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[H.A.S.C. No. 106–63]









SEPTEMBER 21, 2000

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DUNCAN HUNTER, California, Chairman
FLOYD D. SPENCE, South Carolina
BOB STUMP, Arizona
JIM SAXTON, New Jersey
J.C. WATTS, Jr., Oklahoma
LINDSEY GRAHAM, South Carolina
JIM RYUN, Kansas
MARY BONO, California
JOSEPH PITTS, Pennsylvania
ROBIN HAYES, North Carolina

JOHN M. SPRATT, Jr., South Carolina
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LANE EVANS, Illinois
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT BRADY, Pennsylvania

John Sullivan, Professional Staff Member
Roger Smith, Professional Staff Member
J.J. Gertler, Professional Staff Member
Jesse Tolleson, Staff Assistant



    Thursday, September 21, 2000, The Status of Military Procurement Requirements and Funding
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    Thursday, September 21, 2000



    Hunter, Hon. Duncan, a Representative of California, Chairman, Military Procurement Subcommittee

    Sisisky, Hon. Norman, a Representative of Virginia, Ranking Member, Military Procurement Subcommittee

    Skelton, Hon. Ike, a Representative of South Carolina, Ranking Member, Armed Services Committee

    Spence, Hon. Floyd, a Representative of South Carolina, Chairman, Armed Services Committee

    Ellis, Lt. Gen. Larry R., U.S. Army, Deputy Chief of Staff for Operations and Plans

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    Foglesong, Lt. Gen. Robert H., U.S. Air Force, Deputy Chief of Staff for Air and Space Operations

    Giambastiani, Vice Adm. Edmund P., U.S. Navy, Deputy Chief of Naval Operations for Resources, Warfare Requirements, and Assessments

    Jehn, Christopher, Assistant Director for National Security Division, Congressional Budget Office

    Lynn, Hon. William J., Comptroller and Chief Financial Officer, Department of Defense

    Nyland, Lt. Gen. William L., U.S. Marine Corps, Deputy Chief of Staff for Programs and Resources


[The Prepared Statements submitted can be viewed in the hard copy.]
Ellis, Lt. Gen. Larry R.
Foglesong, Lt. Gen. Robert H.
Giambastiani, Vice Adm. Edmund P.
Hunter, Hon. Duncan
Jehn, Christopher
Nyland, Lt. Gen. William L.
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Sisisky, Hon. Norman

[There were no Documents submitted for the Record.]

[The Questions and Answers are pending.]

Mr. Hunter


House of Representatives,
Committee on Armed Services,
Military Procurement Subcommittee,
Washington, DC, Thursday, September 21, 2000.

    The Subcommittee met, pursuant to notice, at 1:30 p.m., in room 2118, Rayburn House Office Building, Hon. Duncan Hunter (Chairman of the Subcommittee) presiding.


    Mr. HUNTER. The hearing will come to order.
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    Today the Military Procurement Subcommittee will receive testimony from the Congressional Budget Office and the Office of the Secretary of Defense experts, and from the top Army, Navy, Air Force and Marine requirements and program officers, about the Defense Department's military procurements requirement, and requirements funding and readiness impact.

    In 1995, General John Shalikashvili, then Chairman of the Joint Chiefs of Staff, testified before Congress that military procurement budgets should be $60 billion per year by fiscal year 1998 in order to maintain the modernization requirements necessary to support the nation's two-major-theater-war strategy. However, it was not until the fiscal year 2001 defense budget request that the $60 billion goal was realized.

    This total was somewhat artificial, however, in that it included $1 billion for chemical agents and munitions destruction in the Army procurement account, the majority of which was for operations and maintenance, and research and development, for chemical munitions destruction.

    Although General Shalikashvili stated that a $60 billion procurement budget was achievable by fiscal year 1998, actual DOD procurement budgets for fiscal years 1998, 1999 and 2000 were $45 billion, $49 billion and $53 billion, respectively.

    These lower procurement budgets have resulted in unprecedented ages of military equipment; declining mission capable rates for front-line military aircraft; high cannibalization rates of spare parts to keep military weapons systems operating; and devastating levels of frustration for our soldiers, sailors, airmen and marines who operate and maintain this equipment.
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    In April of this year, the naval Inspector General completed an assessment of naval aviation readiness which concluded that financial accounts for spare parts, training and logistics were so tight, that, ''acceptable levels of risk have been exceeded,'' and that naval aviation is a ''system that is gradually, continuously winding down.''

    Lack of Army modernization and spare parts funding has resulted in only one of its four primary helicopter systems meeting mission capable goals from June 1998 to July 2000. Seventy-five percent of current Army systems exceed half of their expected service life.

    Air Force aircraft are at unprecedented ages and require more manpower and resources to keep them operating. We will hear today that insufficient procurement and operations and maintenance funding has resulted in a 23 percent decline in the Air Force's combat readiness since 1996. The first-to-fight Air Combat Command's active-duty combat units led the Air Force's decline in readiness with a serious 42 percent decline over this period.

    The Marine Corps will tell us it has reached a point of virtual block obsolescence for much of its ground and aviation equipment. The majority of the Marine Corps aircraft have already exceeded their service life. As a result, the Marine Corps fully mission capable rate has declined 10 percent in the last five years, but maintenance man hours to service this aging equipment has risen 34 percent over this same period.

    Across the board, insufficient modernization funding during the past eight years has left our ability to decisively fight and win on tomorrow's battlefield in a serious decline. And as the Naval Inspector General said, ''Our shortcomings translate down to debilitating levels of frustration and morale crushing drudgery at the operational unit level.''
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    In February of this year, former Defense Secretary James Schlesinger warned before the full House Armed Services Committee that, ''In order to replace the equipment of the QDR-designated force, we will have to spend approximately $100 billion a year.''

    At that same hearing, former Secretary of Defense William Perry stated that military procurement should be between $70 and $80 billion in the fiscal year 2001 budget.

    In March of this year, then Deputy Secretary of Defense John Hamre testified before the Senate Appropriations Subcommittee on Defense that, ''We are still not really making up for the hole that we dug for ourselves in the 1990s,'' and that the procurement budget should be, ''$10 to $15 billion more a year in order to start getting out of that hole.''

    Last week, the CBO completed a study for the Senate Budget Committee which again concluded, similar to its February 1999 study, that in order to sustain and modernize the force for today's national security requirements, a total of $90 billion annually would be required for an additional $37 billion beyond the $53 billion appropriated in the fiscal year 2000 procurement accounts.

    Of note, the Office of the Secretary of Defense projects that procurement budgets from fiscal years 2002 to 2005 will be $63 billion in 2002, $66.7 billion in 2003, $67.7 billion in 2004, and $70.9 billion in 2005. These amounts are well-short of the $90 billion per year that CBO will tell us today is needed to modernize and sustain our current force structure. Unless modernization budgets increase, we will continue our decline in force structure and readiness.
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    In a separate but related modernization matter that affects readiness, I would also like to review military requirements for electronic warfare programs. The importance of these critical technologies were highlighted in the spring of 1999 over Kosovo during Operation Allied Force when we learned that even our most sophisticated stealth aircraft required electronic jamming and support to penetrate a modern, integrated air defense system.

    Accordingly, since that time, members of this Committee in the House of Representatives formed an Electronic Warfare Caucus to focus on the lack of resources applied to electronic warfare systems and requirements. This new caucus has identified the growing pressures on DOD's only high demand, low density tactical electronic warfare assets, such as the Navy and Marine Corps EA–6B Prowler jamming aircraft.

    The caucus has also highlighted delays in the joint service integrated defensive electronic countermeasures program and the inadequately resourced advanced threat infrared countermeasures and suite of infrared countermeasures.

    Delays in funding these systems are placing our young fighting men and women in increasingly vulnerable situations, especially when many of our peacekeeping missions have the potential to rapidly change into combat operations.

    I commend the members of this caucus for their efforts to identify these critical technologies which are fundamental to today's military operations.

    Today we have two panels of witnesses to discuss the procurement budget requirements and shortfalls. On the first panel, we have Mr. Christopher Jehn, Assistant Director for National Security at the Congressional Budget Office (CBO), and the Department of Defense Comptroller and Chief Financial Officer, the Honorable William Lynn.
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    The second panel is comprised of the military requirements programs and resources officers from each service to address their respective procurement budget requirements and shortfalls. This second panel will be comprised of Lieutenant General Larry Ellis, Deputy Chief of Staff for Operations and Plans for the Army; Vice Admiral Edmund P. Giambastiani, Deputy Chief of Naval Operations for Resources, Warfare Requirements and Assessments; Lieutenant General Robert Foglesong, Deputy Chief of Staff for Air and Space Operations of the Air Force; and Lieutenant General William L. Nyland, Deputy Chief of Staff for Programs and Resources for the Marine Corps.

    I would now like to invite my partner on this Subcommittee, the gentleman from Virginia, the ranking Democrat, Mr. Sisisky, to offer any remarks he would like to make.

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


    Mr. SISISKY. Thank you, Mr. Chairman.

    This is a most interesting hearing. We start by having the Congressional Budget Office present a study saying that the Defense Department could use more money. And I think we have heard that before from some very distinguished former defense officials, as you mentioned. So there is no news there. Then the services get to answer the very hard question, ''Would you like more money?'' And I suspect there will be no surprises there either.
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    To say we should spend more on modernization is like motherhood and apple pie, and I am not sure anyone here would disagree. But unless you add more money, the defense budget is a zero-sum game. Every dollar for modernization is a dollar less for readiness. Every dollar for readiness leaves that much less for O&M and pay and so on.

    I have to say, Mr. Chairman, that I understand your interest in holding this hearing, but it is part of an interesting pattern. Next week, there will be a similar hearing on readiness. Again, there will be a cry for increased funding. Again, there will be no balance and no recognition of necessary trade-offs.

    Now, if you are trying to build a Milky Way candy bar, you don't have one Committee deciding how much nougat and another Committee caramel and another for chocolate. No matter how much we like nougat, you cannot just keep jamming more of it in without eventually buying more chocolate to go around it. So there needs to be a balance.

    What we will not hear today is how increased modernization will hurt other major initiatives, such as readiness improvements that everyone here also agrees on.

    Mr. Chairman, I think we know what CBO will say, and we know in large part what the military will say. So this hearing is not really for our benefit, and this hearing is not for the staff. After all, they put it together, they read the report and they chose the witnesses. And it's not as if those hearings will influence the Committee's legislation. Our bill, until this morning, was almost done. Conference, hopefully, will almost be over. So I have to wonder about the motivation for a series of hearings in late September on shortcomings of America's military. But I will not beat the bushes looking for an answer.
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    To our witnesses, I say welcome. We realize that every report, no matter how clear, can be looked at in a variety of ways. The CBO report being presented today should come with a big red stamp on the cover saying ''if.'' It shows what it would cost ''if'' we decide to replace current equipment one for one, ''if'' DOD keeps doing business exactly the same way; ''if'' the operational tempo (OPTEMPO) remains the same; ''if'' the Quadrennial Defense Review offers no change in force structure; and many more ''ifs.''

    We should keep those ''ifs'' in mind. After all, if we actually got a procurement budget of $90 billion, every one of us has ideas about where the money should go. I know I do, and I am sure you do.

    And I hope the service representatives will also keep those ''ifs'' in mind. With all the systems that we have bought on the premise that they are so much more capable than their predecessors, it would be a shame to hear that we would actually need to replace them one for one. And it would be a shame to hear that the forces the Chiefs told this Committee were sufficient really needs about $30 billion more. And it would be a shame to hear that Congress woefully underfunded the military these last few years because, believe it or not, the purse is ours, not Secretary Lynn's or Secretary Cohen's or anybody else's.

    You know we are in the end-game on the budget package right now. And right now is the time someone really should step up to the plate and hit one out of the park about the impact of some of these tradeoffs on the defense budget. I think that could be someone on our side of the aisle, like a Mr. Taylor, to his credit, who has done it many times.

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    So I am hoping that in a genuine, bipartisan spirit, someone will speak out for common sense. The cost of some of these budget packages we talk about jeopardize our ability to pay for things we are all committed to: health care for retirees and veterans, address shortfalls in O&M accounts, procure top-of-the-line equipment to meet requirements of every service, and help military construction keep pace with changes in force structure, and give our precious young soldiers the quality of life they deserve.

    But unless we have the political will to change a top-line, we are all going to find ourselves preaching to the choir in hearings like this. It really may make us feel good but it is not going to change very much.

    When my side was in the majority, my friends across the aisle never let me forget that my leadership never got the message. And it was true. And back then, it was true. But now the tables have turned.

    And it is fair to ask why their leaders don't seem to hear them either. Our Committee has had a history of bipartisanship and unanimity on doing everything we can to meet national security requirements. And if the majority took advice they are getting from the Chairman of this Subcommittee and the Chairman of the Full Committee, I think there would be no need for this hearing.

    That said, I thank you for coming, and I look forward to your testimony, to the witnesses. Thank you.

    Mr. HUNTER. I thank the gentleman for his enthusiastic endorsement of the hearing.
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    And I would like to call on a gentleman who has been a great leader over the last six years, who has successfully led the effort to add $50 billion to the president's defense budget, the Chairman of the Full Committee that came up a couple of years ago with something that we have used very effectively, and that was when the Administration's witnesses would appear, and the Admirals and Generals who represented their respective services would announce upon our questioning as to whether they thought funding was enough, they would say we support the President's Budget.

    And if we put in something then maybe after the hearing was over, they might come to my office or Mr. Sisisky's office or Mr. Spence's office and say, ''Actually, there are a few things we are concerned about, and we would like to get them.'' And if we added those to the budget, we then saw editorials about Congress putting in things that the services did not ask for.

    So Mr. Spence came up with the idea of an unfunded requirements list, and that was things that we need which are not in the President's Budget. This year was $16 billion. And that has gone a long way toward allowing our military leadership to tell us candidly what they need and at the same time be able to support the six-star general, and that is the gentleman who resides in the White House.

    So I want to say to the Chairman of the Full Committee, thank you for a great job in that respect. And, Floyd, do you have any remarks you would like to make at this time?

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


    The CHAIRMAN. This is your hearing. I am just sitting in on it.

    But I do want to thank all of you here today on all the panels, both panels, for helping us in our quest that we have been doing for a good while to try to justify increasing that top-line for defense.

    I have said for a long time, and I will say for a long time in the future, we have done some things in a bipartisan way on this Committee. We have added to the budget, and we have done some things that needed to be done. But they have needed to be done for a long, long time. And we have dug ourselves a hole so deep that one year or maybe two years of a better budget will not make a military, according to our Secretary of Defense.

    We have to have sustained growth for a number of years to even get us out of that hole that we have dug ourselves into. The only way we can do that is to hear from the people who are in our military with what their needs are, that unfunded requirements list that the chairman referred to.

    That was finally the basis we got to go on because we had not been getting those things before, and because they could not say it very well. But now it is out, the unfunded requirements list, all the people who are testifying about procurement.
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    And incidentally, it is not just procurement. This is one area, I will admit; we have got other areas to think about. We have got to think about all of them, but we have got to do more. We have got to raise that top-line and even then we have got to do more.

    What we have done now in these last few years, as the gentleman suggested, we have increased the budget and even increased the budget over the President's request. But we have got to do more, and we have got to do more again, because what we are trying to do is help the military that defends this country and provides us with the freedoms that we have, the environments that we have under a free society, to consider all the rest of these priorities we have in this country.

    If we don't have our freedom first, and that is why I put our defense first, if we don't have our defense first and our freedom first, the rest of these things don't matter. Somebody else can do it for us.

    We are in the process of trying to see what the military needs are and to raise that top-line. And that is all I have to say.

    Mr. HUNTER. I thank the gentleman.

    And the gentleman from Missouri, the Ranking Member of the Full Committee, Mr. Skelton, is recognized.

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    Mr. SKELTON. Mr. Chairman, thanks.

