Page 1       TOP OF DOC
[H.A.S.C. No. 107–32]








MARCH 13, 2002

 Page 2       PREV PAGE       TOP OF DOC



JOHN M. McHUGH, New York, Chairman
LINDSEY GRAHAM, South Carolina
JIM RYUN, Kansas
JO ANN DAVIS, Virginia
ED SCHROCK, Virginia
W. TODD AKIN, Missouri
JOE WILSON, South Carolina

VIC SNYDER, Arkansas
BARON P. HILL, Indiana
SUSAN A. DAVIS, California
 Page 3       PREV PAGE       TOP OF DOC

John D. Chapla, Professional Staff Member
Michael R. Higgins, Professional Staff Member
Richard I. Stark Jr., Professional Staff Member
Debra Wada, Professional Staff Member
Nancy M. Warner, Staff Assistant




    Wednesday, March 13, 2002, Military Personnel Overview


    Wednesday, March 13, 2002



    McHugh, Hon. John M., a Representative from New York, Chairman, Military Personnel Subcommittee
 Page 4       PREV PAGE       TOP OF DOC
    Snyder, Hon. Vic, a Representative from Arkansas, Ranking Member, Military Personnel Subcommittee

    Miller, Hon. Jeff, a Representative from Florida, Military Personnel Subcommittee

    Alexander, Richard C., Executive Director, National Guard Association of the United States
    Barnes, Joseph, Director Legislative Programs, Fleet Reserve Association
    Brown III, Lt. Gen. Richard E.(Tex), Deputy Chief of Staff, Personnel, U.S. Air Force
    Brubaker, Brigadier Gen. David A., Deputy Director, Air National Guard
    Chu, Hon. David S.C., Under Secretary of Defense (Personnel and Readiness)
    Cline, Michael P., Executive Director, Enlisted Association of the National Guard of the United States
    Davis, Lt. Gen. Russell C., USAF, Chief, National Guard Bureau
    Duehring, Craig W., Principal Deputy Asssistant Secretary of Defense (Reserve Affairs)
    Duggan, Dennis M., Deputy Director, National Security—Foreign Relations Division, The American Legion
    Jordan, Michael, Deputy Director, The Retired Officers Association
    Le Moyne, Lt. Gen. John M., Deputy Chief of Staff, U.S. Army
    Manhan, Bob, Assistant Legislative Director, Veterans of Foreign Wars of the United States
 Page 5       PREV PAGE       TOP OF DOC
    McCarthy, Major Gen. Dennis M., Commander, Marine Forces Reserve
    Parks, Lt. Gen. Garry L., Deputy Commandmant for Manpower and Reserve Affairs, U.S. Marine Corps
    Plewes, Lt. Gen. Thomas J., Chief, U.S. Army Reserve
    Raezer, Joyce W., Director, Government Relations, National Military Family Association
    Ryan, Vice Admiral Norbert R., Chief of Naval Personnel, U.S. Navy
    Schultz, Lt. Gen. Roger C., Director, Army National Guard
    Sherrard III, Lt. Gen. James E., Chief of Air Force Reserve
    Spiegel, Jayson L., Executive Director, Reserve Officers Association
    Totushek, Vice Admiral John B., Chief of Naval Reserve, U.S. Navy


Alexander, Richard E.
Barnes, Joseph
Brown, Lt. Gen. Richard E.
Brubaker, Brig. Gen. David A.
Chu, Hon. David S.C.
Cline, Michael P.
Davis, Lt. Gen. Russell C.
Duehring, Craig W.
Duggan, Dennis
Le Moyne, Lt. Gen. John M.
 Page 6       PREV PAGE       TOP OF DOC
Manhan, Robert D.
McCarthy, Lt. Gen. Dennis M.
Naval Reserve Association
Parks, Lt. Gen. Garry L.
Plewes, Lt. Gen. Thomas J.
Raezer, Joyce W.
Ryan, Vice Adm. Norbert R.
Schultz, Lt. Gen. Roger C.
Sherrard III, Lt. Gen. James
Spiegel, Jayson L.
The Military Coalition
Totushek, Vice Adm. John

[There were no Documents submitted for the Record.]

Dr. Snyder
Mrs. Sanchez
Mrs. Tauscher
Mrs. Wilson


House of Representatives,
 Page 7       PREV PAGE       TOP OF DOC
Committee on Armed Services,
Military Personnel Subcommittee,
Washington, DC, Wednesday, May 13, 2002.

    The subcommittee met, pursuant to call, at 2:05 p.m. in room 2212 Rayburn, House Office Building, Hon. John M. McHugh (chairman of the subcommittee) presiding.


    Mr. MCHUGH. I call the hearing to order.

    I want to welcome you here today. I understand that we are going to have a vote probably within 15 minutes, so maybe we can get a few of the opening statements from our side out of the way until we turn to our panel's attention. And thank you for being here.

    Today the Subcommittee will hear testimony about a wide range of force structure, personnel and quality-of-life issues. As has been the case throughout this session, we shall view these issues through the lens and the events of September 11th and the subsequent war on terrorism.

    The war on terrorism with its attendant increase in operations tempo, mobilization of Reserve forces and emphasis on homeland defense and force protection, has put new stresses on a variety of personnel programs. We intend to explore those initiatives and programs to gain an understanding of the problems and to try to hopefully set our legislative course accordingly.
 Page 8       PREV PAGE       TOP OF DOC

    This review must begin with an assessment of the ability of the services to sustain the war over the long term. It is clear that increased operations tempo has caused the services to reconsider their end strength and contemplate significant increases for the first time in some 15 years.

    However, before we conclude that end strength should be increased, we must first ensure that today's force levels include the right mix of skills and force structure and that the active/Reserve force mix is corrected.

    The Subcommittee will also examine the effects of war on the service members and their families. For example, is the Stop Loss policy being used correctly, and how and when do we end Stop Loss?

    Is our compensation program adequate and responsive to a new era of wartime operations and tempo? Are we mobilizing Reservists too frequently and for nonessential purposes? Are we doing everything possible to protect the welfare of Reservists and the well-being of their families on active duty?

    Other issues related to the war on terrorism, however, especially those involved with homeland defense, are relatively new. For example, the mobilization of individual military personnel under Title 10 status for detail to federal law enforcement agencies to perform law enforcement functions for those agencies raises concerns about the applicability of posse comitatus laws as well as major operational questions.

 Page 9       PREV PAGE       TOP OF DOC
    Although we enjoyed a relatively successful recruiting year in 2001, recruiting remains difficult. The Subcommittee will want to once again hear reassurance that funding for recruiting programs has been maintained, and that the services remain dedicated to the success of recruiting. Good retention is a prerequisite to any attempt to increase the end strength and yet the services are struggling to meet retention goals, in the case of the Navy and the Air Force without much success.

    Like recruiting, the Subcommittee will be looking for reassurance that allocated resources are sufficient to be successful. Less than a year ago the House Armed Services Committee and this Subcommittee heard a range of testimony from the Department of Defense (DOD) witnesses that suggested the likelihood of major fundamental reforms to the system used to manage officer and enlisted military careers. At the time, the Subcommittee was told that reform and/or replacement of the military's up-or-out system of promotion was badly needed. Senior officers too often were forced to change positions just to stay competitive and, worse, forced to leave service just at the height of their careers, thereby cutting short their ability to make lasting contributions.

    Furthermore, the competition between the military and civilian employers for people with highly sought after technical skills, it was said, would compel DOD and the military services to find new ways to attract and retain sufficiently high qualified personnel.

    The Subcommittee will be anxious to know what role the Congress should play in achieving these needed reforms. Thus, the challenge for the Subcommittee during this hearing is two-fold. First, the Subcommittee seeks to understand the budget and legislative policy proposals contained in the DOD authorization requests for the fiscal year 2003.
 Page 10       PREV PAGE       TOP OF DOC

    Second, given what may be the beginning of a new era in military personnel management, the Subcommittee will also seek information on a range of possible personnel, financial and Guard and Reserve issues in order to judge how the Department of Defense is moving to resolve them and to assert how the committee and the Subcommittee should respond.

    In addition to the statements provided by our witnesses today, the Subcommittee has received a statement for the record from the Naval Reserve Association as well as a number of questions from nonsubcommittee members, who all have asked that their questions and their statements be entered into the record, and without objection, I would so order.

    Hearing no objection, it is so ordered.

    Mr. MCHUGH. Now, I would be happy to yield to the Ranking Member of the Subcommittee, the gentleman from Arkansas, Dr. Snyder, for any remarks that he would like to make at this time.

    [The prepared statement of Mr. McHugh can be found in the Appendix on page ?.]

    Dr. SNYDER. Thank you, Mr. Chairman. Thank you for your very excellent opening statement. This is my sixth cycle I have gone through as far as budget hearings leading up to the defense bill, and for the first five we talked about getting ready for the wars of the future. Well, this is the first one we are involved in a war of the future, and I look forward to hearing you-all's testimony. Thank you.
 Page 11       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Any other Member wish to make any opening comments? Hearing none, then, let's see if we can get through some of the administrative actions and hopefully to the panel, the first panel.

    Before we introduce the first panel, however, I would like to acknowledge one individual that should be here today but very sadly is not, Lieutenant General Timothy Maude.

    General Maude was the Army Deputy Chief of Staff for Personnel when he and some others were tragically killed in the terrorist attacks of September 11th on the Pentagon, and I feel very certain I speak for all of the Subcommittee members, indeed all of the Committee and House Members and staff, when I say we mourn the loss of such a superb officer and a dedicated advocate for the welfare of soldiers and a decent human being and a good family man. I know you all join me in that thought.

    Having said that, let me welcome the first panel, if I may introduce them. We have in the middle, Honorable David S. Chu, Under Secretary for Defense for Personnel and Readiness. Mr. Secretary, welcome. Lieutenant General John Le Moyne, Deputy Chief of Staff for Personnel, the U.S. Army. Welcome, General. Vice Admiral Norbert Ryan, Jr., Chief of Naval Personnel. Admiral, thank you for being here. Lieutenant General Richard E. (Tex) Brown, III, Deputy Chief of Staff for the United States Air Force. Thank you, sir. And Lieutenant General Garry Parks, Deputy Commandant for Manpower and Reserve Affairs, United States Marine Corps. Welcome to you all. As I have said, Admiral Ryan, I understand you will be retiring this fall, and this might well be the last opportunity you will have to testify before our Subcommittee, at least in your current capacity. I know you are moving on to other challenges in which we all join in wishing you the best.
 Page 12       PREV PAGE       TOP OF DOC

    Your last appearance may not be a cause of sadness for you, but it is to us, nevertheless, one for us, and we thank you as a nation for your service, and certainly from our perspective on this Subcommittee for our advice and counsel that you provided now for over 35 years in service to the nation. Congratulations and best wishes for the future.

    Admiral RYAN. Thank you.

    Mr. MCHUGH. With that, as is the practice here to get myself in as little hot water as possible, we will turn to the witnesses in the order in which they are handed to me, which would put you, Secretary Chu, at the top of the batting order. With that, we are anxious to hear your testimony. And thank you again for being here.


    Dr. CHU. Thank you, Mr. Chairman. And thank you for the opportunity to appear.

    It is a pleasure to be able to discuss with the members of the distinguished Subcommittee the military personnel issues in front of the Department of Defense and the country. And I want to begin by thanking you and members of the Subcommittee for your continuing support of the men and women who serve in our armed forces. As the President of the United States transmitted his budget request to the Congress, he said, ''Good ships and good guns are simply good weapons, and the best weapons are useless save in the hands of men who know how to fight with them.'' That President, of course, was Theodore Roosevelt, transmitting, I believe, his 1901 budget request to the Congress.
 Page 13       PREV PAGE       TOP OF DOC

    But those words are still, as we all appreciate, applicable today. If I may paraphrase a saying the Army often uses, ''People aren't in the Department of Defense, people are the Department of Defense,'' and I think we are seeing that in the actions in Central Asia at this very moment.

    The theme eminent in my testimony here today is the challenge the Department of Defense continues to face in maintaining the military force necessary to meet the demands of our nation's defense. Department of Defense must recruit, train and retain people with broad skills and good judgment needed to address the dynamic challenges of this 21st Century. We must do this in a very competitive environment. We are proud of the record achieved this last fiscal year. We, all of the services, met their recruiting goals as far as the active force is concerned. There were some particular points of weakness, including high school diploma recruiting totals, in two of the Reserve components.

    The Air Force, in terms of active retention, was a little lower than they hoped to be, which caused its end strength numbers to be lower than it wished, and we have skill and specialty issues in all of the services, as you know well.

    And so while these results are heartening, there is not any large margin of error here, and that is evident in the recruiting results. To date for the current fiscal year, we are running a bit ahead of where they were last year, but not by any significant amount.

    As one of the elements, the Administration has proposed a 4.1 percent active military pay raise that it has requested of the Congress as an across-the-board matter. And we will be posing, we hope, additional amounts as a target pay increase in the future.
 Page 14       PREV PAGE       TOP OF DOC

    We are proceeding to administer the law the Congress enacted on access to high schools; it remains an important problem for the Department and we will be undertaking the visits to those high schools that have not afforded us with the access we need, as the Congress has directed. We will be asking the Congress, however, for authority to allow us to use a field grade officer and not necessarily someone in the grade of O–6 for those visits. We have some schools to visit and hope that this will be a more effective approach in actually getting these important tasks accomplished.

    We recognize in the Department that the decision to stay in the military is not a decision made by the military member himself or herself alone, but a decision the entire family makes. And in thinking about how we properly support our families, we recognize the defense family has changed over the last 10 or 20 years. United States military personnel are more senior, educated and diverse than they were earlier. More military spouses work and they are better educated than they were 10 or 20 years ago. Our transformation of personnel policy programs must address these changes in demographics first in the expectations of the 21st Century military family.

    The Department, in our judgment, must keep its side of the bargain by providing relevant programs and policies for the families who support the members of the armed forces. We are paying particular attention to the importance of health care as part of what we do for our military families. We have tried to budget for that health care proposal in the fiscal 2003 request in front of you, and we very much appreciate the support this Committee has given us as we move toward the next generation of TRICARE contracts. We would ask that you make permanent the contract flexibility that you gave us on a temporary basis last year, and we certainly enlist your assistance with your colleagues on the Appropriations Subcommittee to remove the budget accounting group limits that were imposed in last year's appropriation bill.
 Page 15       PREV PAGE       TOP OF DOC

    Mr. Chairman, it is a great pleasure to appear here this afternoon, and I look forward to answering the questions that you and members of the Subcommittee have.

    [The prepared statement of Dr. Chu can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, Mr. Secretary. I should have said earlier, we do, I would say to all of the panels, have your entire statements in our possession, have read them, will continue to analyze them for their very helpful content, and they will be entered in the record in their entirety, so as I believe the Secretary did so effectively, if you could attempt to summarize in some way, that would be helpful to all of us. We have three panels and a lot of people to hear from this afternoon.

    Next is General Le Moyne.

    General LE MOYNE. Thank you very much, Mr. Chairman, members of the Committee. I am pleased to be here today to testify before you. First of all, I would like to thank you for the great successes we had this past year and this year.

    Because of your concerns and these of your staff, you provide proven support to our men and women in uniform, their families, our civilian workforce, and our retirees. We appreciate the pay raise, the Thrift Savings Plan, the G.I. Bill transferability, basic housing allowance, TRICARE For Life, and the mail order pharmacy. You can be assured that all of these programs will increase the well-being of our forces.
 Page 16       PREV PAGE       TOP OF DOC

    When terrorists flew a jetliner into the Pentagon on 11 September, the Office of the Deputy Chief of Staff for Personnel suffered close to 20 percent casualties in dead and wounded. My predecessor Tim Maude was one of those, and he is a personal friend. So it is with pride that I say that the next day, that surviving work force was back at work the next day. A source of pride for all of us, at the same time, humbling that the G1 staff sections are filled with so many heroes, quiet, compassionate and sincere.

    Look at the casualties, sir, and you will see that the Army of One is well represented. There were soldiers from all components, civilians, contractors and retirees of various ages, ranks and religions. They truly represent America's Army and our nation.

    In the aftermath of 11 September, the increased security requirements here and at home and overseas served to emphasize the critical importance of men in the Army. We continue to recruit in a highly competitive environment. The private and public sectors are seeking the same high quality men and women. Maintaining adequate resources for recruiting is essential to ensure we sustain our successes over the past 2 years.

    Sir, recruiting to man the force will continue to be our first priority. The Army's recruiting requirements are developed and project the needs based on a steady state of just over a million soldiers, active, Guard, and Reserve. Therefore, we must recruit more than all of the other services combined.

    Properly resourced, we will continue to meet our recruiting goals. We are grateful for the Congressional initiatives to increase our military pay, our benefits, and improve our overall well being. These increases not only improve the quality-of-life, but enhance the retention of our serving soldiers and our recruiting efforts for new soldiers, making us competitive with the private sector.
 Page 17       PREV PAGE       TOP OF DOC

    The Army's retention program continues to succeed in a demanding environment. Our efforts demand careful management to ensure that the right skills and grades are retained at levels sufficient to keep the Army ready to fulfill its worldwide commitments. This means, sir, that we have to retain 67 percent of all eligible soldiers. We are on track to meet that standard.

    The ultimate success of our retention program is dependent upon many factors. As Dr. Chu related earlier, sir, about 60 percent of our force today is married. Let me assure you that your Army is focused on this aspect of retention.

    The exemplary performance of our Army these past few months is testimony that we are indeed an Army of One, whose components are practically indistinguishable from one another.

    Having seen them perform overseas and at home, our nation is proud of the performance of our National Guard and Reserve forces. Today, sir, nearly 40,000 Guard and Reserve soldiers are answering the duties in the nation's call to duty in the United States and overseas, not to mention the airports, the border patrols and other homeland duties under state authorities.

    Our Army retirees have served our nation, affording American citizens a way of life that is unknown in many countries. Our nation is indebted to those loyal men and women, and even though they have taken off the uniform, they now continue to serve in their civilian and military communities.

 Page 18       PREV PAGE       TOP OF DOC
    For many retirees, the expression ''U.S. Army Retired, Still Serving,'' is not a slogan, sir, it is a way of life. Your Army continues to demonstrate our devotion to the retired population by being the only service to staff full time retirement services personnel at our installations. They assist retirees and family members from retirement to grave.

    Currently there are approximately 1.6 million military beneficiaries over age 65. We appreciate your commitment to provide our military retirees with health care. That addressed one of their major concerns, that is access. The TRICARE For Life provides our retirees the most comprehensive medical coverage and access to include a pharmacy benefit with very little out-of-pocket cost.

    This benefit demonstrates our nation's thanks to the retirees' services and improves our ability to recruit and retain professional soldiers. Thank you for this support.

    We ask for the continued funding to provide the health care promised to retirees in the future.

    In closing, sir, we know that military service offers tremendous opportunities to American youth. And our soldiers, sailors, airmen and Marines return to America's communities, better educated, more mature, and with the skills and resources to prepare them for a productive and prosperous life. They make valuable contributions to our nation.

    The Army's concerns center around maintaining the momentum to man the force while improving the well being of our soldiers. We are hopeful that your support will continue as we demonstrate our commitment to fulfilling the manpower needs to the Army to meet our nation's requirements. Thank you, sir, for this opportunity and I look forward to answering your questions.
 Page 19       PREV PAGE       TOP OF DOC

    [The prepared statement of General Le Moyne can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, General. Admiral Ryan.

    Admiral RYAN. Mr. Chairman, Congressman Snyder, other distinguished members of the Subcommittee. As a result of your support, the Navy has made its recruiting goal for the last 3 years. We have set records in reenlistment rates these past 2 years. Right now we are reenlisting first termers at 65 percent. Two years ago it was 45 percent. We believe last year we had the highest first-term reenlistment rate of any service for first-termers, and we have lowered attrition by 10 percent. All of our vectors, in the aviation vernacular, are in the right direction.

    As a result of that progress, our combat capability for the five amphibious readiness groups and five carriers that we have tasked onward into Enduring Freedom have all been exceptionally ready to do their job, and you have seen the results on TV.

