Segment 2 Of 2     Previous Hearing Segment(1)

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THE QUADRENNIAL DEFENSE REVIEW

House of Representatives,

Committee on National Security,

Washington, DC, Wednesday, April 16, 1997.

    The committee met, pursuant to notice, at 1:03 p.m., in room 2118, Rayburn House Office Building, Hon. Floyd D. Spence (chairman of the committee) presiding.

OPENING STATEMENT OF HON. FLOYD D. SPENCE, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, COMMITTEE ON NATIONAL SECURITY

    The CHAIRMAN. The committee will please be in order. Today the committee takes up an issue that is likely to occupy us all for the rest of the year: the Quadrennial Defense Review, QDR. Second to the annual defense authorization process, the committee's examination of the QDR will perhaps be the most important task in the months ahead.

    For the past several years, there has been a strong bipartisan consensus that the Bottom-Up Review was flawed in at least two major ways. First, it failed to provide adequate forces and resources to execute the two-regional war scenario at the heart of the United States national military strategy.

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    Second, while I believe that the Bottom-Up Review was right to recognize the regional threats to our interests in the Persian Gulf and in Korea and to establish the need to size our military forces to be capable of conducting two wars rapidly and decisively, the last 4 years showed us that the Bottom-Up Review's focus was too narrow. The administration failed to anticipate the rate at which it would deploy our troops on manpower- and resource-intensive peacekeeping and humanitarian operations—what the QDR is apparently calling ''smaller-scale contingencies.''

    If the administration wishes to avoid repeating these mistakes, the QDR must first determine a sound national strategy and then identify the forces and resources necessary to execute that strategy. Based upon what I have heard today, I am deeply concerned that the administration is once again putting the cart before the horse by allowing the budget considerations to drive decisionmaking on strategy.

    When Secretary Cohen states, and I quote, ''I am operating, and the entire building is operating, on the assumption that the defense budget is likely to be no more than $250 billion in real terms for the foreseeable future,'' it is impossible not to view the QDR as another budget-first, strategy-second Bottom-Up Review.

    Make no mistake—the current mismatches between strategy, forces and resources have had real consequences. Last week I reported on the readiness problems our forces are confronting as a result of the doing-more-with-less approach of the Bottom-Up Review. If the QDR once again compels a smaller, under-resourced force to execute an expanding strategy, then the readiness, quality of life and modernization problems we see today will quickly worsen.

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    More fundamentally, what I fear will emerge from the QDR will be long on commitments and short on resources. The emerging QDR is likely to call for a continuation of the current two-contingency strategy, and all of the other lesser operations; and without revisiting diplomatic and military commitments throughout the world, and doing all this while reducing forces and resources to meet a predetermined budget number, and finally, promising to dramatically increase modernization spending while protecting readiness. Call me a skeptic but I do not believe that we can get there from here.

    That said, if something positive does come out of the QDR, I hope it will be a much-needed public debate about the risks associated with an under-resourced national military strategy. If conventional wisdom is true and the defense budget top line does not increase above the President's out-year numbers, then the American public needs to understand the very real risks.

    Weighing the risks of war, of casualties, of defeat, and the implications of retreat after this century's great victories over fascism and communism must play a central role in any honest evaluation of the QDR's recommendations. Only then can the American people understand whether the QDR will turn out to be a sound national security blueprint for the future or simply another exercise in deceptive advertising.

    To help us better understand some of these complex issues, today we are pleased to have with us the three members of the National Defense Panel. Created by Congress last year, the panel's job is to provide an independent assessment of the QDR strategy and its force structure recommendations. We have with us today Mr. Philip Odeen, the NDP's chairman, who also serves as president of the BDM Corporation; Adm. David Jeremiah, former vice chairman of the Joint Chiefs of Staff; and Andrew Krepinevich, director of the Center for Budgetary and Strategic Assessments.
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    Gentlemen, I look forward to your testimony but before proceeding, I would like to yield to the committee's ranking Democrat, Mr. Dellums, for any remarks he would like to make.

STATEMENT OF HON. RONALD V. DELLUMS, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON NATIONAL SECURITY

    Mr. DELLUMS. Thank you very much. Mr. Chairman and members of the committee, I join with you in welcoming to our committee today three distinguished individuals who currently serve their nation on the legislatively mandated National Defense Panel. This panel will review, as you pointed out, the Department of Defense Quadrennial Defense Review, otherwise known as the QDR, and advise the Secretary of Defense and the Congress of their views.

    In my view, Mr. Chairman, those working on the QDR and the National Defense Panel are discharging an extraordinarily important responsibility, one that they will conduct at perhaps the most dramatic opportunity to reassess and redefine our core national security strategy requirements since I first sat in the United States Congress.

    Mr. Chairman, I would like to take a few moments to set out what I believe are the opportunities of this moment, a moment that is beyond the cold war and perhaps beyond the post-cold war era and one that firmly anticipates the coming new century.

    Failure to secure those opportunities will result in hundreds of billions of dollars in misdirected scarce budgetary resources and it could well condemn future generations to an avoidable arms race that might lead to needless military competition and instability among major powers.
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    Achieving a proper balance between military spending, investments in foreign policy programs calculated to promote stability, and key domestic accounts that enhance our national security—what I consider the triad of our national security accounts—is critical.

    We would not know how to make that adjustment without the comprehensive review of the military aspects of our national security strategy. That is the responsibility of the three distinguished gentlemen who sit before us this afternoon and their colleagues on the National Defense Panel. I cannot urge too strongly my hope and expectation that they will seize their role in this process and be aggressive in considering alternative views on threats, strategy, force structure, readiness requirements and modernization.

    My personal view is that the security environment in which we find ourselves allows us to make very prudent choices that can yield force structure reductions in realignments, reconfigure our readiness requirements and make less-pressured decisions regarding modernization.

    I say this not to drive a budget number, Mr. Chairman,

    Mr. Chairman, with those remarks I look forward to hearing each of the views of our distinguished panelists. I would simply add parenthetically that I have said on more than one occasion my hope is that the QDR and the National Defense Panel's review will result in dramatic shifts and changes in how we view our national security requirements going into the 21st century, but I have been around here now more than a quarter of a century and I know that on more occasions than not, we do not have dramatic turns and dramatic changes to the extent that I would like to see bold strokes painted across the canvas of this moment as we view moving into the 21st century.
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    But it would be my hope that there will be some significant changes. Maybe this will be one in a series of steps that ultimately will take us into the 21st century with a dramatic new view of our national security requirements.

    With those remarks, Mr. Chairman, I look forward with rapt attention to the remarks of our distinguished witnesses and I yield back the balance of my time.

    The CHAIRMAN. I thank the gentleman. Before we start, all the prepared remarks will be submitted for the record and you can proceed as you would like. Mr. Odeen, the floor is yours.

JOINT STATEMENTS OF A PANEL CONSISTING OF PHILIP A. ODEEN, CHAIRMAN, NATIONAL DEFENSE PANEL, PRESIDENT, BDM CORPORATION; ADMIRAL DAVID E. JEREMIAH (RET.), MEMBER, NATIONAL DEFENSE PANEL, FORMER VICE CHAIRMAN, JOINT CHIEFS OF STAFF; AND ANDREW F. KREPINEVICH, MEMBER, NATIONAL DEFENSE PANEL, DIRECTOR, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

    Mr. ODEEN. Thank you, Mr. Chairman, Mr. Dellums. I understand you have a number of votes at 2 0'clock, so let me hit the high points. My statement is short but I will just hit some of the high points and we look forward to the dialogue with the committee.

    First I would like to thank you for the opportunity to come before the committee today. I know that I speak for the entire panel when I say we are honored to have been chosen to take on this challenge—the opportunity to influence the future directions for our Nation's military forces and the institutions underpinning their success.
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    While the national security establishment has made great progress in understanding and reacting to the fundamental world changes since the end of the cold war, we are well aware we still have a long way to go. Moreover, it is now time to consider how we will meet the needs of the Nation in the 21st century, an era that will be quite different from the past, as well as the world today.

    Extending our nation's military strength and world leadership in the next century require a combination of knowledge, vision and a sense of where we are headed in the future.

    Let me just briefly discuss our philosophy. The Military Force Structure Act of 1996 calls for a comprehensive examination of defense strategy, the force structure, modernization, infrastructure and other elements of the defense program and policies. Its objective is to develop alternative defense strategies and force structures that will meet U.S. security challenges in the 21st century, and I indicate I want to stress alternatives, which is what the legislation talks about.

    Specifically, the legislation assigns the National Defense Panel two tasks: to review and comment on the 2005 focussed Quadrennial Defense Review being discussed by the Department of Defense; and secondly, to conduct an independent assessment of alternative force structures through the year 2010 and beyond. So we have a somewhat different time structure. We are looking to a much longer time frame than they are internally within Defense.

    We also remain cognizant of our inherent visionary role and the impact our recommendations might have as this committee deliberates during the next several years. We hope our objective asses sment will be helpful to you and we take this responsibility quite seriously.
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    To meet the challenge before us, the panel believes its greatest contribution lies in setting directions for the future and identifying paths to meet them.

    We believe that our real contribution is to look beyond what we are doing today and towards what we should be doing tomorrow. To do this, we must fully explore the future and potential implications for our military forces.

    Additionally, we must consider how the forces of tomorrow should be supported by the infrastructure, management processes and organizations that make their operations effective.

    Tomorrow is not far away. The soldiers, sailors, marines and airmen that will command our forces in the future are already in the force, as are many of the systems and platforms they will operate. Our approach, therefore, will be to look back from the future—that is, identify where we need to be, and then determine how to get there.

    We know, however, that the future cannot be predicted and enormous uncertainty will remain. Therefore, we must consciously pursue approaches which are capability-based and are yet able to adapt to emerging threats to our national security. That is, as new challenges to our national security mature, we must ensure that our capabilities continue to evolve in a manner that will be successful against them.

    Let me also make it clear that we do not see our mission as either one to balance the federal budget nor one which is automatically budget-driven. Instead, our analyses must be guided by the needs of the future and strategies that best get us there.
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    I am confident that our work will result in decision-making that both identifies savings opportunities and identifies innovative opportunities to strengthen or augment current approaches.

    We also realize we cannot be all things to all people, and stand prepared to recommend what we feel are the best alternatives and approaches.

    Allow me to summarize how we view the key aspects of our job. We will strive to first, develop strategies that address the future, not the past; offer a vision of what future forces and supporting structures should look like; identify innovative opportunities to augment or replace current approaches, describe a realistic plan to implement those future directions, and deliver a well thought out framework against which the department and ultimately Congress can make future decisions.

    We seek to achieve these goals by reaching out to those

    You are certainly well aware of the expertise and talent base presented by our panel members. They include strategists, specialists with extensive experience in defense issues, global business and technology development. I am fortunate to chair a panel that is enthusiastic and extremely committed. We also plan to engage a variety of others with varied backgrounds to infuse their thoughts into the panel's deliberations.

    In addition to those already mentioned, we are inviting the defense community at large to offer their insights, both on specific topics and general directions for the future. This morning, in a meeting open to the public, the panel heard from experts from three respected research organizations on a variety of related issues. In two weeks we will have a similar session, and it is my intent to ensure the panel's deliberations are enriched by the considered thinking available throughout the defense community and other arenas.
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    The panel and the staff have concentrated our efforts to date on meeting your objective of providing the Secretary with our views on the direction and emerging results of the Pentagon's QDR. To this end, we have met with the Secretary and Deputy Secretary, the Chairman, the service chiefs and the JROC, as well as a number of senior DoD staff.

    In addition to delivering an interim report on the 15th of March, we are preparing now to submit an additional set of comments on the QDR in mid-May and we are committed to continuing to provide advice and constructive suggestions to the Secretary throughout this entire period.

    We believe, as does the Secretary, that our insights can be of great value, both during the department's review, as well as after it is completed. More importantly, we believe the QDR should be seen as an important milestone in the longer journey to define our security needs for the 21st century.

    We have also been developing the analysis plan and tools that will support our longer-term objective and the delivery next December of alternative force structures. I have already mentioned our outreach program that is directly contributing to this challenge. In addition, we understand the importance of getting the perspective of the services, our allies and the regional and functional CINCs before a true understanding of the future, a strategy to meet it, and a set of capabilities for 2010 and beyond can be crafted. This June we will visit many of those locations to hear their thoughts firsthand.

    A concluding thought: our goal is to give you the very best thinking available. How will we do this? We consider future challenges and the needs of the nation. We make sure we have a sound vision and strategy for our nation's national defense. We consider all the opportunities for new thinking and innovation. Finally, we will offer real, implementable ideas that will support future success for both our forces and the institutions that support them.
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    As I said earlier, we welcome your thoughts and ideas. I am determined that our final report and the process we go through to develop it will be rigorous, enlightened and progressive.

    Thank you again very much for the opportunity to meet with you, as well as to provide support for our Nation's defense and to come before this committee. We look forward to your questions and also your comments, as we are hoping to gain wisdom from you, as well, here today, in terms of the very challenging task we have ahead of us.

    [The prepared statement of Mr. Odeen can be found in the appendix on page 43.]

    The CHAIRMAN. Thank you very much, Mr. Odeen.

    Admiral Jeremiah.

    Admiral JEREMIAH. Mr. Chairman, I have no prepared statement or remarks. I would simply say that I did not expect to be back here this soon, but it is a pleasure to see familiar faces of old friends, and I am happy to serve on this particular panel.

    The CHAIRMAN. Mr. Krepinevich.

    Mr. KREPINEVICH. Let me just echo the admiral's remarks, Mr. Chairman. Again, it is a pleasure to be back, a pleasure to be working with the members of the National Defense Panel.
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    I have no prepared statement or remarks. I believe the chairman of our panel speaks for the group.

    The CHAIRMAN. I will reserve my questions and proceed right to the gentleman from California, Mr. Dellums.

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

    I have stated on more than one occasion that I believe that our frame of reference—that is, what we think we should have the capacity to achieve, and in this instance it is known as the Bottom-Up Review—determines the nature of our strategy, the timing, the direction of the modernization, the size of your force structure and the level of your readiness.

    Therefore, it would seem to me that one important starting point in the Quadrennial Review or certainly in the National Defense Panel is to look at the efficacy of whether or not the Bottom-Up Review is an appropriate analytical instrument that should form the basis of our readiness, our force structure, our strategy, as well as our modernization program.

    In that regard, I have felt for a long time that the Bottom-Up Review, rather than a step into the future, was a cautious step away from the end of the cold war and desperately needs to be looked at. The assumption of the Bottom-Up Review is that we will fight two major wars reasonably simultaneously and win them quickly. In my opinion, that has enormous implications for force structure, enormous implications for the level of readiness, enormous implications for strategy, and it shapes the direction of our modernization program.
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    This was ostensibly designed based on our experience in the Persian Gulf, but if you recall, our strategy was not win-win initially. We sent a carrier in, we sent 4,000 American troops in and we spent several months building up. So it was not a win quickly strategy.

    But if the Bottom-Up Review dictates two major regional contingencies fought and won quickly, the implications for lift, whether it is sealift or airlift, are enormous. It frames the nature of our modernization program, our procurement program, because it determines what kind of ships and at what level, what kind of planes to engage in lift. It determines forward deployment of resources. It frames the nature of our inventory. It does a lot to say we have to be someplace in 48 to 72 to 96 hours, as opposed to moving that back to some other time. The implications there for billions of dollars of savings, it would seem to me, are absolutely enormous. Tiered readiness then becomes an issue that is looked at.

    In terms of modernization program, the question of whether or not leap-ahead technology is a more appropriate way to go than simply purchasing yesterday's technology, as we often do on this committee, and I understand why—I am not sure I agree with it—and also creep-ahead technology, allowing us to spend billions of dollars that, at the end of the day, become obsolete by the time we deploy them.

    These kinds of matters are questions that would put on the table. Are you looking at these kinds of issues?

    One final point I would add to that: one significant assumption in the Bottom-Up Review is that we would fight these regional contingencies alone, an assumption that I have gross disagreement with. No. one, I do not know anyplace in the world where we would go and fight alone. And No. two, it is counterintuitive to our most recent experience, which is to go into a war or low intensity conflicts, peacekeeping, peacemaking operations or humanitarian operations, with coalition forces.
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    So I lay all those things out to say are these the kinds of issues that you will be looking at, hopefully to develop a different frame of reference, a new Bible, as it were, that dictates all of these four important factors, as I said: modernization, force structure, readiness and strategy.

    Mr. ODEEN. Let me make an overview comment and then maybe ask Admiral Jeremiah to comment, since he was quite involved in the Bottom-Up Review.

    First of all, our focus is much longer term. We are looking at, per the legislation, I think, very wisely asked us to look out 2010 and beyond. And I think we all, as a panel, believe the world is going to be quite different in that time era and the kinds of contingencies we are worrying about today are going to be very different than the ones 15 years from now, 20 years from now.

    So we have a very different perspective in the task that has been assigned to us by the legislation. And I am——

    Mr. DELLUMS. When you say different, different from what?

    Mr. ODEEN. The immediate issues that were facing the Bottom-Up Review in 1993, at which time we just recently had finished Desert Storm. The cold war, while over, there was still much more uncertainty over how things were going to settle out vis-a-vis the Soviet Union. We have——

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    Mr. DELLUMS. But that was the thrust of my question. Are you looking at changing the assumptions of the Bottom-Up Review?

    Mr. ODEEN. Absolutely.

    Mr. DELLUMS. My argument is that they no longer are appropriate.

    Mr. ODEEN. And especially by the time of 2010 or that kind of time frame, it is going to be quite a different world. So our perspective will be for a security environment that is going to be, I believe, very different than today.

    Now, I do not believe that we can predict with any precision what that is going to be, but again I think some of the wisdom of the legislation was to ask us to look at alternative scenarios, alternative kinds of security environments and propose strategies and forces that would meet different kinds of environments.

    We can pose several—I do not know how many it will be—two, three, four, five—different potential environments and say these are the kinds of strategies and forces you would need if the world develops this way. Hopefully, that will give us a better sense for how we can move from here toward that era in a sensible kind of way, because we do not know exactly what it is going to be like.

    Let me ask Admiral Jeremiah to comment.

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    Admiral JEREMIAH. Mr. Dellums, I agree with your appraisal of the Bottom-Up Review in the context of it being a post-Cold War structure. You recall that Secretary Aspin and former Chairman Aspin felt that we were, at the time of the base force discussion, that there was no defined structure to our defense posture, and that led to the base force, which was the first post-cold war development of at least a context for our force structure.

    In that sense, I think the Bottom-Up Review was a necessary and useful effort to try to deal with some of the major acquisition, procurement, force structure questions that evolve from the adoption of the base force.

    I think that currently, we are now looking at—we know more than we did when we started the Bottom-Up Review. We can see a different world out there but not very clearly. And this has to be addressed in the Quadrennial Defense Review.

    If there was a flaw that I would argue in the Bottom-Up Review, to me, the more serious one was that it too specifically went to geographic and explicit scenarios, instead of what we intended originally in the base force dialogue: here is a notional scenario, a contingency here and a contingency here. How well do the U.S. military forces—how good is our capability to respond to those kinds of scenarios?

    When you scale it down to beginning to acquire particular weapon systems for an explicit scenario, then you begin to tailor the force to a degree that it no longer carries out our ability to deal with the unknown, which is almost certain to happen, as compared to the scenario, which probably never happens.
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    In amplification of what Mr. Odeen said with respect to the way we think we should go about this, I like to think of it as the future out here and the alternative things that could come about from a very benign, eminently successful U.S. policy of engagement across the world that is quite pleasant and probably not very likely, given the set of circumstances that we can envision then, ranging through a series of scenarios in which peer groups, competitors could emerge. Certainly the wild card is always likely to be there and we have to think about that very hard.

    And then look at the kinds of forces that one would want to have out here and the ones we have today, and find out what R&D is necessary to accomplish some of that work in the future, so that we put in place the forces to deal with the world of, say, 2020, and what forces are likely to be redundant at that point and then find out how to do the transition between where we are and where we need to be.

    The difference in that construct is that typically, in most force planning we start with where we are and extrapolate into the future. We think that it might be more useful to look at the future, to the degree we understand it, and then extrapolate back into the current force structure, find out what is redundant probably, what is going to carry forward and what needs to be developed to move into that new world.

    Now, that does not mean that you are going to cut all these things off in an instant, because it takes some transition time and you still have to deal with the world as we know it, on our way to the world as we expect it to be.

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    Mr. DELLUMS. Thank you, Admiral.

    Mr. ODEEN. Maybe Dr. Krepinevich would like to add something.

    Mr. KREPINEVICH. Just to second what my colleagues have said, it seems to me, as Mr. Odeen has said, you are faced with, first of all, a great sense of geopolitical uncertainty. It is not clear who might pose a challenge to us or when or certainly how they might choose to compete in the future. So it is very different from the cold war era, when we had a clear competitor that we understood, that was ever-present, and we had a good idea of how they would modernize, how they would fight, and so on.

    So there is that sense of uncertainty that we have to account for now, especially when you look out, as Mr. Odeen says, 20 years into the future.

    Second, there is this issue of technology flux, the fact that if we are in this period of revolution in military affairs or military revolution, the kinds of tools available to our commanders may change dramatically over the next 20 years. So we have to think about what those new tools might be and what it might mean for the tools we have today, how well they will make that transition 20 years hence.

    The idea of using a range of scenarios I think is very appealing because irrespective of trying to pick out a particular country, what you get is a sense, as Admiral Jeremiah says, of the kinds of challenges. And I think it has been instructive to a number of us to look at the vision statements that have come out of the chairman and the leaders of the services. And when you look at it, you see that they have developed a short list of very different kinds of challenges that they see us confronting in 20 years.
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    So taken together, it seems to me that, as you say, the challenge is to move towards this very different future, to, in effect, engineer a transformation of the American military while, at the same time, being able to meet the day-to-day obligations that we have as a consequence of a strategy of engagement and enlargement.

    Mr. DELLUMS. Thank you very much, gentlemen.

    I hope that question kicks things off, Mr. Chairman, and I would reserve time. Maybe I will come a little later. Thank you very much, all three of you, for your comments.

    The CHAIRMAN. Thank you. I think it is very appropriate that we have this discussion, this debate at this time, given today's situation, as a good example, of us operating under the bottom-up strategy of the past. And I have said on many occasions that I did not find as much fault with the two-war scenario strategy as I did the fact that we did not have the resources necessary to fight those wars.

    I have heard it said time and time again, even by our military leaders, today we do not have the ability to do another Persian Gulf-type operation, certainly not with the low loss of life and efficiency, as we did the last one, for a number of reasons. We have cut back 30, 40, 50 and 60 percent since the Persian Gulf. The average person does not realize what we have done to ourselves since that time.

    Aside from that, with the reduced forces that we have, the inability to lift the force and all the other things, the equipment that is lacking, we also have the problem of readiness, to do it with the force we have surviving right now.
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    And the readiness to conduct humanitarian-type operations, there is no question about it: we are ready to do those kinds of things and to evacuate people from Zaire and these kinds of things. But the big question is whether or not we are ready to fight high-intensity warfare-type operations, because of lack of training. We are training to do humanitarian-type things. They are taking time away, when they are on these contingency operations, these deployments, and they do not get the training necessary to have that sharp edge, to fight high-intensity-type warfare. So we have that situation right now existing, and it is a good time to be considering this.

    My question would be what we have all raised already about the strategy and the budget-driven strategy or not, and whether that is going to come out of this thing and, if it does, what steps will we take to straighten that situation out?

    So I would like to know what your thinking is on what would be your approach if the Quadrennial Review comes out with a strategy that is budget-driven.

    Mr. ODEEN. Well, Mr. Chairman, I think you have made a series of very good points here. Let me just respond by saying that I think the dilemma that Secretary Cohen has is that he has the need to go back and rethink the strategy very carefully because of all the points that you and Mr. Dellums have made and the changing world. A lot has happened since the Bottom-Up Review and we have learned a lot about demands on our forces. Therefore, a new strategy and new approach is required and I believe they are working on that.

    At the same time, they have quite clear guidance from the executive branch and I believe the Congress, as well, as to what kind of funding to be expecting, so they have to somehow work within that envelope, at least from their perspective.
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    I think our view is that we are looking for a much longer term. It is not realistic to assume enormous increases in dollars, but we certainly should not start with that. We ought to start very fundamentally with the kind of world it is likely to be out there, the kind of strategies and forces

    Admiral JEREMIAH. Mr. Chairman, I support that. The phrase that we hear in the building and in the presentations that have been given to us is strategy-driven, resource-constrained.

    I grew up in an era when the Joint Chiefs of Staff regularly delivered force structures to respond to their perception of the threat at the time, which were substantially beyond any reasonable acquisition cost, at least in the general view, that could be afforded by the country at the time. And that kind of planning was basically ignored because it was so far outside the realm of the possible, in most people's views, that they simply did not pay attention to those force structures, except from time to time in testimony, as debating points.

    The net effect of that is that the Congress of the United States did not have a reasonable baseline for an assessment of military judgment upon the point of departure for budget deliberations.

    And so whether you agree with these numbers that are floating around the Pentagon or not, it at least is within the realm of numbers that we are familiar with and deal with. So I think that there is some merit in recognizing that you should be strategy-driven but you ought to be operating around a number that has some consensus within the realm of feasible budget requirements.
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    The CHAIRMAN. Since Secretary Cohen said everything is on the table, would that option also include recommending a higher budget figure than the ones floating around?

    Mr. ODEEN. You would have to ask Secretary Cohen. I do not know the answer to that one. I think that is an issue for him.

    The CHAIRMAN. Mr. Skelton.

    Mr. SKELTON. Thank you, Mr. Chairman, and welcome to the distinguished guests. We have been looking forward to hearing you.

    The effort on which you are embarking and the recommendations you will make eventually to us, by way of the Secretary of Defense, because the Constitution says the buck stops with us on providing for the forces for our country, you cannot be wrong and we cannot be wrong, because second place does not count on the battlefield and it is a very important and daunting task that you undertake.

    In looking at what you do, undoubtedly you must look at the risks or the threats first, and there are many. The crystal ball in which you must sift out those risks or those threats is a very, very foggy one, with everything from nuclear proliferation, terrorism, operations other than war, great uncertainty. You have to look at the short-term risks, the long-term risks, which countries pose a problem now, which countries pose a problem in 10, 15, 20 years from now.
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    And once you have sifted through all of this and got as good a handle on it as you can, you have to look at the strategy. What strategy do you use? As Mr. Dellums points out, we do not always look at the military very singularly. Often we will have combined forces. We know that what we do now is joint, as opposed to being Army, Navy, Air Force, Marines.

    The one thing that our country did right during a very dark period of our history, between the wars when we denuded ourselves, and it was Congress's fault that did that, was to form in the war colleges, the Army and Navy war colleges that existed at the time, an excellent strategy towards both Europe and towards Japan, a potential enemy there.

    So putting the risk and the threats and the strategy together, you have to come up with what do we need? May I share a thought or two with you for a moment or two? I will ask a question, but it appears to me that the bottom line of all of the military that we have are the young men and young women in uniform. And if you do not have competent, dedicated people in uniform who understand their duty and do it well, all the rest is for naught.

    We look at the future by reflecting from the past, and the immediate past tells us that the operational tempo has increased dramatically and I don't see that changing. For instance, 1950 through 1989, we had a total of 10 deployments of our military, including, of course, Vietnam. 1990 to 1997 we have had 27 deployments, most of them, of course, being joint. There are a couple of articles recently that have indicated that our force is nearly broken because of the operational tempo, because of our deployments.

    So in looking at this daunting task that you have, I ask, is it strategy-based or resource-based? I ask how the 12 elements of the guiding language from the Secretary of Defense are affecting your work. I ask you to measure the strategy against the risk, because there must be some risk in what you do. I ask are you going to come forward with a recommendation like too much TACAIR, too little TACAIR, not enough bombers, too many submarines, not enough submarines, and the like?
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    I ask these questions as open-ended questions so that you can give me your best thought on where you think we will end up, because we are the last to send the money out to buy this, to pay the troops. And the buck eventually stops with us. So if you could help us there, gentlemen, I would appreciate it.

    Mr. ODEEN. That is a charge, I guess, rather than a question for the group, but let me just comment very briefly that I think your point about it being a foggy kind of lens, trying to look out to that era, is very true, and the risks and threats are very hard to forecast.

    Therefore, again, I think the wisdom of this legislation was not to ask us to try to come up with a precise answer to what it is going to be like 20 years hence or 15 years hence, but to look at alternative scenarios and, under these scenarios, talk about different kinds of strategies, different kinds of mix of forces to help you really, with the task you have, of making these major resource allocations.

    But the kinds of issues you raise are certainly the questions we have to ask ourselves and hopefully provide some insights in terms of what the answers are.

    Andy.

    Mr. KREPINEVICH. I would just second that by saying certainly it seems to me that a key question—I will not say irrespective of resources—but a key question is to identify what is the strategic environment in which you are operating. And only when you identify the challenges that you will be confronting can you begin to take the resources you have at hand and begin to apportion out the level of risk at which the American people are comfortable living.
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    As Congressman Dellums said, essentially if our sense of what the challenge is is wrong, if, in fact, we are too oriented on the old paradigm, on cold war standards, gulf war methodology, when, as General Shalikashvili has said in his vision, that essentially in the future, competitors will have great incentive to present a very different problem than the one we saw in the gulf war, then we run the risk of no matter how many resources we spend, of spending them very inefficiently.

    So I think we see it as a very important part of our goal to be strategy-driven, to really try and get a sense of what the environment is 20 years hence, which is our charter, and then work back from there, to begin to get a sense of how you respond to those different challenges.

    Mr. SKELTON. Admiral, can you add to that, sir?

    Admiral JEREMIAH. No, sir.

    Mr. SKELTON. Thank you.

    The CHAIRMAN. Mr. Buyer.

    Mr. BUYER. Thank you, Mr. Chairman.

    The question I have really deals with this question of evolution versus revolution in military affairs and this question about strategic pause. I am curious about your remarks about the strategic pause.
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    If, in fact, there is an agreement that there is a strategic pause, I have this sense that the budget requests and things that come over to us really puts us in an incremental movement of evolution of military affairs. Let's go to the F–22 first and then Joint Strike Fighter.

    I mean, I see it more as an evolution, to make some good yet minor technological advances, not radical in their thinking and thought. So if we are in a strategic pause with a reduction of threat, why aren't we leap-frogging some of the generational technologies, rather than say, well, to buy into $200 plus billion in new types of aircraft and things, why don't we just move right to Joint Strike Fighter, for example, or in helicopters, for example, trying to think anew with some of our power lift and speed. I am interested in your comment.

    Mr. ODEEN. I think that is a good point, good question, and it is a very difficult one to answer because in many cases, we know the new technology is there; we understand there are tremendous opportunities to apply new technology in an era 10, 15 years in advance, but we do not really have it here with us today. The real issue is a transitional issue: how do we get to that point and what do we do in the interim period?

    The Joint Strike Fighter, for example, may be a very effective weapon system and employs a lot of new technology, but it will be 4 or 5 years before we have any real concept for what it is and how real it is.

    So the tough part, I think, the Pentagon has to face is how do we handle this transitional period? I believe, as a panel, we are all quite convinced that the technologies will permit us to have a very different force structure in the year 2010, 2015, in that period.
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    And I think, as Admiral Jeremiah said, our task is to try to go back and put ourselves at that point in time and then look back and say, how do we get here and how do we transition a force which is in being, weapon systems and platforms that last for very long periods of time?

    So the challenge is how do you handle that transition. It is a very tough one to handle.

    Mr. BUYER. Well, we have put the pressure on you.

    Mr. ODEEN. Sure.

    Mr. BUYER. Because we also have to make those decisions and the budgetary decisions and procurement. National Guard—they want the upgrades for the M1/A2 for their tanks, yet the Marine Corps, Paul McHale stresses and points out very well to me, the Marine Corps, they do not have the A2s. Then when I go and talk to the commandant of the Marine Corps, they say, ''I don't necessarily want my upgrades to A2; why aren't we thinking about the new type of tank and the lighter, faster and greater technologies?'' And I have to agree with that point.

    So when we are talking about dwindling dollars and how we spend them, some of those strategic decisions are pretty important. So we are going to place some of those stressors and hopefully you will have those decisions.

    The other question I am going to ask is on the strategic planning with regard to the use of the Guard and Reserve. Many of us talk about the National Guard and their combat divisions, not in the war-fighting plan, yet strategic reserve—at what mix? How would we move them into combat and combat service support, moving the air assets from reduction of fighter assets to more capabilities in airlift? Tell me what your thoughts have been.
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    Mr. ODEEN. Well, I think those are serious issues. They are ones that we specifically are asked to deal with. They are areas that we have been beginning to probe and get information on. I do not think we have any position at this point of time at all, other than those are exactly the right kinds of questions to be asking, and we are going to be asking those questions, I can assure you.

    Let me ask Andy to comment on that question, as well.

    Mr. KREPINEVICH. I would agree with you, Congressman. There have been these periods where you do see dramatic change in the way that military operations are conducted. The last time we went through such a broad transition was in the 1920's and 1930's, although there have been periods like this before. Typically what you see is a surge in technologies that basically lead to the rise of new military systems that not only create new problems for military organizations but essentially these systems can be used to solve new problems.

    So typically you see new kinds of operational concepts, new kinds of military organizations spring up. So if you look at our own history in the 1920's and 1930's, you see the rise of aviation, mechanization and radio, essentially leading to mechanized forces on land with the Germans in the blitzkrieg. You see naval power changing dramatically, shifting to the carrier. You see the rise of an entirely new kind of military operation, strategic aerial bombardment.

    So these periods, although we think of revolutions occurring quickly, typically they take about 10 or 15 or 20 years to play out because you do not change large organizations overnight, which also means it is important to start thinking about these things now.
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    But typically what you see are new kinds of systems being introduced into the force, the force having to basically find out what these systems can do. It is very important to have a clear idea of what the problem is, what the new challenges are, because as people are prone to point out, the French had tanks and radios and aircraft, as well as the Germans. They managed to lose the war in 6 weeks because they did not really have an idea of what the challenge was.

    So some of the issues that you have to confront are what are the problems? And I think the problems, to a certain extent, are laid out in these vision statements by the military leadership. And then the next question is OK, how do you apply the technology? What are the operational concepts that allow you to solve these new problems? And how do we get from here to there, this very different kind of future force?

    Essentially in the 1920's and 1930's, we were not an active global power, so we could sort of take a time-out and think our way through and take our time about it. Now we do not have that luxury. We are an active global power. So you present the military with a very formidable challenge, of preparing for a very different future while, at the same time, preparing and operating today.

    Mr. BUYER. Thank you, Mr. Chairman.

    The CHAIRMAN. Mr. Sisisky.

    Mr. SISISKY. Thank you, Mr. Chairman, and thank you, gentlemen, for being here today and taking an active part in the QDR, which I think is very important.
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    I have a lot of questions I could ask you but I am going to have to limit it to something. The Secretary of Defense did say everything is on the table. That gives you a broad latitude.

    Mr. Skelton alluded to the fact that we find and the chairman also alluded to the fact that we have found that our readiness is not as great right now as a lot of people are saying. We think we are ready, but we do not believe that we may be ready in a year or 18 months. And why?

    And when you say everything is on the table, look, as a businessman, I understand the fact that I could save a billion dollars by closing the commissaries tomorrow morning. We know that. We also know what is happening in the health care end of the Department of Defense. We could save a lot of money in just health care, closing up the hospitals, doing other things with it.

    We also know that why do we have to give housing? Let them go on the economy and get housing. We know that, too. But we do know that just those three ingredients alone are going to make a ready force and keep the people that we are spending enormous sums to train in the service.

    And the other thing that really gets to me, and I have seen it through the Defense Science Board and I have seen it through the present Department of Defense and this leadership, or at least in the past, that privatization is the answer to it all. If we privatize, we can save enormous sums of money. And I think in some instances we can. There is no question that we can save by privatization, as long as it is fair.
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    Now, you know, Mr. Odeen, I am sure when you got to be head of your company, you saw a lot of problems in the companies, and a lot of companies in America cut back on their people—reduction in force. We are doing the same

    But don't think the answer is just in privatization. That worries me to death because you would not believe, you would not put out contracts in your company with no figures at all. Privatization took place. Here it is; go at it. No competition. We are privatizing something with absolutely no competition, on like the repair of a five-inch gun. I mean, who fixes five-inch guns? And we are privatizing it, so there is no competition.

    And I would just hope, I would hope and pray that you keep these things in mind. They are easy things to get. We have scared the living daylights out of people in service just by saying we can save this amount of money by closing the commissaries. We are scaring people every day on cut-backs in the health care. We know they can save money. And believe me, I know all the other things that you are doing, in weapon systems, but this is important, too.

    Now, that is a comment on my part. My question really is very simple. We are hearing a lot of rumors that you are going to cut back two divisions, the Army and Marine Corps, a carrier battle group, two airwings.

    Now, I do not know where these rumors are coming from. Have you made any decisions? I mean, the press is sitting over there. I think we ought to know. Have you made any decisions on what you are going to cut back? I would like to know, too, because we are getting ready to do something here in a few weeks, and it would be good for us to know. That basically is my question and my comments.
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    Mr. ODEEN. Well, let me answer your question and then make a comment on your earlier statement.

    First of all, the decisions on divisions and carriers are really being made by Secretary Cohen in the Quadrennial Defense Review, the QDR. That is the internal defense problem. Our role is to comment on that but to then take on a separate set of studies to set proposals before you for alternative strategies and forces and so on, for the longer-term future.

    So what is happening in the Pentagon is really Secretary Cohen's responsibility. We are watching it and we will obviously provide some comments on it. My sense is they have not made any final decisions at this point in time. Within the next couple of weeks they will be making a series of decisions. They will be coming to you, I think, with those decision in the middle of May, but they are in process. That is Secretary Cohen's problem, not ours. We have a different set of challenges.

    But on your earlier point, which I think is a very good one, the quality of life is an important factor for readiness. As the chairman said, good people, well trained, motivated, is critical to the success of the military, and we have to be very careful in that regard.

    In my own company, we are a people company. We use people to provide services. We have to be very careful about that. Benefits, health care—those kinds of issues are something we think about very carefully and very hard.

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    We are also in a very competitive environment, so we have to watch costs and cut costs sometimes, but you have to do it in a way that is not going to destabilize your workforce or demotivate them, so it really is important.

    Privatization—again, I think it can be an important tool to help us manage the place more effectively, but for privatization to be effective, you have to have two things. One, you have to have private sector capability, and two, you have to have competition. What makes privatization work is the competitive nature of U.S. business, which has a number of people that can do something effectively competing to do it better and cheaper. So you have to have competition, so I would certainly agree with your point. But I do think it has an important role to play.

    Dave. Admiral Jeremiah.

    Admiral JEREMIAH. I would just like to comment. It is sort of a spin-off from the point you are making, a point with which I agree, by the way. There are a number of things that, as we have listened to different kinds of testimony, people have told us that they are constrained by one thing and another. I think that just as the strategy in the future has changed perhaps since the Bottom-Up Review, so also has the environment in which we carry out our day-to-day activities.

    So one of the things that we will all want to look for and perhaps provide to the Congress as part of our report will be those areas where we believe that either the implementation of legislation has been interpreted in a way that it becomes overconstraining in terms of the ability of the department to make management decisions or the circumstances that were extant when a law was passed, say, 10 or 15 years ago, no longer apply. So we should also bring to you suggestions about laws that perhaps ought to be modified in order to make the operation of the department more efficient and less constrained by some legislation that is no longer relevant.
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    The CHAIRMAN. Mrs. Fowler.

    Mrs. FOWLER. Thank you, Mr. Chairman, and thank you, gentlemen, for being here today.

    I want to follow up on the tack that Mr. Sisisky was on because there are quite a few of us here on this committee that are very concerned about this whole question of out-sourcing and privatization and where you are going to be going with this, both with the QDR and with your National Defense Panel.

    In recent years we have seen the Commission on Roles and Missions and the Defense Science Panel both say that we can have savings on the order of 30 percent if we out-source and privatize certain functions, and I agree in things like day care and housing and certain plant operations. We can do that.

    Where I get concerned is when we talk about our war-fighting capability and what are our core functions for our national defense strategy. And I am concerned when we say that, you know, are we going to be able to save this and are we going to still be able to perform those functions, particularly when it comes to depot-level maintenance, because I consider certain functions under depot-level maintenance to be critical to core.

    Now, back in '96, Mr. Odeen, when you were head of the Defense Science Board, you all issued your report and in that, you stated that you could recognize savings of 30 to 40 percent by out-sourcing these support services that traditionally had been performed by government personnel.
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    Well then, the GAO took a look at your report and they came out with their report, and the GAO said that these savings assumptions were not supported and were based on favorable conditions that may not currently exist for a number of activities recommended for out-sourcing, including depot-level maintenance.

    Now, the reason I think this and that we are concerned is when you talk about advanced weapon systems, there is really only one source of repair if you do not have an organic depot system, and that is the original manufacturer.

    And we got some figures from the GAO before the Readiness Subcommittee last week and I just want to make the full committee aware of them and you, if you do not have them, that in fiscal year 1996, of 12,773 Navy non-ship depot maintenance contracts that were awarded, 12,622, 99 percent of them, were awarded on a sole-source basis.

    Now, you just said the two criteria were capability and competition. When you are awarding 99 percent of these contracts on a sole-source basis, there is no competition. And I guarantee you you are paying more money than you would be paying if you had competition.

    So I get very concerned when I read about this revolution in business affairs that the QDR is talking about, as to what that really means as to whether we are going to be compromising the department's war-fighting needs. And when Admiral Jeremiah is making some oblique references to changing of legislation, I know he is talking about 60/40 and I know you are talking about some of these depot things, and yet I am worried because I think it is critical that when we
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    I want to get this on the record, get your thoughts on this, because I am concerned.

    Mr. ODEEN. Well, first of all, the National Defense Panel is not charged with coming up with a strategy for privatization. We have a much broader set of challenges before us, but let me comment, just based on my own experience in the Defense Science Board and other related studies.

    I have seen the GAO report, which is quite critical of some of the savings. But as I read the report, it does not reflect or comment on privatization per se, but rather privatization in place, which is a very different concept.

    Mrs. FOWLER. And I would like your opinion in privatization in place.

    Mr. ODEEN. In Defense Science Board studies and I think most of the internal defense efforts focus on out-sourcing, which is looking for competitive organizations that can take on a particular task and do it more efficiently than you can do it in-house because they have access to better technology, they have more flexible work rules, they have competitive pressures, and so on.

    Privatization in place is quite a different concept. There you basically say you use these facilities and these workers and these conditions and it is a good solution from the point of view of the individual people involved because it preserves jobs, but it is not one designed to provide a very efficient kind of outcome.
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    So I think that privatization in place is a rather specialized kind of focus. It only is applicable in certain places. I don't think it would be fair to judge the success of privatization more broadly—really, out-sourcing is what I am thinking of, rather than privatization—by the results of that particular case.

    There is a lot of evidence on the impact of out-sourcing, of what has truly been out-sourcing, as opposed to privatization, within the Defense Department. And the successes have really been quite clear-cut. I mean, there is a lot of very detailed, very good analysis saying that savings have been in the neighborhood of 30 percent or greater in most cases. But that is not privatization in place. That is a very different kind of concept.

    Mrs. FOWLER. Well, I am so glad to hear your concerns about privatization in place because there are quite a few of us on this committee that share them and have been trying to point out to others the cost savings that could be incurred if we do not privatize in place certain structures that are creating excess capacity in our system. So it is good to hear you on that, too.

    But I am concerned if we get to just doing sole-source. I mean, when you look at 99 percent of these contracts were sole-sourced, there is no competition. To go back to your statement, you have to have capability but you have to have competition and it has to be true competition.

    And I do think this will come under your purview because I do think one of the recommendations out of the QDR is going to deal with privatization of some of the critical functions of our Defense Department, and you are going to be having to take a look at those and make determinations as to whether these should be done or not.
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    So I think it is going to end up coming under you one way or another.

    Mr. ODEEN. Thank you.

    The CHAIRMAN. The gentleman from Texas, Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman. I want to thank the witnesses for being with us today and for your great contribution.

    Mr. Odeen, it would seem that if the QDR is resources-driven, as General Garner told us it was at this morning's Army Caucus meeting, then the organic depots come out losers from the very beginning. But if QDR is strategy-driven, the outcome for depots could be very different.

    What role do you all believe an organic depot system plays in our national military strategy, and how do you think the depot system should be structured? And I ask this question because I feel that the depots, specifically those that do a lot of organic work, play a very key role in the defense of this country, in the readiness of our troops. Maybe you all can give us a little input to that.

    Mr. ODEEN. Well, I think again, until we see the results of the Quadrennial Defense Review, it is hard for me to comment in terms of how we will respond to whatever it is they propose. But to some degree, back to your question about whether it is strategy-driven or resource-driven, I think depots, to some degree, are strategy-driven. Depending on the strategy, depending on the kinds of threats you envisage, you have a greater or lesser need for depots.
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    The depot system was really built during the era when we had the Cold War, we had a very large Russian threat, we were faced with the potential of a very large, long-term-type conflict in which substantial depot capability was of great importance.

    If you have a different strategic environment, you may have less need, but until we really see the results of the QDR, it is very hard for me to, in abstract terms, suggest how we might respond.

    Mr. ORTIZ. Anybody else before I ask another question?

    One of the reasons why we ask these questions, we have had secretary after secretary make an appearance before this panel and tell us the millions of dollars that are being saved in shutting down bases. But then we turn around and we have over $1 billion of maintenance work that is not being done.

    My question is what saving assumptions will you depend on in evaluating out-sourcing or privatization recommendations in the QDR, and what data are you going to use to support these assumptions, because this is what they tell us every single day. ''Oh, we have saved millions of dollars and we have done this and that.'' We have a billion dollars of maintenance work that has not been done. Where is the money going?

    And I hope I can understand the role that you are going to play. I understand that you are going to review what the QDR comes up with and then you will be making recommendations to this committee or do you meet with them, like we do with the Senate, and work things out? How does it work?
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    Mr. ODEEN. Well, let me just comment. We will be providing written comments on the Quadrennial Defense Review, the QDR, which we will provide to the secretary by the 15th of May and he will then transmit to the Congress as part of his report to you, which I believe he actually plans to deliver on the 19th, Monday the 19th. So we will have our written comments at that point in time for your review and consideration.

    Then, at that point, we will then be developing our own alternative strategies and so on, force structures, which we will provide to the Secretary by the first of December and then he, in turn, will send those to you by the 15th of December.

    So we will certainly be in a position to consult with you, work with you after the 15th of May, to elaborate on our comments, and certainly after our final report is submitted in December, we would look forward to the opportunity to come back and meet with this committee and elaborate on, respond to questions you may have and try to give you a better understanding of why we made certain recommendations.

    So we look forward to that opportunity to work with you and interact with this committee. In fact, I think one of the reasons we were anxious to be here today was to get a chance to get your thoughts and your issues on the table so we knew the kinds of concerns you had, to make sure that we could do the best job we can to be responsive to the issues.

    Mr. ORTIZ. I thank the gentleman and I think that you can understand our concerns. We would like to have the best for our troops.

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    Thank you very much.

    The CHAIRMAN. Another gentleman from Texas, Mr. Thornberry.

    Mr. THORNBERRY. Let me express one of my concerns, and that is the difficulty—well, let me back up a little bit.

    Obviously there are lots of pressures to try to influence the outcome of all this process. You have folks, for example, that have depots in their district, and that is one kind of pressure.

    One of the things that I am concerned about is the ability of the military to take a fresh look at this, because of the institutional pressures that exist, the natural bureaucratic self-interest which exists, and the ability to be bold enough, really, to be fresh in looking at what the threats are and how we might meet them.

     I am also concerned about their ability, the military's ability, to be flexible as this thing moves along. I think everybody acknowledges we cannot see into the future. We do not know the threats that are going to be there. One of the things we ought to try to achieve, it seems to me, is a flexible organization that continually analyzes these threats and tries to respond as these things change.

    You all seem to me in the position to try to, to the extent anybody can, make sure that happens, that we take a fresh look and that we also have flexibility into the strategy and the structure that emerges from this thing.
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    Do we have any hope of getting there?