    Let me first, Mr. Chairman, start by noting that this is the first hearing we have held since our Committee has lost our friend, our colleague, Congressman Herb Bateman. While he did not formally serve on this particular Subcommittee, his profound interest in procurement and his interest in the entire spectrum of military affairs guided our decisions. And I know all of us on this Committee will sadly miss him.

    As I look around this hearing room, I see that we have been here before. Over the recess, a few things were freshened up. The place looks good. But yet with these changes, I am struck by an odd sense of familiarity, like deja vu. We have been here before.

    It seems like only a few months ago we were sitting in here, listening to a new study about shortfalls in military spending. It was a Center for Strategic and International Studies (CSIS) study then, not CBO, and Secretary Schlesinger led the team and not Mr. Jehn. But the broad conclusion was similar: the Department of Defense (DOD) needs to operate differently in order to meet its needs with anything approaching the budget they are likely to get.

    So, Mr. Chairman, I thought the fall was in the rerun season but, to paraphrase President Ronald Reagan, here we go again.

    Now, I know this chairman of our Subcommittee and Chairman of the Full Committee are fair-minded men. And we have traditionally operated this Committee in the most bipartisan manner. So when a series of hearings decrying the state of America's military shows up after our bill is complete—I will repeat that, after our bill is complete—I have to believe that the impetus comes from outside this Committee. And after all, fall is the season of reruns, but it is the peak of another season.
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    And frankly, Mr. Chairman, it pains me to see these efforts in this Committee.

    I see two ironies in this hearing. The first is that we are holding a hearing on a report that estimates the future cost of keeping things going just the way they are, and yet the department is just starting its quadrennial review of how best to structure and operate itself. Nobody says the way things are is the way they should be, least of all, this Committee.

    Second, the irony is that we are just criticizing ourselves. Who is responsible for adding money to the defense budget? We are, the Congress. It is in the Constitution. Do we do it?

    Mr. Chairman, I want to point out that I went to the Budget Committee this year, which is, as you know, controlled by the majority. And this year I asked for $12 billion extra dollars, and I spelled out how we needed it and why we needed it. Chairman Spence, to his great credit, went to the Budget Committee and asked for an additional $15 billion. And in the end, all we got was $1 billion. So there is a shortfall, Mr. Chairman. And as Caesar said, the fault is not in our stars but in ourselves.

    Thank you.

    Mr. HUNTER. Thank you, Mr. Skelton. And your remarks and Mr. Sisisky's remarks lead me to give you a little bit of an answer.
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    First, you and I have held hearings on where modernization stands at the end of the year. I think we held one last fall. I can tell you that I don't think either of the two presidential campaigns are organized enough to direct hearings on Capitol Hill. I think they have got enough trouble making all their commitments and putting together all of their strategies. So this does not come from them.

    But second, it would not be bad if it did. If Mr. Bush should win the Presidency, and he should look at some of the information that is developed today that shows shortfalls in the nation's security, and as a result of that he helps to fix it, that is good. If Mr. Gore should win the Presidency, and he looks at some of the information that we have developed in shortfalls in the nation's security, and as a result of that he does something to fix it, that is good.

    Now, one thing that we have all agreed on in a bipartisan way here is that the fault of the budget, in the defense budget, is that it has not been requirement-driven. We have all said that.

    Mr. Sisisky, you have said that.

    We have all agreed that the defense top-line has been budgetarily driven and the Quadrennial Defense Review (QDR) was budgetarily driven. And what we ought to do is ask the simple question, ''What do we need?'' And if you ask the question, ''What do you need?'' that question cannot be answered by, ''Well, how much do we have to spend?'' And we are going to define what we need by what is available to us to spend. That is not the answer.
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    The answer should come from the services who know what they face in terms of a threat and who know what they have to meet that threat, and what has to be replaced and what has to be sustained and what has to be increased. And that is what we are doing today.

    So I find it kind of remarkable that we have got, apparently, enormous resistance to simply bringing people forward who wear uniforms and telling us what they need. Why is that mission impossible? Why is that a difficult thing? Why is that somehow something that is been politically manipulated, to ask people in uniform to tell us the truth about what they need?

    So I think it is a good thing that we have got the services here with us today.

    You know, the American people, whether you are a Democrat taking a poll or a Republican taking a poll, it is true that people don't seem to care much about the defense issue, if you look at the polls that are taken in recent weeks. It is not because they don't care, it is because they don't know. They think that we in Congress and the gentleman in the White House are taking care of national security. And it is only when the balloon goes up and you lose people that the American people develop some anger at their Representatives who they thought were taking care of things all along.

    So they put down education, they put down crime, and they put down the other issues of the day when they are asked to respond to what their priorities are. But they do care about security. But unless we develop the answers to these questions, we don't know.

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    Now, with respect to the last part of my friend Mr. Skelton's position or his statement, and Mr. Sisisky's, that somehow this is more of the same, I disagree. This situation is changing fairly rapidly. When we had our last modernization hearing, we did not have three classes of Marine Corps helicopters grounded. We have got a different number today on Army ammo than the last time, Ike, you and I sat down and went over those numbers.

    And so, things have changed. And now is a good time to ask our services, ''What do you need?'' And so, in light of that, we are going to ask those questions.

    So, Mr. Jehn, we appreciate you being with us today. And you are our lead-off witness. We have actually got a few minutes for you to speak now that we have made our statements, and the floor is yours.


    Mr. JEHN. Thank you. I will try to keep it short. But before I even begin, I want to echo what Mr. Skelton said. I first met Herb Bateman over 10 years ago when I had the privilege of serving in the Pentagon in the Defense Department. And he was a valuable friend and adviser to me, too, and I, too, will miss him. I think the country has lost a valued public servant.

    Mr. Chairman, again, thank you. We have submitted a statement for the record that I would like included in the record.
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    Mr. HUNTER. Without objection, your statement is taken into the record.

    Mr. JEHN. Thank you very much. I will try to briefly summarize it.

    I appreciate very much the opportunity to discuss CBO's estimate of sustaining our steady-state procurement costs for military equipment and systems for today's forces. As you all know, that estimate totals $90 billion per year, and it appeared in our study released last week which addressed the entire 050 function in the budget.

    At this time, let me just simply and briefly emphasize what that estimate is and is not and its limitations.

    First, the concept of a sustaining budget represents the funding DOD would require in a steady state when everything was held constant and nothing changed over time. In other words, CBO's estimate begins with the size and structure of today's military and calculates the annual procurement that would be necessary to sustain that force structure into the future.

    But, of course, things do change. So, for example, our estimate begins with current forces, and it includes funds to replace current inventories of equipment on a one-for-one basis at a rate consistent with currently planned service lives. But if the force structure changed or the services elected not to replace some equipment one-for-one, our estimate would change.
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    Likewise, our estimate rests on assumptions about service lives of systems and equipment, and the cost of replacing those systems. And more generally, the estimate is a steady-state calculation and does not apply to a specific budget year, nor is it an estimate tied directly to the Department of Defense Future Years Defense Plan (FYDP). Some have criticized it for that, for not being an estimate or an analysis of the FYDP. But that criticism reflects a fundamental misunderstanding of what we were trying to do and what we, in fact, did.

    The procurement budget in any year, as you all know better than I do, reflects many judgments made in the Administration and in the Congress: judgments about priorities, one system over another; or judgments about what the right economic order quantity might be for a system; or judgments about which systems are, in fact, ready for full procurement. We did not do that analysis. Instead, our estimate is the amount necessary to sustain today's forces indefinitely.

    And that brings me to the final and perhaps most important point that I would like to make: Our estimates should not be viewed as a recommendation or a conclusion that procurement spending should be increased immediately or as soon as possible to $90 billion a year. CBO makes no recommendations. But more to the point, procurement plans and budgets should be a function of an assessment of the threats the country faces; the development of a strategy and the role of the military in that strategy to address those threats; and, finally, determination of the size and structure of a military to serve that strategy.

    Again, CBO did not analyze any of those important questions.

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    Mr. HUNTER. But, Mr. Jehn?

    Mr. JEHN. Yes, sir?

    Mr. HUNTER. Did you receive a message from the Administration or from the military that this military, which has been cut from 18 Army divisions to 10, presently at 10, 24 active fighter air wings to 13, presently at 13, and 546 naval vessels to 316, and going down probably to 300 at the end of this year, is going to be cut further or is going to have an adjustment?

    Mr. JEHN. I received no message of any kind, sir. In fact, that was my next and final point. I think the necessary procurement budget—

    Mr. HUNTER. Well, then I think that force structure is something you can take as a fairly stable constant in this equation that you have undertaken.

    Mr. JEHN. Well, certainly, that is the way we treated it in our estimate. That is what we started with, and that is what we used throughout. And I just wanted to emphasize that point.

    Mr. SISISKY. Excuse me, Mr. Chairman. Did you use force structure? I thought it was absent any increase.

    Mr. JEHN. No increases. We took today's forces and structure, sir.
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    Mr. SISISKY. Right, today's, not what they need.

    Mr. JEHN. Yes.

    Mr. HUNTER. Yes, but my point was you offered that, at least my impression was, you offered that as something which may be subject to dramatic change and therefore change your analysis. And my question was, you have not received any message to the effect that we are going to have less than 10 Army divisions in the near future.

    Mr. JEHN. No, sir. We have not. No, sir.

    Mr. HUNTER. Okay.

    Mr. JEHN. No, sir. But my conclusion was simply going to be that a new administration and a new Congress are going to have the opportunity to address that very question.

    And it could be that changes will be made. It could be that, in fact, there will be no changes made. It could be increases. It could be decreases. Either of those would, of course, change our estimate. And that is the simple point I wanted to make.

    And as a new administration and a new Congress address those important questions, we are prepared to assist the Congress in understanding the budgetary implications of those changes, if any.
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    And I will conclude with that.

    Mr. HUNTER. Mr. Jehn, could you review the services portions of the $90 billion?

    Mr. JEHN. Certainly. Let me remind you that it is at the back of our testimony in table two and, by service, the numbers are: $15 billion for the Army; $35 billion for the Department of the Navy, in other words, the Navy and the Marine Corps together; $35 billion for the Air Force; and $5 billion for the defense agencies; for a total of $90 billion.

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

    Mr. HUNTER. What is the last one?

    Mr. JEHN. $5 billion for the defense agencies.

    Mr. HUNTER. Okay. Tell us a little bit about how you arrived at that. Or, I will tell you what, let's let Secretary Lynn go ahead and make his statement, and then we will go back for some questions, because I want to get into your analysis a little bit.

    Mr. JEHN. Okay.

    Mr. HUNTER. Secretary Lynn.
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    Secretary LYNN. Thank you very much, Mr. Chairman.

    Let me start, as well, by recognizing the significant loss to the Committee of Mr. Bateman. I had the honor of going down with many members of the Committee to the funeral service. And while it is a tremendous loss, I thought the ceremony and the attendance there by the leadership of the House and most of the service chiefs was a fitting tribute to the great contribution that Mr. Bateman has made to this Committee and, more broadly, to the national security of this country.

    I welcome the opportunity, Mr. Chairman, to discuss the U.S. military procurement requirements, the funding levels, as well as the latest report that CBO has put out as Mr. Jehn has just described.

    I will be brief, and I think you have my written statement. I apologize for its lateness, but the hearing came on us rather abruptly, as well.

    I want to make basically three points.

    First, the Clinton Administration, Secretary Cohen, believes strongly that procurement funding must increase to recapitalize our force, and we are about that as we speak.

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    Toward that end, the President has proposed substantial increases in procurement funding over the past several years. We have projected even larger increases in the FYDP and beyond.

    The 1997 Quadrennial Defense Review articulated a strategy of shape, respond and prepare, was intended to address both current dangers and those we might face in the future, to balance between the present and the future.

    DOD budgets have sought to balance between those short-term needs, the readiness needs, through stronger funding of training, maintenance and other essentials, and longer term needs, the recapitalization of the force through procurement and R&D funding for the modernization of our U.S. force levels.

    Underlying both short-term and long-term needs, of course, are maintaining the high quality of our people, which is ultimately the top priority of this secretary and this department. Now, the 1997 QDR made adjustments to then-plans for modernizing U.S. weapons, set the goal that the chairman referred to of $60 billion for the procurement levels of fiscal year 2001.

    The President took decisive action prior to the 2000 budget to ensure that we hit that $60 billion goal by adding $112 billion to the top-line of the Defense Department over the then-six years of the Future Years Defense Plan. The President's plan at that time constituted the first sustained long-term increase in defense spending since the end of the Cold War.

    In his fiscal year 2001 budget request, the President preserved and, indeed, built upon that $112 billion commitment and thereby met the procurement funding goal of $60 billion in 2001. That 2001 spending is fully one-third higher in procurement, $60 billion versus about $45 billion, than we had in fiscal year 1998. The proposed annual increases to procurement, which, again, Chairman Hunter laid out, will take us above $70 billion by fiscal year 2005.
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    After 2005, our procurement requirements will increase further, especially as production begins on major new weapon systems: the Joint Strike Fighter, the DD–21 destroyer, the advanced amphibious assault vehicle, Comanche helicopter and so on. These growing procurement requirements are reflected in out-year programs and budgets now being developed.

    A crucial step that has been mentioned both by the chairman and Mr. Jehn, a crucial step in developing those programs and budgets, is the 2001 Quadrennial Defense Review. This next QDR will include a new strategic assessment of global threats and opportunities and America's recent experience with dealing with these. That QDR will help the department ensure that it has the right vision and the correct blueprint to guide those decisions.

    The second point I want to make is that, in calculating our overall procurement requirements, we need to avoid being too mechanistic. The CBO study, as Mr. Jehn explained, freezes the force structure for 15 years, actually beyond that if you look at the service lives of equipment, go out 50 and even as high as 80 years. And then they simply replace the old systems on a one-for-one basis with modern updates.

    History tells us that defense programs are more dynamic than that. America's military forces will be transformed as well as modernized. We will not simply buy modern versions of old systems. Instead, many new systems will constitute radically different and better ways of accomplishing the same military missions, or even new missions.

    For example, unmanned aerial vehicles, UAVs, will replace manned aircraft for many missions.
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    Second example, the transformed United States Army, the one that General Shinseki has been laying out over the past year, will have new systems that are lighter, require less air and sea lift, and have a smaller logistics footprint.

    We are going through a revolution in military affairs, and that makes our procurement budgets all the more hard to project. There is a qualitative factor that has to be included in any procurement assessment.

    Substantial complexity and uncertainty surround the military procurement issue. It is difficult to predict the exact nature of future threats to American security, and the rapid pace of technological advances exacerbates that challenge. Our ongoing task is to ensure that we buy the right military capabilities at the right time.

    Our department's leadership believes that the modernization transformation of our armed forces is on a sound footing. However, we also believe that DOD leaders will continued to need to think boldly and with vision about what defense posture is needed. DOD leaders must continue to scrutinize requirements, challenge assumptions and old ways of doing business, think creatively and be candid in their recommendations to the nation's political leadership.

    And then the third point I want to make is, we need to consider procurement requirements not in isolation, but in the context of overall levels of defense spending. Both the administration and the Congress must develop defense budgets in an overall fiscal context in which defense competes with debt reduction, tax relief and other government programs.
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    While Congress and the Administration differ quite markedly on those other elements of the fiscal program, the level of defense spending proposed in the Administration's FYDP is nearly identical to that that is proposed in the congressional budget resolution which you all approved this past spring.

    The CBO study did not consider and could not consider this overall fiscal context. But if a defense program were built based on the CBO study—that is, a program $50 billion higher than the current level—it would require devoting more than half the on-budget surplus to defense increases. This would require corresponding changes in plans for tax relief, for debt reduction and for other federal programs. But even without changing the overall defense top-line, it is still possible to boost procurement funding above current levels by making reductions in unnecessary infrastructure.

    And yes, I am going to make a return to the plea that we need a Cold War transformation, we need to bring our base structure in line with our post-Cold War force structure, we need base closure rounds. If we're to get to base closure rounds, as we have repeatedly asked for the past several years, we would develop about $3 billion annually of savings that could be put into our procurement needs. So I would ask you again as we look at a new QDR and a new time for defense, that we again revisit that proposal.