    Our special forces are similarly equipped. It is ironic that Dr. Chu mentioned a quote from Teddy Roosevelt. The carrier named for Teddy Roosevelt, the nuclear carrier, is now just on its way home from the Gulf, as you know, after 149 straight days without a liberty call or a port visit, 24 hours around the clock, 7 days a week of flight operations, 4,000 combat missions, 1,000 tons of ordinance delivered. They couldn't have done that without your support and the success that we have had in the personnel area. As Dr. Chu said, that is the beginning and the end of combat-readiness.
 Page 20       PREV PAGE       TOP OF DOC

    We have 99 ships over there right now, about 46,000 men and women. We are confident they are going to be able to continue to do the job, in large part not only because of the success we have had with our active force, but also because of the success we have had with your Reserve mobilization. We have mobilized about 10,000 of our Reservists, primarily in individual status. They have performed magnificently and responded magnificently. We have about 60 percent of them involved in, as you mentioned, Mr. Chairman, force protection. A very big concern for us, not only in our bases but, of course, with our high value unit ships, we have 318 of those to be concerned about.

    We will continue to be able to do the job if we get support in three areas. And, Mr. Chairman, it addresses the three questions that you asked us about. First of all, they are the same questions that my bosses are asking. Can we sustain this effort? My answer is that we can sustain this effort if we are able to achieve our Chief of Naval Operations (CNO's), number one priority in his unfunded list, that is, finances for our unfunded manpower, that is about 4,300 people listed on his list. If we can do that, we will answer your number two and number three questions. Do we have the right mix?

    We do not feel that we can ask our Reservists to continue to mobilize at the rate of 10,000 over a 5-year period. If we can get the additional end strength, we believe that we can get a better balance between our active and Reserve and be able to mobilize and sustain a Reserve commitment at a lower level than the 10,000 that we have right now.

    And then, finally, what the about the op tempo, the impact on our families and our sailors? We believe with that kind of manpower, we will still be able to meet the quick turnaround between the deployments and the extended deployments that we have.
 Page 21       PREV PAGE       TOP OF DOC

    So I would just comment with support in that area, in particular, we believe we can sustain this war on terrorism and, as the President said, make this nation proud of its men and women in uniform. Thank you.

    [The prepared statement of Admiral Ryan can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you very much. General Brown.
    General BROWN. Thank you, Mr. Chairman, Congressman Snyder, distinguished members of the Committee. It is really my great honor to appear before you and present our Air Force personnel priorities on behalf of the dedicated men and women of the United States Air Force.

    Every airman owes Congress, and particularly the members of this Committee, their gratitude for your staunch support last year, which included improving military pay and compensation through the target pay raises and reducing the out-of-pocket expenses of all of our service members.

    Your passage of last year's National Defense Authorization Act sent a clear message to America's Air Force that their valiant efforts and selfless service are recognized and appreciated. We depend on highly skilled, educated, and technologically superior force. Our airmen continue to meet challenge after challenge and are proud to serve our nation.

    Currently, Operations Noble Eagle and Enduring Freedom have levied significant additional operational requirements for homeland security, antiterrorism, and force protection. Our total force is overstressed due to those operations. In order to meet the near term challenges and the complexities of the world events since September 11th, we mobilized our forces, and we instituted Stop Loss to sustain the surge of new requirements. Now, I got to tell you, this has been a coordinated effort with our Air Reserve component. Many of our critical assets are in the air Reserve components. We fly, train and fight as one team. In some mission areas, the Guard and Reserve perform as much as 100 percent of the total Air Force mission. They own 83 percent of the air medical evacuation. They fly more than 55 percent of our aerial refueling, and 33 percent of our security forces are in our Reserve components. Some may question our growing reliance on the Guard and Reserve, but the issue is how the three components can effectively compliment each other and bring our respected strengths to bear. The Guard and Reserve have clear roles to execute both in peacetime and during contingency operations, and they continue to meet those commitments.
 Page 22       PREV PAGE       TOP OF DOC

    The dangers facing our country are extraordinary. Thus, requirements continue to evolve, as does the mission. Because of the uncertainty of the mission, we made the decision to initially freeze all career fields when we implemented Stop Loss. As requirements continue to solidify, those career fields that are not being used in direct support of the mission, or who have sufficient manning to meet those requirements, are being released from Stop Loss. We are conducting reviews every 60 days of our Stop Loss situation.

    However, these initiatives are not viable options for sustaining this long term campaign. The events of 11 September exacerbated our overall tempo and resulted in an ongoing reassessment of Air Force total manpower requirements.

    Our long-term task is shift Reserves from ''tail'' to ''tooth,'' through the transformation of the force. In achieving that end, Secretary Rumsfeld has challenged us to pursue more innovative solutions to offset the end strength growth. We see this as one more dimension of our transformation effort, and are investigating a variety of options for shifting Reserve sources.

    We are also looking at cross-leveling within our force to lessen the impact on stress career fields. Consistent with this strategy, the Air Force needs tools to shape our force as we transform, while maintaining a stabilized end strength with a correct skill mix.

    We continue to give top priority to quality-of-life initiatives and competitive compensation and benefits. These legislative initiatives help us achieve our recruiting goals, make steady strides in retaining our best people in the right skills, despite the increase in demands we are placing on our people.
 Page 23       PREV PAGE       TOP OF DOC

    Meeting retention targets will continue to remain our greatest challenge. And we thank this Committee for the many tools you provided, such as the numerous retention bonus programs for both officer and enlisted. There is no doubt that bonuses have been our most successful incentive. However, when we lose funding for these programs, we lose our flexibility and our troops' trust and confidence.

    We greatly appreciate the Congress' and especially this Committee's great support of our troops for providing them with the quality-of-life they have earned. I look forward to discuss our challenges and progress with you. Thank you.

    [The prepared statement of General Brown can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, General. General Parks.

    General PARKS. Mr. Chairman and distinguished members of the Subcommittee, it is my pleasure to report on the personnel status and future manpower picture of your Marine Corps, and to thank you for your support of our Marines, our civilian Marines, and their families. Today's Marine Corps is comprised of young men and women of character who have a strong work ethic, solid moral fiber, and a desire to be challenged.

    The President's budget continues to improve their basic pay, and reduces their out-of-pocket housing expenses. Additionally, this budget provides valuable funding for recruiting and retention programs, which are fundamental assets for contemporary personnel management. The Corps remains optimistic about our current status in today's challenging recruiting and retention environment. Due to the hard work of our recruiters, career retention specialists and leaders across the Corps at all levels, we will once again exceed our recruiting and retention goals.
 Page 24       PREV PAGE       TOP OF DOC

    As a result, the Marine Corps expresses its appreciation and thanks for the support of this Subcommittee as we continue to positively influence retention and morale through improved pay raises, competitive benefits, and improved quality of life for our Marines and their dedicated families.

    Mr. Chairman, I look forward to answering your questions.

    [The prepared statement of General Parks can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, General. Let me just start off, if I might. Most all of you have mentioned the issue of end strength, and a number of you mentioned the challenge that the Secretary of Defense has issued to your individual services, with respect to, as General Brown described it, shifting ''tail'' to ''tooth.''
    As I have traveled, I was in Uzbekistan—more importantly I was in Bosnia a few weeks ago and saw the National Guard unit that is in charge of that operation. And it is truly seamless, as it was when a number of years before I traveled to that very same region with General Shinseki and witnessed the changeover of command from the 10th Mountain Division to a Guard unit from Texas, the first time that had happened. And there is certainly no question in my mind that this new era of the seamless services with respect to the regular and Guard and Reserve forces is working extraordinarily well, and that is a tribute to all who are involved in those programs.

    But I do become concerned as to how long that is sustainable, for a variety of reasons, not the least of which the Guard and Reserves do come from the private sectors, which means that their new heightened role places a great demand and a great burden upon both their families and, of course, their employers, and I am not certain as we get further down the line from September 11th how long that is going to be sustainable at this level, which brings us back to end strength.
 Page 25       PREV PAGE       TOP OF DOC

    Most of the service chiefs have in one form or another indicated that they are interested, very interested in end strength increases for their branches.

    This budget, this proposal, calls for about 2,400 additional troops, most of whom are directed to the Marines, which may explain General Parks' contentment here, I don't know. And they certainly need that. But I am curious, unless something dramatically happens, which I know is in the Secretary's prescription with respect to drawing forces out of places and missions where in his judgment we perhaps might spend our time better elsewhere, but we are in a very uncertain period.

    I was just curious, starting with Secretary Chu. Mr. Secretary, do you have any indication as to how permanent, how long the current DOD position on end strength numbers may prevail before it is reassessed, or are we simply looking to configure our military missions based on an, at least at the moment, a flat line on end strength?

    Dr. CHU. The issue of the appropriate end strength is a subject of constant reassessment by the Department for exactly the reasons you hinted at, Mr. Chairman, in your question.

    The Secretary's challenge, as General Brown has noted to all of us, is to, first, before we ask for any end strength increase, to reassess everything we are doing. That includes both issues of missions we are performing that might be seen as lower in priority in the current context than they were when first undertaken, and I think he is on the public record in stating that, so not all of those are welcomed by other representatives of the U.S. Government and our allies overseas, as well as challenging us to rethink how we do business. Are there ways in which we can move some tasks to the civilian ranks, to another Department, to move some tasks to the civilian sector to be performed? So it is a mission of efficiency that we must meet before the Secretary is going to be comfortable that we have exhausted all of our alternatives in asking for any kind of end strength increase. That debate continues.
 Page 26       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. I hope. I will speak as an individual Member. And I feel similarly to other Members, like Congressman Ike Skelton, the Ranking Member on the full Committee, that end strength is severely restricted to the point that I think it jeopardizes peoples' lives and it jeopardizes the people of all of the services to do what we are asking them to do. As I scan the landscape, and I know the Secretary is an extraordinarily knowledgeable man and a very skillful one, and if he sees opportunities of withdrawing that, frankly, that would at best prove challenging. So that is going to be something that we will continue to watch.

    That was really a question directed at you, Secretary Chu, but I would be happy to hear from any of the service members if they would like to comment on end strength at this time.

    General LE MOYNE. Sir, if I may for the Army. To reinforce Dr. Chu, we are looking inside internally. But, sir, you have also given us the latitude with a plus or minus percentage point as long as we meet that target. I think all of us are watching that closely. The momentum that we have built the last 2 years with your help, in fact, may give us a little bit of flexibility with that one or 2 percent. And within our own ranks, sir, we are looking at that.

    Mr. MCHUGH. I understand you are. And I appreciate that, General, and I do think that is important. That hardly measures up to what I understand General Shinseki has spoken about in the 40,000 top range as to his assessment of end strength. But we certainly support that initiative, obviously support it, helped initiate it. It is important. But I don't think it is the long-term answer. But I appreciate your comments, and I wish you well in that challenge. It is an important one.
 Page 27       PREV PAGE       TOP OF DOC

    Any other gentlemen?

    General PARKS. Mr. Chairman, I will weigh in, and that is, you alluded to it earlier, we have a 2,400 man increase in the President's budget. That is because we have continued to do just what Dr. Chu has stated, that is, reassess our forces. We have been doing that ongoing for several years now, to include reviewing our fleet assistance program where we can retrieve some people. In fact, we subsequently went on a fat diet to slim down. We are in the process of civilizing some of our mess halls to get some people back to the operating forces.

    But then, on top of that has come the new reality that we are dealing with, and as a result of that, we stood up a new unit directly as a result of this, our Fourth Marine Expeditionary Brigade Antiterrorism, and its purposes is clearly to address the defense and—the detection and defense of antiterrorist activities.

    This new reality has caused us to realize that we need that. And currently we are providing that force out of hide. It has been used here on Capitol Hill, it has been used in Afghanistan, and it is being requested routinely. And so we feel our rationale was justified. Thank you.

    Mr. MCHUGH. Thank you. Admiral Ryan, you are retiring. What the hell do you care? I know you care. What do you care what you say, because they can't get back at you?

    Admiral RYAN. No. I think I have addressed our concerns. I think it is just a matter of the level of risk and what kind of horizon you are looking at, Mr. Chairman. And we can't disagree with what Dr. Chu said. We are going through the same thing. Is there somewhere we can save money? My problem is, and as you asked, is sustaining this thing. We have 390,000 men and women, active and Reserves, in this war on terrorism right now.
 Page 28       PREV PAGE       TOP OF DOC

    My budget for next year, planned a couple of years ago, was 375,700. I don't see myself getting from 390,000 to 375,700 and addressing the problems of sustaining the war with the tempo that we have, taking care of getting the right balance between the Reserves and the active. We believe we need to lower the demand on the Reserves, particularly in the force protection area. And then simply we do want to take care of our people. But we are the ones that chose to put it above corps, so we are trying to balance this priority ourselves.

    As everybody knows, you have taken off the end strength, so it is not a matter of end strength. Even with those additional people, we will still be within the 2 percent that you have all have authorized us to be in. It is a matter of competing for dollars. And reasonable people can disagree on this issue. I just think that is our top priority on the unfunded list.

    Mr. MCHUGH. Well, clearly a lot of this is hinged upon the war on terrorism. And if I thought long and hard, I don't think I could come up with sufficient statements to praise the President and the Secretary and everyone involved in this effort. And, as one person, I hope it continues. And, frankly, the challenge there will require that it will for quite some time.

    So with my colleagues' indulgence, just kind of a follow-on question, if I might. That brings us to Stop Loss. That is obviously very controversial. It is also something that is being used very predominantly and very effectively for the moment.

    I am not sure that that is exactly a long-term prescription to your woes, and I am not sure without that Stop Loss initiative how well you would all be managing. But, Mr. Secretary, what, if any, thought has gone into how long this Stop Loss initiative may be continued, and what, if any, follow-on system has the Department contemplated?
 Page 29       PREV PAGE       TOP OF DOC

    Dr. CHU. I don't want to overdo the importance of Stop Loss, significant as it has been. It has been targeted—and even the Air Force is moving, as General Brown testified, in that direction on very specific skills, very particular communities where we have problems. It is not an across-the-board answer. It is not a good long run. We recognize that.

    We are approaching this in a systematic way beginning with the origins of the problem, which is that there are, as people are aware in the national security community, a set of units, often referred to as high demand low density that are frequently involved, involve the skills that are at issue here.

    We believe we need to solve that problem in the next several years. It is a problem we should be solving even if we weren't pressed by the war on terrorism. We are committed to resolving that problem. However, I want to be modest in terms of how rapidly that can occur. That takes time. It takes time to train people. Many of those are skill areas that require significant investment before one is productively able to use the systems involved effectively. But we are trying to address it starting with the source of the problem, which is there are a set of units and a set of skills that we frankly need more of, whether that is within a fixed end strength or a changed end strength of the Department.

    General BROWN. Sir, let me comment. Probably the Air Force was the most aggressive service in using Stop Loss. Certainly we were the first to initiate it. We did it across-the-board. The other services weren't quite as aggressive that quickly. So I have to raise my hand and speak about it. Because—and it ties a little bit with the first question, end strength. We are the only service that did not meet end strength at the end of fiscal year 2001. Now we are working on that, and my pledge to my chief is we are going to be at the end strength at the end of 2002, or he can go find another Deputy Chief of Staff for Personnel (DCSPER). I believe we really will. I believe we are going to be there. And I have got a lot of indications that show that.
 Page 30       PREV PAGE       TOP OF DOC

    But being under strength and being tasked for both Noble Eagle and Enduring Freedom, very quickly we recognized that—and with the unknown quantity of the requirements, we initiated an across-the-board Stop Loss.

    We are very concerned about the reaction we get from our people. We did it in coordination with the Air National Guard and Air Force Reserve. It was really a total force look. Now we have since—it is about a month and a half ago that we released a Stop Loss message that brought down about 25 percent of the force to say they are now released because they are not critical to the war effort and/or the requirement that was critical. We have the—the people to meet that. That is under a 60-day review, as I indicated. In fact, we are coming up in another two or 3 weeks with the next review timeframe. And we are hopeful that we can add a few more of our career fields to the removal from the Stop Loss list. But, again, we will do that in conjunction with your Guard and our Reserves in a total force effort. It is very difficult to call up a particular kind of career field, mobilize that career field, and yet we are going to let the active duty portion of that career field walk out the door.

    So it is a—we are doing this in close proximity with our fellow airmen. I will tell you that the indication, as we did come off of Stop Loss here about 6 weeks ago for the whole month of February, we notified all of those that had their retirement or their separation papers in, that we had held, we came to them and said, ''You are released.'' Tell us what date you would like to separate or retire. The indications to us about now a retention figure, historically, when someone indicates and decides to make that decision, the historical data shows that when they reverse their decision, pull their papers, ''I want to stay in the service,'' has been around two to three percent. What we just had in the last 6 weeks on the reversal of Stop Loss, I have got numbers of the officer corps, around 14 percent have said, ''No, I want to stay. I know I indicated before I was leaving, I want to stay for the fight or stay on the team.'' And our enlisted force, about—it is about 12 percent. Those are three and four times the normal level of folks who changed their mind.
 Page 31       PREV PAGE       TOP OF DOC

    Now, that is a little bit of the flag waving, it is a little bit of the nation is behind us. It is a lot of the support that the Congress has given and the appreciation that those in uniform now feel.

    Clearly some of that is a situation of economy. But I was very pleased to tell you that the reaction so far of our force of Stop Loss has not been a very negative, ''where is the door let me out? Now, that doesn't mean we continue stop—we have got to continue to bring that back down to normalcy and we are going to do that.

    Mr. MCHUGH. Well, I appreciate that. And I suspect that percentage increase shows a lot about what we knew already, that we have got a whole of dedicated and incredibly patriotic Americans in our services, too.

    And just for the record, before I pass it to Congressman Snyder, I don't object in any way to the implementation of this Stop Loss. It is absolutely essential. My concern is more long term that we don't, as Secretary Chu indicated, let this become some kind of force structure management program, because that won't work. And I was happy to hear the Secretary's comments as to longer term perspective because that is an important fact. Dr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman. Dr. Chu, just continuing following up on some of the things with regard to the Stop Loss. I have a constituent back home who has reminded me more than once, he said that you can no longer call yourself the all volunteer force because of Stop Loss. And he said whether you bring them in against their will at the beginning or don't let them go at the back end, it is no longer the all volunteer force. So people back home notice that.
 Page 32       PREV PAGE       TOP OF DOC

    How many numbers? What is the total number of people that are in the service right now that wanted to get out and we won't let them go?

    Dr. CHU. I would have to get you that number for the record, Dr. Snyder.

    [The information referred to can be found in the Appendix beginning on page ?.]

    Dr. SNYDER. General Brown, do you know for the Air Force?

    General BROWN. Yes, sir, I do. Those that are affected by Stop Loss, these numbers through September of 2002, so this entire fiscal year, right now we have stopped—those who have indicated intent to separate or retire, on the officer side right at 1,500.

    Dr. SNYDER. Fifteen hundred??

    General BROWN. Yes, sir. On the enlisted side, the number who have indicated an intent to separate or retire is 4,800. So just under 5,000.

    Dr. SNYDER. Have you all had any complaints or problems with people who really, prior to September 11th, had made arrangements, financial commitments, either home sales, buying into a business, things like that that, clearly when they got the word that they weren't getting out, placed a financial burden? How have we dealt with those situations?
 Page 33       PREV PAGE       TOP OF DOC

    Admiral RYAN. Mr. Chairman, I can talk about the Navy, just to give you an example. Our Stop Loss initially was in specialties like SEALS, explosive ordinance disposal (EOD), type people, medical people, language people. It impacted on individuals in about ratings of about 10,000 people. But only about 2,000 of those officers and enlisted were scheduled to get out this year.

    We have just cut that by 57 percent in the medical area. So we are really less than a thousand men and women that were going to get out this year that we have asked to stay in now since our first quarterly review. We have had 35 requests to allow them to still get out even though there is a Stop Loss.

    We allow the first flag officer in the chain of command to approve that, and 31 of those 35 have been approved. It is usually a health situation, that type of thing. But we have approved 31 of the 35 requests. Interestingly, of the thousand that were supposed to get out, we have had 321 reenlist. So that is the attitude and the morale that you have expressed and we see it in the numbers.

    Dr. SNYDER. So maybe within that 35 are the ones that I referred to are the ones that really made the financial commitments somewhere, they have come to you and said ''I am in a special situation.'' Is what you are saying?

    Admiral RYAN. Yes, sir. Whether they are active or Reserve, we have had the same program for both.

 Page 34       PREV PAGE       TOP OF DOC
    Dr. SNYDER. Dr. Chu, last year in the defense bill we asked for a report on the hundred dollar a day, I don't know what we call it, I don't think we have received that report yet, have we?