    Mr. ODEEN. Well, you have posed the problem quite clearly. It is hard for any large organization to make dramatic change. That is just the nature of organizations, whether military of what.

    I believe that the leadership understands the need to make radical change. Dr. Krepinevich mentioned Vision 2010, some of the other service documents that talk about the kind of world they are going to face out 10, 15, 20 years from now, and I think they understand the issue. The thing that is hard for them to do or any large organization to do is to make that kind of a significant change in direction.

    There are a lot of interesting things going on. I am sure you will be briefed on this recent Fort Irwin Army exercise. The Marine Corps have done similar things. The Navy has similar ideas. The Air Force is doing some really very innovative thinking. And our goal, I believe, is to help stimulate that kind of thinking and to help provide some guidelines and some guidance as to how they can take advantage of new opportunities and new technologies, to take on the different kinds of threats and different kind of world they are going to be facing.

    Now, I have been, I think—I am not sure that surprised is the right word but I have been pleased in our meetings thus far with senior military people that they understand the problem. They understand this issue you have just raised. They have turned to us and said, We hope you will help us. We are looking forward to your assistance because you have the advantage of being somewhat apart from——
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    Mr. THORNBERRY. I think a lot of the responsibility is on your shoulders, to push them in that direction, and I want to encourage you to do the same thing.

    I also want to ask you two slightly briefer technical questions. No. 1, what level of detail does your review get down to? We need X number of B–2's and they should be located at these sites? Do you get down to that level?

    Second, do you look at the manufacturing base? We have had a number of discussions in this committee, for example, a couple of years ago, that we had to build another submarine just to make sure that we still had another yard capable of building another submarine. Do you get into all of that sort of thing in your review of what we have and what we need and how we are going to meet the threat?

    Mr. ODEEN. I think that is at least one level deeper than we will be able to go. I believe we will be able to say in some alternative circumstances and strategies you may need more bombers or fewer bombers; you may need more or less TACAIR, more naval capability. We may be more specific than just ''more,'' but we will not, I am sure, be saying we need 27 of those and they ought to be based thus and so. That is well below the level of detail we will be able to get into.

    Dave.

    Mr. THORNBERRY. And what about the manufacturing?

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    Admiral JEREMIAH. I was just going to make an observation that this morning we had a group of outside folks that Phil Odeen mentioned and amongst all of the ideas and thoughts and concerns that they had expressed, I think there was not one that we had not already heard from the Department in the course of talking to the service chiefs and many others.

    They know that environment, but they are also mindful of the comment that Mr. Skelton made: They cannot be wrong and neither can you, because the price we pay is enormous. So it has a natural tendency to be conservative, while trying to move inside that forward and they are doing it, I think, far more aggressively than the population at large understands in a variety of ways. And I think even the Congress has not had a chance to see some of the things that have gone on in the exercises that Mr. Odeen mentioned and the way they are beginning to tie terribly complex information flow technologies together in a way that gives us tremendous leverage in our forces.

    I think there is a great deal of forward thinking going on. It is a transitional problem. You are looking for forces today that will carry you forward into the future, that have utility in that future, as well as today. And the ones that don't are obviously going to get stripped off, and you can see that, I think, happening and you will see that happening in the QDR.

    So I don't feel as dismal about their ability to do that or their understanding of the problem. It is the ability and flexibility in the environment in which we live, where we have the kinds of deployments that were addressed earlier. And that we are cutting radically, as someone suggested this morning, the numbers of troops in the forces has a huge impact on our ability to sustain that force over a long period of time. Today's private is going to be the warrant officer and the top sergeant who you are dealing with in 10 or 15 years, and if he is not here, you cannot hire him off the street.
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    Mr. BATEMAN [presiding]. The gentleman from Mississippi, Mr. Taylor.

    Mr. TAYLOR. Thank you, Mr. Chairman. I want to go to a remark that was attributed to an Indian Army officer shortly after the gulf war. I think the question was what was the lesson learned of Desert Storm and I believe his reply was, ''You don't fight the Americans with conventional weapons.''

    That could lead to a couple of possibilities. No. 1, Mr. Weldon's great fear of a missile, chemical, biological, and nuclear attack on the United States, but it could also, given some of the things that have happened involving the Chinese Ocean Shipping Co. and a couple of container-loads of AK–47's and RPG's that have been smuggled into this country by that company, the acquisition of Hutchinson of two ports on the Panama Canal, what appears to be a flurry of Chinese Communist activity in Latin America just since the beginning of this year.

    It could also mean a reversion to the days of the wars of national liberation, in places where you have very young populations, in places where you have incredible differences between the few who control most of the wealth and the many who have almost nothing, and the frustration that must bring those young people as they come along and don't seem to think they are getting a fair shake out of life.

    Are you, in any way, focusing on the potential for that to happen? And also just the fact that you destabilize a region so that American business interests cannot even participate. I know of very few Americans who choose to do business in Colombia because of the instability there, because of the narcotraffickers, the revolt and the lawlessness and the kidnappings that are traditionally there, even before the other problems came along.
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    Is that one of the things that you are looking at? And doesn't that, going back to what Mr. Skelton said, doesn't

    Mr. ODEEN. I think that is a very good point and one we have certainly spent time already talking about, something that we have discussed with some of the Defense people, and the outside groups that we met with today made that exact same point.

    We had a very informative briefing by the National Intelligence Council on their view of the world in the year 2010, which is very consistent with the kind of things you talk about there—rapid growth in population in some parts of the world, dramatic increases in urbanization; they call them failed states, the kind of turbulence you are talking about, and that is something I think we have to be cognizant of, we have to work on.

    Does it require larger forces? I am not sure, but it requires different forces. I am certain it takes quite different forces. It also requires a degree of cooperation with other parts of the Government and nongovernmental agencies and international organizations beyond anything we have seen in the past.

    I think it is a very different challenge and a very, very difficult challenge, not only a different challenge, and one that we will take a hard look at.

    Mr. KREPINEVICH. Just to add to what Mr. Odeen said and, in a sense, to follow on what Mr. Thornberry said, it is my personal opinion, at least from what I have been hearing, that, in fact, the military leadership is beginning to focus on these problems.
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    Again, if you read these vision statements, as Mr. Odeen said, both the Army and the Marine Corps are concerned that 20 years hence, if you are doing peacekeeping, the Third World has become much more urbanized than it is today and yet most of our experience in these kinds of operations has not been in Mogadishus and Beiruts but more rural environments, if you will.

    You mentioned weapons of mass destruction. That certainly changes dramatically how you think about a major regional contingency.

    You mentioned the Indian officer who talked about weapons of mass destruction.

    Mr. TAYLOR. Well, no. All he said was you don't fight them conventionally, which leads to different scenarios.

    Mr. KREPINEVICH. Right. And that leads to, in a sense, General Shali's concern about the next war, if there is a regional war, won't look like Desert Storm because there are great incentives to basically compete with us in very different ways.

    In fact, there was another Indian general who basically said the way to go after the Americans basically is to deny them their forward bases. These are things that, at least in the Army I grew up in, we always had in Europe. That is where we planned to fight. We have gotten used to them, and the assumption is that we have had them and will always have them.

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    And yet, it seems to me that if you look 20 years out, for political reasons, as we saw last year in the autumn, we were denied political access to bases in the gulf region to conduct a retaliatory strike against Iraq. For geographic reasons, if you look at the future in East Asia, the distances are huge and the basing structure is far more tenuous.

    And also in '85 the Defense Science Board basically argued that even without going after weapons of mass destruction, by emphasizing perhaps missile forces as opposed to air forces, that even a Third World country could make large fixed bases very vulnerable in 20 years. In fact, as I said, one Indian general said the issue of forward bases is ''by far the trickiest part of the American operational problem. This is their proverbial Achilles heel. India needs to study the vulnerabilities and develop plans and execute operations to degrade these facilities in the run-up to and after commencement of hostilities. Scope exists for low-cost options to significantly reduce the combat potential of forces operating from these facilities.''

    And, in fact, the American military is conducting war games. A number of the Chiefs have spoken to this issue.

    I think one key point, as Mr. Thornberry pointed out, is to what degree is there room, amid all the other things that the American military is being asked to do, to basically begin to address this problem so that in 20 years we will have at least some idea of how to cope with them. That is a question that is not easily answered.

    Mr. BATEMAN. According to the chairman's list, the next person to be recognized for a question is Mr. Bateman, so I will recognize myself.

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    Welcome to the witnesses and we appreciate your being here to help us in preparing ourselves for some of the most, I think, major decisions that any National Security Committee has been called upon to make in a long, long while.

    I am struck by the frequent references at the earlier part of our session with the Bottom-Up Review, and it sort of puts into context something that I hope we will be very alert to as we go through this new evaluation and new process.

    You can criticize the Bottom-Up Review, both in terms of whether or not the strategy was right or whether it was a more challenging strategy than we really needed to be ready for, though I do not subscribe to that view, but the one thing, through the years since Bottom-Up Review that has been my observation is the President has never asked for funding; nor has the Congress ever provided the funding that provided the forces assumed based upon the strategy laid out in the Bottom-Up Review.

    I hope certainly, as I am hearing rhetoric that says everything is on the table, this is going to be driven by a strategy, not by a budget, but it is going to be budget constrained, because that, to me, sounds like a euphemism for it is going to be budget constrained because you will have to define the strategy accordingly.

    I hope I am off the mark in this but these are the concerns that I offer to you. And most of all, two points that maybe you can respond to.

    To what extent is there, in the forefront of your thinking, that the size, the shape, and the nature of our forces should be decided upon in the context of deterring challenge to our national security interests as a major objective of designing the necessary and adequate forces?
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    The other thing I think needs to be addressed is to what extent, if any, our national strategic planning ought to include some continuing multinational peacekeeping force which we made a contribution to. Are any of those things in your consideration?

    Mr. ODEEN. Well, let me comment. On the first one, I think clearly it is. I think the strategy emerging from the QDR and certainly the discussions we have had—in fact, one of our speakers today made a very major point, I think correctly, that it will be very important for us to focus much more on prevention and deterrence, and that is going to be very critical for the very difficult kind of challenges that Mr. Taylor and others have mentioned here today.

    So I think deterrence, prevention—shaping is the term I guess the Pentagon uses these days—I believe are all very, very important parts of the strategy and deserve more attention, and not just focus on the actual preparation for conflict.

    The multinational peacekeeping is an issue that I do not have any particular experience in or knowledge of. I do not know whether that will be an issue or not. I do not know the answer to that. Maybe somebody else has a thought. That is not an issue we have certainly thought about at this point in time.

    The CHAIRMAN. Ms. Harman.

    Ms. HARMAN. Thank you, Mr. Chairman. I want to commend you for holding this hearing before the QDR is released and just as Mr. Odeen's panel gets under way because I think we, as Members concerned most with national security, have a lot to contribute to these efforts on the front end, not just as recipients of a product that we get a few months from now.
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    I am a long-term member of the Odeen Fan Club and I am delighted that you are here, Mr. Odeen, and that you are leading this effort, because I think what you are about to do is absolutely critical.

    I hope you are eating your carrots because good eyesight to see into the future is very important here. You are not just involved in shaping our forces for the future; you are involved in shaping our future, because the United States, as the world's only superpower, has the ability to do that, I think, in some part because of the way we structure our defense forces.

    In fact, it even occurs to me that defense may be the wrong word. It is not just reactive. It is just defense that we are talking about. It is national security, and for the first time I think I am becoming a fan of the new name of this committee, because we are now talking about something a little bigger than we used to talk about.

    Admiral Jeremiah was talking about our former chairman, Les Aspin, the former Secretary of Defense. He is looking over our shoulder right now and he was a member of Congress who was very good at taking a long-term view of our future. And I hope that whether some members of this committee agree with everything he said or not, that we all are inspired by what he did and that we will all do that and that you will do that, because you are in the lead now and if you are bold and if Secretary Cohen is bold, then we will get a product, I think, that is much better than what we will end up with if you are not bold and if we impose some of our views on you.

    I think you can do the better job at the front end, with some input from us, and then we can review it and perhaps tweak it and the end product will be the best product. So you know I think this and I am just urging you one more time to do this.
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    Several questions. I was very concerned by press reports last week that the QDR was not going to deal substantively with three areas: infrastructure, defense agencies, and the Reserve components. I wrote to Secretary Cohen about this. He called me up a couple of days ago and said that these reports were true; however, his plan was to set up some additional advisory panels and to lean on you to do some of this job for him, because he felt that he could not get adequate recommendations from inside the building alone, especially on the subject of infrastructure.

    My first question, and I will just put the other ones to you before I stop, my first question is about this idea and what your view is about separating some parts of the inquiry out of the NPR. Will we have a strong integrated document or a strong integrated set of recommendations if we do this? And if the answer is no, then what? That is one.

    The second is on RMA, the revolution on military affairs. Several has asked about it. I think that it could be a key part of what you look at. I just want to know your views of RMA and what kind of role it will play in your considerations.

    And third, I think all of you have had experience in the past with the heavy bomber study, various kinds of long-range precision strike evaluations and so forth, and what I would like to know is whether or not your review will review those parts of the DAMS study that were used by the QDR panels to arrive at recommendations and that we will presumably learn about in the next few weeks.

    Mr. ODEEN. First of all, let me just comment that the staff prepared box lunches for us to eat on our way between our public outreach session and our hearing today, and in the box lunches were carrots. So somebody knew what you were going to suggest here.
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    Ms. HARMAN. A visionary staff.

    Mr. ODEEN. All three of us have had carrots for lunch, so we are off to a good start.

    I saw the article that you alluded to that Secretary Cohen is going to be deferring certain issues, and we have talked to him about that. I believe his view, as I suspect he shared with you, is that his time is so short—he really got on board in early February and there was really so little time, with Europe trips and Asian trips, that he simply couldn't come to grips with all of the issues that he felt he should. Therefore, I believe he does plan to seek some other outside help, to help him focus on some of these issues that are both difficult and politically complex and to try to get some help.

    He also has told us in all of our interactions with him that he is looking forward to working with us on these issues, as well. In fact, he made a speech to the Navy League recently and he talked about the QDR as a wayplace or a milestone on the way to a longer process. And we certainly hope to work with him very closely—we will work with him closely, not only to make sure we are informed and doing our job but also to provide feedback to the Department and hopefully provide useful input to them, as well. So I think it is probably an astute thing, a smart thing to do, given the timeframe he is in.

    We will, I can assure you, look hard at the revolution in military affairs. We have had briefings on it, discussions on it. I believe the panel as a whole feels that this is an important issue. If we didn't, he wouldn't let us not do it; I can assure you. But I think we feel that it is something very central to our role.
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    And finally, we will be getting briefed on these various studies and I am sure they will play a role in the kind of recommendations we make. We are not going to get into discussions about whether we have more of this missile and less of that, in terms of munitions, I am sure, but the studies do have broader—clearly have broader ramifications, and those aspects we will clearly be examining.

    Ms. HARMAN. Any other comments? Thank you.

    The CHAIRMAN. Thank you. That is a good point you make, Ms. Harman. Some of our witnesses on prior occasions have felt they had to, every one, respond to the question. That is not necessarily true. And the same thing is true of our members. I usually call on them but they don't have to ask questions unless they have one.

    Mr. Bateman, do you have another question?

    Mr. BATEMAN. No.

    The CHAIRMAN. Mr. Lewis.

    Mr. LEWIS. Mr. Odeen, I would like to ask the panel, since the two-major-regional-conflict scenario was put in place, what has changed that would make that not a valid strategy today, if that would be the case, and are we hearing that that may be the case? And in answering that, if the things we are hearing about going from 10 divisions to 8 divisions, what would be the background for that?
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    Mr. ODEEN. Well, let me take a try at it and then maybe ask Admiral Jeremiah to comment, as well. I think the things that have changed, first of all, in the 4 years since the Bottom-Up Review has taken place, the world has changed. I mean, the situation in Korea is quite different than we perceived it to be 4 years ago in terms of the tenuous nature of the very, very difficult economic situation in North Korea, the leadership situation and so on.

    Second, in the Middle East, 4 more years have gone by. The embargo is in place. I think most of the judgments are that the Iraqis still have capability but certainly perhaps diminished capability.

    But regardless of all that, I believe we feel that if you are building forces for the next 20 and 30 years, it would be a mistake to pattern them very tightly on two particular potential crises that are fairly near term in their nature and very specific in their nature, and that we have to be prepared for not only a broader range of contingencies but also a very different set.

    Back to the point that Mr. Taylor made about potential hostile countries saying we are not going to make the mistake Saddam Hussein said, they are going to approach or likely approach us in a very different kind of way, so it would be a mistake to build all of our planning, our strategy, our forces around two very specific contingencies that may not be relevant at all to the needs 5, 10 years from now; it may even go away in 2 or 3 years, for all we know.

    So I believe we need a much broader, more sophisticated strategy to use to plan our forces. But let me ask Dave to respond to that.
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    Admiral JEREMIAH. First of all, I think that the two major regional contingencies, as I indicated, when they went from base force to the Bottom-Up Review, became particularized to specific nations and scenarios when, in fact, they were intended to be simply a means of testing the ability of the United States to handle two near-simultaneous conflicts.

    So when you do that, you may tend to build into a scenario that changes underneath you, and I think that has happened to some degree in Korea and it has also happened in the gulf. I think that today there is probably more concern, for instance, about Iran than there might be about Iraq. The question is would you address those two countries in the same way? And I do not know the answer to that, but I think what you want to be able to do is move forces to those areas.

    The next question is simultaneity, or how soon is that going to happen? Are you likely to have something happen in one country and someone decide to take on the United States because they are preoccupied by one event in a different theater? I do not know the answer to that one, either, and I do not think anybody really did before, but we thought it was important to be able to deal with something like that, to test the force structure.

    I think today we have a different suite of weapons. I think we recognize that pinning it down to a particular scenario or set of nations may not be the right thing to do, that instead of working toward threat-driven forces you might drive toward capabilities, to have the capability and the weapon systems to deal with a problem wherever it occurs.

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    I think there is probably a different perception about the potential capability of countries today, in terms of how they would deal with the United States. An asymmetrical problem or response to U.S. forces is a word or phrase that has been used repeatedly in the briefings that we have heard, and they tend to go towards weapons of mass destruction, particularly biological and chemical, but you can think of a much larger range of problems or opportunities that could arise that could cause a nation to become an effective hostile force to the United States by using technology or something, a wild card of some nature that we have not thought of.

    So I think that changes the strategy from one that became one of responding to two specific scenarios, which I think may have been misplaced in some ways, to a strategy that we now hear goes along the lines of shape, respond and prepare: Try to shape the environment, and that requires the help of the State Department and economic support in a variety of other ways; try to respond effectively to a threat when you see it developing beyond your ability to shape it; and, at the same time, try to prepare for the future that Mr. Thornberry was talking about in an effective way.

    So it is a balance of directions, of strategic directions within the Department. That does not sound wrong to me. It is more likely strategy than the two MRC's, which were scenario.

    Mr. KREPINEVICH. I would just add to that again, I do not think anyone would quarrel with the desirability of being able to basically execute this kind of strategy or have this kind of force posture, but there are two considerations, it seems to me. No. 1 is there is the opportunity cost. By minimizing a risk here, you are increasing a risk somewhere else, unless you are willing to put more money into defense.
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    And the other, as Admiral Jeremiah said, is that the competition is changing. I think you have to give the other side some credit, that it seems to me if they are looking to take us in some region, the lesson they learned from the gulf war is not somehow that we need to resurrect the Republican Guard and have another go at the Americans, but rather to basically present a very different problem, the kind that General Shali is worried about.

    So again, if you think over the next 20 years that we are likely to lose some of our so-called monopolies in terms of the ability to strike at long distances, say, with cruise or ballistic missiles, the ability to do targeting of fixed soft targets by exploiting assets in space, and maybe even diffusion of weapons of mass destruction capability, to create the kind of basing problem or access to bases, forward bases, that some of our military leaders are concerned about, then you begin to say what works well today, unless I can solve that problem, then how do I get my TACAIR into theater or how do I get it in there early, if I don't have the bases? How do I get my heavy, mechanized army units in there if I don't have access to the bases? How do I sustain them forward if I haven't figured out a different way of running logistics?

    So, in a sense, if tomorrow's problems are very different from today, you may have something that does a great job today but which, at some point, begins to depreciate rather rapidly. So there is that tension between preparing for a very different tomorrow while, at the same time, covering the challenges of today.

    Mr. LEWIS. And, of course, my feeling is I would rather be safe than sorry. And if it is true that if we had to deal with a gulf war problem today, that we would have problems responding the way we did during that war, then that concerns me.
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    The CHAIRMAN. Thank you.

    Mr. Snyder, the gentleman from Arkansas.

    Mr. SNYDER. Thank you, Mr. Chairman.

    Mr. Odeen, in your written statement you talk about some of other things you have to look at in the year 2010 and at the bottom of your list there you say the needs of the Nation in the 21st century. Would you tell me what you are thinking about there and how you are going about looking at that?

    Mr. ODEEN. Well, I think the point we were trying to make there is really make to the point Mr. Taylor and others have made that the security environment is going to be very different. I think Mr. Thornberry made some of the same kinds of points. We have issues of terrorism. We have issues of weapons of mass destruction. We have new technology that other countries can adopt and use effectively against us, maybe in a very selective kind of area, but to make the challenge to our forces very different.

    So we really have to look beyond the turn of the century. We have to look beyond the year 2010 in kind of a timeframe, in order to decide what kinds of situations, what kinds of scenarios, what kinds of threats might we face and what kind of military capability we need in that timeframe.

    Mr. SNYDER. I guess I was reading that a little differently. The other things on your list were the dramatic and continuous changes in the world, the emerging technological directions and opportunities, the changing nature of warfare, the role of the military and its relationship to other instruments of power, the relationships we have around the globe and then finally, the needs of the Nation in the 21st century. I thought maybe that was your way of talking about education or——
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    Mr. ODEEN. No, we do not intend to go that broadly.

    Mr. SNYDER. I understand.

    I want to ask, I am a first-term member here and one of the things I have been most impressed with has been the quality of the military leadership that has occupied those seats in the other hearings we have had. I will use as an example Admiral Prueher. While the rest of the country talks about, ''Gee, what are we going to do in the post-cold-war world?'' those men and women seem to have figured out what to do and have done very well.

    Are you all going to be addressing issues with regard to how we provide the military leadership in the future, the culture of the military, what in the military is going to lead to the promotion of the bright people for the future, the whole culture of the military, procurement issues, those kinds of things, jointness?

    Mr. ODEEN. I think probably not in any very specific way. I mean, those are very critical issues. I agree with you that that they are very important to our future, but the task is laid out in the legislation, I think, which is very broad and going to be challenging enough, is more focused on

    Mr. SNYDER. And finally, my last question. One of the questions that comes up here, and the chairman referred to it in his statement also, was there clearly has been a fair amount of peacekeeping operations going on. I talked with a military person the other day who went to Italy to do some work in Bosnia about a year or so ago and from there, rather than going back home, she was transferred to the Sierra Leone and it really stretched out her and her family, although she loved being there.
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    I assume, when we talk about everything being on the table, one conclusion may be that well, that may have been about right, but there actually may have been other areas in the world that we should have gone to, or we should have gone to sooner in order to avoid some of the prolonged nature.

    Was that a fair statement? I mean, we just cannot think in terms of the activities of the last 4 years as the most extreme and active that we would expect a military of the future to be. Is that clear?

    Mr. ODEEN. I think the difference has been that 4 years ago when you did the Bottom-Up Review, that kind of tempo, the number of kind of operations we have done in the last 4 years was simply not anticipated because we had not done that.

    Mr. SNYDER. So we have that experience now.

    Mr. ODEEN. Now we have, and there is no particular reason to think that is going to change dramatically. So I believe it is important, in both the QDR and also in our efforts, to think about that kind of a situation. That may mean different ways of structuring forces.

    I mean, some parts of the forces are under enormous pressure right now because of all these areas, but to a large degree, they tend to be more focused. It is military police; it is airlift; it is certain kinds of AWACS. There are certain elements that are in particular demand because of their value in these kinds of situations.
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    So I think the Pentagon, the Defense Department has to think and we have to think about how do we structure our forces so we can handle those without having the situation you just mentioned, of military personnel going out and coming back, going right back out again. It is very, very tough on them and you are not going to keep good people in the military for long term if you treat them that way.

    Mr. SNYDER. You are not going to keep their families.

    Mr. ODEEN. That is right, exactly.

    Mr. SNYDER. General Joulwan made the point the other day—I have lived in Africa a couple of times in my life, so I was asking him about it—he made the point that if he had additional resources, there are probably things he could do to try to minimize some of these future hot spots or at least be better prepared for when they occur.

    Did you have something else, Admiral Jeremiah?

    Admiral JEREMIAH. I just wanted to essentially expand on the point that you have made. That is while our charter is specifically defense, yours is national security and it embraces a rather different set of components.

    I go back to the comment I made earlier, that a lot of what is done in the shaping phase is done by agencies other than the Department of Defense. And to the degree that you are successful in doing those things, either through diplomacy or other political actions and to some degree through different kinds of perhaps economic incentives, as an example, and some forward thinking on how we handle problems that we see around the world, you can avoid the involvement of military forces, which fundamentally are the most expensive solution.
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    So it is outside our charter, but we will probably make some comments with respect to activities that the Congress might want to examine in terms of other agencies of Government.

    Mr. SNYDER. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. We have a vote on, so we will break right here and go vote. We have one vote and then another vote right after that, so probably about 15 minutes. We will break and come right back.

    [Recess.]

    The CHAIRMAN. The committee will please be in order.

    I understand your problem, gentlemen, that you have other meetings, and we will try to hurry on. We have Mr. McHale right now and maybe one or two others might come in.

    Mr. McHale, you have the floor.

    Mr. MCHALE. Mr. Chairman, I thank you. I also want the record to note that I am now the ranking Democrat on the National Security Committee. [Laughter.]

    Mr. ODEEN. Congratulations, Mr. McHale.

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    Mr. MCHALE. I appreciate the compliment and I will try not to let the power go to my head.

    Gentlemen, a bit more seriously, thank you very much for your testimony and most especially for your patience.

    Dr. Krepinevich, I am delighted to see you here. Based on the correspondence that we have exchanged in the past, you are aware that I have read your published reports and have a great deal of respect for them.

    Mr. KREPINEVICH. Thank you, sir.

    Mr. MCHALE. So it is a particular pleasure to see you here today.

    I have only one question. It was prompted by the initial observations made by Admiral Jeremiah, later reinforced in response to subsequent questioning. That is that if there is an apparent flaw in the Bottom-Up Review, it was that we have focused too narrowly on two specific scenarios, which initially were meant to be demonstrative but I think at some point along the way incrementally became operational. I, too, think that was a mistake of emphasis and we need to be more flexible in our planning.

    My question really relates to what I believe is another potential flaw that will become more serious with the passage of time, and that is that the MRC itself, as a strategic concept, may become anachronistic, may become dated, and that indeed, it may be artificially complacent to build our national security strategy of blocks composed of MRC's.
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    Now, with that as an introduction, the question that I jotted down in response to Admiral Jeremiah's comments earlier really is the following. First, a brief observation, then the question.

    The current global balance of military power has made it probable that any military conflict would likely occur at the level of one or two MRCs. However, in my view, the evolving military strength of several potential adversaries, notably China, will create, in 10 or 15 years, the requirement that the United States be able to fight at a level of combat far in excess of a current MRC.

    In short, I believe that a strategy based on one or two MRCs will, by the year 2010, by inadequate to address the more challenging threat environment.

    My question is are we, in our military planning, focusing too narrowly on the possibility of a near-term MRC while failing to train and most especially failing to equip for the strategic threat of a far more dangerous world as it will exist a decade from now? I would present that to all three gentlemen and request your comment.

    Admiral JEREMIAH. I have been to China twice since the time I left active duty and discussed a number of issues with the senior and the next senior member of the Central Military Committee, along with Dr. Schlesinger and, in the first instance, with Secretary McNamara, former Secretary McNamara, and a delegation of four-star military officers.

    We had an opportunity to see what they allowed us to see and I think that while there is no question that China is a growing economic power and a growing military power and will conduct itself accordingly, I would suggest that that particular issue and that time horizon are probably too tightly coupled. I would suggest that barring some unforeseen circumstances in how the United States develops
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    But I mentioned earlier that the wild card is always an issue, the ability to find technologies that develop over the next decade, that allow someone to challenge us in an asymmetrical way that we have not thought of before or have not recognized.

    At the moment, the United States is probably better able to deal with almost all of those technology changes than anyone else, and I think that so long as our weapons development is done in a way that we have the capability to move into full-scale production ahead of anyone else and we are comfortable that we are equal to any other technology we see around the world, and then we are willing, when faced with a change in that equation where we begin to see someone consciously making changes in their military capability and we are willing to move at the same or nearly the same time, then we will always be ahead of that potential conventional opponent.

    We cannot deal with the guy with the gas in the subway in that fashion; nor is that the question you are asking. So I think that is the first point, is that we want to be sure that our technology is at hand.

    The second point is I think that I cannot see, in the 10-year timeframe or just a little more than that, a truly challenging threat at the scale you are suggesting.

    And third, I suspect that the right course of action is for us to work very hard in as many ways as possible, when we recognize a potential peer competitor, to create a situation where the competition is channeled into the conventional kinds of competition, like economics, and not military competition.
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    Mr. MCHALE. If I may, just as a prelude to the other two responses, I really did not intend, though I did reference China. My question really refers to the whole strategic concept of the MRC. When we look at the threat environment in 2010 or 2015, should we still be thinking in terms of MRC's or will the changed threat environment require us to use different building blocks in terms of our strategic force?

    Admiral JEREMIAH. I think part of the answer that we may come back to you with, back to the Congress, would be to look at some of the likely outcomes that we could project, the kinds of force structure that would be required, given those outcomes, and then, over time, you, together with the Department, can make judgments about what track you are on and where you have to move.

    Mr. MCHALE. I agree with that completely and I am worried that just as we focused too narrowly, almost unconsciously, on two specific scenarios, that we may, with a similar lack of analytical depth, accept the MRC as the building block appropriate to the force structure. And what I am suggesting is the force structure should be tailored to the threat environment.

    Mr. Odeen.

    Mr. ODEEN. I think scenarios and MRCs and things like that really are tests of force structure, not a basis for planning. You use a variety of different scenarios to test how robust our forces are to handle that. What are the shortfalls to——

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    Mr. MCHALE. I agree.

    Mr. ODEEN [continuing.] Guide you in terms of ways to make your forces better able to handle a wide range of kinds of contingencies.

    Mr. MCHALE. I agree, but that is not what happened with the scenarios, and that is really the point that I am making. Just as we unconsciously took an analytical tool and turned it into an operational commitment, I am concerned that we might unintentionally do the same thing with regard to the appropriate building block of the MRC that makes sense in 1997, but I do not think will make sense in 2010 or 2015.

    Forgive me, Mr. Chairman.

    Mr. KREPINEVICH. If I could just add to what my colleagues have said, I believe it was Secretary Cohen who said that the two-MRC posture is not a strategy. And, in fact, I would agree with you, Congressman, that it seems to me you referred to China—it seems one of the great strategic challenges that we have over the next 20 years is to manage the rise of China in Asia, because just by virtue of its growing wealth and confidence, it will create some sort of change in the military balance in East Asia, that and the technology flux that we are experiencing.

    So what this reminds me of, if you want to use a historical analog, is actually Great Britain and its Royal Navy, as it came to the end of its period of great dominance about 100 years ago, had something that was called the two-power standard, its version, if you will, of two MRCs, that the Royal Navy would be capable of taking on the second and third largest navy in the world nearly simultaneously, I suppose.
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    That problem fell away—the two other large Navies were the French and the Russian—because you again were in a period of dynamic geopolitical change and it turned out, first of all, that Germany ended up posing the greatest naval threat. Both France and Russia ended up being allies, not adversaries. And second, the measure, which was the number of battleships, while important, it turned out that an asymmetric problem, the new technology, the submarine and the long-range torpedo, presented the Royal Navy with a very different kind of challenge than what they were prepared for.

    So it was not only a difference in terms of the scale of the problem, the German Navy being much bigger and, of course, the army presenting a wholly different kind of problem, but also the new technology that changed the way that the problem could be presented to the Royal Navy.

    So I think I would wholeheartedly agree with you that to get lost in the MRCs is perhaps to miss the larger strategic challenges, first of all, and certainly MRC's, if they are based on old ways of fighting, when you look out 20 years may not be the best way to go.

    And again, not to beat a dead horse, but again, I think that is what General Shali and other military leaders are telling us: watch out for the asymmetric challenge.

    Mr. MCHALE. I agree with every word you just said. In the year 2010, I do not want a force structure that is well trained and equipped to fight a 1997 war.

    Thank you, Mr. Chairman.
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    Admiral JEREMIAH. Mr. Chairman, Andy made a comment that I would like to try to clarify in the sense that I think we want to manage the relationship with China, not manage China, right?

    Mr. KREPINEVICH. Absolutely.

    Mr. MCHALE. Mr. Chairman, if I may very briefly, I did not mean to imply that confrontation with China is inevitable. I think just the opposite. I believe that with statesmanship on both sides of the Pacific, we can have a cooperative, not an adversarial relationship.

    But we here on this committee, I am afraid, must sometimes take a dim view of future scenarios. And while we seek to avoid a confrontation with China and much prefer a balanced relationship of mutual respect and cooperation, we must be prepared to confront any military challenge that could conceivably face our Nation, not just next year but 15 years from now. And that means that sometimes we have to have a very hard and realistic view of the future.

    Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. And while we are on that subject, too, I was just thinking, talking about new technologies coming along and all the rest, we still have the age-old problem of people in the militaries throughout the world. I think China, for instance, and Japan back before World War II when we viewed the Japanese Army as not being a very credible military, and you see what happened. All of a sudden in Korea, that war that nobody predicted. Our national intelligence estimate did not tell us about Korea. And we had cut back so much and all of a sudden we had it.
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    China came in. All those hordes of people, and what did our technology do for us?

    Political decisions get involved in it. We decided we would not use nuclear weapons—political decision. We have relied on that a lot of times to get us over the hump. We also made decisions not to bomb beyond the Yalu, and that made the men, the people on the ground were effective, more than our advanced technologies, and you see what that resulted in.

    So I hope that people will be thinking about political decisions that will be made to maybe hamper our use of the best technology we have in certain instances, and that is a big decision that I think has to be considered.

    Mr. Pappas.

    Mr. PAPPAS. Thank you, Mr. Chairman. And gentlemen, thank you for being here.

    There are some around the country, and this has been expressed to me on more than one occasion, that view the potential work of the QDR and your panel in particular as being similar to that of a BRAC, and I am wondering if you could comment on that.

    To give you a comment from someone who comes from central New Jersey, which I represent, Fort Monmouth and, near my district, Picatinny Arsenal, just recently some folks from the Army Materiel Command came into my office to tell me that Fort Monmouth could lose up to 300 positions and Picatinny up to 700. And Mr. Sisisky earlier, I think, expressed a concern that I have that there is a lot of anxiety out there from people that could be affected by these kinds of reductions.
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    I am just wondering if you could comment on my question about how you view yourselves.

    Mr. ODEEN. Well, I think we are very different from the BRAC. First of all, the BRAC commission had a great amount of authority and power. They could essentially say we ought to close these bases and it happened unless the Congress and the President said otherwise.

    So we have a very different charter. Our charter is to take a much longer view of the defense posture for the next 10, 15, 20 years, and while there could well be implications, almost certainly will be implications for infrastructure and things like that, it will be not specific, I am sure, to particular areas, and it is also going to be a longer term kind of thing. So I do not see this as a BRAC kind of process at all.

    Now, the QDR, which could well, if they make decisions on forces, reduce forces of some kind, that obviously could affect a particular location, but I do not see the output of the National Defense Panel doing that sort of thing.

    Mr. PAPPAS. In the memo that the committee staff prepared, there were summaries of the draft QDR strategies that were summarized and there were excerpts pulled. I would just like to mention one in particular. I guess this is the first, to promote regional stability, including the need to ''adopt and strengthen core alliances,'' such as the plan to expand NATO.

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    At an earlier hearing—I do not recall whether it was the full committee or a subcommittee—I had raised a question with some other folks from another agency about NATO and I would like your panel, your panel's opinion as to the proposed expansion of NATO and the United States part in defending, if necessary, an expanded NATO with all of the pressure that we have and how I view our uniformed personnel being stretched.

    Mr. ODEEN. That is not an issue we have looked at, I am not sure it is an issue we will look at, and I do not personally have an opinion on it. I do not know whether Dave or Andy—it is just not the kind of issue we have had any reason to come to grips with yet. Perhaps we will later, but we have not looked at that issue yet.

    Mr. PAPPAS. Is it because that expansion has not taken place? Earlier you talked about your needing to look ahead to the future and the needs, and that, as I view it, is a potential reality.

    Mr. ODEEN. I think it is very likely that one of the scenarios we will look at will be some kind of a different circumstance, situation in Europe. I am not sure if we will or not but one of the potential scenarios people talk about is some kind of a resurgent Russia in some case and obviously if that were to happen, an expanded NATO would be a very critical part of that thing, but I just do not know if we will look at that or not.

    Andy, do you want to answer?

    Mr. KREPINEVICH. I would agree with Mr. Odeen. It is, at least as I understand it, not our position to make policy; it is basically to look at the environment 20 years out and get a sense of what kind of challenges the American military might have to confront and overcome.
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    So if NATO expansion is part of the new environment, as Mr. Odeen says, then perhaps in looking at scenarios with respect to the future of Europe, you would look at perhaps what some of our new allies might bring to the table in terms of perhaps things like peacekeeping, but also what kinds of military capabilities we would need to develop to protect an expanded alliance.

    Mr. PAPPAS. So then how do you determine what future scenarios you consider? Obviously you have not considered that one, and what was your thought process in not considering that as part of your long-range thinking?

    Mr. KREPINEVICH. Again, we have not gotten into the process of crafting specific scenarios yet but typically, scenarios, when used as the basis of strategic planning, you start out with today and you have a pretty good idea of what today is, but as you move into the future, you are sort of at the bottom of a cone and the further you move into the future, the greater the range of uncertainty.

    And while you cannot have an infinite number of scenarios, what you try to do is get enough of a representative number that you sort of cover the range of possibilities and try and get a sense of what some of the common challenges are.

    Again, some of our military leaders, for example, are saying these kinds of challenges are how do you operate, project power, without having access or early access to forward bases? How do you control space? How do you defend yourself against information warfare? How do you conduct peacekeeping in urban environments? How do you deal with a regional contingency where the other side has weapons of mass destruction? And so on.
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    So prospectively examining these sorts of scenarios will begin to give you a sense of what kinds of challenges you will face. Then it becomes the military's task to identify how they can meet those challenges.

    The CHAIRMAN. Mr. Dellums.

    Mr. DELLUMS. Thank you, Mr. Chairman.

    I would just like one or two follow-on questions.

    Mr. Odeen, on several occasions the terms ''strategy-driven'' and ''budget constrained'' have been mentioned and I would like to ask this question.

    When the Quadrennial Review provides you with their recommendations, will you take a look at the budget assumptions that underlie those recommendations to determine the efficacy of whether or not these strategies can be efficiently and effectively carried out?

    Mr. ODEEN. We certainly will do our best to do that. I think it is pretty clear that the QDR has been done under the assumption of about a $250 billion budget into the foreseeable future, so that is the assumption they are using. That is a reality that they are using. They see that as a reality. We will look at it. If we think it is not realistic, I am sure we will look at that. We have not thought about that issue yet, but that is something that is obviously very critical to the overall process: what kind of budgetary assumptions you make. They are constraining. Like it or not, they are.
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    Mr. DELLUMS. One of the reasons why I asked the question is not only to elicit the response of our distinguished witnesses, Mr. Chairman, but also to point out that on a number of occasions we continue to talk about budget constraints and planning to a particular number, as if the Congress of the United States stands outside of that process.

    I would suggest that those members of Congress that aggressively articulated, advocated and voted for a balanced budget are an integral part of the budget constraints, and we cannot stand outside of that discussion. And the extent to which we are asking the planners to engage in strategy-driven planning, we also have provided the framework, the budgetary constraints within which they operate.

    So that is not purely an administrative function; that is also a function of the political process that includes the Congress.

    Having said that, I want to make two final points. Mr. Odeen and your distinguished colleagues, it is my view that long-term, you folks probably have, at the end of the day, the most significant and important responsibility.

    The QDR is going to take place within a relatively short and narrow time-frame. You folks have a longer job and will be in business for a longer time and will take a much longer view. And perhaps at the end of the day, America's military forces will be more shaped by what you folks do, maybe, even than the QDR.

    If I had to speculate at this point, I would speculate that there will be some changes by virtue of the QDR, but they would not be overly dramatic. But I think if there are going to be any long-term dramatic changes, it probably will end up being the National Defense Panel that will have to think those things through.
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    Having said that, I just want to make one last comment. I know, Admiral Jeremiah, you mentioned that it is not your

    My hope would be even though it is not your charge, that at some point along the way you gentlemen will point out that this post-Cold War era provides us with the opportunity to rethink and broaden the definition of national security. And I think you are absolutely correct that that is a properly sized, properly trained and appropriately equipped military; it is also an engaged foreign policy.

    And I would suggest, as an integral part of the question that my colleague from Arkansas raised, that vital domestic interests are also an integral part of our national security strategy. And I would suggest that, for example, if we had the greatest and most powerful military force on the face of the earth and our society was deteriorating culturally, politically, economically and socially, then what are we defending, if it is not a cohesive society and cities that work and people that are well informed, well trained and well educated?

    And so I would like to hope that you folks, because if you come out with such a statement from the National Defense Panel that this is now the moment for a new national security agenda that includes a vital economy and a healthy domestic society and an engaged foreign policy and an appropriately sized, appropriately trained, and appropriately equipped military, that will be a powerful statement, because I think this moment is pregnant with great potential and great opportunities.

    And, as I said, at the end of the day, I think you folks probably will play a bigger role in making that paradigm change than maybe even the Quadrennial Review, because time will be on your side.
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    Mr. ODEEN. Thank you. That is a daunting challenge, but we appreciate your comments.

    Mr. DELLUMS. Thank you, sir.

    The CHAIRMAN. I thank you. I think it is very basic, talking about the standpoint of those who use the term ''budget driven,'' I think those people just mean that no amount of money is too little when it comes to properly defending your country. The first obligation of any Federal Government is to defend its people, because all the subdivisions of government and all the rest can work on all the other things that we have to contend with, but only a Federal Government, a national government, can defend all the people.

    And I repeat: No amount of money is too much when it is needed to properly defend our country. That is the basis for all those kinds of statements.

    We thank you for your effort in being here today. I think most people do not realize that your work really comes later. You have been thinking about it a lot but after the Quadrennial Review comes out, then you will really get involved. We look forward to talking to you again at that time. Thank you very much.

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

    The CHAIRMAN. The meeting will be adjourned.

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    [Whereupon, at 3:50 p.m., the committee was adjourned.]

    Offset folios 98 to 104 insert here

QUESTIONS SUBMITTED BY MR. LEWIS

    Mr. LEWIS. What is the NDP's opinion of the budget driving the QDR recommendations as opposed to strategy driving them?

    Mr. ODEEN. The NDP believes that DoD made a serious and responsible review of strategy in its review process. Secretary Cohen and General Shalikashvili, in testimony to the Senate, stated that their review was strategy driven. However, they also said it was ''budget constrained.'' We agree with this. DoD clearly only considered force structures and weapons that could be supported within a $250 billion budget.

    Mr. LEWIS. What efforts have been taken to guarantee that strategy is the priority of this review?

    Mr. ODEEN. This question is best addressed to Secretary Cohen.

    Mr. LEWIS. Does DoD have adequate doctrine to prepare for urban warfare scenarios?

    Mr. ODEEN. The Panel believes that the services are actively addressing urban warfare capabilities in the context of small scale contingencies. However, we have not examined their progress in any detail. Urban warfare is a very difficult challenge and deserves priority attention.
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    Mr. LEWIS. Will urban warfare be addressed in the QDR?

    Mr. ODEEN. Page 11 of the Report of the QDR characterizes the intent of DoD, but does not specifically address urban warfare. Page 43 provides information relative to the Marine Corp's plans for studying the issue. The NDP's assessment of the QDR encourages DoD to increase its attention to this issue.

    Mr. LEWIS. Reports indicate budget reductions will disproportionately impact the Army, how can we justify reducing the Army's budget?

    Mr. ODEEN. The QDR does not spell out the dollar impact of the various program decisions, so we are unable to determine the impact on individual services. The Panel will consider alternative force structures that reflect possible future security environments. These alternatives will likely have a range budget outcomes, both in total and by service.

    Mr. LEWIS. Does the QDR address plans to trim headquarters and overhead defense-wide in order to maintain force in the field?

    Mr. ODEEN. The QDR gives high priority to cutting support and infrastructure to generate funds for modernization. As we understand it, the services have focused their force structure reductions on cutting ''tail'' as opposed to ''tooth.''

    Mr. LEWIS. Will the NDP report discuss and possibly recommend a change in the number of Army divisions?
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    Mr. ODEEN. It is too early for the NDP to comment on specific recommendations relative to force structure. However, we will look at a range of alternative force structures which may reduce or increase individual force structure components.

QUESTIONS SUBMITTED BY MR. GIBBONS

    Mr. GIBBONS. How does the NDP assess the burden of smaller scale contingencies on force readiness, particularly on combat readiness?

    Mr. ODEEN. The Panel believes that SSCs place a significant burden on readiness and we will study this issue in the coming months. It must be recognized that SSCs are an important DoD mission in the post-Cold War era and the need to insure readiness for SSCs is an important element in DoD's overall readiness.

    Mr. GIBBONS. What is the effect of SSCs on guard and reserve forces?

    Mr. ODEEN. The NDP will study this issue. We have no view at this time.

    Mr. GIBBONS. How should SSC related factors be weighed in force planning?

    Mr. ODEEN. The NDP will study this issue. In light of the current environment, SSCs are of considerable importance to DoD force planning and training.
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THE QUADRENNIAL DEFENSE REVIEW OUTCOME ASSESSMENT

House of Representatives,

Committee on National Security,

Washington, DC, Wednesday, May 21, 1997.

    The committee met, pursuant to call, at 9:35 a.m. in room 2118, Rayburn House Office Building, Hon. Floyd D. Spence (chairman of the committee) presiding.

OPENING STATEMENT OF HON. FLOYD D. SPENCE, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, COMMITTEE ON NATIONAL SECURITY

    The CHAIRMAN. The meeting will please be in order.

    Before proceeding with today's subject, I want to take a minute to recognize a new member of the committee, the gentleman from Texas, Mr. Ciro Rodriguez. Mr. Rodriguez was elected to fill the vacancy created by the passing of our late colleague, Frank Tejeda. We welcome you today and look forward to serving with you on this committee, but before making a unanimous consent, let me recognize Mr. Dellums from California for any welcoming remarks he would like to make.

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

    I would join with you and any remarks you would make to welcome our distinguished new colleague from Texas. I am very pleased at his election, and I am sure that he will be a valuable and contributing Member to this Congress, and I look forward to working with him.

    And with these brief remarks, Mr. Chairman, I would yield back the balance of my time.

    The CHAIRMAN. Thank you, Mr. Dellums.

    I now ask unanimous consent that effective today Representative Ciro Rodriguez be assigned as a member of the Subcommittee on Military Readiness in order to fill a vacancy that now exists on that subcommittee.

    Is there objection?

    Hearing none, without objection, it is so ordered.

    It is a pleasure to once again welcome Secretary Cohen

    Let me first congratulate Secretary Cohen for meeting the deadline for QDR's submittal to Congress. In light of the magnitude of the issues addressed, I was never convinced that the legislated time lines were realistic or practical. And having assumed office only several months ago, many people thought that the Secretary might simply kick the can on down the road, and justifiably so. Regardless of the QDR's specifics, both of our witnesses today are to be commended for making a deadline in a town not known for making deadlines.
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    Mr. Secretary, I believe that the Bottom-Up Review's two-MRC strategy was about right, but that it was dramatically underresourced. And it should come as no surprise that I believe the same to be true with the QDR.