    In closing, Mr. Chairman, I would like to thank you and the Subcommittee for focusing on the important issue of military procurement requirements. It will be a question occupying our nation's leadership for the rest of this decade and beyond.

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    Thank you very much.

    Mr. HUNTER. Mr. Lynn, do you think that the budget level for modernization should be a function of what is available or what is required? If you had the uniformed people sitting behind you tell you that they need to replace the systems that we have decided as a nation we are going to replace, not some obsolete system that is going to be junked, but real platforms, and that number comes up to a higher number than what you have, would you recommend going with the higher number?

    I mean, this is the old argument: Should this be budget-driven or should this be requirements-driven?

    Secretary LYNN. Mr. Chairman, it is an old argument, and I have a somewhat different perspective. I think that there is not an exclusive use. You cannot—it is a false distinction to say budget-driven and requirements-driven.

    I think you have to develop a defense budget in line with the requirements for national security and in line with the resources that are available, given other national needs. The President, who sets the levels of defense spending, will—although national security may be the most important of his responsibilities, it is not his only responsibility.

    Mr. HUNTER. Well, then, let me state the question in a different way.

    Secretary LYNN. Okay.
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    Mr. HUNTER. Do you think there is ever a time when it is appropriate for this nation to develop a requirements list where we come up with a number that is based on requirements? You take the average age, or projected age, or life of an aircraft in your fleet, and you figure out how old they are and how many you have to replace on a steady-state basis, and you come up with that number, where at least you have a number that you can work with. Do you think that is appropriate or is that too sensitive, politically?

    Secretary LYNN. I did not raise the issue of sensitive politically, Mr. Chairman.

    Mr. HUNTER. Okay.

    Secretary LYNN. I think that we should develop what the requirements are of the military.

    Mr. HUNTER. Okay, Mr. Secretary.

    Secretary LYNN. I think we need to match it with the resources.

    Mr. HUNTER. Now, that you have established that you do think we should have a list of what the requirements are, have you looked at—

    Secretary LYNN. And we indeed have that list, Mr. Chairman.

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    Mr. HUNTER. Okay. Have you looked at that list?

    Secretary LYNN. Yes, sir.

    Mr. HUNTER. Okay. Do you agree that the modernization accounts are underfunded with respect to that list?

    Secretary LYNN. I agree, Mr. Chairman, that we need to increase over the next several years, as we have proposed, the procurement accounts against the increasing requirements. I think you don't want to be premature in that. We need to increase procurement as the new systems come on.

    The Joint Striker Fighter is not available for procurement right now. The DD–21 is not available for procurement right now. So you need to match the timing of procurement funding to the development of the program.

    Mr. HUNTER. But there are a lot of systems that are available, and that will be available once we authorize and fund them, which are not being funded because there are not dollars to fund them.

    I am not talking about the aircraft that are not ready for start up yet; I am talking about systems that are available to replace older systems. So you agree that we do need—you have looked at the procurement requirements and you agree they are higher than what we are spending right now.

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    Now, do you agree with Secretary Bill Perry's estimate that we need to spend between $15 and $20 billion more per year than we are spending on modernization?

    Secretary LYNN. Over time, yes, sir. Not in fiscal year 2001, and I don't believe that is what he said. I think he said that we need to build the procurement number up over several years to between $70 and $80 billion. I believe we do need to do that and that is what is currently in the Future Years Defense Plan.

    Mr. HUNTER. I think if you look at his testimony, he does not say over several years. I think he said we need to be spending between $15 and $20 billion more in procurement.

    Have you looked at Mr. Schlesinger's estimate that we should be spending around $100 billion?

    Secretary LYNN. I have not looked at Mr. Schlesinger's estimate. I have looked at the CSIS study I think that he may have based his estimate on.

    Mr. HUNTER. Have you looked at his testimony?

    Secretary LYNN. I have not looked at his testimony.

    Mr. HUNTER. Okay.

    Secretary LYNN. I looked at the CSIS study, and I believe that is what he was testifying about.
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    Mr. HUNTER. Okay.

    Secretary LYNN. And I actually think the CSIS study is flawed.

    Mr. HUNTER. Have you looked at the front-line aircraft, F–15E, and the fact that its mission capability rate has dropped 10 percent since 1992? Have you looked at that?

    Secretary LYNN. I am aware of that, yes, sir, Mr. Chairman.

    Mr. HUNTER. Okay, are you aware of what the F–16 has dropped?

    Secretary LYNN. Yes, sir.

    Mr. HUNTER. How much?

    Secretary LYNN. I know it; I don't have the percentage in my head.

    Mr. HUNTER. Ten percent, approximately 10 percent. Ten points, from about 83 to 73.

    How about the F–15? Are you aware of that?
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    Secretary LYNN. Yes, sir.

    Mr. HUNTER. Are you aware of the fact that our capability for airlift has dropped like a rock with C–5?

    Secretary LYNN. I am aware, Mr. Chairman, that the C–5 mission capable rates, which have been a problem since the inception of this system, continue to be a problem. We have a C–5 remediation program to fix that.

    Mr. HUNTER. That is not my question.

    Secretary LYNN. More importantly, we have a C–17—

    Mr. HUNTER. My question is, are you aware of the drop?

    Secretary LYNN.—far better.

    Mr. HUNTER. Are you aware of the drop?

    Secretary LYNN. Yes, sir.

    Mr. HUNTER. What is your rate?

    Secretary LYNN. I don't have the numbers in my head.
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    Mr. HUNTER. Fifty-five percent.

    Are you aware of the fact the Army is $3 billion short on ammo? Basic ammo.

    Secretary LYNN. That is not a number I am familiar with, Mr. Chairman.

    Mr. HUNTER. I will get the report for you.

    They are actually about $14 billion short on ammo. But when you put the substitutes in, we end up being about $3 billion short.

    Is ammunition considered a new system that may not have to be replaced? Or something that we are not going to replace on a one-for-one basis? You have been talking in generalities about somehow maybe not having to replace this stuff.

    Secretary LYNN. Ammunition is a good example. Yes, Mr. Chairman.

    Mr. HUNTER. Kind of should be replaced, shouldn't it?

    Secretary LYNN. That is something that we would not necessarily replace on a one-for-one basis. As we move from the level of effort munitions, that is, the dumb bombs, to the precision-guided munitions—
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    Mr. HUNTER. Well, I am not talking about precision-guided munitions.

    Secretary LYNN.—replaced on a one-for-one basis.

    Mr. HUNTER. I am not talking precision-guided munitions. But for your benefit, we are going to get to that in a minute. I am talking about basic Army ammunition. We are $3 billion short. Are you aware of that?

    Secretary LYNN. Just that you have just said it, Mr. Chairman.

    Mr. HUNTER. Okay, I am going to get you the report from your Army that says that.

    Do you think that we should meet two-theater-war Army ammunition requirements?

    Secretary LYNN. I think we need to do the best we can to reduce the risk of fighting two major theater wars.

    Mr. HUNTER. And don't you think that includes having ammunition?

    Secretary LYNN. I think it involves having significant levels of ammunition, yes.
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    Mr. HUNTER. Okay, precision munitions, you brought it up. Your Administration's requirement for precision munitions to have right now is 4,000 Tomahawks. Okay? You know how many we have got?

    Secretary LYNN. Under 1,000.

    Mr. HUNTER. No, we have got more than that, a couple of thousand. You are thinking of the conventional air launched cruise missile.

    Secretary LYNN. That is true.

    Mr. HUNTER. Yes, that is under 1,000.

    Secretary LYNN. That is exactly right.

    Mr. HUNTER. Okay, Tomahawks, we have got roughly 50 percent of the load-out we are required right now, and we have shut down the line.

    Secretary LYNN. We have shut down the line, Mr. Chairman, and we are transitioning to a new Tomahawk that will be far more effective and cheaper.

    Mr. HUNTER. And you have taken the bait, Mr. Lynn, because if you look at the profile of Tomahawk, of the number of Tomahawks on hand, whether it is the old one or the new one, we have decided that as a Nation to go forward for about the next 10 years with an inadequate supply of Tomahawks because Tactical Tomahawk (TACTOM) does not come on for a long time. There are still a few problems to be worked out. There is no sure thing that it is going to be in the inventory even as soon as we project. And we are going to have an inadequacy of Tomahawks for a long time.
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    And that inadequacy is not measured against my requirement or CBO's requirement, it is measured against your requirement. You are not going to have what you say we should have.

    Secretary LYNN. Mr. Chairman, I think you raise a good issue. The issue is, do you want to buy more of a system that is inferior to have it right now, or do you want to transition to a better system so that you can have that capability into the future?

    You are absolutely right. We have to balance. We have to decide which is the better course of action. You correctly described which course of action—

    Mr. HUNTER. And, Mr. Lynn, the point it is not necessarily an either/or point, but the profile we have got laid out now is not one in which we securely have enough Tomahawks until we have developed a new one. We are going to have what we feel will be what we as a Nation have decided is an inadequate number of Tomahawks for a long period of time measured against your requirement, against the Clinton-Gore Administration's requirement, the two-theater-war requirement.

    So we don't have enough Tomahawks. We are not going to have enough Tomahawks for about eight or nine years. That is a big window of vulnerability from my perspective.

    Mr. Jehn, you put this analysis together that basically took the platforms that we have got, as I understand it. I want you to talk us through this.
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    Mr. JEHN. Sure.

    Mr. HUNTER. Projected the expected life expectancy for these systems—

    Mr. JEHN. That is right.

    Mr. HUNTER.—and then tried to figure out how many we had to replace on a steady-state basis to keep the fleet halfway new.

    Mr. JEHN. That is correct.

    Mr. HUNTER. Walk us through this thing.

    Mr. JEHN. Well, maybe the best way to do it is with just the numerical example. Imagine a system, for instance a tactical aircraft, for which the Department of Defense projects service life of 20 years. And, in fact, the service lives we used are the ones the department is currently using.

    Mr. HUNTER. Okay, so you used their numbers?

    Mr. JEHN. That is right.

    Mr. HUNTER. Okay.
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    Mr. JEHN. And assume that, as I said, the aircraft has a projected service life, or planned service life, of 20 years. Then our point was, in order to maintain that inventory without the average age of the inventory growing, you need to replace 5 percent of the force every year. In other words, every 20 years, replace the whole force.

    And so, we took 5 percent of the existing inventory—we would have taken 5 percent of the existing inventory of that aircraft, and multiply that number by our estimate of the cost of a replacement. And the replacement was a system under development, if one existed. So, for example, in the case of tactical aircraft we used JSF or F–22. And otherwise, we simply assumed it would be replaced in kind, because, as you know, many systems there is not at the moment a replacement system under development. Simply multiply that out, add up the numbers across systems, and across services, and came up with our number.

    Now, that was what we did for roughly have of that $90 billion.

    Mr. HUNTER. Okay.

    Mr. JEHN. That is what we call major systems. These are systems for which the department would be required or is required to develop and provide to the Congress acquisition reports quarterly and detailed plans.

    For much of the procurement, of course, in the department, the department does not have and does not provide detailed plans that we were able to use in this same way. And for that half of the procurement budget, we estimated the sustaining budget, as we called it, or the steady-state budget, on the basis of history. How has the department spent money for these items in the past in relation to the amount it spent on major systems and in relation to the amount it spent in general on its total budget.
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    Mr. HUNTER. Okay.

    Mr. JEHN. So you will see in that table two I cited a moment ago, for each of the military departments, in addition to the total you asked me to relate to you earlier, we had it broken down into procurement of major systems, which is the first case I described, and then other procurement, which is everything else, which is the second case.

    Mr. HUNTER. Okay. So to replace this equipment on a steady-state basis—that is, to keep your force modernized—the conclusion is we need to spend about $90 billion a year on modernization?

    Mr. JEHN. That is the number in our estimate, yes, sir.

    Mr. HUNTER. Okay. Now what happens if you put that off? Do you have any comments on that? We delay biting the bullet and spending that kind of money on modernization.

    Mr. JEHN. The average age of the systems will increase with whatever consequences that might bring.

    Mr. HUNTER. And does not that create a bow wave then, in terms of procurement requirements?

    Mr. JEHN. It would if you wanted to then all of a sudden decide to start replacing those things, and of course that is the problem the department has faced repeatedly over the years.
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    Mr. HUNTER. Okay.

    Mr. Skelton.

    Mr. Spratt.

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

    Let me just take an opportunity to review some history and bounce it off our two witnesses. I was one of those who negotiated the balanced budget agreement of 1997, and we came to a bipartisan accord. We voted for it on the floor. The four of us in the room and the others who participated came to a consensus about defense spending, 050, for the next five years.

    It was tight, unrealistically tight. We basically tracked a spending curve for defense that Senator Domenici had developed a year or two before in 1995 as their side, the Republicans, attempted to come up with a seven-year plan for getting the budget in balance by the year 2002.

    Spending went up, up at a very slight rate, and then in 2000 and 2001 it tapered off. And for all of us who have been here for a while, we knew that was not realistic. We hoped we would never have to live or face that day, but we plugged that particular chart in our BBA, our balanced budget agreement, because it helped us reach our goal, which was a balanced budget in 2002. As I said, it was bipartisan. Unrealistic, but bipartisan.

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    The Pentagon did the QDR the same year. And the QDR laid out a requirement for $60 billion, I believe you said, Mr. Lynn, and the procurement accounts by the year 2000, fiscal year 2000.

    Secretary LYNN. 2001.

    Mr. SPRATT. 2001. And R&D was about nearly $40 billion. So we were talking about getting the investment accounts, planning to get the investment accounts up to $100 billion. For those of us who were familiar with that BBA curve and what we laid out for ourselves in that five-year budget, we knew that was going to be awfully difficult to do unless we broke out of the box.

    And indeed, that is exactly what the President did do in 1999. When it appeared that we were going to be able to reach a balanced budget sooner, far sooner than we had anticipated, we, the Pentagon and this Administration, changed the plan on its own, changed the FYDP and added $84 billion in new money if you included the inflationary savings, because we had overestimated inflation for that period, $112 billion in new resources in the FYDP. And the next year, because of that plus-up in the FYDP, we were able to reach the $60 billion goal for procurement.

    Now, it is not everything that everybody has wanted or asked for, but I have a sense of deja vu as I sit here because I have been here a long time—18 years. I remember in the flush Halcyon days of the mid-1980s.

    Mr. Lynn, I think you were here, too, on the other side on the other side, on the Senate side.
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    We were spending a lot of money. Caspar Weinberger had a FYDP that called for us going to $456 billion for 050, or maybe it was just for DOD, by the year 1989.

    And he had to relent because of something called Gramm-Rudman-Hollings, which was also bipartisan, he did not get there. He got to about $296 billion in the year 1990. That was the high water mark for defense spending before the end of the Cold War.

    But we did hearings at that time with Les Aspin sitting here as chairman, called the plans-reality mismatch, because we had a FYDP, we had goals out there, and we had the strategy predicated upon it that far exceeded what we were appropriating then and likely to appropriate in the future. Same sort of tension between what we would like to have and what we actually have due to political reality.

    In any event, we got to $60 billion. We have got about, what, $38 billion in the R&D account? We are just shy of $100 billion. Clear we have got to do more, but the President has asked for—put in his FYDP $70 billion for the next year, I believe, fiscal year 2002, is it, for—

    Secretary LYNN. 2005.

    Mr. SPRATT. 2005.

    Secretary LYNN. It steadily goes up—

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    Mr. SPRATT. 2005 for procurement.

    Now I think it bears repeating that if you look at the two FYDPs, both the five-year budget resolution, which we have adopted here, which the Congress adopted, and the president's FYDP, we are only 0.3 percent apart—is that correct?—in total spending.

    Secretary LYNN. Yes.

    Mr. SPRATT. Three-tenths of one percent difference between the two of us. That is hardly any difference at all in a budget that big.

    And if you look at Operation & Maintenance (O&M), when we are talking about readiness capabilities of F–15s and F–16s, if I am not mistaken, the President this year requested—CBO, Mr. Jehn, said that if we are going to maintain O&M at anywhere near adequate levels, we need a constant average of about $107 billion over the 2001–2005 period; is that correct?