    Dr. CHU. No, sir. It is not quite due yet. As you may imagine, this situation has been changed by the war on terrorism and the actions since then. The Department intended to frankly implement that pay procedure, but we suspended it with the mobilization, since the two are inconsistent, at least in our judgment. And that was a power that Congress did give us, which we are very grateful to have. We have not suspended the requirement to collect the necessary data. So we do think going forward that we will have a much better way to report back to this Subcommittee on just what is the dimension of the problem, as well as eventually what are our proposed solutions to that problem.

    Dr. SNYDER. I wanted to ask about attrition. I think it was Admiral Ryan, you used—I have used the word attrition before. I don't think I have used the world attrite. You have got a phrase in your written statement, less likely to attrite, as in trying to get recruits in there.

    Dr. Chu, when you have people enlisted—and I don't know where you measure attrition, is it after three months of once they have enlisted?

    Dr. CHU. It is measured, sir, as anyone leaving before the normal expiration of term of service. So you have the first few days, the first few weeks and so—months, so on.

 Page 35       PREV PAGE       TOP OF DOC
    Dr. SNYDER. What is that number currently for new enlistees?

    Dr. CHU. It varies across the military services. Across the first term of service, typically, about one-third do not complete the term for the period of time that they originally enlisted for, for a whole variety of reasons. A big portion of attrition does occur within the first six months for a variety of reasons. They include medical reasons, they include issues of fitness for service, they include physical fitness issues.

    Dr. SNYDER. I think that is—I am sorry. Excuse me. I guess this is my sixth year here. That one-third number seems to have stayed about the same for the last six years, which seems—it is awfully high. I am not making any criticisms, that may just be the way it is. But it sure seems like that is an area to work on. I know you refer to it in your written statements about how do you—there are two ways to get at it, either working with the people that are having problems to get them to stay in and do a good job, or not recruit them in the first place. But it doesn't seem like we have made much movement in that in the last several years. Is that just a tough problem to get at?

    Dr. CHU. It is. I think the understanding of what drives it is poor. Although a lot of work has been done trying to understand that problem, I am very intrigued with the approach the Marine Corps takes, which is to work with its enlistees before they come on active service while they are in the so-called delayed entry program. I think there are two issues we need to think about as a Department that are appropriate for that period of the time that might help reduce this attrition. One is whether the physical condition of the potential recruit is up to what we expect the day he or she reports to the basic training program.

 Page 36       PREV PAGE       TOP OF DOC
    The Marine Corps, I believe, does essentially encourage—that would be the nice verb to use here—some physical conditioning during that period of time to make sure that people are ready.

    Second, there is the issue of whether a military lifestyle is really what that person is suited to. And I think some effort during that period of time to acquaint the young person with what he or she actually signed up for would be constructive, so that if this turns out to be not—this is a volunteer force, notwithstanding the Stop Loss issue. If this is not really what that individual is suited for, we would be better off learning that sooner rather than later.

    Dr. SNYDER. One last question, if I might, Mr. Chairman. Dr. Chu, are you familiar with the articles that came out in USA Today and the others? And the chairman and I sent a letter, I think we directed it to Secretary—oh, we received the report yesterday. I have not seen it.

    Mr. MCHUGH. I have not, either.

    Dr. SNYDER. Do you have any comments to make about those?

    Dr. CHU. Yes, sir. We have just delivered to you a rather lengthy letter. I apologize for its length, but that tries to respond to your questions on this subject. I do think there is more sound and fury in the USA Today articles than there is a factual problem on the ground.

 Page 37       PREV PAGE       TOP OF DOC
    Across the Guard complement as a whole, this a relatively modest proportion of the total. There is no issue of fiduciary misconduct or anything of that here. There is an issue of how quickly we recognize whether someone is really not going to participate and strike him or her from the rolls. But I don't think there—I don't believe, and thus the import of my letter—that there is the kind of readiness issue here that USA Today fears might exist.

    Dr. SNYDER. Thank you.

    Mr. MCHUGH. Ms. Davis.

    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman. Thank you, gentlemen, for being here today. And Secretary Chu, I guess this question is for you. I have two areas of real concern. One is TRICARE For Life and the other is Reservists. I am going to start with TRICARE For Life. I notice in your statement that in order to make the transition that you have undertaken a demonstration project, and you did three things in that demonstration project. The one that interests me is authorizing health care payments up to 15 percent above the allowable charges for care for nonparticipating TRICARE providers.

    Last year when Admiral Clinton was here, I indicated at that time that we have a real problem in my district, the Fredricksburg area of Virginia, where the TRICARE providers have dropped out, and I wrote a letter at that time asking for a 15 percent increase so that we can try and keep these doctors in. Do you know anything about that, and could you tell me where this project is?

 Page 38       PREV PAGE       TOP OF DOC
    Dr. CHU. This is an issue in various parts of the country where physicians feel our scale is not as generous as they would like to see. We do have to be careful not to be the source of inflationary bias in terms of health care costs, not so much for ourselves, but for other government agencies, especially Medicare and the country as a whole. But we will be delighted to look at the specific situation in Fredericksburg.

    Mrs. DAVIS OF VIRGINIA. It is more than Fredericksburg, it is Stafford, the whole area. We have no doctors.

    The other question is the—I don't know who this is for, anybody can jump in. What is the percentage of Reservists that make up the actual active forces that are fighting our war on terrorism right now?

    Dr. CHU. We have approximately 80,000 Reservists called to active duty on a so-called involuntary basis at the present moment. We have some additional numbers who are there voluntarily. In addition, we have several—a few thousand who are in various other states, including various other status states, that is to say, including those who are serving the airports under Title 32 authority. So less than 100,000 total is the bottom line.

    Mrs. DAVIS OF VIRGINIA. I guess my concern is, I don't know how to phrase the question, I guess, but right now we probably are doing OK with the Reservists, we couldn't do it without them. But as I was talking to some of the Reserve chiefs the other day, some of the complaints that I am hearing is that the salary that they are having to give up in the private sector comes nowhere near what they are paid as Reservists. And some of the private employers are making up the difference. But we can all see that this war is going to go on for a long time. So I guess I am concerned that our Reservists, we won't be able to keep our Reservists going the way they are. What is that going to do to us? This may go back to end strength. What is it going to do to us when we can't continue to have these Reservists?
 Page 39       PREV PAGE       TOP OF DOC

    Dr. CHU. We are very sensitive to that issue. I should note, first of all, that as Members of the Subcommittee understand, under the law we can only call them up to active service for at most 2 years. So there is a limit for any individual. We issue orders typically for 1 year. That was to signal to the individual, on the one hand, this was not a 1-week issue. On the other hand, we really did not intend to keep them—any individual the full length of our statutory entitlement.

    We recognize that for many individuals, not for all, but for individuals, the pay in military service is not the same as civil pay. Some employers are very generous. We are very grateful for that in making up that difference, either in part or in whole.

    I should emphasize, however, that there is an important financial incentive for all Reservists that led them to serve in the first place, besides the patriotic impulse that may be most important here. That is that they do receive a significant pension, indexed, and for life, and entitlement to health care for the remaining days of their lives once they are retired. And, of course, eligibility for the use of the commissary system and other military benefits.

    So as a lifetime compensation issue, I think in general these individuals are well compensated, even if at the present moment they are going to make less in cash money than they would if they were in their civil job. That is one of the reasons that many people are encouraged to join.

    I must say that I am impressed at the response of our nation's Reservists. It has been terrific. I defer to my military colleagues in this regard, but it outshines any other mobilization that we have ever had in the past. Many of those people, if I may, Dr. Snyder, particularly point out, for example, the battalion of the Arkansas National Guard which is in the Sinai at this moment. I doubt most members of that battalion ever thought that they were going to the Sinai. But they went. I heard no reports of complaints. I am sure that there were a few out there, but they all saluted and are off doing their duty and doing it very well.
 Page 40       PREV PAGE       TOP OF DOC

    Mrs. DAVIS OF VIRGINIA. I will tell you, Mr. Secretary, that the active and the Reservists, I am just so proud of them, as I know every member of the committee is.

    The other question I have, and, General Parks, you may be able to answer this. I know—at least I understand the Marine Corps is the only service that has currently integrated personnel and pay incentives in with the Reservists and active duty. I think there may be something out there to integrate it in the rest of the services. Can you elaborate?

    General PARKS. I can't address it for everyone else, but we are continuing to view our forces as total force. In looking at that, we don't need an independent system to address it. And we are looking at all of the mechanisms to streamline it, to put the information technology in place that will provide us that latitude in bringing together our forces so that we have one system, so that they can be all viewed the same way.

    Mrs. DAVIS OF VIRGINIA. Are we doing that throughout the other services?

    General PARKS. Yes.

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

    Mr. WILSON. No questions.
 Page 41       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Ms. Sanchez.

    Ms. SANCHEZ. Thank you, Mr. Chairman.

    I actually have some questions for Dr. Chu. First of all, thank all of you for coming before us today. Dr. Chu, my questions are very specific. And forgive me, the others, very parochial here. This is about the National Guard in California. We have had some issues in particular to the work related since September 11th, and I have in particular one question and several collateral questions to that.

    It is my understanding that the uniformed military, including the leadership, the National Guard, the Army, the joint staff, advised that the National Guard support our Immigration and Naturalization Service (INS)—and we have a lot of this in California, obviously—the INS, the Border Patrol, U.S. Customs Service should be conducted under the provisions of Title 32 versus Title 10.

    I wanted to find out, because I know there are a lot of Members of Congress that had some input into this, and we also recommended that the border missions be conducted under Title 32, can you explain why you all decided, or you in particular maybe, the rationale behind the decision that the Guard perform the mission under Title 10 status?

    Dr. CHU. I am delighted to, ma'am. I think fundamentally it goes to the fact that the border patrol mission is a federal function. Title 32, as you know, is a provision of federal law that allows us to reimburse the Governors with federal moneys for guard troops serving in a State function. Guarding the border is a federal function, not a state function. And that fundamentally was the conclusion of the Department's general counsel, that made it appropriate for us to use Title 32 for this purpose, and that this is a Title 10 responsibility, i.e., responsibility of the Federal Government of the United States.
 Page 42       PREV PAGE       TOP OF DOC

    I appreciate how some confusion arose on this point for two reasons. First, airport security is provided under Title 32 for the simple reason that that was done before that became a federal responsibility. It was the President inviting the Governors to provide protection in the nation's airports using their state guard powers and promising that he would finance it under Title 32.

    Second, I know in some states, the Governors, concerned with traffic problems, did take the—the matter into their own hands as a matter of traffic enforcement, not of border control, did provide a certain number of Guard personnel to assist in traffic control. And that did create an impression that we could do this under Title 32. But the legal ruling was and remains that this is a Title 10 function. This is a federal function.

    Ms. SANCHEZ. So you are saying your own general counsel suggested the ruling be under Title—.

    Dr. CHU. There is no question here. The border is a Federal responsibility, it is not a state matter.

    Ms. SANCHEZ. OK. How does this Guard mission, to support these federal agencies along the border, differ from the Guard's counterdrug support to the same agencies along the border which have been done in Title 32 status for over 10 years now?

    Dr. CHU. This is a different kind of matter. Drug enforcement is a joint federal-state matter, it is not purely a federal matter, whereas the INS is a federal agency. And this is a decision, and the Border Patrol is a federal decision, this decision to augment their manpower with federal troops.
 Page 43       PREV PAGE       TOP OF DOC

    Ms. SANCHEZ. OK. Were there different medical and dental standards applied to the Guard soldiers in Title 10, and if so, what are they, or why?

    Dr. CHU. Different from, ma'am? I am not sure I understand your question.

    Ms. SANCHEZ. Different medical and dental standards applied to these Guard soldiers in Title 10 versus Title 32.

    Dr. CHU. Well, Title 32 is a state status, so it will be whatever the state rules are. Title 32 is effectively—I am not a lawyer, but Title 32 effectively is a reimbursement mechanism. Title 10, if you are called under Title 10, you are Federalized if you are a Guard person, and you therefore must meet federal standards.

    Ms. SANCHEZ. OK. I will look—I will have my staff look that difference up. The California National Guard soldiers were required to move from California to Fort Lewis, Washington for in-processing, and they then came back to California to do their mission. Is there a reason why? Could we have not processed them in California? Why were they moved up there and then brought back?

    Dr. CHU. I will let General Le Moyne answer. What is typically the case is we have certain points that we do that. It may not have been possible to do that in California.

 Page 44       PREV PAGE       TOP OF DOC
    General LE MOYNE. If I can add to it, ma'am. We have mobilizationsites that are determined ahead of time. And we exercise those and staff those in advance. In the—probably in the likelihood of saving time with the emergency, we went ahead and used that preexisting plan. Since that time there has been discussion of how to mobilize at site, at home station. And I will defer for the record to my brethren-in-arms who will follow us in the next panel.

    Ms. SANCHEZ. I would like an answer to that question as to where we would mobilize in California. That was one of the inconveniences, if you will, for some of our people, getting moved up to Washington, when they really saw no reason for that. Thank you.

    [The information referred to can be found in the Appendix beginning on page ?.]

    Mr. MCHUGH. Mr. Langevin.

    Mr. LANGEVIN. My question would be for Dr. Chu. Over the years we have had successful efforts with the National Guard in kinds of drug operations. With the $40 million funding cut in this year's budget, how will they be able to continue the counterdrug effort that has been so successful?

    Dr. CHU. Well, it will continue, sir. I think this is one of the several areas where the Secretary is asking difficult questions, back to the end strength issue. Things that are going reasonably well where we could afford to take a bit more risk. And ultimately a decision, as you indicated, is that we could perform this at a bit lower level than was true before.
 Page 45       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Ms. Davis, California.

    Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. And thank you to all of you for being here. I wanted to follow up briefly with the question that Mrs. Davis of Virginia raised relating to the health care. And I did have a chance, Admiral Ryan, to talk about that earlier. We have a number of people in San Diego that are very concerned because they are not able to access their employee's health care program, having gone in to the—now that they are on active duty, they can access the military system, but there are breaks in that. They are not able to access the same physicians. And in some cases it is a just a major, major inconvenience that is contributing to some of the difficulties at home in having been called up to active duty, and I am hoping that perhaps we can take a look at that and see if there are ways of expanding the TRICARE physician pool, perhaps, what—.

    Dr. CHU. We have done that, ma'am. We announced, very shortly after the mobilization began, for exactly the reason you have indicated, the question of continuity of care, that we would waive the usually required certificate of non-availability for any Reservist called for active duty, that we would pay—back to Mrs. Davis of Virginia's question, for any Reservist called to active duty at the TRICARE rates plus 15 percent, and that we would further forgive the deductible that would usually apply to a military family member in terms of medical care during the first—during fiscal 2002 and fiscal 2003 because our assumption is that the Reservists will perhaps will have already paid a deductible before he or she comes to active duty and might have to pay it again after.

    So there really is no financial reason that the Reserve member could not go to his or her normal physician. Now there is an issue of some physicians who won't bill TRICARE directly. That is an issue that there are limits as to what we can do. I would appeal to the nation's physicians to adopt a little bit more patriotic approach in this time of national challenge. But we stand ready—.
 Page 46       PREV PAGE       TOP OF DOC

    Mrs. DAVIS OF CALIFORNIA. Is that well known? Why—because they are still very concerned about that.

    Dr. CHU. You are indicating to me we need to redouble our efforts to publicize that policy.

    Mrs. DAVIS OF CALIFORNIA. And just a few—another question, Dr. Chu, relating to the basic allowance for housing (BAH). Should that be adjusted more frequently? And certainly, from a geographic perspective as well?

    Dr. CHU. Well, it does, of course, vary by jurisdiction as you know. We are on a course, Congress further accelerated that course to buy down the out-of-pocket amount within a very few years. I think we are making excellent progress on that score. We are very grateful for the Committee's action on that regard.

    Mrs. DAVIS OF CALIFORNIA. Thank you. And, Admiral Ryan, briefly. We had talked about this earlier, but I wonder if you could, for the record as well, talk about the fact that many of the Navy personnel have not been able to access the Montgomery G.I. Bill and we want them to be able to do that, they never had the opportunity to convert into the program. How can we change that? What do we need to do?

    Admiral RYAN. This is something that all of the services, I know the Administration and the Members up here care about. As you know, we have members that, even though the Congress has allowed members that were in the Veterans Education Assistance Program (VEAP), program to buy in two different times into the Montgomery GI Bill, we have never been able to allow those that never had an account in the VEAP program to buy into the Montgomery G.I. Bill.
 Page 47       PREV PAGE       TOP OF DOC

    So basically what this means is each of the services have people at a senior level, 15 to 22 years of service, that don't have an educational benefit for their career and their service, and what we are hoping is that we could come up with some kind of sliding scale that would cost quite a bit for those that are more senior, but allow them at least the option of spending money to get a very, very good G.I. Bill program. And it is something that I get asked every where I go by men and women that have put in at least 15 years in the service. If there would be a way to find a way to work with the members to come up with a chance for them to at least have the option of signing in, even if—it would be at some considerable cost to them. Because this benefit is such an outstanding benefit.

    Mrs. DAVIS OF CALIFORNIA. Is that something—.

    Mr. MCHUGH. I hate to interrupt, but we have five minutes left on the vote. I had hoped to finish the questioning. Apparently Mrs. Davis has more questions, so I would ask the panel to stay. It will be some time.


    Mr. MCHUGH. We stand in adjournment.


    Mr. MCHUGH. We will call the hearing back to order. Let me begin by thanking Mrs. Davis who was in the process of questioning the previous panel, and she—and I know there will be others, and if there is someone still here representing the first panel, we certainly would appreciate their forbearance. I know we will have probably an unusually large number of written questions to be submitted. I would say to both this esteemed panel—which is a very large one as I look at it—and the third one, that we would appreciate your assistance in accommodating us. Thank you for your patience.
 Page 48       PREV PAGE       TOP OF DOC

    We will get right to the introductions. We have Craig Duehring, Principal Deputy Assistant Secretary of Defense for Reserve Affairs; Lieutenant General Russell C. Davis, U.S. Air Force, Chief of the National Guard Bureau; Lieutenant General Thomas Plewes, Chief of the Army Reserve; Lieutenant General Roger C. Schultz, Director, Army National Guard; Vice Admiral John B. Totushek, Chief of Naval Reserve; Lieutenant General James Sherrard III, who is chief of the Air Force Reserve; Lieutenant General Dennis McCarthy, Commander of the Marine Forces Reserve; and Brigadier General David Brubaker, Deputy Director of the Air National Guard.

    I also understand two of your very formidable ranks will be retiring this fall. Both General Davis and General Plewes will again in all likelihood be having the last opportunity to testify before the Subcommittee. And, gentlemen, we thank both of you for the service that you have provided and wish you all the best into the future. General Davis, over 43 years of dedicated service, and General Plewes, a mere 35 years of likewise dedicated service, and certainly our best wishes in your future endeavors, gentlemen. We appreciate your service.

    Let's get right to the testimony with that. And as in the prior panel, we start with those in the order in which we read them, and that would be Mr. Duehring, the Principal Deputy Assistant Secretary of Defense for Reserve Affairs. Welcome.

 Page 49       PREV PAGE       TOP OF DOC

    Mr. DUEHRING. Thank you, Mr. Chairman and Congressman Snyder, distinguished members of the Subcommittee. In the years past they were simply called the Reserves. Webster defines them as forces not in the field but available, or the military force of a country not part of the regular services.

    But September 11th changed that definition forever. In the first moments after the terrorists struck, members of the National Guard and the Reserve components of this great country raced to the scenes of destruction in their roles as policemen, firemen, and medics, blending their military and civilian skills as they rushed to save lives, giving no thought to preserving their own; while overhead, racing on clean silver wings above the towering columns of smoke and ash, were fighters and tankers, National Guard, the Air Force Reserve, and the Marine Air Reserve.

    By the end of the day, an estimated 6,000 members of the National Guard and Reserve, including 700 alone from the Coast Guard Reserve, had voluntarily reported for duty. Within three days President Bush had issued a call-up, for, as he put it during his subsequent visit to the Pentagon, no other single act more clearly demonstrates the national resolve than to mobilize the National Guard and Reserve forces of the United States. This act also is a proof to the entire world that we are committed to bringing our enemies to justice or justice to our enemies.

    This profound change in the National Guard and Reserve may have come as an epiphany to some, but not to our men and women in uniform, nor did it to you Members of Congress who have steadily supported our Reserve programs through funding initiatives, pay increases, equipment purchases, and commonsense laws that enhance and encourage participation in our programs. And thank you for considering the concerns of our employers and of our families without whose support this war would be even more difficult to endure.
 Page 50       PREV PAGE       TOP OF DOC

    My colleagues and I are delighted to be here today and are eager to tell you about new programs that we have undertaken such as our Quadrennial Defense Review (QDR) Directed Force Review, which we hope will make the National Guard and the Reserve force of the United States even better prepared to defend our nation in years to come. As a result of the current call-up we are finding areas that need tweaking, and as the call-up lengthens from six months on, we may need your assistance in the military personnel arena.

