure out is how to compete with the private sector. But have you also looked at private companies and other organizational behavior about mandatory retirement age and limits on length of time that they can stay in a particular post, and is there anything approaching what we have today in the military?

    Dr. CHU. Yes, sir, we have. Matter of fact, it is an explicit basis of rethinking our management here. We reviewed the literature. Typically at a minimum, senior executives stay in their post four or five years. The average chief executive officer in recent history, typically it is eight years. It turns out, by the way, to be exactly how long Don Rumsfeld was Chief Executive Officer (CEO), although that was accidental. And it is those lessons especially that have led us; certainly it is the intuition that we need to be purposeful about the time the most senior officers spend in their post and it does typically need to be longer than is now true.

    Mr. THORNBERRY. And according to the information that I have seen, the average that O–7, O–8 and O–9 spend on their post is right around 2 years.

    Dr. CHU. Yes, sir. We have been through those data. It is invariant, it is two years.

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    Mr. THORNBERRY. Okay. Let me ask, Admiral, one last question of you. You all have looked obviously at the data, the hard numbers, and how this would work for the Navy and presumably others. On Mr. Skelton's concern about the effect of younger officers, we all have that concern, and you said you did, too. But part of what we are dealing with, and I think you were talking about, this is a cultural issue, not just numbers and dollars and cents, but I think you said the psyche of the organization. What effect does it have on the psyche of an organization for O–5s or whatever, O–6s to look up and see people who are having to spend three years marking time just so that they can retire? I mean, surely that rigidity and that phenomena has an effect on whether young people want to devote—younger officers want to devote their life, and what about the two-year rotation? Do you think there is concern as you are down in the lower ranks that I can't stay anywhere long enough to make a big difference anyway because this rigidity requires me to leave in 24 months? What effect does that have on the psyche of the organization?

    Admiral CLARK. Well, there is no question about the fact that the organization observes people up the chain. The psyche of an organization has to do with people identifying how will I fit in this in the future. And so, what I have come to believe is that the winning organizations—and I have studied this extensively, inside the military and out, I have on my Web page the stuff, the books that I insist that my flag community read so that we know what is working in the civil sector, what are the principles that guide the very successful and highly effective organizations.

    And the psyche that works is that you are in a winning organization, where performance is rewarded and that the organization fairly does that and it is clear to everybody in the organization that if you perform you are going to get ahead. What I have come to believe about this, the generation that we have today, and by the way, we are having unprecedented success in the people business in the United States Navy. In the 227-year history, it is all the numbers are higher, better than they have ever been in our history. What we are doing is that we are saying this: We are going to give you a chance to prove what you can do. We are going to give you a chance to make a difference. And we are putting appraisal systems in place that are going to assure that you are fairly evaluated and assessed.
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    Congressman, they are responding to it in a powerful way, and I believe that the points that you make are absolutely correct. I don't believe that there is ever a one size fits all. Let's take the case of Wayne Meyer, my good friend, and we are both from Missouri, that he brings up. Wayne Meyer is a national treasure. He served 38 years. He served much—by the way, it was a totally different system; couldn't do that today. It was pre-Defense Officer Personnel Management Act (DOPMA). Having said that, the Wayne Meyer case is exactly the case we want to be able to perpetuate. They are not all three and four stars. Wayne Meyer was a two-star. The individual who is—what we have come to believe is this: The analysis on this shows that when you analyze our positions, we have got developmental positions where people go into jobs and it is a huge development growth experience and you got user positions where you are using the skills that you have developed and now you are really in your optimum productive mode. There are—every job and every position has to be handled differently. The current system is an impediment to that. I need the freedom and a set of rules that allows me to create the Wayne Meyers of the future.

    Mr. THORNBERRY. Thank you.

    The CHAIRMAN. Thank the gentleman. Excellent line of questions.

    Ms. Bordallo.

    Ms. BORDALLO. Thank you, Mr. Chairman, Mr. Skelton. Thank you, gentlemen, Dr. Chu and Admiral Clark, for appearing here today.

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    We spoke at length yesterday, and it was suggested by many of my colleagues on both sides of the aisle that perhaps we need more time to deliberate on this Transformation Act, and I am sure that you have been working at it for months, maybe years, putting it all together. And we have just a few days to look all of this over. So I wish to ask Dr. Chu to clarify something that he was interviewed on April 30th in The Washington Post regarding the timing of the Defense Transformation Act. And I quote, ''As for the quick pace, Chu attributed that to a request by the Armed Services Committee, which may include the measure in the defense authorization bill that it is scheduled to take up mid-May.'' And this is your quote, Dr. Chu, ''The Department is not saying we have to decide all of this in a few days. That was not our intention.''

    So I would like for to you clarify. Do you feel that or are you in support of further deliberation on this bill?

    Dr. CHU. We are seeking prompt action, Madam. There is no doubt about that. That is why we came up even before we had language and spent time and included material and testimony, quite unusual that we haven't in my experience had to testify about something where we would come in and answer questions about how we would like to proceed, starting with the early subcommittee hearings. So we favor prompt action. We very much hope that this committee will see fit to include these provisions in its bill. That would be terrific.

    Ms. BORDALLO. So what you are saying is, you want prompt action; is that what you said?

    Dr. CHU. We favor prompt action, yes, ma'am.
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    Ms. BORDALLO. So this was a misquote.

    Dr. CHU. What the reporter asked is what was driving the specific question we are on and I answered honestly we are trying to be responsive to the processes of the Congress, yes, ma'am.

    Ms. BORDALLO. Well, I just find that, you know, you said the Department is not saying we have to decide all of this in a few days. That was not——

    Dr. CHU. The Congress—it is not my place to speak to the processes of the Congress. They are a process to which we must respond. We are trying to respond to those processes. The Congress will take—even if this committee does act and includes it in this bill, the Congress will take many months to complete that process.

    Ms. BORDALLO. So you feel that further deliberation

    Dr. CHU. I am not—let me put myself on record. I am not arguing for delay. There are real problems here. I think we need to move on those problems. I am delighted this committee is giving us this chance in the last two days and in the subcommittee hearing in the Civil Service Subcommittee of the House Government Reform Committee on Tuesday. We are eager to see these committees move forward. But the process, as you know, is a long run. You have floor action ahead of you, you have conference, you have enactment, it is a long process. If we don't begin, in our judgment we are not going to get to the end.
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    Ms. BORDALLO. Thank you. Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentlelady.

    Mr. Wilson.

    Mr. WILSON OF SOUTH CAROLINA. Thank you, Mr. Chairman, and thank you, Secretary Chu and Admiral Clark. It is an honor to be with you this morning. One of the concerns that has been raised, or certainly it has been raised a number of times, has been that the services have not fully studied the implication of the proposals for the Transportation Act. And in the newspaper this morning in The Washington Post it was indicated that Secretary Wolfowitz had indicated there were actually more than 100 meetings between members of the Department and lawmakers and their staffs. Can you review for us the coordination and review process leading to these transformation proposals, especially those related to the general and flag officer management?

    Dr. CHU. Yes, sir. The general flag officer provisions really emanate from a charge the Secretary of Defense gave to me over a year ago. Really, in some ways the charge began the first day I took office. He is very concerned, has been very concerned for a long time, about the rapid turnover that Congressman Thornberry spoke to so eloquently as undercutting the Nation's ability to do planning and lead its military forces properly. That led to the empirical studies that Admiral Clark provided. We looked at the records of promotion and assignments of general and flag officers since the early 1990s. And we tried to understand the patterns. First, what are we doing now and then if we would like to do something different, produce it better, improve result; what rules of the game could we contemplate that would produce that.
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    In the final stage, after, I am sure what seems to some like less simulations of alternatives, the final stage was, if these are the rules that we need to live by, the kind of rules that Admiral Clark discussed, what are the statutory impediments to achieving that outcome. So, the last stage of course it leads to the specific legislative proposal. So these proposed changes are enabling; they would permit the Department to reach the kind of goals that Admiral Clark so eloquently spoke to.

    Mr. WILSON OF SOUTH CAROLINA. And additionally, this has been touched on by Congressmen Skelton and Thornberry, but the concern about allowing senior general and flag officers to serve until age 68 instead of the current limit of age 62 there will be a sufficient—or would there be a significant decrease in the promotion opportunities for officers in grades below general officer, or are there any studies or other evidence that would subject the impact that the longer service by general and flag officers would have on the promotion opportunities for officers up through the grade of colonel?

    Dr. CHU. No, sir. We have no—in fact, below O–6 because the way we have structured this package, we did very carefully simulate what would happen to promotions from O–6 to O–7 and O–8, so on and so forth. Our conclusion is, if the Congress were able to give us this package of powers, that promotion opportunity would be typically the same or slightly better from O–6 to O–7 and about the same from O–7 to O–8 as we enjoy today.

    Mr. WILSON OF SOUTH CAROLINA. What flexibility is there in the system being proposed to ensure promotion stagnation does not occur, and are there sufficient slots to fit into this, too?
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    Dr. CHU. The key provision, sir, is the one that Admiral Clark and I have spoken to, and that is the ability to retire flag and general officers at the grade in which they are serving without regard to the tenure in that grade for the reasons that he so ably explained. I think the insight we developed in this one and a half year or so process is that it is the management of O–7, O–8 positions and the proper management of the positions that precludes stagnation.

    Mr. WILSON OF SOUTH CAROLINA. Thank you very much. I yield the balance of my time.

    The CHAIRMAN. I thank the gentleman. Mr. Ryan.