    Mr. JEHN. Over the period 2001–2015—

    Mr. SPRATT. 2015, excuse me, I don't have my glasses on. I see that is exactly what my notes say—constant 2000 dollars—

    Mr. JEHN. Yes, sir.

    Mr. SPRATT. About $107 billion. The President this year requested $106.5 billion, $500 million short of that. The Congress, on the other hand, appropriated for O&M, fiscal year 2000, in constant dollars, $105.2 billion. So we are lower than the President and we are the ones who put up less O&M money than is necessary to meet the constant amount of money that Mr. Jehn needs.
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    So this is a problem, no question about it, if we want to meet our needs, defend our country, there is no question about. But my basic point is: We are on this boat together and we should not be pointing the finger at each other. We ought to be looking around—the one particular point that strikes me as pertinent to mention is that we are, this year, going into next year, the President's request was $24.4 billion above that fiscal year 1997 agreement, the balanced budget agreement of 1997. We are $24.4 billion, and this Congress has added about $4.5 billion on top of that. That is a pretty big plus-up for that period of time. And if you look at the amount of money by which we have increased the budget this year, I believe it is about—is it $12 billion, $13 billion increase this year for fiscal year 2001 over fiscal year 2000, is that where we stand right now?

    Secretary LYNN. Oh, the Administration proposal was that, and I think the Congress, again, as you said, added $4 billion on top of that.

    Mr. SPRATT. Added $4 billion to it, so we are about $15 billion or $16 billion.

    Another go, just to put that in context, because all of these things are competing priorities—we passed, the Senate passed a resolution, we passed a budget resolution saying we are on the cusp of medical miracles. If we can put money into National Institute of Health (NIH) and National Science Foundation (NSF) we think we can achieve, across the board, some miraculous discoveries, bring them to fruition.

    And so the Senate resolved, over the next five years, we would like to double our appropriation for NSF. That would require $15 billion, and we are struggling to meet that goal. There's a bipartisan consensus about it, we are shy of the goal, everybody agrees upon it, and yet we come up short consistently. But that is how much money we added to the defense budget this year for next year.
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    So it depends on whether you look at the glass as half empty or half full. And I would just like to make the presentation that it is fuller than it seems. We have got to do more, we can do more because we have got these surpluses, but we ought to bear in mind that we all have a responsibility here for the situation we find ourselves in now.

    Thank you very much.

    Mr. HUNTER. I thank the gentleman.

    The gentlelady from California, Mrs. Tauscher.

    Mrs. TAUSCHER. Thank you, Mr. Chairman.

    Secretary Lynn, is this report of any value to you?

    Secretary LYNN. Well, it is a nice abstract long-term view of the department. But as Mr. Jehn said, it is not intended to be a program for any given fiscal year. So as a benchmark to compare against, it is helpful, but it is not something you'd use to build a program, no.

    Mrs. TAUSCHER. Mr. Chairman, what concerns me about this report is that it is mind-cluttering, I think, because I don't understand what the value of the report is. I think it was probably well done, but, frankly, I don't understand what the value of the report is, if it does not take into effect, or into account that we don't, frankly, want things the way they are, and we don't expect things to be the way they are in the future. And just to measure what it would cost us to replicate what we don't want is maybe an interesting exercise, but I don't think it really gets us to where we want to go.
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    And what is very troubling to me, Mr. Chairman, is the sense that the American people, as you said earlier, don't really know what is going on. And I think when you see reports like this in the press, and you hear about reports like this in the press, it is very easy for the American people to be led to believe or to be confused about what our state of affairs actually is.

    And I think that that is—from my point of view, as somebody on the political side of the fence—the wrong thing to do with 46 days to go to a presidential election, and certainly the wrong thing to do when we are spending five times more than what Russia, Iran, Iraq and China are spending right now on defense.

    And I still believe that we need to add more in. And I still believe that we need to be doing the right kinds of investments and the right kind of planning.

    But I have got to believe that this report, like the information it provides, is nice to have, not a have to have. And I think it takes everybody's eye off the ball. And since we cannot affect anything and don't intend to affect anything, it is a lot like taking people out to dinner, sitting down at the table, having the water poured and asking for the check and then asking what people want for dinner. We have got it a little backwards, I think.

    And what worries me about this is that—Mr. Chairman, you are a very eloquent spokesman for us on the needs of the military and what we need to do. And we have people on our side that are, too. But I think that it is more important for us to take facts that we are actually going to use and plans that we are actually going to implement and allow people in the military to make those decisions, and that we actually make those investments for the American people.
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    I have a chart that I want to show very quickly. It is actually one that my colleague, Mr. Spratt, was alluding to. I just want to make sure that no one's confused about this number, about what we have done and what the President had asked us to do. This is a chart that shows a comparison of multi-year defense plans, Clinton Administration and the Republican Congress majority.

    If you notice, as Secretary Lynn has talked about, we are essentially in agreement. And those numbers, I think, reflect good investments on the part of this Congress and the Administration for the American people. And while we are not anywhere near perfect, we cannot make the good the enemy of the perfect. And I think that we need to do more in the future.

    But I do think that reports like this are very confusing for the American people. And I think that we need to redouble our efforts to make sure that we are not confusing anybody.

    Mr. HUNTER. I thank the gentlelady. And now I think we have set the stage well for the services to come forward and tell us what they need.

    Gentlemen, thank you very much, members of the first panel—and if you can, you may want to hang around here and listen to the—when our second panel comes forward. And you may want to stay in the hearing room and listen to them. And we may have a few questions for you when they get finished with their testimony.

    Although, Mr. Lynn, you have a—
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    Secretary LYNN. I have a commitment at the White House.

    Mr. HUNTER. It comes to me now that you had to leave a little early. Okay. Okay. Well, we will make sure we get you all the copies you need of the testimony.

    Secretary LYNN. Very familiar with it.

    Mr. HUNTER. And thank you for being with us today, sir. We do appreciate you.

    Secretary LYNN. Thanks, Mr. Chairman.

    Mr. HUNTER. And Mr. Jehn, if you can hang tough, we would appreciate. We may have a question or two for you at the end of the testimony.

    Mr. JEHN. I will do that, sir.

    Mr. HUNTER. Okay. Thank you very much.

    Mr. JEHN. You are welcome.

    Mr. HUNTER. Okay. Our second panel is Lieutenant General Larry Ellis of the Army, Vice Admiral Edmund P. Giambastiani of the Navy, Lieutenant General Robert H. Foglesong of the Air Force and Lieutenant General William Nyland, U.S. Marine Corps.
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    Gentlemen, please come on up here.

    And General Ellis, you go right ahead. And when you get settled there and you are ready to go, the floor is yours, sir.


    General ELLIS. Okay. Thank you.

    Mr. Chairman and members of the Subcommittee, thank you for the opportunity to appear before this Committee to discuss the Army's requirements.

    First, let me express my deepest sympathy at the passing of Congressman Bateman. We thank him, this Committee and the Administration for the important role you play in keeping today's Army the world's premier land force.

    I would also like to thank the Committee for their support of the Army's transformation. Your continued commitment is critical to this effort.

    The Army leadership has previously testified on our transformation strategy. Transformation serves three purposes: It ensures sustained land combat dominance from today through the objective force; second, it meets an immediate operational requirement with the interim force; and third, it eases the requirement to recapitalize our aging equipment.
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    The faster we can transform, the sooner we can achieve these three purposes.

    Army transformation requires us to balance competing demands. We must sustain, recapitalize and modernize the current force to meet the national military strategy. And we must continue to invest aggressively in science and technology to provide for technological solutions by 2003 for the objective force.

    Today, the science and technology community is working hard to develop solutions for the objective force by fiscal year 2003. We project that transformation to the objective force will begin in 2008 timeframe and take about 20 years to complete. The objective force will be more deployable, lethal, survivable and sustainable than the current force.

    Between now and the fielding of the objective force, we have an operational shortfall. This shortfall is an inability to get forces on the ground quickly with the requisite combat power. To address this capability gap, we will field interim brigade combat teams that will be strategically deployable and capable of operations across a full spectrum of conflict.

    The Army will transform five to eight existing brigades into interim brigade combat teams. We plan to have the first of these operational by December of 2001 and the second by December of 2002. The fielding of these brigades will include a mix of active and Reserve component units. The objective force will be more deployable, lethal, survivable and sustainable than the current force.
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    As we develop and field the interim and objective force over the next 30 years, one of the greatest challenges is the age of existing equipment. Our Abrams tank was fielded in 1981, the Bradley fighting vehicle in 1982, and the M–109 field artillery howitzer in 1960. Although each system has been significantly upgraded over the years, each is programmed to remain in the force through fiscal year 2032. Seventy-five percent of current Army systems exceed its service half-life.

    The Army cannot accept any degradation in current readiness. The heavy burden of the major deployments of the last decade has increased operations and support costs. To meet these increased costs, about $500 million per year has migrated from procurement accounts, sacrificing capability to preserve near-term readiness.

    Migrating funds to other accounts slows the development and procurement of improved capability. Equipment is kept in the force longer, driving up Operations and Support (O&S) costs, requiring additional migration of funds to maintain readiness. We must break the readiness and procurement trade-off cycle to ensure the long-term health of the Army.

    The Army must also maintain its aviation war-fighting capability. The aviation modernization plan is a major step forward. This plan will modernize both active and Reserve component aviation. It will divest the Army of obsolete Vietnam-era UH–1 Huey, AH–1 Cobra and OH–58 aircraft. And it will transform our aviation units into multi-functional organizations with embedded reconnaissance, attack and utility assets.

    Ammunition is an essential component of the Army's transformation. The Army has been consuming the Cold War stockpile of ammunition. Those stocks are nearing depletion and reaching their recapitalization point.
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    The Army's ammunition procurement request for fiscal year 2001 includes approximately $270 million for modernized war reserve items. We face a mounting recapitalization challenge for a number of munitions that require an increase of $252 million in fiscal year 2001.

    Over the past three years, the Army has consistently identified approximately $5 billion per year shortfall in research, development and acquisition. We have already made significant changes in our program to shift approximately $16 billion that directly supports Army transformation, the Army's greatest challenge in modernization and recapitalization of our legacy force. This is essential to honoring our non-negotiable contract with the American people to fight and win our nation's wars.

    Full funding of the O&M account is critical to preclude further migration of procurement dollars into the readiness account. This year Congress has supported the Army's transformation. Continued support and additional funding is required to fully implement our transformation strategy.

    Once again, I thank the Committee for this opportunity to address the Army's procurement concerns. And I would be happy to answer any questions at this time.

    [The prepared statement of General Ellis can be found in the Appendix.]

    Mr. HUNTER. Okay. Thank you, General Ellis.

    Admiral Giambastiani.
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    Admiral GIAMBASTIANI. Mr. Chairman, I, too, ask that my prepared statement be submitted for the record.

    Mr. HUNTER. Without objection.

    Admiral GIAMBASTIANI. And on behalf of Admiral Clark, our Chief of Naval Operations (CNO), and the Secretary of the Navy, Mr. Danzig, I would also like to thank the Congress, this Committee and the rest of the Armed Services Committee for your continued and outstanding support for our men and women in uniform and the House Armed Services' (HASC's) record of excellence on issues affecting the security of the Nation—of our Nation.

    I know that many members have questions, so I will keep my comments very short.

    First, I would like to thank the Committee for the opportunity to appear before you today. I am prepared to address and discuss with you the Navy's most critical needs and our efforts to balance the competing demands of retaining our high quality sailors, maintaining the required current readiness of our deployed naval forces and modernizing and replacing our aging fleet of ships and aircraft.

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    As the CNO has said, we have the finest Navy in the world, and we intend, with your help, to keep it that way. To do so, we will need the sustained support of the Congress.

    I look forward to your questions, Mr. Chairman, and those of the other members of this distinguished Committee.

    [The prepared statement of Admiral Giambastiani can be found in the Appendix.]

    Mr. HUNTER. Thank you, Admiral.

    General Nyland.


    General NYLAND. Mr. Chairman and members of the Committee, I thank you for this opportunity to address the Committee. And let me also express my sympathy—

    Mr. HUNTER. Get a little closer there, General, to the microphone.

    You can always share the Navy microphone, right?

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    General NYLAND. Yes, sir. We share real well.

    Mr. HUNTER. Okay.

    General NYLAND. Mr. Chairman, members of the Committee, thank you for this opportunity to address the Committee today. And let me also express my sympathy on the passing of Mr. Bateman, a great leader and a true American.

    I would also like to thank you specifically for your continued support of your Marine Corps. I would simply state that the Marine Corps is ready today, and we continue to work hard to provide the best balance we can to each of our four pillars of readiness: Marines and their families, legacy systems, infrastructure and modernization.

    We believe that we have a balanced, viable plan for modernizing our aging ground and aviation equipment. However, we are concerned about the pace at which we will do so.

    I have elaborated on these points in my prepared statement. I would ask that be entered in the record.

    I am ready to respond to your questions. Thank you, sir.

    [The prepared statement of General Nyland can be found in the Appendix.]

    Mr. HUNTER. Without objection. In fact, all statements will be entered into the record.
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    General Foglesong.


    General FOGLESONG. Thank you, Mr. Chairman, members. Delighted to be over here and have the opportunity to talk with you today. Thanks for the statement going into the record, Mr. Chairman.

    I have three points I would like to briefly discuss and then take your questions.

    First of all, like the rest of my uniformed partners here, we have been around the world for the last three or four years. I have had the opportunity to visit in over 100 countries. And I am confident in telling you today that I believe we are the world's most respected military.

    And to a large degree, I blame you all for that. Thank you very much for your help.

    Having said that, I also think we are able to go out and fight our wars today. I think we are equally capable of doing that.

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    Second point I would like to make is we have wonderful people—airmen, soldiers, sailors, Marines—out there helping day in and day out, working very hard to make sure that we are able to win those wars if we are asked to do that.

    But I agree with you. I think they are very frustrated now. Having just come from a field command a month ago, I sense their frustration. And I will have more to say about that in a few minutes.

    Third point I would like to make is that, as the head of operations in the United States Air Force, we are detecting a worrisome trend in our readiness indicators. I think there are two or three reasons for that. One is our retention rate is not as good as we would like for it to be. Our experience level is especially worrisome to us right now, especially when we are looking for those mid-level Non-commissioned Officers (NCOs) who are the core of what we do for a living, and those 1,000-hour captains who are out flying and fighting for us every day.

    So retention is an issue for us because it impacts our experience level. It is very hard to recover from that lack of experience.

    Second reason that I think that our readiness indicators are worrisome is we have not funded our spares as fully as we should have funded them over the last decade. Only four times in the last 11 years did we fund our spares at 100 percent. I think we are seeing the results of that at this point.

    As you know, it takes 18 months to 24 months for those spares to show up. And while we have had some help with that funding over the last couple years, we are still at that point where we are just beginning to see, we think, the turn in our readiness indicators. But not confident enough to tell you that we have started back up again.
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    And finally, I would like to tell you that the impact of old equipment that those young airmen and those young captains are out there flying has a tremendous impact on their desire to stay with us. We have found new ways to break old airplanes. And recapitalizing our fleet, I believe, will be vital to the health of our readiness over the next decade.

    Thank you very much, Mr. Chairman.

    [The prepared statement of General Foglesong can be found in the Appendix.]

    Mr. HUNTER. Okay. Thank you, General Foglesong. And why don't we start with you, General Foglesong, with questions?

    Your statement says that overall combat readiness is down 23 percent since 1996. Is that correct?

    General FOGLESONG. Yes, sir. That is for our front-line units that—what we will do is often robust-up the units that we send to our deployed locations. And for our front-line units our overall readiness is down 23 percent.

    Mr. HUNTER. What is the readiness rate of your units that are not front-line units?

    General FOGLESONG. Sir, they are down in the 40 percents now. The units that we would keep back in the United States that have robusted those units that go forward is about 45 percent.
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    Mr. HUNTER. What is 45 percent?