    Our employers have been tremendously supportive through this period and the Department has increased funding for our efforts with the National Committee for Employer Support of the Guard and Reserve.

    The recruiting and retention tools you have provided us yearly are still needed. The Department is defining its role in homeland security and the Reserve components are participating. Thank you for your invitation, and may God bless America.

    Mr. MCHUGH. Amen to that, Mr. Secretary, thank you.

    [The prepared statement of Mr. Duehring can be found in the Appendix on page ?.]

    Mr. MCHUGH. General Davis.

    General DAVIS. Good afternoon. It is a real pleasure to be here with you this afternoon, and I would like to thank you for the opportunity to testify on behalf of our 460,000 members of the Army and Air National Guard. The National Guard's mission has been to protect America for a number of years—365. In addition to protecting the homeland, we also protect America's interests all over the world. The National Guard has been prepared for and is ready and challenged and is doing that mission.
 Page 51       PREV PAGE       TOP OF DOC

    The duty to protect the life and property of our citizens applies both in the state as well as the national level with respect to the National Guard. That mission, directed by the Governors, is one which we do with pride. We do with equal pride the federal mission, the overseas mission, the deployed mission, and many times that mission, as is true today with homeland security, is performed here within the continental United States.

    Homeland security has been and remains our No. 1 mission, protecting America and her interests. We have some 50,000 National Guardsmen, Army and Air, involved in the current efforts, while at the same time, we have aircraft flying overhead here in Washington, D.C., we have aircraft flying out of bases in Turkey, out of bases in Saudi Arabia, bases supporting the Bosnia and the Kosovo operations. Our No. 1 priority, after making sure we take care of America, is our people because our people are the ones that will do that. So our personnel priorities are No. 1.

    Additional full-time manning is one of the requirements that we have. In the Army Guard we have 57 percent of the validated full-time manning requirements, and as we have grown with missions in the Air Guard, we too need additional manning there. That is one of our highest priorities.

    The bulk of the people are traditional guardsmen, so we rely heavily between the National Guard drills, particularly on those units that are equipment intensive, be they Army units with tanks or be they flying units with aircraft or communications units with equipment. So that much-needed force of technicians and Army Guard Reserve (AGR) personnel is a major, major requirement in terms of improving and enhancing our readiness.
 Page 52       PREV PAGE       TOP OF DOC

    We have those folks who are working on equipment, and the equipment they have is not always first line equipment, but we are able to maintain that equipment. We do need to continue to modernize and to reenhance that equipment.

    We have the issues of pay, and we would like to thank you, and benefits, we would like to thank you. Those have made our jobs much easier in terms of recruiting and retaining our personnel, because those pay bonuses and incentives have made it possible for us to do the mission.

    Our civil support units which we have deployed and have stood up and have certified as ready have performed those missions, and are doing just an outstanding job in responding to America's needs. Retention still requires and gives us some challenges, but the trends are all in the right direction. We thank you for the funding you provided for that; however, in the future we will continue to need funding for recruiting and retention.

    Last but not least, an issue which is a quality-of-life issue in the National Guard, the place where our people work, be it an armory, be it a hangar, be it a section in which our young people work. So military construction funding to recapitalize the facilities we have is a key issue because it is about retaining those high, top-notch, top-quality people.

    As I said, these are our top issues and they involve our people. My written statement goes into much greater detail, and I thank you for the opportunity to appear before your Committee.

 Page 53       PREV PAGE       TOP OF DOC
    Mr. MCHUGH. Thank you.

    [The prepared statement of General Davis can be found in the Appendix on page ?.]

    Mr. MCHUGH. General Plewes.

    General PLEWES. Mr. Chairman, members of the Committee, thank you for the opportunity to testify on behalf of the citizen soldiers of the Army Reserve. Today's Army Reserve is very busy and it is successful. You demonstrate your commitment to the men and women of the Army, and we demonstrate our gratitude to you.

    Full-time support, the Montgomery G.I. Bill and supplements, incentives and benefits programs that we have worked on over years with the Committee, have made a difference and made us more ready. That has really shown itself in the lives of our soldiers and their families.

    Let me just give you a short example up front. During Desert Storm when we called a unit to duty, between the time they were alerted and the time they showed up at their mobilization station, our units lost between 15 and 25 percent of their soldiers. No family care plans, not being qualified for their jobs, not being fit or having good dental care were the reasons.

    Today, it is still a fairly large number, about 5 to 10 percent, but what it means for us is we do not have to call in individuals to supplement our units. Our units are ready to go on day one. It is a tremendous difference in our capabilities today.
 Page 54       PREV PAGE       TOP OF DOC

    We are changing our Army Reserve, as we are changing our Army. We are transforming the Army as we are doing things that bring us to war. We have set a few priorities to sustain our high level of readiness: to obtain more full-time support; to acquire the modern equipment we need to, if you will, be relevant in this fast-changing Army of ours and support improvement in the quality-of-life and quality improvements for our soldiers, and maintain the progress we made in recruiting and retention to assure that we have the force we need today and tomorrow.

    Let me just give you a report on the success we have made in recruiting and retention. We have made our recruiting mission for the last two years, and we are going to make it again in fiscal year 2002. In fact, as I speak now, our recruiters are 1,500 over in their mission for the year. In retention, when I started out this business as the Chief of the Army Reserve back in 1997, we had an attrition rate of 37.5 percent. Today that attrition rate stands at 26.9 percent. That is still high, and we are working on it. But I think that we are doing great things for our soldiers; they understand it and they appreciate it; our readiness has improved as a result.

    These are successes that we can all take pride in, but I think we cannot rest on our laurels, especially now that we are challenged by some of the things that we are doing for our soldiers and to them in the way of calling them forward. We have got to be able to continue the level of incentives and to continue the work that we have done in recruiting and retention.

    Thank you for the opportunity to appear before you, and I look forward to answering any questions that you may have.
 Page 55       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Thank you.

    [The prepared statement of General Plewes can be found in the Appendix on page ?.]

    Mr. MCHUGH. General Schultz.

    General SCHULTZ. Mr. Chairman, distinguished members, thank you. On behalf of the soldiers in the Army National Guard, we say thanks. As we think about the Army Guard today, we are in 57 countries. Last year we were in 84. The pace is up, as you well know, and we have the same interest as members here regarding this pace in the long-term sense. And one of the things that I testified last year about was this Committee's support for full-time manning. And I appreciate what you did for us, and I want you to know that all the soldiers, AGR and military technicians that this Committee authorized, went to the field. Our priority, after all, is there.

    Mr. Chairman, as we talk about the priorities with regard to our interests, General Le Moyne asked that I answer a couple of his questions first off. Title 32 status, Mr. Chairman, is actually a Federal status, and so I know of no differences between Title 10 and Title 32 status in terms of personnel regulations. So I stand by to answer any follow-on questions, should we have this with regard to that specific question.

    We did select four mobilizationsites for the border mission; 1,531 soldiers are going to perform that duty located in the western and eastern parts of the nation. That process is underway today, and they will report for their duty with the Border Patrol and Customs Service very soon.
 Page 56       PREV PAGE       TOP OF DOC

    Mr. Chairman, I am the person responsible for the Army National Guard, and our drill attendance, training participation, is something that I track personally. You asked Dr. Chu that question earlier, and over the previous years I am telling you that I have not been satisfied with our training participation. Our goals were not what they should have been. We had a 3.5 percent target. Today I have changed that to two percent out of our strength that is in the administrative processing category. Frankly, our states have taken it seriously and we are moving those figures to lower numbers.

    Our idea is soldiers come to formation, they participate in training, and they are paid for that training. And today more than ever as you think about the reliance on the Guard, you know that is bottom line for personnel readiness. And I just tell you personally, Mr. Chairman, this has my complete attention and I monitor it all the time. We are not quite where we need to be. We have personnel data bases that do not talk to one another. The finance data bases do not talk to the personnel data base. I make no excuses, but I do want to explain my interest to this Committee in helping to fix this issue.

    The Guard and emergency force soldiers make it all possible. As we talk about those special members out there, our families and our employers are what make the Guard what it is. Thanks to this Committee for making that possible.

    Mr. MCHUGH. Thank you.

    [The prepared statement of General Schultz can be found in the Appendix on page ?.]
 Page 57       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. General Sherrard. I have so many—.

    Admiral TOTUSHEK. You did skip me.

    Mr. MCHUGH. I did skip you, Admiral Totushek. I thought I goofed as I saw you sitting there, but I did not see it on the sheet, and if I do not read it here I am in trouble.

    Admiral TOTUSHEK. Thank you. Also, thank you, Mr. Chairman and distinguished members of the Committee, for the fantastic support this Committee has given to all the Reserve components in the past years. And particularly this last year and the bill that you all passed has made a real difference to soldiers, sailors, airmen and Marines in both the active and Reserve components, and we thank you from the bottom of our heart.

    Today I would like to talk specifically about two things and they are, of course, the two missions we are involved in primarily now: Enduring Freedom and Noble Eagle. Even before the mobilization, over 230 Naval Reservists immediately began assisting in the defense of our homeland. Chaplains were on duty here in Washington, D.C. administering to the needs of people that were killed and wounded at the Pentagon.

    Naval Reserve F–18s were flying combat air patrol missions in Texas. A Reserve helicopter squad was doing training in northern Virginia and immediately came to the Pentagon to do medevac work. We had tremendous response from people, both active and retired, wanting to come and help with the emergency.
 Page 58       PREV PAGE       TOP OF DOC

    The second aspect I would like to talk about is the mobilization itself. So far we have mobilized approximately 10,000 Naval Reservists, and they have been largely in the fields of law enforcement and security, as you might expect. But we also have a tremendous number of people doing intelligence missions, supply missions, and medical missions that are important aspects of the support that we give the Navy.

    We have been very busy with our intrafeeder airlift aircraft as well. Our C–9s and C–40's have been working overtime bringing sailors and equipment to the Gulf with great reliability.

    With the mobilization underway, and mindful that President Bush cautioned that this could go on for years, we have focused very hard on how we are going to sustain this effort, and we are working with Navy to understand exactly how we are going to demobilize people as the year wears on and as we look toward the second year of this war. We are working hard to make this a detailing process so that the sailors' needs and the needs of their families and employers are met, as well as the needs of the Navy.

    Mobilization has gone much smoother this time than it did in Operation Desert Storm, due to the fact that we put changes into effect during the nineties that helped with this mobilization, but also we brought people to bear to the problem right away, and had several teams working 24 hours a day to make sure things went smoothly.

    While the demand for Naval Reserve's long-term capabilities are not clear, there are some important Reserve roles. Homeland security and demand for capabilities to guard the nation's borders is going to be a major role that the Reserve components are going to play in the future.
 Page 59       PREV PAGE       TOP OF DOC

    In order to continue this fantastic work, we have needs like the other services do in our equipment modernization and our, Information Technology (IT), as General Schultz mentioned.

    Finally, let me say a couple more things about the manpower piece of this. While the response from the sailors, their employers, and families have been fantastic, we still have a little bit of work to do in that regard. I think we need to readdress the compensation of sailors and airmen and Marines to the level of what they are being paid in their civilian job. Some would say that is inequity when you call them to serve next to somebody who is paid less, but we are not requiring those people to maintain a second household. We are not tearing them away from an occupation where they may be the sole proprietor or a key employee of that proprietor.

    Finally, I think we have taken strides in fixing the TRICARE and getting health care to all of our mobilized individuals. But in some cases, as Dr. Chu said, we find that some health care providers do not want to go through the bureaucratic red tape to get into the TRICARE system. This is a problem that needs to be addressed and we look forward to working with the Committee on that.

    Finally, let me say that before and after September 11th, the Navy/Marine Corps team has relied on the Naval Reserve to support it through a full range of operations, from peace to war. Right now it is war. But fortunately, the Naval Reserve is well trained and dedicated to achieving the nation's objectives, and it is a privilege for me to lead the outstanding men and women of America's Naval Reserve. We have been called and we are serving. I look forward to answering your questions.
 Page 60       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Thank you.

    [The prepared statement of Admiral Totushek can be found in the Appendix on page ?.]

    Mr. MCHUGH. General Sherrard.

    General SHERRARD. Thank you, Mr. Chairman. It is my pleasure to have the chance to address this wonderful group who has been so supportive of us, and in particular I would like to say, supportive of us in terms of additional recruiters. I asked 2 years ago, and you were gracious enough to offer that, and I can proudly tell you that the fruits of those endeavors, we are here to celebrate, because we achieved 105 percent of our recruiting and accession goal and an end strength of almost 101 percent of authorized personnel. And I am extremely proud of that.

    Our officer retention rates are in excess of 92 percent; our first-termers in excess of 81 percent, and overall retention rate in excess of 89 percent. Those are all indicative of the great support that you have given, as well as extreme hard work of the men and women of our command.

    Unfortunately, though, as we all know, the tragic events of September 11th changed our whole lifestyle, and I can tell with you great pride the men and women of the Air Force Reserve, like all the members of our fellow services and the American public, stepped forward immediately. They were volunteering on day one and continue to volunteer.
 Page 61       PREV PAGE       TOP OF DOC

    We have more than 12,400 members actively to date, of which about 2,400 are deployed in the Area of Responsibility (AOR). We have on average 2,700 to 3,000 members that are volunteering each and every day, outside those members that are activated doing missions around the world.

    It is interesting to note, or it should be, that we take reference to the last large activation we had. We activated just slightly more than half the numbers we had under Operations Desert Shield and Storm, but we have activated more—a 36 percent increase in our numbers of individual mobilization augmentees. Security forces, intelligence forces, have been key in this number. They show the tremendous benefit that they in fact bring to the active force in the experience levels that they do bring.

    I would also like to tell you that we have concerns. We are very concerned, as has been mentioned by all of my colleagues, that retaining our members is, in fact, key. One of the key issues, as was testified earlier by General Brown, the Air Force is a force that relies on experience. We strive for a goal of 80 percent prior service members. This year we in fact achieved 75 percent prior service members, and that is driven primarily by the fact that the numbers of members that we can assess departing the active force is now down to 14- to 15,000 in a given year throughout the Future Years Defense Program (FYDP). We have to retain those experienced members we have. Retention beyond the 20-year point, it is critical to keep that experience base as high as we can to do the missions that we are being asked to do.

    We are concerned about the impact that Stop Loss will have, and I echo the words of General Brown that it was in fact a team effort; that the active force, the Reserve and the Air National Guard, sat down and literally took the Air Force Specialty Code (AFSC), skill level by skill level, and walked through to decide what was the right thing to do for our Air Force; and in doing so, making sure we did not jeopardize the Reserve force, nor did we jeopardize what the active force was going to be asked to do.
 Page 62       PREV PAGE       TOP OF DOC

    We are also concerned about the length of mobilization. We heard Dr. Chu's comments. We are concerned about what that impact will be. But I must tell you that the men and women of this command—and it echoes up and down this entire dais here—that each of the members are saying we know we have a challenge. We know we have a job to do, and they are stepping forward and it makes us all very proud to be part of this force.

    Sustaining the high levels of OPTEMPO, in fact, a key concern for all of us, and we have to watch that. Full-time support is critical in our ability to be able to do that. We look forward to your continuing support, and I also look forward to answering any questions that you or other distinguished members of this Committee may have.

    [The prepared statement of General Sherrard can be found in the Appendix on page ?.]

    Mr. MCHUGH. General McCarthy.

    General MCCARTHY. Mr. Chairman, Dr. Snyder, distinguished members of the Committee, I am honored to have the opportunity to appear before you and to thank you personally for the consistent level of support that the Marine Corps Reserve and all the Reserve components have received from the Congress and through this Committee.

    Like my colleagues, I am very pleased to report the status of the Marine Corps Reserve. I think it is an organization that overall is in very excellent condition. Recruiting has been good, retention has been good, and all of the signs that we see in those two vital areas are very positive.
 Page 63       PREV PAGE       TOP OF DOC

    If I understood your opening statement, Mr. Chairman, I think you asked two questions that I would like to try to address. You mentioned did we mobilize too quickly and did we mobilize for the right missions?

    I believe, speaking on behalf of the Marine Corps and its Reserve, the answer to that is no, we did not mobilize too quickly; yes, we mobilized for the right reasons and the right missions. I think the mobilization, as we have utilized it, has been measured. The Commandant has been, quite frankly, rigorous about scrutinizing the requirements for Reserves that have come in from the field. He has not honored all of his commanders' requests, but those that have been answered, we have filled.

    We have about 4,600 Marines currently serving on active duty. And I would venture to say that all of those Marines, or substantially all of those Marines, are fully occupied within their skill levels and within the kinds of missions for which they have trained and prepared themselves.

    As long as we continue to support those Marines and support those who will take their place at the appropriate time, I think Marine Forces Reserve can sustain the current level of mobilization and can step up if we are called upon to do so.

    I look forward to having the opportunity to answer your questions. And, again, I thank you for the support that you have given to the Marine Corps Reserve.

    Mr. MCHUGH. Thank you, sir.
 Page 64       PREV PAGE       TOP OF DOC

    [The prepared statement of General McCarthy can be found in the Appendix on page ?.]

    Mr. MCHUGH. General Brubaker.

    General BRUBAKER. Mr. Chairman and members of this Committee, good afternoon. It is a pleasure to be here today to represent the more than 108,000 Air Guardsmen and women throughout the United States and its territories. Today, fully 48 percent of our Air National Guard men and women are on full-time duty, in both mobilized and volunteer status, supporting Operation Noble Eagle, Operation Enduring Freedom, and Air Expeditionary Force deployments.

    Nearly 97 percent of our security forces are mobilized for operations abroad and force protection at home. Our people are very engaged and extremely proud of their contributions which will continue for the unforeseen future, proving once more that the Air National Guard is always ready, always there. We are able to sustain these capabilities because of your strong support for our critical retention programs such as control grade relief, aviation continuation pay, bonus programs, pay increase, family readiness, and employer support.

    I would like to point out that the Air National Guard met our end strength with flying colors. We had to stop work on our recruiting goal because our retention rate was the highest of any DOD components. The Air National Guard members love their jobs and are staying on to serve.

 Page 65       PREV PAGE       TOP OF DOC
    We thank this Committee for its generous support in the past, and we want you to know that we welcome any challenge set before us. With your continued support we will remain a viable total partner of the total force. Thank you for the opportunity to be here today.

    [The prepared statement of General Brubaker can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you all very much.

    I want to go first to an area that Admiral Totushek mentioned specifically; that is, his recommendation that we take some steps to ensure that those called up receive a gap pay, if you will, between their private sector paycheck and what their military active duty pay would be.

    There used to be a program, as I understand it, that really was in response to some of those problems that were exhibited during the Persian Gulf. I will call it the mobilization insurance program. That program ultimately failed and was terminated. There is a bill in the House, H.R. 3337, that would call for Reservists who are at least federal civilian employees—and I suspect, Admiral, you were talking about all—.

    Admiral TOTUSHEK. Yes, sir.

    Mr. MCHUGH. But to speak specifically to this bill, to require federal civilian employees to be paid the difference between their active duty and military pay and their federal civilian salary, for largely the same reasons that you said, Admiral.
 Page 66       PREV PAGE       TOP OF DOC

    Have any of your shops had a chance to look at this? If so, I would be interested in what your response is to that specific bill. But if not, how might you each respond to the initiative that Admiral Totushek had mentioned and is embodied in the philosophy behind that bill?

    Admiral TOTUSHEK. If I could say just a couple more words about that.

    Mr. MCHUGH. Sure.

    Admiral TOTUSHEK. We really support the House bill that you mentioned, because one of the largest employers of the Guard and Reserve is the government. So we support that a great deal. And we also have seen, and particularly on this mobilization, that a great number of companies have stepped forward and are paying the delta for their employees. And some of them have looked around to see what other employers are doing, and the ones that had it for 90 days now have extended it so they are paying it for the whole year.

    The thought occurred to us that maybe the way to skin this cat that wouldn't get us back into the problems of the mobilization insurance would be to subsidize the employer and let him make up the difference, so that if we incentivized him through a tax relief to pay only those people who had a delta in a negative sense to make up, we would take the Administration of the program away from the government, let the employer do it. And we are just starting to talk about that now, but we think that has some merit.