    Mr. RYAN. Thank you, Mr. Chairman. Thank you gentlemen for coming. I have one question and then I will yield back. Regarding the joint officer management and joint professional military education portion, I have an air base in my district that has the Navy, Marines and the Air Force. So we are proud of the jointness capabilities that we have. And can you talk a little bit about some of the impediments that you see as far as the educational process goes and the effectiveness of that and in the management portion of this bill?

    Dr. CHU. We very much have taken to heart the need to strengthen our joint, especially officer, cadre. One of the issues, however, that has risen has been the requirement in the present statute that in order to qualify, you must first have completed the schooling and then do the joint tour. That is the preferred sequence. There are reasons for operational schedule; for example, what is happening with the deployments to the Persian Gulf region where the officer may have a joint tour first before he has had a chance to have the education. And then, in order to qualify, he or she needs another joint tour, which may or may not be the best assignment for that officer at that juncture. So, to permit us to use the officers to their maximum talents within the constraints of career link, that is one of the issues out here that we are trying to work on. It would advantage, I think, the whole joint special officer initiative if we could qualify those individuals as long as they complete both requirement segments, both education and the tour, but that the sequence is not material.
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    Second change we value, as I indicated, is the ability to give credit for joint tours to a set of joint experiences that now don't qualify. And that specifically involves situations whereby our policies—we do not allow the tour to be more than one year because it is a non—no dependents go. Korea is the example, or joint task force headquarters which are often a finite period in terms of their existence.

    So we would like if you accumulate 365 days in that experience to be able to say, yes, you have indeed had the joint experience we are seeking. We think substantively, both these situations give the officers the joint experience that is the spirit of this statute. But we would like to be able to recognize it in terms of joint specialty qualification.

    Mr. RYAN. What is the education component? How long is that?

    Dr. CHU. Mr. Skelton, of course, is the national expert on this so I defer to him. But basically, they have to complete a course that follows their war college course that gives them the joint specialty background that they need.

    Mr. RYAN. I don't know if the gentleman who asked before this, if you were talking about this specific portion of the bill, too, the Defense Acquisition Work Force Improvement Act streamlining. Is that what you were referring to in the last line of questioning? Was that—did he ask you that question?

    Dr. CHU. No, sir, I don't believe he did.

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    Mr. RYAN. I was reading through it here, and as far as having the ability to vary tenure on critical acquisition positions, can you just talk for a minute about that?

    Dr. CHU. Yes, sir. We just—we have benefited greatly in this department from the Defense Acquisition Work Force Improvement Act. We have learned some lessons from that. It also needs to be modernized, brought up to the present date. And these changes are intended to accomplish that end.

    Mr. RYAN. Okay. No further questions, Mr. Chairman. Thank you very much.

    The CHAIRMAN. I thank the gentleman. Mr. Cole.

    Mr. COLE. Thank you, Mr. Chairman. Secretary Chu, having given you a hard time yesterday on the civilian front I want to tell you how much more pleased I am with this particular set of proposals for a variety of reasons. First the process, I think—while I think all of us would have
liked—you always want things as far ahead in advance as possible. I feel like at a congressional level we have had much better exposure to this, the subcommittee's level, much better discussion. Frankly, I am very impressed with the change you have had with the uniform personnel, as well. I think you have talked to your stakeholders and your partners, so to speak, that perhaps was not done in my opinion at the other level. So I think it is generally an excellent set of proposals.

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    I must say, drawing a personal parallel, there was a time in my political career I was enamored with term limits, and now that I am 54 and have arrived in Congress, I am seeing the wisdom of age and experience more clearly. There are a couple of things: One, I want to commend you on and pursue a line of questioning. First, I was particularly pleased on the Reserve components. You were talking about medical and dental. Just visiting with my uniform personnel at Fort Sill, commanding general down there told me during the mobilization process, as they were bringing in units, he said I learned more about teeth in 30 days than I ever want to learn in a lifetime. It was a real problem for them. They did a great job as always, but being able to address those problems earlier and more thoroughly and, frankly, more regularly I think would be an enormous benefit when the time comes. They seem like they are little things, but I am sure they are not when you are dealing with them. So I commend you on that.

    Second, you mentioned you are requesting the authority to call up involuntarily for up to 90 days for additional training. Number one, tell me, if you would, what in your current experience—because we agree the reserves seem to have done extraordinarily well; and again I hear from both sides of what used to be a great divide and is not so much of a divide anymore and that pleases me enormously. What prompts you to feel the need to do that, given the success? If you could respond to that first.

    Dr. CHU. It is very much the real world experience of the formulation of the force that was actually sent to Southwest Asia in the most recent operation. As we began contemplating the potential need for military action, one of the issues that we were starting to run into is how well trained is this unit. Does it have all the skills it needs? How long will it take to get that skill level? No decision was made by the President that we are going to use force, so it put the Department in a frequently difficult position in terms of being ready. We might know of unit needs that is not the fault of the unit. It may have been—frequently was the result of the resourcing process. So it is not that the people are inadequate, it is just that they had not had the chance to do the type of training that would bring larger units together. The individual skill set is fine, the small unit, let's say platoon or company set, is fine but the battalion or the larger unit has not had a chance to train together.
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    So the purpose of this would be to allow us to say we have not made a decision that this unit is going to be mobilized. We have not make a decision we are going to use any unit, but if the country should call upon us, it may call upon us on short notice. It would be prudent as a matter of military planning to be sure this particular unit was a little higher on the step, and that is the purpose of the provision.

    Mr. COLE. Well, I find your reasoning very persuasive. Let me ask you this: The problems I foresee are frankly personal problems that relate to the reservists and their employers. Do you have any set of proposals in terms of easing the burden for relatively short-term call-ups, whether it be, you know, for an employer tax incentive for military families or reservist families with health care, those type of very practical issues? You are going to have a whole range of them if you are bringing up people there that way. I wonder how much thought has been given to that particular part of the problem.

    Dr. CHU. We are paying very close attention to it. Those are very significant issues, sir. As a result of that deliberation, as I know you are aware, we have already changed our rules, helped by some powers that Congress gave us last year, on health care for reservists. Basically, if you are called up for more than 30 days, you get the same package the actives get. In fact, in this mobilization we gave the reserves a little bit better package because we hadn't got to this conclusion. But with this conclusion we put everybody on the same level playing field so that we will be in good shape going forward.

    On the larger question of what else we ought to do, let me say two major issues: First, the Congress has asked us for a study of Reserve compensation, which is due this August. I think I would urge that that be our vehicle for a cohesive debate about the right set of answers rather than piecemealing the answers at the stage in advance of those results. That effort, we hope, will be informed by a survey of reserve personnel, which is being conducted this month. It is a Web-based survey; it is very much focused on the experiences of the current mobilization. What happened to you? How does your income compare with your civilian income? How much notice did you get? That is one of the issues that has arisen. So I think by toward the close of summer we will have a lot more evidence to make decisions about what is needed.
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    I do want to note that the employers of the Nation have really answered—especially some of the major employers—have really answered the country's need with their own voluntary decisions. Had several major employers celebrated in ceremonies, one this week with a major corporation. There are more planned. I don't want to endorse any one company, so let me avoid naming names. But I do want to emphasize they include some of the most important corporations of American life, who recognize this as their contribution to the national effort, and I think it is something we all collectively should celebrate.

    Mr. COLE. A couple things: One, I commend you very much for your efforts in terms of determining from a reservist standpoint what their needs are if we are going to move to this kind of system on a more regular basis. And second, I appreciate your expression where employers are concerned. I think it is important they ought to be recognized, and frankly, most of the ones I know want to participate. I would ask you as we move toward August to think if there are some specific things that the Congress ought to consider. You know, clearly we put an enormous strain on a lot of police officers, I can tell of a lot—in Oklahoma we took 12 people out of the police force. They were all happy to go. The force was very supportive of that. But it was an unusual strain for them. And I am sure that was repeated in a lot of places around the country. And I worry larger companies have the resources to do things; smaller companies sometimes don't with the best will in the world.

    What I would like to know, that we have at least thought about seriously, is how do we make it easy for that reservist to reenter where he was at? I do not want somebody in the process of serving their country to sacrifice their civilian employment again just because they slip through the crack and they don't work for either a public entity or a large enough corporation. So I would really urge you to think about that, and certainly I will be trying to do some thinking about that. But I would love to have a dialogue on that point as to what we can do, because if we are going to do this, it will make a difference to a lot of employers. I don't want to do something that detracts from your ability to recruit and retain. And that means we have got to make it easy for these folks to leave and easy for them to come back.
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    With that, I yield the balance of my time.

    The CHAIRMAN. I think the Admiral had a response.

    Admiral CLARK. 30 seconds. The issue of the ability to surge is, I believe, of great strategic importance, and this measure with regard to dental benefits and these kind of issues is a key thing. I think when we get all the lessons learned on Operation Iraqi Freedom we will come to the issue of speed and agility. There is a time when the military operates in support of diplomacy. In order to do that, the speed is of great importance. The ability to surge large numbers of forces rapidly is one of the lessons that will come out of this operation. You know, our time lines dramatically improved over what we were able to do in Desert Shield and Desert Storm. This provision is critical to our ability to give the Commander in Chief options and the ability to surge forces that shows a potential enemy that we mean business. So I believe that this measure is very, very important.

    The CHAIRMAN. I thank you. I thank the gentleman from Oklahoma.

    Mr. Taylor.