    General FOGLESONG. Forty-five percent either C–1 or C–2 in our combat rating systems. Our units back home, our combat units, would be 45 percent, either C–1 or C–2 status.

    Mr. HUNTER. Well, C–1 or C–2 is ready?

    General FOGLESONG. Yes, sir, that is correct.

    Mr. HUNTER. Okay. So you are saying that 45 percent of your units that are in the U.S., that are not front-line deployed, 45 percent of them are C–1 or C–2?

    General FOGLESONG. Yes, sir.

    Mr. HUNTER. That means 55 percent of them are below C–1 or C–2.

    General FOGLESONG. C–3 or C–4 or are in some form of conversion.

    Mr. HUNTER. What does C–3 or C–4 mean?

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    General FOGLESONG. It is a measurement, generally by percentage, of how many people are trained to do their combat jobs, how the equipment is kept up, maintained to be ready to deploy. In the case of air crew members, it is how often they get to go out and actually participate in combat training activities.

    Mr. HUNTER. So it means those units are inadequate in terms of being ready to go to war.

    General FOGLESONG. Well, it means they are less trained than the units that we push forward.

    Mr. HUNTER. Well, what level do you consider to be inadequate? Is there any standard for that?

    General FOGLESONG. We would like to see our units at C–1 or C–2. Our preferred position would be to see them at C–1 or C–2.

    Mr. HUNTER. So what are the C–3 and C–4?

    General FOGLESONG. Those are units that we have effectively, because—I will give you a good example. Our crew chiefs in F–16s, we will often robust and have to send them to our deployed locations. When we do that, because our manning is down—and that, by the way, largely is a function of the economy now and somewhat due to the frustration of not having the spare parts and not being able to do the job that they would like to be able to do—those F–16 crew chiefs, when we robust them and send them forward to make sure that we are more fully manned overseas, it will leave a shortage back in our home stations.
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    Mr. HUNTER. Okay. General Ryan said that since 1996—I am paraphrasing his statement—our combat readiness for the units in the U.S. has fallen by 45 percent. Is that accurate?

    General FOGLESONG. Yes, sir. That measure is the one that I just gave you. What that is is a measurement of it was in the 80s and it is now in the 40s.

    Mr. HUNTER. Okay. So our readiness with the units that are not front-line deployed has fallen by 45 percent.

    General FOGLESONG. The readiness as measured by our C ratings, yes, sir, that is correct.

    Mr. HUNTER. And the readiness of the units that are front-line deployed has fallen by 23 percent.

    General FOGLESONG. Yes, sir, that'd be correct.

    Mr. HUNTER. Is that acceptable, from your point of view?

    General FOGLESONG. It is a worrisome trend, Mr. Chairman, it is something that we would like to reverse. As the head operator in the Air Force, that is worrisome to me.

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    Mr. HUNTER. Well, when does it become disastrous?

    General FOGLESONG. It becomes—

    Mr. HUNTER. Or does it? I am just trying to get a feel from you as to how you gauge this. I mean, it sounds like a lot, a 23 percent fall. Do you look at that as a little trend?

    General FOGLESONG. Yes, sir. We think we are at our lower limit right now as far as our readiness capability to deploy forward.

    Mr. HUNTER. Okay. Have the mission capability rates of the F–15, F–15E and F–16 fallen since 1992?

    General FOGLESONG. Yes, sir, they have. The F–15 community is down between 9 and 10 percent. We think we may have arrested that decline, but it is a little too early to tell as the spares that we were able to buy two years ago are now starting to flow into the system. We have leveled the rate of decline is what we have done, but we have—

    Mr. HUNTER. Okay. Now, the mission capable rates that you guys sent over to was the effect that they had fallen since 1993 from about 83 to about 73 percent mission capable.

    General FOGLESONG. That is correct.

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    Mr. HUNTER. Is that accurate?

    General FOGLESONG. Yes, sir, that is accurate.

    Mr. HUNTER. The F–16 had a similar 10 point drop in mission capability. Is that accurate?

    General FOGLESONG. Yes, sir. The real numbers are F–16s about 9 percent, F–15s about 8 percent, F–15Es about 10 or 11 percent.

    Mr. HUNTER. Well, okay, if you were telling us, as a Congress, what your priorities are, do you think it is important to have a mission capable rate that is close to 80 percent or is that something you folks can live with?

    General FOGLESONG. Eighty percent allows us to experience our fighter pilots at a more satisfactory rate than we are able to do that now. As the mission capable rate goes down, we are not able to use our airplanes as much as we would like to and we are not able to experience our fighter pilots as rapidly as we would like to. So it would clearly be desirable for us to be at a higher mission capable rate.

    Mr. HUNTER. C–5s. Tell me what has happened to C–5s in terms of capability.

    General FOGLESONG. C–5 Alpha, our oldest one, is down about 5 percent in the last 10 years. We are averaging a little higher rate than that in our C–5 Bravos, which are our newer airplanes. And we see that as one of the backbones of our airlift fleet and would like to see that maintenance rate also go up. It also has to do with experience level of our crew chiefs and spare parts and other—C–5 is a great example of an old airplane that we have found new ways that it will break.
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    Mr. HUNTER. You found what?

    General FOGLESONG. New ways that it would break.

    Mr. HUNTER. Okay.

    General FOGLESONG. Ways that we never envisioned that that airplane would break, and after many years it is breaking in new ways on us.

    Mr. HUNTER. What is your mission capable rate for C–5?

    General FOGLESONG. Overall it is about 60 percent right now; 55 percent in older ones and about 65 percent in our newer airframes.

    Mr. HUNTER. Tell me about cannibalization. What is cannibalization?

    General FOGLESONG. When we have to go to the supply bin and there is not a part in there, often we will go to another airplane and take a part off of it to ensure—cannibalize it, if you will—to make sure that we can fly the asset that we want to fly that day.

    In the 1970s, as an example, we got very good at that. We learned to cannibalize almost everything except the paint. What we discovered when we do that is about one out of every three parts that you cannibalize unfortunately you break. So that is a very frustrating thing for our crew chiefs to have to do. They are, on occasion, forced to do that, and it is not a desirable maintenance practice.
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    Mr. HUNTER. Do you have a cannibalization rate?

    General FOGLESONG. Yes, sir, we do.

    Mr. HUNTER. What is it?

    General FOGLESONG. It is 10 percent, which means for every 100 sorties we fly that we have to cannibalize to fly 10 of them. And that is an overall average for all—

    Mr. HUNTER. For every 100 sorties you fly you have to do what?

    General FOGLESONG. We have to take a part off of another airplane on 10 of those sorties to fly those sorties. So 10 percent of the time.

    Mr. HUNTER. Okay. So 10 percent of your sorties require cannibalization from other aircraft.

    General FOGLESONG. Roughly speaking, that is correct, sir.

    Mr. HUNTER. Okay. Where has that gone in recent years?

    General FOGLESONG. It is from 7 percent to as high as in the lower teens; it is back down now to about 11 percent. I will tell you that those are not figures we are proud of because any cannibalization is frustrating for our crew chiefs and hard to do.
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    Mr. HUNTER. Okay. Get that cannibalization rate for us, if you could.

    General FOGLESONG. Yes, sir.

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

    Mr. HUNTER. Has the cannibalization rate, coupled with your drop in mission capability—

    General FOGLESONG. Yes, sir, it—

    Mr. HUNTER.—led you to any conclusions?

    General FOGLESONG. It is directly tied in many cases to our supply rate, the rate that we have airplanes broken because we don't have the spare parts. And the conclusion that you can generally draw is that as your cannibalization rate goes up, it is because your supply rate is also—your lack of parts has gone up as well. It is a direct correlation. If you don't have the spare parts, you take them from somewhere to make sure you can fly the sortie.

    Mr. HUNTER. General Ellis, Army ammo, you had a little discussion about Army ammo here in your statement, but you don't discuss the overall shortfall, and Mr. Skelton and I started several years ago trying to ascertain what it was. I have got the September 1 status report here. This says there is a critical shortfall of $3.3 billion. So I made a mistake with Mr. Lynn. I think I told him it was $3.5 billion, but it is $3.3 billion.
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    Are you up to speed on that?

    General ELLIS. I am.

    Mr. HUNTER. Okay. The statement says that we estimate the shortfall at $14.5 billion, up from last year's $12.5 billion. But it is brought down to $3.3 billion by doing what you call acceptable substitution, is that right?

    General ELLIS. That is correct.

    Mr. HUNTER. What does not having enough ammo result in with respect to our ability to carry out two theater wars?

    General ELLIS. Well, first of all, we would like to have our wartime stockages at those levels. That $3.3 billion would bring that level to our wartime stockage level. We most often see those shortages in training ammo. And what we are having to do is shift ammunition from our wartime stockage to use it in training, so much of that shows up as a training shortfall.

    Mr. HUNTER. Does that result in risk?

    General ELLIS. There is an amount of risk there, yes.

    Mr. HUNTER. Explain what risk is when you are talking in that context?
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    General ELLIS. From the standpoint of the requirement for wartime stockages, and if I have used it in training situation, when I prepare to go to war, it may or may not be there. So what I would like to have is the ammunition for training on hand—

    Mr. HUNTER. So, could that result in more casualties if you have to go to war?

    General ELLIS. I guess that would be the end result of risk at some point.

    Mr. HUNTER. The reason I say that is one time we asked the Joint Chiefs to define risk and in the end it means you might not be able to prosecute the war and win it as quickly as you need to and you could take more casualties.

    I did not come up with that definition; that is what I was told by one of the Chiefs. So if you have a different definition, I want to hear it.

    General ELLIS. I don't have a different definition, but it would be selective in terms of the types of ammunition. All ammunition would not necessarily carry the same amount of risk with it.

    Mr. HUNTER. Okay.

    General ELLIS. It depends on when you need it, and we have calculated it based on need for wartime stockages.
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    Mr. HUNTER. How about M–16 ammunition? Have you looked at the two-war requirement?

    General ELLIS. Yes. I don't think there is any shortfall on M–16 small arms—very little.

    Mr. HUNTER. Okay. Take a look at that information paper we got from you folks and if you have any other answers for the record on that, we would be interested in them.

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

    Now Mr. Lynn talked about the fact that we might do some innovative things that means that we would require less force structure than we have now and less equipment than we have now, implying we might not really have as big a shortfall as CBO projected in this $30 billion shortfall.

    You talked about Army transformation. Now, the figures I have seen on Army transformation is that we are going to have to add money to the Army budget for transformation, is that right? We aren't going to subtract money because you are transforming.

    General ELLIS. That is correct.

    Mr. HUNTER. How much more are you going to need over the next 10 years?
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    General ELLIS. What we have asked for is $1.5 billion per brigade.

    Mr. HUNTER. Okay.

    General ELLIS. And we are asking initially for five to eight brigades over this FYDP.

    Mr. HUNTER. Okay. And that is above and beyond your regular budget, is that not right?

    General ELLIS. We have funded one brigade each year in the current FYDP.

    Mr. HUNTER. Okay. But I am talking about the amount of money that we—if you use this year as a baseline, you are going to have to spend that above and beyond your other budgetary requirements.

    General ELLIS. There would be some, and I do not have that total cost, because that will be predicated upon the cost of the future combat systems and we don't know that number at this point.

    Mr. HUNTER. Could you get that for the record?

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    So the point is your Army transformation is going to add to the projections of military spending requirements that you heard CBO talk about. You did not tell them when they were putting that together that you needed to add on for Army transformation, did you? They just presumed they are going to replace legacy systems, I presume.

    General ELLIS. I have not read the CBO report.

    Mr. HUNTER. Okay. Well, that CBO is here, and I want you to confer with them when you get a break here. I want to see if that is going to lower that number for Mr. Lynn, the fact that you are doing Army transformation. I don't think it is.

    In fact, Mr. Jehn, are you here? Where's our—back here. Come on up, Mr. Jehn. Let's find out if we are going to have this magical reduction of the defense requirements here.

    Mr. Jehn, you heard General Ellis say that Army transformation's going to cost more, not less, money. Did you hear him say that?

    Mr. JEHN. I did, indeed.

    Mr. HUNTER. Okay. Your projection of that we were operating under a $30 billion procurement shortfall did not contemplate that factor, did it?

    Mr. JEHN. No, sir. In fact, we even specifically mentioned the Army transformation as a case in point, that we did not account for any changes—as you brought out in your questioning of me—any changes in force structure, up, down or different shape.
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    Mr. HUNTER. Okay.

    Mr. JEHN. So if transformation is going to wind up in a bigger procurement bill, or a smaller one, that is not reflected in our report, in any case.

    Mr. HUNTER. So the only real transformation that is actually planned, that you have heard about in this hearing, is a bigger bill, isn't it?

    Mr. JEHN. I cannot comment on whether the transformation will be a bigger or smaller bill, but it is not reflected in our report.

    Mr. HUNTER. Okay. And if General Ellis is correct when he says it is going to add money to the Army's budget, not take it away, then it is going to be a bigger bill, isn't it? You are going to have to add that on to your—

    Mr. JEHN. If General Ellis' projection is that the transformed force, the objective force will require more spending than the current force, then that is a correct conclusion.

    Mr. HUNTER. Okay.

    General Ellis, while Mr. Jehn is here, you heard Mr. Lynn talk about the prospects for actually saving money by doing new and innovative things. But the only transformation that we have heard so far is yours, which is going to cost money.
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    Is the Army doing anything with respect to modernization over the next several years that, over the next several years, will actually result in reduced modernization costs, that you are aware of?

    General ELLIS. Not that I know of.

    Mr. HUNTER. Okay.

    Well, if you should happen on some of those breakthroughs, I want you to get those to Mr. Lynn so he can—because he talks about them, and I think he'd like it if there were some.

    But thank you.

    General Foglesong.

    General FOGLESONG. Sir?

    Mr. HUNTER. Are there any projected breakthroughs in technology that you see that are going to dramatically reduce your replacement cost for aircraft below those that you have got projected in your out-years defense program?

    General FOGLESONG. Not at this time, Mr. Chairman.

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    Mr. HUNTER. Okay. If you come on any, please let Mr. Lynn know about that. Because he's looking for some good ones.

    Admiral Giambastiani, tell us about the rate of shipbuilding that we are engaged in right now. Number one, how many ships do we have? And what is our shipbuilding rate over the last five years? And where's that taking us in terms of fleet size?

    Admiral GIAMBASTIANI. Right now, Mr. Chairman, we have 318 ships in our active fleet. And we have been building just over seven ships a year. Our projection is is that we need between 8 and 10 in order to completely recapitalize the force to maintain the QDR force level of about 305 ships plus 5 Nuclear Attack Submarines (SSNs) that have been added here over the last year and a half of deliberations as a result of the chairman's attack submarine report.

    Mr. HUNTER. Okay. Okay. Thank you.

    Mr. Sisisky.

    Mr. Spratt.

    Mr. SPRATT. General Foglesong, when we look at these mission capable rates and readiness rates, what do we attribute to them? One of the things that you mentioned was the intensified OPTEMPO ratio for the Balkan campaign in particular. Obviously, those planes were flying every day, sometimes twice a day, seven days a week.

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    To what extent is it deployment like that, in active combat scenarios, and to what extent is it simply a lack of funding for essential parts? Or to what extent is it a lack of funding for the training that these pilots need actual, you know, hours behind the wheel?

    General FOGLESONG. Sir, I think it is a combination of several things. I alluded earlier to the fact that our experience level is down substantially right now with our mid-level NCOs and our captains who are flying those airplanes because the economy's great. There's a draw out there with the airlines right now that is tremendous. There's a draw out there in the high-tech industry that takes a lot of our good people. And clearly that has an impact.

    The impact that you talked about is also substantial. When we go to a contingency and crank our airplanes a lot, we use a lot more spare parts. There's no doubt about that.