 Page 67       PREV PAGE       TOP OF DOC
    Mr. MCHUGH. Mr. Secretary, I don't know, have you had an opportunity to look at the bill or think about that concept? But I suppose we really should start with you.

    Mr. DUEHRING. This is an area that is going to involve an awful lot of study because there are other ways of skinning the cat. We would like to take a look, before we propose spending more money, at perhaps restructuring or deferring debt payments or trying to help people resolve some of their problems. We do have a very aggressive employer support of the Guard and Reserve program that is working with the employers, and I think that we are seeing the benefits of that program now partially coming from the large number of employers who are offering either the delta, paying the differential pay, or perhaps assisting in some other ways.

    If we are talking about federal—employees of the Federal Government—we are talking about only perhaps 10 percent of the Guard and Reserve. That is our snapshot look at it. And we would like to know what standard would that set, then, for other employers. What do you do for the small businessman? Are we raising the standard by saying that at least—forcing the Federal Government to pay the delta for employees?

    We have to make sure that we are equitable. We also have to consider the active component member who is in the foxhole right alongside our Reservist, and suddenly have a person doing the same job, with a very, very different compensation package there. Will we actually increase the problems that the active forces have? These are all very, very deep questions and we would like to take a little bit longer look at this.

 Page 68       PREV PAGE       TOP OF DOC
    Mr. MCHUGH. But I take it from your answer that you are looking at it?

    Mr. DUEHRING. Absolutely. This was actually part of our Comprehensive Force Review. We also have a study going on from an earlier Quadrennial Review of Military Compensation (QRMC) that is looking at this whole program, and we take this very seriously. But we want to be very, very careful before we come to you and ask for more money for this program, because we have a number of areas that we are going to need financial assistance in.

    Mr. MCHUGH. Thank you, sir. Any of the other panelists like to respond on that issue? General Davis, you are reaching for the microphone.

    General DAVIS. I am going to try to represent a lot of folks, so we want to get our point in. It would set a high-water mark and put a lot of pressure on other employers, and so it would be very difficult in a lot of cases. I would not know how to compensate somebody, as an example, who made $140,000 or $160,000, if he or she were in a skill or at a point in their military career where they were not being compensated very well. That would have the potential certainly to create a lot of problems, I think. Morale problems and otherwise. We have some of those issues, as we have in our day-to-day operations, with people who are military technicians and others who are AGR. They are compensated at different levels. That does create some problems. But are we looking at it? Yes, sir, we are looking at it. We have got to do something, though, because there are some real hardship cases that are created out there.

    An anecdote: We have a young man who was a sergeant, and he was mobilized very early in the Presidential call-up for Bosnia, and his total compensation came to 70 percent of his house note. He did very well in the private sector, college graduate and all. So something needs to be done in that arena, and maybe financial management will help, but when you are that short of dollars, I am not sure. So we need to look at some kind of a program, perhaps that in special situations we do it. I am not sure. But it does create some financial hardships.
 Page 69       PREV PAGE       TOP OF DOC

    The Federal Government as a player would set an example for what employers could do. Employers do look to the Federal Government for what they do. A few years ago, there was discussion about doing away with military leave for federal employees, and that was not very well received from the private sector community. We worked with the U.S. Chamber of Commerce, and they were appalled, and they said if they do it, a lot of our employers will want to do away with it also.

    We need to come up with some kind of a program. There are a lot of people out there in serious financial problems. We do not have good answers at this point, sir.

    General MCCARTHY. Mr. Chairman, if I could make one comment with regard to the earlier program of mobilization insurance. I was on the Reserve Forces Policy Board at the time the decision was made to terminate that program. I think that it is safe to say that the failure of that program was not because the idea was not a good one because there was not a need or a requirement but, rather, because the Administration of that program or the development of that program by the administrators who did so was flawed from the outset. And so I would hope that we would not take from the failure of that program the answer that we should not try again or that we should not look at that as at least one of the potential areas of solution.

    I share what has been said here, that it is a thorny problem and it presents a lot of both policy as well as practical considerations. But that insurance program did not fail because it was a bad idea, it was because it was an idea that was not well executed. At least that was my assessment of it.

 Page 70       PREV PAGE       TOP OF DOC
    Mr. MCHUGH. Appreciate it. Any other panelists? Well, we have that part of the equation that is a challenge, the burden we place upon those employees and what that means to their families and to their ability to sustain their way of life. We also have the other side of the problem, the employers—and General McCarthy expressed the confidence that the Marine Corps, in his words, can sustain the current levels. And I admire that kind of determination, but I just become very concerned over the longer term how long the employers can sustain that kind of loss.

    And that takes us back to the end strength issue, which is a problem, we all know. But let me tie that into another matter. We are in a very uncertain period, a very indeterminate duration with respect to this war on terror. One of you mentioned that President Bush said it could be years. It probably will be. We heard reports and concerns early on in this mobilization that there were select skills being fully mobilized early on, and the question that has been repeatedly asked of us: Should we rethink the active and Reserve mix with respect to select skills?

    And perhaps a question in that regard: Are those certain high-demand, low-density skills perhaps better placed in the active duty force structure if indeed they are going to be the ones particularly that are called up so early and one of the first to go to call-ups that we have in these areas? And I was curious if the Reserve community has had an opportunity to think about that, about that Reserve/active duty mix, particularly with respect to those skills; and, Mr. Secretary, if your shop has any concerns in that regard and maybe has had a chance to assess which of those high-demand, low-density skill areas may applicable in that kind of reevaluation?

 Page 71       PREV PAGE       TOP OF DOC
    Mr. DUEHRING. Let me give you a little progress report on where we are with that very issue.

    The QDR directed that we take a look at how we do business with the National Guard and Reserves; and, to that end, we established a comprehensive force review, which we kicked off in December. All of us are involved in it, very actively, as well as the active components, the Comptroller, all of the rest of the people in the building.

    In addition, we have even brought in people who have retired with a lot of experience. We have brought in folks from the various think tanks and agencies who do work on research for the Federal Government, bringing everybody we can. In fact, we very frequently work with our friends on the Reserve associations who you will be talking to a little later on. You might ask them about this as well to try to determine what it is that we are doing wrong, what we can do better.

    This ia a six-month program. We are going to try to finish it by the first part of June in order to have an effect on the fiscal year 2004 budget. The purpose is to review active and Reserve force mix organizations, priority missions and associated resources, and also to recommend options for changes to address new challenges and opportunities.

    What are the objectives? Should DOD rebalance its active and Reserve forces? If so, how? What innovative approaches can enhance the use of the Reserve components? What Reserve component management and organizational changes will support DOD transformation efforts? What new policies are needed to guide the use of the Reserve components?

 Page 72       PREV PAGE       TOP OF DOC
    We are looking at three specific areas, the first one being homeland security, addressing how we are going to play in that particular new mission; the second, we have lumped together space, intelligence, and information operations; and the third is transformation and experimentation, because often experimentation lends itself to the Reserve forces for many reasons.

    We want to ask if we can retain people with special skills longer. Can we make the transition from active to Reserve back to active more seamless? Perhaps we might even need a new type of Reservist. The Air Force has had a lot of success in bringing people on board as individuals for much longer than the traditional 39 days that we had become accustomed to in the past but perhaps still not a full-time active duty member, 365 days. We think that this experience, which is now actually being shared with the other branches, will yield great dividends.

    Finally, how can we better integrate the activities of the active components and Reserve components, and can we accelerate a common personnel, finance and medical tracking system, something we desperately need across-the-board in all of the components?

    So we will have a very well-prepared, well-thought-out plan of evaluating how we do business, something we haven't done, I don't believe, for years and years. We hope to be able to bring back to this community our outcomes, our proposals in a few months; and we will have something we can hang our hat on.

    Mr. MCHUGH. Well, good. We will look forward to reviewing that. General.
 Page 73       PREV PAGE       TOP OF DOC

    General PLEWES. Can I add something here? Because the Army Reserve has a number of the organizations that are considered to be high-demand, low-density in the Army. We have given a lot of thought to that.

    The first point I want to make is that what is high-demand, low-density changes over time. When we are doing humanitarian missions, for example, one of the organizations we look at are our civil affairs organizations. Most of those are resident in the Army Reserve. There are about 8,000 of those soldiers. We sent about 5,000 of them now to Bosnia and Kosovo. We fixed the problem by reinvigorating the data base and enlarging that force. Now we are up to about 9,000. We are going to 10,000 in that force. I think we can support that kind of operation indefinitely into the future. So the Reserves can do that business.

    The second question is accessibility. If you are going to have organizations like your biological detection organizations, one of the two in the Army Reserve, can you do that because we have got the kind of skills in the Army Reserve that we need to have to sustain that and can you get ahold of them? And the answer is yes. We have called that one unit, the 310th Biological Detection Unit at Ft. McClelland—we have called them to colors three times. We mobilized them three times in the last four years, and we are over strength in that organization. They pop up. They are all over the world right now as we speak.

    Sustainability is another matter. If this is going to last five years, we are going to run out of those kinds of units in the Reserve as well as the active force. So it becomes an issue of how you replenish them, both in the Active and the Reserve. It is not a Reserve issue.
 Page 74       PREV PAGE       TOP OF DOC

    Finally, a lot of those units rely on civilian skills. Information operations. We are successful in setting up organizations there and with civilian skills, civil affairs, and military police. And the Guard units we have in Guantanamo are primarily guards from prisons here in the country, military intelligence. So they belong in the Reserve and the National Guard.

    So I wouldn't say that you would want to, by any means, take those and put them in the active force. What you have to do is get a balance and make sure that they are viable if they are in the Reserve.

    Mr. MCHUGH. So the answer to that, in summation, is that what you are doing in your civilian units, to plus those up? That is what I am hearing. Would all of you agree with that?

    General DAVIS. Yes, sir. We have a similar situation with a one-of-a-kind electronic warfare unit up in Harrisburg, Pennsylvania, the 193rd. They have the capability to do radio transmissions, TV transmissions, and I won't go much farther than that. But they do that, and they can do that all over the world.

    We were able to get an increase in the crew ratios; the number of crews per aircraft. That really helped us a lot. As a direct result of that, we have done four to six operations a year over the past four or five years. And we have not mobilized that unit, sir. We have been able to do it with volunteers, by increasing the crew ratios and by allowing the unit to swap people out at intervals so it is compatible with the mission and the mission requirements.
 Page 75       PREV PAGE       TOP OF DOC

    So there are ways we can do that not necessarily putting it back in the active. It is hard to retain the kinds of skills that we have in that unit because a lot of those kids have part-time jobs when they are not on duty so they can augment their incomes. Even though they are not compensated as well militarily, they love what they do. It is about patriotism, it is about love of country and love of job; and the camaraderie in all of those special ops units, as you are aware, sir, is very, very high.

    So it has been a real boon to allow, as General Plewes has talked to, to allow the organization to help be part of the solution to the problem. What do you need? Go to them, ask them, and they will come up with some pretty good ideas. So that is another success story as Tom talked to with the special ops as well as the civil affairs folks, sir.

    Mr. MCHUGH. Any others?

    Admiral TOTUSHEK. In the Navy we are doing some rebalancing already. Our low-density, high-demand units are our mobile in-shore undersea warfare units that do harbor protection. That was totally Naval Reserve up until about a year ago. We started investigating the need because of—well, the USS COLE, actually the COLE accident, that we needed to do that on an ongoing basis. So we are reforming the Naval coastal warfare, both active and Reserve. There will be enough active to do the ongoing requirements, and then the Reserves will handle the things that pop up in the war plans.

    Mr. MCHUGH. Thank you. Dr. Snyder.

 Page 76       PREV PAGE       TOP OF DOC
    Dr. SNYDER. Thank you, Mr. Chairman.

    Thank you all for being here this afternoon. Mr. Secretary, I know the people of Arkansas, particularly Searcy, Arkansas, appreciate your recognition in your written statement of their service in the Sinai. The Sinai Desert is a long way from Searcy, Arkansas. I think almost 200 from that unit are there.

    Let's see, I just had a couple of questions. General Schultz, following up on Congresswoman Sanchez's question, you made the Title 32 Title 10 distinction. Now, there is some distinction, is there not, correct me if I am wrong, on the—with regard to the personnel? Are they not treated differently under the Soldiers and Sailors Civil Relief Act? And I thought there was also some reemployment rights differences. Am I right or wrong on that?

    General SCHULTZ. You are correct. As we talk about the status question of Title 32 and Title 10, both are federal paid statuses. Title 10 really is a status of an Active component soldier today. In the case of Title 32, it is controlled by the Governor, by the adjutant general. That is where this distinction comes in on the chain of command.

    Soldiers today at the airports are in a Title 32 status. They are not covered by the question of the Soldiers and Sailors Civil Relief Act. So low interest loans are not available to them, which is one of the issues that we have an interest in working out some resolution, some solution to.

    It is still a federal status, but the question is, who controls those soldiers in the formal chain of command?
 Page 77       PREV PAGE       TOP OF DOC

    Dr. SNYDER. What other differences are you aware of in terms of how they are treated differently? Is that the only one?

    General SCHULTZ. That is the principal difference, the pay and allowances. Of course, you have to be on duty more than 30 days to be eligible for the medical care. There is a different category of medical care if you are on more than 179 days. So there are a couple of differences in terms of coverage, eligibility, basically. But, essentially, the federal status, paid status is the same.

    Dr. SNYDER. Essentially.

    General SCHULTZ. Yes.

    Dr. SNYDER. How about with regard to reemployment rights?

    General SCHULTZ. No coverage for Title 32.

    Dr. SNYDER. All right. General Davis, in your opening statement you made mention of equipment, which is I guess is it the Procurement Subcommittee that mainly deals with that. Did you cite that because that is a factor in your recruiting and retention, or is it something that concerns you? Was there a specific reason you brought that up in your—.

    General DAVIS. Yes, sir. We've got a lot of soldiers as well as airmen who come off of active duty in the active component. They have to train down to the equipment that we have. Because the equipment, while being compatible, is not identical.
 Page 78       PREV PAGE       TOP OF DOC

    Dr. SNYDER. Instead of an H–2, C–130, it goes down to—.

    General DAVIS. Yes, sir. So when we get into those kind of situations it makes it more difficult. We are able to overcome most of that. But, over a period of time, if they have been in eight or ten years, they say, well, when are we going to get new equipment? Are we ever going to get that? So it becomes a retention factor at some point.

    Dr. SNYDER. Right. I don't know if you all were in the room when the first panel was here, but I brought up the issue of attrition, the folks that drop out during the first months or a period of time. Do any of you have any comments on that as an issue?

    I mean, the staff was telling me that there was a little bit of a fairly hefty discussion about this topic five or six years ago, but really in the last five or six years the numbers haven't budged at all. And if you are losing a third of the people, which is the number Dr. Chu cited, that is a heck of a lot of recruitment energy that went in recruiting, you know, one out of every three people that didn't work out for the military.

    Do you have, Mr. Secretary, any comments and any comments from the panel, too, on that issue?

    Mr. DUEHRING. I think what I will do is pass it along to the gentlemen here on the panel. They have more detailed information than I would have.

 Page 79       PREV PAGE       TOP OF DOC
    Dr. SNYDER. Sure. Thank you.

    General SCHULTZ. Sir, in the Army Guard our turnover for career members is 17 percent; and it is about 24 percent for those obligors, first 6 years of service. So it is a little higher for the first term.

    General PLEWES. Our Army Reserve first term attrition is about the same as the National Guard. In fact, our attrition in the training base has gone down over time. We don't have the same problem as the actives do. Last year, we lost about 5.6 percent in the training base; this year, so far, only about 4 percent.

    Dr. SNYDER. Why do you think there is a difference? That is a fairly dramatic difference, is it not, with the Active?

    General PLEWES. Well, I think the idea is we had spent time with our soldiers before we send them into the training base, for one thing. We bring them into our units. We aculture them, if you will, and we—.

    Dr. SNYDER. I see. So they may have been out before then.

    General PLEWES. Where they know what the expectation is. That is one thing. The second thing is they know when they come from the training base they are going to go home. So it is not like ''I am going to finish training; oops, I got a longer time in the service.'' So I think they stay with it.

 Page 80       PREV PAGE       TOP OF DOC
    Both the Guard and Reserve have senior NCOs at the training bases to work with those soldiers to keep them in the program and to make sure that there is a good transition for any home problems that they have. We work on that very hard.

    Admiral TOTUSHEK. We have been spending a lot of time looking at attrition as well. We did a survey of our entire force last year and found some of the leading things that caused people to go or to stay, which is the first time we had really done that ever.

    Our attrition numbers are fairly similar to the Army's. We are in the 20's right now overall. But what we found is that if you can keep the sailor with you for the first two years, you probably keep them for the rest of his career. The attrition in the first two years is where we are really applying the pressure right now to try and—I think it is all about expectations that aren't met. The sailor for some reason thinks he is going to have some sort of life that is going to be one way when he gets in the Naval Reserve, and it turns out it doesn't work out that way. That is all about leadership. That is where we are getting our leaders to get into and find out what those issues are.

    Mr. MCHUGH. Anyone else?

    General SHERRARD. Sir, from the Air Force Reserve standpoint, to tie on to what Admiral Totushek was talking about, the six to ten year group that we are looking at are the ones that are most critical to us, because if we lose that group, we don't have anybody to step up to that long term, as I mentioned earlier that experience base. And those are the most trying, because they also have completed a first term enlistment, they are into that second, and they have got huge pressures coming to them, both from family as well as from their job. So we really have to strive for that.
 Page 81       PREV PAGE       TOP OF DOC

    We are today retaining about 79 percent of those members, which we are very proud to do. I wish I could get it higher, and we are really pushing to do that.

    But that is a critical piece of our business, and we have got to have the ability to have some mechanism by which we can incentivize those members, whether it be with a financial incentive or something else that we can show that it is worth their time to stay, to get to the 20-year point. Because if we lose them between that 10- and 20-year point, there is very little recovery.

    As I mentioned earlier in my testimony, the numbers of members that are leaving the active force that can join our force are truly down from what we had in the early 1990's, and they are going to stay at that level. So we have got to retain those members that we have on board today as well as continuing to pursue the non-prior members that will continue to grow, simply because of that lack of eligible members to join that come with that high experience rate from the active force.

    Anybody that separates from the active force, my personal opinion is we need to have a place for them to participate in our Reserve forces. America has made a great investment in them, and we need to have a place to get that return on that investment.

    Dr. SNYDER. General McCarthy.

    General MCCARTHY. Doctor, the question of attrition seems to me to be an incredibly complicated one; and it has a lot to do with the demographics of the service. My situation in the Marine Corps Reserve is very much different than that of the Navy and the Air Force, for example.
 Page 82       PREV PAGE       TOP OF DOC

    We have 70 percent of the Marine Corps Reserve is non-prior service. That is, Marines who come in, go to boot camp, spend about 10 or 11 months on active duty and then spend the rest of their 6-year career in the Marine Corps Reserve, 30 percent are prior service. So almost an exact opposite of the Navy and Air Force Reserve.

    Dr. SNYDER. Is the attrition rate of your 70 percent about the same as in the active Marine Corps?

    General MCCARTHY. It is. There are two points I would like to make, if I could. I would like to take your question for the record, because there is the one thing that would take me a long time to explain, but I would like to address it for you and the staff.

    [The information referred to can be found in the Appendix beginning on page ?.]

    But we have both what I call good and bad attrition. We are losing a lot of our non-prior-service Marines. About 40 percent of them, by the way, are college students, a tremendously high rate of college students; and many of them are leaving service in the Marine Corps Reserve with our full blessing to go into officer candidate programs. They show up in the attrition statics, but we are glad to have them there.

    So the numbers have to really be sliced and diced to understand what they mean. But it is higher than we would like. It occurs at about the four-year point of their enlistment, often when they are finishing college and their lifestyle is changing; and all of a sudden the Marine Corps Reserve doesn't fit a new job and a new career. So we are trying to do some things, and we have got a legislative initiative that I would like to write to you about.
 Page 83       PREV PAGE       TOP OF DOC

    Dr. SNYDER. Thank you.

    General SCHULTZ. Dr. Snyder, could I follow up on one question? I gave you a partial answer when you asked about reemployment rights. Title 10 and Title 32 I said—the better answer is, no difference in coverage for reemployment rights.

    Dr. SNYDER. No difference.

    Thank you, Mr. Chairman. Thank you, gentlemen.

    Mr. MCHUGH. Mrs. Davis.

    Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Chairman; and thank you, gentlemen, for coming to testify today.

    I would just like to say one thing. General Davis, when you talked about the anecdote of the young man who is only getting 70 percent of his monthly house payment, I understand that this isn't an issue with us with a quick answer. It is something you have got to study. But sometimes we study things to death. In the middle of that, these young families lose their home and everything.

    I just think we need to do something now, and I don't know that this piece of legislation is the answer. In fact, I am not sure I would agree with it if it is just federal workers and not small businessmen. It doesn't take long for a mortgage company to foreclose on some of these guys. It is a big deal when they have got their family back home and they are separated and they are going to lose them. I hope we will take a good close look at that.
 Page 84       PREV PAGE       TOP OF DOC

    My question for all of you, I guess, is how your family programs, such as financial counseling, stress management, those sorts of things, how are you dealing with those when the families are not anywhere near military installations? Because the Reservists may not have lived near a military installation. They are called up, and the families are left behind. How are you handling that?

    Mr. DUEHRING. Let me just start off. I am sure that the other gentlemen have some good anecdotal stories on how they are handling their separate situations.

    But when we began this mobilization process, we established guidance, very detailed guidance, on how to conduct that mobilization; and I think it has shown results in that we have had a very smooth mobilization compared to some we have had in the past.

    In addition, we have produced a family readiness tool kit that if we were to print it out would fill a three-ring binder all the way to the top. It has a tremendous amount of information, answers just about every question you would ever want to know. Then we put it on line, so we don't have to just distribute it in paper form. Anybody can contact our site and find the answers to virtually all of their questions if they are willing to be patient long enough. So it is there.

    We also have a mobilization guide that is equally as big. I have seen it printed out. It is a moose. But you can download the forms that you need so you don't have to go on base to start actions. But it tells you all about your legal rights, your medical rights and everything else.
 Page 85       PREV PAGE       TOP OF DOC

    In addition, the Family Service Support Centers that we have at every base that—the National Guard has them, the Navy has them, everybody has them. Any member can go to any one of these support centers and get their questions answered. If they can't answer it, you know, they will know who to go to to find out. So it is not necessary for a member of the Navy to find a Navy base. They can go to an Army base or whatever. I think we have tried to be preemptive in this area to make this transition just as smooth as possible, and perhaps the other gentlemen have other stories.

    General DAVIS. Well, in the Guard, we have a couple of different situations. I will let the two directors comment on it. But, in general, we have very good programs, both the Army Guard and the Air Guard. They are slightly different in the sense that the Army Guard is distributed out throughout a state, so it will be frequently at the battalion levels, which cover the northeast part of the state, and then the rest of the state may be covered by troop commands or one of the other commands within the state. I would like to ask General Schultz to comment on that.

    But the other piece is, we found during Desert Shield, Desert Storm, we have a large number of active component soldiers, sailors, airmen, Marine and Coast Guardsmen who got called up, and they move forward. They are active component soldiers and all. Their dependents frequently go back home to hometown America. There is no family support center there as there is on a major military installation. They will come to the Guard, and they have come to the Guard. As Secretary Duehring said, we provide services to them.

    But I would like to have—the Army just completed a family conference this past week—and General Schultz is probably all primed to tell you about what the Army does—and it is the Army program. It is not the Army Guard. It is all integrated in one program when we mobilize people, because they are all Active Duty soldiers or all Active Duty airmen and all.
 Page 86       PREV PAGE       TOP OF DOC

    General SCHULTZ. If I could just give you some highlights. It is all about volunteers. We have trained over 35,000 so far to perform that special duty for which we are reimbursed very little. So we form in our units readiness groups, family readiness groups. They come together on special occasions. For communications purposes, as you know, one of the most important issues with family readiness groups is it is vital that they have a lifeline when we call our members on very short notice for emergency duty.

    I will tell you that the Army has fully funded our requirements in terms of our family readiness requirements. We are part of the Army in terms of the program, and it is an awesome contribution without a doubt for the team over there in the Pentagon. They have stepped up to the plate in every sense of the word. So the Guard has a readiness program, but it is a piece of the Army's program overall. It is very well done. But it is all based on volunteers.

    Admiral TOTUSHEK. I am real proud of the program we put together. And I think it is about communication. I think that is the most important thing. We made sure that we had an active ombudsman at every one of our centers. They went out and touched base with all of the people that had been mobilized to make sure they understood that these things were on the web or, if they didn't have the web, to be able to get them to them. That I think has been the key of our program, again a volunteer program at each of the centers.

    But we have it centrally managed out of New Orleans and pay a lot of attention to it. I think it has paid us big dividends.

    General SHERRARD. Within the Air Force Reserve, at our host locations, we have a full-time staff consisting of, in most cases, one person, with some traditional Reserve positions that are actually assigned there relying extensively on volunteers to come in and help us. At our places where we are a tenant location, we have traditional Reserve billets that, in fact, do those duties.
 Page 87       PREV PAGE       TOP OF DOC

    It is important that, as mentioned by my colleagues here, the communications from within the unit itself, within the squadron down to that member is really critical. One of the key points that we found and we continue to find today, as we did in Shield and Storm, that many times when the member is activated that the family will go back to where its support structure is, back to its family home; and we are trying to keep that connectivity in having the opportunity to provide them the services. Sometimes it becomes a real challenge for us.

    But the key point, as has been mentioned by each member so far, is that volunteerism is key in terms of who can get out there and help you. Then the other part is just having that avenue for that member—family member to have the ability to come back and talk to someone inside that organization, and it becomes a one-on-one relationship to solve that problem for that particular family.

    General MCCARTHY. I am proud, as well, ma'am, of the program that we have. It does depend on volunteers. But it is spread all over the country.

    One of the things we learned from Desert Shield and Desert Storm was that you couldn't just have a unit-based family readiness program, because, as you point out, sometimes the members of the unit don't live where the unit is located. So our program is both unit-based, but it is also geographic in that the unit recognizes that they may have to pick up and service families of other Marines, both active and Reserve, who happen to live in their geographic area. We spend a lot of time training people, training both volunteers and traditional Reserves to work in the family readiness program. So far, knock on wood, I think it has been going well; and the hard work of a lot of people is really paying off.
 Page 88       PREV PAGE       TOP OF DOC

    Mrs. DAVIS OF VIRGINIA. Thank you.

    General BRUBAKER. Ma'am, if I may add, from the Air National Guard perspective, we received funding last year, with the help of this Committee, to establish a full-time family support staff at each of our flying units. First of all, thank you, but it was very fortuitous considering all of the mobilizations we have done. We are still implementing that program, but I have to tell you it is one of the most exciting programs that we have. We are going to need help to continue that. It has been a very good program for us.

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

    Mr. MCHUGH. Mr. Wilson.

    Mr. WILSON. Thank you, Mr. Chairman. It is a real honor for me, as a newcomer, to be here with people who mean so much to our country, Guard and Reserve. Also, you mean so much to the opportunities for young people for service, and I want to thank you for what you do. I particularly say that in light of my 28 years in the Guard and Reserve. It has meant a lot to me.

    General Davis is also correct, but he was particularly correct today about the camaraderie, the people that you meet, their level of patriotism, their dedication. You just can't beat it with members who are in the Guard and Reserve. It is just exciting to be here with you today, and I just want to thank you for the opportunities I have had.

 Page 89       PREV PAGE       TOP OF DOC
    In our state in particular, in South Carolina, we had the experience of Hurricane Hugo and the recovery from a natural disaster. From that time, there has been a greater appreciation of the Guard and Reserve than ever before in the recovery. And right after that, of course, came the Persian Gulf deployment. That just solidified it. We are in a better position now in the Guard and Reserves than ever before in terms of recruiting good people and making a difference.

    The only thing I regret, General Schultz, I notice that you indicated that Army Guard personnel are now on duty in 57 countries. I just don't understand why I have spent 25 summers at Ft. Stewart, Georgia. But, again, it is just—I just want to really thank you before I run off to vote. Thank you except for my—no, I had—I even enjoyed being at Ft. Stewart.

    But, again, it is just a great experience for young people and meeting people, organizing the junior officers in my section—in addition to myself, I have just seen them mature and meet people, have experiences that you could not have in the civilian experience and then have a Guard and Reserve experience on weekends in Actual Training (AT).

    I want to apologize. I have got to run off and go vote. But thank you all for what you do for our country. Thank you, Mr. Chairman.

    Mr. MCHUGH. Thank you. The gentleman is probably high-density, low-demand, as most of us are. Well, I certainly want to echo the comments of the gentleman from South Carolina, who has really taken to his new duties here. We deeply appreciate his participation, and I associate myself with his comments.
 Page 90       PREV PAGE       TOP OF DOC

     I mentioned on the previous panel I have had a chance to travel to some of those 57 countries and have seen the amazing work that the folks that you care for are doing, and it is a compliment to all of you. Obviously, our concern over the broader term is to ensure that it is sustainable and that we are doing the right thing by this new seamless armed services structure that we have evolved into and I think, in large measure, for the betterment of the defense of this nation.

    We do have another vote. There are a whole host of other questions. But, given the hour and we have another rather large panel, as I said, during my opening comments on this second panel, we will, with your permission, submit some written questions for the record and would appreciate your participation, cooperation as you have so graciously given us in the past. To all of you, I wish the very best; to our two retiring members, I wish particularly the best; and thank you for your service, gentlemen.

    We have two votes this time. So, with a begging of further indulgence by our third panel and those who wish to stay, we will return as soon as that second vote is concluded. Thank you.


    Mr. MCHUGH. Well, we are getting to the truly dedicated. We will have another vote relatively soon. I apologize for that, but we decided that, given the enormous amount of time you folks have already dedicated to us here, we would at least try to get the panel under way.
 Page 91       PREV PAGE       TOP OF DOC

    So let me, with that, go right to the introductions. We are very grateful that all of you could join us.

    Starting with Mr. Dennis Duggan, who is Deputy Director, National Security-Foreign Relations Division of The American Legion, sir; Bob Manhan, Assistant Legislative Director, Veterans of Foreign Wars of the United States; Jayson Spiegel, Executive Director, Reserve Officers Association; Major General Richard Alexander, U.S. Army, retired, Executive Director, National Guard Association of the United States; Michael Cline, Executive Director, Enlisted Association of the National Guard of the United States; Joseph Barnes, Director of Legislative Programs, Fleet Reserve Association; Joyce Raezer, Director of Government Relations for the National Military Family Association; and Michael Jordan, Deputy Director of Government Relations for the Retired Officers Association.

    As I said, welcome to you all. Thank you so much for your patience.

 Page 92       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. With that, we would go right to Mr. Duggan for your comments; and welcome again, sir.

    Mr. DUGGAN. Thank you very much, sir. Sir, The American Legion, the nation's largest organization of war-time veterans, is extremely grateful to you and your Subcommittee for the opportunity to present testimony on military personnel matters as relates to the fiscal year 2003 defense budget. We have always valued your leadership in assessing and authorizing such key military personnel matters as quality-of-life improvements, compensation, housing increases, and even authorizing the end strengths of the armed services.

    With the September 11th terrorist attacks on America, as Secretary of Defense Rumsfeld noted, we are still in the early stages of a long and dangerous global war on terrorism. We believe it is the obligation of a grateful nation to provide our brave men and women of the armed forces the quality-of-life resources needed to effectively defend the freedoms and liberties that were attacked on September 11th and to further pursue the war on terrorism.

    The past decade of military downsizing, early retirement incentives and increased operations tempo and deployments we feel have created significant challenges for maintaining readiness levels to improve personnel levels. With current active duty strengths at about 1.37 million, military leaders, we feel, are forced to meet increased mission requirements by increasing the operations tempo in some cases.

    Extended activation of Reserve forces and the institution of Stop Loss policies perhaps may not adequately reduce this OPSTEMPO and perhaps a loss and reduction of our strengths. They are certainly being used, and I think the perception is that they are being perhaps overused.
 Page 93       PREV PAGE       TOP OF DOC

    A permanent fix such as an end strength increase may be in fact what is needed, and it was certainly a pleasure to listen and experience the questions and the conversation of the earlier panels in this regard. I think our perception is that the services are somewhat under strength. But the services have asked for increases. They have certainly not been granted them; and too often, as we know, perception has been the reality.

    In addition to assessing the service end strengths, The American Legion would recommend the following: One, closing the military pay gap with the private sector. Eleven pay caps in the past, I believe, 17 years, have taken their toll, and military pay still continues to lag with the private sector. Pay raises are without a doubt what will attract and retain our military.

    The Administration and your help in reducing the servicemen's share of out-of-pocket housing costs has also been extremely commendable, sir, and we thank you for that.

    Second, is the issue we wanted to mention of concurrent receipt. We are strongly supportive of full concurrent receipt for all disabled retirees. The responsibility for the enactment of a provision authorizing it in the fiscal year 2002 budget shifted responsibility from the Congress to the Administration. We ask that Congress support a budget that would provide concurrent receipt funding for disabled military retirees. Disabled retirees certainly should not have to fund their own disability compensation by offsets of their hard-earned military retirement pay.

    Third, our national commander has visited the troops abroad in Europe as well as in the Far East. They have done that repeatedly over the years. And I know in our visits to the DMZ, particularly in Korea, where we have heard the idea mentioned and also reinforced on a number of times by the Commander-in-Chief there, General Schwartz, that he supports a tax-free status, or at least a tax-incentive status for troops being assigned to Korea. I believe that the General believes that this could help married service members in maintaining their two homes but, perhaps more importantly, would encourage troops to want to serve in Korea as well, too.
 Page 94       PREV PAGE       TOP OF DOC

    Finally, just a few words with regard to inequity which has plagued those service members and retirees who have experienced divorce. The Uniformed Services Former Spouses Equity Protection—I will get it right—was adopted by Congress in 1982 to ensure divorced spouses of military members received a portion of their former spouses military pay.

    Since the passage of this law, divorce courts have been awarding up to 50 percent of disposable military retirement pay to former spouses with lifetime annuities regardless of their marital status. The American Legion, first and foremost, urges congressional hearings on the Uniformed Services Former Spouses Protection Act. This law continues to unfairly penalize active duty armed forces members and military retirees.

    This Act has created an even larger class of victims than the former spouses it was designed to assist, namely remarried active duty service members or military retirees and their new families. We believe that, as a minimum, the law should be changed as follows: Payments granted on the Uniformed Services Former Spouses Protection Act should cease once the former spouse remarries or some reasonable approach rather than full life-time annuities.

    Second, the law should be amended to make disability pay exempt from reapportionment. Currently, military retirement pay which is waived in order to receive disability compensation must be reapportioned in divorce cases.

    Mr. Chairman, that concludes our statement before you. Again, I am extremely grateful for this opportunity.

 Page 95       PREV PAGE       TOP OF DOC
    Mr. MCHUGH. Thank you. We are very grateful that you gentlemen and lady are able to be with us here today.

    [The prepared statement of Mr. Duggan can be found in the Appendix on page ?.]

    Mr. MCHUGH. Mr. Manhan.

    Mr. MANHAN. It is a pleasure to be here to represent the Veterans of Foreign Wars (VFW); and I thank you, Ms. Davis, for being present.

    Because our testimony is already a matter of record, I will only highlight one or two things. I must update the concurrent receipt portion of our testimony that was submitted several days ago. At that time, we reminded you that 86 percent of the House, Members of the House, supported H.R. 303, full concurrent receipt. As I understand it, just today, Chairman Nussle released the House budget; and within that budget for the first time there is money in fiscal year 2003 for concurrent receipt. The guidance that the Budget Committee used was to pay some portion of concurrent receipt in fiscal year 2003 to the most severely disabled veterans, and the Budget Committee considered those veterans who are 60 percent or more disabled.

    The point of my oral testimony here, Mr. Chairman, is to ask you to consider allowing the VFW and many of the other organizations present to work with you to determine what would be the most proper, more equitable way to disburse—there is about $500 million for fiscal year 2003—to disburse that so that we can have the overriding concept of concurrent receipt for all military retirees who are disabled.
 Page 96       PREV PAGE       TOP OF DOC

    The other issue that I will just briefly touch on happens to be the DOD mandatory spending program. It is the survivor benefit program, SBP. Part of it was addressed by this Committee, now Public Law 107–107. That is to—the VFW would like to have you consider the equity of having those military retirees who are 70 years old or over and who have paid into SBP for 30 or more years to be considered fully paid up in fiscal year 2003, rather than in fiscal year 2008 as your last—as the current Defense Authorization Act has.

    Our rationale to ask for this change is that those older veterans will have paid in more than 30 consecutive years if you run it out to fiscal year 2008, as you already know; and the older veterans paid in at a higher rate of premium than those retirees who have elected SBP after 1985.

    The other portion of the SBP thing is to address for the first time the offset at age 62 wherein the survivor, the person who will get the SBP annuity once he or she reaches age 62, Mr. Chairman, will only receive a maximum of 35 percent of the annuity that the sponsor paid into.
    The VFW would like to have you consider raising the floor from 35 percent, which is current law, to 45 percent in fiscal year 2003, and in fiscal year 2004, bring it up to the 55 percent annuity payment.

    The last point—and I am sorry that Mrs. Davis from California is not here—it is the basic allowance for housing. She addressed that to Dr. Chu. VFW realizes that the lower grade enlisted—and for the sake of this discussion, E7s and lower—who must live off base or off post usually live at a greater distance from the base or post, the military working establishment, only because the further away one goes for housing, the cheaper it becomes. So the lower rank enlisted people ultimately pay more money in the way of transportation costs coming home from work.
 Page 97       PREV PAGE       TOP OF DOC

    Our recommendation for your consideration is to this year allow E7s and below who are drawing Basic Allowance for Quarters (BAQ) to receive an 11 percent catchup, pay them an 11 percent gain on the BAQ. The figure I picked up out of the current fiscal year Defense Authorization Act, you wanted to increase or improve the BAQ for all people in two steps, but in fiscal year 2008, as I recall, everyone would have this catchup.

    This concludes what we think is the most important issues for your consideration. Thank you, Mr. Chairman.

    [The prepared statement of Mr. Manhan can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you. And as always, I appreciate your being here. Mr. Spiegel, welcome.

    Mr. SPIEGEL. Mr. Chairman, thank you very much. It is a pleasure for me to be here on behalf of the Reserve Officers Association (ROA), both in ROA's capacity as an independent military association and also as a member of The Military Coalition.

    I would like to just highlight a few points that are made in our written testimony and then also track with some of the discussion that we had earlier, and that is that we submit that the Congress needs to act now to encourage and incentivize Reservists and their employers to maintain their role in the total force policy, and there is an important tax bill currently pending before the House and the Senate that we submit would in fact provide some relief and some incentive to employers.
 Page 98       PREV PAGE       TOP OF DOC

    We understand that this Committee does not—this Subcommittee and the Armed Services Committee do not have jurisdiction over tax bills. However, we would encourage each member of the Committee to take a look at H.R. 394. It is Mr. Nethercutt's bill. It provides a tax credit to employers that the employer could take advantage of when one of their employees is mobilized. It is targeted toward small business. The employer cannot claim more than the total of a $7500 tax credit per year.

    To do that, the employer would have to have four employees mobilized, and according to the Joint Committee on Taxation, the annual cost to the government for providing that to employers is $7 million a year.

    There are approximately 100 co-sponsors in the House. The Senate version of the bill, S. 540, was introduced by Senator DeWine. It has 60 co-sponsors. The Finance Committee is ready to report it out. Unfortunately, revenue bills have to originate in this chamber, and they said they need to—they may report it out of Committee and let it languish till Ways and Means does something. But, Mr. Chairman, I would urge you to dialog with Mr. Thomas, if that is appropriate.

    Mr. MCHUGH. If that is possible. Don't tell him I said that.

    Mr. SPIEGEL. There are members of Ways and Means who are co-sponsors of that bill. Mr. Rangel is a co-sponsor, and given the small cost and the fact that it is a legislative priority for the U.S. Chamber of Commerce, and of all the employers are doing, we would like to see if that can be moved this session.
 Page 99       PREV PAGE       TOP OF DOC

    Second, we want to track with what was discussed about providing some financial incentives to Reservists who suffer income loss. We recognize that for those individuals affected, it can be devastating, and we would urge the Committee to entertain a whole range of options in a hearing or—and/or a dialog with the Pentagon and the associations, including a resurrection of some form of mobilization insurance, perhaps a public-private partnership between the large insurance carriers and the Pentagon or perhaps some sort of self-insurance program where these reservists who would be most dramatically affected by mobilization could perhaps set up their own savings accounts with the appropriate incentives to self-insure themselves against the financial loss.