    Mr. TAYLOR. I want to thank you gentlemen for being here. A couple inconsistencies, Dr. Chu, that I would like to point out; give you the opportunity to respond. Yesterday, the chairman made a very good point that Marines don't have any place to practice amphibious landings; that because of, I am told, environmental regulations on the bases, they have to take a bus across the beach. Given that, how does the Department justify giving away 13 miles of beach that the taxpayers paid for that was available for that type of training on the Island of Vieques? They are not making any more beach. It is hard to buy, the environmental rules will take years. We had 13 miles of beach, and apparently your Department just decided to give that away.
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    Dr. CHU. That was, as you know, sir, the subject of considerable debate. A decision was reached, as I appreciate the outcome, that we could find adequate alternatives. I think that was the certification the Secretary of the Navy offered on that point. And it really is ultimately his judgment as to whether those alternatives would give the Navy comparable experiences.

    The Department always would like to have as many alternatives available as possible. We recognize in some cases that is not going to be feasible.

    Mr. TAYLOR. Nothing to do with kowtowing to the Hispanic vote?

    Dr. CHU. My understanding, sir, is that the decision was made on its merits.

    Mr. TAYLOR. Political merits? Doesn't strike me as defense merits in having studied the issue probably as much or more than anybody in this room. I would like to go on record that this administration, as well as the previous administration, have hurt national defense for the sake of the Hispanic vote, and I find it strange. And now, all of a sudden, we have to throw all these environmental rules out the window, because you don't have a place to train and you just gave away 13 miles of beach on land that the United States taxpayers have paid for and have been in their possession for close to 60 years.

    Admiral Clark, how many ships do we have in the fleet now?

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    Admiral CLARK. 302.

    Mr. TAYLOR. How many did we have when your watch began?

    Admiral CLARK. I believe 310.

    Mr. TAYLOR. I think it was a little bigger than that but I will cut you some slack.

    Admiral CLARK. I will check my number.

    Mr. TAYLOR. How many Admirals did we have when you began your watch?

    Admiral CLARK. Fundamentally the same number I have today.

    Mr. TAYLOR. Which is?

    Admiral CLARK. The ones that are paid is in the vicinity of 200. I have a number in the category that I say are frocked that are not being paid.

    Mr. TAYLOR. So, it is your thought it was in excess of 400?

    Admiral CLARK. I was talking about the ones on active duty. I will be glad to show you the numbers. There have been no major changes in the flag community since I took office.
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    Mr. TAYLOR. Let me ask you this: Are you going to go online as saying we have more admirals than ships or fewer admirals than ships?

    Admiral CLARK. That is a real interesting line of discussion. I don't think it has any relevancy at all.

    Mr. TAYLOR. Well, I asked the question. I am a Member of Congress. I was elected to represent 700,000 Americans. I think it is a very relevant question, Admiral. I would prefer a straight-up answer.

    Admiral CLARK. Here is what I believe is the way to explain how many admirals you need. You need admirals to command certain size of troop structures. So you need them for that. But if you evaluate the number of Admirals based upon how many ships you have, I would suggest that the world we live in today—and if you compared it with, let's say, World War II, there is no comparison. You need admirals to run development programs that are creating new combat capability. The degree of complexity in the acquisition world today is how many dozen times to one more than it was in World War II. So if you are going to develop complex systems, you need a very capable individual to do that. So with the number of systems that we are talking about, you might then build 1,000 ships or 300 ships. But the systems are what is driving the requirement for flags as opposed to the number of ships. And that is why I don't believe that it is the right measure to use. I mean—so I made my comment not to be flippant at all. I don't think it is the right measure.

    Mr. TAYLOR. Again, Admiral, I would like to go on record that I have heard you say we can get by with fewer ships, I have heard you say we can get by with fewer sailors. I find it inconsistent that we say, you know, we need this many admirals. And I appreciate the work you have done to eliminate the practice of cross-decking. I think that is great. As one Member of Congress who does indeed represent 700,000 Americans, who is concerned about national defense, I wish you would put as much effort into maintaining the 375-ship Navy that you said we need as you have put into your efforts to take care of the O–8s and O–9s. I am using this opportunity to say that.
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    Admiral CLARK. May I respond?

    Mr. TAYLOR. Absolutely, sir.

    Admiral CLARK. I absolutely believe we need to move toward a larger Navy. I would never stand, sit before you and say that I want fewer ships because I just want fewer ships. The judgments that, and the recommendations that, I made in the submission of the budget this year that leads us to fewer ships, I do that specifically so I can move this Navy to the future. And if I cling to old ships for the sake of numbers, I believe that—I sub-optimize my successors in their ability to provide options for the Commander in Chief.

    And so, here I sit, and I have to make some judgments, and I don't pretend that they were easy judgments to make, but I made them. And so I have outlined in formal submission to this committee what I think 375 ought to look like in terms of the mix. And I stand foursquare behind the belief that that that is where we need to go.

    I want to say that this administration has allowed me to put that number out there and put that stake in the ground. I am appreciative of the fact that I have been given that degree of freedom to talk about what I think the Navy ought to look like in the coming years. But I can't get there from here. We have to get on a path to it. And so I take your point, and I hope that you are able to take mine.

    Mr. TAYLOR. I take your point. I also remind you that you don't get to 375 by retiring more ships than you are building, and that is precisely what is happening. And from what I can see, it costs about $50 million a year to operate a cruiser. You are getting ready to retire five of them that the taxpayers paid close to a billion dollars apiece for. I am told that the logic for this is that we can retire these and with these savings buy newer ships. Well, at that rate you would have to retire 20 for every one you purchase.
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    Now, the ship you purchase is also going to require a crew that has to be paid and fed. It is also going to require fuel. So it is my hunch the one you purchase is also going to cost 50 million a year to operate. So I really would have to point out that I don't buy the logic that you are going to retire enough ships to buy that one and that that one is going to make up for the 20 you retire. Because the world hasn't shrunk. There is just as much space out there as there always was, and you need a presence.

    So, I again would like to go on record that if you say we need a 375 ship Navy, and if they are going to last about 30 years apiece, then I would certainly hope in your budget request that you would ask at least for 10 or 12 of them, which gets us to 360 at 12. You have requested 215. If you can retire them in less than 30 years, which you are doing with these cruisers, we don't get to 150. I would hope one of the legacies you leave those who follow you is a decent size fleet.

    Admiral CLARK. One of the things that has to happen is that I get to deal with the circumstance as it came to me. In my next proposal that comes to the Congress you will see a midlife upgrade for virtually everything we own. The midlife upgrade on the cruiser program should have happened a long time ago. And now we are in a position that I do the analysis on the investment required to sustain platforms and I make the—I have to make an affordability judgment. If there was a way—and fundamentally we are talking about affordability issues. If I hadn't been faced with affordability trade-offs I would have made the recommendations in another way. But let's get right down to it. The business case on this has to do with how many years of life you are going to have left for the investment you make. This decision is being made too late in the game. So, the next proposal that you see coming up in follow-on years is that there is going to be a midlife program in for every one of what appears to be the new ships today that if you don't do this correctly at the right time in the cycle, you get to where we are today with not enough years left to make the investment pay, and that is the difficulty of the financial competition that we are in.
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    Mr. TAYLOR. So, in your next budget request we are going to see this? It will involve——

    Admiral CLARK. This budget, the 2004 budget that is before you, has the rest of the Aegis cruisers with a mid-life upgrade program in them that are not so far along in the age of the basic platform. The baseline ones are at a point that in order to make it pay, you are already well into the 20s, so you are making an investment for 8 to 10 years of life in the platform. And when you got to the affordability decision over the several billion dollars that you are talking about to upgrade those platforms so that they are competitive platforms for the remaining years, it was fundamentally too late in the game, too late in the life of the ship. So this year please support us in our attempt to get the mid-life program in place on the rest of that class of ships.

    Mr. TAYLOR. Thank you, Mr. Chairman.

    The CHAIRMAN. I would just inform my colleagues that the flag cap for the Navy is 216 under the law, and for the Army 302, the Air Force 279 and the Marine Corps 80.

    Let me see. At this time we have gone—everybody has had an opportunity to ask a line of questions. Let's take a second round and let's start with the ranking member, Mr. Skelton.

    Mr. SKELTON. I was hoping, Dr. Chu, that you would answer my question of yesterday about the different qualifications for chief of the service. And I point out that the book that you gave us with the proposed law reflects that in 2006 a colonel could be the Commandant, that a one-star or brigadier general in both the Army and the Air Force could be the Chief of Staff, but you have to have two stars and have sea service behind you before you could be the Chief of Naval Operations. And we discussed this very briefly, and just before the hearing you indicated this was a historical listing. Am I correct on that? So my question would be should they all not have the same qualifications?
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    Dr. CHU. Thank you, sir. As I indicated yesterday and double-checked last night, the specific language you are citing is language that has been in the statute for some time. When we came to amend the statutes we focused on amendments on the changes we need, which is the flexibility that Admiral Clark and I have testified to. We did not change the underlying guidance of the Congress which goes back some distance in history. We are researching just how far back that guidance from the Congress goes. The guidance is in the form of from what pool of officers must you choose. It is not that the person is going to be a Colonel and Commandant. In fact the law specifically provides it will be a general O–10. The pool can include anyone with a grade of Colonel or higher but not lower. And there is similar language, I should point out, for the Army and the Air Force, if I recall correctly, must be chosen from the general officers of those two services.

    Mr. SKELTON. Which means down to Brigadier?