    Earlier this week, I came across an interesting Los Angeles Times editorial that referred to assertions that our military could execute the two-war strategy as a, quote, ''dangerous fiction,'' unquote. The editorial went on to argue that the numbers simply don't sustain that claim and that there was no way that the military could meet simultaneous commitments in two theaters. As I have said on other occasions, reductions in forces, in budgets, and equipment just since 1991 lead me to conclude that we could not even do one Persian Gulf-type operation again today, certainly not with the same effectiveness as we did the last one. And that was just a few short years ago.

    Since that time we have cut back on our force in many areas. This does not bode well for our ability to execute the more ambitious QDR strategy of two MRCs, especially when an even smaller force is recommended by that study.

    Although I commend the administration for not walking away from a realistic national military strategy, nonetheless it is an expansive and expensive strategy. But when execution of the strategy relies on a budget that is more than $60 billion short of even keeping pace with inflation and on forces that continue to shrink, the QDR strategy may prove to be more dramatically underresourced than its predecessor.

    In responding to questions about whether the QDR was budget or strategy driven, the official answer seems to be that it was strategy driven, but infused with a large dose of budget reality. But if budget reality translates into real decline in defense spending, then the expansive QDR strategy is either overly ambitious relative to projected budgets or it has been tailored to fit within projected budgets. In fact, I suspect time will show it to be both, marketed as consistent with projected budgets while in reality underfunded.
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    Anticipating the response of the Secretary and others on the issue of defense spending, let me reiterate my belief that while the budget agreement may be a step forward with regards to our economic security, I am not convinced that the same can be said for our national security. At least not if our global commitments remain the same or continue to grow, or if we want our forces to be sized, equipped, and trained to be capable of prevailing in two major conflicts. But while I may personally believe that the budget numbers are inadequate, they are about to become reality, at least for the time being. And we all have to deal with reality.

    Had the QDR truly been a strategy-driven review, many believe that the result would have been the same strategy but with a significantly higher price tag. My frustration is that in a strategy-driven review, budget reality should not be inserted into the decisionmaking process until after strategy options have been defined and costed. At that point, if budget reality renders the desired strategy too expensive, at least then we would be embarking on a long overdue and more meaningful debate over the relationship between risk and national interest.

    Indeed, what we have is a QDR that will be presented as all things to all people. It calls for an expansive military strategy, including accelerated modernization, all of which is to be paid for from within declining budgets through some end strength cuts, a few more closed bases, a revolution in business affairs, and a reduction in the out-year procurement profiles of several major acquisition programs. As such, it seems to me that the QDR's most glaring shortcoming is its demand on the one hand that America accept difficult trade-offs, yet on the other hand the review fails to provide a clearly defined baseline from which to assess the risks and trade-offs associated with an expensive post-cold-war world security strategy in an environment of fiscal constraint.
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    Mr. Secretary, I hope that you will assist the committee in its efforts in the months ahead to go at this question of risk and tradeoffs: What are the risks associated with the specific path you have recommended? Are there alternative paths of greater or lesser risk and what are the associated budgetary, force structure, readiness, quality of life, and modernization tradeoffs? Without a far more comprehensive understanding of how the Department arrived at the QDR, in essence without access to the review's analytical underpinnings, Congress will have no ability to ascertain how viable the QDR really is.

    Accordingly, I hope that the Department is prepared to share with the committee all of the pertinent analysis that underlies the QDR's recommendations.

    On an administrative note, I would like to inform our members today that the Secretary needs to leave this afternoon by about 12:45, give or take a few minutes, maybe. Therefore, we will operate under the 5-minute rule, and I ask all members' cooperation and courtesy in assuring that as many of our colleagues as possible have an opportunity to question the Secretary and General Shali.

    Before proceeding further, I would like to recognize the committee's distinguished ranking member, Mr. Dellums, for any opening remarks he would like to make.

    [The prepared statement of Mr. Spence can be found in the appendix on page 109.]

    Mr. DELLUMS. Thank you very much, Mr. Chairman.
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    First, I do have a lengthy statement, and though I think it brilliant and thoughtful, I will resist the temptation to offer it at this time and would ask unanimous consent that my formal remarks be inserted in the record and would make a brief opening comment.

    The CHAIRMAN. Without objection.

STATEMENT OF HON. RONALD V. DELLUMS, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON NATIONAL SECURITY

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

    I join in welcoming Secretary Cohen and General Shalikashvili to discuss the Quadrennial Defense Review, otherwise known as the QDR, their conclusions and recommendations.

    I will be brief this morning because I wish to engage our distinguished witnesses in a series of questions regarding the Quadrennial Defense Review. Based upon last week's briefings by the Department, I would summarize my current thoughts in the following manner:

    The QDR is another incremental step away from the cold war force in a process that was started during the Bush administration. It is a cautious step that accommodates the requirements to be engaged in preventing and containing conflict. It is not budget driven but cognizant of budget realities. I believe it fails to achieve sufficient force structure realignments for a security environment in which there will be no, and cannot be, a global peer competitor
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    That notwithstanding, Mr. Chairman, I look forward to engaging with the administration and the Department over the balance of the year as we hear more from the National Defense Panel, the working groups established by Secretary Cohen, and as we ourselves engage and work through and gain greater understanding about the QDR's assumptions, methodology, conclusions, and recommendations.

    Finally, I would like to say to you, Mr. Secretary and to you, General Shali, that the fact that all of my colleagues are not here this morning is no indication of their great interest in you and the topic before us this morning, but we left here sometime after 3 a.m., most of us got to sleep around 4 so it is as if we never left. And my recommendation to the Chair—to Mr. Secretary, Mr. Chairman, was that if he slowed this briefing down we would all be asleep in about 15 minutes. But my hope is that he would resist that temptation.

    With those remarks, Mr. Chairman, I would yield back the balance of my time.

    [The prepared statement of Mr. Dellums can be found in the appendix on page 116.]

STATEMENT OF HON. WILLIAM S. COHEN, SECRETARY OF DEFENSE

    The CHAIRMAN. Mr. Secretary, you may proceed as you would like.

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    Secretary COHEN. Thank you very much, Mr. Chairman. And let me extend my commendation to all the Members that are here this morning after being up so late. As I indicated to several of you before coming out here in the public session, it is one of the few things that I do not miss about serving in Congress, those late, late or early morning sessions, I should say. I still have hours comparable to what I had in the Senate, but a little more regularity to the process. Though I commend all of you for being here this morning. In fact, I expected to receive a call from the Chairman saying maybe we ought to reschedule this to another time so that we would have greater attention and greater attendance. Thank you very much.

    I will try to be brief as I can. I will not slow my normal talking speed down to 78 rpms. I will try to maintain the rapid speed with which I normally speak to get through this as quickly as possible so that you can get to your questions.

    Mr. Chairman, let me indicate that contrary to some of the suggestions, including your own, one of the things that I insisted upon when first taking over this job and looking at the QDR process, it had just started, to get under way. Congress had mandated that it be presented to you by May 15. They started the examination in December. I came in in late January and began immediately to indulge in the process itself. It had been under way through the leadership of General Shalikashvili and the Deputy Secretary of Defense, John White, and Gen. Joe Ralston and they were deeply involved and they brought me into the process almost immediately. So I have been actively engaged in this process, and the first thing that I insisted upon was that we first look at strategy. That should be the driving factor in all of this.

    And once we looked at the strategy, I said, second, I want all the Members who are involved in this process to give me realistic assumptions. Do not present me with something that underestimates the cost of procurement items, for example. Do not come back with a number of recommendations that are clearly unrealistic. We have to present something that is real and tangible to the Congress.
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    Having been on the receiving side of these reports for so many years, it was something that I really wanted to insist upon. And frankly, Mr. Chairman, that accounts for the reason I also indicated at the very same time, I said let's be strategy driven and not budget driven. I want to be real on my side as well. I don't want to conduct this exercise and say let's not be concerned about budgets, let's operate in a budget constrained environment, because that is the reality on Capitol Hill. I just left. I know what the sentiment is. And, frankly, I don't see a strong support on a bipartisan basis for increasing defense spending in the absence of a major conflict in the foreseeable future. I think that we will be fortunate we can hold it at roughly $250 billion, where it is today in constant dollars, and I wanted the military to operate with that assumption in the background.

    Look at the strategy first and let's go through the analysis, but also we have to be real ourselves. The last thing I needed to do was to present an analysis, ignore what the budget realities are likely to be, and present a document that said we need roughly $275, $300 billion, and that is what we based this QDR on. I didn't want to do that. It would be a waste of their time and it would be a waste of your time to look at that, because the reality is such that Congress is never going to support that absent a major conflict.

    So it was with that in mind that I insisted let's operate also in a budget constrained environment. And I will get to that as we move to the charts.

    And the third thing, as you have already touched upon, I said let's be on time. I know the time is short. The first day when I arrived in the office they said, we can't do this, it is too short a time, the analysis will not be as thorough. And I said, we are going to finish on May 15, and you Mr. Chairman, and several others I briefed privately to give you at least the outline of the QDR so that I could keep my commitment to you and allow General Shali to return from China to be here for the presentation of it on Monday.
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    So those were the initial instructions I had and I think we accomplished basically all three. I would like to go through the charts very quickly, if I could. Some of you have seen these charts, but in order to devise a strategy we had to decide what are the threats out there: What are the threats in the near term, mid term and long term. And as we looked at these charts, we said, there are still the threats of major theater wars. They are out there in the near term. Saddam Hussein is still here. He still poses a threat to Kuwait and Saudi Arabia. Iran is still very much in business and likely to be in business for some time to come. They still pose a threat to the stability of the Gulf region.

    We also had to continue to engage in some peacetime activities as well as crisis response. We have to be on the ready to go to Zaire or the Democratic Republic of Congo if that is necessary to get our forces out, American citizens. We have to be prepared to have these so-called NEO's and other operations off the coast of Albania. There may be others. That is one of the things that we have to face in the future, the instability, the possibility of failed states, threats to American citizens' lives, so we have to have a range of capabilities.

    And we also have to be prepared for asymmetric challenges. There are going to be countries out there that will look for our Achilles' heel. I noticed that there was a program on NBC for a couple of nights talking about the Odyssey. And of course Achilles was very much involved in not the Odyssey but the Iliad, and we know the story of how the enemy sought one weak spot that they could exploit and obviously any country that would seek to look for our vulnerabilities will look at our strength and say where are the weaknesses? Can we use chemicals or biologicals? Can we use terrorism? Could we engage in information warfare that could disrupt this revolution in the military affairs that they are seeking? Is there a way to block GPS? They will seek asymmetrical means to exploit their disadvantage in terms of overall military power and so we have to be concerned about that in the near term as well as the long term.
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    Second, as you move further into the environment of 2000, 2010, we are going to see again more challenging

    We could see the loss of overseas bases. Again, information warfare could work to our disadvantage if we are not thoughtful about how we go about preparing for the asymmetrical challenges.

    And then as you move on into the year 2010 and on, we have to be prepared for the rise of a regional power or a peer competitor. We don't see that—Congressman Dellums, you are correct—we don't see that for the next 10 to 12 years or so, possibly 15. We don't see a rise in the peer competitor until that time. But we also have to keep an eye on that particular peer competitor. It might arrive sooner, given the advances in technology that are taking place.

    During the acquisition of that technology that is being acquired, we know that a lot of transfers are taking place between Russia and China. By way of example, both countries could reemerge or Russia could certainly reemerge as a peer competitor in the near future, so we have to be prepared and not ignore that in the long term.

    The defense strategy basically is summed up as I have indicated to a number of you before in three simple words and that is to shape, respond, and prepare. The shaping aspect of the strategy is critical. We believe that the best way to keep the United States out of conflict is to be forward deployed, to be fully engaged, not only militarily but certainly diplomatically, to have our forces, roughly 100,000, forward deployed in the Asian Pacific region, to have roughly the same number deployed in Europe as well. And to engage in a variety of activities, comprehensive threat reduction, cooperative threat reduction responsibilities, the so-called Nunn-Lugar funds where we are helping the Russians to dismantle nuclear weapons. Also helping them to get rid of chemical weapons. Those kinds of activities across the spectrum help us to avoid the kinds of conflicts that could be devastating in the future.
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    So being engaged and shaping the environment is critical to our strategy. And that applies to today. It will apply tomorrow. It will apply in the year 2015. We simply cannot afford to come back to the Continental United States and sort of zip ourselves in a continental cocoon and watch the world unfold on CNN. What we have to do is to be out there, to be present, to be shaping people's opinions in a positive way if we possibly can. That is a critical component of our strategy.

    Second, we have to be able to respond. And here, of course, Mr. Chairman, it calls into question your challenge as to whether we can fully respond to the full spectrum of crises that we are likely to confront, all the way from humanitarian operations, from time to time we may find and states that have failed, that the local civilian authorities are completely overwhelmed, that millions of people might be starving and it might require some temporary deployment of our forces to provide water, food, some restoration of electricity on a temporary basis. That is something that we might be required to do in the future given the problems that we are likely to see in the future.

    Second, we have to have the ability to rescue our people in a noncombatant situation. We have to be able to respond to small contingencies, smaller conflicts as well as the two MRCs.

    Mr. Chairman, you mentioned an editorial that said we simply don't have the capability, the numbers don't sustain the strategy. The Persian Gulf operation, you indicated, couldn't be conducted today. That is a matter of legitimate debate, but I would respectfully suggest to you that Saddam Hussein has half the capacity he had 5 or 6 years ago. He doesn't have the capability of waging the kind of war he once had, and, therefore, we are fully capable of defeating Saddam Hussein under any circumstances as of this time. So we could in fact contain, and we are containing, and, if necessary, we could in fact defeat Saddam Hussein were he to move into Kuwait or to Saudi Arabia.
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    Second, with respect to Korea, that is the other major regional conflict scenario that we have to be at least concerned about. I can't tell you and no one can tell you whether or not in the next 2, 3, 5 years, whether North Korea will still be there, but in terms of planning we have to assume in the short term that Korea, North Korea is still going to be there. It could change tomorrow. It could implode; it could explode. We don't know at this point.

    Some reporter when I was speaking last week said, well, now that deterrence has failed, don't you think that we should have a bolder plan for North Korea?

    Well, number one, deterrence has not failed. Deterrence has succeeded. We have deterred the North from, in fact, attacking South Korea. Whether that deterrence will hold, given the circumstances that now confront the North Koreans is another matter. But we are there, we are there in numbers and we are there in capability, and yes, the North could, in fact, launch a surprise attack, do horrific damage in the short term and then be totally wiped out in return in response. So we have that capability. And we can wage that, and I am confident we could do it under stressful scenarios.

    Mr. Chairman, with respect to the ''prepare'' side, I can't quite see it from here but the preparation side, that basically is what we have to get to. Joint Vision 2010, General Shali will talk about that. I think you have seen the document. But essentially that is where we are trying to get to in terms of how we are going to modernize for the future; how we are going to try to bring those so-called leap-ahead technologies into the military; how we are going to be able to afford to do that.

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    I know that Congressman Hunter and others have been out to Fort Irwin. It has been exciting to see the kind of capability that we are developing, the sort of battlefield awareness that Force 21 is now experimenting with, and that is the future. It is not here yet, but it is closer to being here and those other kinds of systems that we want to bring forward and integrate into our military so that we have overwhelming superiority.

    It may sound like a cliche, and I have said it many times before, but I don't want our forces to engage in a fair fight. I want it to be unfair under all circumstances. I want it to be unfair in our favor. And so I want to get the best possible technology in the hands of the young men and women that we ask to put their lives on the line to defend our interests and that is what we have to get to. That is the preparation part of our strategy. So it is shaping, responding, and preparing.

    We looked at three integrated paths, if I could have the next chart. I don't want to confuse you with the colors at this hour of the morning, given the lateness of your hour last evening. You are probably seeing more red than green and yellow from your perspective, but path one is essentially the status quo. We looked at the status quo saying, let's just do what we are doing right now.

    The system really isn't broken. We have, as you know, the finest military in the world. Everyone is envious of us. Virtually every Minister of Defense that has visited me said, how can we be more like you? Can you teach us? Can you help us? And they look to us as role models, so we are doing things the correct way.

    We have the best fighting force in the world, and we want to keep it. So we could sustain the current method of doing business right now, and that will get us in terms of our strategy, it will allow us to continue to shape the environment. We will be forward deployed in Asia, forward deployed in Europe. We will continue to be able to deal with the full range of the contingencies that we are likely to confront.
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    The problem is we don't get to preparing. We don't get to the Vision 2010. That keeps getting slipped off further and further in the future. Each year when General Shali comes to testify before you, as he did when I was sitting over in the Senate, I used to challenge him. I said, General, I don't understand this; I keep looking at that

    We then looked at path two. How about being bold? Mr. Secretary, why aren't you bolder? And I must tell you, I did not set out to be bold. I set out to come up with the best possible analysis and the best possible recommendation given the responsibilities that we have. So I wanted to get the best system, not the boldest.

    This is a bold proposal, proposal No. 2. It is supported by some academicians. It is supported by editorial writers and supported by some Members of Congress for that matter who have studied this issue, and I am not in any way questioning their judgment because it has a good deal of merit to it. And they say, for example, why don't you just have a deep reduction in your force structure? Why don't you cut half a million people out of the active forces today and take that money and put it into research and development and get those technologies that you keep talking about? I said, fine, let's look at that.

    Well, you look at the chart, then you see that what it does do is it precludes you from being able to shape the environment, as well as we do today, so you have a greater risk involved.

    Mr. Chairman, you asked about risk and trade-offs. Here is a trade-off for you. You can cut deeply into the force structure saying the cold war is long past, let's start dealing with the future so let's cut the size of that force down and you can do that. But if you do that, then you give up that ability to shape the environment. You can't have those forward deployed forces; you can't have 100,000 in the Asia Pacific region or in Europe. So you have a smaller force which is less extensive in its operations.
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    You then have a certain dynamic that sets in in other countries. They say, well, maybe you are not quite as reliable. Maybe we have to start militarizing on our own. Maybe we should start building up our own capabilities or maybe we should strike a different alternative as far as our alliances. Maybe we have a peer competitor who will be there in a few years and our chances are better going with other allies. That is a risk. If you think it is unrealistic or exaggerated, then dismiss it. But that is one of the inherent risks if you cut back on your force structure today. But you have a red there in saying go slow, or even stop, but go slow at least and think about that aspect of shaping the environment.

    The second component, can you respond as effectively with a smaller force as we can today? I think you would agree, especially, Mr. Chairman, given your statements, if you cut it down dramatically, you couldn't certainly do all that we are doing today, and that means that we have to then think about a different strategy, different commitments. Maybe we don't want to have a commitment to defend against Saddam Hussein and tell him he has free reign. We know that he is about to violate the no-fly zone. He is going to stick a thumb in our eye whenever he can to challenge us, to see if he can break up the coalition that currently exists. So, let's just give him a free ride and say we are not going to do that.

    Or, we could tell the South Koreans that they are on their own. We are pulling our 37,000 troops out, or half of them out and you will have to do more to defend your own interests. That is another option. But you will not be able to conduct the full spectrum of options that we can today with our forces. You have a part of that red component there as well.

    What it does do is it gets you to the new technologies faster. So it has that on the positive side. If you cut deeply, we can put that money and get those technologies and, hopefully, we will get them faster and perhaps at cheaper rates. So the risk involved is that you give up the shaping, you give up the responding, but you do get there faster. So we looked at that and I, frankly, didn't think it was worth the risk.
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    I have to look and recommend that we all look at the near term, midterm and long term. And so I looked at option No. 3. Option No. 3 says that we should continue to shape the environment, we should continue to respond to the full range of crises, and we should also modernize. We have to modernize at a slightly lower rate or less accelerated path, but we get there nonetheless in a more balanced fashion, and that is precisely the recommendation that I am making to you in the QDR.

    The investment challenges, how do we come up with the funds necessary to get us to that goal that General Shali has testified before? Congressman Dellums has said maybe you don't need to get there. There is nothing magic in 60, but in the range of 55 and 60, that is the considered judgment that we have to do that.

    If you look at the chart, you can see when we talk about having a cold war structure, or a cold war strategy we know that is not the case.

    Mr. Chairman, you indicated that we have come down dramatically. The budget has been cut roughly 40 percent since 1985. The force structure has been cut 33 percent, and if the QDR recommendations go into effect, it will be cut 36 percent. The procurement budget has come down 67 percent. And that accounts for that drop all the way down to where we are.

    If you can make out that thin red line, it says BUR, the BUR program. That was the Bottom-Up Review's Program of where we had to start up that ramp toward modernizing. You can see that we are well below that. So we are below what the BUR had recommended in terms of starting up the ladder to get to a much higher rate for that $60 billion goal.
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    So my challenge at this point or our challenge is how do we get from here to there? So along came the recommendations that I am presenting to you in the way of modernization initiatives.

    I have recommended, and let me preface this by saying that there has been a lot of commentary saying, well, you really didn't do very much, kind of nibbled around the edges, you didn't touch anything. You look at the F–18E and F program. It was projected to have a 1,000 F–18E's and F's. I am recommending that we cut that back to 548, almost half. That is a significant cut in the projection for the F–18E and F.

    I also wanted the F–18E and F to be in competition with the joint strike fighter, and the rationale is pretty simple from my perspective. Many of you were involved in the C–17 program. I remember being on the Armed Services Committee in the Senate way back in the early 1980's and it was simply a piece of paper at that time, and we were going through looking at the C–17, should it have long legs, short legs, what should be the design? And it went through a lot of perturbation, a lot of turbulence in terms of what Congress funded. It was getting out of sight in costs, and finally we came down to a budgetary decision. We finally went to the manufacturer and we said, this is much too costly, you have to bring it down. And if you don't; then we have an alternative. It is called a commercial wide-body aircraft and we will make use of that. As a result of that kind of competition, we got the C–17. It is an incredible aircraft. It is in the inventory today. It is an outstanding system that we have.

    I would like to see the same competition for the F–18E and F and the joint strike fighter. If you canceled the F–18E and F, then you don't have much in the way of holding the price down of the joint strike fighter.
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    Again, the easiest thing for me to do, if I came to you and said, let's be bold, Cohen, and do something significant here, let's just tear up the paper plane that we have called joint strike fighter. It is on paper. There is no constituency out there to begin with. No one has built up an inventory of personnel, so I could have done that.

    But I don't think it is the most prudent thing for us to do. It is not the wise thing for us to do. And I go back to what happened. I know Congressman Hunter was very much

    If we don't get them faster, if the price is out of range, we will continue to build the F–18E and F, and that will give you the option as well as me to make a determination how many we want. The joint strike fighter will give us greater capability at lower cost with greater stealth features to it. That was the rationale for cutting back the F–18E and F by almost 50 percent.

    I then went on to the F–22. F–22, the request was for four wings. I reduced that to three wings, and I worked very closely with the Chief of Staff of the Air Force and we believe that that is the right recommendation. It can be done.

    In each case, I have slowed the ramp somewhat to what it was projected to be in order to get what Dr. Kaminski has long tried to get and that is program stability so you don't get high peaks and then low peaks, and if you get too high a peak in terms of the ramp-up it becomes a target for Congress, we can't afford it, and you cut it back, and when you start cutting it back, it adds money on the downside at a 4 to 1 ratio.

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    I said, let's level out the procurement rate and let's build the F–22. There is some notion that the F–22, just cancel it. It is not really a valid need for the Air Force. The F–22, in fact, is going to be a stealth aircraft. It is going to replace the F–15. It is going to have greater capability than the F–15. And some of those stealth features that will be involved in the F–22 will also be incorporated in the joint strike fighter, so it is not one against the other. These are not replacements for each other. It is a total comprehensive tactical air capability that we will have at that time.

    National missile defense. You have read about this. I was somewhat surprised myself to learn that it was about $2.1 billion short on the research and development for national missile defense. When I was sitting in the Senate, I helped negotiate the agreement with the administration and with Members of the Senate. We ultimately reconciled with the House as well.

    As you may recall, there was a mandate to deploy a system by the year 2003. I must tell you that I have never really believed in the wisdom of mandating the deployment of a technology until you are satisfied that it works, but there was considerable doubt as to whether we were ever going to have a system, and I said, we have to work this out, and we did. That was Secretary Perry's compromise of 3-plus-3. Three years for the research and development.

    We then make a determination based upon the intelligence that we had at that time as to whether we go forward. Well, I intend to keep that commitment, and I am recommending we put $2.1 billion into the NMD account so that we can, in fact, keep the commitment and put us in a position to make a decision in the year 2000.

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    The V–22, we reduced the buy from 425 to 360, but we accelerated it into the inventory. Again, the Marine Corps agrees that we can do that with the acceptable risk. They are anxious to get this aircraft into the inventory. They have helicopters now. They are now ferrying people around in the Marine Corps and some are 40 and 45 years old. We don't want to do that to our Marines. We want them to have something that is far more capable and safe than those helicopters are today, and so we are going to move those in a more rapid pace into the inventory.

    There are other recommendations. I talked briefly about Force 21 and that is the revolution in land warfare and it offers exciting possibilities. It is not here yet, but we are doing remarkable things, and I would urge all of you to see this in action.

    I went out and watched those training maneuvers and it is remarkable to see the young people that we have that are actually part of that deep blue. Deep blue is internal into their mechanism right now. They operate those computers and it is an extension of their personality. And it is going to revolutionize the way we fight wars in the future. That is something we want to move forward and we are putting more money into Force 21.

    Chemical and biological weapons protection. I think we have been deficient. I see this as a real threat of the present, knowing in the future I think it is going to increase exponentially, and we are seeing more and more countries that are developing chemical weapons and we know the threat is increasing to our troops in the field and also increasing to us here at home, so we are putting roughly a billion dollars more into chemical and biological weapons protection and counterproliferation programs.

    The bottom line is that we are moving into this revolution of military affairs. We are not quite there yet but we are moving it closer to where we ought to be.
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    The other thing we need is this revolution of business affairs. And here comes the touchy subject matters that you have been reading about, and I know how sensitive they are. It deals with base closures. And I have been on the other side of base closures from the time I came to Congress. I came in 1972 and I recall perhaps the first base closure fight that I had was in 1974, 1975, where an effort was underway to close a base in my district, and it was interesting. I fought it. Frankly, I felt it was unfair the way it was being conducted.

    I recall at that time that they filed an environmental impact statement. It had the base located in the wrong part of the State. It said that your base—the environment is going to be improved in northern Maine, you will have less traffic—have you ever been to Loring Air Force Base? Talk about less traffic in the community—that it would contribute to the environment by having less pollution in the region, probably the clearest skies in America, but anyway, I was opposed to it and I said it wasn't fair. I wanted a fair analysis of whether this was needed and that, of course, was at the height of the cold war. So I know, having been deeply involved in this process, what pain is involved.

    I have also supported BRAC rounds in the past, and when I found that they were not conducted satisfactorily, I changed the law. I felt during one BRAC proceeding that I had not been treated fairly. I found, for example, that a gag order had been put on local officials. They couldn't talk to me. I found that outrageous. I found that unacceptable, a senior member of the Armed Services Committee and I couldn't talk to the local base officials.

    I had to file a FOIA request to get information about the facility. I didn't get the information until the day after the final decision came down. And so what I did was I changed it. I worked with Senator Nunn, and I said, the next time we are going to have some more BRAC rounds, the next time let's change the law so that doesn't take place again in the future and so those avenues are always open.
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    But I also realize that we are going to have to have more. So I looked at this process and I said it is a case of mathematics. We have cut down 33 percent in our force structure. It will go to 36 percent. We have cut back 21 percent on our infrastructure. We have got excess capacity. So we can either choose to carry it and not be able to use some of those savings and put into the revolution in military affairs, or we can make the tough choice and say we have got to give some of it up.

    I can't make that decision; you make that decision. And unless you authorize BRAC proceedings, it doesn't happen. All I can do is say, here is a recommendation, Members of Congress, I have looked at it, the numbers don't add up the way it is. If you are told by your best professional military that you have to get slimmer, trimmer, you have to lose some weight in order to be able to compete, then I give you that recommendation, but ultimately you have to decide.

    If you figure that politically it is unacceptable, economically it hasn't worked out just yet, that we have to defer it to sometime in the future, well, that is a choice you have to make, but do so with the understanding that it also inhibits the military from doing the things that we need to do.

    So I intend to come back to you sometime next January, sometime next February, and I will present a series of charts and you will point fingers at me and you will say, well, that line is still down below what I said you had to get to, you are not climbing very rapidly, you are staying where you are. And I will say, that is right; not only do I have the same amount of resources, I have to fend off a Congress, as you had to deal last night with a proposal that would have cut, what, another $5.5 billion out of defense in terms of outlays.
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    Here is my problem. Last year, last December, when the administration and the Congress reached an agreement on the balanced budget, $5 billion was reduced in outlays in the year 2002. So there is a $5 billion cap that I have got to live with now, and it is not like I have to wait until the year 2002 and I will not be sitting here. In order to reduce outlays by $5 billion in the year 2002, I have to start giving notice, cutting programs or people or something now in order to get down to that level in 2002. And then, if you—by the way it is not 5, it is now almost 6, 6.5 billion as a result of this budget agreement.

    So it is $6.5 billion that I have to get down to. If you were to add another 5.5 billion on top of that, I don't think—I don't know what I would tell you. I would say forget about the QDR. That is out the window.

    All the recommended changes that I am showing you now from the BRAC recommendations to the change in 60/40 to the cutbacks in all the weapons programs to the cutting all of 15,000 active forces and another 30,000 Reserve and Guard and another 80,000 civil, take all of those cuts and they only add up to $6 and $7 billion. That is what it takes to get down to $6 and $7 billion. And yet last night you had to deal with an amendment that would take another $5.5 billion. At that point I would say, here is the QDR, it is meaningless, I have to go back and now deal with an $11 billion problem.

    So that is the reason I said, Mr. Chairman, I have got to get real. I want the military to operate with an understanding. I think I have a pretty good understanding of how the Congress operates, that we weren't going to get the increases that you might think were necessary. It would be lucky if we hold it exactly where we are today, and that is the reason I said ''operate in a budget-constrained environment,'' because I don't believe the Congress is going to give us the kind of money they gave us last year.
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    When I was sitting over there, we added $9 billion to last year's request from the President. What was the add-on this year? Not very much. In fact, it will be less. And now that we have an agreement to hit a balanced budget, the pressure is going to be on, year after year, take it out of defense, and so that is something that all of us have to be concerned about.

    So what I reported to you, what I am presenting to you, I should say, Mr. Chairman, Members of the Congress, is simply what I believe to be a fifth step. This is a blueprint that I can submit to you and say I believe we have got the right strategy, the National Defense Panel which is sitting, giving you a second opinion, has already indicated it supports the strategy. It has indicated that perhaps there is some kind of lack of connectivity between the strategy and the resources, and we are eager to hear the specifics of that and are eager to work with the National Defense Panel who will file a final report to you in December.

    In the meantime, I have got a lot more work to do as well. I haven't done enough on the infrastructure over at the Defense Department, the Office of the Secretary of Defense. I have got a bloated bureaucracy. I am going to have to reengineer. I am going to have to slim down. I am going to have to eliminate a lot of duplication and redundancy.

    So I formed a task force that will work with Members of Congress, it will work with members of the corporate executives of this country who have gone through downsizing and streamlining, and I am going to ask them, take a look at this picture, what is wrong with this picture of OSD? What is wrong with all of these DOD-wide agencies? Isn't there a way to become more efficient, to slim down, to get rid of the redundancy? And then I am going to present that to you in December.
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    At the same time the National Defense Panel is presenting it to you, I am going to give you another copy of the recommendation coming from the reform task force, and that way you can look at me and say, well, you have been taking it out of our tails over here up on Capitol Hill, and I want you to say, well, I am willing to take it out of mine as well, and I think that is important. It is important symbolically. It is important I think from a fiscal point of view as well. But I want to indicate to you that I think I have got a lot more to do. I intend to do it by December, and to work with each of the Members here in the process.

    So, Mr. Chairman, that is a brief summation of what I was going to say in a lengthier statement, but I am going to now at least acknowledge your weariness of my carrying on and yield to General Shalikashvili.

    [The prepared statement of Secretary Cohen can be found in the appendix on page 121.]

    The CHAIRMAN. General.

STATEMENT OF GEN. JOHN M. SHALIKASHVILI, U.S.A., CHAIRMAN, JOINT CHIEFS OF STAFF

    General SHALIKASHVILI. Thank you very much, Mr. Chairman. I will also try to be very brief but tell you that I am very happy to be here to help present to you our effort so far on this review.

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    Let me begin, if I may, just by outlining just how extensive has been the involvement of the service chiefs and the combatant commanders and their staffs and the OSD staff and the joint staff in this defense review. In fact, some would say that the level of combatant commander involvement and the involvement of the service chiefs has been unprecedented. And in my judgment is, in fact, a great strength of this Quadrennial Defense Review. Literally dozens of briefings and countless meetings, their insights and their perspectives have bolstered the results of this review.

    Now, we learned an awful lot over these last 4 years. We learned that the strategy we were asked to execute required us to look at more than just major theater wars. More than just MRC's. MRC's beginning from a cold start. That is not how the world works, so we undertook an assessment across the entire spectrum of anticipated operations from the specific military tasks that we would be asked to execute in a shaping part of the strategy through small scale contingencies, the Bosnias of today and tomorrow, two major theater wars that Secretary Cohen already talked about, and we used a broad array of analytical tools from seminars, war games, computer modeling, to intensive sessions with senior civilian and military leaders involving literally hundreds of people over the last 4 months.

    We brought in the CINC war planners, the guys that actually do the war planning for them. We brought in the service war planners as well as other experts that we could find in a warfighting business. More than some 200 professionals to war game the forces necessary to meet the future requirements of shaping and of responding.

    And then we met face-to-face with the deputy combatant commanders that we brought in to validate our findings and then finally we presented all of that to the combatant commanders and to the service chiefs.
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    As you all know, one of the results of all that is we now understand better just how hard the force is working to protect America's interests all over the globe, but our analysis confirmed which parts of the force are busier than others, but we also learned where it is possible to thin the force, and to thin that force without impacting our ability to execute the strategy. And I know that you will want to pursue that when the service chiefs testify before you.

    And we drew upon the exhaustive analysis conducted by the CINC staffs over these past 4 years as they were preparing their war plans for execution. So the analysis didn't just draw on the work of the last 4 months but all the work that had been done preparing for actual contingencies over the last 4 years. And based upon the strategy, and on this rigorous and comprehensive examination that I just outlined for you, the Joint Chiefs, the combatant commanders, and I believe that the force that you will see on this next slide here is, in fact, a force that the United States needs to protect and advance its interests as we go into the 21st century.

    While maintaining a 10-division force structure in the Army, the Army will accelerate a Force XXI modernization plan. Also, a reduction of some 15,000 active duty personnel will be carried out by deactivation and consolidation realignment of headquarters, not combat units, but headquarters and support facilities.

    The Quadrennial Defense Review also recommends that the Army restructure its Reserve components, that is, that it shed some Guard combat structure that provided for the strategic hedge during the cold war, but that is part of the structure which is no longer necessary. As previously agreed, it will also accelerate the conversion of some Guard units to combat-to-combat support and combat service support, relieving what is now a big warfighting void.
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    These adjustments will result in a Reserve and Guard end strength reduction of some 45,000 personnel. Navy, in turn, will retain 12 carrier battle groups and 12 amphibious ready groups but will reduce the number of service combatant groups in a fleet from 128 to 116 to reflect the more capable ships now coming on line, and we revalidated that our submarine force can be reduced from 73 boats down to 50 boats.

    These fleet reductions combined with streamlining of overseas infrastructure and the transfer of some combat logistics functions to the military sealift command will allow the Navy to reduce active and Reserve end strength by 18,000 and 4,100 personnel respectively.

    The Air Force, in turn, will maintain 20 fighter wings, but will consolidate fighter and bomber units to streamline its command structure. This will result in a force structure of just over 12 active fighter wings and 8 Reserve wings.

    It is recommended that the Air Force pursue an aggressive outsourcing plan, and of course it will depend upon the necessary changes in laws and your concurrence to do that. The Air Force will also reduce its force structure for continental air defense and handle the U.S. air sovereignty mission with other forces. These initiatives will allow the Air Force to realize a reduction of approximately 27,000 active duty personnel.

    The Marine Corps will man a three Marine expeditionary force capability to support our strategy, but will take modest reductions in end strength through restructuring.

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    We also examined our nuclear force structure. Until START II is ratified by the Duma, the law mandates maintaining the START I force. However, we remain committed to START II and a possible START III and could use these savings to further our national missile defense program.

    This next slide will provide you a summary of our end strength adjustments. The total active duty strength will be adjusted down 36 percent from 1989, Reserve force will be down 29 percent from 1989, and the civilian personnel down 42 percent from 1989.

    Now, I tell you again that we believe that we can make these end strength reductions and still support the strategy that Secretary Cohen outlined. But let me point out that while these reductions are essential if we are to meet our modernization goals, they will not be easy. For these are not positions or spaces we are talking about, these are people we are talking about. Every man and every woman who leaves the service is a unique story in his or her own right, and to keep faith with our people, we must offer a wide range of programs and services as we did during previous drawdowns.

    These programs, instituted by Congress, should include early retirement and voluntary separation programs, selected continuation of benefits for separated members, and comprehensive transition support assistance. And I must point out that some of these programs will expire at the end of fiscal year 1999, and we will ask Congress that they be continued beyond then, so we can implement these reductions fairly and compassionately. I have said before to you on many occasions that our major strength is our men and women, and they and their families remain our highest priority, and we must continue to provide for the quality of life.

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    From the beginning of this process we all were very conscious that we must balance the requirements to invest in a force of tomorrow with the requirement to field a trained and ready force today, and Secretary Cohen has talked at length to that, for it would make very little sense to break today's force to pay for tomorrow's.

    As all of us know, readiness in today's force is already challenged by a very high operating tempo that we face in all of the services, and in committee and you, Mr. Chairman, have certainly talked to that issue. But we believe we can reduce the stress on the force in a number of ways to improve the time at home for our service members with their families and still maintain a high level of operational readiness.

    First, we will continue to fund current readiness. Next, we must look more closely at how we employ units in high demand, units such as Patriot air defense units, electronic warfare, aircraft air and military police units, just to name a few.

    Also, we will make prudent end year adjustment in joint exercises, because it is a fact while we are stressed by operational deployments, we are stressed even more by the demands we face on our forces through exercises, both service and joint training events and what not.

    And so the service chiefs and I need to make sure that we discipline ourselves by making the appropriate reductions and I believe, and they do, that they are smart enough that we can make those reductions without adversely impacting our forces. So the two impacts, understanding who is stressed excessively and reducing that, reducing it by either taking other units or like units to go on deployment instead of them, and, second, by reducing the OPTEMPO that we create ourselves through the exercises and training events that we impose upon our units.
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    You know that our business is about making very tough choices, about who goes where, when, and for how long, and the overall impact on readiness and the quality of life is very much a factor in those decisions that we make. But as much as we emphasize today's readiness, our eye was always on the future to ensure our military readiness well into the next century.

    Last year, we introduced Joint Vision 2010, our unifying vision based on revolution and military affairs technologies and new operational concepts as shown on this busy chart: Dominant maneuver which will emphasize mobile and agile organizations to rapidly and decisively employ widely dispersed units to attack enemy weak points to the full depth of battlefield; precision engagement which will enable our forces to better locate targets that count and strike with decisive results with minimal effort; full dimensional protection which will rely on active and passive measures to protect our force; and of course, focus logistics which will feature fusing information, transportation, and other logistics technologies to allow the precise, on-time delivery of support and greatly reduce the stockage levels which we now maintain.

    Underlying these concepts is information superiority, the

    But to realize our vision for the future, we must take steps to free resources for investment in modernization. Our challenge is to capture this vision for tomorrow while preserving a healthy force today, and I believe that the Quadrennial Defense Review balances these competing demands quite well.

    For the near term, the Quadrennial Defense Review concludes that we can move towards a leaner force by reorganizing headquarters, trimming support functions, improving our ability to manage OPTEMPO and PERSTEMPO, and realigning Reserve forces. Implicit in this effort must be additional base closures, and again, Secretary Cohen has talked about it.
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    Along the way, we must never lose sight of our bedrock commitment to our people, both civilian and military. Keeping faith with them is the right thing to do.

    Let me conclude by saying the Quadrennial Defense Review in my judgment provides a rational, prudent, and well thought out approach to keep our armed forces strong and the American interests protected for many years to come. Most important, it sets as its standard whether their recommendations would lead to a better, more effective joint force best suited over the near term, mid term and long term to protect our interests, and I believe it does and I support its recommendations.

    Thank you very much, Mr. Chairman.

    The CHAIRMAN. Thank you, gentlemen. I am going to skip my question and proceed right to Mr. Dellums.

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

    The Bottom-Up Review contemplated fighting two major regional contingencies virtually alone and quickly. My first question is to what extent did the Quadrennial Review consider the position of going alone or going with allies?

    I have argued in this committee and other fora that this is counterintuitive to talk about going it alone when all of our most recent ventures, whether humanitarian or peacekeeping, low intensity conflict, we have gone with coalition forces.
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    So to the question of going it alone, to what extent have you considered the issue of going forward in the Quadrennial Review, leaving behind the notion of going alone and going forward with allied forces or coalition forces?

    Second, to the question of pace, in Operation Desert Storm, Desert Shield/Desert Storm, U.S. troops were on the ground from August to February, or February—prior to the commitment of ground force operations. Remember, when Saddam Hussein crossed into Kuwait, the first thing we did was put a carrier in the area to establish presence. We put 4,000 troops on the ground to lay down a marker. It wasn't for 6 months until we entered into the counteroffensive phase. Yet the Bottom-Up Review, and as I have reviewed the Quadrennial Review in a more relaxed degree, they both suggest we should move from the halt phase to the counteroffense phase more rapidly than what was the reality in the context of the Persian Gulf war.

    This has, in my opinion, significant consequences for military requirements because you contemplate going quickly from halt to counteroffensive. That has implications, readiness implications. It has implications for procurement, because if you are going quickly, you keep your readiness at a very high level. It has implications for our airlift, sealift capability, et cetera, et cetera.

    I would appreciate understanding—and I would also suggest that it to some extent precludes the use of Guard and Reserve forces very quickly in combat missions to the extent to which you say you have to move from the halt phase to the counteroffense phase very quickly. That has implications. Combined, I would suggest that that is billions of dollars.
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    I would appreciate understanding how rigorously this assumption was analyzed, and what was the basis for maintaining a more rapid move to the counteroffensive warfare that was in the minds of military and the civilians as you contemplated the Quadrennial Review.

    Secretary COHEN. Let me respond to your initial question. First of all, we did make the assumption in the QDR that we would have the support of our allies in the region. We have them today. We had the British and French who helped us with the no-fly zones in Iraq.

    Initially, I mentioned Saddam Hussein is probably at half the strength I was prior to the Persian Gulf war. But we are in a better position, also. I don't think any potential enemy is going to wait 6 months in the future. If there is a lesson to be learned from Desert Storm and Desert Shield, it is don't wait. So we better be ready to act more quickly.

    We have far more equipment now in the Gulf region that we can call upon. We have an air expeditionary force on the ground as well. We have the support of not only the Saudis but the Kuwaitis and other Gulf States, the French and British. So we have a coalition strategy for dealing with Saddam Hussein. And we also have to be concerned with Iran as well sometime in the future, if not now. So our strategy is based on coalition effort.

    But we also have to face reality if it became in our interests and the other allies peeled away and said, we are not interested anymore, we still have to be able to go it alone if we think it is in our vital interests, and I would suggest that maintaining access to Persian Gulf oil would be in our vital interest. If we had to go it alone, we would have to be able to go it alone. But we don't plan on that. We are planning on allied cooperation because it is in their interests as well.
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    With respect to the other issue, I would say we were successful in the Persian Gulf war, that we perhaps overestimated Saddam Hussein's ability to fight, and maybe we underestimated our power.

    You may recall, former Secretary of State Aspin tried to calculate how many bodies would be coming home and how many bags to order, and we were preparing for the worst case and that didn't happen because we were better than we thought we would be under very trying circumstances.

    I would ask General Shali to talk about the halt phase versus the pound phase. My understanding, no halt phase but an extensive pound phase, but perhaps he can clarify that.

    General SHALIKASHVILI. Let me first say on the issue of allied participation, all the analytical work we did, every computer run we did, assumed historical levels of allied participation, and it also assumed that they would have the weapons systems that we now know in the programs would be able at that time. For instance, Saudis, F–15's, in that timeframe. So I think we have not only assumed that they would be there but we also assumed they would have the systems they now project to have at that time.

    As far as the halt phase is concerned, Secretary Cohen already spoke to what we have done to make the halt phase more effective, and that is the prepositions. It is the presence of the air in the region and it is the equipment prepositioned, not just in the Middle East but also in Korea where we have now also prepositioned a set of heavy brigade equipment. When you go from the halt phase to the next phase, it is really a situation of dependent.
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    So the computer runs took into consideration a number of options, because you can make an argument that the later you go into the halt—from the halt to the regain phase, you have more time to use your systems to reduce their capabilities. On the other hand, you have to also assume that they might have retained the capability to do damage to you. So you must avoid trying to be too precise in computer modeling how the fight is going to go, because there are always two that dance the dance, and we know from experience that few plans get executed the way you intended to because the other guy influences it. So you have to retain the ability to go to the regain phase from the halt phase sooner than you would like.

    But we have looked at the full range of doing it as soon as transportation feasibility studies indicate we can do it, to trying to do it later so we can take greater advantage of the pounding that we would be doing during this time, and try to develop the capabilities we want that give us the bridge from one extreme to the other. And so that the capabilities we are retaining in the force is to give us the maximum flexibility to hedge against what he would do.

    Let me just be specific. In Korea, one of the greatest threats that we face is the artillery and rocket threat to the city of Seoul and others within range of that. We have to be very careful before we say we are willing to sit for 3 or 4 months, take that pounding on the city of Seoul while we get ready to go from the halt phase to the regain phase. We need to retain the capability if the damage continues to occur and we are unable to take out those systems, to go into the regain phase sooner.

    Mr. DELLUMS. If I understand both of your answers, No. 1, to the first question of going it alone, you have actively planned to go forward with coalition forces, although you reserve the option, perhaps less strenuously but to go it alone if necessary.
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    To the question of timing, as I read the Quadrennial Review, you have relaxed this more rigid time schedule that was apparent in the Bottom-Up Review that drove the force structure, drove the procurement and drove the readiness. That is not the case?

    General SHALIKASHVILI. It is the case. We have tried to go from the very rigid to the least and find a golden middle way there that gives us the maximum flexibility at an acceptable risk.

    Mr. DELLUMS. Thank you.

    Now I would like to turn your attention to strategic nuclear forces. I have long argued that the United States should take some unilateral initiatives to reduce our nuclear arsenal, and I have done so before this committee and with the administration. And although I commend the administration's efforts to achieve Russian ratification of START II, I would argue that you potentially are better capable of bringing that about by moving to discussions of START III, because to move to discussions of START III, that would bring nuclear forces down even further, you put START II in a more stark reality and take some pressure off of it.

    I also believe we can afford to take unilateral actions that go below START I that would create a climate to induce the Russians to further reduce their nuclear arsenal and move beyond their modernization program that is often discussed before the committee.

    As I have read the requirements of START II, the Russians are required to move away from their MIRV warhead capability and to reduce those MIRV warheads to single warheads. Many of my colleagues have interpreted that as modernization when I view it as greater stability that was built into the negotiations for START II.
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    I do not believe it is in the United States interests to refuse to go below START I levels even absent Russian ratification of the START II. Like the BUR, the Quadrennial Review reserves the discussion on strategic nuclear forces for another day.

    First, I would appreciate both the Secretary and General Shali's comments on when we can expect such a review as well as on the continued advisability of the congressional mandate that we not go below START I, and do you need some flexibility in that regard? Some of us would argue you ought to go down unilaterally to START II. Some would argue that START I doesn't make sense and you need some flexibility in that regard.