    With that, I will be happy to answer any questions you may have.

    [The prepared statement of Mr. Spiegel can be found in the Appedix on page ?.]

    Mr. MCHUGH. I thank you, General Alexander, for your forbearance. Rather than try to rush you through your testimony, we do have two final votes for the day we need to go to. Maybe I can save us some time in just a few minutes, if I could make a couple of comments on the testimony referred so far.

    Mr. Duggan, I was delighted to hear your comments about end strength, and I know you all heard our discussions about that. I think this is one of the most serious problems that we face on both the active Guard and Reserve side, and I continue to be very alarmed at some of the rumors that we hear coming out of the Office of the Secretary of Defense (OSD), with respect to not just holding end strength but, in fact, decreasing current end strength, and I think that would be absolutely disastrous.
 Page 100       PREV PAGE       TOP OF DOC

    Your comments about the pay gap, obviously we are very concerned about that as well, and we have tried to, and will continue to do so, some better things there as we go through with this budget that adds on to the previous two that have been pretty significant, and clearly the challenge remains.

    Concurrent receipt that the first two speakers mentioned, indeed the Budget Committee did come out with this. Our Chairman, Bob Stump, along with many of the Members here and Mrs. Davis and so many others in the views and estimates letter asked for full funding of that. Our intent was not really to put the onus on the President but, rather, to finally make a statement that we hoped would force some kind of action. We had hoped that perhaps the President's submission would include that, but obviously the realities of September 11th constructed different priorities. I do think it is a positive step that at least there is something there, $513 million this year, building over to $5.8 billion over five for, as you said, Mr. Manhan, over 60 percent.

    Let me make a commitment to you, and I am saying this not for my own edification, but for the staff here, to make sure we do this. Obviously we would want very much to work with any or all of your organizations to see what other kinds of options may be available as we go through the House markup to perhaps make that more fairly, more effectively distributed. And your comments in that regard would be not just appropriate but very, very welcome.

    Mr. Spiegel, I have asked my staff to make a note to have me have that dialog with Congressman Thomas, who is a good friend, and I joke, but he has an enormous responsibility. But I agree with you, the cost distributions of that and the effects of it, particularly given this new era of Reserve deployment, and I hope you heard me comment on that earlier. We are concerned about the Reservists, but we better be concerned about the employers as well, because ultimately they are an important part of that equation as well. So we will try and follow up, and I hope that saves us a few minutes when I come back. I apologize to you all, but I hope you can stay with us, and we will get back as soon as we can. Thank you.
 Page 101       PREV PAGE       TOP OF DOC


    Mr. MCHUGH. Thank you for your patience. By the way, with respect—I just had this checked because I was pretty sure I was, but I am a co-sponsor of H.R. 394 as well. So I guess I am heading in the right direction.

    General Alexander, thank you, sir.

    Mr. ALEXANDER. Thank you, sir. Mr. Chairman, Congressman Snyder, Congressman Davis, on behalf of the 40,000 men and women of the National Guard Association of the United States (NGAUS), thank you for providing the opportunity to express our views concerning issues affecting the National Guard. My testimony today represents some of the most important priorities identified by our membership, to include our continuing challenge with full-time manning, use of the National Guard in support of homeland security missions, retention and quality-of-life issues.

    For the sake of brevity, I will speak orally to the full-time manning and the National Guard's role in homeland security. Continuing to remain at the top of the list for the NGAUS, that is the National Guard Association of United States, is full-time manning for the National Guard—Army National Guard. For years the Army National Guard operated with an unacceptable percentage of its full-time manning force. Significant increases in military technicians and AGRs provided by the Congress are leveling off what was a downward spiral for the Army National Guard and its overall readiness, and I thank you, Mr. Chairman, and this Committee for reversing this downward spiral.
 Page 102       PREV PAGE       TOP OF DOC

    The Army has validated a plan to bring the National Guard full-time personnel to, quote, an acceptable level of risk of 71 percent of its required force by the year 2011. This requirement assessed against deployment criteria does not meet the operational needs of the National Guard. The National Guard greatly acknowledges the actions taken by the Committee to correct the full-time manning challenges for the Guard.

    However, there is still a critical shortfall that needs to be addressed. We ask that this Subcommittee and the Congress as a whole to support a level of funding consistent with or greater than fiscal year 2002 funding for full-time manning for the Army National Guard.

    Another developing issue that will have large impact on unit readiness is how the National Guard is called into the service of the United States—will call into service the United States for homeland security. Critical to this is the role of the Governors who best know what resources are available within their respective states to address homeland security.

    The National Guard, with its unique constituted, mandated dual mission, provides a flexible link between the states and the Federal Government. The decision to Federalize the National Guard to augment non-Department of Defense agencies under Title 10 sets an unwise and unacceptable precedent for similar future service. Federalizing the National Guard under Title 10 prevents continued individual and unit training for all Federalized Army National Guard soldiers. Our borders can be best secured on an interim basis by deploying properly trained and armed Title 32 National Guard forces in the service of the United States but under the command and control of the Governor to assist lead federal agencies.

 Page 103       PREV PAGE       TOP OF DOC
    Mr. Chairman, again, for the preservation of team and the ability to answer questions for the Subcommittee, I have submitted the rest of my testimony for the written record. That written testimony addresses the activation—the ability to activate AGRs for operational missions instead of active duty. It addresses retention incentives for civil support teams, in that these teams are experiencing turnover because of their high skills having demand by private industry, and extension of TRICARE to members of the National Guard. It also speaks to the direct commissioning of warrant officers in the Army National Guard; aviation career incentive pay for our aviators, a matter of equity; the Soldiers and Sailors Relief Act in Title 32 which we heard from previous witnesses; and finally, the National Guard Youth Challenge Program.

    This completes my oral testimony. I thank you again for the opportunity to address this Committee.

    [The prepared statement of General Alexander can be found in the Appendix on page ?.]

Mr. MCHUGH. Thank you, General. Appreciate your being here. Mr. Cline, welcome.

    Mr. CLINE. Thank you, Mr. Chairman. I would like to thank you and members of the Committee for the opportunity to bring to you some of the issues that are important to the enlisted men and women of the Army and the Air National Guard. Many of these personnel issues not only affect the enlisted members of the Army and Air National Guard, but those of our entire Reserve component.

    Mr. Chairman, we fully support the testimony that you will hear from other member organizations of The Military Coalition in which the Enlisted Association of the National Guard of the United States (EANGUS), is a proud member of and also that of our sister organization, the National Guard Association of the United States on full-time manning and Homeland Security.
 Page 104       PREV PAGE       TOP OF DOC

    Mr. Chairman, the first issue that we would like to talk about is an immediate annuity retirement system for members of the National Guard and Reserve components with 20 years of service. This will provide a significant recruiting and retention incentive. Currently when a National Guard member or Reservist retires, he or she must wait until age 60 before they can draw the retired pay. We applaud Congressman Saxton's introduction of H.R. 3831 to reduce the retirement age from 60 to 55. We believe that this is a big step in bringing about equity in the total force along with the increase in retirement points that this Committee has already approved.

    The retirement program for the Reserve components has basically gone unchanged since 1948. However, we believe it is time to eliminate the current ceiling on the point system and allow members to receive credit for all points earned.

    Our second issue, Mr. Chairman, is the issue concerning the Montgomery G.I. Bill Chapter 1606 benefits. As you are well aware of, when an individual joins the Guard or Reserve, they have ten years from the date once they complete their initial active duty training to use the Montgomery G.I. Bill benefits. Eligibility for these benefits is automatic upon incurring a six-year Reserve service obligation and completing initial active duty training. Extending the Montgomery G.I. Bill will expand its value, not only a recruiting incentive, but also as a retention incentive.

    Congressman Buyer and Congressman Taylor introduced H.R. 1962 that would have extended the Montgomery G.I. benefits to members of the National Guard and Reserve for as long as they remain members of the Selected Reserve.

 Page 105       PREV PAGE       TOP OF DOC
    The Office of Management and Budget (OMB), has costed this trigger at $5 million annually. Last year OSD has acknowledged that extending the benefit to 14 years would have a great effect on retention within the Guard and Reserve at an estimated cost of $1 million annually. By extending the Montgomery G.I. Bill benefits, retention would improve.

    As you heard earlier today, the Guard has an attrition rate of approximately 17 percent a year. That represents over 59,000 people a year that leave the Army National Guard at a cost of almost $80,000 per individual to train these individuals. We believe that the taxpayer deserves better, and by providing incentives to those people over 8 years of service, we could help retain some of these people in the National Guard in the Selected Reserve.

    Mr. Chairman, while it is not the jurisdiction of this Committee, we are trying to raise the awareness among all Congress and focus their attention to the issue of the Soldiers and Sailors Civil Relief Act. Members of the Army and Air National Guard have been contributing to the defense of the homeland since the events of September 11th unfolded. National Guard members have been called to active duty, are deployed under two federal titles, as well as state active duty, and I applaud the efforts of Lieutenant General Schultz in reminding the Committee that Title 32 service is federal service.

    The difference between the two federal titles and state active duty poses a problem for financial protection that these members of the National Guard who are deployed receive. If called to active duty under Federal Title 10, Guard members receive all federal pay and benefits and job protection under SSCRA, the Soldiers and Sailors Civil Relief Act. The members of the National Guard deployed under federal Title 32 receive federal benefits such as pay. However, they receive no protection under the Soldiers and Sailors Civil Relief Act. Lack of SSCRA protection has already and will continue to cause financial hardship for many of our citizen soldiers and their families unless this problem is addressed and remedied.
 Page 106       PREV PAGE       TOP OF DOC

    The Enlisted Association of the National Guard of the United States is seeking the support of Congress to amend the Soldiers and Sailors Civil Relief Act of 1940 to include members of the National Guard on active duty under Title 32 at the request of the President of the United States.

    Mr. Chairman, EANGUS believes that it is not only time to invest in the nation's military defense but also in the people who choose to serve their country. We must make sure that the men and women the American people will come to depend on even more in the near future for their protection and security must themselves feel secure in the knowledge that their families will not become homeless because they couldn't pay the mortgage or rent, or that the financial ruin will follow them because of their unselfish and patriotic decision to serve their country and their people.

    Mr. Chairman, that concludes my testimony. I will be happy to answer any questions.

    [The prepared statement of Mr. Cline can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, sir. Mr. Barnes.

    Mr. BARNES. Thank you, Mr. Chairman, Dr. Snyder, Mrs. Davis. We appreciate the opportunity to present The Military Coalition's views on key personnel and compensation issues. I also extend The Coalition's gratitude for the significant pay in allowance enhancements enacted last year. These improvements convey a powerful positive message to all uniformed services personnel.
 Page 107       PREV PAGE       TOP OF DOC

    The Military Coalition again recommends increasing service end strengths. Prior to the events of last September, the Secretary of Defense acknowledged at a hearing before the House that we have a 30 percent smaller force doing 165 percent more missions.

    The services need adequate personnel to sustain the war on terrorism and current operational commitments. The Coalition urges the Subcommittee to consider all possible manpower options to ease the demanding operational stresses on active, Reserve and National Guard personnel.

    With regard to pay, The Coalition urges the restoration of full pay comparability on the quickest possible schedule and to change the permanent law to eliminate annual pay caps. All service members need and deserve annual raises, at least equal to the private sector wage growth. The Coalition strongly supports the targeted plan being developed by DOD and additional funding earmarked for these increases. The Coalition recommends that the Department of Defense identify the ultimate objective pay table toward which targeted raises are moving.

    The Coalition urges the Subcommittee to front-load as much of the remaining Basic Allowance for Housing (BAH), upgrade as possible in 2003 and to direct adjustments to grade-based housing standards.

    Finally, I would draw your attention to two additional issues addressed in the Fleet Reserve Association statement. The first is extending the dislocation allowance to members retiring or transferring to inactive duty to assist with the expenses associated with their final change of station move.
 Page 108       PREV PAGE       TOP OF DOC

    And second is a proposal to allow retention of the full final month's retired pay by surviving spouses of military retirees at the time of death. Currently the Defense Finance and Accounting Service (DFAS), terminates retired pay upon notice of death and recoups the full month's retired pay and then later reimburses the surviving spouse for each day the retiree was alive in the month of his or her death. This would permit the grieving spouse to have immediate access to some money to assist during the grieving period.

    Again, thank you for this opportunity to present our views and we stand by to answer any questions.

    [The prepared statement of Mr. Barnes can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you, sir. Ms. Raezer.

    Ms. RAEZER. Thank you, Mr. Chairman, and thank you, Dr. Snyder and Mrs. Davis, for staying to the bitter end. We appreciate your interest in these issues.

    The National Military Family Association (NMFA), thanks you, Mr. Chairman, for this opportunity to testify on behalf of military families. As a member of The Military Coalition, we endorse the statements submitted for the record by The Coalition, but have also submitted our own statement with a little more detail on several issues affecting military families.

 Page 109       PREV PAGE       TOP OF DOC
    Because of the time available, I will limit my oral statement to just two of those issues: Permanent change of station funding and improvements and family readiness.

    NMFA thanks you, Mr. Chairman, and this Subcommittee for your leadership in improving benefits and compensation to support a strong and ready force. We especially thank you for your work last year in securing authorization for much needed improvements to the reimbursements service members receive when they are ordered to make a permanent change of station, or PCS, move.

    Unfortunately, however, just as the word was getting out about these improved reimbursements, some military families began hearing that because of the PCS funding cuts approved by Congress in the Defense Appropriations Act, their service might not be able to move them in summer.

    NMFA understands the concerns of Members of Congress who want the services to reduce the number of PCS moves. We unpacked enough boxes, enrolled our kids in enough new schools, put our careers on hold enough to know that families shouldn't move just for the sake of moving. We believe, however, that an appropriate baseline must be established for all types of military moves before cuts are made.

    NMFA also urges this Subcommittee to continue seeking improvements in the move process itself. We hope that the reports due you from DOD on the recently terminated pilot programs will provide recommendations that will lead to improvements for all moves and not just another round of move pilots. We encourage the Department as it develops its social compact and commitment with service members and families to recognize that just as the service member and family commit to move when ordered, the government must commit to making that move process as smooth as possible.
 Page 110       PREV PAGE       TOP OF DOC

    As our military juggles existing deployments and missions with the new war on terrorism and homeland defense, the military family and community feel the strain. NMFA believes enhancers to family readiness must be included in resource requirements.

    NMFA also urges Congress to ensure that families of all members of the total force have access to the training, information and support needed to ensure family readiness while the service member is performing the mission. You talked today, Mr. Chairman, of the seamlessness in the operating force between Guard, Reserve and active duty, and we have heard many commanders say you put a group of deployed service members in a room, and you can't tell who is the Guard, who is the Reserve, who is the active duty. Unfortunately, if you put a similar group of active Guard and Reserve family members in the same room, you could tell the difference, because their family support issues are radically different, and the level of support they get is radically different. The total force concept has not yet reached the family support arena. Our Guard and Reserve families tell us they need better information about accessing benefits such as health care. They need assistance often in dealing with changed financial circumstances. They need access to child care.

    It is a great concern of NMFA that as we talk about how we sustain the force, we really need to worry about how we sustain the volunteers that support the family readiness. You heard from the last panel about the wonderful family programs, and I think almost every witness said those programs were being staffed primarily by volunteers. We worry about burnout among our volunteers and who take care of our families once the volunteers have burned out.

 Page 111       PREV PAGE       TOP OF DOC
    Programs to ensure the readiness of those families will have to be structured differently than for full-time active duty families living on military installations, and remember that less than half of our active duty families live on military installations where there are family support centers, chaplains and other support mechanisms readily available. Because they don't have the manpower to provide family support everywhere out of their own staffing and continue fighting a war, DOD and the services must involve local civilian community resources and make better use of technology to provide information and referrals, as well as the actual services needed by isolated families.

    We need to change the way we do business and look at programs already in place in terms of getting—accessing more health care providers into TRICARE. We need to beef up our education of providers. Right now the only charge to educate providers about TRICARE is to the managed care contractors who are building networks. They are not going out and isolating areas and trying to get TRICARE-authorized providers. Basically the guidance is to the beneficiary, see if you can persuade your doctor to sign up to be an authorized provider. So we need to get the word out to all providers about improvements that have been made in TRICARE, to get more of them as authorized providers who will take TRICARE standard patients.

    Resources spent to support families, full-time staffing for Guard and Reserve family support, resources available at military installations, outreach to communities will pay off in service members' readiness, because they will be able to better focus on the mission if they know their families are being taken care of.

    Mr. Chairman, we thank you again for your advocacy for pay and benefit improvements necessary to retain the quality force that now protects our homeland and wages war against terror. We ask you to remember that in time of war, mission readiness is tied to service member readiness, and service member readiness is tied to family readiness. Military members and their families look to you for continued support for the compensation and benefit packages that enhance their readiness and their quality-of-life. Please don't let them down. Thank you.
 Page 112       PREV PAGE       TOP OF DOC

    [The prepared statement of Ms. Raezer can be found in the Appendix on page ?.]

    Mr. MCHUGH. Thank you. Mr. Jordan.

    Mr. JORDAN. Yes. Mr. Chairman and other Committee members, I will be brief, and I will address retiree and survivor issues. I would like to echo, but I won't belabor the issue since it has been covered, but winning the authority and the funding for the concurrent receipt of retired pay and veterans disability compensation this year is our top priority, and we believe, like so many others, that retired pay is earned for a career in uniform serving this country, often performed under dangerous conditions, as evidenced today, and disability compensation from the Department of Veterans Affairs is deserved for the pain and suffering and potential loss of future earnings caused by service-connected disability.

    As was mentioned before, we are not alone in that belief. Eighty-six percent of the House and 78 percent of the Senate have co-sponsored corrective legislation, and I know that the markup of the House budget resolution was today, and there is money there, and what we would urge is—sincerely request that you translate that significant co-sponsorship into concurrent receipt legislation this year.

    Let me address another issue that I think is an inequity and explain why, and it deals with the military uniform services survivor benefit plan (SBP), and we would recommend that you support H.R. 548 by Representative Jeff Miller who is new and took it over for Representative Joe Scarborough. H.R. 548 would raise the age 62—there is a reduction at age 62 for the recipients of the survivor benefit plan from 55 percent of covered retired pay to 35 percent, and H.R. 548 would correct that over time and eventually eliminate that offset. Why is that important? It is important, because, No. 1, it would restore the intended cost share of the government for that program, the subsidy, to 40 percent. DOD actuaries now report that that is below 27 percent. So retiree premiums are paying for the bulk of the military survivor benefit program.
 Page 113       PREV PAGE       TOP OF DOC

    And second, it would bring the military SBP up to par with the survivor benefit plan that exists for federal civilians who experience—survivors experience no offset at age 62. So we would ask that you consider H.R. 548.

    Last, with regard to the survivor benefit plan that was mentioned before, there is a bill—I think it is H.R. 609—by Representative Saxton that accelerates the 30-year paid-up SBP coverage that takes effect in 2008 under current law. The delayed effective date, 2008, severely disadvantages older participants who have paid substantially higher premiums from the inception of SBP in 1972 until the premium formula was dropped in 1991. In many of these, older retirees will complete 30 years of payments well before 2008 and unfortunately won't survive until then, and they truly deserve some earlier relief.

    And I would like to finish with the sincere appreciation to this Subcommittee for last year's authority to extend SBP coverage to survivors of all military personnel who die on active duty. That was, in my opinion, a huge piece of legislation, and we would hope that more can be done with the survivor benefit program. And that concludes my verbal statement. Thank you.

    [The prepared statement of Mr. Jordan can be found in the found in the Appendix on page ?.]

    Mr. MCHUGH. Well, I thank you all very much, and thank you again for your patience.

 Page 114       PREV PAGE       TOP OF DOC
    Let me ask a question generically—well, not totally generically, but a couple of you mentioned the targeted pay portion of this year's budget submission. There is about $300 million that the President has indicated will be again spent on the targeted portion of the overall pay raise, mid-grades and NCOs, by and large. That is a follow-on to what we were doing last year. Obviously our intent is to try to make up some discrepancies that have been built in over a period of time in the pay tables and also to retain critical areas of folks when they are starting to make real career choices, and this question would probably apply most directly to Mr. Jordan and Mr. Barnes and Ms. Raezer.