    Dr. CHU. Which means starting with Brigadier. The pool of people you may consider, the post itself, as you know well, sir, carries a an O–10. So as I testified yesterday, that comes before the Senate, nominated by the President, as an O–10. So this language goes to what pool might we consider. We did not see any need—this gives great flexibility to the Department, but we didn't see any need to change that, and it has been the position of Congress these many years that that is the pool we should consider.

    Mr. SKELTON. Let me ask, when Congress passed the DOPMA, the Defense Officer Personnel Management Act, all officers were considered and laws passed thereon. The current situation, the current request addresses only one group of officers; that is, the flag officers and not the majority of other officers. Should this not be more comprehensive?
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    Dr. CHU. We believe that this problem can be solved, as I testified, on its own. It can be solved in a way that does not affect the others. We think it is a matter, just as Admiral Clark testified, central to our ability to transform the problem, going forward to be able to solve these problems, particularly as I think a number of expert commentators have observed, tenure in the post, ability to design, effect and see change through is a key component, as Mr. Thornberry observed, in achieving a different organization in the end. You can't do it with two-year rotations.

    Mr. SKELTON. I earlier expressed my concern about the O–5 and O–6 level of people getting discouraged. What about those that do become one-star and two-stars, and they look up and see the pool of three and four-stars in their service staying much longer and maybe trading places and the like? Will that not discourage the best and the brightest that have potential to be three and four-stars to get out at the one and two-star level?

    Dr. CHU. No, sir. We don't believe so, specifically because of the provision we have discussed this morning. We would hope to make prompt decisions about who is going on to three and four-star range. Those decisions I think actually energize the pool of officers we are discussing; in other words, they don't have to wait forever to get to the top.

    One of the issues that Admiral Clark so courteously discussed by allusion in his testimony, we are often waiting until too late to make these decisions. Then the officer doesn't have the running room to in fact exercise the powers of the senior post and see through to conclusion the kinds of changes that we are seeking.

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    I think this is going to be inspirational. My experience is the more junior officers, the O–5s, O–6s that you have discussed, the O–7s and O–8s that you were mentioning in your question and the most senior officers see them move from being Commandant and Supreme Allied Commander Europe (SACEUR) and Commander for the European Command I think inspires people, realizing that the very best are being given a repeated chance to serve their country. I think that is heartening to all concerned.

    Mr. SKELTON. Admiral Clark, you know what my last question of you is. All the other officers, the other services, should they reach flag rank, go to an intermediate war college and go to a senior war college or the equivalent, whether it be a master's degree in a certain recognized university or a war college in England or some other country to become flag rank. I can think of no exception in the other services. The latest figures I had for the Navy is that 8 percent of your flag rank have two intermediate and senior level war colleges and 46 or 47 percent have one. And I understand we have discussed this many times. Are we making progress on that, Admiral?

    Admiral CLARK. We are making progress and it is not just the intermediate schools, but also graduate education. And fundamentally, we have to—we must do better in this area, and the way we are handling it is that we are talking to our whole Navy about the requirement to commit themselves to a lifelong learning process. And I have established some things to accelerate the process at the senior level, courses at the graduate school to help grow my executive core. But in the middle of this, my service as an expeditionary service is on the go. And it is the nature of our profession. It is my conviction that we have to have more—we have to have additional end strength committed to space that allows us to do better in this area. And in the process of this last year, as we looked at areas where we were going to be able to save some billets—and that is part of the transformation process, figuring out how to make the best utilization of all the resources that we have—I directed our Chief of Naval Personnel to commit a number of additional billets that will then be committed to this area of endeavor.
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    Yes, we have talked about this often, and I am committed to moving in that direction. I won't be able to write this overnight, but this is a journey and we are on it.

    Mr. SKELTON. I think you are right, regardless of one's profession, it is a learning process or else one becomes stagnant. I am in the process of—well, let me go back. I have through the years, as you know, worked with war colleges of intermediate, senior, et cetera, and obtained required book reading lists from each of the services and the war colleges. And without being presumptuous, Admiral, I have done a bit of reading through the years myself, and I will soon produce a suggested reading list for military officers of our Nation based upon three things: Number one, leadership; number two, character; and number three, military art. And when I complete that list, I will see that you are the very first one to get it.

    Admiral CLARK. Thank you.

    Mr. SKELTON. Thank you.

    The CHAIRMAN. Thank the gentleman.

    Mr. Saxton.

    Mr. SAXTON. Mr. Secretary, Admiral Clark spoke a few minutes ago about the importance of our ability to surge. How are the provisions that you have included on reserves compatible with the need to surge, particularly with regard to reserves?
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    Dr. CHU. Yes, sir. Thank you for the chance to respond to that point. It is very important to be able to be sure that people have the right medical and dental readiness. As you know, in past mobilizations it is often the case people are called up and it turns out they have real teeth problems. You don't want to send them forward in that circumstance. That is why we would like the authority, even absent any mobilization decision, to expend public funds if necessary to ensure that particular unit members are up on the step in terms of medical condition so that that is not a factor that slows down the surge process.

    Likewise, as I testified in response to Congressman Thornberry's question—I am sorry, Congressman Cole's question, the ability when we are in the planning mode to be able to take a reserve unit that may need some additional training to come up on the step—again I don't want that to be seen as a criticism of the reserve components or that unit, be sure it is up on the step—so when the decision is made, there is no long period of preparation that is necessary. And, I think, exactly as Admiral Clark said, the political leadership of the country is going to make a decision. Our job is to respond in the shortest possible interval in that decision. That is what these kinds of decisions are ultimately all about.

    Mr. SAXTON. You mentioned, and I didn't quite get the context—you mentioned a 12-week training requirement. Would you expand on what that is?

    Dr. CHU. Yes, sir. Coming off of having the experience in Second World War, our combat soldiers were deployed with too little training. The Congress mandated that before you deploy overseas you must have 12 weeks of training.
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    Mr. SAXTON. Total.

    Dr. CHU. That is a minimum. You must have 12 weeks of training. It is in the statute. We cannot deploy an individual overseas who has less than 12 weeks of training. As we come to look at using direct appointments to the reserve as a way of getting civilian skills promptly into our ranks that we might need, it is clear that this is something we would like some flexibility on. Take linguists for example. We have an urgent need right now for people who speak Arabic, Pashtu and Urdu. We need to appoint those individuals to the reserves with their understanding they can be called to active duty promptly. Under present law, when we think they are ready to go, they are certainly ready to go from the linguistic perspective, we will certainly give them minimum training they need in order to participate successfully. We have to continue that training period for a full three months before we could send them to Iraq for the reconstruction program, and that is the kind of thing we would like a little bit more flexibility on.

    Same thing is true of other highly specialized civilian skills. We are about to announce the availability—we are in the process of developing a program for Spectre management, very technical civilian skill. Again, if we need to deploy the individual overseas we may not have enough time in this particular area to give everybody 12 weeks training, but it is necessary to give these people 12 weeks training. So the question is in being a good steward of the taxpayers' money—we would like flexibility to deploy such people without the 12 weeks.

    Mr. SAXTON. And I know that you spent an extensive amount of time studying and understanding and evaluating the mobilization process. Any changes there?
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    Dr. CHU. Yes, sir. That is an ongoing review, as you know. The Joint Staff is deeply involved in that. The Chairman has been—and the Vice Chairman—tasked by the Secretary to look at that mobilization process.

    First, I would like to observe that it is a credit to our Reserve Component personnel, that in my judgment that is the finest mobilization we have seen in the history of the country. We didn't always do everything just right, I would acknowledge, in the Pentagon, but our people responded and made up that difference.

    What we are really looking at is what our internal procedures look like, how do we manage, how do we breathe a cohesive approach to this critical ability to meet the Nation's needs. We haven't completed that. I think it would be premature for me to speculate on what kind of changes would be forthcoming.

    Mr. SAXTON. But do you think things went pretty well in this latest mobilization?

    Dr. CHU. I am impressed at how our people did.

    First, it demonstrated, I think, to the Nation that this is a volunteer force, just as the Active force is a volunteer force. The old image that the reserves were somehow a little bit reluctant to serve, might push back, might attempt to evade their responsibilities, that is dead wrong with today's force. These people want to serve, even when it is clear that this has been inconvenient for them, where we might have used them better. Their response in my experience has uniformly been, I understand. I just want to do what the country needs.
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    I am struck in terms of, for example, exemption mobilization. It hasn't been individual reservists pressing us for exemptions. It has been particular employers pressing us. I have had employees come to me and say, ''Please deny the exemption. I want to serve. I want to go on Active duty. I want to be with my unit.''

    And I am so impressed with what they have done, what they have achieved. I am impressed with how the mobilization process went at the places I have been able to see, such as Fort Dix. They beat the Army's timelines in terms of getting people out the door on average. It was a significant achievement.

    Mr. SAXTON. On the time that we spent together at Fort Dix, one of the issues that came up was that we were putting people through the mobilization process. It appeared that the war may—it appeared that the war may have a life span of less than we originally thought, and we had folks that were mobilized up and trained up and their units were not going to be deployed. How did that work?

    Dr. CHU. Well, that is the process we are still sorting through. The principle we are following is that if the union is not really needed, we should demobilize it properly. We are trying to move to do that. I have been trying to encourage as much as possible a volunteer spirit about this. However, you have some individuals who already made personal arrangements that lead to a situation where they would like to stay on active duty longer. And we have said that if someone wants to volunteer, and the service has the need and the funds, it is fine, as long as it is truly volunteer, as opposed to involuntary decisions of one sort or another. Those who want to go home, however, are home. Our stand is, let's get them home just as soon as we can.
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    Mr. SAXTON. Thank you.