    Finally, if the Russians do not ratify START II, what are the budget implications that this committee will have to address and what level of magnitude are we talking about? I hope that is not too many questions.

    Secretary COHEN. No, that is fine. They are all interrelated.

    First of all, one of prohibitions is a congressional mandate that says we should not move to START II until it is ratified, we have to stay at START I. We have budgeted—we have funds of roughly $37 million in the budget for this year, we have $64 million I think in next year's budget, after that, it is roughly $1 billion a year that we would have to maintain to maintain START——

    Mr. DELLUMS. Billion dollars a year?

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    Secretary COHEN. Yes, so it does have implications for us——

    Mr. DELLUMS. Mr. Chairman, it is hard to hear, Members.

    Secretary COHEN. I should also indicate I met with Minister Rodionov last week when he was in town, had 2 days of extensive discussions with him, and indicated I thought it was important for him to use his influence to encourage the Russian Duma to ratify START II, and also recognizing this places an enormous burden upon the Russian people precisely for the reason you have just articulated, that it means they have to get rid of their MIRV system, move to a new single warhead system at a great expense, and that is why the administration has, in fact, moved forward with meeting with Russian counterparts.

    To say as soon as the Duma ratifies START II, we will go immediately to start negotiating lower levels in START III in the range between 2,000 and 2,500 which would obviate the need for the Russians to expend that to build a new system. So we would like to get down to lower levels for both sides and really relieve them of a great burden as well. So those discussions are under way because we recognize the burden it places upon them and we want to get much lower ourselves because of the financial burden it places on us.

    General SHALIKASHVILI. The first thing I would tell you is the Joint Chiefs have met on this issue, quite frequently. We fully support the notion that once START II is ratified that we move on to START III at the levels that Secretary Cohen just outlined.

    The other thing that we are in agreement on is that it would be helpful to us if the restrictions imposed by Congress on staying with the START I structure were relaxed so that we could have the flexibility to adjust structure and still retain the maximum capability, and there are many, many different variations on that. Right now we are just—we have a frozen structure. We could make changes in the structure and still retain a good deal of the START I capability. So it is those sort of flexibilities that we would like to have from Congress.
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    Mr. DELLUMS. Last comment, Mr. Chairman, there have been a great deal of attention given to the base closure recommendation, in my humble opinion probably one of the least significant aspects of the Quadrennial Review but has a very high profile because of the implications. I am probably one of the people on this committee that can't be harmed by any more BRAC's. All of the facilities in my district have been closed, so I can meet BRAC with great comfort. I would also say to my colleagues that are in fear of base closure, that there is life after base closure and you can survive.

    But I would say, one, I agree with you that we do have excess inventory, but I think you meet great resistance here unless and until you can show Members of Congress with some degree of certainty that there is life after base closure. That means that the bases that are presently under way to be closed need to be success stories. We need to show Members of Congress what can work and what does work. I would suggest that goes beyond the Department of Defense. That includes a wide range of Federal agencies, because I think in the context of a balanced budget, this is a comprehensive view, we must look at the gestalt of it and when Members contemplating base closure look at those of you who have survived base closure and show it is successful, you begin to minimize the political resistance to this. So it is in everyone's interest to make BRAC–1, 2, and 3 go forward and the next round of BRAC will be more readily acceptable to people.

    Secretary COHEN. Congressman Dellums, I think you are absolutely correct. I have a list I will submit for the record, not take your time to go through it, but I notice in yesterday's coverage before the Senate that there was a statement that bases were closed in South Carolina to the great detriment of that State's interest.
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    I have a couple here that have been quite successful. One, Myrtle Beach Air Force Base, there are some projects under way that will create 2,500 construction jobs, 5,000 permanent jobs, replacing the 784 DOD civilian jobs. There is a list of these.

    I must tell you from my own perspective and experience that I think it is much more difficult in rural areas than urban areas as far as base closures are concerned, and I am speaking from parochial background now in terms of how much harder it is when you get into the remote areas to develop them and to attract the commercial activities you need to make them successful. But I also have a list of the successes in rural areas as well.

    And I think you are right, we have got to show there is life after closure and in many cases it is a more successful and prosperous economy as a result. But I will submit that for the record and not take your time.

    [The Department of Defense did not cooperate in providing a timely response for the record.]

    Mr. DELLUMS. Thank you, both of you, for your responses to my questions, and thank you, Mr. Chairman.

    The CHAIRMAN. Thank you.

    Mr. Hunter.

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    Mr. HUNTER. Thank you, Mr. Chairman.

    Mr. Secretary, nice to be with you today and, General Shalikashvili, thank you for your continuing service to the country and, Mr. Secretary, I am glad you are where you are because you have a lot of capability and creativity and integrity and you are going to do good things for the country.

    Having said that, let me say I am disappointed with the QDR and I want to help you and General Shalikashvili give something to the American people that you haven't to this point, and that is this. The American people need to know what we in Congress need to do and how much we need to spend to defend America. The Chairman's initial comments, what do we have to do to protect the country, and then give us a price tag for it.

    The QDR starts out, says we start all of this with the acknowledgment that we are going to be spending around $250 billion a year, and the political climate will not accommodate any larger expenditures. Now, we have based most of your force structure recommendations based on trade-offs within that box, and I think that sends the wrong message to the American people. I think that becomes a self-fulfilling prophecy.

    Once you come out with your recommendations, you say this is all we are recommending because this is all we are going to get out of the American people, that then translates for editorials to say this is all the military says they need and therefore anybody who says they need more is giving the military something they don't want. So one thing, Mr. Secretary, is what do you think we need to spend, come out of that box for a minute, to defend America?

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    And I want to go, second, to the two-war strategy. We presume that is Iraq and Korea. We know the interesting thing about that is we fought both of those wars and we don't have to guess too much about what we need in those wars and we referred to our ability and capability and what we did in Desert Storm and to a lesser degree in Korea.

    In Desert Storm, we utilized 8 divisions. During Desert Storm, we had 18 Army divisions. We are now down to 10. We had 24 fighter air wings. We are now down to 13. We had 546 naval vessels. We are now down to 346. So we have gone from 18 on to 10 Army divisions. We utilized eight in Desert Storm. We fought Korea. We used 7 divisions in Korea; 7 and 8 is 15.

    And it is interesting that this report is replete with vague statements to the effect of black boxes, new technology is going to make up the difference. We thought that in Korea. The administration's doctrine endorsed by Congress was since we had tactical nuclear weapons, we didn't have to have as many ground forces. That didn't work. We got attacked anyway. On June 25th, the North Koreans came south and almost drove us off the peninsula and in 3 days they had Seoul. We had at that time 10 Army divisions, exactly what this administration says we needed. The planning for Korea was the same as what you gave the Chairman.

    You said Saddam Hussein only has about half the forces he had. We thought we could handle the Korean but we didn't count on the Chinese coming in. The first few divisions we sent in got absolutely torn up. We tried to hold them in the Chosan Pass and got ripped to shreds. The 25th division came in from Japan and we got torn up. The Joint Chiefs made a recommendation to go back to 18 divisions.

    So my second question is, was there any analysis done on this as to the actual number of divisions needed, and air wings and ships, to handle in real terms this two-war commitment in these two particular wars?
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    Now to go back to the requirements, the Marine Corps tells me, and I have got the letters I want to offer, Mr. Chairman, for the record, from the Marine Corps and the Army to the effect that the Marine Corps is $300 million short on basic ammo for 2MRC's; the Army is $1 billion short. I think we should focus on that instead of saying here is the box we are in and here are the trade-offs we have to make.

    [The information referred to can be found in the appendix on page 196.]

    Mr. HUNTER. Second, let me go to troop detail. I know you have talked about that. We have 300,000 professional shoppers in the Pentagon, that is, acquisition personnel. That is essentially two United States Marine Corps. If we cut down the professional shoppers or the acquisition corps by 125,000 or 150,000, cut it lower than the United States Marine Corps, we are going to be able to spend about 7 1/2 billion extra dollars a year.

    I have the results of this QDR review of the TACWAR study that says we need the ability to stop our enemy early on. That saves a lot of lives when you get to the final turnaround phase when we are trying to take the initiative away from the enemy. That recommendation would seem to compel us to at least look at B–2 as an early stopper that could stop armored attacks and to save a lot of soft bodies later on. So I offer that for the record and ask for your comments, if you could answer those first couple questions.

    Secretary COHEN. Congressman Hunter, let me agree with at least two-thirds of what you said.

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    With respect to the acquisition reform, that is something we are really committed to. It was started by Dr. Kaminski as far as reforming the way in which we acquire systems, trying to introduce greater competition and stability and better business practices, that is taking place.

    Dr. Hamre is now busily working and trying to reform the way in which we conduct business, becoming less of a paper society and one that deals in today's electronic means as such, electronic commerce.

    So there are billions of dollars we think we can get out of the current system, and that is something I am going to focus on between now and the time I come back in December. So there is much to be done in terms of acquisition reform.

    With respect to ammunition, I think the gentleman would agree, we intend to put greater emphasis on having the type of resources and ammunition the Army needs.

    On the issue of technology versus quantity, we had 5,000 ships, roughly 5,000 ships during World War II. We are down to, as you indicated, about 348. I think anyone in the military would tell you today those 348 are far more capable than the 5,000 we had in World War II. You had the quantity but not the quality we have today. So we have had to compensate and we have with the quality over the quantity.

    I recognize that you can get in the arrangement that after a while quantity has a quality of its own. You can get so small and just so much technology and then it starts to merge that you are really on the downside of that particular curve. But right now we feel that the 348 ships that we have, given the kind of technology they are developing, are far more capable than anything we have had in the past. But
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    And one final point. If you ask me, let's just ask for the number that is necessary to continue doing what we are doing today, I would simply say add $15 billion to the budget and we can continue on that first path that I indicated. We are about $15 billion short in terms of procurement in as far as modernizing at the pace we want to, so if you think we can acquire more than 250 or if you add the Department of Energy, 260, if you add another 15 billion we can probably continue what we are doing and carry it out very well.

    The problem if I do that is how do I plan for the next 5 years, which I have to start doing now and present a budget to you next January. I have to start making the reductions right now in terms of thinning out, reducing the forces, active, Reserve, start cutting back to a number of programs in order to produce a budget for you next year, and this is the only agency that is required to plan in advance 5 to 6 years ahead of time, and we are doing that, and if I came back and said we need 275 or 280 or whatever, and then you—and I present that to you and that gives you ammunition to go out to your colleagues and get it, if I could plan on that that you would be successful.

    I saw last night's vote or this morning's vote. I think it was a, what, two vote margin, 216 to 214, whatever the vote was. And that is cutting another $5 1/2 billion out of the $6 1/2 billion I have got to contend with, so I would have been $11 billion short in this environment. So I didn't want to be unrealistic.

    I said, you be realistic, members of the military, in presenting me the options, and I am going to be realistic and say, based on my experience, I don't think we are going to get that. I would like to advocate more and if you want to give it, we are more than happy to receive and to apply it, and I am willing to go to the public with you on that account. But I believe the budget environment in which we need to operate is about where we are and we are not going to be successful in getting much more. If we can, we will gladly accept it.
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    General SHALIKASHVILI. For me, it is very easy to tell me how much more money we would need. I have testified before this committee and others for the last couple of years at least that we were underfunded by some $15, $20 billion, so you have this migration from one account to the other and you can argue which account is short, but that is how much we were underfunded.

    And our task, based on what Secretary Cohen outlined, was to see what we could do internally to ours to come up with that money without impacting our ability to execute the strategy. You cannot do this all by cutting end strength or cutting defense programs, but you can do it in combination with that and a very serious reengineering of the infrastructure. Not just doing it around the edges, but seriously begin to do the management of our business as efficiently as I think we are doing the warfighting side of our business. We have a great disconnect between those two, and so if there is a Goldwater-Nichols II, it needs to be on the side of managing this business. There are better ways of doing it.

    As far as the warfighting side is concerned, we looked very carefully at the number of Army divisions, Marine Corps units, specific platforms and what not that would be needed to fight Saddam Hussein in today's environment, and what to do in Korea in today's environment with the allies that you might or might not have, the weapons system he now has, we have. The United States is also not the same force that we were during Desert Storm. Most people refer to the fact that we are smaller, and we surely are. Secretary Cohen said so is Saddam Hussein. There is also one other difference. Just ask yourself how many platforms we had during Desert Storm that could deliver precision munitions and how many we have today that can do that. Look at the capabilities that we have pound for pound, although we are smaller today than we were then, and we tried to take that into consideration.
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    But the Quadrennial Defense Review isn't just based upon the analysis we did the last 4 months to get ready for this. That analysis really started trying to understand the Bottom-Up Review 4 years ago, and in asking the warfighting CINC's, saying, you tell me whether you can execute what the Bottom-Up Review gave you if you are first, and what happens to the other one, Korea if that is second, and can we do it all together and running transportation feasibility studies and whether we have munitions in the right place, what we need to preposition. So it is based on very extensive work.

    Now, could we use more? Certainly. What is the difference? The difference is we feel comfortable that we can execute with the forces we have now against the enemies as we now envision them. If you give us more, we can do it with less risk. It isn't a question that we can't do it, but you do it at a higher risk than you feel comfortable with. So anything that you give us more will translate into a reduced risk.

    Secretary COHEN. If I could add one more feature, and that is whether or not there is additional money, we still have to have a revolution in business affairs in order to get that money to our warfighters. So that is irrespective of the money issue. We have got to change the way we do business, period.

    Mr. HUNTER. Thank you.

    The CHAIRMAN. Mr. Skelton.

    Mr. SKELTON. Thank you very much, and I must add to previous comments, Mr. Secretary, that you bring with you confidence. I thank you for your thorough review. And, General Shali, we thank you for your continued commitment to service.
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    Mr. Secretary, you asked the question, when do we get to the future, and you pointed out in your discussion that you would be looking for a peer competitor maybe 10, 12, maybe 15 years from now, but you can't tell.

    From the Spanish-American War to our involvement in World War I, it was 18 years; 23 years before World War II; 5 years before Korea; 10 years before Vietnam; 14 before Panama; 1 year before the Persian Gulf war. So with that unpredictability, I think that you are headed in the right direction with your strategy, and I compliment you for it, because it is a broader strategy than the Les Aspin two major regional conflicts. It recognizes the other things that the military does, the Haitis and the Bosnians in this world.

    My second thought, however, is that the budget recommended is insufficient, and I think the penalty for that would be paid for among the personnel of the Armed Forces. Not just numbers, but in quality.

    Remember not so long ago regarding the Army, as a for instance, 520,000 was going to be the bottom line for the Army. Then 495,000 would be the bottom line for the Army. Now the recommendation is 480,000 will be the bottom line for the Army. What will it be next year or the year after that? I think that where we are headed could be a dangerous scenario.

    I understand from the briefing I had previously and your testimony today about the halt phase of the battle and the regain phase. You might have to have a cooperative enemy to do these things.

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    I am concerned about your having insufficient troops in numbers and in quality because of three things. If you continue to cut the troop strength in all of these services, you are going to have them operating in a high-level of tempo, you are going to damage their families, more problematical, you will create continued uncertainty for their personal future.

    So where are we headed with all of this? I think that if we continue we might well find ourselves coming off the 100,000 troops in Asia, the 100,000 troops in Europe. We will have ourselves a 200-ship Navy and the United States of America will become irrelevant militarily and diplomatically in this world. I also think as a result we might end up with a broken spirit among the troops. These things concern me.

    So I ask you, is this the bottom number of personnel reductions? Can we tell those young men and women sitting back there in uniform that this is it? In a related matter,

    Would you please comment on my observations?

    Secretary COHEN. Let me start from the beginning about the lack of predictability. That is precisely the enemy of the future, we don't know. All we can do is try to make the best assessment we can as far as who is likely to become a peer competitor in the foreseeable future.

    There is no other country presently that can operate at that status to say that they are comparable in power to the United States. Not Russia, not China, and not any other country. Not Saddam Hussein in Iraq, not Iran, not even Korea. There is no other, quote, peer competitor. We remain the world's only superpower.
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    The question that you raise is should we stay in that capacity, is that something that we are willing to bear? What are the burdens involved in that? What are the benefits? What are the liabilities if we don't?

    Your suggestion that we might go down to a 200-ship Navy, that we might pull half, if not all, of our forces out of the Asia-Pacific region and cut down those in Europe, reducing us to irrelevancy, if that were the case, we would be irrelevant. So we have to understand that there are great benefits to us by being engaged in the world, by maintaining that 100,000 presence in Europe and Asia, and being able to shape events and being able to respond.

    Now, the best military judgment I have asked for, and I will yield in a moment to General Shali, is that they can carry out these responsibilities with increased risk. It is not that you can carry out the same without any increase in risk. We understand that there is increased risk. This is not a budget document. The budget document will come up next year. But in terms of how low will we go, it depends upon Congress as well. We don't appropriate the money; we don't authorize the money. We can make requests. And if you find that this is so deficient in terms of its recommendations, then obviously you will have the power during your budget negotiations on the floor in which there will be a number, a multitude of efforts made to cut it further.

    So it is really an existential exercise we have to go through as far as the country is concerned, who do we want to be in the future, do we want to maintain this status, to be the world's premier power, and are we willing to pay for it. If not, we have to do one of two things. We have to say we are no longer willing to carry out these commitments, let the Asians take care of Asian security, let the Europeans take care of European security and we will just come home.
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    I think that is a mistake. I think we have done that in the past.

    Can we still carry out our strategy? The military has advised me they can with a modest increase in risk. Is it something we are willing to accept? If you are not willing to accept it, the short answer is, come back and give us more money and we will spend it. But that is a joint effort and, frankly, I wasn't encouraged after seeing the debate last night. That was not an encouraging vote from my perspective in terms of what that means for the future of this country.

    So we have a lot of selling to do to go out there and persuade the American people, and it is tough in a democracy. Any time you have a perception that we are at peace and that the cold war is over and long over and that you are still maintaining this superstructure that is reminiscent of the cold war, that is the rhetoric we see in the paper and hear on television, it is not true, but we have to overcome that and say no, it is important that we do these things and take pride in the kind of quality of life issues you are raising and not readiness and not overstress the troops and all the day care, et cetera. We have to maintain the best fighting force in the world.

    Do we still want to do it? I think it is imperative we do. I think we can do it under this proposal, but at a slightly increased risk.

    With respect to B–2's, if that were the choice, B–2's give you a capability certainly in being able to get from here to there on relatively short notice, but they don't help you shape the environment. You don't have a forward presence as you would with aircraft carriers and the TACAIR and the forward based F–22's and F–15's. So you give up something else. You have a different kind of capability in terms of going to war on short notice but lose the forward deployment, having the carriers able to go through the Taiwan Straits, being present over Japan and off the coasts. So you give up something.
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    And we looked at that and made a specific analysis that, yes, the B–2 does give you a specific capability, but when you measure it against the other aspects of our strategy, we felt it is outweighed by the shaping and responding part in terms of capability. But it does have a very unique, specific, and rather limited capability in wartime as opposed to the shaping in the peacetime as well, and there are other aspects we can discuss at length, but I believe that is the kind of analysis we made.

    General SHALIKASHVILI. Let me just address one part of your statement and your questions. You talked about your concern about the men and women and because of the OPTEMPO that they face and because of the uncertainty for the future. How right you are. I think I have said before on previous occasions that we need to bring the OPTEMPO down. But we will not solve the problem if we think the OPTEMPO comes only from operational deployments, like Bosnia or Haiti or whatever it might have been. There are on any given day since I have been Chairman some 40,000, 45,000 people that are deployed on these deployments. Even if you multiply that by three and take that out of a force of 1,400,000, mathematics will tell you it can't mean that the whole force is churning because of those deployments. They add to an already existing problem.

    Much of the problem is our training, our internal deployments, our exercises and so on. And so we, the chiefs, have challenged ourselves as part of this Quadrennial Defense Review, now that we understand how much churning is coming from operational deployments and how much comes from the internal way of doing business, to try to get a handle on it and get it down.

    On joint exercises, we are bringing down by next year our man-years on exercises by something like 15 percent.
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    General SHALIKASHVILI. We are going to drive that down further, and we are going to—the Secretary in the QDR has challenged the services to do the same thing.

    However, the uncertainty of the future, and your question, is this the last cut, obviously, one answer depends whether we will have steady budgets of $250 billion, but that is not a complete answer because nearly one half of our active force is in what can be categorized infrastructure. In the defense agencies, in the headquarters, in the service infrastructures, the support agencies, the training base, schools and so on.

    And we have talked about trying to find ways to significantly reengineer the infrastructure. So I don't want—so that would involve them as well. But it is different than in talking about the fighting part, the deployable part of the force. We have made very few adjustments to that here.

    In the Army, none of those adjustments, the 15,000 is in the deployable part of the force. It is on the infrastructure side. The Navy is, of course, different because we did take out some surface combatants.

    But I think we should not now leave the impression that

    The CHAIRMAN. Mr. Bateman.

    Mr. BATEMAN. Thank you, Mr. Chairman. And let me compliment both of our witnesses for what I think has been a brilliant discourse on the Quadrennial Defense Review. And I mean that in the truest sense. I think it has been an extremely logical, coherent, well-thought-out presentation of the case for what is recommended in the review, and if I take the assumptions underlying it, I really can't find much in it to quarrel with.
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    My concerns, as already expressed by my colleagues, Mr. Hunter and Mr. Skelton, are about the underlying assumptions that were driving the result, and yes, I cannot argue with you that your budgetary assumption is not dreadfully close to accurate. But I take Mr. Hunter's point. It becomes a self-fulfilling prophecy if we continue to proceed on the premise that it ain't going to get no better even if it needs to get better. And until the Department of Defense articulates the propriety and the necessity to enhance our national security resources, the American people are not going to be persuaded and act through their elected representatives to solve the problem in the way I think the problem needs to be solved. But you have heard enough of that for one morning at least, though I very sincerely believe in that point of view.

    I am concerned in one aspect of the strategic determinations and that is the so-called peer competitor and we don't have one in sight until 2010. I am not sure I have the same confidence that you all seem to have in that. If you take what I would refer to as the detent between Russia and China on the stated basis of being a counter to a unipolar geopolitical environment and wanting to effectively counter it, I am not sure that the combined capability, especially if you take a scenario where we are involved in conflict with Iraq and/or Korea, that we do not already have a peer competitor that we must give some consideration to.

    The next thing I want to turn to is more narrow and specific, but in discussions with staff about what we can do to get through this horrendous fiscal year 1998 budget and the authorization bill that is coming to markup soon, it is reported to me that in the fiscal year 1998 budget request, there is $2.9 billion in requested budget authority for contract advisory assistance services, which I think translates essentially into consultant fees. From 1992 to 1998, that account has increased 248 percent and from 97 to 98, the increase just in the O&M accounts is $104 million.
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    What in the world is going on that you have those kind of increases in consultant fees? And to what extent is it being driven by the fact that in our efforts to downsize and rightsize we haven't gotten it exactly right and the people that used to be doing things and paid from Government accounts are now being paid a big $2.9 billion to do it as outside consultants? I would like very much not so much for an instant response today, but I would love to have you get back to me on what in the world is going on in that phenomenon.

    In deference to my colleagues, I will reserve the other questions for the record in order that others may have a chance to inquire. Thank you.

    Secretary COHEN. Thank you very much, Congressman Bateman. I will get back to you very quickly with a statement for you and for the committee in terms of the consulting arrangements that have been calculated in the budget.

    With respect to Russia and China, I don't think anyone can really give you an accurate assessment of how that relationship will unfold. I could—my own assessment is it is more an engagement of convenience rather than a marriage of convenience. I think, obviously, the Chinese are interested in getting as much Russian technology as they can. The Russians are interested in getting as much cash as they can. But I do not see at this point that there is going to be a lasting integral relationship between the two.

    I could be wrong and we have to follow that very closely. But I think historically you will not find a real integration of those two countries in the near term based on their historical performance, but I could be wrong on that and that is why we have to be flexible. We don't calculate a near-term competitor in the next 10, 12, 15 years, but it could happen and that is why we have to have some flexibility in that regard. And I am always, well, not surprised, but I guess concerned when I see editorials saying this is simply cold war strategy, it is long over.
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    We don't—we are hoping by virtue of our relationship with Russia that we can maintain a good relationship with them. We are serving with them shoulder-to-shoulder in Bosnia right now. We have a NATO-Russia charter, which is also a matter of some controversy, but nonetheless we are trying to proceed with the Russians in saying that we are going to enlarge NATO, but it is not a threat now. We are going to proceed with you on a parallel track. We are going to have more Partnership for Peace exercises. So we are trying to maintain that relationship.

    And General Shali has been very involved, along with former Secretary Bill Perry, to maintain these military-to-military contacts. Mr. Rodionov was here last week. I am going back over there very soon, next year. We are going to try to maintain relationships so that we don't see the rise of a peer competitor that is going to challenge the United States strategically again in the foreseeable future to pose that kind of a threat.

    We are trying to deal with China in the same fashion. I know that you are all tired, but General Shalikashvili has just returned from a trip to China, and I am sure his body time has not caught up with the travel lag that is involved; that he perhaps needs a little more rest to be fully integrated before this committee. But he has done an outstanding job.

    I haven't detected any real jet lag yet. He has been over there and he can tell you what his response in terms of how we deal with them in the future. It is not going to be an easy relationship. It is one we hope can be more cooperative. We can find areas where we can cooperate rather than have confrontation, but it is one that we have to be in for the long haul. We have to engage them. So we are going to have more military-to-military contacts as a way to prevent any kind of real strategic confrontation in the future.
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    It is a combination of having military power, like you say that military power is the steel in the sword of freedom. But you also have to have great diplomacy and we want to make sure our diplomats are involved with them as well so that we don't have the kind of cold war confrontation either with China or with a Russia of the future.

    The CHAIRMAN. Mr. Sisisky.

    Mr. SISISKY. Thank you, Mr. Chairman and welcome gentlemen. I want to commend both of you for your leadership. I did read a report. I talked to the press, and, of course, first thing they want to know where I come from is am I in favor of BRAC? And I said not yet, but I won't close the door to listen to you gentlemen.

    I have a whole sheet, and I can tell you what happened to the last BRAC, but I will do that at another time, but I don't have the time. It was politicized to a great degree, to a great degree the military had too much of a part in it, and could not be objective, but that is for another day.

    The truth is in this report there are probably two dozen initiatives of which BRAC is but one, but these initiatives to some extent are not necessarily new and we have already put a lot of time on some of them. And my favorite one, of course, is privatization.

    As you know, I come out of the business world, and I think I know a little bit about what I am talking about.

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    It was interesting a top person in the Department of Defense, very top, not as top as you, Senator Cohen, excuse me, Mr. Secretary, who testified in front of this committee about that issue, and what struck me so much was they talked so much about competition when the policy would virtually eliminate the public sector as a competitor. They bragged about a 31-percent savings was achieved in part because the Government won half of the competitions. Something like that really doesn't make sense.

    If savings are achieved through public-private competition, why eliminate the public competitor? Savings won't happen simply because work is done by the private sector. Savings come from competition and the business world we used to call it ''gotcha'' if there is no competition. I am serious about this.

    I notice in all the reports, the big thing in this city so the Vice President or the President can say we have eliminated 200,000 Federal jobs, what we are really talking about is FTE's because we are transferring these jobs, big thing to the public, we are transferring these jobs to somebody else to do it.

    I will never forget in this room an Assistant Secretary of the Energy Department was bragging about how they privatized in a very critical place not too far from here and they had it cleaned up and I just asked them one question. I knew the answer already.

    I said how many bids did you get? I mean this was multihundreds of millions of dollars. And guess what the reply was. One. All the subcontractors were the people that would bid. It is a very strange and illuminating thing. He turned red-faced because he knew exactly what was going on.
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    Now, the other factor in this report that really—and you have heard it already, so I won't elaborate too much—I am concerned about the reduction in force and particularly in the Army. You know we don't have 495. You know that—495,000, we have got a lot of space in between now that we are going to reduce it so much.

    We have heard so much about OPTEMPO and PERSTEMPO and General Shali, I really hope and pray that we have the discipline—and that is what it is going to take by the Joint Chiefs of Staff—really to have these people spend a little more time at home. I mean, it is good to say and to write it down, but in the real world, I am worried about them.

    I am going to help you Senator—I mean, Mr. Secretary. You said you are going to look at the Pentagon and OSD. I am going to look at some health care services in Washington, too, with an amendment to this bill, and I tell you why I am going to do it. Because I am going to bring this issue—maybe it missed me somewhere in the report. I did look, but it could have passed me by. We are doing wrong in health care to our military and to our retirees. Of all the mail that I get, that absolutely tops anything and the telephone calls. We have gone back on promises.

    To give you an example, we closed a hospital at a military base and said we are going to have a super clinic and I think they reduced from 26 physicians to 4. The junior enlisted serviceman in that area, to take a child, would have to go 88 miles to another military hospital. So what does he do? He goes to town, goes to CHAMPUS, pays his 20 percent. That is wrong. It makes the same amount money. We have got to look at all of these things.

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    The autocratic way of doing it is if we are going to cut health care out in the field, then, by golly, I think we ought to cut health care in Washington. And it all boils down to one thing, the OPTEMPO, health care, and you have heard it before, housing and commissaries and everything. This is a readiness issue, and I hope that we will never forget it. Thank you.

    Secretary COHEN. If I can respond to Senator Sisisky, in fact, I was introduced the other evening by one of your colleagues and he said it was my pleasure to introduce the Senator of the Pentagon. Slip of the tongue on that one.

    But Congressman Sisisky, I have always assumed whenever you asked a question you already know the answer. I have operated on that assumption from knowing you and traveling with you over the years, so that does not come as a surprise to me.

    I think that you raise a good cautionary flag in terms of the privatization issue. I have always felt that we have to look at that very closely. I think that we do have to adopt good sound business practices where they apply, and if they will not save money or if they will give any kind of a monopoly to the private sector that does not, in fact, do right by the taxpayers, that we ought not to do that.

    So I think that your business experience and skepticism is healthy and is something that we will look at very closely not simply invoke the mantra of privatization unless we are satisfied it really does save money and doesn't simply revolve or resolve itself into a monopolistic type of pricing scheme. So I would like to see that private and public competition to make sure that we are getting the best for the public.
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    With respect to health care, you didn't miss anything in the report. We looked at it quickly and we decided in the short period that we had it, it was much too complicated for us to have made a positive recommendation and it is something that I think the National Defense Panel ought to address and we ought to address working with the Congress. But we didn't look extensively at the reformation of the health care system.

    When I get accused again of not being bold enough, I have seen some proposals that say let's just provide health care to our active forces and let everybody else who is retired go to the private sector. That was pretty bold. I wonder how that would be received if that were to be a recommendation coming from this process to the committee. I don't think very well and it wouldn't do well by our service members either, so it is something that we have to address and we have to address it in conjunction with you, the National Defense Panel, myself and others will be working on that with you in the coming months.

    Mr. SISISKY. One thought, Mr. Chairman. I noticed in some writings that you had that you talked about the travel voucher system and how much money it is saving. I want you to understand that this committee allowed that to happen under a pilot program. So we are not opposed to things that make sense.

    The CHAIRMAN. Mr. Hansen.

    Mr. HANSEN. Thank you, Mr. Chairman. Like others, I think the Secretary and General Shalikashvili gave an excellent presentation and there is a lot of room for thought there. Looks like pretty smooth sailing, but there is a lot of rough water in there as you can see. And I think you put your finger on the roughest water of the whole thing and that was BRAC.
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    And I kind of enjoyed your comments about when you were a Member of Congress and the word that jumps out at me is the word ''fair,'' and that seemed to be the thing that bothered you so much that you went to Dole and tried to get the law changed. A lot of us worked on that law years ago when it was here.

    I think I have read and reread that law as much as anybody around here. We have asked for a legal opinion from you folks time, after time, after time. Never got it. I can see why. Who would want to write it? And so it comes down to the idea of what is fair?

    If you read the law, there is absolutely no question that the President cannot privatize two bases. And if you can take his criteria and extrapolate that over to the criteria that is given to Congress, then 535 Members of Congress could do exactly the same thing.

    So I think if you want to get off the rough flood in here and make this thing easy and you talked about doing this, Mr. Secretary, and believe me I have a lot of faith in you and

    Last year, in front of the Senate Armed Services Committee you said this: The whole purpose of the BRAC process was to eliminate excess capacity and yet we have created it by what has happened in those two areas. Anyone can see it.

    You talked about the idea just a few minutes ago about your statistics. Because our force structure declined by 36 percent while the infrastructure has only declined by 21 percent in the Air Force depots, if we followed the BRAC law and close Kelly and McClellan, we will have closed 40 percent of the capacity, so we more than take care of it just on that closure.
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    I have to say, Senator, what you said when you were Senator—or Mr. Secretary, was absolutely fascinating. I think you were absolutely right on most of the things you said. I want to compliment you for the very well-thought-out things that you stated. For example, you were highly skeptical of significant savings from privatization.

    In fact, the Air Force's own analysis, your folks's analysis, found that privatization is likely to waste almost $700 million per year. So the boys in blue have got $700 million they are ready to waste. I can't understand it.

    You also stated that with regard to privatization of depot maintenance, I believe the Pentagon has a misplaced sense of priorities. I couldn't agree with you more. I would stand and applaud you. That is excellent. You said it just right. You called for a strong core maintenance definition and you stated that to change the 60/40 criteria will deteriorate critical war-fighting capacities and most likely require further closures beyond what has been accomplished by BRAC. Excellent. Couldn't have said it better.

    I think all we are saying—and no disrespect, but on March 6, I sent you a letter signed by 20 of my colleagues. I could get you another 40 that said you would come over and talk to us on a one-on-one. The first I heard about it was yesterday. I know you are a busy man, but on the other side of the coin, I think it would be nice if we played the old Isaiah theory of ''come let us reason together'' so that we could get some of this resolved.

    In my humble opinion, if you folks follow the law on base closing, all of us will stand up and say we will do it. I stood in front of this committee and said if it comes out that the ALC that I represent comes out No. 5, I will stand up on the floor and say let's close it. Of the three BRAC commissions of the five areas in Utah, three of them have been closed.
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    Fine, probably necessary. But, doggone it, I think you folks have to follow the law. And I think all of this stuff of, yes, we are going to have a base closing, as long as there is political reasons behind it, as long as the problems that keep coming up, I think it is nothing more than a pipe dream. Maybe it is good for a sound bite and maybe it looks good in Newsweek, but I doubt it will occur because we go right back to what you said, Mr. Secretary: Let's do it fair. And I don't think you can find many Members of Congress who feel that it has been fair. Thank you for indulging me in that comment. I feel better after saying it.

    Secretary COHEN. Well, I will do anything to help you feel better. A couple of quick responses with respect to my willingness to meet with you and the depot caucus.

    I did have a meeting scheduled and came over that day. As a matter of fact, I had two meetings lined up that morning and I attended the first one. I was going to say, you were getting so rhetorically, I guess, heated, that the chairman left the room. I thought he was going to leave me here all alone to respond to you.

    But I did have a meeting scheduled with the depot caucus and it turned out that was the day in which they had the Chemical Weapons Treaty before the Senate and I was asked to go back and try to persuade some of my former colleagues in the Senate as to the wisdom of ratifying that. So I had to cancel that at the last second, but I had planned to do that earlier, and as a result I have rescheduled that to make sure that I keep a commitment that I made when I first came before the committee to say that I am always open to meet with all the members of this committee or others.
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    I have tried to keep that up. I have come up to the Hill on several cases to meet with Members; I have invited Members over. You can be sure that I will keep that pledge that we will have that meeting and have an open discussion and try to reason together. So that is something that I intend to do.

    With respect to public and private cooperation, on the base closure you talked about, the Chairman of the Commission indicated that he believed that the President had the option—the Defense Department had the option of either consolidating with other depots or allowing it to go to the private sector.

    My understanding is that that public-private competition is underway, an RFP has been issued. There have been negotiations with the public unions and the private sector. Apparently, neither side is satisfied with respect to the RFP, but nonetheless that is underway right now.

    On the 60/40 rules, while I raised questions about 60/40, I also had recommended during the negotiations I thought a 50–50 split was reasonable last year during the negotiations, so I think you should look into that as well. I tried to negotiate the 50–50 and it didn't work. I think that we need to sit down and find out if there is some kind of a ratio that makes sense that still protects the core capabilities without undermining that and I am open to that. So it is not something that I can dictate or mandate; it is something that I have to come back to you and get so that is part of the negotiation process and something that I would encourage.

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    Mr. HANSEN. Mr. Chairman, one quick response. Mr. Secretary, every time that comes up, someone brings up the idea that the President felt he had the option of privatization. I, again, say read the law. It doesn't give him that option. It says he can privatize, but not in place. It is very, very clear.

    Secretary COHEN. Again, my understanding is that there is not privatization in taking place today, but rather there is a public-private competition that has been ordered and that is underway so that there has been no privatization in place as far as my understanding of the situation concerned.

    Mr. HANSEN. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you.

    Mr. Ortiz.

    Mr. ORTIZ. Thank you, and I would like to welcome both witnesses this morning. And in response to that question, we do have privatization in place in my depot where we repair helicopters at the Corpus Christi Army Depot right next door. They were let go. They turned around and hired them, you know, at a lower wage and they are working side by side.

    But you know, Mr. Secretary, when you were in the Senate, you supported the requirement that 60 percent of depot level maintenance be done at military facilities in order to maintain a viable organic depot system as a ready and controlled source of repair for our war-fighting needs. And I know you helped us in that battle, and I know that it was not a parochial interest because I know that you care for our troops and the readiness of our country.
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    But I would like to be enlightened now. Why have you changed? And you know you are looking at some other figures, you know, but specifically, how can we achieve a savings when the GAO has documented that 95 percent of the Army's and 99 percent of the Navy's depot maintenance contracts awarded for fiscal year 1996 to date were sole source, no competition?

    Now, if the Government gives up its organic depot system and loses its ability to counterbalance the private sector, doesn't that result in the private sector increasing instead of decreasing prices?

    In your QDR passage, you state that we have to decide what is more important, keeping a maintenance depot in Government hands or putting advanced technology in soldier's hands. Are we really willing to risk our future readiness on proven savings? We have had Secretary after Secretary testify that we have had so many savings that we saved so much money here. We haven't seen them. At least I have not seen those savings.

    What assurances do you have that these moves, the work outsourcing and privatization, will yield the estimated savings? Because I haven't seen any. Maybe I can be enlightened as to how this can work, but there is no competition whatsoever.

    What Mr. Sisisky said about the hospital, we have a hospital in Corpus Christi at the naval base. You know, this last year we had 15,000 patients come to the hospital. You know how many patients we have in the hospital? Four. Doctors, two. Because, again, they all contracted out to the hospitals or some place else.

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    And my main concern is that if we continue to do what we are doing now, cuts here, quality of life, hospitalization, retirement, we are going to have a hard problem retaining the good men and women who serve our country. And I hope that we can work something out because I am very, very concerned, Mr. Secretary. Thank you.

    Secretary COHEN. Thank you very much, and let me indicate again, I don't recommend privatizing if it doesn't save money. If I cannot demonstrate to you that it does, in fact, save money for the taxpayers so that we can then not only save money for the taxpayer, but assure them that they are getting the most efficient use of their dollars, but to save the money from those activities and put them into the other procurement and other needs that we have, then obviously I wouldn't recommend that. So the burden of proof is upon me and it is one that I have to measure up to.

    Mr. SPENCE. Mr. Saxton.

    Mr. SAXTON. Thank you very much, Mr. Chairman. Mr. Chairman, General Shalikashvili, I would like to ask you a more narrowly defined question than one with which I know you are familiar because I know we talked about it earlier today. In the world of military affairs from time to time there are new acronyms that come along and recently I was introduced into a new acronym that is known as GATM, G–A–T–M, which stands for global air traffic management. And I had a visit from General Cross several months ago, and he introduced me to this new concept in transportation aeronautical technology. And you mentioned it also in the QDR report in section 7 transferring U.S.—transforming U.S. forces for the future and essentially you say the Department is—quote, ''the Department must introduce the needed navigation equipment to comply with the Federal Aviation Administration and the International Civil Aviation Organization procedures in order to preserve the worldwide deployment capability of our forces, avoid delays and enhance airspace management capabilities.'' In other words, carry out the doctrine that Secretary Cohen talked about a little bit earlier; don't wait. And I think that is very accurate.
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    Anyway, my understanding is that for some reason, that is unknown to me, the needed funds were not requested in the administration budget submission this year for GATM technologies and you would like to see, according to General Cross' figures, $167 million added in our mark. Would you tell us why you believe that is necessary and why it is important? And you also might want to touch on why it was not in your budget submission.

    Secretary COHEN. Let me respond first, initially, we are required to introduce this new capability that is required of our civilian aircraft into our military aircraft now. The President issued a directive that asks the Department to pursue the protection and denial techniques for navigational warfare. In other words, we have to have access to GPS and also make sure that adversaries are not allowed to disrupt that particular system and knock out the capability of navigating.

    The funds, frankly, are going to be enormous. The estimates that I have seen between the fiscal years of 1998 and 2003, are as much as $5 billion. Beyond the FYDP, it could run as high as $11 billion in order to have this capability.

    I cannot explain to you, I don't have a good answer for you now as to why those funds were not requested in fiscal 1998 in the budget itself. I would have to go back and examine that. But the funds do have to be provided and we have to be prepared to allocate substantial revenues to that system in order to be in compliance with it in the coming years. So it is a big price tag. It is one that we have not dealt with in the QDR and it is one we are going to have to come up with the funds to comply with.

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    General SHALIKASHVILI. The only thing I would add is the urgency of the matter. When the new rules go into effect on transoceanic travel, rules that have to be put into effect because of the vastly increased number of airplanes now crossing, which dictates that you make the lanes on which they travel narrower and space the airplanes closer together, therefore they need much more advanced navigation aids than they have right now. That is the essence of it. And if our military aircraft do not have those navigation aids on them at a certain date, they will be prohibited from traveling in those lanes.

    They will still get across, but they will have to go way out of the way, longer time, more costs to get goods across. We need to start this effort now because it is a long-term effort as you bring aircraft into depots to install this new equipment and we cannot wait until the last minute.

    Therefore, those $167 million is the right amount this coming year to start this effort which will take many years to complete. But we couldn't afford to force military airlifters into these uneconomical routes.

    Mr. SAXTON. Thank you very much, both of you, for answering the question. General, you said $167 million, my numbers are 176.

    General SHALIKASHVILI. Yes, I think that is correct.

    Mr. SAXTON. Thank you very much.

    The CHAIRMAN. Mr. Pickett.
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    Mr. PICKETT. Thank you, Mr. Chairman and welcome Mr. Secretary and General Shalikashvili. I have a couple of strategic concerns I would like to mention at the outset, and those have to do with the Navy, in particular the reduction in the number of attack submarines and the reduction in the number of service combatants, I think, is a risky proposition. I don't have to tell anybody in this room the importance of control of the oceans to our Nation and any kind of an emergency, and I think we are cutting it pretty thin when we reduce vessels that are out there to protect our Nation by this degree.

    Second, Mr. Secretary, with missile defense, the theater missile defense and national missile defense, you mentioned national missile defense this morning. It was my understanding that we have still had the theater missile defense as a priority that we were trying to move ahead first with the theater missile defense. You plussed up the national missile defense, but not the theater missile defense. I wish you would take a look at that and let us know what might be done to try to make sure that the theater missile defense does indeed stay a priority.

    Next, you mentioned in your report a good deal about technology and now the military intends to use information technology to shape and form the battlefield and our strategy toward other nations around the world. If you are successful on the battlefield, bring some of that capability in-house and see if you can't get your in-house computers up to speed and maybe get a common language so they can talk to each other and improve your computer capability in-house.

    I have a lot of concern about the way that this part of the Department's affairs are being managed. In particular, I know that DOD agencies spend a lot more dollars than is reflected in the budget that we get because the DOD agencies make assessments to the service departments and the service departments have nothing to say about it. They have to pay the money up to the DOD agency and the DOD agency may or may
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    With specific reference to the report, I notice you say the Air Force will reduce its force structure for continental air defense and handle the U.S. air sovereignty missions with other forces. For the record, you might tell me what that is. I get a little alarmed when they are not going to use their best forces to protect their own territory.

    And finally, Mr. Secretary, I say this with some degree of trepidation, but I do believe that the measure that the department is using in determining what part of the base infrastructure has been closed and that measure is the replacement value of physical facilities, is a somewhat false and misleading standard to use in determining what bases—what actually remains in the way of capability.

    I know from personal experience that on many, many bases about half of the facilities there, the base commanders want to tear them down. They are not worth anything. And I take from this standard that that has been included in placing a value on these bases and perhaps in computing what existing capacity is.

    So I would hope that you would take another look at how you measure our remaining capabilities and perhaps you might even give this committee some indication of where the Department perceives the excess capacity to exist so we may begin to study this issue in anticipation of wanting to cooperate with you at some point in the base closure process. But I think it is premature, as Congressman Dellums mentioned earlier, to get into that issue at the moment.

    So I thank you very much for your appearance here this morning, and I am really impressed by the report and what you all have done and I look forward to working with both of you on it.
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    Secretary COHEN. Thank you, Congressman. With respect to the cutbacks of the Navy ships, this is something the Navy was prepared to undertake in any event. As far as the surface combatants, most of those are old, outmoded and obsolete technologies on frigates, which are now being replaced by much more capable AEGIS, either cruisers or destroyers into the force itself. So that is something that the Navy was prepared to do in any event. So we are making a quantum leap in capability again over the technology over that of the past.

    With respect to theater missile defense, you are correct. As a matter of fact, we have a problem with the THAAD system. We had four consecutive failures of the THAAD systems and we have decided to defer that, delay it from the year 2004 to the year 2006 in order to try to stabilize it and reprogram and restructure that particular program so that we can be effective, hopefully.

    The other theater missile defense systems are, in fact, on track. THAAD is the only one we have had to slip a couple of years by virtue of the fact we haven't had the integrated technology that we need. We are going to use only for one year only some of the savings that would come out of the slipping of the THAAD program to put it into NMD, but only for 1 year and then we put—the rest of the money is going to go back into the THAAD program. So I think it is important that you focus upon the TMD because we think it is still the most important threat we have to contend with.

    With respect to information warfare, you may recall that I authored the Information Technology Management Reform Act last year, and I was concerned about the very same things that you are concerned about, and that is that we do not buy computer technology or information technology wisely; that we waste a good deal of money and much of that comes in the Defense Department as well as other nondefense agencies, and that Act, hopefully, is going to save us, I think, billions of dollars in the future, and also have a better management tool that we need in the Defense Department.
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    With respect to the analysis as far as of the savings on base closures, I know that Dr. Kaminski was not fully satisfied that we have made an accurate accounting in terms of how much we actually save and asked the DOD Inspector General to really look at that and to come up with a better analysis, and I will get that to you as soon as I receive it, sometime this June.

    Mr. PICKETT. Thank you very much.

    General SHALIKASHVILI. I think there are two issues that perhaps have not yet been answered. One is the submarine issue that you raised. The Navy program for submarines, irrespective of the Quadrennial Defense Review, had the submarines going from 73 to 52. The Quadrennial Defense Review and analysis we did indicated to us that we can safely go to 50. So it is really a difference only of two attack submarines from the existing Navy program.

    As far as the air defense—CONUS air defense issue is concerned, the Air Force had squadrons dedicated purely for CONUS air defense. That air defense is going to be handled by CONUS-based air defense aircraft that also have, however, deployment missions. So the air sovereignty issue on a day-to-day basis will be taken up by the appropriate type aircraft, air-to-air, air defense type aircraft that are stationed in CONUS, but that also have deployment missions in case of major regional contingency or whatever.

    So it remains in a right aircraft, it is just that the threat analysis that we now have no longer in our judgment justifies retention of that many squadrons purely dedicated to CONUS air defense.
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    The CHAIRMAN. Mr. Buyer.

    Mr. BUYER. Thank you, Mr. Chairman. I have some questions for each of you. We will talk about the force structure and personnel and talk about Reserve components.

    First of all, let me compliment you, Mr. Secretary, for you to hit the ground running and step into something that is in motion and try to take control of something that is very large. It is a compliment also to some of the key individuals whom you had the opportunity to select and while that was minimal, I compliment you in being able to do what you have been able to do.