    But I wonder if you would care to comment on that targeted pay raise. Specifically do you think that is sufficient to achieve the results, or do you think it is just an incremental step to address that deeper-seated problem in terms of those particular pay grades? Because this will be part of the debate, how are we going to spend the overall pay raise, is really the reason I am—.

    Mr. BARNES. Yes, Mr. Chairman. I would say that the plan for this year appears to be appropriately targeted to the most—the grades most in need of adjustment, and it is a significant follow-on to the increases last year, and we appreciate the strong support of the Subcommittee on that.

    The entire issue of pay comparability is one of major concern within The Coalition and the individual associations, and one of the challenges is to determine a benchmark, if you will, as to what is appropriate with regard to targeting and where we are headed with this.

    The 13.5 percent pay gap has been significantly reduced, thanks to your support, and I think at the end of 2003 here, assuming enactment of the DOD's proposal, we still have a 7-percent decrement there to close. The housing allowances are part of this. It is helping significantly, and it is also part of the total compensation package, but the targeting is important, and The Coalition is strongly supporting where DOD is headed with this.
 Page 115       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Ms. Raezer, Mr. Jordan?

    Mr. JORDAN. I would add that you would—that the targeted pay raises to the mid-grades, to the warrant officers, to the others definitely have enhanced retention from what I have observed, but I would ask the question, if I were in a position to do that, of what are you targeting against? What is the objective—and Joe mentioned it—what is the objective pay table? The ninth QRMC did a study that indicated that there was this disparity in comparability of pay raises over time with regard to the private sector. So if we say there is a seven-and-a-half percent pay raise comparability gap, to me it begs the question of, OK, what is your objective pay table? What are you managing to? And I don't know if that is a bridge too far to create, but it seems to me that we ought to work toward that.

    Mr. MCHUGH. Thank you. Ms. Raezer?

    Ms. RAEZER. When I go talk to family members, they do not ask me detailed questions about the pay table. They understand the overall—the averages on pay and are appreciative of those raises. Where family members ask the details is on the basic allowance for housing. How is it set, what is the standard that is used, what is the involvement by the commander in selecting appropriate neighborhoods used to set the BAH, and when are we going to get to that publicized zero-out-of-pocket expenses? And so family members are focused on basic allowance for housing. Over 60 percent live off base. As we go to more and more family housing privatization projects so that more folks on base also get basic allowance for housing, there is going to be more—even greater attention to that and how it is calculated for each area. They are very concerned about—last year when the utility rates spiked in a lot of places, they were very concerned that the BAH was not responsive enough to those increases. There are still just a lot of questions about that and a lot of concern about the standards used for setting that BAH.
 Page 116       PREV PAGE       TOP OF DOC

    Mr. Manhan talked about the—targeting more of that money toward some of the E7s and below. Part of the need we see isn't so much that the BAH is wrong for the standard, is that the standard is wrong for the service member. The current standard as—I had a chart in my written statement. It says that—determines that you don't get BAH for a single family home if you are enlisted until you are an E9, and some folks, when they see that chart, they get very angry, because we have got a lot of young families who are having to rent above the standard and we will never see that zero out-of-pocket goal. So I think my message in this is please do what you have to do to work to get equitable pay, but don't forget that families view the BAH as an important piece of their compensation, and they have a lot of questions about how fairly that is being distributed.

    Mr. MCHUGH. Well, you make some good points, and I have experienced that determination process up at Fort Drum, and it is very frustrating. We are trying to work through that right now. So your points are well taken. The theoretical goal of zero-out-of-pocket I think is a laudable one, and I am glad that we have so far managed to stick to the objective, but clearly there are other problems that are every bit as relevant, particularly at the lower end of the pay grades where it is hardest felt and under any circumstance. So I appreciate all of your comments.

    We talked a bit about—Mr. Spiegel had mentioned H.R. 394, which I guess through my co-sponsorship is a statement as to—my agreement as to its direction, but I don't suggest it is the only way we can address the issue. It is really an employer side of the equation. I was curious if any of you had any thoughts as to other ways in which we might address the question of pay comparability for Reservists, income protection particularly, in a way that might be effective? I am sure you heard our first panel, particularly Secretary Chu, illustrate some of the concerns he has, for example, on the initiative on the federal employee side to just pay the delta. And what does that do to the person next to you in the foxhole when you are making $160,000 bucks? Although there are not a lot of federal employees that do that, that I am aware of. But whatever the figure is you are making that much more.
 Page 117       PREV PAGE       TOP OF DOC

    So any other suggestions as to how that issue could be tackled from the Guard and Reserve side?

    Mr. SPIEGEL. Sir, let me make one point, and that is that I think as the issues approach, there is going to have to be a governmental role. When the mobilization insurance program was terminated, a number of us went out and tried to work with the private insurance market to see if Lloyds or AIG or Zurich would underwrite it, and their concerns were that the potential risk and the number of people who might be called up is indeterminate. You can't do an underwriting study the same way you do with automobile insurance where you can predict how many accidents you are going to have.

    The other concern was that the only people who would buy the insurance from the private sector would be those who would be likely to be claimants, those who would suffer an economic loss and those who are in a position where they are likely to be mobilized. So you wouldn't have a base of premium payers to enable it to be a profitable product.

    So I think given that, there is going to have to be some governmental involvement, and that is why I think following on to what General McCarthy suggested, perhaps a study of what went wrong with the last program—and I think his point is well taken. In part, it was the Administration of it, not the program itself, and a public-private partnership to try to get our arms around it. We at ROA are sensitive to the argument that you could have two people in the military performing the same job receiving different pay from the government if you did the proposal in the bill that was referenced, but at the same time, given the amount of use of the Reserves and the financial sacrifice that a lot of us are making, there has got to be some recognition of the unique aspects of service in the Guard and Reserve.
 Page 118       PREV PAGE       TOP OF DOC

    And my last point is that having been in the Reserves and still serving in the Reserves, if you have got two enlisted personnel in a foxhole and one is making more money than the other one, rather than be angry, I think the one who is making less is going to try to organize a poker game and solve the problem that way.

    Mr. MCHUGH. OK. Well, that is an interesting—thank you. Any other—.

    Mr. CLINE. Yes, Mr. Chairman. We were very instrumental in playing a role in getting that mobilization insurance, and I think General McCarthy hit right on the head is you have to look at what went wrong. Being an enlisted guy, we have a tendency to say what we have to say, and you don't institute a program right in the middle of a mobilization. You don't tell somebody 1 day you are going to be mobilized and the next day say, ''Oh, by the way, you can buy $5000 of mobilization insurance for $60 a month.'' I mean, it doesn't take a rocket scientist to say, ''Yes, I am going to sign for this program.'' And I think Mr. Spiegel has hit right on the head, there has to be government participation. We have to look at the idea of really how much people really need and the worth of it.

    We have a lot of employers under Operation Desert Shield and Desert Storm that suffered drastically. Mr. Buyer, one of your colleagues, an attorney, you know, when he went off to war, his law business went away. And many dentists and doctors have the same problem. They have to close up their offices, and a lot of people end up losing their jobs. So is there a need for it? Absolutely. Especially on the enlisted side of the house where people don't make a lot of money, and those who do have good paying jobs or businesses get severely hurt.
 Page 119       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Thank you all very much. Dr. Snyder.

    Dr. SNYDER. Mr. Chairman, are we going to send for pizza or something? I mean, you seem to have great staying power here. You know, you are talking about doctor and dentist. I am a family doctor and I remember in 1991 I was working in a clinic, and the fellow—the physician down the street in civil practice was mobilized. He didn't go overseas, but he went to Texas because the medical units went overseas from Texas and he called me. He was almost desperate. He wanted to know if I would cover his practice for him. Well, I didn't—I did end up seeing a lot of his patients because he left town and they started to come up the street, and I am not sure—I don't know if he actually did get back in practice. I think he started working for someone else when he came back, because he was gone too long for patients to stick around waiting for the war to be over. So it is a problem.

    I won't take long, Mr. Chairman. The pizza wouldn't get here before I was finished.

    Ms. Raezer, the—you had a lot of good things as—well, you all had a lot of good things to say, but I was struck by—you mentioned focusing on the family units both in your oral and written statement. Earlier today when Dr. Chu was here, in his written statement, he refers to in terms of child care slots, the need for 45,000 more child care slots in the military, which seems like a tremendous number of slots. Do you agree with that number? Do you have any reason to—have you formed your own estimate?

    Ms. RAEZER. I am trying to pin down whether that number is just active duty or whether it actually includes mobilized Guard and Reserve members. The Department is only providing about seven or eight percent of child care off the installation. Our Guard and Reserve families are off the installation. We are very concerned about their—both their access to care and the cost of care for those families. If military accesses military child care on the installation, that care is subsidized by the government. If they have to find care in the civilian community, they are paying the whole way for that child care, and this is an issue with Guard and Reserve families. So I would probably say that number is higher. I think that would be a wonderful question to ask DOD to—in the fiscal year 2000 authorization there was a provision allowing DOD to go off base to try to get more child care, work with community agencies to open up access to child care. DOD is supposed to do a report to you folks sometime this year on that, and I would hope that they will be addressing that issue in the report.
 Page 120       PREV PAGE       TOP OF DOC

    Dr. SNYDER. I know the Little Rock Air Force Base in Arkansas has an excellent child care center. The personnel love it. We use it as a model, as you know, in military child care. Unfortunately, I think that when you see this 45,000—you know, that means—I don't know how many kids you can have in a child care center, but if 45,000 is right, you know, if you had 45 in a child care center, which seems like a lot of kids to me, that means you would need a thousand more child care centers, if I have calculated that right.

    Also in your written statement you make a comment about education and the support, not only for a military family education, but also for society as a whole, and to me it is an important issue, because it gets into this issue, too, of where do we find money and how do we spend money. And again, as a family doctor, the big issue—or a big issue for me outside of this Committee is the fact that Medicare doesn't have a prescription drug benefit. So back home in Arkansas, we think it is over a third of our seniors have no prescription drug—outpatient prescription drug benefit, so they are going to the pharmacy and paying full cost, and so here in this town things get balanced. We put this much money into defense. That means it is coming from something else.

    But the other way to phrase that, it means, in my view, that one-third of the military families who come out of Arkansas have parents or grandparents who have someone with no prescription drug benefit for Medicare, and we hear about those cases, too. You know, when they are overseas and they find out grandma is not doing well. Why is she not doing well? She hasn't had her damn medicine for—I mean, these issues interrelate. I thought your statement did a good job of talking about it.

 Page 121       PREV PAGE       TOP OF DOC
    Mr. Duggan, I think in your—several of you made comments about a Montgomery G.I. Bill. I think in your statement you talked about while giving the Veterans' Committee praise and the Congress praise for the expanded benefit last year, you recognize the fact that a whole lot more needed to be done or more should be done. I was one of those that, while I supported the bill, was very disappointed that we didn't do more in line with what the Principi Commission wanted prior to when Mr. Principi became Secretary of Veterans Affairs, because when you go back and look at the original G.I. Bill, it is almost breathtaking in which the guys got out of service and they could go to any college and the military would pay for them to go to that college, and if they were good enough to get into a Harvard or a Yale—and now what we have done is we—you know, I went to a State law school and a State medical school. I don't think I am the worse for it, but that was my choice. But now because of our level of payment, we really do restrict the ability of a lot of kids without their own personal resources to make the choices. And, I mean, I talked to Secretary Principi about it and we both think it would be a dramatic improvement in recruitment in those kinds of issues if that is what the G.I. Bill meant, that you get out, you are good enough to get into Harvard, by gosh, that is what is going to be paid for. But it is obviously very, very expensive.

    I am ready for pizza, Mr. Chairman. Thank you all.

    Mr. MCHUGH. Thank you. Mrs. Davis.

    Mrs. DAVIS OF VIRGINIA. I won't take too long, Mr. Chairman, but I will say the other two panels were good but this is the one I would really like to sit and talk to for a long time, because they are where the rubber meets the road for guys that are out there.
 Page 122       PREV PAGE       TOP OF DOC

    In concurrent receipt, I heard from so many of you and I will tell you that since I have been in Congress, last year and a couple months, that is the one issue I have heard the most from from my entire district, and I don't just hear from them once, and they have got my full support.

    Ms. Raezer, you brought up a couple points that I guess I am—what were you saying about we won't pay for the military moves this summer?

    Ms. RAEZER. There was a cut in the appropriation for PCS funding. The Navy has already put out a press release saying they are $30 million short, and therefore some moves will have to be deferred until the start of the fiscal year in October. Families are being told this already.

    Mrs. DAVIS OF VIRGINIA. So the PCS is delayed?

    Ms. RAEZER. Is delayed.

    Mrs. DAVIS OF VIRGINIA. What happens to those—I used to be a real estate broker in my other life. What happens to those who have already bought a home?

    Ms. RAEZER. We would hope that they haven't bought a home. These are folks who are coming up for orders now for summer moves. So they haven't—they were told, you are moving this summer. We need you to move this summer. Now they are being told there is no money.
 Page 123       PREV PAGE       TOP OF DOC

    Mrs. DAVIS OF VIRGINIA. So hopefully they don't have to incur a financial loss? That is where I am going.

    Ms. RAEZER. I am hoping they haven't incurred financial loss. The first thing that most of these say to me is, ''School is already started in October. My kids are going to have to change schools in the middle of the school year.'' That is the big concern, and this is a real hard one. I mean, we saw this right away when we saw the appropriation, that this might be a problem and didn't expect to hear about it end of February, beginning of March, but we have.

    Mrs. DAVIS OF VIRGINIA. The other thing, you talked about the family support for the Reservists that are mobilized. When I asked that question with the other panel, they said, you know, they have these wonderful books this thick that—you know, and you can even go on the web. So am I hearing you say that it is not working?

    Ms. RAEZER. There is information there. We have our folks—and we have volunteers in our office. A lot of us depend on volunteers, and so we are conscious of concerns about volunteers. We love them, but we know we can't push them too hard, or they—they just have too many other things going on with families. But there is a lot of information there, but as Mr. Duehring, said to wade through that tool kit to find the information you need, you can find it, but you have to be patient. We have had trouble even opening the thing up on a lot of our computers. It causes our computers to crash.

    Mrs. DAVIS OF VIRGINIA. So there is an inequity in the families of the Reservists and Guardsmen are not—they don't have the same services available—they do. They just don't—.
 Page 124       PREV PAGE       TOP OF DOC

    Ms. RAEZER. The Guard have state family readiness coordinators. They have—there are people tasked with the job of family readiness. The problem is those offices are usually one deep in terms of a paid staff. Everything else falls on volunteers. They have to deal with geographically disbursed populations. You may have somebody in the Virginia Guard whose family lives in Texas, and so that—how can that Virginia Guard family readiness coordinator, who is coordinating with the unit, get the information to the family in Texas, get the correct information on health care, for example, because we are talking different TRICARE regions? The answers on the web should never be the first answer to a family member's question about support or benefits, and, yes, there is a lot of wonderful information out there. We use the web. We tell people to use it as a resource, but it shouldn't be the only answer and we shouldn't be saying we have got wonderful programs that are staffed by volunteers and those wonderful—because those wonderful volunteers may need some help being sustained through a long—a long period of deployment.

    Mrs. DAVIS OF VIRGINIA. Mr. Chairman, I won't drag it out any longer, but I do hope we can come up with some solution to the concurrent receipt, to the SBP, and the one that really concerns me the most at this point, although concurrent receipt does—don't think it doesn't—is our Reservists and Guardsmen who could possibly lose their home or, like Dr. Snyder said, lose their practice, have to start all over again. I mean, that is—know it is something we have to study and look at, but it is a real concern, because I believe this war is going to go on for a long time. Thank you.

    Mr. MCHUGH. I agree. Thank you. Just so the record will show—and I believe Ms. Raezer said it in her statement, but in case anybody missed it—the cut in the PCS did not come through the authorization.
 Page 125       PREV PAGE       TOP OF DOC

    Ms. RAEZER. No, no.

    Mr. MCHUGH. The appropriators—and the intent of those who I understand led the charge, as you also noted, was an understandable one.

    Ms. RAEZER. Yes.

    Mr. MCHUGH. Dealing with the unforeseen consequences of good intentions, I guess. But that obviously is causing some deep concern.

    I just want to ask one question of clarification, and I have got so many notes here that I frankly don't—I believe it was—I believe it was—I am not sure who it was. I think it was General Alexander spoke about the Montgomery G.I. Bill.

    General ALEXANDER. No, sir.

    Mr. MCHUGH. It was you?

    Mr. CLINE. Yes, sir.

    Mr. MCHUGH. I am very sorry. It was Mr. Cline. You mentioned two different—I think I heard two different responses. One was the proposal to increase the availability of the benefits from 6 to 14 years.

 Page 126       PREV PAGE       TOP OF DOC
    Mr. CLINE. No, sir. Currently when a Guard person joins, they have 10 years of eligibility from the date they return from their initial active duty training. So the clock starts running. Should that individual get out at the end of that 6-year term, their eligibility is lost. Should they stay in through the tenth year, they have till then. After the tenth year of service, they have no eligibility for the Montgomery G.I. Bill.

    Mr. MCHUGH. I see.

    Mr. CLINE. There is currently an initiative by Congressman Buyer and Congressman Taylor, a bipartisan support, to extend that privilege as long as a member remains in the Selected Reserve. In other words, they are drilling Guardsmen, and if they haven't used their benefits, that benefit would be available. OMB has scored it at $5 million a year, and as General Schultz had mentioned, the attrition rate in the Army National Guard is about 17 percent which relates to about 59,000 people a year go out of the Guard. So we feel that—we did our own study a couple of years ago to find out that between the 8th and 15th year of service, the Army and Air National Guard lost over 57,000 of those people in that timeframe. And, you know, we think this is a way to save some of those people, because we spent almost $80,000 training the soldier, and I have no idea what it costs to train an airman.

    Mr. MCHUGH. But DOD is expected to put out an initiative extending that to 14 years?

    Mr. CLINE. They did last year, sir. They submitted to the Congress an initiative to extend it to 14 years, and this came over when Mr. Cragin was the Assistant Secretary of Defense for Reserve Affairs.
 Page 127       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. That is where I got confused.

    Mr. CLINE. And that would have cost $1 million a year, that initiative.

    Mr. MCHUGH. Thank you for clarifying that. One more question. Is it my correct impression that on the issue of Title 32 versus Title 10, while I understand the Governors and probably issues of posse comitatus amongst others, would suggest that the Title 32 be utilized when you have non-defense-related assignments coming out of the—is the only—I don't want to understate that, but is the major detriment under an activation of Title 32 to the person being called up, the lack of the Soldiers and Sailors Civil Relief Act or are there other—.

    Mr. CLINE. No, there is other things, sir. There is the BAH rate. People called under I believe it is 179 days have BAH—139. They have BAH2, which is a lesser rate. For example, my old military police company was mobilized from Cleveland, Ohio and reported to Fort Bragg that they were given orders for 1 year. Those individuals, once they complete their tour of duty under Title 10, according to Title 38, are then eligible for veterans benefits. In other words, they are veterans.

    People under Title 32 do not have that same thing, but the Soldiers and Sailors Civil Relief Act is the biggest problem facing our Guardsmen. Right here in Virginia down in Fredericksburg, they did an article about Guardsmen who were guarding our airports, and I can tell you this, sir, serving as a military policeman for 15 years in the National Guard, the worst thing you can do is put a service member in the face of a civilian. It is not an easy task. And we had soldiers right here in Virginia who had to turn to the Red Cross for help, because their pay was significantly impacted, and they have no protection under Soldiers and Sailors Civil Relief Act.
 Page 128       PREV PAGE       TOP OF DOC

    Mr. MCHUGH. Anybody else want to add? Folks, no pizza is coming and it is late. It is after 7 p.m., and I can't tell you how much I appreciate your patience. All of your work in preparing these statements, there are—obviously you were very gracious in your summaries of those, and I appreciate that, but there are issues and questions that your written statements have caused in our minds, and as with the other two panels, we will be asking you to respond to certain written questions. If you could do those at your earliest convenience, it would be very helpful to us. We have got a markup coming up very soon, sooner than probably we all would like, but we want to have the benefit of all your comments with respect to those issues that are so very important.

    Mr. MCHUGH. Thank you for—as Mrs. Davis of Virginia said, you are where the rubber meets the road, but you folks represent the interest of folks who have served who we owe so much to and those who are serving now, and we continue to owe so much to, and we are deeply appreciative of that, and I know they are as well.

    Thank you for being here and thank you for staying here.

    [Whereupon, at 7:17 p.m., the Subcommittee was adjourned.]