    The CHAIRMAN. I thank the gentleman.

    Dr. Snyder, do you have other questions?

    Dr. SNYDER. I do, Mr. Chairman. First to Dr. Chu and then to Admiral Clark, and it is on the same provisions of these Sections 112, 113 and 114 that have to do with the extension of terms.

    And Dr. Chu, I have a summary in front of me that gives the—but I don't have the statutory language right in front of me. So would you explain how this would work if—well, I will use Admiral Clark. He has been in for over three years now. He is coming up at the end of his four-year term of service. The President wants to keep him on.

    Specifically what, under the language of your proposal, does the President have authority to do? Is it to extend him another four years? Is it to extend him for a term of years that would be set by some kind of letter or order, or would it be, he is going to keep him on, and we will let him know when we don't want him around anymore?

    What specifically is the language of the proposal? And I assume the language would be the same for the chairman and vice chairman of the Joint Chiefs and for the senior leader—for the CNO and others.

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    Dr. CHU. The attempt here, sir, was to make this as simple as possible. We want to deal with two issues really. One, is that for the service chiefs, if Admiral Clark would agree, there is a bit of a guillotine at the end of four years. That is it. Unless Congress has declared war or national emergency, we have no authority to extend you under present law. That wasn't always the case. The exception since World War II is Admiral Burke, who did serve six years, I believe, as CNO. That is not feasible under current law, and so we want to make it feasible.

    Again, back to the point of how long should someone be in these posts, would it make it feasible, if it is appropriate, to have more than four years? And so, the proposed language would say—reconfirms, of course, what we all know, he, referring to the Chief of Staff, serves at the pleasure of the President. The President may extend the length of the service as he deems necessary. So there is no fixity in the term.

    The second issue dealt with in these provisions is that, with the exception of the Chairman and Vice Chairman, where we continue the notion of specifying the term, our recommendation is that we not specify—we can specify four years for the chiefs, I might add, in our recommendation, but beyond that, we propose that we not specify terms for this whole—a host of other officers, several of the medical officers, for example, have a specified term of three years, and so on and so forth.

    We think that has been counterproductive. It leads in any organization to those who don't agree with the leaders' views, to judging that, well, he or she only has three years. I can outrank him or her. And so we would like this to be a situation where the organization understands this is the leader. This person might be here longer than you are. You better respond to his or her direction and leadership that he or she is providing. And so, that is the spirit behind this set of changes.
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    Dr. SNYDER. Let me ask you, Admiral Clark, do you have any comments on that, right now before I——

    Mr. CLARK. Well, sure. Look at it in a fashion of the way you do—you manage the whole flow through various key assignments, and the way it really works is that it is always—you know, there are very few real senior officers, and so let's say that they pick the individual that they desire to relieve me, but there is a timing issue because someone is caught in a critical job and there is something going on in the world, and it really would be better if we did it three months later. The law says it is a day-for-day cutoff. That is not the way it ought to be done.

    So I view it as the kind of flexibility to even move it a few weeks just because it would be better for the way all of the pieces of the puzzle are going to fit together.

    I also think that—and here is what I have come to learn in this job, learning how to put together a 21st century human resource structure, is that effective leaders are constantly evaluating and assessing key individuals in the organization, and I have got—Mr. Skelton, my required reading list has my three and four star officers reading what the really successful people in the industry are doing in just this field. How they assess the strengths and the skills of their executive corps, and what are the characteristics that best fit them for another post and assignment.

    And it is my view that this gives the Chief the kind of environment of setting to sit down with the Secretary of Defense and say, ''Okay, here is the way we see the landscape,'' and, by the way, I will tell you, I am doing this with the Secretary of Defense today. I take my book down there, and I give him my lay down, but there are certain encumbrances with kind of fixed lines of the way Dr. Chu said, with regard to the expectation, that it is going to be this kind of a length of tour.
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    So, I believe really what we need is just the flexibility to not be caught up with some arbitrary deadline.

    Dr. SNYDER. When you say, ''We need''—the President needs?

    Mr. CLARK. Well, and we collectively in the Department and the President, yes.

    Dr. SNYDER. Well, because I am asking specifically in these Sections 112 and 113. They are the highest ranking——

    Mr. CLARK. Yes.

    Dr. SNYDER. Mr. Chairman, not to belabor the point. I am trying to get a sense here—I made a comment about making sure we don't repoliticize a process. I remember the Commandant General Krulak was sitting there. Duncan Hunter asked the question about, if you don't get certain additional monies, and General Krulak, in the spirit of candor said, ''Well, we won't be the 911 Force. We will be the 91 Force.''

    Now, I am not sure he would have had that much candor if he had been working under a provision where he had been—his term had been extended at the pleasure of the President, and he was really hoping to stay on for three or four more years and was three months into this new extension, would he have been quite so candid.

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    I am just trying to get a sense of how this actually would work. Would there be some possibility of repoliticizing a process where, you know, we are going to keep you on at the highest the CNO, but you need to be advised we expect you to carry the water a little bit more for this President.

    I mean, word has a way of getting around. I am just trying to get a sense of, would it be better off to say, yes we are going to extend you, it will be for six months or three years or four years, but this is it, not at the pleasure of the President.

    Dr. CHU. If I may, sir, all officers serve at the pleasure of the President, notwithstanding the specification of these terms in the law.

    Dr. SNYDER. I know, but that is under, you know, pretty extraordinary circumstances to have someone get a term——

    Dr. CHU. It has happened within memory. General Dugan was relieved by the President of the United States in the first Persian Gulf war, so it is not an unknown situation.

    Dr. SNYDER. I understand. Thank you.

    The CHAIRMAN. Ms. Bordallo.

    Ms. BORDALLO. Thank you very much, Mr. Chairman.

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    I am interested in Section 122, which has to do with retirement pay for grades E–8, E–9 noncommissioned officers versus the regular general and flag officers.

    The transformation proposal seems to suggest that some noncommissioned officers in grades E–8 and E–9, who have served beyond 30 years, would be denied the benefit of receiving more than 75 percent of their active-duty basic pay in retired pay. The language requires the Secretary of Defense to designate those noncommissioned officers, if they can or cannot receive the enhanced retired pay. And there is no similar requirement for such a designation for the general and flag officers before receiving more than 75 percent of their active-duty pay in retirement pay.

    I am just wondering, could this difference in policy lead to criticism that the proposal favors officers? I mean, I feel that noncommissioned officers who have served 30 long years, you know, in service—I don't see why the Secretary of Defense should be the one to come in and designate who is to receive and who is not. Could either one of you answer that?

    Dr. CHU. I think perhaps there has been a misreading here on the part of your staff. Present law limits everyone to 75 percent of base pay as the maximum retirement annuity. The provisions proposed here would allow that cap to be lifted for general flag officers and for such E–8 and E–9 individuals as the Secretary, by regulations, might prescribe. So the proposal is to give an additional annuity recognition to the general flag officers and to at least a subset of those in the grades E–8 and E–9.

    Ms. BORDALLO. So then, the Secretary of Defense doesn't come in and designate which officers in the noncommissioned ranks——
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    Dr. CHU. No. The proposal is carefully constructed to be thoughtful of the taxpayers' money. So it is limited to the—as we have discussed, the very small set of general flag officers that we have in the country, and recognizing also the longer service of some E–8s and E–9s to a subset of the E–8, E–9 community, under such regulations the Secretary might prescribe.

    Ms. BORDALLO. What do you mean some? Can you explain that?

    Dr. CHU. Not all. In other words——

    Ms. BORDALLO. Yes, I know——

    Dr. CHU. It is not our judgment that it would be appropriate necessarily to——

    Ms. BORDALLO. Who makes that judgment to——

    Dr. CHU. The Secretary would make that judgment. Under present law, no one—we underscore that—no one gets more than 75 percent.

    What this is proposing to do is to recognize the longer service that we are inviting general flag officers to provide the country by honoring them with a more generous annuity by allowing, in other steps, the multiplayer to run beyond the 30 years.

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    Ms. BORDALLO. Why couldn't the benefits be extended to both sets?

    Dr. CHU. That is what we are proposing to do, is that selected E–8s and E–9s——

    Ms. BORDALLO. I don't think so, Dr. Chu. You are saying that the Secretary of Defense will designate some. So that is not the entire group.

    Dr. CHU. That is correct. That is what I stated.

    Ms. BORDALLO. Well, that is my—I said, wouldn't this proposal then look like you are favoring the flag officers and the general officers over the——

    Dr. CHU. I think if you look at the numbers, if you look at the numbers of the E–8s and E–9s, which are limited by law to one percent, two percent total enlisted force, which is therefore a somewhat bigger pool; that this is a balanced proposal in terms of the numbers of the individuals, potentially, who will receive this benefit.

    Ms. BORDALLO. I see. Well, I feel it is discrimination, you know. I think that if you reach that rank, you have served these many years, that you should be receiving the same benefits that the general and flag officers receive and not just designate some.

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    Dr. CHU. You are dealing with a large pool of individuals, ma'am. I think——

    Ms. BORDALLO. Even if the groups that you are going to designate to receive the higher pay is the larger percentage, but still it is discrimination. The benefits should be the same throughout. I mean, it looks as if we are favoring one group of officers over the other.

    Dr. CHU. I don't think that is the case, ma'am, but I understand that you see it differently.

    Ms. BORDALLO. Thank you. Thank you, Mr. Chairman.

    The CHAIRMAN. I thank the gentlelady.

    And we probably ought to wrap up and let our next panel get to work here, unless somebody else has any compelling questions.