    As you and I have discussed, I am concerned about the Reserve force structure being closely related to the strategic requirements. That is not only by concern, but also of my colleague, Paul McHale and others on this committee. The most difficult issue is the role of the Army Guard and in particular that of the eight guard divisions.

    You have asked the Army leadership to report to you by June 10 with recommendations on the Army Guard and the Army Reserve Force structure reductions. I am concerned about the integration of the total Army and about parochial interests, about politics weighing in on strategic military decisions, and I would like for you to share here with the committee what is your plan to ensure that these decisions are strategy-driven and not politically driven with regard to this meeting that is being held.

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    Have you issued any guidance to the Army to cure? And if so, what is that guidance to cure this problem that we have in the Army? If the Army's product is unsatisfactory, what do you plan to do?

    For General Shalikashvili, I am concerned that the Army Guard divisions do not have any specific mission in their current war plans. Are there any plans to give these units specific missions? In the QDR you talked about the recommended mix of combat support and combat service support. I also had a conversation with the Secretary about this concern about domestic weapons of mass destruction and the potential use of the guard for those specific missions, but I am curious on your recommendations.

    And the other is if, in fact, we go to a strategic decision that is driven—I am sure that is your plan, Mr. Secretary—what is the commitment that, in fact, the funding will be there, not only for the operations and maintenance, the basic training, the annual training, the specialty training, all those schools, the equipment, if, in fact, we want to resolve some of these parochialisms and the inner battles and the fight, the integration, look at some of the other services.

    And let me also share with you General Shali in your testimony, when you presented the end-strength reductions,

    I would ask of you, sir, if we are talking about a reduction of Active by 90,000, Reserve by 65,000, and your civilian by 80,000, what are those cost savings in dollars are you looking for to modernize?

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    And the last is I would like a commitment from you that you will resist the temptation to touch these personnel until we move into the 1999 cycle. And I would appreciate your comments on these issues.

    Secretary COHEN. Let me respond, first of all, Congressman, to the situation between the Army and the Army Guard. My instructions were to meet and to try to resolve the differences that currently exist. I must tell you, I was not aware that there was such a schism as such between the Army and the Army Guard and Reserves in terms of their approach to this.

    I believe there should be a total force concept that has to apply to the Army as it has applied to other services as well. And my hope is that the Army, in working with the Guard and the various components, are able to work out some kind of an understanding in terms of what the roles are going to be, what the funding levels are going to be, and to basically have that full integration.

    I look at the Air Force and I find that the Air Guard is fully integrated. There are pilots who are flying from the Guard who are over in Bosnia today, who are flying all around the world, and it is a total force concept. That same integration has not taken place with respect to the Army at this point and it needs to. So from my perspective and my direction as such, I want them to work together to resolve the differences so that we can have a total force concept.

    The movement has been to look to the support, the Reserves and the Guard, to redefine their missions, to make their missions relevant to the war-fighting capability as such, and as you know, there has been a movement to have them become more combat support rather than combat units as such, and I am sure General Shali can touch on that with greater expertise.
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    The assigned mission, something that Congressman Murtha has been advocating for some time, former Senator Nunn from Georgia also has advocated this, that we look to the Guard to really pick up the primary responsibility for threat that is here today and not tomorrow, that is to deal with weapons such as chemical or biological weapons that we anticipate are going to be used on a more frequent basis, not only the threat of them, but the existence of them. That we don't have an adequate response capability today. We need one and we need it fast and that would be an appropriate mission and a real combat mission as such for the Guard to undertake under the direction of the Governors that are in place and need the training the direction, the supervision, the coordination all of that should take place soon.

    We have a plan underway now to look at 120 cities to use the Department of Defense to help integrate and organize the interactivity of the FEMA, EPA, local agencies, communities for this threat, much like what hit Tokyo in the subway threat a couple of years ago. That, we believe, is an important mission and a combat mission as such because that is the kind of combat we are going to have to face in the future.

    On the resources, let me give you the notes that I have and I will have to back them up for you. The so-called steady state savings from personnel reductions once they are fully implemented are roughly $400 million per year, and the cost of redesigning the divisions total about $4 billion, about $1.4 billion during the FYDP period prior to the QDR; an additional $850 million as a result of QDR acceleration.

    I will get you a backup of those numbers so that you can satisfy yourself, and I can satisfy myself that those are accurate, at least, projections, but they remain projections at this point.
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    General SHALIKASHVILI. On that, the first point that I should make is that there is no question that we really are a one force. We couldn't go and do any operation today, not even a small one, without the Guard and the Reserve going along with the active force. So that cannot be a question.

    Look at Bosnia, how many reservists and guardsmen we have over there. Look at any flying operation, no matter where we fly and see how it has worked. We are a one force.

    We also have had good experience with the Army in their relationship with the National Guard and the Reserves. Just go back not so long ago at an offsite that they had when a decision was made to take 12 brigades worth of combat structure and convert it to combat support and combat service support. Good agreement. Everyone working together.

    What we need now to do, and what Secretary Cohen has directed be done, that the Army and the National Guard and the Reserves all go back to that same environment, that offsite environment and together work the issue. Why? It is not that the Guard is not needed. As I told you before, they really are. But there are these eight divisions in a guard structure that up until sometime ago were used as a strategic hedge in a cold war environment.

    No war plan that we have today calls on the use of those eight divisions. None of our war plans do. And so it is unfair to the guardsmen in those divisions, and it is unfair, I believe, to the taxpayers in the system.

    And so on the one hand, we need to find the missions that are appropriate for those units and on the one hand those that are excess to those missions whether that is the issue of the chemical biological business that Secretary Cohen talked about or whatever. There is, nevertheless our judgment and in our calculation, significant structure that can be reduced out of those eight divisions. And that is the issue that in a cooperative way we have asked the Army, the Guard, and the Reserves to get together and find a right mix and the right numbers so that between them we believe they can come up with an approximately 45,000 reduction. The others, the remaining ones to be given the right kind of mission so they don't feel like they are out there without a real mission.
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    Mr. BUYER. Thank you very much for your answers. I just want you to know as we are moving to the 99 cycle, I am committed along with both of you gentlemen to make sure that the Reserve components are not only relevant, but material to the fight in their funding not only for O&M, but also in their equipment and I look forward to working with you.

    General SHALIKASHVILI. One of those issues is that we have—we have committed ourselves to move forward, the conversion of those 12 brigades. That offsite agreement had set doing that. The budget, the Army budget had foreseen not completing this work until I think the fiscal year 2013. We want to move that forward, and money is being put into it to get that work done by 2007.

    Mr. BUYER. So you are going to accelerate now?

    General SHALIKASHVILI. Yes, that conversion, that is right. That is part of the QDR to accelerate that conversion from combat-to-combat support, combat service support.

    Mr. BUYER. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. It is obvious we are not going to get to everybody, but we will go ahead and try.

    Mr. Gene Taylor.

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    Mr. TAYLOR. Thank you, Mr. Chairman. I want to thank General Shali and our new Secretary of Defense for sticking around this long.

    Let me start first with an observation and follow up on Mr. Buyer's comments. QDR recommends that the Army National Guard be reduced by 10 percent. These units are about 5 times less costly to train and maintain than their active counterparts. They supply 45 percent of the combat support units, 25 percent of the Army's combat service support units, 55 percent of the Army's combat units, and 2 percent of the budget cost.

    That just doesn't add up, Mr. Secretary. If you have to move the mission as you suggested, I think you should do so.

    And the third thing is at intangible. As a member of this committee, I witnessed the public mood shift from outright opposition, to being very cautious, to being incredibly behind the Desert Shield-Desert Storm effort. You could correspond that to the day when the Guard and Reserve units were called up. When they were called up, it was not some draftee's war, it wasn't some 18-year-old enlistee's war. It was Uncle Frank's war, it was Aunt Sally's war, it was by brother, my cousin, my sister's war. And that intangible, I think, we have to keep.

    I think Sonny Montgomery was absolutely ingenious when we demanded that those units be called up and I don't think that we ever want to go into any other armed conflict without the Guard and Reserve units there because when they went, the heart and soul of America went and the people of America were for it. And I hope you will keep that in mind in your future computations.

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    The second thing is I would hope you would respond to this, I have received a very large amount of mail from retirees, going back to what Congressman Sisisky made reference to, regarding some published reports that the QDR contained a recommendation that military retirees under the age of 65 who are eligible to participate in TriCare would be charged an access fee of $934 in addition to the enrollment fee that is already assessed to retirees who participate in the program.

    The annual enrollment fee for military retirees' participation in TriCare is about $460 now. But although I have asked some folks in my office to look into it, and they cannot see where you have actually said this, I would certainly ask of you to either confirm that story or let it be known that that is not the case, because there is certainly some people who are in the business of scaring the hell out of retirees who are saying it on a regular basis. So if it is not the case folks, need to know that. If it is the case, then I think the committee needs to know that.

    Secretary COHEN. It is not the case.

    Mr. TAYLOR. Could I get that from you in writing?

    Secretary COHEN. Yes, under oath.

    Mr. TAYLOR. Well, there is nothing more authoritative for me than to be able to include a letter from you in response to my constituents. I would sure like to be able to do that.

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    The third thing is you talked earlier about a revolution in business affairs. I really hope you mean it. We had the opportunity to speak prior to the meeting about a great deal of heartache that is occurring in the shipbuilding community. A couple of years ago I distinctly remember the Virginians and the Mississippians working very hard to get the fast sealift ships in the budget. Those ships were turned around and built in California and Louisiana.

    But you know what, I could go back to my constituents and say, folks, we were not the low bidder. And although some people were severely disappointed, they understood competition and they understood they were not the low bidder, and that issue kind of went away. And if you recall there really weren't any hard feelings over the fast sealift program either from the Virginians or the Mississipians, or the other folks who did not get you contracts.

    The LPT–17, Mr. Secretary, it is a whole different ball game. I am hearing anywhere from 11 to 14 percent more money for the same ship. And the reason it keeps popping up is that how on Earth, with a reduced budget, do we go back to our constituents, do the Virginians go back to their constituents and say, well, we are going to pay 14 percent more for that ship. It just doesn't wash.

    Now, when you consider the reputations of the two shipyards that didn't get the contract, I happen to think they have the best reputations. So I would certainly encourage you in the future not to let something like that happen again.

    The third thing I want to bring up very briefly, getting back to you talk about a revolution in business affairs. You all have got a revolving door in the Department of Defense that needs to be either slowed down or shut. I see too many people I deal with, in particular, and it is the only criticism I have of the Army, deal with on a regular basis in the Army Materiel Command a couple of months later they are walking in in a three-piece suit, a new business card, and they are working for the exact same people that they used to buy from.
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    I don't think anyone could be objective under those circumstances. And I will give you a better for instance. A couple of weeks ago here in the Capitol there was a meeting on the Arms Program. The general who was conducting the meeting would repeatedly turn to his civilian counterpart when he couldn't answer a question and the civilian counterpart would answer the question on behalf of the Arms Program. That civilian's father works for a company that is a major recipient of arms funds.

    Now, it may be legal, but that is bad public policy and it is horrible business policy. They cannot be objective. And I would sure hope, Mr. Secretary, since you have pledged to bring a fresh approach to this, this is one of the things that you will address. That is entirely too cozy. No business would allow that to happen and I don't think our Nation should allow that to happen.

    And again, the Arms Program, somebody will say, well, it is only $50 million. I come from a place where $50 million is a heck of a lot of money and when we are telling so many people to do without, I do believe we could use that $50 million in a much better manner than that. And I think that it is just a symptom of something that is going on in a lot more places than I just had the opportunity to talk about.

    Secretary COHEN. I will certainly look at the revolution—the revolving door, I should say, very closely. I am not aware of what the restrictions are as far as the time frame, but I know that I have certainly pledged a very long time frame as far as I am concerned and there are other top officials who have similar pledges. But I am not familiar with what the restriction is.
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    Mr. TAYLOR. I am told it is a year for the higher ranking officers, but I think we both know, based on our experience with our own staffs, that there are people at the mid-level and even lower level who make very big decisions who are not bound by that, who can immediately go to work for the same people that they helped out the week before. And that is bad business policy. It may be legal, but it is horrible business policy, and I hope you will initiate some moves and make some recommendations to this committee to change that. Mr. Chairman, I have used up my time. Thank you.

    The CHAIRMAN. I believe you have, yes, sir. Two times. Mr. Bartlett.

    Mr. BARTLETT. Thank you very much, Mr. Chairman, and thank both of you for a very articulate presentation. Just a couple of comments and then your response, if you would.

    First of all, I would like to follow up on what Congressman Taylor was saying. We made a commitment a number of years ago to the young men and women who entered our military as recruits that they were going to have lifetime health care. We need to keep that promise. It is going to impact on our ability to recruit new individuals for the military.

    If young people see that they cannot count on our promises, they are going to be more reluctant to volunteer for the military. And so I don't know what it is going to cost us to keep our promise, but it is going to cost us a whole lot more if we do not keep our promise. And we need to do that.
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    I would like also to follow up on something that Congressman Hunter said, and that is that I understand that you have prepared this Quadrennial Defense Review consistent with the reality of budget constraints. As a parallel effort, I think that the interests of the country would be well served if you conducted another exercise, and that was to realistically look at our needs as determined by threats and to tell us—tell the country what we need.

    I remember I had an occasion to look back at the Eisenhower years and I remember the numbers correctly we were spending about 16 percent of our GDP on defense and it was 62 percent of the Eisenhower budget. Today we spend about 3 percent of GDP on defense. That is one-fifth of what we spent under Eisenhower.

    And we are spending about 50 percent of our Federal budget rather than 62 percent on defense. This great country can afford any defense that we need to defend ourselves. It is your challenge and ours to articulate to the American people the magnitude of this need and the funds will be there. We don't need to be constrained by present budget projections. If we have a need, the money will be there.

    I would just like to ask for your comment on one additional thing. You made the observation that we have no peer competitor today, that we stand alone as a superpower. That is clearly though if you are looking only at conventional forces. If you look at strategic forces, I don't think that that is clear at all. The Russians continue to modernize their nuclear forces. They continue to launch more submarines than we launch and their future plans are even more aggressive.

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    A few weeks ago in the New York Times, I think, there was a major article about a huge complex under the Ural Mountains, under the Yamental Mountains. Just the first day of this month, in April, in the Washington Times there was an article referring to the Russian efforts to continue to build large bunkers near Moscow and an extensive deep underground rail system, presumably to take the leaders of government to these underground bunkers, from which place they might be flown out to Kavinski Mountain, which is 850 miles west of Moscow under the Ural Mountains, deep, nuclear secure.

    They are also pursuing, as was detailed in the New York Times article, an enormous project under Yamental Mountain costing roughly $4 billion. They don't have money for SALT 2 ratification, they don't have money to provide housing for their military officers, they can't pay their military people, and yet they continue to invest billions of dollars in these exercises.

    Peter Pry, a former CIA analyst who is now writing a book on Russian nuclear operations, said the continued construction of the Russian strategic defense sites is ominous and cannot be dismissed by U.S. officials as inertia from cold war era strategic policies.

    My question is, in your review, did you take into account these activities by the Russians and, if so, what response do you recommend?

    Secretary COHEN. Let me respond briefly to your questions. With respect to a peer competitor, yes, the former Soviet Union still has a number of nuclear weapons in their arsenal. They have, however, a declining capability as far as their conventional forces, to be sure. The Warsaw Pact no longer exists; it has disappeared. They are having serious problems with their conventional capability. They are not looked to by any other nation that I am aware of as a superpower in being able to help shape the environment, to have the kind of diplomatic influence that we currently have. So they have power in the sense that they have nuclear weapons.
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    We still have a very strong nuclear deterrent capability; we have looked at the activities they are engaged in. We can surmise that any attempt to build underground facilities, if that is what they are doing, would be an act of folly.

    The very notion that they or any other country would be prepared to engage in a nuclear exchange, I think, is an act of folly to begin with. We have North Koreans who also are starving their people yet engaging in military exercises. It has to do with a mind-set. We cannot simply dismiss it, but this is their thinking.

    As you were saying that, I was thinking of a line from one of the Peanuts cartoons, how do I do new math with an old math mind. We have people over there with old math minds. There are people, however, like Minister Rodionov who was here saying, I want to reform the military, I want to make it more like the United States, I want to have a noncommissioned officer corps. How do I do that, Go to an all-volunteer force? How do I restore a sense of pride as you have done following Vietnam?

    So there are people from a different generation who say we don't have the type of military we ought to have as a power. So I think that they are ready. They are people who are ready to change the way of thinking over there. They have not yet risen to positions of ''powerfully'' yet, but there is a lot of new thinking going on. There is still a lot of old thinking going on. In the meantime, we have to be prepared to deter any notion that they could ever engage in a nuclear exchange with us and survive it, and at the same time reach out and deal with them in a diplomatic way, military-to-military contacts.

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    But we believe we have a strong deterrent and what we have to do is combine that strong deterrent with our superpower status, which means diplomacy as well as military power, and help them to reform their system in a way that leads to a peaceful relationship, and we are on that path with them and I think it is one we should continue to pursue.

    General SHALIKASHVILI. The only thing I would add, at the same time we do what Secretary Cohen said, we also need to understand that if we can get ratification of START II and get the Russians to get on with the business of reducing their systems to START II levels and then go on to START III negotiations, that could lead to warhead levels between 2,000, 2,500, that further reduces the potential threat. So there is this partnership between reducing the weapons, staying strong ourselves, working hand in hand with them in military-to-military contacts, help drive down the weapons systems that are being inactivated through the Nunn-Lugar program, all of those things working together in my judgment are the best way to deal with the problems and potential threats that you are mentioning.

    Secretary COHEN. Also building upon our experience with Bosnia. Here we are with Russian soldiers serving right next to American soldiers. We want to have more exercises to show them we can work together as friends rather than as enemies. That is all part of our process right now and our status right now in being the world's superpower. We think it is important to have those kind of relationships and I think we can build on that as we are doing in Bosnia.

    Mr. BARTLETT. Thank you very much.

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    The CHAIRMAN. The situation is this. The Secretary has to leave absolutely at 1 p.m., I understand, and we still have a lot of people who have not had an opportunity.

    Secretary COHEN. I will try to keep my answers short.

    The CHAIRMAN. With that, of course, you have a lot to say, Mr. Secretary and General Shali, in answer to these questions. But we are going to go ahead and try—I understand, too, a vote is going to be coming up any time, but I will try tomorrow, for the benefit of those people we don't get to today, I will try to see if we can't work them in tomorrow ahead of schedule, or something, to benefit Ms. Harman. So, Mr. Underwood.

    Mr. UNDERWOOD. Thank you Mr. Chairman, and thank you very much for a comprehensive presentation.

    I want to draw your attention to the 100,000-man commitment, which I had asked you about previously in the Asian-Pacific region. And of course representing Guam, I very much understand and appreciate and enforce the presence in the region, as well as the benefit not only in terms of security but in terms of the overall democratization and normalization of the region.

    I want to ask two questions pertaining to that. One is if the 100,000-man commitment is relatively firm for the course of the next few years, other than the peaceful Korean scenario, what are some technological issues or political issues with Japan or others which might affect how these forces are actually configured within the region, and that is a source of concern to me.
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    The other issue pertains particularly to Guam. In the calculation of this 100,000-man commitment, Guam is included. When BRAC rounds are articulated, Guam is counted, as it would be, a CONUS base, and to some extent we are living in a different kind of environment strategically and the value of Guam is different strategically because it is part of that forward commitment, and then when it comes time to analyzing

    And so the question that I want to ask in regard to that is, at least based on my discussions with numerous military officers in the region who lament some of the decisions that were made in the previous BRAC round, although they could be misrepresenting it to me, maybe they are just telling me what I like to hear, what kind of consideration do you think could be given to having a forward deployed base in a future BRAC round. And that question also could perhaps be expanded to include all this renewed emphasis on outsourcing and contracting out activities which are currently conducted by people in the civil service or uniform.

    Secretary COHEN. The President and Vice President have both made a public commitment to maintain roughly 100,000 people in the Asia-Pacific region. I would expect if any BRAC rounds are authorized, which I hope would be the case, that Congress would be writing the criteria that would be established, that those factors of the commitment made by the Commander in Chief and endorsed by the Vice President and myself would be major factors to take into account that we want to remain forward deployed, we want to have a presence, and Guam obviously provides that forward deployed presence as well, and that would obviously be a major criteria that Congress would insist on taking its cue from the President of the United States, saying I want 100,000 out there, support the region, support the signal that we are there for the long haul, and I would assume that any BRAC legislation would include that criteria written by the Congress consistent with that commitment.
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    Mr. UNDERWOOD. Thank you for those ideas. What about just the general question of any military technological advances or political problems in Japan which might force some reconfiguration, not that I see any right now?

    Secretary COHEN. Well, obviously, and I was in Japan recently, General Shali was in Japan recently. I made statements indicating that we were there for the long haul as such; we would have 100,000 in the region indefinitely. That is always assuming we have the consent of the host government. Any time the Japanese Government would say, we don't want you, obviously we won't be there. But President Hashimoto has indicated he wants us there. I think everybody there understands the stabilizing effect that we have. They want us there.

    To the extent there are changes in Korea, changes in Japan or elsewhere, then obviously we would have to adjust our presence. But we intend to maintain that level of presence into the indefinite future.

    Mr. UNDERWOOD. OK. Thank you very much.

    The CHAIRMAN. Mr. Thornberry.

    Mr. THORNBERRY. Mr. Secretary, I would like to make a couple of brief comments and then ask you about whether you think a couple of areas have been adequately addressed in the QDR. The first area is that begun by the chairman and Mr. Hunter and others about the budget box you put us in, and I would like to add this additional thing to what has been said, and that is if your department takes the threats that you see out there in the world and then what is necessary to meet those threats and comes to Congress and says, this is what is necessary to do all that we would like to do, then it is Congress' job, it seems to me, to work with you and decide what risks you are willing to run. And particularly if all the resources are not going to be available, or that we won't provide all the resources that you would like to have.
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    But that brings Congress into the decisionmaking process, and what this does, by putting us into this budget box from the beginning, is make it more difficult to bring Congress and the public along with discussing why this is still a dangerous world and why we still have to make some tough decisions.

    And so I think, as I read the QDR last night, I get a lot of sense that we are splitting the difference in a lot of areas and making it more difficult for the constitutional processes to work.

    Same comment regarding BRAC. I think a lot of us are not necessarily opposed to more base closings, but it is going to be difficult to do only base closings. You have committed to looking at the Pentagon bureaucracy. I think if we can have a streamlining effort from one end to the other, logistics, acquisition, streamlining the bureaucracy, the infrastructure can certainly be a part of that. And whether it is Goldwater-Nichols II or whatever, management streamlining from one end to the other is possible, and I certainly want to, to whatever extent I can, work with you to do that. I think just singling our infrastructure for more base closings and a lot of other things is going to be a difficult challenge.

    I want to ask you about two areas. One is what you are calling asymmetric threats. In my mind, the most serious national security threat we face is the spread of weapons of mass destruction and their materials. And I realize it is mentioned about every other page, but I am not sure we have a strategy to really deal with this problem, and let me just give you a couple of for instances.

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    Nunn-Lugar, CTR, I believe is very, very important; we should do all we can on that. Whatever happens with START III, I understand the Russians have thousands of tactical nuclear weapons, which they are now even talking about in the press as willing to use to counter a conventional attack.

    All of that is changing. This committee has had testimony that there is some discussion at least of new kinds of nuclear weapons with different kinds of capabilities that they are looking at in Russia. And you go from Russia to all of the problems that you are well aware of, other countries that are actively engaged in trying to get these materials and these weapons. Many people think that the lesson of the gulf war is don't challenge us conventionally, go these other routes.

    Are you satisfied that we are developing the strategy and spending the resources and approaching this problem with the seriousness I think we have got to spend on it or I think we are going to rue the day?

    And the other question is the personnel. Health care is part of it, but what—in the coming months between now and December, would it not be a good idea to try to make sure we understand why people make decisions to stay in the military? Because I understand we are going to have fewer people. It seems to me that each one of those people that are left are going to have to be better trained, more highly qualified, and whether we can keep those people is going to be very, very important. Health care, housing, how do they make those decisions? I think we need to know that and you need to know that, and I don't think that was adequately addressed in the QDR and is there an additional area we need help on?

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    Secretary COHEN. Congressman, I think you asked some very pointed questions and some important ones. Let me first respond to the issue of the budget box I have placed you in.

    I haven't placed you in any budget box. Congress has placed itself and the DOD in a budget box. If I would have taken this process in which I had roughly 3 1/2 months and said, let's just ignore the budget for the time being and look at the threat and develop our strategy and present it to the Congress, I also have to present the QDR to the President of the United States who is in deep negotiations with Hill leaders, who are saying, let's slash defense spending even more. And I would then put the President in the position of saying, here is a recommendation calling for $260, $275, $300 billion, at a time when they have Republican leaders and Democratic leaders saying, we can take a much bigger chunk out of defense than is currently there. I, then, would have gone through an exercise which is irrelevant. I would have put the military through all the analytical process to come up with a document that is dead on arrival. You would say, this is unacceptable; we are not in a box.

    Obviously, if Congress decides based upon what you decide, looking at the threat that we see, the strategic response that we have, the strategy that we have, if you think that this is inadequate, then by all means, you have the power and will have any support and say we should spend

    Now, if you come to a different conclusion than what our military leaders are saying is within acceptable risk, then you have the power to change it. All I can do is give you my best recommendation based upon my experience in being in both bodies.

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    I have been a strong proponent of more defense spending. I have voted for it on each and every occasion that I had in the 24 years I was in Congress. But I also have to be sitting on this side of the table and saying, how do I do with now with what Congress has passed in the past years? You said $250 billion, can we expect more? I don't think so. I don't think that the American people will support large amounts more. If they will, then I would be eager to embrace that, General Shali would take it.

    But I think that we are where we are today, they don't see a Soviet Union, they see a Russia that has been seriously crippled by also economic woes; they see a Russia that has been declining in terms of its conventional capability; they see a Russia that needs to be dealt with in terms of reducing its strategic weaponry; and the pressure is always on a democracy to take it out of defense.

    I am trying to hold the line where we are to say yes, we can do this with some minimal increase in risk. If you are unwilling to accept that, you say the military leaders are wrong or need to be reinforced, we are willing to work with you on that. But I had to deal with the reality of negotiating with congressional leaders who want to cut more, who have cut more, who have presented me with a $6 1/2 billion problem in the year 2002 that I don't know how I am going to cope with now, who were that close last night to adding another $6 billion on top of that. So I have tried to be real and I have asked the military leaders to be real about their assumptions, and that is the framework with which I have had to operate. That is the environment. I think we can do the job.

    There is some increase in risk. If you are unwilling to accept that, then you will provide more funding and we will try to work with that, but I haven't seen that incentive coming. In fact, when I talk to Republican leaders and Democrat leaders, they say, we want you to turn the Pentagon into a triangle. We want you to reduce it further. We want you to go from the major force of the cold war down to today's realities. And I am saying we are not at cold war levels. We have greatly reduced our capability. This is minimum below which I don't think we should go. That is my response.
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    But you raise an important question, how do we stop the proliferation of weapons of mass destruction? If I had the answer to that, I would be up here in a nano second saying here is the solution. I will tell you we have been successful, diplomatically, in encouraging certain countries who were prepared to transfer weapons of mass destruction, missile technology, other types of technology, to countries who mean us harm. We have been successful in stopping that from taking place. Not entirely, but we work that day in and day out with our diplomats saying, don't do this; if you transfer this technology, there will be repercussions. So it is hard to maintain that pressure because there are countries that see an opportunity to make money, and don't see any jeopardy to them.

    We are trying to say no, it will certainly injure your relationship to the United States. In the event any of those weapons are used against our forces, I can assure you there will be consequences you will have to pay. So we are doing that on a day-to-day basis. We have been successful in some cases and not in others, but there is no magic solution to that.

    The CHAIRMAN. Mr. Allen.

    Mr. ALLEN. You caught me by surprise, Mr. Chairman.

    Thank you, Mr. Secretary. It is very good to see you here. I have a couple of questions and we will try to get them out and have you on your way in just a few minutes, but I think back to the time, to the Carter administration, which was challenged for its defense policy by Members of this Congress, and yet Jimmy Carter decided to invest in stealth technology and cruise missiles, two technologies that a dozen years later helped to win the gulf war.
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    And you clearly have been faced with tradeoffs between modernization versus force structure versus infrastructure, and I am just wondering, first, how far out your thinking is going. You are trying to make decisions for the near term and the mid term and the far term, and are you really trying to repeat in some way what the Carter administration did by concentrating on modernization and hope that it will pay off in the long run? That is one question.

    My second question is that premise behind shedding excess infrastructure is that it will improve the ability to spend on modernization and readiness, and I am concerned that the real savings expected from the initial BRAC rounds have not been as high as anticipated and perhaps are not as clear as they might have been. And I wonder whether there is enough time, enough time has elapsed from the 978 bases or so that have been closed since 1988 to effectively understand the total costs?

    And of course I have to say that I share your view that it is extraordinarily, it is much more difficult in a rural area to deal with a base closure when the base may be a major part of the local economy than it is in an urban area that might just coincidentally reflect the State we come from.

    Secretary COHEN. Congressman Allen, let me respond quickly. I failed to respond to the third question of Congressman Thornberry. I have made an effort to ask people out in the field what motivated you to come, and usually they say education is the first, and why are you staying, because they love the military. And so I have tried to find out exactly why we have been able to maintain the best and the brightest in the country today and how to keep them. So there is an area to focus on as well, as well as health care.
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    But I am as concerned as anyone as to how we maintain the capability that we have today well into the future, and health care will play an important role in that. But it is education, it is opportunity, it is the pride they feel in serving in the finest military in the world, and I wanted to reinforce to you that I look at that very closely.

    Congressman Allen, it is interesting you ask the question are we looking too far into the future. Actually, the criticism is we are looking too closely to the present. If you look at the National Defense Panel, for example, they think that perhaps we have focused too much upon the FYDP as such, the future—forward years defense planning. We have tried to do both.

    Our charge is to look at NAPP from this point forward, 1998, into the year 2015. Do we have that kind of vision? Probably not. Do we try to look ahead to say what is the world likely to look like, what kind of technological revolutions are taking place? We can see certain things now that will be obsolete in 5 years. So it will be a constantly evolving process.

    You will have another QDR in 4 years or 3 1/2 years, and so you will say what has happened in the world of technology that we have to look at again. So you are constantly going to be updating yourself.

    We have focused on the near term. We have tried to look forward as far as we can into the future given we have certain limitations, but one of criticisms directed toward this process, we really could have restructured much more dramatically and cut out those half a million people they don't need and then put the money into new technologies. And we decided if we are going to maintain our strategic vision as such, be able to shape the environment, respond to crises and still make modest improvements in our modernization programs, we can do what we are doing and still move into the
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    You have to understand, you will have more risk in the near term. You will not be able to shape the environment to the degree we can today, you will not be able to respond to the degree we can today, but you will get modernization faster.

    We have tried to look at it and say we think we did it right, we think we have the right strategy and think we are on the right path, and we disagree with those who would go so much further faster.

    On base savings, the projections I have seen is roughly by the year 2001 we will save $5.6 billion on an annual basis. That will increase. If there were two more BRAC rounds well into the future, you are talking about the savings would not materialize until after the FYDP period, but a potential $9 to $10 billion savings over that time, assuming those numbers are correct. That is why Dr. Kaminski indicate maybe we have to have a much more definitive assessment of what we are going to save and how much we have been saving.

    We have apparently crossed the threshold that we have net savings as of last year, and those will start to accumulate on an annual basis, about 5.6, but we now have the DOD IG making an examination. They will give me a report this summer, and I will give it to you and the other Members.

    Mr. ALLEN. Mr. Chairman, one quick follow-up. The $3 million savings, is there some assumption that that is based on?

    Secretary COHEN. The assumption is when you complete a BRAC proceeding, you save roughly $1.4 billion for that BRAC round on an annual basis, after you pay out the initial costs. The costs are high up front. You have to pay for the shutdown, the environmental aspects as well as other, but after that is completed, you start netting out at roughly $1.4 billion. So it is in that range.
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    Mr. ALLEN. Thank you.

    The CHAIRMAN. Mr. Dellums is going to sound us off.

    Mr. DELLUMS. Thank you. First, I would like to thank the general and Secretary for the presentation. We have begun what I think is an important and significant dialog. I just quickly want to say something to you.

    You have alluded to the vote that took place last night, 216 to 214. There were a variety of reasons why different Members voted for that, but I want you to know that there were a significant number of Members of Congress who voted because it was a statement rooted in frustration and concern, because we saw, many of us saw a product, the bipartisan 5-year agreement that came about as a result of an undemocratic process, because many of us didn't feel we got elected to sit on the sidelines, and we saw this fait accompli on a fast track and some people for no other reason but out of frustration wanted to throw a monkey wrench into that process and say, slow this fast track down and give us an opportunity to be a part of this process. So it wasn't all monolithic. There were some people that thought it was the last opportunity to say, I want to stand up for my right to participate in this process.

    The CHAIRMAN. Mrs. Fowler.

    Mrs. FOWLER. I am not going to ask a question, Mr. Chairman, just a comment and a request.

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    The QDR is the most important defense document that this committee is going to be considering this year, and I am greatly disappointed that we were only allocated this brief time when you have got 55 members of the committee and if you just take 5 minutes a piece, the minimum amount of time it would take is 4 hours. And we have Members who have been sitting here, and I am also saying this for Ms. Harman, we would certainly hope the Secretary and General would come back since they weren't able to allocate sufficient time this morning for the members of the committee to get their questions in, I would hope they would come back another time so we could complete our questioning.

    Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. With that, we will adjourn the meeting. Thank you.

    [Whereupon, at 1:05 p.m., the committee was adjourned.]

QUESTIONS SUBMITTED BY MR. ORTIZ

    Mr. ORTIZ. The QDR is similar in many respects to other studies that we have seen in the past few years, especially in the fact that it assumes billions of dollars in ''efficiencies and savings'' that have little if any basis in fact. The services are being told to start taking these savings out of their budgets starting in FY 1999. The Army, for example, has been told to reduce its operating budgets by almost $9 billion between 1999 and 2003. An analysis by the Army found that the best it could possibly save was a little over a billion dollars. You know what is going to happen when it comes time to make up the difference: readiness accounts will be raided, depot maintenance work deferred and civilians laid off and replaced by contractors, often at higher cost. We recently saw just this happen when the much-ballyhooed defense management initiatives were implemented and the savings never materialized.
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    What assurances can you give me and the Committee that only real savings based on actual efficiencies will be used in your budgets starting in 1999 and that we will be able to trace these efficiencies to a master plan that reflects how and where they are being implemented?

    Secretary COHEN. The QDR will produce savings. The QDR did not direct the Army to save money; rather all the Services thoroughly reviewed ways to shed excess infrastructure and to fundamentally reengineer business processes. The recommendations detailed in the QDR report should be seen as the outcome of this effort, with the Services directed to implement these actions in the most recent Defense Planning Guidance. I will track the Department's efforts to implement this guidance through the upcoming program and budget submissions. The decisions I make, in close consultation with my senior military and civilian advisors, will then be reflected in the FY 1999 budget and associated Future Years Defense Program.

    I share your concern, however, that these actions must be followed closely to ensure accountability. Remember, one of the primary goals of the QDR was to end the migration of funds from modernization to operations and support; only realistic, achievable savings proposals will reduce the cost of doing business.

    Mr. ORTIZ. The economies and efficiencies that are being imposed on the services at this very moment are said to be derived from the Defense Science Board report on potential efficiencies. Your own OSD program analysis and evaluation office reviewed these proposals back in March and found most of them unobtainable. In reviewing the top five DSB areas of savings—BRAC, CONUS logistics, medical, deployable logistics and base support—PA&E found that the $22.4 billion of estimated DSB savings would probably yield only $10.1 billion, and that of the $10.1 billion, $6 billion was unlikely to be achieved, $3.3 billion would be hard to achieve and just $800 million was achievable. The reasons for such small savings being achievable ranged from serious operational issues to strong opposition from retirees and military personnel due to reduced benefits.
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    With your own analysts saying that the vast majority of the DSB savings just aren't achievable, why are you allowing DoD to impose these numbers in future service budgets, setting the services on a road that will eventually gut the operating readiness accounts?

    Secretary COHEN. It is incorrect to say that the Defense Science Board proposed efficiencies are being ''imposed'' on the services. The Defense Science Board presented a number of proposals for savings. Some of those proposals have already been incorporated, in part, in defense budgeting and programming, but the majority have not. The Board recognized at the time it made its proposals that many of them would be extremely difficult to implement. The Defense Science Board, for example, recommended three additional BRAC rounds starting in FY 1997. Some, but not all, of the Board's proposals were also included in the QDR, sometimes in a modified form. The QDR set ambitious objectives in some cases, but only those portions of the Science Board's recommendations that the Department's senior leadership, military and civilian, generally thought were possible were included in the QDR. In some cases, the QDR also recommended steps not identified by the Science Board, such as the limited force structure reductions detailed in the report.

    Mr. ORTIZ. You have established a follow-up task force to the QDR—the Defense Reform Task Force—to seek more savings from Defense agencies and other organizations. Since the Defense agencies have ballooned in size in the past few years, this is obviously a very good target to find reductions and savings. My question is, since most major organizations undergoing downsizing are decentralizing, do you automatically rule out the possibility of decentralizing some of these functions or is this on the table as an option?

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    Secretary COHEN. Decentralization is one of many tools to reduce infrastructure. I think it likely that the Reform Panel will propose some measures that decentralize certain infrastructure functions, either through outsourcing or through assigning functions to the Military Departments that are currently performed by defense agencies. There are, however, other strategies that may be appropriate in particular circumstances: consolidation, outsourcing, and reengineering existing organizations are three obvious examples. Much of the growth in defense agencies in the past few years occurred because the Department concluded that consolidation of like functions was more efficient than duplication of those functions across four military services. No one solution is likely to be appropriate for every situation.

    Mr. ORTIZ. Your follow-on task force is supposedly also going to look at the military service headquarters for additional savings. I have watched the civilian side of these headquarters being continually reduced, to the point that now any further reductions could very well jeopardize the Goldwater-Nichols reforms concerning civilian oversight of the military. Is your task force going to be properly guided so that we don't lose the gains that have been made in civilian oversight? Will we also be assured that the military headquarters staff will be given a close scrutiny for consolidations and reductions?

    Secretary COHEN. During the QDR process I established a special group to examine headquarters functions and requirements, to include OSD, the staffs of the Service Secretaries, those of the Service Chiefs, the Joint Staff, and defense agencies and activities. Because of the far-reaching nature of that examination, it was not possible to finish in time to meet the QDR deadlines. The final results of the headquarters study will be provided to the Defense Reform Task Force, who will then address headquarters-specific recommendations along with any other reform proposals. Ultimately, I will review all of these recommendations for consistency with the strategy and their impact on a broad range of concerns, not least of which is civilian oversight. Our goal in reviewing headquarters is not to undo the effects of the Goldwater-Nichols Act, but rather to identify efficiencies that can be achieved without compromising this oversight.
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    Mr. ORTIZ. Everyone uses the term ''infrastructure'' when talking about further areas for cuts. However, without a definition we have no idea what people are talking about. What is your definition of infrastructure and how do you decide what parts are readiness related and what are not?

    Secretary COHEN. We do not have a definition for infrastructure that was developed in the 1993 Bottom-Up review and subsequently improved. We define infrastructure to be activities and programs that primarily operate from fixed locations and support the accomplishment of the Department's core mission. Specifically, programs that reflect infrastructure are categorized into eight areas: Installation Support, Central Training, Central Logistics, Central Medical, Central Personnel, Central C4I, Force Management, and Acquisition Infrastructure. This definition provides a logical framework by which I can track both personnel and investments for these activities.

    Of the eight infrastructure areas, three provide primary support to mission programs and thus can be classified as directly readiness-related. They are Installation Support, Central Training, and Central Logistics. I will assess any proposed infrastructure reductions against these categories to ensure that operational readiness and quality-of-life programs are not negatively affected.

    Mr. ORTIZ. Congress ordered the Secretary of Defense to review how to downsize OSD and that report is long overdue. Now we hear that your follow-up task force is going to study OSD. Why haven't we received the legislated report by now, and what assurance do we have that we will get a report in December from this new task force?
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    Secretary COHEN. The Department is committed to undertaking a full review of the organization and functions of the Office of the Secretary of Defense and has initiated a number of actions consistent with the intent of Section 901 of the National Defense Authorization Act for Fiscal Year 1996. During the recently completed Quadrennial Defense Review, many aspects of DoD's organization and functions were examined, including the role of headquarters, secretariats, and defense agencies. This work led to a decision by the Secretary to charter further analysis with the aim of producing specific recommendations for reductions and other administrative efficiencies in these organizations. In order to facilitate this process, the Task Force on Defense Reform has been appointed to advise the Secretary on these matters. The work of the panel will play an important part in decisions to be made later this year. In addition to the above activities, the Department asked a team from Hicks and Associates to undertake a comprehensive study of OSD management and structure. Although this study does not address all of the issues identified in the Section 901 requirement, it focuses on many of the central questions of interest to the Congress and identifies important issues for decision. The Deputy Secretary of Defense forwarded this study to the House National Security Committee and the Senate Armed Services Committee on July 15, 1997. This study will also serve as input to the Department's deliberations on organization and management and the decisions to be made this fall. As we proceed with this process, the Department looks forward to working closely with the Congress to achieve our common objectives of sustaining a strong national defense with the most efficient management possible.

Questions submitted by Mr. Evans

    Mr. EVANS. Mr. Secretary, the QDR calls for huge cuts in the DoD civilian workforce. My question to you is how can we be sure that the important missions these personnel perform can be executed at the reduced levels the QDR proposes?
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    Secretary COHEN. The changes in DoD civilian endstrength reflect improvements in operational concepts and organizational arrangements while still maintaining the full spectrum of combat capability, thereby preserving the critical combat skills of our military forces while reducing excess infrastructure and support activities. Streamlining command structures, such as intermediate level headquarters, will provide some of the reduction in endstrength. More importantly, civilian and military endstrength reductions will be achieved through outsourcing and privatization of functions that are transferable to the private sector.

    Mr. EVANS. This committee has had problems with the way DoD has managed the civilian workforce. Most of the time, it seems that DoD has Salami sliced civilian personnel levels instead of measuring the workload needed to be done and shaped the workforce accordingly. Can you tell us how this is not another example of budget driven civilian personnel cuts and actually matches future workload requirements?

    Secretary COHEN. The civilian personnel reductions recommended in the QDR were derived from Service proposals, based on an analysis of their future needs. I reviewed each of these proposals in order to ensure that each was realistic and consistent with the strategy. For example, many cuts will be achieved through outsourcing and privatization, a proven technique which takes advantage of the Revolution in Business Affairs. It is important to understand that the QDR explicitly set out to fashion an achievable set of recommendations, based on the needs of the Department. Having said that, some of these recommendations, such as outsourcing and privatization of depot maintenance activities, will require legislative action by the Congress.

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    Mr. EVANS. Mr. Secretary, could you please provide data which shows how civilian personnel cuts, as envisioned by the QDR, will be allocated by service? Could you also please provide information as to how the specific cuts by services will be allocated through major commands and support agencies?

    Secretary COHEN. By Service, the DoD civilian workforce reduction will be:

Table 1

    Now that the QDR is complete, the Department will proceed to implement these plans in the FY 1999 budget and program plans through FY 2003. The full implications of the QDR on programs and budgets will reach definitive expression in the submission of a new budget and program in February 1998. The Army will achieve the majority of their reductions through outsourcing installation support functions and streamlining the Army Material Command. The Navy's initiatives focus on privatizing and outsourcing maintenance and reengineering of the hardware systems commands. Air Force efficiencies will be derived from outsourcing headquarters, base and logistics activities. Marine Corps reductions will come from support functions. Defense agency and defense-wide reductions come from outsourcing selected computer, logistic and medical support and reengineering logistics, financial and information support.

    Mr. EVANS. The Secretary of Defense has appointed a Reform Task Force that is tasked to look at, among other things, civilian personnel requirements to support the future strategic requirements. They are to report to him in Nov and the Secretary stated that he would report his recommendations to the Committee in Dec 97.

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    How does the QDR proposed civilian personnel reductions relate to the future requirements that are to be determined by the Defense Reform Task Force?

    Secretary COHEN. The Department of Defense has had long-standing, ambitious plans to reduce the number of civilian employees. The QDR report contained a number of specific proposals that can further reduce the requirement for civilian employees. Those proposals are being incorporated into the Department's plans at this time, and the FY 1999 budget submission will identify these lower civilian requirements. We anticipate that the Defense Reform Task Force will provide still more ideas to reduce infrastructure and associated civilian personnel requirements. Reductions due to any specific proposals from the Reform Task Force would, in general, be in addition to those already contemplated.

Public/Private Competition

    Mr. EVANS. Has DoD explored ways in which to make its own civilian operations run more efficiently as opposed to wholesale privatization of functions? Is public/private competition the only method in which DoD seeks efficiencies from publicly performed functions?

    Secretary COHEN. We have numerous programs designed to make in-house operations more efficient: regionalization, partnering with industry, workload consolidations, public/private competition, and our request for two more rounds of base closures. Further, the Department has launched many initiatives to meld the best capabilities of organic DoD activities and industry. Outsourcing and privatization are not being pursued as special initiatives. Instead they are integral elements of a comprehensive strategy to develop a leaner, more efficient, and more flexible infrastructure capable of meeting worldwide requirements well into the twenty-first century. For example in our logistics business areas, the strategic objective is reengineering supply, maintenance, and transportation processes and products. This implies primary attention devoted to making the in-house operations run more efficiently and effectively. However, it also implies that wherever there are world-class providers of logistics services in the private sector, the Department should fully examine the prospects for employing these services rather than by default depending exclusively on government support structures. This is where public/private competition comes in to play. Competition is an effective tool of business reengineering. As DoD focuses on making in-house operations more efficient, we concurrently assess the best capabilities of private sector providers of similar support functions. Best business practices, tempered by risk and threat assessments, must be used to determine where public/private competition can improve the performance of support activities.
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Civilian Personnel Cuts

    Mr. EVANS. How do civilian personnel cuts called for in the QDR effect mobilization requirements for organic activities? In calling for privatization of functions, has DoD explored the capabilities of private sources to be able to ramp up functions (production, management support, etc) during a general mobilization?

    Secretary COHEN. It is important to recognize that the civilian personnel cuts recommended are integral to Defense Department reform where duplication and overlap are cut out and efficiency and productivity are increased. Cutting civilians or privatizing functions will not jeopardize the Department's ability to respond to mobilization requirements. The cuts recommended are predominantly to headquarters staffs, Defense Agencies, and non-deploying organizational entities. Privatization of functions will only be pursued after risk assessments affirm the capability of the provider to surge and be dependable in foreseeable scenarios. The Department's experience in Desert Storm, Bosnia, Somalia, and other recent contingencies indicates no degradation in the rate of mobilization caused by private sector providers. In fact, industry's agility is generally found to be a positive when a mobilization surge is required.

QUESTIONS SUBMITTED BY MR. KENNEDY

    Mr. KENNEDY. I realize that the purpose of the QDR is to review our national military strategy and to determine the force structure best suited to implement that strategy. And within that context, decisions are made in determining the appropriate funding levels for various functions. The QDR puts a premium on modernization of our equipment. In essence, the ''Procurement Holiday'' has come to an end. I agree that providing our troops with the most effective and appropriate technology and weapons systems is an important priority.
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    But I sincerely believe that the complement to that priority is the need to modernize the most important aspect of our military, our men and women in uniform. Looking to the future, I would like you to assure me that we will not see an ''Education Holiday''. Would you please outline for me the priority that will be placed upon the education of our men and women in uniform as we meet the challenges of tomorrow. More specifically: Will the funding increase, remain steady or decrease over the next five to ten years? Do we plan to provide advanced and professional military education to a greater percentage of our troops?

    [The Department of Defense did not cooperate in providing a timely response for the record.]