    These are older airplanes. Recapitalization of those airplanes I think will be critical to help us—it is like your car. When you own a new car, you don't have to buy many new parts and then when it gets out to it is as old as my 1970 Ford, you got to start thinking about trading it in. And we are reaching that point on many of our airframes. And I believe that has an impact on our cannibalization rate and our mission capable rate, which then drives our ability to train our pilots.

    Mr. SPRATT. Have you actually cut back flying hours? Or is it simply the fact that your pilots themselves have less experience and therefore are less proficient than their predecessors?
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    General FOGLESONG. It is a combination of two things. It is a combination of both of those. We have not flown our flying hour program for the last several years because we have not had enough money to do that. We have not infused enough money to fly our flying air program to 100 percent. That is one issue.

    And the other issue is, as I say, the draw by the airlines that takes that eight-year captain who's our flight lead, our heart of the envelope for combat experience and he flies—and the good news in this, by the way, because there is some good news, is often he will get out and go into the Reserve forces and we will be able to recapture a lot of that combat experience, but on our active forces it is very hard to find a flight commander right now.

    Mr. SPRATT. So the most dramatic degradations that you gave us were in the active, front-line, first-to-deploy units. Are the Reserve units—compared to the levels they are supposed to attain, are they closer to the mark than the active-duty units?

    General FOGLESONG. They have more stability in the Reserve forces, without any doubt. First of all, they absorb a lot of that experience that leaves the Air Force and so they are able to fly a few less hours each month and maintain their proficiency because they are experienced. But even our Reserves—United States Air Force Reserves this year will be 1,800 short, for instance, in its recruiting goals.

    And again, some of that has to do with an economy; some of it has to do with a high Personnel Tempo (PERSTEMPO).

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    Mr. SPRATT. We were discussing earlier with Admiral Giambastiani the cost of modern munitions. They are great. We saw that in Yugoslavia. They are also very expensive, and that makes training with live munitions more difficult to fund and afford than ever. Is the Air Force experiencing that problem?

    General FOGLESONG. Yes, sir, we are. We have a shortage in funding, and one of our highest priorities for our underfunded list that we sent over that is emerging for this year is to replenish some of our training stocks.

    Mr. SPRATT. Now the Navy Inspector General (IG) report which was leaked a couple of weeks ago indicated that when Navy pilots were flying in the early days of combat, there was a lot of actual on-the-job training, in the sense that a lot of these pilots, F&A–18s, were dropping these real live munitions for the first time. Is that a correct—is that a correct summation of the problem? All I heard was ''60 Minutes.'' But is that a serious problem that the Navy's experiencing?

    Admiral GIAMBASTIANI. What I would tell you is that the statement you made that we had air crews dropping precision-guided munitions, specifically laser-guided bombs, without having done them in training is correct. Not all of them, but some of them.

    And is it a problem? The answer is yes. And in fact, in the latest on non-nuclear ordinance requirements that we have put together in the Navy here over the last 12 months, we have increased the requirement for training ordinance of precision-guided munitions by 150 percent in order to allow each crew per year to at least drop one precision-guided munition.
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    Mr. SPRATT. Now to some extent I guess this is a function of the fact that, as the Joint Direct Attack Munitions (JDAMs) and these modern precision-guided munitions are being procured, in the early stages you don't want to deplete your stocks by making them available for training then not having them available for actual live situations.

    Admiral GIAMBASTIANI. In the case of the Navy, sir, the stocks of JDAMs that we have right now, they are called JDAM–A, but the first version that we have been given and we have procured, we have small numbers of them. So we don't really have an allowance for using them in a training mode, and we have to build up our ordnance levels before we will be able to do that.

    Specifically, we are using training ordnance in the laser-guided bomb area.

    Mr. SPRATT. Does the Army experience this same problem, say with the Army Tactical Missile Systems (ATACMS)? Multiple Launch Rocket Systems (MLRS)?

    General ELLIS. We have what we call a training practice round that we use with the MLRS. And so our soldiers will feel the effects of firing a live round. And so we have a separate round for training than for wartime stocks in that case.

    Mr. SPRATT. I remember years ago being at Fort Hood and seeing the Stinger in its early days demonstrated and being told that in those days at least you got to fire one Stinger a year, live round, and the rest of the time they had a magnificent facility for simulating the operation, queuing the radar, actually targeting the incoming targets and everything else, but it was not a live situation, it was simulated.
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    General ELLIS. The effects with the training practice round from the crew standpoint is you can't tell. The issue is in most cases is the range-fan. If you try to fire the actual live round, we run out of a range-fan. So the training practice round allows us to do that. And from the standpoint of the crew, they cannot tell any difference.

    Mr. SPRATT. One further question, General Foglesong. You indicated that the weapons system mission capable rate has declined by 11 percent.

    General FOGLESONG. Yes, sir.

    Mr. SPRATT. The degradation there is not nearly as sharp as the degradation of 42 percent in your front-line overall training capability. This suggests, to me at least, that the hardware is holding up fairly well, given the OPSTEMPO that we have been deploying at.

    General FOGLESONG. It may be a little bit of apples and oranges comparison in that the C ratings incorporate several different categories. And the 40-some percent degradation had to do with the number of units that were going down from C–1 and C–2 to C–3 and C–4 or below.

    Mr. SPRATT. Then one final question. Are these C–5Bs as well as C–5As you are having problems with?

    General FOGLESONG. C–5Bs are newer and they are more—their reliability is better. So once again, our older airplanes are breaking in new ways for us, and the C–5A fleet is significantly older than the C–5B fleet. So it holds up a little better, in answer to your question.
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    Mr. SPRATT. Thank you very much.

    Mr. HUNTER. Thank you, Mr. Spratt.

    Mr. Sisisky, any questions?

    Mr. SISISKY. I notice, Mr. Jehn, in the CBO report, which makes a lot of sense, you say in the conclusion the estimates of $90 billion for the annual sustaining procurement budget for DOD is considerably larger than the current spending.

    And I want to emphasize that CBO is not recommending an increase in funds to that level. And I guess because we couldn't buy everything in a prudent manner if we had the money today to go out and manufacture it. But it seems to me—and I would like to know how much the shortage is in ammunition, which is O&M funds, I believe, that we are talking about.

    Because we have added money to ammunition. The chairman made sure of that, that we add it every year. And of course part—but this may be the opportunity, if we can get the top-line up, to fill that in while we are planning on the procurement of new equipment. Does that make any sense?

    Mr. HUNTER. Yes. We authorize ammo in the procurement account. And we have added, but we still have, as you just heard, Norm, a $14 billion preferred ammo shortage. I mean, it is huge. So we have added—

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    Mr. SISISKY. Is that for all services?

    Mr. HUNTER. No, that is just Army.

    Mr. SISISKY. Well, if it is $14 billion for the Army, what is it for the other services in ammunition? The shortage?

    General NYLAND. Sir, if you are talking in the ground-type ordinance, our shortfall across the FYDP is about $320 million.

    Mr. SISISKY. Navy?

    Admiral GIAMBASTIANI. Off the top of my head, I tell you we could probably double our precision-guided munition procurement rate. It is running up, on the aviation side, for example, about $800 million a year. We could double that and that would help us to reduce the overall shortfall. Because they are substantial, particularly with the generation of some new weapons where we just came up with requirements and it is going to take us a period of time to get there.

    Mr. SISISKY. Does that include the Tomahawk and—

    Admiral GIAMBASTIANI. Same thing with Tomahawk. On that side, clearly, you have already heard earlier in the discussion and in previous hearings that we are inadequate on our Tomahawk side with regard to our non-nuclear ordnance requirements, and we could definitely use increases there, up to the full production rate that the facilities could handle.
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    Mr. SISISKY. How about the Air Force?

    General FOGLESONG. I will have to get that for the record, sir, but I do know that we are at about 50 percent of our requirement now for precision munitions. We did get some help on munitions and we have been able to buy back some of the precision munitions that we used in Kosovo, but for our requirements purposes we are at about 50 percent.

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

    Mr. SISISKY. How about parts for equipment?

    General FOGLESONG. We got a little over $900 million. Some of that was Kosovo supplemental money. We were able to spend a little over $300 million of that, closer to $400 million for spare parts out of that. This was two years ago, in 1999. And we were also able to put about $300 million of that into our depots. And that is starting to flow now, because it was two years ago, we are just now starting to see those attitude indicators show up in the supply bins.

    And so—but we are—we have an emerging requirement in 2001 right now for about $300 million for our flying hour program, of which about two-thirds is for spare parts.

    Mr. SISISKY. Well, your problem was not just money, it was to fill the pipeline, I guess—
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    General FOGLESONG. Yes, sir, that is correct.

    Mr. SISISKY.—from the manufacturers.

    General FOGLESONG. Yes, sir, that is correct.

    Mr. SISISKY. And is that because—I think in answering a question from the chairman, you talked about you had problems that you never even considered before.

    General FOGLESONG. Yes, sir.

    Mr. SISISKY. Is that type of thing you are talking about?

    General FOGLESONG. That is also correct. As a result of an average age of about 22 years, fleet-wide, for our airplanes, when we have something like our stabilizer actuators break in our tankers and have to stand down that fleet, those are things that you cannot can. They are so big that you cannot can them, and we don't have those in our supply system, and so we have to invest to get those kinds of assets for our tankers—an unexpected requirement.

    Mr. SISISKY. How about spare parts in the Army, General?

    General ELLIS. We don't have a major problem. We manage our spare parts a little bit differently. We have something called an Authorized Stockage List (ASL), a little more decentralized, and it is a demand-supported system. And as a result, those numbers flow fairly freely back to the wholesale system and we keep track of it.
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    So over time, our sort system, which we track our readiness, has been in pretty good shape.

    Mr. SISISKY. How about the Navy?

    Admiral GIAMBASTIANI. This is with regard to spare parts, sir?

    Mr. SISISKY. Yes, yes.

    Admiral GIAMBASTIANI. What we currently see right now—and this has been reflected in our IG report—is that we are doing a good job of current readiness with our deployed forces. However, with regard to spares, we have not—even with an infusion of money over the last couple of years, for example, on the aviation side, we have not seen the full effect of that. And in fact, we have seen some systemic problems beyond just plussing up spare parts accounts.

    So with our non-deployed forces, we have seen a degradation of their readiness conditions over a period of time.

    We have now seen in the last year to year and a half an arresting of that—for example, on our aviation side—but we have not seen an upward trend.

    We are living off the backs of our non-deployed and shore-based forces to keep our front-line deployed forces ready, and that is been—
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    Mr. SISISKY. That's particularly true in aircraft. Of course in ships, you are just not repairing them as often as often as you'd like to.

    Admiral GIAMBASTIANI. On the ship repair side, sir, as you well know, we have had some definite depot maintenance shortfalls. This Committee and the Congress has helped us out substantially. In the last go-around, you gave the Navy another $220 million in depot maintenance funds.

    Mr. SISISKY. Actually this Committee gave almost double that, I think.

    Admiral GIAMBASTIANI. Yes, sir. And I have to tell you, we split that evenly between our two fleets, and it was used instantly. Very important. I know this for a fact, because about a third of that money went to my former command. Having just arrived here six weeks ago from being in the submarine forces in the Atlantic Fleet, about a third of that, if you will, additional money that you sent on maintenance was used on the submarine side, and the remainder was on the surface side down at the Atlantic Fleet.

    So we definitely have had some shortfalls.

    I have to tell you, we are looking at ourselves to make sure we have got these requirements proper because we think we have done a poor job in some areas of defining the maintenance requirements and also the spares requirement.

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    Mr. SISISKY. How about Marine Corps?

    General NYLAND. Yes, sir, we are obviously very closely tied to the Navy for our aircraft. We see the same situation. We saw the infusion of money starting in 2000, but it usually takes 18 to 24 months for those parts to show up in the bin. So we think that there is good news in sight.

    Similar to the Army, on our ground spares, we don't have a significant readiness degrader on our ground spares at this time.

    Mr. SISISKY. Thank you.

    Mr. HUNTER. I thank Mr. Sisisky.

    And the distinguished ranking gentleman from Missouri, Mr. Skelton?

    Mr. SKELTON. General Ellis, we hear a great deal on the history of the Army about the inadequacy or the unpreparedness of the Army in two instances: one is called Task Force Smith, and the other is called the Kasserine Pass. You are familiar with them?

    From the study of history, it appears that Task Force Smith truly was a matter of not being prepared. It was a pickup ball team, as it was, and rather unfortunate.

    I am not convinced that the Kasserine Pass is fully a matter of lack of readiness. I think a good part of it was the leadership of General Fredendall.
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    Be that as it may, I use those as historical references.

    You undoubtedly, if not every day, every week—and I am going to ask this same question to the other gentlemen—receive briefings on threats and hot spots throughout the world; is that correct?

    General ELLIS. That is correct.

    Mr. SKELTON. Is there any mission or deployment that might result from those briefings you receive that the Army could not fulfill today?

    General ELLIS. I would say at this point, no, with a qualification. We spend a great deal of time ensuring that near-term readiness is taken care of and often times at the expense of the other part of the force, as one of my colleagues here just mentioned.

    So I would say, off the top, we prepare very carefully. In fact, as we start to see situations change, we start to lean forward. I think the situation you addressed in the case of Task Force Smith and Kasserine, we had taken our eye off the ball. But we monitor on a regular basis our readiness posture of our units.

    Mr. SKELTON. Are you saying that as we speak today, should the president pick the phone up and ask the United States Army to fulfill a mission to which you are briefed regularly—or the threat to which you are briefed regularly—you could fulfill that mission?
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    General ELLIS. Again, I would qualify, we are postured against a two-MTW scenario, and for that, absolutely. And we never take our eye off of the ball for the two-MTW scenario.

    In addition to that, we have got a series of small-scale contingencies that degrade or take away from our ability to be prepared for the two-MTW scenario.

    Mr. SKELTON. I am speaking as of this moment, your answer is yes?

    General ELLIS. As of this morning, I would say my answer would be, yes, we could probably do that. I would have to, again, qualify, because we have, right at this point, about 14,000 soldiers in the Balkans. And so I have got two divisions tied up in the Balkans. And one of those units would have to be redeployed back home, and I would have to figure that into the Time Phased Flow Deployment (TPFD).

    Mr. SKELTON. Thank you.

    Mr. HUNTER. I think that is as good as you are going to get, Ike.

    Mr. SKELTON. How about the Air Force?

    Mr. HUNTER. I want to see if I can—this is some great cross-examination. I want to see who can get a better answer than that, Ike. [Laughter.]
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    You have got to be able to try one more time.

    Mr. SKELTON. I am going to try three more times. [Laughter.]

    How about the Air Force?

    General FOGLESONG. Yes.

    Mr. SKELTON. Navy?

    Admiral GIAMBASTIANI. Yes, with high risk in the second MTW.

    Mr. SKELTON. Marines?

    General NYLAND. Yes, sir, we are ready to go.

    Mr. SKELTON. Now, we have spoken about today. At what point, General Ellis—and I will ask your cohorts this as well—at what point would your answer be no?

    General ELLIS. We have worked a scheme to meet the MTW scenario. And it is at the point of the second MTW I would have to say I would have a problem.

    So the scheme we have is to allow for a 120-day recovery period, so it is a 40-day period to recover the unit, 40 days for it to ship back home and then redeploy into the theater for those units that are currently deployed.
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    I have to say that because I currently have a requirement, in the case of heavy divisions, for seven heavy divisions in an MTW war fight. And given that I have got two of those tied up in the Balkans, I could not meet both of those requirements at this time.

    Mr. SKELTON. Thank you.

    General Foglesong.

    General FOGLESONG. Multiple events would be the point where I would get very concerned. Multiple events, that are occurring simultaneously or near simultaneously, would be the point where I would operationally be concerned that it would stress our lift capability, our force structure capability overall.

    Mr. SKELTON. Admiral.

    Admiral GIAMBASTIANI. Multiple events is another way of describing stress on the force with regard to munitions, spares, those things that we transfer from one battle group to another, expendables that we use in that fashion. But munitions is what puts us in this, and if we had a high rate of expenditures in some other type of contingency operations, then it would. That is why we list the second MTW as high-risk.