    I think it could—yes, Admiral.

    Mr. CLARK. There were notes I wanted to get to as questions were asked, and I didn't get a chance to respond. If I can on two points?

    The CHAIRMAN. Go right ahead.

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    Mr. CLARK. One is joint credit. I would like to stand in support of the Joint Credit Proposal for this reason. I believe that the existing structure really does not align with the kind of experiences that we are having today, and I give you this example. For myself, I was a captain, and I was the director of the Crisis Action Team in Desert Storm. I was selected for flag, and the rules said I had to be in that job 24 months before I could get joint credit. I had a graduate education and joined this, but there is no way they were going to leave me there for almost two years waiting as a captain. They sent me off to be an admiral.

    The proposal in the legislation suggests that we take people that have truly unique experiences on joint task forces, and so forth that are at the height of jointness, and with a much lesser time, we consider them to be joint qualified officers. And I believe that our history and our experience really proves that that is a very, very wise thing to do.

    The second thing I want to talk about was—and just make a comment about—my comments today have all been about the military proposals, and I want to make a comment about the civilian proposals. I am convinced that Vern Clark has to create a human resource process and system that serves the whole Navy, and a big part of that is the civilian sector. And one of the things that I am most concerned about is my ability to compete in that marketplace. And I believe that these proposals do wonderful things that allow us to do so, and I can give you a couple of examples.

    One of the demonstrations that we have had going on at China Lake for 20 years, so we got wonderful experience in having a performance-based system. You know, the results of the employees, they are gratified that they are working in a system that is rewarding them on the performance-based methodology.
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    The other part of this is acquiring the talent. We find ourselves disadvantaged at every point, and it leaves me to a crucial problem that I have as the Service Chief. Every place I go today where it is a predominantly civilian workforce, be it my warfare labs, my S&T centers, they are all facing this fundamental challenge. They have got an aging workforce that can retire in five years or so. They feel tremendously under the gun to renew that workforce.

    The other challenge that they have from the leadership is to streamline this workforce the best way you know how, make sure you rid yourself of overhead and that we have effectiveness and efficiency in our workforce.

    And Mr. Chairman, I would like to suggest to you, fundamentally, the way the law is written today, it is as if it says to the Navy, ''Navy, don't streamline and don't become more efficient, because I cannot become more efficient with the rules that I have on—for example, with the age workforce.'' it says fundamentally, ''Navy, do not renew your workforce, because I can't renew my workforce, while I am trying to become more effective and get the best bang for the taxpayers' bucks, because the restrictions keep me from doing both of these at the same time.''

    So fundamentally, I need relief, because if I streamline, I cannot keep people that I have recently hired, because deciding who is going to stay is not merit-based, but it is longevity-based. And so I find myself in a very difficult situation, trying to renew a workforce that my commanders say is one of their biggest challenges.

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    So that is why I align with projects like we have going on at China Lake that—and to see the way our people are responding to a well-documented, proven performance-based system that is working extremely well for us.

    The CHAIRMAN. Thank you very much, Admiral.

    Just one last thing, and this relates somewhat to what you are talking about. Talking to—the talk we had about pay banding yesterday, Dr. Chu—I think we had a good give and take with Mr. Harnage representing the prospective from union leadership, and you always have that rather sinister shadow overlooking—or over any proposal to change things where people are treated in a disparate manner, that the specter of politics will intrude and that you will end up with friends rewarding friends with extra payments.

    In the military, I think we have an extraordinary system and that we have—where folks grade other folks who may have been their peers at one time and are their peers still, and sometimes as you get toward the top, folks that have been junior for a long time pass folks that are senior, and we have always—at least I always figure if I got a bad officer evaluation report (OER) in the Army, that there was a personality defect on the part of the guy that was grading me. But it is a rough and tumble business in some sense, but it works fairly effectively.

    I think one solid point that was made yesterday is that to maintain integrity in this system, there has to be some kind of a wall of formality, full, and disassociation and insulation between the individual who is going to determine that a particular worker in a civilian workforce is going to get more money than the person standing side by side with him. That is a serious thing, both in the elevating of the one person, and, in some cases, the diminishing of the earning capabilities of the other person. And that is one aspect I think that this committee is very, very concerned about.
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    So I think we need to work that and really scrub that and make sure that the safeguards that we—and the insulations that we build in between the rater and the ratee in the military system is—if we are going to go to this—to a system in which there is the discretion which is exercised which can be far-reaching, especially when you are talking about how much people get paid; that there is an appropriate mechanism of restraint in the safeguard and discipline and distance, perhaps that ensures that we have a system that has got all the integrity that Teddy Roosevelt wanted the system to have.

    So, let's work on that a little bit. I know we have got limited time to work it.

    Dr. CHU. We appreciate that, sir. I think we offer as a starting point at least our April 2nd Federal Register proposal, which has exactly that kind of wall. In other words, there has to be a quite organized review board, review procedures. This is not just a supervised recommendation.

    The CHAIRMAN. The other aspect I would say before you folks leave is that in the end the real duty that we have is to have talented people, because that is what saves lives or in some cases could needlessly expend life, the talent or lack thereof at the top, and that is the real obligation that we have. It is not to make sure people get their tickets punched or to accommodate people, but it is to make sure we have the very best talent in the military when lives are at stake.

    And I am reminded that we have a—there has always been a problem between the great warfighters, and sometimes there is not a problem and somehow you have Eisenhower types, but I am reminded that probably the greatest warfighter that the Marines ever had was gotten rid of by the establishment, in my estimation, at the age of 59, when he had a lot of great years left in him, a 5-time Navy Star Winner—or Navy Cross Winner. We have had lots of other instances. I doubt Patton would have made it back to any job in the United States. He managed to anger both Democrats and Republicans rather quickly right after his role in combat was finished.
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    Napoleon said, ''I make my generals out of mud,'' and that is one reason he won so many battles, because he made his generals out of mud, and the other—and his adversaries made their generals out of a political system that didn't include efficiency in combat. And we have got to make sure that we have a system that rewards performance.

    It occurs to me, Admiral, that you—well, you have talked about these two aspects, this aspect of letting talented people stay on longer and utilizing them. That makes great sense, and that the other idea that you don't want people to simply be marking time. And it is a disservice to them, and it is a disservice to the folks below them, that those two items, to some degree, are going to offset each other. You will have more people—you will have people who will get out earlier instead of having to do that time in grade to accumulate the retirement grade, and that will provide some pressure relief that will balance the people that stay on a little longer. Is that——

    Mr. CLARK. That is correct.

    The CHAIRMAN. Do you think you are going to be close to a zero sum in terms of upward mobility, that in the end you will have little or no effect on upward mobility for the folks below those guys?

    Mr. CLARK. That is what the numbers in the studies show us, and obviously you have to manage this process as you go.

    The CHAIRMAN. Okay. Well, thank you very much.
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    And I think we have had a chance—you have got some really great thoughtful members on this committee that want to scrub this thing pretty thoroughly with you. Let's keep working it. And we look forward to our next panel.

    Thank you, gentlemen, and we will resume the next panel. We will take a five-minute break and resume the next panel.


    The CHAIRMAN. The committee will come to order.

    We have our second panel with us, Dr. Lawrence Korb, who has been with us on a number of occasions and has served the country very effectively in the Executive Branch and now as a Director of National Security Studies, Council on Foreign Relations and Lieutenant General Theodore G. Stroup, Junior, United States Army (Retired), Vice President for Education, Association of the United States Army.

    The CHAIRMAN. And gentlemen, it has been a long morning here, but I think it is good that you have had a chance to reflect on the discussion between our membership and the CNO and Dr. Chu.

    Dr. Korb we will start with you. What do you think?

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    Mr. KORB. All right. I have been asked to comment specifically on a couple of the provisions of the law.

    First of all, I don't think anybody should receive more retirement than on active-duty pay. So I think you need to stop that. I agree with the comment that was made before that; if you are going to allow officers to continue to accrue beyond 75 percent, it should be enlisted, as well. So whoever serves beyond 30; I think if you are going to allow that—that shouldn't be something the Secretary of Defense does. It should be automatic.

    In terms of the four-year term for the service chiefs and to be extended at the pleasure of the President, I agree with Dr. Snyder. That was in my thoughts here. You do not want to have an individual who then serves at the pleasure of the President, because we are all human beings. If you like the job and if you want to stay, are you going to be as honest as the people who have been before. Remember that military people serve the constitution. They serve both houses of Congress as well as the Executive Branch. You have the power, as it says right here, to raise and support armies, provide and maintain a Navy, as well as to declare war, and you need their honest opinion.

    Remember that the fixed four-year term for service chiefs was put into effect in the 1960s. It used to be two and then a two renewal, but Secretary McNamara relieved—all three of the service chiefs did not get the four-year terms for various reasons, arguing about TFX and other things like that. So it was put in to provide that, and I think that is fine.

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    I am not as concerned as people here about keeping people on active duty. General Franks, 56 years old, could easily serve as Army Chief of Staff and still be 60. So I don't know if that is as big a problem as people make it out to be. And if they wanted to have—want to change it, I think that they can come up here and ask for that as has been done with people like Admiral Rickover and Admiral Grace Hopper. I think that you can certainly, certainly do that. And I do think if you leave some of the four—three and four-stars in positions longer, that will I think have an effect on the younger—the sevens and eights, and maybe colonels just think that they may not get up there.