Special Operations Forces

    Mr. KENNEDY. Since the demise of the Soviet Union, our Special Operations Forces, probably more than any other element within the Department of Defense, have been constantly employed as a means to obtain US national and international security objectives. The OPTEMPO numbers themselves paint a clear picture of that increased tasking:

    The QDR recognizes this reality, saying that SOF ''provide a range of unique capabilities that have important applications across the full spectrum of conflict.''

    I am concerned though, that the same report that recognizes SOF's unique capabilities in all our operations from peacetime engagement to conventional warfare also calls for SOF to reduce to two Reserve Component Special Forces Battalions.
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    Increasingly we have been turning to our Reserve Special Forces, especially those in civil affairs, to help achieve our objectives of engagement in order to shape the international environment. One only need to look at their role in Haiti and Bosnia to understand their importance.

    These warriors, many of them also doctors, lawyers, judges, and engineers have special skills required for the missions of today and tomorrow. In addition to the skills from their civilian jobs, many have received intensive training in order to obtain a regional and cultural orientation and special language skills. I am troubled that we may be reducing an important capability that takes years and years to grow.

    General Shalikashvili, please share with me your thoughts on the importance of SOF and in particular our Special forces in meeting the challenges of tomorrow. In addition, because the warfighting CINCs are often tapping our SOF, I'd also be interested to know what input they may have provided with respect to the capability provided to them by our SOF.

    General SHALIKASHVILI. From their founding in 1952, US special forces have been known and respected for their ability to accomplish the most demanding direct action, special reconnaissance, counterterrorism, foreign internal defense and unconventional warfare missions. They distinguished themselves in Southeast Asia, Lebanon, El Salvador, Panama, Somalia, Northern Iraq, Haiti, Liberia, and Bosnia. These are examples of smaller-scale contingencies that continue to be important mission areas in the 21st century. The US special forces will have a continuing role in these operations. Their language skills, cultural sensitivity, leadership abilities, low-visibility and continuously updated reservoir of experience make them an essential force multiplier--flexible enough to carry out tasks ranging from humanitarian demining to non-combatant evacuation operations. The combatant commanders (CINCs) hold special forces in high regard as evidenced by their continuous deployment to every continent. They serve as trainers and on coalition support teams to bring US experience, organization and discipline to peacekeeping and nation-building activities around the world. As our focus moves to fostering regional stability, it becomes apparent that the skills that Special forces naturally bring to the table will be even more in demand by the CINCs in the future. They will continue to be an important tool for US foreign policy and power projection for the 21st century. In regard to the question of CINC input during the QDR effort, each CINC has a special operations forces component and it was through these components that CINC concerns regarding SOF issues were addressed to CINCSOC.
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Procurement Effort

    Mr. KENNEDY. My final question is for General Shalikashvili as well. The QDR reflects an understanding that US forces must be able to respond to a wide range of crises, from major regional conflicts at once end to peace-keeping and peace-enforcement at the other. I would assume then that our forces must be structured to fight and win 2 MRCs as well as to prevent conflict, deter and shape the environment through peace-time engagement. How does the current procurement effort as modified by the QDR recommendations result in forces that will be able to address contingency operations, operations in which we are most likely to find ourselves engaged?

    General SHALIKASHVILI. You are correct that the QDR and its recommendations are centered around developing a force that is capable of successfully completing all missions across the full spectrum of conflict. However, requirements for our procurement programs generally are not driven by the forces' day-to-day activities in smaller-scale contingencies (SSC), but rather by the environment that has the highest risk of loss and the gravest threat to national security. That highest stress environment is in major theater war (MTW) or a war with a near-peer. It was with this premise in mind that we made the procurement recommendations in the QDR. On the other hand, as we looked at the requirement for total numbers of platforms and units required in the force, we focused on a force that was capable of winning MTWs and had the flexibility to respond to all of the day-to-day requirements that are inherent in our military's shaping and responding roles.

QUESTIONS SUBMITTED BY MR. McKEON
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Precision Weapons

    Mr. MCKEON. Your response to a question during the May 21 hearing of the House National Security Committee indicated that the U.S. military had more platforms for precision weapons now than it did during Operation Desert Storm. Can you elaborate on this statement? ''Your response to a question during the May 21 hearing of the House National Security Committee indicated that the U.S. military had more platforms for precision weapons now than it did during Operation Desert Storm.'' Can you also list for the record a comparison of the platforms and precision weapons available at the start of Desert Storm against what is available now?

    General SHALIKASHVILI. Although the total number of combatant platforms in the Department of Defense has declined since Operation Desert Storm, all Services have had a net increase in both precision weapons and platforms capable of delivering them. Enclosures A and B identify the current and pre-Operation Desert Storm inventory levels for precision-capable platforms and precision weapons.

Table 2



Table 3

Quadrennial Defense Review (QDR)

    Mr. LEWIS. The President's budget request calls for a $5 billion savings over the next five years in operation and management accounts, as the result of reforms implemented from the QDR. I am concerned that this budget projection is in fact the target for the QDR rather than the result. What safeguards are you taking to ensure that reforms are not merely budget driven? What percentage of the $5 billion will come from the Army?
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    Secretary WEST. As of the date of this hearing, we have been working with the Office of the Secretary of Defense and the Joint Staff to ensure that the QDR is based on the requirements of our national strategy. However, we acknowledge that while the QDR may not be resource driven, it is resource constrained. The measurement of our success in the QDR will be how well we are able to link our force structure, modernization, readiness, and infrastructure, with the realities of the geostrategic environment and the requirements of our national strategy. We have not been assigned any targets for QDR-related resource savings.

    Mr. LEWIS. Is this savings projection in anticipation of reductions in endstrengths which may come from the QDR?

    Secretary WEST. While we anticipate that everything is on the table during the QDR, as of the date of this hearing, we do not anticipate, nor have we been assigned any goals for, reductions in personnel end strength. If there are personnel end strength reductions directed by the QDR, we are confident that they will emanate from an assessment of the requirements of our national strategy and be consistent with anticipated resource levels.

THE QUADRENNIAL DEFENSE REVIEW OUTCOME ASSESSMENT

House of Representatives,

Committee on National Security,

Washington, DC, Thursday, May 22, 1997.
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    The committee met, pursuant to notice, at 9:40 a.m., in room 2118, Rayburn House Office Building, Hon. Floyd D. Spence (chairman of the committee) presiding.

OPENING STATEMENT OF HON. FLOYD D. SPENCE, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, COMMITTEE ON NATIONAL SECURITY

    The CHAIRMAN. The meeting will please come to order. Before proceeding with today's business, I would like to discuss a brief administrative matter. Yesterday's hearing with Secretary Cohen, a number of members were present and stayed around during the entire proceeding, and we did not have time to allow them to ask questions, and so in a little bit I am going to ask unanimous consent that we dispense with the rule that provides otherwise and allow these members who were here to proceed out of order and be recognized first before we get around to the regular order.

    Before I ask for unanimous consent to do that, though, I would like to maybe suggest a little bit better regular order during these meetings, and possibly we can show more consideration to these members and get around to them before the meeting is over. Of course, we are handicapped sometimes by not having the witnesses here for a long enough period of time. But aside from that, we have the tendency sometimes to go beyond our allotted time in asking questions under the 5-minute rule, and, of course, it is difficult to keep it under 5 minutes when the witnesses feel compelled to expand on their answers, and that sometimes runs three times as long as the question. And sometimes the questions, too, are not just 1 question, but they are 15 questions in 1.
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    And it also would be of help if we ask a question of maybe one member of the panel rather than everybody on the panel. Somebody can get around to the others later on if we can just get to the other people. And one thing, too, just because your name is called, do not feel that you have to ask a question and make up one if necessary. [Laughter.]

    I have on occasion myself as a member of the committee and not in the chair's position passed when my time was called if I did not have a question, if someone had already asked the question, I do not feel compelled to make up a question just to take up my time. Someone else down the row, I am sure, has a question, and so it would be more considerate of them if we do that. So with those thoughts in mind, if we can more or less go along with that kind of a conduct in our proceedings, I think we might be able to get along a little better, and with that, I would like to ask unanimous consent that we allow those people who were here yesterday when the meeting was concluded and did not get to ask a question that they be allowed to proceed first. I have a list of them. And there again, we will call these people's names, but if they do not prefer to go ahead out of order do not feel compelled to ask that question. Ms. Fowler, Mr. McHugh, Mr. Chambliss, Mr. Bono, Mr. Riley, Ms. Harman, Mr. McHale, Mr. Snyder, Mr. Boyd, Mr. McIntyre, and Mr. Rodriguez. I ask unanimous consent at this time that they be allowed to proceed out of order. Hearing no objection, that will be the order.

    This morning, of course, we have with us the Chiefs of the services. We have had our fine Chiefs on other occasions for different reasons. This morning we are going to be continuing to review the Quadrennial Defense Review. Yesterday, as you know, we had Secretary Cohen and got into it in some detail, but this morning we will have the benefit of thinking of our Chiefs. After all, according to Secretary Cohen, they were asked if they could carry out the strategy that is recommended by that review with the forces that are going to be provided by it, and that is the big question I have in my mind this morning.
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    I will not ask it myself. I will let some other people get around to doing that, but that needs to be asked, I think. When these gentlemen last testified before the committee, much of the discussion was about the readiness of the force to execute the national military strategy. There was a lot of talk about the difficulties of doing more with less, a situation that was the result of defense budget cuts, force reductions, and a growing number of peacekeeping and humanitarian missions.

    Since that time, the national military strategy has changed. It has become more ambitious. The newly announced QDR strategy retains the commitment to be prepared to fight two major regional wars, but it also recognizes the labor intensive demands of peacekeeping and humanitarian operations. In essence, the QDR acknowledges that our soldiers, sailors, airmen and marines are now and will continue in the future to do more.

    At the same time, the QDR assumes a continued real decline in defense resources. First, the budget agreement calls for a 5-year defense budget that falls $60 billion short of even keeping pace with inflation. And second, it calls for smaller forces. Yesterday I made the comment to Secretary Cohen we are called upon in this QDR to have a strategy of being able to fight two nearly simultaneous regional contingencies, and then we are provided with a reduced force to do that. And by reduced, I mean even reduced from what we had since Desert Storm, the Persian Gulf. There is a lot of debate as to whether or not we would be able to even execute one of these contingencies given the fact that we have cut back on our force 30, 40, 50 and 60 percent since the Persian Gulf, and then this Quadrennial Review even cuts it further than that. So that is the big question: whether we could execute one, much less two, under the new strategy we have?
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    In sum, the QDR will have our forces transitioning from doing more with less to doing even more with even less. In my view, this trend is going in the wrong direction. As the National Defense Panel has indicated, there is an inconsistency between the QDR strategy and projected resources. And I am deeply concerned that the result will be to make worse the readiness and modernization problems we are all familiar with. Yesterday, Secretary Cohen was frank in explaining that the QDR plan would increase the risk to the security interest of the United States. He said, in effect, that he was willing to live with and adopt a greater risk in the near term to better prepare for the future and to lessen the long-term risk.

    While the debate over the QDR can quickly devolve into a discussion of end strength, force structure, and procurement programs, as I said yesterday, I believe we owe it to the American public to approach this debate from the perspective of risk and the relationship between risk and national interest. We are unable to put the QDR's recommendation into any meaningful context without a clearer understanding of the associated risk and tradeoffs.

    Accordingly, I look to our witnesses today as both service Chiefs and as members of the Joint Chiefs of Staff to help us better understand the risk involved with the QDR and its recommendations. Most of our witnesses have a record of testimony before this committee establishing that the pre-QDR personnel, equipment and resource baseline was the absolute minimum required to carry out the mission of your service. Assuming none of you plan to directly criticize the QDR, I hope you will reconcile your positions, particularly in terms of the risk associated with the QDR's recommendations.

    [The prepared statement of Mr. Spence can be found in the appendix on page 277.]
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    The CHAIRMAN. Before proceeding further, I would like to recognize at this time the ranking Democrat on our committee, Mr. Dellums, for any remarks he would like to make.

STATEMENT OF HON. RONALD V. DELLUMS, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON NATIONAL SECURITY

    Mr. DELLUMS. Thank you very much, Mr. Chairman. First, for the record, I would to concur in your earlier admonishments to my colleagues and underscore them again for the purposes of emphasis and second to concur in the wisdom and fairness of your unanimous-consent request.

    Mr. Chairman, I welcome the opportunity to pick up where we left off yesterday in the understanding of the process, methodology, conclusions, and recommendations of the Quadrennial Defense Review. Today's witnesses, the military leaders of the Army, the Navy, the Air Force, and Marine Corps, can provide additional insights into those offered by Secretary Cohen and Joint Chief Chairman General Shalikashvili. As with yesterday, I do not intend to offer lengthy opening remarks at this point. I believe that engaging the service Chiefs with questions regarding the Quadrennial Defense Review outcomes will best benefit the committee's efforts to undertake our own assessment of the QDR product and its implications for our Nation's military.

    I look forward to that effort and to the expertise that will be offered by our four distinguished witnesses before the committee today, and with those brief remarks, Mr. Chairman, I would yield back the balance of my time.
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    The CHAIRMAN. Thank you very much, and we will proceed in regular order. General Reimer.

STATEMENTS OF GENERAL DENNIS J. REIMER, CHIEF OF STAFF, ARMY; ADMIRAL JAY L. JOHNSON, CHIEF OF NAVAL OPERATIONS, NAVY; GENERAL RONALD R. FOGLEMAN, CHIEF OF STAFF, AIR FORCE; AND GENERAL CHARLES C. KRULAK, COMMANDANT, U.S. MARINE CORPS

    General REIMER. Thank you, Mr. Chairman. Mr. Chairman, Congressman Dellums, other members of the committee, thanks, first of all, for the opportunity to appear before this important committee and discuss something that I think is very important. We collectively, I think the services, the Office of Secretary of Defense, and Congress, share the important responsibility to transform the Armed Forces into the 21st century. Let me give you my bottom line up front: the QDR is a step in the right direction. We have participated fully in its finding and I support its recommendations.

    The strategy that we have developed based upon the three pillars of respond to current crisis, to be able to shape the environment for the 21st century and to be able to prepare our forces for the unique requirements that they will have in the 21st century is the right strategy and it drove our deliberations. I firmly believe it is the right strategy to lead us through this transition period.

    For the Army, there were three major concerns. First was Army modernization. As I have testified before this committee many times, we reduced the modernization account during the drawdown period to take care of our people. I do not apologize for that. It was the right thing to do. We would do it again. The QDR that we just went through validated the fact that we had done that, it validated our programs, our modernization account, but we still face about a $3 billion per year shortfall. The personnel reductions which we are recommending will get us about halfway there. But the fine tuning of this program, the modernization account, and additional support will be required to close the gap.
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    In terms of base closure, BRAC, I understand how critical that is, how difficult that is. But the basic fact is that we have cut the tooth more than the tail since 1989 in the U.S. Army. We must balance that equation. We have taken the troops down about 36 percent. We have taken the installation and support to facilities down about 21 percent. The primary focus in this BRAC deliberation for the Army will be on the design, the redesign of the institutional Army, the proper use of our training areas, and initiatives such as distance learning to help us reduce the PERSTEMPO associated with what we are doing right now.

    The third area is personnel reductions. That is extremely tough, especially for me. Reductions that we are recommending have been strategy based. They are needed, I think, in order to get the balance that I talked about between respond, shape, and prepare. Basically we cannot prepare for the future unless we are able to reduce the size of the force a small amount. In our reductions and in our recommendations, we have protected the 10 divisions. I think it is essential we do that. They are the warfighting requirements for the U.S. Army, and they have been protected. The deeper personnel cuts that we will have to take will be taken from those headquarters that are nondeployable and from other streamlining activities that we have identified. The cuts will also require us to transfer later deploying CSS units from the Active component to the Reserve components. It will also require us to eliminate some of the less relevant force structure associated with the total Army.

    As I said, all cuts are tough. But I am convinced these are necessary if we are to meet the requirements of the new strategy. I would just say a word about civilian personnel cuts because they are also painful. In this area, I think it is important that we focus on the competition between our quality in-house workforce and the outsourcing and privatization efficiencies that are promised. I think if our in-house workforce is allowed to compete fairly with the most efficient organization, they will do very well.
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    Failure to achieve the personnel reductions leaves the Army with few options. In summary, this is the third time that I have been involved to some extent in the redesign of the Army since 1989. I think this effort takes advantages of lessons learned in the past. It takes advantage of the experiences we have had in the last 8 years and takes advantage of the tremendous analytical effort that we put forth to take a look at the next 10 or 15 years.

    It is a solid effort. And I do believe it is important that we stabilize the force and eliminate the uncertainty that exists out there in the force because I believe that is the biggest challenge we face. Mr. Chairman, thank you and I look forward to your questions.

    [The prepared statement of General Reimer can be found in the appendix on page 280.]

    The CHAIRMAN. Thank you very much. Admiral.

    Admiral JOHNSON. Mr. Chairman, Congressman Dellums, members of the committee, good morning. I too appreciate the opportunity to once again appear before this group. I will be very brief. I have given you a written statement, but I would like to make a few points about the QDR. Navy approached the QDR with five fundamental principles sort of underpinning our efforts.

    First, we would be true to our strategic and operational concepts embodied in the Forward From the Sea document. We are the forward presence force today and QDR would not and did not change that reality. Second, any reshaping of our general purpose forces would be done in such a way as to retain our ability to dominate the seas and effectively influence events ashore. Third, we would sustain our strategic deterrence force. Fourth, and most importantly, we would keep faith with the wonderful men and women who wear our uniform and our civilian force throughout this evolution. And fifth, we would pay our bills and work harder to live within our means.
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    We saw no need to reinvent the Navy for the Quadrennial Defense Review. The relevance of forward deployed naval forces centered around 12 carrier battle groups and 12 amphibious ready groups would be as much a reality in the future as it is today. The QDR has reaffirmed that for us. We will be a leaner but more capable force as we enter the 21st century, and we will reshape ourselves at a pace which will ensure that we do not compromise our readiness and that we do not break faith with our people, as I said before.

    Obviously, and as General Reimer pointed out, this is only the beginning of our work. And we look forward to working with this committee and Secretary Cohen and General Shali and their staffs and with the National Defense Panel to implement this Quadrennial Defense Review. Mr. Chairman, I appreciate the chance to comment and I look forward to your questions.

    [The prepared statement of Admiral Johnson can be found in the appendix on page 293.]

    The CHAIRMAN. Thank you, admiral. General Fogleman.

    General FOGLEMAN. Mr. Chairman, members of the committee, I too appreciate this opportunity to appear here with my fellow chiefs to discuss the Quadrennial Defense Review. My remarks will be brief. They are going to focus on how the Air Force prepared for the QDR, our efforts during the conduct of the study, and finally some observations on the report itself.

    Two years ago, the Secretary of the Air Force and I embarked on a long-range planning effort. This was not primarily motivated by the QDR, but it was in the back of our minds that at the end of this effort, there would be a QDR. We started this long-range planning effort by reassessing our responsibilities of providing air and space power for the nation across an entire spectrum of conflict in a world where technology was making some tremendous changes but on the other hand we were experiencing conflict and crisis in some very backward areas of the world.
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    As we built that long-range plan, we wanted to make sure that we understood the needs of the Nation, what they would be. And so we set about to formulate the kinds of capabilities that the warfighters and the national command authorities would need. We looked at alternative futures. We tried to avoid the trap of being precisely wrong by building towards a very precise future scenario. We also spent a considerable amount of time discussing and formulating the approach to changing the size and nature of our force, particularly how it would impact on our people and support infrastructure. We spent a lot of time focusing on taking care of our people, not only in the near term but in the long term. And in the end, I think this long range planning effort left us well prepared as we began to participate in the QDR. We used the ideas generated to put forth our basic principles.

    First of all, we wanted to maintain the time phased modernization program that we had underway. We wanted to maintain our near-term readiness and at the same time we wanted to take care of our total force. We also very clearly saw the need to restructure and reevaluate our approach to infrastructure, to combat support, combat service support. During the QDR, I think there was ample participation from the military services and the unified commanders and chiefs. Frankly, I do not think you can do a QDR in 9 months or 6 months or 3 months. But I would like to compliment the Secretary of Defense for the fact that he stuck to the report date and he drove us to that because, as others have said, we have come to see this QDR process as just the beginning of a phase in this debate.

    My concern over the next 6 to 8 months is that we are going to generate during this debate a great amount of anxiety, a great amount of uncertainty and turbulence in the force. And that could be very detrimental. As to the QDR report itself, I think it is comprehensive. I think it is insightful. The drafters of the report deserve praise for a job that was very tough and in the end I think very well done. There are some specifics that I am particularly proud of such as the contribution that I think all the members at the table here have made involving the Secretary of Defense and helping him craft a new military strategy. In it, we see a reflection for the increased appreciation for advantages and possibilities of responsive and capable forces as we approach these two major theaters of war.
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    One of the things that I am personally excited about is this strategy puts new emphasis on the critical importance of an early decisive halt to any armed aggression. I think this is an important element, and as a service I think one of our strengths lies in projecting lethality quickly and with less vulnerability. Part of our long-term planning effort was a recommitment to our total force policy. In the Air Force option put forward, we proposed shifting one active TAC fighter wing to the Guard and wing.

    Mr. Chairman, members of this committee, as I said yesterday before the Senate, and I say it again, getting lean and mean is no easy feat, and I think all of us here at this table we are pretty capable of being mean. We know what mean is. We know how to do that. We need your help to become lean. We are going to need some enablers, some things that will help us work the infrastructure, the outsourcing, the privatization, some of the proposals that are put forth that will make this strategy work with the forces that we are left with.

    I would again like to compliment the Secretary of Defense for another part of his approach. In his approach he told us that if we could find efficiencies, he would allow us to keep the money to take care of our people, our near-term concerns, and keep our procurement dollars from migrating. I would tell you that this was a very important part of this exercise. I was also very pleased to see stated in the strategy and throughout this study a commitment by the leadership to engage our forces as selectively as possible to continue the efforts to manage our peacetime OPSTEMPO and PERSTEMPO.

    There is one last area that may not be the favorite of many, but in this QDR, we made a commitment, all of us, to aggressively reduce costs and rethink the way we approach infrastructure. Outsourcing is a key to that. So one of our key objectives during this QDR was to see whether or not we could achieve savings while maintaining a strong defense. I do not mean to speak for the other chiefs, but I believe that we, in general, think the answer is yes, but we cannot continue to operate the way that we have in the past. So, in summary, I think this is a journey, not a destination. We have just begun the debate that will ultimately result in hopefully the right and strong military forces we need. But we need your help, all of us as members of the Joint Chiefs of Staff and as individual service chiefs. Thank you.
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    [The prepared statement of General Fogleman can be found in the appendix on page 301.]

    The CHAIRMAN. Thank you, general. General Krulak.

    General KRULAK. Mr. Chairman, Congressman Dellums, and distinguished members of the committee, I have submitted a written statement. For better or worse, I wrote it. I would use that also as my oral statement, and I stand by for your questions.

    [The prepared statement of General Krulak can be found in the appendix on page 313.]

    The CHAIRMAN. Thank you very much.

    [Applause.]

    The CHAIRMAN. You did write it yourself.

    General KRULAK. You will be able to tell, sir.

    The CHAIRMAN. I do not think we had any doubt about that. Let us begin with Ms. Fowler.

    Ms. FOWLER. Thank you, Mr. Chairman, and I want to thank the chiefs for being with us today. I say I am concerned that looking at the QDR that it followed the lead of the CORM report and the Defense Science Board once again in relying, I think, on some very questionable assumptions about achievable savings, and that is what we are all about here. I have seen some of the working documents that led up to the QDR that project savings as much as 40 percent through the contracting out of government positions, and I agree that there are going to be some areas where we can get some savings as a result of contracting out, although I strongly question whether that is the instance where there is only one commercial source from which to get a given service. And I am concerned about the increase in sole sourcing that is going on throughout the services.
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    Having said that, however, it troubles me deeply when I heard the services are banking on savings of as much as 40 percent from contracting out because you are building wedges into the fit based on some rosy scenarios, and I believe savings of that magnitude are really unrealistic and will get you in even more serious problems in the outyears when you find you have dug yourself an even deeper resource hole.

    Now yesterday we had the Secretary of Defense and the Chairman of the Joint Chiefs before us on the QDR, and Representative Bateman raised the issue of contract advisory services. Now these are consultant fees and expenses that the department is currently procuring. The figure given was $2.9 billion annually on such expenditures, a 248 percent increase. Now, for the record, could each of you provide information regarding the level of contract advisory services procured by each of your services? Could you tell us how much of that figure is dedicated to contracting out for the service of non-governmental advisers to provide information on whether we should contract out DoD operations? In other words, how much are we paying contractors to tell us whether or not we should contract out current government functions? So for the record, if you could submit that, I would appreciate it.

    [The information referred to can be found in the appendix beginning on page 318, the Department of the Navy did not cooperate in providing a timely response for the record.]

    Ms. FOWLER. And then I just have one question for Admiral Johnson. The QDR advocates reducing the total buy of F/A–18E/Fs from 1,000 to 548. Now does this ratio of Es to Fs change as a result of this recommendation? What is the breakout of Es and Fs as a result of the QDR? Would the timing of the acquisition of the Es vis the Fs change and does QDR also recommend considering a variant of the E/F for the E/W role? What is the timing on that because all that comes into that reduction level?
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    Admiral JOHNSON. Yes, ma'am. Let me start with the last first and regarding the E/W variant, that is, I would consider that to be a downstream evolved program from the E and F once we are stabilized in the program as here. We believe that it has great viability as a potential follow-on to the EA–6B, but the requirement for that is sometime out. So I would consider that to be a downstream issue. The ramp and the buy rate, the buy number that you mentioned with the 548, as you know, the Quadrennial Defense Review put a range in there between 548 and 785 depending on how JSF matures. I would tell you, as I have told you before, I think, that the E/F is absolutely considered to be the cornerstone of the future of Navy TAC air, so we are very committed to it. We are encouraged by the support that the QDR has given to the program, and we are looking even at the 548 number to at least a decade's worth of E and F buys with revisit points almost every year to reassess how we are going and how the program is.

    I want to get it up on the ramp and stabilized so that we can get the most cost efficient and best combat punch airplane for the fleet. The E/F mix piece of it, I would tell you that right now the leading edge is to try to get the Fs there as fast as I can because frankly they are going to replace the Tomcats which are legacy systems that are costing us a lot of money and they are older. So the flow is still essentially the same.

    Ms. FOWLER. Thank you, Admiral Johnson. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you, ma'am. Mrs. Harman.

    Mrs. HARMAN. Thank you, Mr. Chairman. I want to start by expressing my appreciation to you and Mr. Dellums for the unanimous consent request and to tell a very small story. When I joined this committee in 1993, I sat in Mr. Boyd's seat, and our first hearing was the authorization bill, the presentation of the authorization bill by then Secretary of Defense Aspin. He spent the entire day here from 9:30 a.m. until about 6 p.m. so that he could answer the questions of every single member of the committee, and I was sitting in that seat, the bottom row and so forth, at about 5 p.m., and then Chairman Dellums sent an emissary down to me to ask if I could come up and see him. And I thought, oh, my gosh, I must have blown it, you know, maybe I just, even after all these 9 hours cannot ask my questions. I finally got up to the top, the potent top, the top row, and then Chairman Dellums said I have to step out for a moment, would you mind taking the chair? And so I sat there and was able to ask my questions of the Secretary of Defense from the chairman's seat. It was an extraordinary moment. I want all the young members to hear this because maybe it can happen to you. [Laughter.]
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    Mrs. HARMAN. But it says a lot about Mr. Dellums and a lot about our former chairman and then Secretary of Defense Aspin, and I will never forget it. I just have a few questions, and I will hold strictly to my 5 minutes. First of all, I would like to say to General Fogleman and the other chiefs that I have not participated in the press conferences calling for a particular course of action in the case of Lieutenant Kelly Flinn. The Flinn case is a difficult one, and as such a hard set of facts on which to make good policy. It has conflicting issues, rules regarding adultery and fraternization, but just as important rules on the appropriate behavior of a uniformed officer. In my view, we need to modernize the rules regarding consensual sexual behavior between members of our armed forces, but we must also demand the highest standards regarding the chain of command, obeying lawful orders and truthfulness. I do not envy Secretary Widnall as she makes her decision in the Flinn case, particularly because it probably is the first example of a woman disciplining a woman, at least a woman Secretary since she is the first we have had. But I think the goal is, and I hope she shares this, to treat women and men the same, not to treat women differently be it worse or better. Just as this committee, which is composed of both men and women makes a valuable contribution, individually and collectively towards our nation's defense policies, so too must our armed forces draw on the talents of the best and brightest throughout our country. The message I think to women and men must be we want you and we want you to succeed.

    Changing the subject, yesterday had I been able to talk to Secretary Cohen, and I do understand under the circumstances why I was not, I would have commended him for extraordinary leadership in helping to fashion the QDR and adding—I see you all nodding—adding to a document that was two-thirds prepared when he showed up a more of a focus on strategy, at least I believe so, and some bolder choices, and I also would have commended him for the partnership that he and General Shali seem to have, and it is certainly my hope that that partnership will continue with General Shali's successor and obviously with you four. It matters for the Secretary of Defense to have the kind of relationship he seems to have with the uniformed services and their leaders.
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    I have just a couple of questions, and I see I do not have much time. I am just going to put two out there. First of all, no one yesterday in the long hearing raised the issue of NATO expansion. This is something I want to put out there because we are about to, not we, but NATO is about to add three new members and presumably set in motion a set of responsibilities by the U.S. military with respect to that alliance and its members, and I wonder whether in terms of the preparation of the QDR and the preparation that all of you have made for some accommodation of cuts caused by the QDR, thought has been given to any responsibilities that you may have to assume under NATO?

    And I see that the light is on so I do not want to take anymore time. I will submit other questions in writing, but if I could just ask for a response to that question.

    General REIMER. Congressman, let me start. Yes, I think we did consider NATO expansion. It was one of the things we talked about in terms of putting additional resources or additional requirements on our troops. I do not think we got into the area of the dollar cost or anything like that. We have a very successful Partnership for Peace Program, and with NATO expansion we saw that probably increasing. It was one of the deliberations that took place in the Quadrennial Defense Review.

    General FOGLEMAN. I think it manifest itself primarily in the discussion of whether or not we ought to stay with the 100,000 troops in Europe? Was that adequate? Was it too much? This sort of thing. And I think that the considerations associated with NATO expansion led to the decision that we would stay with where we were at at that number.

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    Mrs. HARMAN. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you, ma'am. Mr. Chambliss.

    Mr. CHAMBLISS. Thank you, Mr. Chairman, and distinguished service chiefs. I will get in my question in a moment, but I feel compelled to address an issue that I had hoped to raise with the Secretary yesterday but unfortunately ran out of time. I sat in this hearing room yesterday and listened to the Secretary's response to a number of questions, two of which were very frankly of great concern to me. They were questions that were submitted by two members of this committee who have stood up for the members of every single branch of our service time and time again. And the Secretary commented in response to those members' questions that it is Congress that has put in the budget box that served to limit the recommendations of the QDR, and I am concerned that the media and the people of this nation will actually begin to believe those types of statements.

    Over the last 5 years, this President and this administration have sent to Congress woefully underfunded defense budgets. And in the last 3 years, it has taken every bit of heavy lifting possible on the part of this Congress, many of the Members of which sit in this room today, to bring these anemic budgets to minimal respectability. And so in this QDR debate, while the Secretary may try to shift the onus of base closure on the shoulders of Congress and while he may blame Congress for this inadequate assessment known as QDR, I think all of us in this room know the truth. Until this administration stands with the Congress and furthers the debate about why a robust defense posture continues to be a priority, I will consider the Secretary's comments of yesterday nothing more than good theater.

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    Now, General Fogleman, I would like to address my comment and my question to you. I have had an opportunity to review the QDR report, and I must say that much of the goals and principles that are enunciated in there are very admirable. As you know, I spend a good deal of my time focusing on air power issues. You and I on many occasions have spoken about all aspects of mission as well as requirement. That is why I am so concerned about this report. I am most concerned, however, that this report fails to step up to some very difficult choices that are demanded by the goals put forth. And let me offer you one example. One system that has recently come on line and performed above and beyond expectations is Joint STARS system. We have had numerous members of the military come in here and sit in the very same seats where you gentlemen are today and just expand very gleefully about the work that JSTARS has done in actual operation and something that we can be very proud of and something that is so absolutely necessary to any future military conflict.

    From an information gathering standpoint and battle management, there is simply no substitute for this system today and in future conflict. Robins Air Force Base is the home of Joint STARS so I have taken a keen interest of the requirement for this system. Now I have been told on at least a half dozen occasions by various experts in the Pentagon that it takes 8 aircraft to adequately meet the need of a single major theater war, and while the assumptions laid out in this report acknowledge a two MTW scenario, it would follow that our military requirement for this system would be 16 aircraft not including spares. And yet, General, this report calls for the funding of only 13 JSTARS aircraft.

    I had an occasion yesterday after our hearing with the Secretary to raise this issue with Secretary Cohen, and he conceded that there is considerable question about whether NATO can and will invest in those six additional aircraft that are going to be necessary to have this system fully operational. While I have every confidence in the ability of NATO to support our operations anywhere in the world, I am not prepared to set the dangerous precedent of relying on systems they have not even decided to purchase for the safety and security of our troops. In my estimation, we owe the service members more than that. There are simply some things that must be viewed as non-negotiable keys to the critical halting phase of conflict. Systems like Joint STARS and F–22 are perfect examples.
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    And gentlemen, I have got two questions. One, can you explain for me the thought process on the JSTARS element of QDR and, second, in your estimation what impact will this recommended reduced buy have on the home facility of Robins Air Force Base?

    General FOGLEMAN. Yes, sir. I will take the second question first since that is in many ways the easier question to answer. Given that we would end up with a total of 13 aircraft, in all likelihood what we will do is rather than stand up a separate wing at Warner Robins, we would probably form a group headquarters. That group would be reporting to a wing, probably the wing at Tinker, which is our major air command and control wing. In terms of direct manpower impact, that would result in about 700 to 800 people less eventually going into Warner Robins. Right now I think we are projected to have somewhere around 2,250 people when that wing is fully fleshed out, and I am told that with the 13 aircraft buy, that would probably end up being about 1,500 people down there in that organization. So that would be kind of the parameters of the way I think it would impact Warner Robins.

    In terms of the rationale or the thought process that went into the reduction or the construction of a 13 plus four kind of program, looking at what NATO might be, I believe,

    But the only thing that you are going to have available, and you will have some capability available with 13 aircraft programs, is you will have a limited availability immediately to go to a second theater, and then you would have to start swinging forces from the other theater as it matured back to that second theater. And while there has been some analysis done by our operations people on that, that analysis is far from over.
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    Now I think another subset of this was driven by the fact that there are people who are looking at cheaper alternatives or other alternatives that may be able to take over at some phase in a conflict that you would not need the full and robust capability that you get off the Joint STARS. Now, there is another dimension at work that would drive you the other way, and that is, I think, most recently we have done some joint exercises with the Navy, the Marines, and I believe they are beginning now to see the great utility of this also. So clearly it is a tough decision. It was driven primarily in this case by tradeoffs in funding versus capability.

    Mr. CHAMBLISS. Thank you.

    The CHAIRMAN. Mr. McHale.

    Mr. MCHALE. Thank you, Mr. Chairman. Good morning, gentlemen. My questions will be for General Reimer and General Krulak. General Reimer, let me begin with you if I may. George Will has a column in today's Washington Post, and what I would like to do is read to you a paragraph from that column and then ask for your comment. The paragraph reads as follows:

    The QDR reaffirms the capability of coping with two major regional conflicts, MRC's, nearly simultaneously. Defense Secretary William Perry defined an MRC as involving an enemy fielding up to one million men and 2,000 to 4,000 tanks. Kagan and Fautua, writing in commentary, argue that not only can the U.S. Army not conduct two MRC's, it could not conduct even one unless it withdrew from most of its international commitments.

    Would you comment on that analysis?
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    General REIMER. Yes, Congressman. I read the article. I read the column and I read the article written by the two professors of social science at West Point, both lieutenant colonels. My view is a little bit different. I think the point they were making was that the Army force, the article written by the two professors, the article pointed out that the Army force was very busy, and that is very true. But I do not necessarily buy some of the assumptions that they made. They indicated that out of 10 divisions, we had 5 or 6 of them tied up in areas that could not be extracted, and they cited, for example, the 3d Infantry Division having a battalion in Kuwait. That is where we want that battalion to be if that is, in fact, one of the two MRC's.

    We also have forces in Korea. So I do not necessarily think that their article was right on the mark. I think there were some good things. I think they are outstanding officers. They do a great job as social science professors, but I think they are a little bit out of their lane in some of the things they talked about in their article. That is my own view.

    As far as being able to handle two MRC's, yes, I think we can. We have 10 active component divisions. We have protected those active component divisions. We rely very heavily on the 15 enhanced brigades. They have got to come through. I do not think this QDR submission and recommendations that we make puts the two MRC strategy in danger. It does increase the risk slightly in the near term. You are always going to have a little bit more risk when you reduce the force and that is my view on it.

    Mr. MCHALE. General, I am pleased that you made reference to the 15 enhanced brigades. As you know, Mr. Buyer and I cochair the Guard and Reserve caucus. Let me tell you I find the current training being provided to those 15 enhanced brigades to be wholly unsatisfactory. Up until recently, not one of those brigades had gone through the NTC. Last year, one brigade went through. This year for reasons that I think are unacceptable, the only rotation through the NTC for one of those brigades was cancelled.
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    If the schedule is implemented next year as planned, one of those brigades on average will rotate through the NTC once every eight years. I urge you to please look at that training schedule to make sure that those brigades upon which we are indeed counting on to receive the kind of training that we owe to those troops morally and militarily to make sure on that future battlefield they can fight. Once every eight years, going to field as a maneuver element through an NTC type of training is not satisfactory.

    General REIMER. May I respond?

    Mr. MCHALE. Please.

    General REIMER. Congressman, I think the training that we are giving the enhanced brigades is so far better than what we gave them before Desert Shield that there is no comparison.

    Mr. MCHALE. I agree with that.

    General REIMER. I have seen it both ways. We have focused their training on premobilization at the company platoon level. That is where they should be. Post-mobilization we will bring them to the brigade level. I think we have put 47 people active component in each of those enhanced brigades. I do not think there is any comparison. I think the wrong gauge is to measure how many times they go to the National Training Center. The National Training Center is a very important part, but the pre-mobilization training that they receive and the lanes training I think is absolutely the right thing for premobilization.
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    Mr. MCHALE. Let me agree in part with what you just said. The training is vastly superior to what we provided before Desert Storm, but the combat obligations today are also vastly superior. We are now counting on those units as enhanced force requirements in order to fight a two MRC strategy, and my reference was to an NTC-type of training. I am not saying that it has to be the NTC, but these units as maneuver elements must go to the field if they are to be combat ready within 90 days.

    General REIMER. And I totally agree, Congressman. And we brought the NTC lane graders to the brigades as they would go through lane training. That is, our whole design is to make the lane training they go through in premobilization as close to the NTC as we possibly can. We have a responsibility to the taxpayers, though, to make sure it is cost effective training. It takes about $10 million to send them out there to a level that they should not be training at.

    Mr. MCHALE. I care more about their combat readiness than I do the financial considerations.

    General REIMER. I agree.

    Mr. MCHALE. And I would urge you give them the same kind of training that you provide to the active duty forces. If we have identical training for identical missions, I will be satisfied. Let me turn very briefly—my light just went on—General Krulak, I am pleased that you wrote your own statement. It has been a long time since I have seen such creative use of whiteout. [Laughter.]
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    General, if I may, one question. General, the QDR calls for a more rapid procurement of the V–22 but ultimately a smaller buy. Will that work?

    General KRULAK. Yes, sir, it will. I liken, after some 34 years in the Marine Corps, the V–22 is a phoenix rising from the ashes and the wind under the wings is the Congress of the United States. I think this was a tremendous recognition of a superb leap-ahead technology system. To see it ramped up is extremely exciting. The dropoff on the end, I think, is something that can be handled. We are looking, as you are well aware, through Sea Dragon to limit the amount of requirement for large-scale resupplies using that type of helicopter. So I think we can find through experimentation that we can take some of the numbers off. Certainly, the tradeoff for numbers in the outyears for this tremendous capability early on is going to make a large difference. That one move pulls the V–22 from a fully operational and capable in the year 2020 to now 2012.

    Mr. MCHALE. General, thank you. Mr. Chairman, thank you.

    The CHAIRMAN. Mr. Bono.

    Mr. BONO. Thank you, Mr. Chairman. Whoever wants to answer me, and thank you for coming. There are a lot of issues here and I am new to this committee, but I would certainly like to be informed and judge my opinions on that information. I have been trying to get as informed as fast as I can. I just recently returned from Bosnia and Albania, and that was very helpful to me to actually see what was going on. The first question I would like to ask is on the QDR and the revenue produced by it, are we talking about strictly projections or are we talking about accurate numbers right now, or are all these numbers a profit projected? Can anyone answer that for me?
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    General REIMER. I think we made recommendations as to the numbers in terms of instinct reductions and those type of

    Mr. BONO. But are they projections? Are the profits projections right now? That is the question.

    Admiral JOHNSON. To a certain extent I would answer, yes, sir, they are. I mean as Ms. Fowler said, we do have in our plan——

    Mr. BONO. OK.

    Admiral JOHNSON [continuing]. Projected savings, and we have got——

    Mr. BONO. All right. Because——

    Admiral JOHNSON [continuing]. Work to get those.

    Mr. BONO [continuing]. To the extent of my knowledge, I mean there was always this discussion about this tremendous peace dividend we were going to get from the last cutback. I am not aware that we ever received a peace dividend. Have we? Has that ever come in?

    General REIMER. If you would have taken the force that we had in 1989 and straightlined the money, I think you will find a delta of about $569 billion between what we spent between 1989 and if we had straightlined it from 1989. I may be off a little bit, but that is the figure that sticks in my mind.
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    The CHAIRMAN. OK. General Kulak.

    General KRULAK. I think the major difference, in my opinion, that I see versus anything that is done before is that the Secretary of Defense has very clearly articulated that the savings, as an example, from manpower will, in fact, be returned back to the service. That is something that has not happened before. It has normally been scraped off the table, and so from that standpoint, although they are projected, each service has a pretty good idea of the cost of an individual, and can, in fact, apply that to——

    Mr. BONO. That is the difference between the two cutbacks, then, I presume.

    General KRULAK. In my belief, it is.

    Mr. BONO. And from that standpoint, I think we are talking a little bit more on a reality level than the level we were talking before because that was the perception before, but I do not think it really occurred.

    General KRULAK. It did not occur, sir. But we have gotten basically——

    Mr. BONO. Well, thank you. I think we should be assured that it will occur this time because to do these things and have those kind of projections and then not follow up. Second, yesterday, a lot of reference was made to the gulf war and how well we did, which we did, but I wonder if—again, this is a question—did we also deal with an army that was not too bright and not very sophisticated and really overrated as far as their ability to enter a confrontation of this type? General Krulak, would you answer that?
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    General KRULAK. I think that the Iraqi Army, in fact, was extremely well equipped, fought by Soviet tactics, but was not very bright when taken under the heavy air power that my friend here put up and the ground power that they, in fact, did collapse. My concern is not fighting them though. My concern is everybody out there that may be our potential enemies watched on CNN and saw what we did, and they are not going to fight us that way.

    Mr. BONO. I concur with that. I feel that everybody got to view the fight films here, and there is an exposure factor that we have now that we did not have in the past, and it was very new. So I think that that should be a consideration when we talk about how equipped we are and how tough we are. On base closures, base closures—I respectfully ask for 3 more minutes, Mr. Chairman.

    The CHAIRMAN. We are trying to go by the rules so the rest of them can get to it, Mr. Bono. Go ahead. Not 3 minutes. Just ask your question. Maybe they can submit it for the record.

    Mr. BONO. OK. So the answer is no? [Laughter.]

    The CHAIRMAN. I wiggled around a little bit for you there.

    Mr. BONO. OK. I will take a slight amount of wiggle room. Well, look, on base closures, one of the results of base closures is COSCO, which is an arm of the Chinese military, and so here we tried to economize with base closures, and we wind up giving a base to the Chinese military. And although I have not spent a lot of time on this committee, I have spent a lot of time, 2 years, on unconventional warfare, and we have a new style of war now. We have unconventional warfare including terrorism, information, smart equipment which now can be hacked. And the security. The only secure equipment we have on smart equipment is the classified equipment. So there are areas now that need a lot more work. I could go on, Mr. Chairman, but my time is up, but I would like to go into all of these because I did not cover all of these. So this extreme assurance that it is a piece of cake, I do not view it that way, Mr. Chairman, and I sure would like to make sure that all Americans are safe and that what we say is certainty rather than conjecture. Thank you.
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    The CHAIRMAN. Thank you. Mr. Boyd.

    Mr. BOYD. Thank you very much, Mr. Chairman. And Mr. Chairman, I sat through the meeting yesterday and today and listened with interest as my colleagues cited comparative historic examples of lots of issues including force size, periods of time between military encounters, and when I say comparative historic examples, I think we even had some examples of the War of 1812 and the First World War and Second World War and comparing force sizes that time with this time. Also, military funding levels as a percentage of gross domestic project, our gross national product. We have heard parochial arguments about specific systems. We even heard this morning from a very good friend of mine an issue that was all the fault of the President that we do not have the sufficient funding that we have.

    I would just like to remind the Members that it was not the President that proposed an amendment on the floor night before last that would have cut an additional $6 billion out of the defense over the next 5 years. That amendment was supported unfortunately by Members from both sides of the aisle. So I wanted to ask the question and for all of you to consider as it relates to your own services, but personally I do not believe that we can compare today's military with that of the past. Today I think we certainly are more powerful. We are more accurate, and we have a greater standoff capability than we did even 30 years ago when we fought the Vietnam conflict.

    I am sure that if we were to fight that conflict today, we would not see many of the examples that you all and I also saw as a participant in that conflict. I do not think we will have the luxury of traditional wars where defenses can be moved around just like a chess game. I think it will be a
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    And I think that we will counter those attacks with less humans and more technology, less humans and more technology. And I think that is what we all are beginning to recognize. So my question is this: some of us are concerned that we devote sufficient resources to research and development, to testing and evaluation, to make sure that we develop that technology that has enabled us to become the most powerful and stay the most powerful military in the world over the last couple centuries, including weaponry, deployment of that weaponry, logistical modernization, housing, environmental issues, temporary runways, a myriad of other kinds of issues that will be an issue, will be a factor in the new war that we fight.

    So my assumption is that the QDR addresses all these in a sufficient manner. In reading and reviewing the QDR, though, that I did not see a lot of time devoted to T&E and R&D, and I just want to know from your own perspectives and your own service, particular services, do you think that we have sufficient resources addressed in the QDR to make sure that we move into the technological area that we need to be to fight this next war?

    General FOGLEMAN. Maybe I will start that one because I want to address maybe a couple of your broader comments because it would help perhaps to put it into perspective, at least my standpoint. I think that your observation of where we are going in the future maybe with fewer people and more technology is probably correct, and I think all of us have programs underway to get us there in the future, and I think what is important is to remember the three dimensions again that are really foremost in this strategy where, first of all, we are trying to keep the forces to shape events in the near term so that we can respond, whether they are SSCs or major theaters of war.

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    And then the third dimension of that was this idea that we had to be preparing for the future, and if there is a deficiency in the QDR report it is that many of the things that we discussed and decided that they were right or we did not want to take cuts on these programs, they do not really get a by-name mention in the QDR. And that is the situation, I know, at least, I believe it is true in all the services in the science and technology, research and development area. That was an area we examined early on, and we said, hey, even though the dollars may be coming down overall or we may be wanting to shift dollars, we do not want to take dollars out of science and technology and research and development to pump it into procurement. We have got to keep preparing for the future and so I know that is the case in my service, and I think yesterday your testimony indicated the same, Jay.