    Mr. SKELTON. Thank you.

    And General Nyland.
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    General NYLAND. Sir, as you know, the Marine Corps is a single-MTW force, as structured, and we would swing. My concern would come, similar to Admiral Giambastiani's. Where do we continue to get the low-density/high-demand assets like EA–6Bs? Where do we get the spare parts? Where do we get the precision-guided munitions?

    That would be where we stumble, I would think.

    Mr. SKELTON. It is been very helpful, thank you very much.

    Thanks, Mr. Chairman.

    Mr. HUNTER. Thank you. I would say to my friend from Missouri. You covered a good—that was an excellent MTW question.

    Mr. Maloney.

    Mr. MALONEY. I don't have any questions at this time, Mr. Chairman.

    Mr. HUNTER. Thank you, thank you, sir, and thank you for being with us here, Jim.

    General Foglesong, in Kosovo, you folks looked at that as basically a major theater conflict—
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    General FOGLESONG. That is correct.

    Mr. HUNTER.—did you not?

    General FOGLESONG. Yes, sir.

    Mr. HUNTER. Could you have taken on a second major theater conflict and successfully prosecuted it?

    General FOGLESONG. It would have stressed us substantially to have moved assets to another location. It would have stressed us to assist the other services as well with that airlift that I am talking about. It would have been very difficult.

    Mr. HUNTER. It would have been very difficult. Does that mean you could not have done it?

    General FOGLESONG. No, sir, it does not mean we could not have done it. It means it would have taken us longer and with more risk than we would like to have done it.

    Mr. HUNTER. Define ''risk'' in this situation. Can that translate into casualties?

    General FOGLESONG. Yes, sir. The opportunity to halt impact, an attack in another area would have been degraded which could have potentially put soldiers, sailors, airmen, and marines in harm's way.
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    Mr. HUNTER. General Foglesong, when I was at Nellis Air Base, and I was talking to a Commanding Officer (CO) out there about the retention problem. He called it the ''birthday problem.'' And I said, ''What do you mean?'' He said, ''When we have got folks that have missed one or two birthdays, their kids' birthdays,'' he said, ''they can live with it. When they miss four or five or six in a row, they are gone.''

    General FOGLESONG. Yes, sir.

    Mr. HUNTER. His point was, to a large degree, we are stretching our people so thin with the relatively small force structure that we have now—13 active air wings—that its impact in another—the force structure itself, the small size of the force structure, is driving or exacerbating the people problem, because the people that are left have to do more. Do you agree with that?

    General FOGLESONG. Yes, sir, I do. Our PERSTEMPO is four times higher now than it was 10 years ago, if you exclude Desert Storm. I think that has a direct impact on our retention.

    Mr. HUNTER. Do we need more air wings?

    General FOGLESONG. We need the ability to be as effective or more effective than we are with our current structure. So I am going to give you a qualified answer on that also and say that the F–22 is going to be a revolutionary asset, and we will have to revisit numbers and force structure as we take on those revolutionary assets.
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    Mr. HUNTER. Well, don't you think that we are probably going to have fewer air wings when we have F–22s than we have today, are not we? That is a fiscal possibility.

    General FOGLESONG. It is a fiscal possibility. It is right now—

    Mr. HUNTER. You make it the sticker price.

    General FOGLESONG. Right now it is a one-for-one exchange with F–15s.

    Mr. HUNTER. Okay.

    General FOGLESONG. But, to be more specific on your question of personnel, I believe we are undermanned at this point. I believe we are asking that same security policeman to go back to Al Jabar Air Base more frequently than he likes.

    Mr. HUNTER. Well, isn't that a function, though, of not having enough air wings? I mean, if you have got 13 and we have got all the missions that we have got, you are asking the smaller pool of personnel to deploy more often—

    General FOGLESONG. That is correct.

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    Mr. HUNTER.—because you don't have the 24 air wings we had in '92.

    My point is, it appears now that force structure is having an effect on the personnel problem.

    General FOGLESONG. Yes, sir, I agree with that.

    Mr. HUNTER. I mean, I don't know if you can get from here to there with what we have got. But do you think that we need more than 13 air wings, if you assume the F–22s coming on, assume Joint Strike Fighter is going to be with us at some point?

    General FOGLESONG. I think we are satisfactory with the air wing force structure we have now as long as we recapitalize it soon.

    Mr. HUNTER. Okay.

    Admiral Giambastiani, do we need more Tomahawks?

    Admiral GIAMBASTIANI. Yes, sir.

    Mr. HUNTER. How many more?

    Admiral GIAMBASTIANI. As you have indicated, we are at about 50 percent of requirement, and we need to build to a larger requirement.
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    We have made a judgment within the Department of Navy, that with the level of risk we can accept, our current levels with the, frankly, Kosovo supplemental that you gave us to buy and remanufacture Tactical Air-to-Surface Missiles (TASMs) into Block III Tomahawks, and then with the tactical Tomahawk program. But I can tell you that I am going to be taking another look at the Tomahawk production lines here in the next year.

    So I cannot give you a direct answer, specific numbers, but my gut feel is, is based on the demand that we have had on Tomahawks, that we need to build more.

    Mr. HUNTER. That we need to build more Tomahawks.

    Admiral GIAMBASTIANI. Yes, sir.

    Mr. HUNTER. So you are concerned about this window of exposure with the small Tomahawk inventory?

    Admiral GIAMBASTIANI. Yes, sir, I am, and the reason why I am is because we have revised our requirements upwards within Navy for Tomahawk usage just because of the number of Tomahawks that we are using through everything, all the contingencies we respond to.

    So we are going to have to look at this in the next budget cycle here, and I guarantee I will be looking at it.

    Mr. HUNTER. Can we carry out all the obligations of the Navy with a 300-ship force?
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    Admiral GIAMBASTIANI. We can carry out the obligations that we have today; however, as always, it is a balance with current readiness and long-term readiness to recapitalize the force. And we are looking very carefully at that balance and how we take care of current readiness and improve the readiness of our non-deployed forces.

    I will give you an example: In 1990, our force structure, with almost 600 ships, about 20 percent of our force at that time was deployed, whereas today, with the 318 ships, 31 percent of our force is deployed at any one time.

    That is a significant amount. And what is happened is, is the shock absorber that we used to have in there that we could borrow on if we had a ship that dropped out of a deployment cycle, an aircraft squadron, a problem in one of our units, we could make up for it. But we have lost that shock absorber here today. So the strain is much greater on today's force. That is why, when we sent over our shipbuilding report to Congress back in June, we put one option in there for what we called a less-risk force, which was a larger number. And as you recall, the number is about 360 ships.

    Mr. HUNTER. Did you see the testimony of 3rd and 5th Fleet commanders who said we needed 360?

    Admiral GIAMBASTIANI. Yes, sir.

    Mr. HUNTER. General Foglesong, we are about 1,200 pilots short this year, as I recall.
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    General FOGLESONG. Yes, sir.

    Mr. HUNTER. Do you think that part of that shortness, that scarcity of pilots, is related to the PERSTEMPO?

    General FOGLESONG. Yes, sir, I think it is a combination of that and the draw from the civilian airlines.

    Mr. HUNTER. Okay, so my question back to you, again, is—see, I am like Ike, I like to re-ask these questions. But he did a great job, didn't he?

    He asked that question three times, General Ellis. That was masterful. But you gave him great answers, I have got to say that.

    So my question is: If we don't have enough pilots today—and I think this is a severe problem, I mean, I think it is more severe than people think—if we only have 13 active air wings, can we maintain our personnel structure, can we keep pilots in the Air Force, when they have that kind of a PERSTEMPO which is driven by requirements matched against the 13 air wing force structure?

    General FOGLESONG. Sir, a dilemma is, even if we had more force structure, we still would not have the pilots. And so it is, kind of, a vicious cycle we're in.

    Mr. HUNTER. Yes, but my point is, if you had more force structure, that is if you had a couple more air wings, so the guy who was going to be doing an Operation Deny Flight could be home more often, he might not be getting out.
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    In other words, if the reason for people separating—one of the reasons that was given to me is that people are stretched so thin, they are deployed so much, because there is not that many air wings, that they are getting out, because they are not seeing their family.

    So if you had, for example, a 24 fighter air wing Air Force today, those people would be seeing their kids for some of those birthdays, and they would be staying in the service. You get my pitch?

    General FOGLESONG. Yes, sir.

    Mr. HUNTER. You get down to where cutting your force structure so severely it becomes self-defeating, because it ends up deterring people from coming in to the Air Force, in this case, or it motivates them to leave.

    General FOGLESONG. Yes, sir. I take your point on that and agree with you that more force structure, if we were fully manned, would stop the rotation cycle we are in.

    The dilemma we are in right now is the 1,200 that we are short. If we could man up to that number, it would also reduce the cycle of the remaining 85 percent. And that is the dilemma we are facing today.

    Mr. HUNTER. Yes, but it looks like—and it looks like it is a death spiral.
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    General FOGLESONG. Yes, sir, and..

    Mr. HUNTER. Because the fewer people we have, the more deployments you have got with the ones that are there, and the more motivated they are going to be to leave as fast as possible. Would you agree with that?

    General FOGLESONG. Yes, sir, I would agree that. And the bad news is, the airlines are going to hire another 5,000 pilots this year. And all of us together won't produce 5,000 pilots.

    Mr. HUNTER. General Nyland, three species of helicopters have been grounded.

    General NYLAND. Yes, sir.

    Mr. HUNTER. And you have got, I think, some supportive cast here, some of the folks that are involved in the grounding decision. Explain the groundings.

    General NYLAND. Yes, sir. The first one, the V–22, the system worked exactly as it should. We got a warning light that indicated we had a problem with an interconnect shaft. The aircraft sat down. We found that problem. We have since inspected all the other aircraft and now have procedures in place to preclude that from happening again.

    The AH–1 Cobra, we found seven blades that had cracks on the under-surface.
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    Mr. HUNTER. Now which one is that?

    General NYLAND. This is AH–1W Cobra. The blades were originally manufactured in '82, but they were well short of their design life. But what we have come to find—and I would ask Admiral Dyer to correct me if I go astray on this—is that it had two weights for it is balance point versus a single weight, which is used on blades after 1983. We found the development of stress cracks between those two weights. So we found those seven bad blades, we have inspected those, and we have new blades en route.

    The CH–53 Echo was grounded as a result of the loss of the MH–53 Echo in the Gulf due apparently—although the complete engineering investigation is not yet complete—due to a duplex bearing in the swashplate.

    It is an older bearing. We have, actually, two generations of bearings since then and the addition of a bearing monitoring system. When we use the most recent bearing and the bearing monitoring system, the aircraft are being returned to flight.

    Mr. HUNTER. Do you have anything else you want to say on that?

    General NYLAND. No, sir.

    Mr. HUNTER. Okay.

    General NYLAND. I was just checking with Admiral Dyer from Naval Air Systems Command (NavAir).
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    Mr. HUNTER. Okay. What capability does that deny the Marines in terms of their ability to move out and meet their objective, to have those three—first, the three species of choppers are down right now. When do you project you are going to be back up?

    General NYLAND. The V–22s are already flying, sir.

    Mr. HUNTER. Okay.

    General NYLAND. Anticipate the rest of the blades for the Cobras within the month. It is probably a six- to seven-month recovery period for all of the 53 Echoes. That, of course, denies us our heavy-lift capability for the number of airplanes that we have to work our way through.

    Mr. HUNTER. Because the 53s you were heavy lift.

    General NYLAND. Yes, sir.

    Mr. HUNTER. What does that mean in terms of a Marine Corps operation?

    General NYLAND. It means that the medium assault aircraft, the CH–46 Sea Knights, will have to work harder and more frequently.

    Mr. HUNTER. Is it going to keep you from being able to move out as quickly?
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    General NYLAND. No, sir.

    Mr. HUNTER. How about to move with much equipment?

    General NYLAND. To move equipment—it will degrade our ability to move the equipment as quickly.

    Mr. HUNTER. Does that produce a risk factor?

    General NYLAND. I would say that ultimately, yes, sir, that produces a risk factor.

    Mr. HUNTER. Admiral Giambastiani, your sub fleet is 55 right now, right? Attack subs.

    Admiral GIAMBASTIANI. Fifty-six, sir.

    Mr. HUNTER. Fifty-six, excuse me. Is that enough?

    Admiral GIAMBASTIANI. No, sir, it is not. And we have, obviously, completed this Joint Chiefs of Staff study which talks about the fact that we need 68 Attack Submarines (SSNs). It gives you a period from 10 years from now. But I think we have got experience with the current force, both in the Atlantic and Pacific. In other words, we are stretched thin on our worldwide requirements, and there is no doubt in my mind, having just spent two years commanding the Atlantic force, that we are stretched very thin.
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    If anything happens to any deployer, currently deployed ship or one returning from deployment, that directly impacts the rest of the force because we are so thin on numbers of forward-deployed ships.

    Mr. HUNTER. How many do you think we need?

    Admiral GIAMBASTIANI. Sixty-eight is the right number, sir.

    Mr. HUNTER. So we are 12 short.

    Admiral GIAMBASTIANI. Yes, sir.

    Mr. HUNTER. That is going to require doubling the production rate of one a year, isn't it?

    Admiral GIAMBASTIANI. Yes, sir, it is. And that was reflected in our report to Congress. And in fact, if you look at that report carefully, it shows that some of the rates go out to three per year to make that 68—or 55 number actually, and then the 68.

    Mr. HUNTER. So that is going to add $1.5 billion, $2 billion to the shipbuilding account, if you take the baseline of one that we have got projected now.

    Admiral GIAMBASTIANI. Yes, sir.

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    Mr. HUNTER. What does the FYDP call for—

    Admiral GIAMBASTIANI. Right now—

    Mr. HUNTER.—the five-year plan?

    Admiral GIAMBASTIANI. Right now our rate, as we provided the Congress, is one submarine per year.

    Mr. HUNTER. So you are talking about an extra couple of billion dollars a year required for submarine construction.

    Admiral GIAMBASTIANI. Yes, sir. What we said in the report was is that a sustained rate of construction to get us to the 8 to 10 ships would bring us up long term to about $14 billion per year in then-year dollars.

    Mr. HUNTER. Okay.

    Mr. Jehn, thought we would forgotten about you, didn't you?

    Mr. JEHN. No, sir.

    Mr. HUNTER. Okay. You didn't calculate this Navy projection that they need to have an extra submarine per year in your modernization shortfall?

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    Mr. JEHN. That is correct, sir. The procurement numbers for the Navy reflect current plans and inventory of the Navy, not this latest study from the Joint Staff that projects a larger requirement for attack subs.

    Mr. HUNTER. Okay. So you have seen now two programs that have been spoken about by our requirements leaders here in the services. Both programs, the Army transformation and the requirement of more submarines by the Navy, drives the procurement accounts up, not down, is that right?

    Mr. JEHN. They would, under the assumptions and discussion we have heard today.

    Mr. HUNTER. Okay.

    General Foglesong, I would like it if you could get us for the record—you responded to, I think it was to Mr. Skelton or Mr. Sisisky, that you had roughly 50 percent of your two-MTW munitions requirements. And if you'd get that for the record as to what that pencils out to, we need that. Do you have any idea of how many billions that is?

    General FOGLESONG. No, sir. I will get that for the record. And what I have referred to we have about a 50 percent field rate of our requirement for precision munitions. But I will get for the record what you have asked for.

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

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    Mr. HUNTER. Okay. And let me go. I have got some questions that our very well organized staff has put together here. Let me chat with Roger for a second.

    Oh, yes, Roger wants to make sure it is broken down into conventional ammo and Precision Guided Munitions (PGMs) when you put that together.

    General FOGLESONG. Okay.

    Mr. HUNTER. But, General Ellis, let's start with you. Of the CBO's $90 billion annual procurement figure, the Army's share will be about $15 billion, while your fiscal year 2001 procurement budget request was $10.4 billion. Is $15 billion about right?

    General ELLIS. I have not seen it, but my sense is $15 billion is not right.

    Mr. HUNTER. Well, what do you think is right?