    If somebody doesn't want to serve the time in grade and it is their choice, they don't want to serve the time in grade to qualify, then I don't think they should be rewarded with that title. But if for the good of the service you want to move them out, I think that is a different thing. So I don't want to see people get promoted and then say, ''Okay, I am going to get out of here, and I can still keep the title as well as the benefits.'' If the service has to do it, that is one thing, but not if it is the individual's choice.

    So let me stop there, and I will answer whatever questions or comments you might have.

    The CHAIRMAN. Very concise and very to the point. Yes, sir.

    Mr. TAYLOR. Dr. Korb, I will have you know, in this committee some of us feel the same way. We can't progress because——

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    The CHAIRMAN. Do you want time for rebuttal, Ike?

    Mr. SKELTON. There goes his ship.

    Mr. KORB. Let me make one other point, which I hasten to get in and I didn't. They also do not want to allow people to have the fixed terms, things like judge advocate general. I think you have to be very careful there, because this is a person you do not want to be susceptible to pressures, either from the uniform or the military, because as we saw, for example, in Tailhook, these people are called upon to make some pretty tough decisions.

    The CHAIRMAN. Okay. Very good, concise analysis here—reflection on what has been said here.

    The CHAIRMAN. General Stroup.


    General STROUP. Mr. Chairman, it is nice to be back in front of the committee in a different uniform. Thank you for inviting me.

    I am coming at having looked at the 208 pages, and from my experience at looking at—having run personnel operations during Desert Storm, having run general officer management for two Chiefs of Staff in the Army, I have looked at the proposed language that has been submitted, and I have got summarily four points that I would like to make.
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    One, I believe there is a very constructive interplay that goes on between the service chief, the Secretary of the service and the Secretary of Defense, regardless of personalities. And I think that the management and the leader flexibility that has been introduced from the standpoint of general officer management in changing the law, regardless of the party in power, will enhance that flexibility now.

    Second, with respect to that, I think the compensation issue that is offered for up to 4 years and intermediate between retirement age now and the 40-year potential and what I call the release valve of being able to go out with the retirement rank and equivalent compensation is effective. It was something that inhibited me as a personnel chief trying to move generals, for both Generals Bono and General Sullivan. So I would encourage that.

    I am happy about the joint specialty officer management fixes that they put in there. I participated as the team leader to transform the Army, back when Goldwater-Nichols came in as a brand new brigadier. Congressman Skelton and I have not dueled. We have debated on putting more flexibility into it. This puts some flexibility into it, that with the service cultures and characteristics will not inhibit it. I am encouraged with that.

    From my experience in the basement, running personnel operations in Gulf War I, I am also enthusiastic about the Reserve Component fixes that are put in, that gives the Service Chief and the civilian leader, particularly in Dr. Korb's old job as it has evolved into management during wartime operations, a tremendous amount of flexibility, and takes care of the individual reservist across the board.

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    I am open to your questions, sir.

    The CHAIRMAN. Gentlemen, thank you very much for very concise statements, and I am going to have to leave for a few minutes. I will be back very shortly.

    When I get back—but I am going to ask Dr. Korb, this aspect that you have mentioned of the objectivity of top officers in giving their unvarnished opinion and position and the effect that might have on an officer serving at the pleasure, if you will, of the President.

    I will let Dr.—Dr. Chu said, in essence, everyone does all the time. That counterargument to this need to keep talent on longer; it looks like there is a little tension between those two objectives. And so I am going to want to explore that with you when I get back.

    But I would ask Mr. Saxton to take the Chair, and Mr. Skelton, you are up.

    Mr. SKELTON. I don't mean to be retrenching previous questions, but I did ask the prior witnesses about the dampening effect of the fives and sixes when they look up and in their hearts know that they are competitive for flag rank, and they see a bunch of these old guys up there floating around and changing jobs and so on. The reality is one thing, and according to Dr. Chu, that should not affect them.

    However, the psychological end of it is what concerns me. They will do—they don't have the tools to do a study if they are in five and six, they have a good set of OERs or fitness reports, and they know, my gosh, they are competitive, but they still see the change from 62 to 68 without all the nuances. They say, my gosh, that throws me back another six years. My wife wants me to make more money anyway. So who will hire me? And they are off and running with a fancy job somewhere else, and you lose a really first class, possible brigade commander, Navy captain, a one-star, possibly a two, three, four-star.
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    So give me—each of you give me your thoughts on the psychological end of the 68-72-year proposal.

    Mr. KORB. I think, unless it is a time of war and emergency, I don't see any need for changing the thing. Now, under the way it is now, they can always come to you and present a good case for doing it, but I really think—you know, if you take a look and you say, is there a real problem with this, I don't see it.

    Go back to Gulf War I. You had General Schwarzkopf and General Waller. They did a terrific job. You go look at the most recent Gulf War, you have General Franks and General Abizaid. Just as good. I don't see any diminution at all. And if I take a look at the people coming into the jobs, whether it is service chief or combat commanders, I don't see any problem to say, ''Gee, we really need to keep these people longer.'' and I think you are quite right, because in addition to working the Pentagon, I spent 4 years on active duty, another 20 in the Navy Reserve, and you do see those things, and one of the things that always kept us going was, well, the tour of the commanding officer of the unit was limited. So, you know, if we kept on, we would have a chance to go up there. And so, you know, the old Burt Lance thing, if it is not broken, why fix it? And I haven't seen any evidence that it is, in fact, broken the way the system works now.

    Mr. SKELTON. General.

    General STROUP. Congressman, I am going to take a look at what I call the talk that goes on in the war room or the talk that goes on over at the foot locker in the barracks.
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    The younger officers that you and I are familiar with, they aspire to positions, and they also aspire to promotions. And they know that successive performance in positions such as Battalion Commander, Brigade Commander, in the acquisition field the program manager (PM) or the program executive officer (PEO), leads to their capability to be selected for the higher rank.

    I think your field grade officers at the lieutenant colonel and the colonel rank are more concerned over, ''Am I going to make it to brigadier.'' I know in the Army that most brand new Brigadiers are conditioned to the fact that when they look around at their promotion cohort, there is only going to be 50 percent of them who are going to make major general. And I—as I have been in and out of personnel as a combat engineer, what I had discovered is that good career officers can read the tea leaves, and as they read the tea leaves, they can determine through the merits system that all services run under the law in terms of selection boards and that, that they are either going to make it, or they are not going to make it. And as they become more senior in years of service, then they become somewhat contemplative as, ''Okay, am I going to be the next chief of service.'' Again, as they read the tea leaves, depending upon their specialty, whether they are technical or whether they are combat, some of them will know that they are not going to be the chief of service.

    So, back to your question about—in terms of psychological impact, I don't believe there is going to be that much worrying about the change within the officer ranks. I think there will be some debate and discussion, but I think with the officer corps that we have now, and particularly in the Army with the Army's leader development and education system, those officers will be able to read the tea leaves and make that determination as to whether or not it is time to leave or whether or not the system will tell them.
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    I think from the flexibility, as the Chief of Naval Operations just mentioned, I knew because of the way the law had changed when I came in to be the Deputy Chief of Staff for Personnel (DCSPER) of the Army, I knew from conversations with Gordon Sullivan and then General Reimer that I was going to be a two-year DCSPER. Although the law allowed me, in that window where it changed, that I could be there for three years. But as we looked at bench-building and looked at the officers who we wanted to bring up to move into senior personnel positions in the Army, I made the decision that—talking mainly with General Sullivan, well, let's just make me a two-year guy. I can still get my retirement, knowing that my successors would be locked in at three years.

    So I think the flexibility that is being introduced with the change in the law will give senior leadership, both uniformed and civilian, that capability to manage and grow their bench. With respect to the junior officer bench worrying about the future, I think everybody does that, just like Congressman Taylor worrying about the older members of the committee.

    Mr. SKELTON. My health.

    General STROUP. Sir, I say nothing derogatory about you. But thank you very much for becoming a life member of AUSA. I am expecting your check.

    Mr. SAXTON [presiding]. Let me ask—you heard Dr. Chu and Chief of Naval Operations both talk about the important role that reserves play today; and Dr. Chu outlined, I believe, 3 main points in their recommendations to us on some changes they needed in terms of medical and dental care, in terms of waiving a 12-week requirement and in terms of authority to call up for training purposes individuals and units.
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    What do you think, based on your experience? Is that—are those changes that are needed, or are there other changes that are needed, as well?

    General STROUP. I believe that as we move into this new defense era that we already find ourselves in, I think that the medical-dental changes that have been proposed are what I would call on a continual-improvement spectrum that we realized we needed to change after the last Gulf War.

    So those will bring in a great deal of facilitation for when appointed officials, say in Dr. Korb's position that he held under the Reagan administration, makes the determination that they have to bring in the reserve components.

    And as you know, Congressman, in the era now that we are in, of bringing in reserve components, with four Presidential Selected Reserve Call-ups already working, we are not looking at a Cold War call-up system. So the dental-medical fixes I see are beneficial.

    When you take a look at the needs that the Nation might be facing in the future with respect to potential other locations that would behave like Afghanistan or Bosnia or Kosovo, your services are going to need a suite of individuals with capabilities that probably were not in the Cold War bank as we grew our forces.

    And so the example that Dr. Chu suggested for either the linguist or the other type of specialist, which we really haven't grown too much since World War II—it facilitates that.
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    I am confident that the service chiefs and the service secretaries would not bring somebody in and send them into an overseas hostile theater or environment unless they had adequate self-protection training. And, historically, when the Congress put in the 12-week mandate for that level of combat—individual combat training prior to overseas-action, there was some gross errors that occurred.