    General REIMER. May I jump on that, Congressman? I agree with your basic thrust about research and development. I would say that a lot of what drove us here in the QDR was Joint Vision 2010, a document. And we really talked about four tenets in that document: precision strike, dominant maneuver, focus logistics and full force protection. I think the important thing is to keep them in the proper balance. In our case, in the Army, about half of our RDA account is in the R&D. It is very low, and that is why we had to beef up the modernization account so that we got that a little bit better in balance.

    We are trying to drive our R&D effort with our look at the wargames in a 2020 time frame. It is something we call the Army After Next, and we are trying to look at what technology we will need there and then focus that investment and that technology and try to pull that forward as fast as we possibly can. So that is the approach we are taking on it.

    Admiral JOHNSON. I would only add, sir, that we are very much invested as a Navy in the R&D stretch to the future, as you have heard the other service chiefs mention here. We have got a lot going on that is very exciting that captures the magic of technology, and even though you may not read all of that in the QDR product, it is imbedded. It is fundamental to everything the QDR does, and what the QDR also did, though, is it gave us visibility on the whole process in such a way that we will put enough discipline into the system so that we can protect those accounts and make sure that we do continue the R&D program. That is the way we are building new ships. That is the way we are building new airplane systems. That is the way to the future.
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    General KRULAK. Sir, I agree obviously 100 percent with the world you painted, a world of chaos. I think that is where we are going. I think it is going to be one of tremendous asymmetric warfare. Your balance between human and technology, the only place we might differ is that I am not prepared right now to say that that is, in fact, something that we can count on. And we are going through a series of experimentations. I would, rest assured, believe in what you had to say if we fought in an open terrain. We are now about ready to go into something called urban warrior to discuss and to test and to develop concepts for fighting an asymmetric enemy in a built-up area, in an urban slum.

    The fact that 70 percent of the world's population will be living in cities and urban slums in the year 2020 is something that we really have to get a handle on. We are doing that, as all the service chiefs have indicated, through a series of experimentations. I believe right now we are about where we need to be. We have just completed one. We have two more major experiments to go, and then at that point in time I am prepared to build off of those concepts, requirements and structure.

    The CHAIRMAN. Mr. Riley.

    Mr. RILEY. Thank you, Mr. Chairman. Thank you, gentlemen. As we listened yesterday, the Secretary seemed to call for a new round of BRAC. I think one of the things that concerns most of the members of this committee is before we move into a new round of BRAC, of base closings, why do you think we have had so much difficulty in achieving the goals that we set under the last BRAC process? General Reimer?

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    General REIMER. Well, I think when we first started into the BRAC process, Congressman, we obviously had some assumptions that turned out to be somewhat faulty. Initially I think we felt like that it would cost us less to turn over installations and we would get more payment for it. Those have turned out to be not as—we were over optimistic in thinking the initial round of BRAC. But as we have gone through this, I think we have learned a little bit more about it, and I believe the assumptions now are much firmer. Basically the BRAC is driven by the fact that we took about 36 percent of the force out and only 21 percent of the infrastructure, and we are carrying more infrastructure than we really need.

    Mr. RILEY. And I think that brings up my next question. You know if I understand the process right, it was to utilize the capacity that we have in the remaining bases. But it seems to me like what we have done is just exacerbate the problem because the existing capacity is still there and the bases are not closed. And it is not only at McClellan and Kelly, some of the Air Force bases, but even in the Anniston Army Depot, we are running at 50, 55 percent capacity there. There is work that should have already been transferred in from other parts of the country to get that productivity level back up in Anniston. And the process has been slow to the point that we are still, you know, having to deal with the same problems of overcapacity, which brings up my other point.

    The Secretary yesterday commented on the 60–40 rule. I would like to know what your observations on the 60–40 are? Is the 60–40 something that we will relook at again? What ratio would be acceptable to you? And what do you define as a core capability of the depots that are servicing your Army today?

    General REIMER. As far as the 60–40 rule, I basically have testified, and I believe, that what we need is the most
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    Mr. RILEY. Based on that, and looking at the overall picture now, if we are at 60–40 today, how many Army depots do you think that we need today to have full utilization and to be able to serve your branch of the armed services?

    General REIMER. I would prefer to provide that for the record, Congressman, but my guess is we have five. We probably need about three.

    [The information referred to can be found in the appendix beginning on page 318.]

    Mr. RILEY. OK, sir. One other question if I have time. I was a little shocked at the level of reductions in the National Guard. I would just like your observation of why it seemed like the National Guard took such a disproportionate share of the personnel cuts?

    General REIMER. Well, I think you have to go back and understand the whole process in this reduction. As I said, the reductions were tough across the force. In order to meet the strategy, though, and prepare for the future, we had to bring the resources in balance a little bit. We went through the strategy. We determined what forces were most required to meet that strategy, which were the most relevant. And basically we tried to eliminate those who did not have a valid Federal or State mission. That was our recommendation. I do not think it was disproportional to the overall force. If you look at the cuts that we have experienced since 1989, the active component has come down 36 percent. The U.S. Army Reserve has come down 35 percent and the Army National Guard has come down 20 percent. So if you do it on a percentage basis, it probably is about the same, and even under the recommended cuts, you will still find that the Guard is about 28-percent reduction since 1989 whereas the active and the U.S. Army Reserve are about 38 percent.
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    If you look at how we have reshaped the force over time, what you find is that 52.5 percent of the total force is in the reserve component. About 33 percent of that is in the National Guard. So I do not think that this was a disproportional cut at all. I think this was a cut that was based upon strategy first of all, and we had to eliminate those units that were least relevant.

    Mr. RILEY. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Mr. Snyder.

    Mr. SNYDER. Thank you, Mr. Chairman. I am sorry that I had to leave. I am on the Veterans Committee. I have not figured out how to be in two places yet, but I am learning the traffic patterns on Pennsylvania Avenue very well. But one question, please, if you would do this, I will say it for the record. I really hope that means it will be delivered to my office and as a courtesy to me if you would deliver it to Mr. Hefley's office, too, please. But I do not really know—I hear a lot of this number being thrown around when we talk about BRACs, 36-percent reduction in force, and only 21-percent reduction in infrastructure. I do not really know what that means; 21 percent of what?

    For example, if I have some technological improvement in a fire truck that means I do not have to have as many people on the fire truck, the fire truck may be exactly the same size or, in fact, a little bigger and need more square footage of space. And so I am confused by what the 21 percent of what? And I suspect that may be different for each of you depending on your particular focuses. And also since I am a family practitioner instead of a neurosurgeon, I hope it will be in a language that I will understand, but I appreciate it.
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    [The information referred to can be found in the appendix beginning on page 318. The Department of the Navy did not cooperate in providing a timely response for the record.]

    Mr. SNYDER. And then a specific question. We have had a lot of discussion the last couple of days and the days since the QDR has come out about I think it is described as the box that the Secretary, the $250 billion box that the Secretary deliberately put you all in versus should it have been based on strategy alone. And one of the things I have been impressed with since I have been here is the high quality of the folks that work for you, you all included, but the three and four star generals that we all relate to here and the other people on your staff. And as you know, one of the disadvantages of getting to know someone well is they start confiding in you a little bit, and I am having a little bit of grumbling being confided in me from folks below you that they, too, wished it had been more strategy oriented.

    So my question is not talking about you specifically, but about the folks that you encounter throughout the services, is there some grumbling going on which may at some point make it difficult to implement these type of recommendations with enthusiasm? Is there some grumbling going on amongst your troops about the box that the Secretary and you all put your analysts and planners into?

    General REIMER. Well, I will start. I am sure that not everybody is totally happy with all provisions of the QDR.

    Mr. SNYDER. But that is different than to say we wish that these cuts had been—we are prepared to make cuts, we wish they had been based on strategy, not money.
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    General REIMER. I am sure there is grumblings going along, but I would also say that, as I think all of us have testified, this was a strategy-based deliberation. Obviously, you have to bring in the resources at some point in time. I mean it is not something that you cannot totally not consider, and so it was. I would say that there may be some grumblings, but I believe that we will execute this QDR, and I do not think there will be a problem in that regard.

    Mr. SNYDER. Is that essentially the——

    Admiral JOHNSON. Yes, sir. I do not sense any large swell or undercurrent of grumbling, and I agree with what General Reimer said. I mean I like the strategy.

    Mr. SNYDER. OK.

    Admiral JOHNSON. I think it is very well founded. I think it was very carefully thought through and we were a part of that process. I also am a realist and I understand the fiscal realities that we have to deal with, but in terms of the impact to the U.S. Navy, there were things in the QDR in the reshaping of ourselves that quite frankly we needed to do anyway to help live within our means to help recapitalize our force. So I think the fleet understands that. The one thing that you will hear recurring from us relative to QDR, I think, is that we want to make sure that how we articulate this to our forces and how we deal with the reshaping, the pace at which we do it is very critical because it gets back to the point about keeping faith with our people.

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    Mr. SNYDER. Right.

    Admiral JOHNSON. They are volunteers. We got to take care of them. So how we do this and the delivery is critical, and I think that the whole department is committed to making sure we do it right.

    Mr. SNYDER. I mean there certainly would be a different attitude if what filters is Congress cut us again versus this is an adjusted strategy for changing defense needs of the future.

    Admiral JOHNSON. Yes, sir.

    General FOGLEMAN. Sir, I would echo the point that Admiral Johnson made. First of all, as I said in my introductory comments, the Air Force spent about 2 years looking very hard at ways we wanted to restructure ourselves and still give the combat capability the nature needs. And that was not a top-down operation. We involved the people in the field, all of the senior leadership. So I think by and large we had buy-in on that. So I would be very surprised if I had grumbling among the senior folks.

    On the other hand, I fully anticipate that the biggest challenge we are going to have is trying to keep the force to understand what is happening during this 6–8 month debate here while we try to come down to a finite number and start to execute this thing because our service press does not do us much good here. They run off with this little excursion or that little excursion. They inflame the passions and fears and concerns of our people. So we need to work the people thing hard, and we ask your consideration to help us on that.
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    Mr. SNYDER. Sure.

    General KRULAK. I would answer it by saying that one of the obvious strategy-driven decisions was, in fact, the V–22. I think that the Secretary of Defense saw in the strategy the SCC's. He saw what took place in Albania, in Zaire. He saw a technology that was leap-ahead and yet it was here today. And he, in fact, took the bold step to go with the strategy vis-a-vis budget constraints. So I think that there were instances where we fully went with the strategy and I think that is a good example of one.

    Mr. SNYDER. Thank you. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Mr. McIntyre.

    Mr. MCINTYRE. Thank you, Mr. Chairman. Gentlemen, as many of you know, I am extremely pleased to represent the Seventh District of North Carolina which is home to America's premier strike forces including Fort Bragg, Pope Air Force Base and Camp Lejeune Marine facility, all of which I have enjoyed visiting recently, some of them several times, and I must compliment you on the commanding officers you have at

    General Reimer, the QDR calls for, as you well know, the smaller reserve, the National Guard unit that you have mentioned today. Concern back home is with the personal involvement of so many individuals whose sons or brothers or fathers spend a great deal of time on weekend duty with the National Guard, that in the reduction of reservists and guardsmen will there be consideration given to the longevity of service or the rank and title, or if their unit is subject to reduction, is that whole unit obliterated and, in particular, do you know how this might affect North Carolina?
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    General REIMER. Those kind of details, Congressman, I think are the things that are going to have to be worked with the off-site process. Obviously, as we have gone through this reshaping process since 1989, we have put people first and tried to take care of them. We will stay with that, but I cannot give you the specific answers to those questions. I think that has to be developed by the off-site. I can just simply say that we are committed to the principle of taking care of all of our people.

    Mr. MCINTYRE. Do you have any figures at all with regard to proposed personnel cuts in the Regular Army such as would affect installations like at Fort Bragg?

    General REIMER. Yes. As we have looked at it, it would be one of our recommendations that the 82nd would have a—we have kept them overstrength because as you mentioned, they are the force of choice in no-notice contingency anywhere in the world. So we would reduce that and take that. It is about 200 spaces that we are talking about. It is not going to affect the inside of the division. We have just overmanned them to make sure that they were capable of doing that. These personnel cuts without getting inside the division were so tough we had to go in there to that type of thing, but it is a very small cut.

    Mr. MCINTYRE. So you are saying 200 positions?

    General REIMER. 200 positions in the 82nd is our recommendation, and it will impact a little bit from that standpoint, but it will not impact the division strength itself. Those were overmanned spaces that we kept there for their high contingency or their no-notice contingency mission.
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    Mr. MCINTYRE. Were there any other spaces in the 18th Airborne Corps there at Fort Bragg?

    General REIMER. Not that I am aware of, but we have not worked out all the details yet. I do not think that there is any in that area.

    Mr. MCINTYRE. All right. There has also always been a concern, as we know here at home, of the threat of terrorists to our own national security. And Fort Bragg being the most populated facility as far as a concentration of soldiers here in America, there is a concern now about putting up a fence around the entire complex and closing off some of the gates for internal security here. Does QDR allow for this type of financing so that this can be done for security of our own soldiers?

    General REIMER. General Keene and I talked about that as late as Monday as a matter of fact. It was one of the subjects. It was not to close off Fort Bragg, but it was more to be able to control access when we need to do that. There is, as you rightfully suggest, a proposal to put some type of fence around major portions of Fort Bragg. There is a cost associated with that. I think that is doable from the standpoint of the funds.

    Mr. MCINTYRE. All right. And General Fogleman, I must compliment you on how the Air Guard has been incorporated into the total strike force of the U.S. Air Force and how they have handled that. Will the planned reductions in the Air Guard, I believe it is about 700 positions, in any way lessen the effectiveness of the Air Guard or are these positions that are considered non-essential or tell me exactly how that reduction will take place?
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    General FOGLEMAN. Well, that reduction will be the net when we reroll the current 10 dedicated air defense units. And what we do is we take six of those units and put them in the general purpose forces and we keep four dedicated air defense units. And so as you get the puts and takes from that type of a transfer from one missionary to another, you end up with a net reduction of about 700 slots.

    Mr. MCINTYRE. OK. Thank you, sir. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Mr. Rodriguez, your time. First time.

    Mr. RODRIGUEZ. Thank you, Mr. Chairman, and thank you for allowing us to say a few words. Let me first of all, to General Reimer, let me indicate to you, I think you made some comments in reference to looking at the less relevant areas and also looking at maybe cutting the not deployable headquarters. You also mentioned in terms of looking at the word ''redesigning'' our active duty. And I wanted you to give me a little more feedback in that specific area, if possible.

    And for General Fogleman, I think I wanted to make some comments as it relates to Secretary Cohen, but I also want to get some feedback from you. I know he was here yesterday. And really stress the importance of both the public and private sector participating in competition, and I know some of my colleagues have made some comments indicating as if that was not occurring. And I know in Kelly it is the contract on the C–5 that is out there right now. There is an attempt both for the public sector and the private sector to participate both with Warner Robins as they are participating right now in that contract, and I know that there was an emphasis placed by the Secretary as it dealt with the importance of the most cost effective method, and that if it was not going to be cost effective that we are not going to privatize, and that that should be the approach that should be taken.
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    But along with that, the report, Quadrennial Defense Review report, talks about some areas that are restricting and I will add, for example, it says many of our opportunities are restrained and that some of the regulations restrict our ability to be able to do that. And I know he mentioned the 60–40 issue and even talked about bringing down to a level that might be more effective in terms of a 50–50. And I wanted you to make, you know, some comments as regards to that.

    General REIMER. Let me start on the active component cuts that you mentioned, Congressman. It would be fairly complicated, but actually what we are looking at is to take 30,000 force structure spaces out of the active component and transfer many of those to the reserve components. Fifteen thousand will come out with end-strength. In other words, there will be faces with each one of those spaces. How we plan to do that is to, as I mentioned, to reduce the overmanning in the 82nd is the first one, to be able to eliminate and streamline nondeploying headquarters that are in the inventory, and we have done a pretty good review with our functional area analysis and how we might be able to do that as well as streamline some of our functions such as intelligence and that type of thing.

    We will also look at taking out the Army share of the reductions promised in OSD and the Joint Staff based upon their reduction. We will take a look at refining the title VII and title XI, which is basically you all told us to put 5,000 people active component into reserve component training. We have slightly more than that, and we will bring that number down to about 5,000. We believe that program is good, but we got a few excess people into that, and so we will streamline that.

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    And then the last thing, to balance out that 15,000 cut, we will take some late deploying active component CS/CSS units, combat support/combat service support, and transfer those from the active component to the reserve components. That is the way the 15,000 active component end strength cut and the 30,000 force structure cuts come about.

    Mr. RODRIGUEZ. Thank you, General. General Fogleman.

    General FOGLEMAN. Yes, sir. First of all, I believe that the emphasis should correctly be on the importance of cost effectiveness when we look at the issue of outsourcing

    Mr. RODRIGUEZ. And the timetable for that contract is in August. So we should get a good picture in terms of how cost effective it is for the C–5; is that correct?

    General FOGLEMAN. That would be the first indication, in my view. But I would also be very realistic in this, and that is that in the past, we have been bitten by competition where somebody buys in so not only do you get the first clue in terms of what kind of savings do you get when you award the contract, but then you want to watch contract performance.

    Mr. RODRIGUEZ. Is it also true that I know there are some discussions in terms of privatization in place, the fact that in the contract that that is not the case, because anyone of those individuals, both the private and the public sector, whoever gets that contract, it does not necessarily have to be in place; is that correct?
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    General FOGLEMAN. That is true. That is the way I understand it.

    Mr. RODRIGUEZ. Thank you. I just needed for you to clarify that for some of my members. Let me also—you did not mention anything as it relates to any kind of education in terms of the airmen. Is there any plans on the report to look at changing the education aspects of it?

    General FOGLEMAN. Well, there is nothing that is in the Quadrennial Defense Review, but in our long-range planning effort that we went through on our spin-up, our global engagement document that we put out there, there is significant attention given to the way we plan to change our approach to assessing people, of training them, and of managing certain career fields, and all of that is being fleshed out as we go forward as part of our long-range planning effort.

    Now I will, along that line, and we have all mentioned this as we have gone along, but I would like to stress it again, one of the things that we are going to need help from you all on is we are going to need some enabling legislation, just like the last time we went through the massive reductions. Many of the things such as the variable separation incentive, the VSI, the SSB, the early retirement, the early retirement programs for our civilians, et cetera, many of those, it is my understanding expire in 1999, and so, Mr. Chairman, that is an area that we really need to pay attention to and have some help on. It is very much like the transition assistance programs we have had in the past, and we have continued to fund to help these people as we move them out of the force.
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    The CHAIRMAN. Thank you. Let us go back to regular order. Mr. Browder, a former Congressman from Alabama is just leaving. He has been in the audience this morning. He is out at Navy Postgraduate School now in Monterey, and his lovely wife. Good to have you with us. Back to the regular order. I will pass for now. Mr. Dellums.

    Mr. DELLUMS. Thank you very much, Mr. Chairman. As all of you are aware, in the context of the Bottom-Up Review, we talk about fighting two major regional contingencies going virtually alone and moving rapidly. As I have assessed the Quadrennial Review in a more relaxed fashion, your efforts are still resting strongly upon the assumption that you would move rather quickly from the halt phase to the counteroffensive phase. The extent to which you move quickly from the halt phase, how fast rather you move from the halt phase to the counteroffensive phase has implications for readiness requirements, size, perhaps shape and organization of your force structure, and how quickly you move from the halt phase to the counteroffensive phase to some extent determines the use of guard and reserve forces in combat action.

    The more quickly you move from halt to offensive, it seems to me that that precludes, to some extent, the use of guard and reserve forces in combat missions. The more slowly you move, the greater the opportunity. For example, in the context of the Persian Gulf, there was great participation of the guard and reserve in combat missions because from August to February, you had a very long timeframe between the halt and offensive phase.

    My question is as you move through the exercise of coming up with your recommendations regarding the Quadrennial Review, how rigorous was the analysis of the timeframe between halt and counteroffensive? How rigorous was that analysis and what was the thought processes that you went through in order to maintain a rather rapid move from the halt to the counteroffensive phase? Very different from what you experienced in the context of the Persian Gulf. And I know two off the top answers are we will never fight the Persian Gulf again the same way, and the other guy will not wait around 6 months. But beyond that, what was the analysis that went into this recommendation?
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    General REIMER. I think, Congressman, the analysis that went into this whole QDR was probably the best analytical efforts that I have seen in many years. I do not know that we got into the specifics, the details that you want. I think you almost have to go into the actual war plans and you have got to get models that give you that kind of feedback that you are really suggesting. My view on that is the quicker you can go into the counteroffensive phase, the quicker you can terminate the conflict on your terms and less casualties overall that you will suffer.

    Now whether we went into those kind of details to the extent that you would like, I cannot really answer that. I can just simply say that we did a lot of war-gaming on it. We have run a lot of war exercises, particularly in the area of Korea where they do Elchi [phonetic] lens and those type of exercise. I think my read of that is that they support the fact that if you can get in the counteroffensive, terminate that conflict quicker, then you will have less casualties overall.

    General FOGLEMAN. I guess I would take a different approach to that in that I believe that if you look at the traditional approach to conflict where we tend to think about the halt phase, the buildup phase, and the counteroffensive phase, that one of the strengths of this strategy is that it does, in fact, recognize the advantages of a decisive halt. If you think about it in the context of the enemy's options, when that enemy initiates aggression or whatever it is that we are going to respond to, he has the full range of options available to him and he has a set objective out there that he is going for.

    If we can decisively halt him, then first of all, hopefully we have done it short of his objective, and once we have decisively halted him, his options begin to narrow very, very quickly. At the same time, if we continue to use the same forces that we use to halt him to continue to pound him while we build up, we are decreasing his combat capability through that entire period of time. That is increasing our options as we go forward and certainly we must build up the combat for the land forces to be prepared to do the counteroffensive.
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    But it also exposes for us another full range of options to include just, again, going back to the desert, things like we saw, sanctions, diplomatic efforts, maybe strategic strike, whatever it is that we have. So this I believe is one of the strengths of this strategy. It gives us a wider range of options, and many of the models, a lot of the analysis that was done, I think really did not focus so much on the length of time as it did, at least, expose the fact that this is a different approach that gives us some different options, and it did not fully explore, you know, what this means as we go down the road.

    Mr. DELLUMS. Thank you, sir.

    General KRULAK. I think that, first, this kind of goes back to the drum I have been beating. I am a little concerned that we talk a lot about Southwest Asia and what we saw there and not enough orienting toward say Korea where the goal will be to get into the cities, and once we are in the cities, then you are into one heck of a fight where some of the accuracy of our long-range precision weapons are going to be minimized. I think that General Reimer's point on casualties versus time is probably one that we hung our hat on. Second, unfortunately, we operated with a model that modeled the battle that does not take into account, in my opinion, or I believe in any of our opinions, the way we are going to fight. I mean we are not going to fight in an attrition war, I hope. I mean I think that would be foolish, and therefore the models that we need to utilize are those that measure how we are going to fight in a maneuver context.

    We did not have that model available. We did the best we could by putting on top of the TAC war model and some of the others the obvious ability of our lieutenant colonels and colonels who actually fought the battles on the ground during this whole QDR process. We ran many, many battles in both theaters. And so we were able to minimize that problem, but we have got to get a model that responds to the way we are going to fight, not how we did fight.
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    Mr. DELLUMS. I thank you. Just one follow-on in that regard. All of you do agree with me, though, that these are significant variables because at the end of the day you got to come with a force structure and you got to talk about the level of your readiness, and it seems to me that in that context, timing is an important variable. Even if you wargame it, you have got to look at these assumptions; am I correct?

    General KRULAK. Absolutely, sir.

    Admiral JOHNSON. Yes, sir.

    Mr. DELLUMS. Now to the question of going it alone, in the QDR, the report acknowledges that you folks now recommend that we plan, train, and prepare to respond to the full spectrum of potential crises with allied forces, which means now that your planning in the context of the QDR anticipates moving with coalition forces. With that in mind, given the fact that we are now moving forward with fairly dramatic and dynamic technological changes, how do you address the issue of interoperability if our technology is moving forward rather quickly when there is this time lag between us and how other nations develop their capability because we are moving forward rather aggressively and, as I said, in a very dynamic fashion technologically? How do you handle the issue of interoperability if the Quadrennial Review now contemplates planning and training and preparing to go forward in any of these conflict areas with coalition forces?

    General REIMER. I do not think interoperability is dependent upon having an exact same force for all coalition partners. In the Army and I think in all of our services, we have been a high-low mix, what we call a high-low mix in terms of modernization, where we had more modern equipment associated with units with less modern equipment. We know how to divide the battlefield up. We know how to provide the right type of systems over there to those who do not have the right modernization program to give them the information. What is important is to be able to share that information and to work together.
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    I think it is more important to have a common doctrine, a common playbook, so to speak, common understanding of the capabilities of the forces on the ground, and I think you can make that work on the ground. It would be ideal if all of us were in the same boat, had the same technology, but that is not going to happen. And I think we have got a lot of experience on that. I do not think we should hold up in terms of trying to use technology to help our own forces just because we are ahead of the pack. We have to learn how to do that. The exercises that we are involved in Korea, the exercises we are involved in throughout the world, I think, give us experience in that interoperability.

    Admiral JOHNSON. If I could add, sir, General Reimer has hit it spot on, but I think from a Navy perspective, the key is acknowledging the reality that you have just brought forward, that the potential gap is there. There is a gap and the gap could widen. That is a great concern to our allies as much as it is to us. But given that acknowledgment, I think the key for us is as we develop our systems, and I agree exactly with General Reimer, that we do not want to slow ourselves down to stay with anybody else, but as we go forward, we must be able to use our technology and share the appropriate pieces of it with our allies. When we stay engaged with them, when we exercise with them, we know what they have got. We know how we need to make our systems able to talk to theirs, and I think if we just keep working that way and stay engaged in general, we will be fine.

    General FOGLEMAN. If I could perhaps just take a slightly different tact. I agree with what both General Reimer and Admiral Johnson have said about the way we will have to come together in say some sort of a major conflict and to work this to be prepared to do it. But I think an area that we have not generally paid enough attention to is the potential to use our allies better across the perspective of conflict. And there is in certain areas of that spectrum the opportunity for us to use our high tech enabling forces to help our allies do things that we should not be deploying our own troops out there to do.
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    I think it makes them feel better. They are taking problems in their parts of the world. They are stepping up. All the militaries of all the world, I think, want to feel useful to their national command authorities, and I think there is a tendency sometimes for us to rush in because we know how to do it. We can do it. But I think and I hope that part of this commitment that we see in the QDR that says that we will take a moderate approach to where we go and what we do does not mean that we will necessarily not address problems, but we will use some of our enabling technologies and forces to help others go work their problem. That is just one other dimension I think we ought to think about.

    Mr. DELLUMS. Thank you.

    General KRULAK. I would just say that if you get down to the battalion level where they are actually going to be fighting, they are not so interested in what their coalition partner has in the way of equipment, they want to be able to talk to them, they want to be able to communicate and coordinate. We are going to get after that the same way we always have and that is there is going to be liaison teams because the fact of the matter is we are so far ahead now in our command and control systems that there is no other way to do that.

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

    The CHAIRMAN. Thank you, Mr. Dellums. Mr. Saxton.

    Mr. SAXTON. Thank you, Mr. Chairman. I just have one question which I would like to direct at General Fogleman. General Fogleman, in the Quadrennial Review, in section VII, under Transforming U.S. Forces for the Future, there is a section on navigation. And this section points out that both the Federal Aviation Administration and apparently in cooperation with the International Civil Aviation Organization have agreed on a requirement for upgraded navigation technology to be used to be installed and used in military aircraft. General, when this requirement came about, General Cross brought it to my attention, I guess 3 or 4 months ago, and indicated the seriousness of it and suggested that it might be a good activity for me to try to add some money to our authorization bill to take care of this requirement.
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    So my good friend Duncan Hunter and I chatted about this and I told him that the Air Force estimate was that we needed $176 million in this year's authorization, and he said excuse me, that is a lot of money. But I understand——

    Mr. HUNTER. The Marines need that money.

    General FOGLEMAN. He just told us yesterday, sir, he has got all the tin pegs he needs. I am sorry, Mr. Congressman.

    Mr. SAXTON. So I am pursuing this $176 million add and anything that you can contribute here this morning to help us

    General FOGLEMAN. This is a reflection of the greatly increased air commerce in the world and so what you have are the air routes going to the Pacific and across the North Atlantic. In order to accommodate more air traffic, they must compress the amount of space assigned to each aircraft going across there. A few years ago the way we navigated across the Atlantic is that we had on-board navigators. We made radio calls telling people what altitude we were at, what lat/long, and there were certain rules. You had to be separated by 10 miles or whatever because of the slop in the system.

    Then along came INS, and when INS came along, the inertial navigation system, they shrunk the boxes. I will tell you that the Air Force when that occurred said, Why would we want to buy INS's, we have navigators? And eventually what they did is they just said people with navigators cannot fly in these altitude blocks, and they drove us then down into altitude blocks that were inefficient, more timely, et cetera. What has happened now is with the combination of GPS technology, et cetera, the civil aviation folks are driving us into smaller boxes. This will have considerable impact on the size of the payloads that you can carry in a cargo aircraft because if you have to go lower, it is going to consume more fuel so you are going to have to drop payload, upload fuel.
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    These are the kinds of tradeoffs that will be made. If we do not make these investments, we will be driven out of these altitude blocks because commerce will drive this thing, not military necessity.

    Mr. HUNTER. Will the gentleman yield? I thank my friend for yielding, and I just wanted to pass the buck on and tell my friend that our esteemed chairman has not given us our cuts yet. So we lay everything at his feet with respect to these massive add-ons that you have requested here, General Fogleman. My question is on the $176 million, how much of that could you spend that year? What is your blueprint on developing this system?

    General FOGLEMAN. Yes, sir. Sir, in fact, I had a conversation with General Cross to make sure that if we got that money, it be executable. And he assures me that he can execute that money. This is a massive bill over a long period of time. We are talking about multiple billions and so we need to get started really. And if you would allow me to come back to you just to reconfirm, but the last time I talked to General Cross, he said if we had this money in 1998 we could execute those kinds of dollars because we do not have to go develop something. The commercial people are buying this technology now, and essentially we need to get it in our aircraft is really what we need to do.

    The CHAIRMAN. Thank you. Mr. Skelton.

    Mr. SKELTON. I confess I feel somewhat like the little boy must have felt when he yelled that the emperor had no clothes. I question the long-range product of where all of this might lead. First, let me make a comment about the halt, buildup phases that are mentioned in your strategic thought. There is nothing new in warfare to halt someone or try to and then build up and win, you know. Pick a war. Sometimes it works, sometimes it does not. Now the French halt phase is called the Maginot Line. Did not work. They never got to the buildup phase. And the early parts of the Second World War, the buildup phase was very, very long, and the halt phase did not work that well in some areas.
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    The only ace in the hole that I see right now in the event, General Fogleman, that other countries do not allow us to have local bases for TAC air is, of course, the B–2 and its extreme longrange and its very high capability. I wish there had been more discussion of this, particularly in the papers that were written regarding the QDR. But that is not what I wish to discuss. We can talk about models and technologies and the systems, but the bottom line is will the U.S. military remain relevant in this world? It is today. I am so proud, so proud of the young men, young women, all the way up through the generals and admirals. We have class acts.

    But at some point in the cutting back of all of this, there is the strong possibility of American military becoming irrelevant, irrelevant through the diplomatic realms, irrelevant to deter aggression. We know that and we have seen that. Right now we have roughly 100,000 troops in the Pacific and roughly 100,000 troops in Europe. Cutting back on the numbers in the forces, particularly Army but not limited to that, at what point does that lead to irrelevance—75,000 in each theater, 50,000 in each theater?

    At some point at the same rate, Admiral Johnson, that we are decommissioning ships and building ships, we have a 200-ship Navy, and what if countries, General Fogleman, will not allow us to use their landing fields? Remember the Libyan raid? Remember we could not use some of our allies' airfields. We had to fly around some countries, and thank goodness for Great Britain. At what point do we become irrelevant where we do not deter? At what point do we become irrelevant where our diplomacy does not have the force and effect that it does today? Now we reached this once before between the wars. We reached this point in 1950. Will is part of relevance or irrelevance, and our military capability had slipped considerably between the 5 years from 1945 to 1950 and our will as a result of a speech given by Dean Acheson was reflected in North Korea felt they had an open door to the South. At what point, gentlemen, do we become irrelevant in your measured judgment? General Reimer.
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    General REIMER. Congressman, I think you hit a very critical question that all of us have spent a lot of time thinking about and discussing. I think that point is when you start to lose the balance of the things that have made us great. In the Army's case, we have what we call six imperatives that basically has to do with the quality people, the training of our soldiers, the leader development program, the modernization, the doctrine we have and those type of things, and when those are in balance, then we will continue to be relevant. We will continue to deter war. We deter in a lot of ways.

    We just had a Pacific Army Management Seminar Conference in Hawaii. We had representatives from 41 nations. We brought them to watch a small exercise capability demonstration of the night vision capabilities of the 25th Infantry Division. Those countries that left there saw something they had never seen before. I think that is a form of deterrence. It is a form of reassurance to our allies when we can do that. The issue for me is that you have to keep those in balance. The balance equation goes even further. We have it now, but will we have it in the 21st century? That is what we were trying to do with this QDR to try and walk that balance very, very carefully and to make sure that we carry that forward to the 21st century.

    Mr. SKELTON. Thank you. Does anyone else wish to comment on that?

    Admiral JOHNSON. My comment, Mr. Skelton, would be that you asked when will we become irrelevant.

    Mr. SKELTON. That is correct.
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    Admiral JOHNSON. To me from a Navy perspective, the relevance of naval forces is tied directly to our forward presence. So long as we are forward, so long as we in accordance with the new strategy and the old one, by the way, but reinforced in the new, as long as we are there to help shape events on a day-to-day basis, we will be relevant. That would be my marker. If we ever pull away from that, then your question becomes very operative.

    General FOGLEMAN. I would have a similar answer, I think. I think in the main I would start out by saying I believe that the measures of relevance will change over time. And so some of the traditional measures will no longer be relevant, and I think we have to watch that we do not become enamored with things like end-strength numbers relative to combat capability and forces. So I believe from an air perspective that we will no longer be relevant when we cannot control and exploit the air and space medium, or put another way, when we cannot guarantee the access of U.S. forces, U.S. commercial interests in air and space, we will not be relevant.

    General KRULAK. And for us, sir, I would kind of echo Denny Reimer. One, we have core competencies, and the first is our people and who they are, our ethos, what people expect of their Corps of Marines, our expeditionary nature, and I think Jay Johnson hit that one right on the head, and then finally, and something that is kind of danced around lately, but you mentioned it, this idea of access. I will tell you that the days of needing forcible entry capability have not gone away, and as a matter of fact, we are going to see them come to the fore. I think this Nation cannot afford to lose the relevance of forcible entry capability.

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    Mr. SKELTON. Thank you, gentlemen.

    The CHAIRMAN. Thank you. And while we are right here, I think if I can put in my two cents' worth, Mr. Skelton raised the question about relevance, and one thing I do not know whether you considered or not in the QDR that I think has a lot of effect on what we are talking about, is the decisions made by other than military during these conflicts that you are thinking about. If you were going to do a wargame on someplace like, well, Korea, and that was fought the last time, we were not allowed to do a lot of things militarily that we thought that we should do that would help. The same thing is true in Vietnam. You can do a wargame on it and you can win it, hands down, with our capability to win it if we are allowed to win it.

    Political decisions that are made can have a big effect on it and I do not know whether they are considered or not. People say, well, we always have this nuclear capability. What good is it if you cannot use it and will not use it? In Vietnam, the ability to bomb, for instance, different places that we were not allowed to and those things that would help militarily to bring the war to a better conclusion. We were not allowed to do it. That had a big impact on the conduct of these conflicts. And I do not know if those things are considered or not in a QDR type thing in getting a strategy together. Do you consider those kind of things? Were they considered?

    General FOGLEMAN. Sir, I think they were in a macro sense. In other words, the political leadership of the country, at least from the administration side, was briefed on several occasions about what the elements of the QDR were about, the direction it was going. To the extent that there were detailed discussions about kinds of political decisions that had to be made, I do not know that those kinds of discussions occurred in this process, but all of us, General Reimer just concluded a wargame up at Carlisle where—and they do them up at Newport, and we do them down at Maxwell—we always make sure we have somebody playing the role of the national command authorities, the President and the Secretary of State, et cetera, to try to put realism into this, these dimensions. So I believe that we try to understand that there will be, in fact, political considerations made, and they drive these wargames, and they drive different branches and sequels of how they come out.
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    But to be able to stand up and tell you that there was a great debate within the tank or between the Chairman and the Joint Chiefs on this, I do not remember that occurring. I think it is just part of the process that we go through.

    The CHAIRMAN. It is difficult even considering you do not know until the time comes who will be in charge and all the rest of these things because I do not think we considered those things in the other two conflicts I was talking about in Korea and Vietnam. It had a big impact on the way things went. Mr. Buyer.

    Mr. BUYER. Thank you, Mr. Chairman. Gentlemen, I want to cover three issues. One, the issue of sexual misconduct and fraternization. Second, I want to talk about Reserve components. And third, I want to talk about time limit implementations of some of the QDR. First, I want to comment on you are well aware the personnel subcommittee is conducting its investigations of sexual misconduct, fraternization and sexual harassment in the military. We have been out and about and we have seen some different things. One I want to comment on is the recent politicization of this Lieutenant Flinn case that is in the Air Force really is beginning to bother me. In the personnel subcommittee we have the oversight of the military judicial systems, and I just want to make this comment to you, General Fogleman, and I'm not eliciting account response from you.

    I want you to know that I believe that it is an honor and it is a distinct privilege for a man or woman to serve in the military as an officer or as a noncommissioned officer. That is a privilege. And that a special trust and confidence does not come with the rank. That it requires also individuals through their leadership to set the example, whether it is in the issues of obedience, courage, zeal, sobriety, neatness, discipline. Then we can talk about virtues. And at the top of the list of virtues is fidelity. Fidelity is that unbridled faithfulness and obligation when you say you will lay down your life for the country, that, in fact, it will be done, that your word is your honor is, in fact, your bond. And that somehow a lawyer is trying his case in public with complete ignorance, actually not ignorance, with the complete discounting of integrity issues. I just want to throw out that in my observations, I believe that the military, in fact, has to set the standard in our society about honor, that your word is your honor is your bond.
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    When I think about the Marine Corps, when you go out and you have to rely upon a colleague to say cover my left as I go the right, you got to make sure that, in fact, they are going to cover your left before you go right. So even the slightest transgressions, I believe, begin to undermine the good order and discipline in the military, and we must have a basic dedication to that element of trust and confidence. So that is where I am coming from. I just wanted to share that with you.

    The other is about the Reserve components. As you came up with these numbers, may I ask to the Marine Corps, this is a yes or no, and we will go right down the line, did you have discussions with the Reserve components as you came up with these force reduction numbers?

    General FOGLEMAN. Yes.

    General KRULAK. Yes, sir, we did.

    Mr. BUYER. Did the Air Force?

    Admiral JOHNSON. Yes. Yes, sir. Yes.

    Mr. BUYER. And the Army?

    General REIMER. Yes, sir.

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    Mr. BUYER. All right. Then let me now shift to the Army. If, in fact, you sat down and you discussed these force reduction numbers with the Guard and with the Reserves, why is it now we have the Secretary of Defense comes in here yesterday and in response to questions, he said that he has directed a panel now to get together and report back to him by June 10 with recommendations? So if you have had this discussion before, why, in fact, is there a need for a panel to do a second look or is there somehow politics entering the equation?

    General REIMER. Well, I think what happened, Congressman, is discussion does not always mean that we had total agreement on this. We obviously did not have total agreement. I was asked about the disproportional cuts. I think they had been disproportional cuts because they have taken down the Active United States Army Reserve more than they did the Army National Guard, but we were not trying to make proportional cuts. We were trying to build the best Army, the best total Army we possibly could.

    So there was not total agreement on the cuts. There was discussion. The Reserve component officers participated in all the wargames. They were not a part of the tank in the deliberation that we did inside the tank with the Secretary of Defense and his immediate staff, but they were a part of the buildup. They were briefed in terms of agencies outside the Department of Defense, and I think the issue is one of disagreement in terms of the numbers, and so that is where we are, and that is what the off-site conference is supposed to do is to take a look at that and see if we can get agreement.

    Mr. BUYER. Who all is a part of this panel and it is led by whom?

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    General REIMER. It would be led by the Vice Chief of

    Mr. BUYER. Let me pause here just for a second. If this is going to be an off-site very similar to the first off-site, I am very uncomfortable. I just want you to know that because some of us here began to see what this off-site was about and a lot about the politics. If, in fact, you have made some decisions based on strategy and the QDR process, now we see the permeation of politics in the building, i.e., in particular, the National Guard, who for some reason feels that they have to maintain on this combat side and are unwilling to work with you in a total force, you have some serious problems, General.

    General REIMER. I think I would go back and say we have had about 40 meetings on this off-site to try and get the total Army to work together better and to understand each other a little bit better. We have worked very hard on that, and obviously we have not been 100 percent successful. We will continue to do that, but the policy and the decisionmaking in terms of the cuts will be inside the building.

    Mr. BUYER. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. We have a bell, but we are going to go ahead and try to get Mr. Sisisky.

    Mr. SISISKY. Thank you. First of all, I want to associate myself with the remarks of Mr. Skelton. I think he was right on target. I have a great amount of fear and over the last 2 days I have not really been satisfied. I did not ask the Secretary of Defense—I mainly did business issues with him yesterday on privatization and other things, but I did mention I was concerned about the Army more than any service of losing people. General, I am really concerned, even more after the answer that you gave to my colleague from California. If indeed we are going to be associated with our allies in a way, and this is for all the services, then we are going to need more training exercises, and if we have more training exercises, in my opinion from the hearings that we have had, we are going to be in worse shape as far as readiness goes and the quality of life issues that make up readiness, in our opinion, than we were before.
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    I think the QDR said you are going to discipline yourselves to have less exercises. I think it said it in there. But from the answer to my colleague, it seems like it will be more exercises. And I am really concerned now. If I am incorrect, tell me. You allowed 495,000 people in the Army. You only had 480. Now, what really worries me I assume you did not fill those positions because of money things. Now if you get down to 465, how many real bodies are you going to have? And I do not mean that to you. You know I am not an expert, and you are all experts, but I am really concerned. The same thing goes with the Navy. If we are going to have less ships, the seas have not shrunk, we are going to use our people more.

    And General Krulak, in testimony that we heard, the 2d Marine Expeditionary Force were out 177 days and, guess what, when they came back, the equipment was so old. They were working 12 or 15 hours a day. Now I do not say this, but my fear is that we are going to get into a trap that in 18 months or 2 years, we are going to be working our people so hard and so long away from home that we are not going to have a very ready force. And the amount of money that we are going to spend in training, we may very well lose. So I do not know the answer to it, but I do know one thing: we are not going to solve the problem by cutting the forces that much.

    I think you made a statement to the Senate, if I am correct, about what you would realize by cutting 40,000 people. There is no sense in cutting them anymore. The realization of what you save is not there. So, Mr. Chairman, I have got to say my fear and real fear is that we are cutting too much. Now how we solve that problem, I do not know. But I think in the long run, we are going to be in trouble.

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    Again, I brought up to the Secretary of Defense yesterday one other item that really frightens me. And it is in all the services, not so much in the Air Force, and that is health care. We are slipping back on health care. Most of my mail today, promises we made. I have even seen it in writing that we made promises that we would take care of our retirees. We are not even taking care of our Active duty now to the extent that we should be taking care of them. So these are my fears. I am just throwing it out to you. Thank you. If you would like to answer any part of it.

    General REIMER. I probably should not, but Congressman, let me just say on the exercises, I think, yes, we do a lot of exercises. I think what we have to do and what we have been saying is we have got to do a better job of prioritizing. All of the exercises we are involved in are not of equal importance. We need to continue to do those exercises that really sharpen our war skills, and all we are asking is—and we are not asking—we are going to do a better job of taking a look at that prioritization process. And the end strength figures, I want to make sure that the Army end strength is 495,000. The recommended cuts we have here are to 480,000 in the Active component. As I said, all of those cuts were tough, but we just flat did not have a modernization program, and I was very concerned about what we were going to do in the 21st century.

    So the challenge here was to try to balance that and to try to take out those headquarters and those people who would not be deploying and to transfer some of them also into the Reserve component.

    Mr. SISISKY. The reason I asked but you did not fill the whole 495; am I correct or I was wrong in that?
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    General REIMER. No. We came in last year about 4,000 below 495, but we would have hit 495, and we can hit 495 this year.

    Mr. SISISKY. My fear was that you get to 480, less 15, it would be 465. That was——

    General REIMER. Four eighty was the number. And by the way, can I say I think it is important that we have stability in the force. We should not be messing with that number in the next 2 or 3 years because that is the uncertainty that we are dealing with out there.

    Mr. SISISKY. If I had my way, I would not be messing with it now.

    Mr. HUNTER [presiding]. OK, folks, we are going to have a vote here. It is on and I think we got about 8 minutes left. I think we have got time, though, for another question if we have got anybody who wants to ask one before our members get back. Mr. Taylor. We have got 7 minutes.

    Mr. TAYLOR. Thank you. And I will make it real quick. Commandant, I read where the future plan calls for 12 ARG's. Now if the carrier is the centerpiece of a carrier task force, what do you envision as being the centerpiece of those 12 ARG's?

    General KRULAK. The big deck amphibs or the LHD.
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    Mr. TAYLOR. OK. But you only have seven of those. So what do you do for the other five?

    General KRULAK. I think that eventually we will be looking to build as a centerpiece 12 big deck ARG surrounding the LHD.

    Mr. TAYLOR. So you envision at some point 12 LHDs?

    General KRULAK. I think that eventually we will need 12 of them, yes, sir. I think that it is a matter of obviously time and of funding, but that is the centerpiece of the ARG right now.

    Mr. TAYLOR. You would not use the LPD for that?

    General KRULAK. Pardon me?

    Mr. TAYLOR. You would not use the LPD for that mission?

    General KRULAK. The LPD?

    Mr. TAYLOR. Yes, sir.

    General KRULAK. The LHD with its big deck with the movement in of what we believe will be the V–STOL strike fighter, which will be the V–STOL joint strike fighter, the V–22, the actual deck space on that LHD, the well deck and the number of troops it carries will be the
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    Mr. TAYLOR. Well, Commandant, if I may, if the centerpiece is going to be the LPD—I mean the LHD——

    General KRULAK. That is correct, sir.

    Mr. TAYLOR. You have got seven. You need a total of 12. You are getting ready to shut down the production line on the LHDs, let the workers go, let the suppliers go; would someone explain the wisdom of doing that and shifting production to the LPD because basically this committee is responding to a request from the Navy and from the Marine Corps?

    General KRULAK. What the committee is responding to is a requirement to build 12 amphibious ready groups around 12 big deck amphibs and a new class of ship, the LPD–17, that is taking the place of multiple ships. It is an attempt to get far more capable ships in a less number than we currently have in the overall amphibious fleet. Instead of having amphibious ready groups that range from three to five groups, this would be three very capable——

    Mr. TAYLOR. Commandant, I am not doubting that, and please except my apologies for my brevity since I have to leave in about a minute for the vote.

    General KRULAK. Yes, sir.

    Mr. TAYLOR. What I am asking is with limited amount of money, and since the committee by and large does what the DoD asks for—there are some exceptions—can anyone explain the rationale for shutting down the production line for the LHDs, therefore running the cost up probably 4 to $500 million per copy when you start it up again, interrupting that and building some LPDs for a short while when that is not as a high a priority for almost the same amount of money, and then coming back at some point and building some more LHDs? It just does not make any sense at all, sir.
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    General KRULAK. Sir, to be fair and also to take care of the time, I think that it would be important that both the CNO and I put that in writing and come back to you.

    Mr. TAYLOR. I sure hope you do it in a hurry.

    General KRULAK. Yes, sir.

    Mr. TAYLOR. Because the folks who build the LHDs are letting people go and the suppliers are letting people go. That just does not make any sense at all.