    General ELLIS. The number we are looking at, I believe, is about $5 billion per year unfunded for RDA.

    Mr. HUNTER. A little bit more than $15 billion—

    General ELLIS. So it is a little bit more than what he's addressed there. I have not seen the report.

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    Mr. HUNTER. Just in 2001.

    Well, how much are you underfunded in fiscal year 2001?

    General ELLIS. About $5 billion.

    Mr. HUNTER. About $5 billion underfunded. Okay. What is the impact on the Army if you are not funded for this additional amount?

    General ELLIS. We would still be into continuing to age the fleet. The largest impact, which we have consistently done, and that is continued to mortgage, I guess is the word, our systems, that would only get worse. That is part of the reason we undertook the transformation effort, to try to get from underneath that situation. So we would simply continue to push that bow wave out to the right.

    Mr. HUNTER. Will you be able to fight two major theater wars if you don't have that additional funding?

    General ELLIS. There would be risk. And depending on—for example, some of these systems, like in ammunition, we could only procure certain amounts of those items in a given year. So we could start that war and over time, I would say, we would be able to fight the war, two MTWs.

    I am not sure I have answered your question.

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    Mr. HUNTER. Okay. But you would have some risk in terms of—and could that risk translate itself in terms of casualties?

    General ELLIS. That would be the end state, yes, if we did not get it in a timely manner.

    Mr. HUNTER. Admiral Giambastiani and General Nyland, of the CBO's $90 billion annual procurement figure, the combined Navy and Marine Corps share would be about $35 billion, while your fiscal year 2001 procurement budget request was $26.6 billion. Is $35 billion about right?

    Admiral GIAMBASTIANI. The way I would answer that, Mr. Chairman, is to say that, under our current budget request, we can quibble about the exact number. Upwards is the right number or the right trend, but we can quibble about that number.

    What I would tell you is is that we are building six ships during that $26-plus billion procurement this year, and we are building 128 aircraft. Our sustained rate to—and this is both for Navy and Marine Corps aircraft—is 180 to 200 aircraft per year. And we need a sustained build rate in the shipbuilding side of between 8 and 10 ships.

    So over a sustained period of time, the answer is we need a larger budget than $26.6 billion. I don't know an exact number, but I know that it is towards the CBO projection.

    Mr. HUNTER. So you think it is relative close to the CBO projection.
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    Admiral GIAMBASTIANI. It is reasonable. I cannot give you an exact number.

    Mr. HUNTER. Okay.

    Admiral GIAMBASTIANI. But it is in that direction.

    Mr. HUNTER. And let me ask you, Admiral Giambastiani, while we are at it, a couple of my colleagues felt that it was not right to take equipment's projected life and match that life projection against how old your equipment in the inventory is and then figure out by making that match how much you need to buy each year at a sustained rate; while it seems strange to me that they would find that unusual, because I think that is what everybody does, whether in business or the military, who has equipment, you analyze how much equipment you have to buy on a regular rate to keep your inventory of equipment modern.

    Is that a standard method of trying to figure out what you need?

    Admiral GIAMBASTIANI. In the Navy we look at two things.

    One, we look at capability for equipments. For example, we were at, a few years ago, a 48-ship amphibious ready group (ARG) force. We had essentially five-ship ARGs. We have today three-ship ARGs. So we are building more capable ships to provide us the capability to lift a Marine expeditionary unit special operations capable.

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    So in the long term, our shipbuilding plan has us going to 36 amphibious ships. So that is the way we looked at it in that area. Also, in our Combat Logistics Force, we are providing some more capable ships in our shipbuilding plans.

    However, with regard to the numbers of carriers, for example, in some of these other units, quantity has a quality all of its own, and there is only certain levels you can go to and you don't want to go below.

    So, what I would tell you is, yes, we look at age, and we also look at capability that we are bringing on. And in some areas we can make up for some of the numbers with capability, but in others we cannot, just because you only can be in so many places on the globe at one time.

    Mr. HUNTER. And so the combined requirement for the Navy and Marine Corps in terms of aircraft is what, again?

    Admiral GIAMBASTIANI. The long-term sustained rate that we need to be able to achieve and maintain is about 180 to 200 aircraft per year. And to sustain the QDR force plus five SSNs, we need a build rate of about 8.7. We call it 8 to 10 ships, but it averages out about 8.7 per year.

    Mr. HUNTER. Okay. And what are we doing?

    Admiral GIAMBASTIANI. Right now we are building just above seven.
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    Mr. HUNTER. You are building above seven. And what are you building in terms of aircraft?

    Admiral GIAMBASTIANI. And our aircraft rate is down around 120—I will get you the exact number, but I would say, for example, I gave you the example in 2001 of 128 tactical aircraft Navy and Marine Corps.

    Mr. HUNTER. So would it be fair to say that you are at least 52 tactical aircraft short this year, in the Navy and Marine Corps?

    Admiral GIAMBASTIANI. Yes, sir.

    Mr. HUNTER. Of what you need to maintain a modern force.

    Admiral GIAMBASTIANI. Yes, sir. Otherwise, if we don't build to that force, then the age continues to rise and we don't arrest that level.

    Mr. HUNTER. Okay. Age: Are the platforms today measurably older than the platforms in 1993, 1994? What is the answer. Let's start with General Foglesong.

    General FOGLESONG. Yes, sir, they are older. Average age—and I will get you the exact numbers—but I believe was 10 years in '94 and it is about 15 years now. This is the fighter force that I am talking about.

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    Mr. HUNTER. Okay.

    General FOGLESONG. And I will also tell you that for us to recapitalize the number is about 160 airplanes per year. We are purchasing about 50. Of those 50, a—

    Mr. HUNTER. You need how many per year to recapitalize?

    General FOGLESONG. Yes, sir.

    Mr. HUNTER. How many?

    General FOGLESONG. One hundred-sixty.

    Mr. HUNTER. And you are getting how many.

    General FOGLESONG. About 50, of which those are not all combat aircraft. We are buying the T–6s, you know, as—

    Mr. HUNTER. So you are saying you are more than 100 aircraft short per year of what you need to maintain a modern force.

    General FOGLESONG. That is what we believe, sir.

    Mr. HUNTER. Okay. That leads me to another question. Well, let me see, we started on aircraft ages.
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    General Nyland, how about Marine aviation, helicopters? Are the ages up, the average age of your platforms up since what it was in the mid-1990s?

    General NYLAND. Sir, save the 11 MV–22s that we are flying now, we are flying the same airplanes that we were flying in 1990. So the age has, in fact, gone up.

    Mr. HUNTER. Okay. When did you make your last helicopter, out of the—the couple of MV–22s we got? When was the last production?

    General NYLAND. I think would be our 53—well, actually the AH–1W would be the most recent, and after that the 53 Echo.

    Mr. HUNTER. Okay.

    General NYLAND. Save those, all the others are in excess of 20 years old.

    Mr. HUNTER. So you have not made any choppers in 20 years—

    General NYLAND. No, sir—

    Mr. HUNTER.—except V–22?

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    General NYLAND. The AH–1W and the 53 Echo, the average age of the 46 is in the 30s, the average age of our 130F is in the high 30s. I don't have with me the age of the 53 Echo or the AH–1W. Those two will be in the 10- to 20-year-old time frame.

    Mr. HUNTER. Do you think you have had crashes because planes have been old or choppers have been old?

    General NYLAND. No, sir. We don't put people up in airplanes that are not ready to be flown.

    Mr. HUNTER. Well, do you think that age is a factor in crashes?

    General NYLAND. No, sir.

    Mr. HUNTER. Okay.

    Admiral Giambastiani, do you think the aging of the aircraft is a contributive factor in crashes?

    Admiral GIAMBASTIANI. No, sir, I don't.

    Mr. HUNTER. Okay.

    General Ellis.

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    General ELLIS. No, sir, I don't.

    Mr. HUNTER. Okay.

    General Foglesong.

    General FOGLESONG. No, sir, I think it is a factor in the frustration for our people, though, to try to keep them airborne.

    Mr. HUNTER. Okay.

    Admiral GIAMBASTIANI. I think we would probably all jump in on that one, sir.

    General NYLAND. Sir, I do have some information on the 53 Echo.

    Mr. HUNTER. Okay.

    General NYLAND. That average is 11 years old.

    Mr. HUNTER. Eleven. Okay.

    General Foglesong, was not the last B–52 manufactured in 1962?

    General FOGLESONG. Yes, sir. It was tail number 60001. It flew on the 6th of September and it landed Code 1, believe it or not. I thought I would use that one-liner today because—
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    Mr. HUNTER. That is great.

    General FOGLESONG.—it would have 14 ride-ups, but it did not. That is because those young men and women have figured out how to take care of those old airplanes.

    Mr. HUNTER. The plan we got back when we asked the Air Force what are we going to do for bomber recapitalization was, as I recall, and I would ask staff to correct me if I am wrong or you correct me, that we are going to fly B–52s until they are 80 years old. Is that right?

    General FOGLESONG. We can fly B–52s until they are 80 years old. As to whether we would—

    Mr. HUNTER. Well, I mean, we can fly Eddie Rickenbacker's plane, too, if we go out to an air show—

    General FOGLESONG. That is correct.

    Mr. HUNTER.—but what I saw, we are going to fly B–52s in military combat operations until they are 80 years old. Is that right?

    General FOGLESONG. Yes, sir, that is conceivable.

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    Mr. HUNTER. Do you think that is prudent?

    General FOGLESONG. I think there is a point there where the economy of flying that airplane has to be revisited and the survivability of that airplane has to be revisited.

    Mr. HUNTER. What is your personal opinion?

    General FOGLESONG. My personal opinion is it should not fly for 80 years. My personal opinion is it'll be too difficult to maintain.

    Mr. HUNTER. What do you think we ought to do?

    General FOGLESONG. We ought to revisit our force structure for bombers. I am not sure that we have the right number. We are doing that as we speak. We are constantly revisiting our force structure—

    Mr. HUNTER. Don't you think we need a new bomber of some kind?

    General FOGLESONG. Oh, at some point in the future, I agree, Mr. Chairman, at some point in the future we ought to have a bomber X program. I am not sure we are ready to do that because the technology and the capability improvements would not be significant enough to go to a new bomber right now to go beyond what we are able to do with our current bomber fleet.

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    Mr. HUNTER. Well, when you get that study let us know about that. Is that going to be done fairly shortly?

    General FOGLESONG. The study on requirements you are talking about, sir?

    Mr. HUNTER. Yes.

    General FOGLESONG. Yes. We are provide that for you when it is done.

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

    Mr. HUNTER. Okay.

    General Foglesong, of the CBO's $90 billion annual procurement figure, the Air Force's share would be about $35 billion, while your fiscal year 2001 procurement budget request was $20.9 billion. Is $35 billion about right?

    General FOGLESONG. $35 billion, I believe, would be about right to recapitalize our fleet, but it does not account for other improvements that we would need to see in our infrastructure, for instance, and I will give you an example. We are now recapitalizing our infrastructure on the ground, our buildings, our equipment on the ground, at a rate of every 250 years, and industry's standard for that is about 50 years, and the bill to do that is $2 billion to $3 billion in excess of what we are investing now. So I am hesitant to tell you that would be right because I am not sure exactly what the color of money would be for some of that.
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    [The information referred to can be found in the Appendix.]

    Mr. HUNTER. Okay. Why don't you get me an answer for the record on that, take a look at that?

    Are there any closing remarks that any of you would like to make about the state of modernization with respect to your respective forces?

    General Nyland.

    General NYLAND. Sir, I would simply say thank you, again, for the opportunity to be here. As I mentioned in my opening remarks, we think we have a viable plan for modernization. We do have concern over the pace at which we will do so.

    Thank you very much for your support, sir.

    Mr. HUNTER. Okay. Anybody else want to—Admiral Giambastiani, you want to make a—you don't have to make a statement if you don't want to, but if anybody's got any closing remarks they'd like to make, anything you think we need to be focusing on with respect to your priorities.

    What do you—maybe this question will be better.

    General Foglesong, what would be your number one priority in terms of modernization?
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    General FOGLESONG. Keep faith with our people. And I know that sounds like, kind of, an indirect way of getting to modernization, but I think one of the greatest frustrations those young men and women have out there are working on that old equipment and trying to maintain it and sustain it so they can take it to combat.

    Mr. HUNTER. Okay.

    Mr. Maloney has a question.

    Yes, sir.

    Mr. MALONEY. Yes. Thank you, Mr. Chairman. I know you and I are here alone and have been for some time, so I will be brief. And I appreciate our military witnesses being here today. And I also appreciate the chairman of the Joint Chiefs and the Service Chiefs testifying every year to explain the needs and requirements of the services.

    I recognize that you gentlemen today have gone into a little further detail and elaborated on some of those concerns and issues that the Chiefs have raised and I very much appreciate you doing that. But my question would simply be, do any of our military witnesses believe that the Service Chiefs have failed to properly alert the Congress to concerns of readiness or personnel or equipment needs in the past?

    General FOGLESONG. General Ellis would like to answer that. [Laughter.]
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    Mr. MALONEY. Well, I don't need an answer. If no one wants to answer the question I will take it as—

    Mr. HUNTER. Well, let's have General Foglesong go ahead and answer that for you.

    General FOGLESONG. I will be happy to answer that. I believe our Service Chiefs have been very forthcoming when they have come over to testify.

    Mr. MALONEY. Yes, sir, I think so, too. I think so, too. And they have for the four years I have been here and for the two years prior to that, I am sure, as well.

    General ELLIS. What I would add to that is—and I agree—but readiness can be very fragile, and particularly when your OPTEMPO is up, and that is what we are seeing in the Army. We are deploying more now than ever, and that is what is causing this problem. So the more we use the equipment, the faster it wears out. And so I think that is what is causing the problem.

    Mr. MALONEY. Thank you, Mr. Chairman.

    Mr. HUNTER. Thank you, Mr. Maloney.

    And I would just add to that that our Service Chiefs are candid, but the Service Chiefs have a mission, and that is part of our great constitutional directive that the military acts under civilian leadership, and that is that the six-star general in the White House puts a budget together and his subordinates—that is the other generals with fewer stars—are directed to and have a responsibility to support that budget. And so while they may have an opinion that that budget is not large enough and does not provide enough ammunition, spare parts or modernization, their obligation is to support it.
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    So it is up to us to ask the follow-up questions as to what they need, because our constitutional duty is to provide for the maintenance of the military and sometimes our answer is different than the president's and it can go both ways.

    So I think it is good that—I want to thank you for hanging on and having some good endurance here in this fairly lengthy hearing.

    So thank you, gentlemen. You have provided very valuable testimony today. And I want to thank Mr. Jehn also for sticking around and listening.

    Hopefully this provided some insights, too, Mr. Jehn, for your next exercise. And let me just tell you, I think your exercise was extremely valuable to us, because you did what millions of companies and businessmen and everyone has to do who utilizes equipment, and that is figure out how often you have to replace it, and you figure that out by figuring out what the projected life is, and then you do your calculations. And everyone uses that as a baseline, and that is not some abstract exercise without value, that is of extremely important value.

    And the other thing that impressed me was when you came in with that analysis, you were followed by former Secretary of Defense, highly regarded, Jim Schlesinger, who said it is close to $100 billion a year we got to spend. He was a little higher. Then Bill Perry came in and was just a little bit lower. He said, as I recall, $70 billion to $80 billion a year. So that was not a figure pulled out of the air, it was an excellent job that you did, and we need you to keep working with us.
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    Mr. JEHN. Thank you very much.

    Mr. HUNTER. And where is Lane Pierrot, who actually did all the work?

    Mr. JEHN. She's in the back.

    Mr. HUNTER. Right there. Thank you, Lane.

    Well, thank you very much. Thanks to everyone today. And I want to thank the folks that took down all these words and our folks who attended the hearing today in the audience. And we will try to make some good use of your information.

    Thank you.

    [Whereupon, at 4:15 p.m., the Subcommittee was adjourned.]


September 21, 2000
[The Appendix is pending.]