    So I am comfortable with—if that waiver was put into effect, there still could be policy decisions or even congressional language that would correct that. So I am up on both suggestions that are in the proposed language.

    Mr. KORB. I think they make sense, but I think one of the things that Secretary Rumsfeld is talking about is changing the whole active-reserve mix. I think we have enough evidence now to know what capabilities we need to keep more on active duty and the reserves. I mean, in many ways we still have a Cold War model, almost a Vietnam model, so we wouldn't go to do any type of military activities without calling up the reserves, which we failed to do in Vietnam.

    So I think you really need to do that, and I think the provisions that I have seen talked about, where a person, for example, joins the Armed Forces of the United States and can move back and forth among the active and reserve is really something we need to do, given how often we use these people.

    I think you ought to take a look—these units get used most of all. They will be primarily active. These units don't get used very much, primarily reserves, and almost have a spectrum across there of people in the units.
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    Mr. SAXTON. Do you think it is possible to just make those adjustments and maintain current end strength, or do we need to begin to look at——

    Mr. KORB. I think you need to look at the end strength of the total force. If you add it up, you ought to ask yourself, is that enough, and can you accommodate it by switching things? And it seems to me that if you are going to implement the President's National Security Strategy that he came out with in September of 2002, you really better take a look at your end strength, because that is a very aggressive type of thing.

    For example, we read in the paper—I don't know how true it is—that Secretary Rumsfeld may want to get rid of two Army divisions. Well, if you are going to be occupying Iraq for a while, it seems pretty hard for me to see how, in fact, you could do that.

    So I think you really need to—I haven't seen—the Quadrennial Defense Review came out in September of 2001. The strategy came out in September 2002, and I haven't seen anybody try and put the two together.

    General STROUP. Sir, if I could address end strength.

    My personal belief from the last number of years trying to stay current on defense issues and reading public documents, current Army end strength of 480,000 for the Active component, I don't believe is large enough. I think we probably need another 35 to 50,000 end strength, because you are now finding that the Army, as it is currently deployed, is going to be almost on an expeditionary mode of brigades or divisions rotating to these different locations. I look over at Congressman Skelton, and I know he is going to say, there he goes again, old stretched and strained Ted, but I think we are reaching the point where we are becoming stretched and strained, and we will probably see that continue. I am not saying that to disparage——
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    Mr. SKELTON. May I interrupt at this point?

    General STROUP. Yes, sir.

    Mr. SKELTON. You testified to 40,000 in January 1995, just when we were going into Bosnia the first time.

    General STROUP. Yes, sir, that is correct.

    Mr. SAXTON. I think this is an extremely important question. If we are, in fact, going to move some of the function of the Reserve into the Active force, then the difficult decision has got to be made, what do you take out of the Active force to put into the Reserve, and I am not sure that I can, personally at least, identify what those functions that you migrate out of the Active force are, and so the alternative is more people in the Active service, it seems to me.

    Dr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman.

    Before I ask a question for Dr. Korb, for the benefit of Mr. Taylor as the only doctor here today, I need to point out that I think Mr. Skelton looks in fine health, but as one of your junior members, I want to assure you I think you are looking a little peaked, Mr. Taylor.
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    Dr. Korb, I wanted to get back to this issue of the terms for the highest ranking—the Joint Chiefs and the Chairman. Is there a way to get at this—what may be some legitimate concerns on the part of the Administration? For example, Admiral Clark brought up the issue of there just may be an overlap problem of three months or so. It would seem like—could the legislation—if we think that is the legitimate concern, could it be written in such a way to say that the President may have that authority for up to one year, recognizing that maybe we are in the middle of a war, maybe the person coming up wants to be left—would like another job. One year, I wouldn't think anyone is going to change their candor, and also getting an additional eight-month position.

    And then that second aspect of it, I don't think under current law that the President, for example, could appoint Admiral Clark to a second four-year term. Would that not be a possibility to say that—rather than serving at the pleasure, but just to say—I can't imagine many of these guys would want to have a second four-year term, to be honest with you. But for an extraordinary situation or extraordinary people or in the middle of a transformation or whatever.

    I mean, that is what we do with Alan Greenspan. There is a lot of political dynamic there. He has served through multiple presidents, but we don't let him serve at the pleasure of the President. We say, okay, you want him around? You keep him on an additional five-year term. And he goes through the process again. Would you comment on those two possibilities.

    Mr. KORB. Well, I have no problem if you want to keep somebody beyond four years. My problem is this indefinite type of thing. I think if you need that, you ought to get a limited flexibility, and you ought to come back to the Congress to do it, because you don't want to be rewarding some and punishing others.
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    Look, I think what happened with General Shinseki is a disgrace, the fact that his successor was anointed 15 months ahead of time. And many people said to me, well, if Secretary Rumsfeld wasn't happy, why didn't he relieve him? The Congress said you have got to have a fixed four-year term, because you want those people to be honest with you. And they talked about General Dugan. When General Dugan was relieved, Secretary Cheney and the President checked with Senator Nunn to make sure that was okay, because in effect he was being relieved for cause.

    I mean, so I think you have to be very, very, very careful that you don't impinge upon the ability of those men and women serving in those high positions, to be honest with you, as we have this debate. I don't know how many people we need to occupy Iraq, but I am glad that General Shinseki laid a number on the table so that we could get the debate going, and remember he did that in response to a question from Senator Levin. I think it is very important that you safeguard the ability of those people to be able to do their jobs.

    And similarly, as I mentioned, if you say, well, we are not going to have a fixed term for the Judge Advocate Generals or the medical people, are they going to be free to do their jobs, because they are going to be times when they are going to disagree with their service chiefs. So I think it is very important that you look at that in terms of your own ability to get involved in the debate and get the best opinions, so that you can make the judgments that the constitution calls upon you to make.

    Dr. SNYDER. And I understand what you are saying. We had a lengthy discussion yesterday. This is about words on paper, and one option, as I suggested, would be to deal with Admiral Clark's thing about the 30 days or 3 months or something, would be to specifically say the President may extend for up to one year, which it is just difficult for me to think that there would be—that someone's candor would change——
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    Mr. KORB. I agree, as long as there is a term limit on it and——

    Dr. SNYDER. Enough to deal with the specific situation.

    But thank you. Thank y'all for being here today. Thank you.

    Mr. SAXTON. Mr. Taylor.

    Mr. TAYLOR. I was wondering if either of you gentlemen had been around and served under different administrations, if either of you gave much thought to the language on page 108 which allows the Secretary, by my calculation, the discretion to move $100 billion around during any national emergency. Of course we have had—I checked during the Clinton Administration—national emergencies; two were inherited, I believe Iraq and Libya. One was because of the drug problem in Colombia. And the fourth was for Serbia. And the point I would—I wish a few more Republican colleagues were here. I wish a few more of my colleagues, period, were here, but the point that I would hope all of us Democrats and Republicans would take away from this is, we are talking about a law change. It is going to be the law whether George Bush is the President or whether Hillary Clinton is the President. And it is going to be the law whether George Bush appoints Donald Rumsfeld or Hillary Clinton appoints Chuck Schumer as Secretary of Defense. Now strange things have happened in my life. And I could, see that strange thing happening. And so I was wondering if either of you gave much thought to that, because a $100 million ''play fund'' is a heck of a lot of money where I come from.

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    General STROUP. From one of my two-star jobs building the Army's five-year program and interfacing with its annual budget submission on the two-year budget cycle, I believe that defense leadership needs more fiscal capability to move money around than is in the current law.

    I don't have any experience as to come back and tell you that the number that you suggested from page 108 is the correct number, but I can tell you, working in the Pentagon during national security crises and that, where we had to go get money from one account to another, the smaller ceiling that was established at the time was a level of frustration for those of us that were working it, not that we didn't want to come over to the Congress to the Appropriation Committees. It just was a long involved process, and the forces at the other end of the spectrum out in the field waiting for that operational money to come down so they could train more or get ready to ship more, that wasn't an inhibitor.

    So I would say raising the ceiling for financial flexibility for the good of the Department in times of crises, I am in favor of. I cannot give you an opinion on whether the $100 billion is the right number as you described.

    Mr. TAYLOR. Dr. Korb.

    Mr. KORB. Well, remember in most times of emergencies, administrations come up with the supplementals, and so I think if there is a problem, they certainly can come up for supplemental, because in a time of emergency, you are going to need more money.

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    Mr. KORB. What General Stroup was talking about is not quite an emergency; it has a lot to do with unanticipated things occurring when you are executing a budget that was planned a couple of years ago. I agree with General Stroup; you might want to raise the caps somewhat, but not the $100 billion. I think that is way, way out of line. And remember that I think it is important to keep in mind that why we have these laws that we have, a lot of these restrictions were put in to correct abuses when people move money around to thwart the will of the Congress because they did not like some of the things that Congress did. So I think that is important to keep in mind as you take a look at that.

    Mr. TAYLOR. I very much appreciate you saying that.

    Mr. SAXTON [presiding]. Thank you, Mr. Taylor. Mr. Skelton, I believe, has a closing thought.

    Mr. SKELTON. Let the record show that I misspoke, and it should have been 1995 rather than 1945. General Stroup wasn't even born in 1945. Thank you.

    Mr. SAXTON. Any further questions, Dr. Snyder or Mr. Taylor?

    Gentlemen, Dr. Korb and General Stroup, thank you for being with us today. We appreciate it very much. It has been a greatly informative morning and we thank you very much for your willingness to be here with us to share your thoughts with us. Thank you. And the committee is adjourned.

    [Whereupon, at 12:20 p.m., the committee was adjourned.]
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