    Mr. HUNTER. Let me make a suggestion to my friend from Mississippi. We are going to be meeting on some other Marine Corps issues here and having a few briefings in office. Why do we not get together in the gentleman's office or my office and invite Mr. Skelton also, and let us add to that list that we have got to chat about here.

    General KRULAK. All right, sir.

    Mr. HUNTER. General, I think that a legitimate question has been raised here by my colleague on this issue. We got about 3 minutes left, Gene, but you know something, I think it is important to keep this hearing going, especially when we got General Fogleman right here ready to talk about Deep Strike and the need for the B–2 bomber. And General Fogleman, when the Secretary brought the QDR in yesterday, a particular part of the analysis of the QDR commented critically on the Deep Strike analysis that had been made, the Deep Strike study, with respect to the three phases, the halt phase, when you stop the enemy's tanks from rolling, the build-up phase when you inject your forces into theater, and finally the counter-offensive phase when you close with the enemy, and that involves a lot of casualties, sometimes on both sides, and you degrade his combat capability. Yours is being degraded too as your troops go down and are killed and wounded in battle.
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    The critique by the QDR was that basically the enemy in most of the studies we have done, including this Deep Strike study, his ability is not degraded much on the basis that we really hold off on most of our precision guided munitions and our air-to-ground munitions, to save them up for the counteroffensive, for the time when we close with the enemy and incur a large number of casualties. The criticism was that, in fact, we could degrade the enemy significantly, and send a lot of General Reimer's troops home not in body bags but on troop ships alive and well if we would continue to pound the enemy during the build-up phase.

    And the analysis that I have seen says you could do that if you had B–2 bombers coupled with precision guided munitions. And that is, of course, a lot cheaper than sending in stand-off weapons at a million bucks a piece and it is also something you can do when you do not have those very valuable base rights close by that allow you to focus your TAC air on the adversary. In light of that and in light of the fact that you are interested in saving lives, why did we match the B–2 up in this QDR study? Why did we say that the only way we can have that is if we trade off a fighter wing or do other things that would somehow degrade the Air Force's capability? Why did we not just say we need both these capabilities, this will save lives and let us have it? Or do you have some other force that can handle that degradation of the enemy's capability during the so-called build-up phase?

    General FOGLEMAN. Well, sir, our deliberation in the so-called Part 2 of DOMS clearly led us to the conclusion that more B–2s would be extremely valuable in the halt phase and, in fact, in all phases as we would go.

    Mr. HUNTER. And they would save lives, would they not?
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    General FOGLEMAN. Yes, sir, but I believe that the real rationale behind the words that you find in the QDR report again came down to taking a look at trading off against other fighter force structure. In fact, I believe that they did an analysis and looked at trading off against a carrier and I don't know that they looked at anything much beyond that.

    Mr. HUNTER. That is my question to you. When we asked in the QDR what does it take, we wanted a QDR that tells us what it takes to defend America, and we are willing to pay. The American people, if we do not underestimate them, are always willing to pay what it takes to defend this country as long as their military leadership advises them that is what it takes. So instead of putting us in this mission impossible box, where you know you are going to have to hurt Admiral Johnson to have this system or you are going to have to hurt General Krulak or you are going to have to hurt General Reimer by taking their forces down, why did you not simply say that this is saving American lives and giving ourselves a maximum leverage in the final counteroffensive where you really come into contact with soft bodies against soft bodies, and you take a lot of casualties in order to degrade the enemy so they cannot kill as many Americans? It is vital to have a long-range strike capability like B–2 and we need to have it instead of this dog-gone exercise where we come to the conclusion it would be nice to have as if it is an extra home somewhere but we cannot quite afford it right now. That is my question to you.

    General FOGLEMAN. Yes, sir. Sir, I did not write the words that appeared in the QDR report on this. I did have the opportunity to review them and see what analysis went into it.

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    Mr. HUNTER. Were you given the directive that you had to trade something off in order to have B–2 in reviewing QDR?

    General FOGLEMAN. I do not know that I was given a directive, but that was certainly the understanding. In other words, there is no—and quite frankly as I look within trying to provide a balanced Air Force capability across the perspective, I did not see anything that I wanted to give up or could give up that was less valuable than the B–2 capability because of trying to keep a balanced spectrum across this whole spectrum of conflict.

    Mr. HUNTER. Well, you see, I agree with you. I do not think we should give up. We have gone from 24 fighter airwings down to 13.

    General FOGLEMAN. Yes, sir.

    Mr. HUNTER. The idea that we are going to have to starve the TAC air community further to have something else does not make sense. It does not make sense for the American people. When they want to defend, want to have safety in a town, they do not say we would sure like to have another policeman, but

    I am interested—if you could do a review of the charter for QDR, my understanding is QDR basically you task you folks to tell us what it takes to defend America, not to become politicians and say we think we are only going to get $250 million or billion a year for national security, and therefore everything that we put down here has to be done in a budget-driven process because that becomes a self-fulfilling prophecy. When you do that, that translates into 100,000 editorials around this country basically saying anything that is added is pork because the military did not ask for it. You did not ask for it because you presumed you would not be able to get it.
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    Secretary Cohen said he would sure like to have more money yesterday. He said an extra $15 billion would reduce the risk that we have with respect to national security. But if he does not ask for it, the average guy out there who is working 8 hours a day and relies on you for your judgment as to what we need to defend the country never knows that you would like to have some more capability. I would like to discuss that with you further when you get a chance.

    But on B–52s, I understand that our program for B–52s is to fly these things until they are 80 years old; is that right? Till about 2040?

    General FOGLEMAN. What we say is we think that you could fly them to 2040. The program at this point as we look at it goes out through about 2020 in terms of the kinds of upgrades and viability.

    Mr. HUNTER. Well, what have you got in mind after 2020?

    General FOGLEMAN. Sir, I think by 2020, you could have a whole range of things. Perhaps your long-range strategic bomber by 2020 is a weapon from space and it is not a kinetic kill, but it is a directed energy kill.

    Mr. HUNTER. Yes. Well, I hope you are not hoping to wait for space weapons to replace your bomber force because that is pretty problematic, General.

    General FOGLEMAN. Yes, sir, but it is one of the options as we go look at it, and between now and 2020, we have lots of things that we are going to look at in terms of this. One of them, another possibility, is as we move forward with miniaturization, the increased computer power that we will actually be able to do this with stand-off relatively inexpensive precise weapons.
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    Mr. HUNTER. I understand that. But let me just say this. When General Johnson wants to have carrier aircraft, he starts planning for those things 30 years in advance because he cannot rely on space-based weapons to take the place of carriers at some point in the future. He cannot rely on things that are not tangible and have some lack of surety in terms of coming about. You have to do the same thing. And you got to be looking at how you are going to replace bombers.

    General FOGLEMAN. Sir, let me tell you——

    Mr. HUNTER. If we have to continue to use bombers, what is your plan? So you are going to keep the B–52s till they are 60 years old?

    General FOGLEMAN. And I will keep B–1s, but I will also look at new technology.

    Mr. HUNTER. And how many? You got 100 B–1s?

    General FOGLEMAN. Yes, sir. I will tell you part of our problem in this country is because we do not look at new technology, we do not take advantage of it, and we are doing things the way we did 50 years ago, and it continues to consume large amounts of money. So I think we have to look at these things.

    Mr. HUNTER. I understand that. Listen, I am all for space-based weapons. I am one of the few Members that embraces them, votes for them. I think they are good. They do not generally get funded politically. So you have to look at that reality and come to the conclusion you may have to build a new bomber. What do you plan to do to preserve the B–2 line if the thing gets closed down? Have you got a——
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    General FOGLEMAN. Sir, we have no plans to preserve the B–2 line if it gets closed down.

    Mr. HUNTER. Well, then what if we get to 2020 and we do not have space-based weapons for you?

    General FOGLEMAN. I may be looking at a stand-off munitions truck because I think I am going to make lots—I know I have made progress in this area where I cannot have to depend upon overflight but stand-off and be just as precise.

    Mr. HUNTER. Have you got a task force looking at that?

    General FOGLEMAN. Sir, we have been looking at all kinds of these options. That is why we have pushed so hard on the tactical air-to-surface stand-off missile.

    Mr. HUNTER. My recommendation is that you look at—if you have to—replacing the bomber with another bomber because a lot of this stuff is pretty iffy, the alternative stuff that you talk about, global artillery, that type of stuff. So I would recommend that you develop a task force to look at how we are going to maintain some kind of a bomber line in this country. Lord knows the TAC air boys have not decided that something is going to replace tactical aircraft. You have given us a $350 billion bill through 2018 for TAC air. Now you did not come up with any space-based munitions to replace that stuff.

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    General FOGLEMAN. Yes, sir.

    Mr. HUNTER. We got real price tags on that. Well, listen, it has been nice chatting with you, General Fogleman. [Laughter.]

    The distinguished chairman of the full committee is here, and I am going to go vote if there is time left.

    The CHAIRMAN. Mr. Talent.

    Mr. TALENT. Thank you, Mr. Chairman. I think there is a part of the transcript I am going to have to look at later. I appreciate it, Mr. Chairman. I thank all of you for being here and for indulging the committee, not just on this occasion but on others. Admiral Johnson, I would like to thank you for your response to Mrs. Fowler's questions before regarding how important the E and F is to naval power, and I know you said something to the effect that it is the workhorse absolutely central to the power of the Navy and the aircraft carrier, and I agree, and I appreciate the Navy's ongoing commitment——

    Admiral JOHNSON. Yes, sir.

    Mr. TALENT [continuing]. To that vital program. I want to follow up on what Mr. Skelton and Mr. Sisisky asked. QDR is an opportunity for all of us to think about what we are expecting you all to do, and what I hear you telling me—I am not an expert and will never be an expert on the level of detail that you all are. So I think of this in broader terms. What I hear you telling this committee, and what I think the Congress and the country is hearing, is that you can fight two nearly simultaneous contingencies at the same time while having about a fifth to a quarter of the force structure, particularly the ground force, involved in peacekeeping without stressing the force in a way that reduces readiness in either the short or the medium term, accepting at least a slight decrease in force structure and given a freeze in the end number of the defense budget. That is what I hear you all saying. Maybe I am missing something. But I want to give you a chance, each of you, if you are not confident that you can do those things under those conditions, I want you to disabuse the committee of that because that is what I hear.
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    I tend to share Mr. Skelton's and I think what I heard Mr. Sisisky saying, their concern that you cannot. If you are not confident you can do that, fight two near simultaneous contingencies at the same time, with roughly a fifth to a quarter of the force committed to peacekeeping, without stressing the force in a way that reduces short or medium term readiness, accepting at least a slight decrease in force structure and given a freeze in the end number, if you are not confident you can do that, then I would invite you to disabuse me and the committee of that, at least me because that is what I hear you saying.

    General REIMER. I guess I would say that I do not think I meant to imply that the force is not stressed. The force is stressed. The force is extremely busy, and they are meeting themselves coming and going, and that is why having quality of life programs is very important to take care of those soldiers, sailors, airmen, and marines and also to add as much predictability in their life as we possibly can. That to me is also a quality of life enhancement.

    As far as doing the two MRC issue, this is a total force operation. Obviously, we are going to have to go into mobilization of the Guard and Reserve. Even just doing Bosnia with the small numbers, relatively small numbers we have there, we have to call up 3,000 reservists and send them over there. That is the way the force is put together. So this will have to be a total force operation.

    The third point I would make is that there is risk associated with all of this, and the risk is not whether we win or lose. The risk, I think, is the number of casualties. Our job, I think, is to try and drive those casualties down as much as we possibly can to get them as close to zero as we possibly can, and that is what we are trying to do, but this is not a risk-free operation as far as I am concerned.
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    Admiral JOHNSON. If I could add, Mr. Talent, that from the Navy perspective, the QDR reaffirmed 12 carrier battle groups and 12 amphibious ready groups. We believe that that will allow us, that force will allow us to serve to MTWs. I also would remind everyone, though, that the shaping for our force really is one of the day-to-day business of forward presence. That is really almost as operative in terms of what we do day in and day out. We need that size force to be able to do the daily business.

    The measure of risk is acknowledged. If you look at what we are asking ourselves to do and others to help us with, it is aggressive and ambitious to get the savings out of the system to allow us to keep the tip-of-the-spear forces as ready and as modern as we know we need to be. That will take a great effort on all our parts, and I describe it, as I did yesterday for the Senate, in fighter pilot terms. We will need a certain amount of high cover from you to help us get the savings out of our infrastructure, for instance, so that we can focus our efforts on the tip-of-the-spear forces so we do not overdrive them, but we are able to get the job done.

    Mr. TALENT. Well, I think there will be help whether I agree or disagree with all of it in terms of the internal things you are talking about doing within the number. I think there is now a growing bipartisan consensus on the end number and a growing bipartisan consensus that the Congress is accepting that you can do this at a level of risk that is acceptable to you as the professionals in charge of this. And I have great fears that that is not the case, but I do not know what I can do about it.

    Mr. Chairman, let me close with a story that I think is apropos because Mr. Skelton mentioned that the emperor having no clothes. I think the story that is apropos is one President Reagan used to tell about the old Soviet Union, and it is a story about the commissar of agriculture, the head of it comes back from a politburo meeting and calls in the deputy commissar in charge of vegetables, and he says, Comrade, the politburo is very concerned about potato production. What is the status of potato production? And the deputy commissar says, oh, Comrade, potatoes, he says we are producing so many if you stack them up one on top of another, they would reach to the very foot of God. And the head of the politburo says, well, that is very good. I am glad about the production, but remember, Comrade, there is no God. He says that is all right, Comrade, there are no potatoes either.
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    And I just hope we are not in a situation where one of our successors has to say to us there are no potatoes. I accept your judgment that there we are in a situation that is acceptable. I hope we do not come to that kind of a condition. I think the Congress is moving towards an acceptance on a bipartisan basis of this QDR, and I hope it works out the way you gentlemen indicate. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman. I feel like the cavalry having just gotten here in time to ask my question because yesterday I had to leave and I was not able to ask a question neither yesterday nor in the first round, but I want to say that I would like to kind of piggyback on a number of comments that my colleagues have made, and I would like to preface it by telling you, gentlemen, that I really appreciate your position and you being here because I feel like having served in the U.S. Border Patrol and having been before Congress many times and a lot of times having to tow the party line, I regret that I do not have a personal relationship with you because I think I would hear a different story in terms of some of the answers that you are giving us this morning, and I say that with all due respect because I have been interested in some of the same things that my colleagues have taken note of such as the troops have been cut 36 percent, the facilities by 21 percent, and in my own mind, there is an implication there that we have to keep both of those in balance. Personally I do not feel the same way, but I understand the necessity perhaps to say that.

    The other thing is that you gentlemen have to face your troops and you gentlemen, I am sure, understand that your testimony here very quickly gets out through the grapevine regardless of what service you are in, and I really empathize with your situation. However, I will tell you that I really appreciate and respect you gentlemen being here and being here under those circumstances. Having said that, I have a couple of questions, primarily for General Reimer and General Krulak, because I am very much concerned about the fact that although DOD has committed between $1 and $2 billion to the National Missile Defense System, I am concerned that that would be at the expense of the Theater Missile Defense System. And I say that in the context that if we were to deploy our troops, particularly today, to Southwest Asia, I think they would be in tremendous peril because we do not have a way of protecting them.
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    And one of the things that I would like to ask both you gentlemen is it is my understanding that MEADS is a system that could protect our soldiers from those types of threats and I would like to get from you do you agree that there is an operational requirement for that system?

    General REIMER. I think we not only agree, but I think the Joint Requirements Oversight Council basically established the TMD, the Theater Missile Defense, as the No. 1 priority because the threat is here right now. I think MEADS is, as you say, the only system that I know of that provides the protection for the forces on the move and in the field, and so it is absolutely something that we have been supporting.

    General KRULAK. Sir, MEADS is something that we desperately need. We are going to need that kind of defense for the warfare in the future.

    Mr. REYES. Having listened to your responses, you know, one of the concerns that I know I have and I think some of my colleagues is the fact that DOD has not funded the program past fiscal year 1999, and while I am pleased that there is an increase in funding in fiscal year 1999 I think to the tune of $33 million, I think as I understand it I am still concerned that the program is not funded in the outyears. I think in the context of protecting our personnel and our resources with the instant threat, I would also like to say that given the issues that you have addressed in terms of the QDR, that we would do everything possible to give what I perceive to be an accurate evaluation of the jeopardy that our personnel are under today if they were to be deployed.

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    Admiral JOHNSON. Mr. Reyes, may I make a comment?

    Mr. REYES. Sure, Admiral.

    Admiral JOHNSON. In addition to the description you have already heard about the support for MEADS, I would just like to say that we all share the concern about the protection of our troops, and the focus of the theater ballistic missile defense effort department-wide really, I think, reflects that in that the top priority systems for us right now are what we

    In our own instance, we have just had a very successful kill test out at White Sands and we will have that system in our ships in the next year to do further testing. So we are committed very much to do exactly as you wish.

    Mr. REYES. And that raises in my mind another question. You know understanding that in testimony that we have heard here and the questions that I have heard my colleagues ask, Germany is one nation that I can think of that has already fully funded their portion of MEADS. Again, how can we expect other nations to agree to work with us on international programs if they see that MEADS, in particular, as an example, has not been funded by Department of Defense in the outyears? If you want to tackle that one, you are welcome to. I guess that is more in terms of a rhetorical question than anything else, but you are welcome to address it.

    Admiral JOHNSON. I would only add, sir, and anyone else can piggyback here, but I believe that that was part of the calculus in the QDR's support of MEADS. It was exactly that concern so I think we have reinforced the support, which will cause us to relook at the obligations we have put against MEADS.
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    General REIMER. I think also we have funded it through the Project Demonstration Validation Phase, and at that point in time it is the decision cycle which then I think would get into the 1991 outyear fundings. I think that is the approach that we are taking.

    General KRULAK. Could I say one thing that has absolutely nothing to do with MEADS or anything else, but the thought was proposed that the service chiefs would come up to this august body and somehow try to preach the party line or stick with something that is administratively correct, and I can just assure you, sir, with all due respect, these gentlemen when they come before this committee give their personal views. We have done that certainly since I have been here, and I know these men. There is nobody that is not going to say what they feel in their heart and more importantly for the very reasons that you said, because the bottom line is our allegiance is to the nation like yours and certainly to those precious troops, and I just cannot imagine anyone of these gentlemen saying anything but the truth to this committee.

    Mr. REYES. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Mr. Bateman.

    Mr. BATEMAN. Thank you, Mr. Chairman. I guess I will start with saying ''hail to the chiefs.'' We are happy to have you with us today. Let me commend General Fogleman for the comments that he made with reference to our supplying things which our allies and coalition partners are less capable of providing but hopefully a better track record in the future than we have had in the past vis-a-vis Bosnia of us doing much more than should have been necessary or required of us in terms of the mission, but certainly shaping our contribution to those things which are critical that we do and others cannot do. I hope that is going to be the guideline of future policy.
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    Also I want to get in a word commending my colleague, Congressman Buyer, for the comments that he made with reference to this ongoing cause celebre, and I simply share the view that he expressed and I hope it will be one that the American people will hear and will understand fully.

    References were made by one of you to the importance of getting a definition of what is core work in the context of our depots and maintenance. My subcommittee and even before I became chairman of it had been trying to get a resolution to a proper definition of core in order that we could come to a better public policy resolution as to who ought to do be doing what and why they ought to be doing it. I would certainly hope that we will make some progress in getting core defined because I think it is the key to doing a lot of things that you are urging us to do, but there is no political capability in the Congress frankly to get it done until there has been a resolution of what is indeed the core work as the underpinning of a sound well-thought out policy that can be executed.

    I understand that my colleague, Mrs. Fowler, has raised with you the question that I raised yesterday with the Secretary concerning consultant's fees, and it would be deeply appreciated if you could get back to us with the data she requested on that as soon as you possibly can. It is something that we feel a strong need to get a handle on.

    Let me move to the area of undersea warfare, if I may, Admiral Johnson. I would like to have, if you could have your people pull it together for me, sort of an inventory of the funding that has been authorized and approved for the Navy for undersea warfare research and development programs and activities.
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    Admiral JOHNSON. Sure.

    Mr. BATEMAN. My basic sense of it is that we have provided more than has been used, and I want to get an accurate picture as to whether that perception is indeed correct, and if it is correct, why funds that have been authorized have not been used or where and how they would be better used in that area.

    Admiral JOHNSON. I will be happy to provide that for the record, Mr. Bateman.

    [The Department of the Navy did not cooperate in providing a timely response for the record.]

    Mr. BATEMAN. Thank you, admiral. Also, admiral, one of the things that I have been concerned about in terms of the reductions in end-strength and especially as it relates to the Navy is that I hear General Reimer talk about how the Army is going to accomplish its personnel downsizing with headquarters staff and noncombatants and even shifting people now in headquarters noncombatant or noncombat support positions to such positions. And if it is going to be done, if we are going to have to endure those reductions, that is the way it ought to be done. I see your challenge in the Navy as being even more difficult in that as you downsize and as you reduce personnel and if you are going to do it by doing away with shore duty stations, it is going to be increasingly difficult for you to maintain the Navy's commitment to ship-to-shore rotations when it comes to personnel assignments.

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    Admiral JOHNSON. Yes, sir.

    Mr. BATEMAN. Is that going to be an aggravated problem for you?

    Admiral JOHNSON. It is going to be a challenge, but we acknowledge your concern straight up. I mean that is why in simple terms, and it is not a simple issue, but I would just describe it this way. We will retire legacy systems as part of this reshaping, the ships, the specific ships, and in so doing, we will take the infrastructure, the appropriate shore mix, to balance that as we go through it so that we do not do exactly as you say. That is a major part of our calculus, sir.

    Mr. BATEMAN. The QDR speaks in terms of reducing the number of attack submarines in the fleet from 70 boats to 50 boats. Over what period of time would we come down to the 50 and how does that number differ from what was contemplated under the bottom up review?

    Admiral JOHNSON. The Bottom-Up Review numbers, Mr. Bateman, frame it, you can get it two different sets of numbers. One is from 51 to 67. One is from 45 to 55, but the operative here, I think, is the 45 to 55, which this puts us in the mid-band of that. You know we are at 73 boats today. The original plan, the pre-QDR plan, put us on a glide slope that took us down to 52 boats by 2003 or at the end of 2003. That number has now changed to 50. I will tell you, sir, that I have anxiety perhaps is the appropriate word at the size of that glide slope, and I would only tell you that we are going to watch very carefully as we come down that glide slope to make sure that we are within our own comfort levels between us, the unified CINC's, everybody who uses and depends upon those nuclear submarines. We have to be very careful as we come down this path.
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    Mr. BATEMAN. OK. One of the other items that I do not recall having seen referred to or reference made to in the

    Admiral JOHNSON. I would tell you, sir, and I will just give you my personal opinion, I do not know if those words are in the QDR. I have not looked for that specific term, multi-year buy, but as you know, and again this gets back to Johnson's opinion here, as you know, part of our shipbuilding plan right now, specifically the DDG–51 program, has in it a multiyear buy. I believe that as we bring these new systems in, and you know the new attack submarine plan, the DDG–51's, even some of the airplane systems, I believe that multiyear buy, like packages, as we see them execute and really get the savings out of them, I think they are going to become more and more attractive.

    Mr. BATEMAN. Mr. Chairman, if I could be indulged a little longer. We over here need help from you on this. There is a natural, I guess, parochial or political resistance to doing it even though most people would concede it is more efficient. But we do not seem to be able to get there. I think it is going to take some urging from you all in order to have us be able to succeed in doing something that would be extraordinarily important to you long term especially.

    National missile defense—we are now told that we have a $2 billion shortfall in that program and we need to fix it, but I do not think it came with any request that we increase the size of the defense budget. So are we going to have to fix that problem if we can fix it by reduction in other things that you have asked for within the budget that has been submitted?
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    General FOGLEMAN. I will answer at the risk of answering for the Department, but it is my understanding in the discussions with the folks in the Office of the Secretary of Defense going back to the overriding rules of engagement were that as service chiefs as we identified efficiencies and tradeoffs that we could keep that money, that the Office of the Secretary of Defense was going to go look at defense-wide kinds of accounts to include defense agencies and look at this reform panel that the Secretary has formed, and that that was going to be the source of the national missile defense plus-up. I mean I thought that was what I had heard and I——

    Mr. BATEMAN. Well, Mr. Chairman, if I could extend this just very briefly.

    The CHAIRMAN. We better get back to regular order, Mr. Bateman.

    Mr. BATEMAN. OK. I will suspend.

    The CHAIRMAN. Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman. I know that your responsibilities are so great and your decisions that you have to make will have a tremendous impact, and I pray to God that he will give you the wisdom to do what is right for this great country. General Reimer, in response to a question that Congressman Riley asked about how many depots are you planning on closing, and you said that we now have five and the possibility that we might have to go to three. Because of that, now how far-reaching, do you plan now to maybe do some more contracting out because knowing the fact that we will have to reduce from five to three? Will you have to wait for somebody to come up or wait for the Base Closure Commission to recommend what they are going to shut down? I know you probably recommend to the Base Closure Commission what to recommend, but we have a helicopter, as you well know, in Corpus Christi, and then we have an installation that stores weapons and so on and so forth.
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    Do you plan to maybe consolidate this with other agencies or how do you plan to come down from five to three or what is your thinking along those lines?

    General REIMER. Congressman, first of all, I said I would like to provide a more detailed answer to the record. I said off the top of my head that was probably ballpark. There has to be a whole lot more analysis done in that area that has not quite frankly been done. The only point I was trying to make is that if we are keeping excess capacity, then the work force will not be as efficient as they should be and will not be able to compete in the outsourcing privatization business, and that is the point I think that we have to look at very carefully.

    Mr. ORTIZ. Thank you. Admiral Johnson, again I have just one. We were in Corpus Christi this last weekend and talking to some of the wing commanders and the base commanders about health care, which seems to be a very serious problem, and as we travel to different bases and as we talk to some of the military people, they are concerned with what is happening to some of the benefits that we promised them when they enlisted. An example: Corpus Christi, there were 15,000 visits this past year to the hospital. Most of them went someplace else. We still pay. We have a hospital with 140 some odd beds. I asked how many patients do we have? Four. Doctors? One or two. Nurses, very few. When we were smaller, we had more nurses and more doctors. We have grown considerably since the last Base Closure Commission, and now these medical services are low. And, you know, this really has an impact on retention of our military people because they see what is happening. What do we expect from the Navy to do along those lines as far as health care is concerned?

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    Admiral JOHNSON. I accept the concern, Mr. Ortiz, as we have talked about it before specific to Corpus Christi. I want to make sure that we do not let well intentions get in the way of the realities. The original round in terms of the transformation from a hospital to ambulatory care center was based largely upon the inpatient utilization rates, if you will, which put it under six patients a day as I recall. That is only a part of the metric, and I acknowledge that as we discussed in your office. We will make sure that we do not in perception or fact erode the level of care in Corpus Christi, and I will give that personal attention, sir.

    Mr. ORTIZ. Again, thank you very much, all four of you, for the outstanding work that you do for our country, and we continue to pray for you. Thank you, Chairman.

    The CHAIRMAN. Mr. Dellums.

    Mr. DELLUMS. Thank you, Mr. Chairman. I would like to go, my question, directly to Admiral Johnson. In the context of the Bottom-Up Review, it called for 12 carrier task force. I notice that in the context of the Quadrennial Defense Review, you still have 12 carrier task force. In the Bottom-Up Review, some people said you needed as low as 8 carrier task force to carry out the responsibility of the Bottom-Up Review. Some said 10. So anywhere in between there, the question that I kept asking was if you need 8 to 10 to carry out your responsibilities under the Bottom-Up Review, why do you have 12? The response then was presence.

    The question I asked at that point was do you need a task force as muscular as a carrier task force to maintain presence with all of the personnel readiness force structure implications that accrue to that? My question is (a) are you still rationalizing the 12 carrier task force, and I am not using the term ''rationalizing'' in a negative way, but do you come to 12 carrier task force with the very same reasoning and I would like to know that? And, second, the fact that you have reduced some of our surface ships, does that mean that you are reconfiguring to some extent the carrier task force?
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    Admiral JOHNSON. Yes and yes, Mr. Dellums.

    Mr. DELLUMS. OK.

    Admiral JOHNSON. The carrier No. 12 is derived partially from the two MTW commitment, as you discussed, and partially because of the realities of the day-to-day tasks that we are asked to serve for the unified CINC's around the world. If we serve the commitment that is laid out there everyday, we would need at least 14 to do that, 12 is considered acceptable risk. It has to do with the front end of the MTW's that we discussed. It has to do with all of the presence arguments which I will not go into right now.

    The second part of your question regarding the battle group composition itself, indeed, we will reshape those battle groups somewhat in the surface combattant sizing and capabilities as we work our way through this QDR implementation. But I believe, and I really do believe this, that what will come out at the other end, there is a price to pay in presence. If you sent five ships before and you only send four, you still can only have one ship in one place in one time. So your presence is not as robust, but from a combat capability, what it gives us, because of the systems we will have in these new ships, is an ability to network and do network-centric warfare where we used to be specific platform-centric. So in the main, it will give us much greater capability.

    Mr. DELLUMS. Thank you, sir. Thank you, Mr. Chairman.

    The CHAIRMAN. We are going to miss this vote if we do not run. We have a few more questioners I think if you can bear with us for a few minutes for this vote. Mr. Bateman, Mr. Hunter have some questions, and we will try to come back in just a few minutes.
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    [Recess.]

    The CHAIRMAN. The meeting will please be in order. Mr. Bateman.

    Mr. BATEMAN. Thank you, Mr. Chairman. I came back because I had one further question that you do not need to respond to today, but it would be very helpful to us. As one of the committee/subcommittee chairmen, and as we approach sometime in the near future marking up bills, I am mindful that you put together your budget request and they were all signed off on months and months ago. If there are things which you feel priorities and circumstances dictate making adjustments in the budget as originally submitted, the sooner we know of that, the better we can accommodate looking at it and hopefully doing the right thing. So if you have adjustments to budgets as submitted, we would be very interested in having that.

    The CHAIRMAN. Mrs. Harman.

    Mrs. HARMAN. Thank you, Mr. Chairman. I have two brief questions. First of all, I want to mention to the witnesses that I was one of those foolish folks here who sacrificed the highways in her district for military readiness, and the other night I voted no on that amendment to reduce funding for defense. So I hope we can argue that every road in my district is somehow militarily necessary. But having said that, I believe that money can be reduced for infrastructure, and I know that the Secretary of Defense agrees with that, and I believe you all do. One way to do that that I think has great promise is a little subject called dual-use technologies. I think that there are commercial technologies that can be leveraged for defense use that will make scarce dollars go further and it is in everybody's interest to reduce those dollars if we do not need to spend them because we all can have our lists of better ways to spend those dollars.
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    I just wanted to make that point to you and elicit any response because this committee and specifically the R&D subcommittee has been interested in that subject. We are going to have language, I think, in this year's bill again designing a program that will help you, you the services, spend some of your R&D money on dual use technologies, and so if any of you has any comment on that point, I just wanted to invite you to make it.

    General KRULAK. I would agree a million percent. I mean we are working very diligently in that area, particularly in Sea Dragon. We literally for the first time have somebody that his single job is to look at dual use and see where the tie-in is. I mean I agree 100 percent.

    Mrs. HARMAN. And you would say that, General Krulak, even if you were not mortally ill?

    General KRULAK. Yes, yes, ma'am.

    Mrs. HARMAN. Thank you. General Reimer.

    General REIMER. I would say also that our experience is

    Mrs. HARMAN. Well, I obviously respond well to that. I think it will help all of you. It also will make sure that our industrial base is around for the future, and we need it around because in the future we may need to ramp up in a variety of ways, and I appreciate your comment.
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    My second and last question has to do with modeling, the use of models. There are some experts up here. I am not sure I am a total expert, but I have certainly worked hard at it, who have problems with the models you have used in various ways for various studies. And certainly some of my problems have to do with some of the models you have used and some of the conclusions you have reached on Deep Strike. But at any rate, I do not want to argue that. I just want to ask you, any of you, whether we need to invent some new models for the 21st century while we are finding new strategies and new ideas for each of your services?

    General FOGLEMAN. I think the answer to that is absolutely, and I think the good news is that this has not only been recognized by the services but also by OSD and they have got some efforts under way to do that right now, and we are all in one way or another playing in that either as executive agents or deeply engaged in it.

    Mrs. HARMAN. Any other comments?

    Admiral JOHNSON. No, only to second it. We do it from a service perspective. We are doing it from a joint perspective. I think there is a great initiative and a lot of interest to do exactly as you suggest.

    General REIMER. We are trying to bring in WARSIM, which is a simulation and it is a joint simulation that I think will better replicate what we are trying to do. We probably need to do additional work. At the same time, we are putting a cap on what we are doing with our old systems so that they do not continue to grow and reinvest those dollars into the new systems.
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    Mrs. HARMAN. Well, Mr. Chairman, I appreciate the time. I just want to say that we have to fight and win the next war, not the last war, so I welcome those comments, and I think that this committee and other committees in the Congress, especially Defense Appropriations Subcommittee and the Intelligence Committee, may have a big contribution to make as you figure out what kind of modeling we need for the future. Thank you, Mr. Chairman.

    The CHAIRMAN. Yes, ma'am. Mr. Hunter.

    Mr. HUNTER. Thank you, Mr. Chairman. Mr. Chairman, I want to thank you for extending this hearing and for our esteemed witnesses sticking around for us and answering so thoroughly. Let me thank you for what you are doing. We do not, maybe I do not do that often enough. I know a lot of the other members are gracious enough to do that. But we do respect you. We appreciate you and unfortunately these are tough times. They are not times in which we have a lot of extra dollars and can afford to make a lot of mistakes, and I think we all have to be a little tougher perhaps than we have been in the past, and, gentlemen, you all have a big problem. The problem is that you are in this funding box that is being laid out as a reflection of the budget agreement that was made.

    You have got a tooth to tail problem and we all know about it. I was astonished the other day when I got a figure that came ostensibly from the Defense Science Board that said of the 1.4 million folks we have in the military, about 25,000 are trigger pullers. That is Marine riflemen or in the case of the Army infantrymen. General Krulak is shaking his head so when we get together I want to get the real numbers from you because that was a figure that was floated out. But we have today all the services, all of you have gone down in terms of your percentage of the defense budget. The Marines were at 6 percent. They are relatively stable. They have stayed right there for the last several years. The Army has gone down. The Navy has gone down. The Air Force has gone down. DOD agencies have gone up as a result, as a proportion of the defense budget.
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    There are 300,000 professional shoppers in the Pentagon. And when I say that, I use the term ''shoppers'' to distinguish them from the civilian work force that includes people at depots who turn wrenches and bend metal. I am talking about the people who do the paperwork for acquisition. That is almost twice the size of the U.S. Marine Corps. This chairman is putting together defense language and I am trying to work on that, and you may see something that comes out that essentially asks/requires DOD to reduce the size of the ''U.S. shopping corps'' below the end strength of the U.S. Marine Corps.

    The first question I would like to ask all of you is in the face of personnel cuts, which is where you get real dollars, they are not ethereal dollars or problematic dollars that you may get as a result of base closing, but that is where we get real dollars, and that is why we cut end-strength so quickly. It gives us a real payoff quickly. If we have to make personnel cuts, and you look at DOD as a whole, including the civilian population, the uniform population, the logistical population, the combat population, before you cut end-strengths in your services, would you like to see this acquisition or shopping corps reduced? If you had the choice between cutting your uniformed folks or reducing the shopping corps or the acquisition corps below 300,000 people, which would you reduce first?

    General REIMER. Congressman, I think that is exactly what we argued for in the QDR, and that was the basis of our discussion, and that was what was supported by the Secretary of Defense. I think probably what you have here is it takes time to get into those reforms, and his reform panel, I believe, will really get at the heart of that issue, but that certainly was our position going in. I speak for myself, but I think we all agreed on that.

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    Mr. HUNTER. So you would like to see the shopping corps go down.

    General REIMER. The revolution of business affairs has got to occur, and it has got to start in the Pentagon.

    Mr. HUNTER. OK. Admiral Johnson.

    Admiral JOHNSON. If our—and again, I am not sure exactly what the definition of the shopping corps is, but in the context that I think I understand it, back to General Reimer's point, we need to go after the infrastructure——

    Mr. HUNTER. Acquisition corps.

    Admiral JOHNSON [continuing]. Piece of our whole organization. I think that is exactly what SECDEF is after with this Defense Reform Task Force.

    Mr. HUNTER. OK.

    General FOGLEMAN. Absolutely.

    Mr. HUNTER. OK.

    General KRULAK. Yes sir.

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    Mr. HUNTER. Mr. Chairman, just a couple of other fast observations here, and I will retire, but I understand that we have, Admiral Johnson, we have gotten some great results back as a result of the sea trials with Sea Wolf. Now, as you know, this committee's position and Congress' position has been that we should not have jumped into a brand new class of subs that we were going to build for many years on the rebound from the public's divorce with Sea Wolf when we cut it off at three because we suffered from sticker shock with a $3 billion price tag. And you folks came back with a smaller slower system with less weapons on board that would presumably cost less.

    But the sea trials now—we did not have the sea trials behind us at that point when we designed the NSSN. So we were never able to capitalize on new information, especially with respect to propulsion efficiency, that is now coming out of the Sea Wolf sea trials. The initial reports that I have gotten back are that we can make some changes in the new sub that will allow it to be much less expensive because we are getting much better propulsion efficiency than we ever

    I think the information that has come back has validated the congressional position and invalidated to some degree the Navy position, and let me ask a couple other questions, and you can answer those for the record, too, if you want to, because I know time is of the essence. But we are retiring subs right now. I would agree with you that retiring these high leverage items does not make a lot of sense. We are retiring 688's I understand with 15 or so years of life left on them. And in terms of when you look at the manning requirements for submarines compared with other systems and the enormous leverage that you get and also the fact that today's world is getting somewhat dangerous with respect to Third World nations now acquiring submarine operations, to some degree of efficiency that this idea of laying off the subs and getting down to 45 or 55 subs, like it was some kind of a base closing, does not make a lot of sense. And I would like to work that issue with you. I think we would like to be supportive of you on that. So thank you, Mr. Chairman. If you could comment, General, on the sea trials, that would be good.
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    Admiral JOHNSON. I will be happy to, and I will give you more detail for the record, but I would tell you that in terms of the Sea Wolf sea trials, we are very pleased with it. We are very—my interpretation—not surprised by it. It is as good as we thought it was going to be. Absolutely.

    [The Department of the Navy did not cooperate in providing a timely response for the record.]

    Mr. HUNTER. So the answer, the point is, though, that we found enormous propulsion. If we found some propulsion efficiencies that we did not have before, things that we could use to design the next sub, it does not make sense to design the next sub before you have the information from the sea trials of the Sea Wolf.

    Admiral JOHNSON. I believe that the program we have got in place for the new attack submarine is the right answer, Mr. Hunter.

    Mr. HUNTER. So you think that design that was done before the sea trials ever came back reflects all of these new things we found out in the sea trials?

    Admiral JOHNSON. I think the design for the new attack submarine and the technology insertion plan that we have got will make that an even more all around stealthy platform than the one you are talking about with Sea Wolf.

    Mr. HUNTER. OK. Well, I think it will make it more stealthy, but, however, the shape of the sub hull is something you cannot change by insertion. I am led to believe by the initial briefings I have gotten that the shape of the sub hull and the size of the NSSN, of the new boat, whatever it is, can be modified with major savings to the taxpayers as a result of new information, new facts that we did not have when we designed it, that have come out of the Sea Wolf trials. Are you aware of that?
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    Admiral JOHNSON. Not specific to the hull size.

    Mr. HUNTER. OK. Well, let us work on that at a later time.

    Admiral JOHNSON. OK. Be glad to.

    Mr. HUNTER. Mr. Chairman, thank you for your indulgence.

    The CHAIRMAN. We have had Mr. Norm Dicks with us for a long time today, and you all know who he is on the Defense Appropriations Subcommittee. Mr. Dicks wanted to ask someone a question.

    Mr. DICKS. Yes, Mr. Chairman, I am going to be very brief. I want to compliment you on these outstanding hearings and giving the public an opportunity to fully understand and appreciate the Quadrennial Defense Review and the deep attack weapon mix study. I want to concur with Congresswoman Harman. I think these models need to be rethought, and I think the sooner we do it, the better everyone is going to feel about it, and I just worry about making judgment based on models that we all agree are basically flawed.

    I am not going to get into any specific weapon system. I know that will please some of you. But I want to talk today about what Duncan Hunter raised earlier, and what worries me the most out of what I have learned thus far, and that is this whole notion of the strategy, of how we are going to fight a major regional war, major regional contingency, and as they explained these charts to me, you have got the halt phase which occurs at about 14 days, and that is going to be done basically by using air power from our carriers and from land-based bombers potentially. And then we are going to go to about a 70-day buildup phase, and then we are going to have a counteroffensive.
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    And as I am told, the way the analysts do this—this is why I worry about these models—that at the end of the halt phase, and in the halt phase you would have sorties of aircraft at about 3,000 a day, your total air packages, and that would then drop to 1,500 sorties a day, which then would stay that way during the buildup phase, and then when we go back to the counteroffensive, we would raise the sortie rates again. Well, I called General Horner, and I asked him, I said, ''General, is this how you would have fought the gulf war?'' I mean, in other words, Saddam, in essence, halted himself and then we had a buildup, and then we started with the air war, and prosecuted the air war, and then had the counteroffensive.

    I said would you drop your sortie rate in half? Do you think that would be the right thing to do? And he said no. He said if I were running the air war, and I think this is the position in the debate that the Air Force took, I would keep the sortie rates at the highest level I could off our carriers and using TAC air and using your bombers and try to take the enemy apart, kind of like we did out there in the gulf. And what we have been saying up in Congress is that you are going to get all these new smart conventional weapons, JDAMS, JSOW, sensor-fused weapons, and you are going to have an ability, you are going to have greater ability in the future, to deal with the enemy in that halting phase and so if I were thinking about this, first I would think deterrence. Can we deter the enemy? And then if there is an invasion, can we halt the enemy short of his objectives, and if we do halt him, then can we use this combined air power that we possess to destroy the enemy and then launch the counteroffensive with the Army and the Marine Corps and the other ground forces because ultimately you have got to take the ground and I understand that?

    Why would that not work? And therefore instead of having this 74 days of buildup, why would you not then just keep attacking, attacking, attacking that enemy force and drive its military capability down like this and so you would get him below 50-percent capability in say 50 days rather than waiting for 84 days? It seems to me that, and I understand that this is what the Air Force argued, but this was rejected. Now, can you all explain this to me? I mean to me it sounds like this is not the way—and I am told one of the reasons is we did not have enough ammunition. We do not have enough bombs.
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    Well, it seems to me the answer is why do we not go buy the bombs? Why do we not go buy JDAMS at $13,000 a weapon if that is the problem, and go buy the bombs instead of cutting the sortie rate in half? And what worries me about this, bottom line, and I will shut up, Mr. Chairman, is if you do it the way it was originally considered, where you have this long buildup phase, then the counteroffensive, we assume that we are going to take casualties of 34 percent of the force. Now that to me, I mean if you do not have to do that, if you do not have to lose the 34 percent of your force by using air power in the halt phase and making that the decisive point and then the counteroffensive, why would we not do that? It seems to me that if that is not the strategy, we ought to rethink it, and I would like to hear from you as our great experts on this.

    The CHAIRMAN. For the record? Or do you think we are going to be able to get them in this afternoon?

    General REIMER. Well, let me wade into it, then, Congressman. I think, first of all, I would say that the scenario that you painted was a rather generic scenario. It was not any specific war plan. I think it was representative of generic war plan. I think you can go through these different phases. I think the history of warfare would say, though, that for every action, there is a reaction, and what you really need is a balance of capabilities. You need some things in your kit bag so that if they are able to counter what you bring, then you have got another counter for that.

    I think that what we tried to do was to build a balanced force that was capable of serving the Nation across a full spectrum of responsibilities, and I think that is what the QDR was all about. I think if you want to get specific about the war plans, we have to get into the CINC war plans and look at those individually. I do not disagree—I go back to what I said initially. The Joint Vision 2010 really laid out four basic tenets: precision strike, dominant maneuver, focus logistics, and full force protection. I think the issue here is to keep all four of them in balance, and that is what we tried to do with the QDR.
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    The CHAIRMAN. Anybody else? We are going to get Mr. Pappas here. He is wanting to weigh in on this too. Mr. Pappas.

    General KRULAK. I would like to just say one point. I am just concerned that, and somebody mentioned it earlier, that we do not get transfixed with fighting the son of Desert Storm. I use the term the ''stepchild of Chechnya'' is probably going to be the fight. And the asymmetric enemy who saw CNN and saw the technology and what it did to the Iraqi forces learned a great lesson. I remember asking some of my lieutenants since Desert Storm when you watch TV, where has the fight been? And if you think back, I have yet to see a fight that has not been in an urban area, a built-up area. And it is in that area that I think we are going to do most of the fighting.

    And so one of the things that we are involved with with all the services is trying to build the operational concepts and the requirements to fight that battle, which is the one that I think really worries me the most.

    General FOGLEMAN. If I could just, I think the point that Mr. Dicks makes, for the first time this is, in fact, included in the strategy. In other words, there is this statement in the strategy recognizing the importance of the halt phase and so I believe that that is a major step forward, and then the secret is to balance that across what we are doing. But clearly, if we are going to be involved in urban warfare, I think that will happen some place.

    The reason we exist is to win the big one, to win the big one. And so we got to look at the big one as well as all the spectrums that we have across there, and so I think that is why it is important that this was put into the strategy this time. It is part of the beginning of this debate that we will have as we shape forces in the future.
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    The CHAIRMAN. I understand. None of us had lunch yet either and we are keeping you, and I apologize for doing that. General Krulak, I know, has another appointment. So, General, if you want to go ahead——

    General KRULAK. I am fine, sir. I am fine.

    The CHAIRMAN. And the rest of you, just a few minutes. I think Mr. Pappas has a question.

    Mr. PAPPAS. Thank you, Mr. Chairman. Gentlemen, thank you for being here. I have one question for General Reimer, one for Admiral Johnson, and then a third for the four of you. General, let me just mention each of the questions so the four of you can be prepared to answer that one general one. General Reimer, yesterday General Shali stated that the QDR could very well free up some resources that we could then use to invest in the Army of tomorrow, and I would wonder what your priorities might be for any savings that might be realized? And as you think on that, Admiral, I would like to know what your observations are of the present naval ordnance system and whether the QDR will bring any changes to that and the weapon station system?

    And then a general question, a pretty probably complex one, for the four of you. Secretary Cohen and General Shali yesterday assured each of us that our Armed Forces could continue to fulfil their missions, but I think they used, the words that they used ''at a greater risk.'' I could be paraphrasing them. They also felt that if there were greater resources provided by the Congress that that risk could be lessened. I am wondering if you agree with that statement, and if you do agree, how would that affect our troops? In what way would that risk be greater to our troops?
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    General REIMER. Let me start with the movement of the Future Army Forward. I think what the chairman was referring to was the advanced warfighting experiment that we have run in the desert with the brigade out of Fort Hood at the National Training Center. That experiment showed us that we have great capability, I think, in the terms of the digitized battlefield, as we refer to it, bringing in situational awareness, basically taking the systems we have and hooking them up to information age technology.

    Our current plan was to try and field a division by 2001 and a corps by 2006. We think if additional resources are available, it is feasible to move a division up to 2000 and a corps up to 2004. At the same time, we are running another exercise, which we call the Army After Next, which basically looks at the timeframe 2020. And the intent there would be to try and pick up the technology that we need and bring that forward as fast as we can while we develop the other aspects of military operations, the training, the doctrine, the leadership development, all of those things, the tactics, techniques and procedures, and marry those two up and come up with a real revolution of military affairs which would occur in the 21st century. So I think that is what he was talking about. That is certainly what is in my mind.

    Admiral JOHNSON. With regard, sir, to the first part for me about the naval ordnance system, I would be happy to give you a greater level of detail, but for now let me just say that the key in all of that obviously is to be responsive to the operational forces and to give us ready access to the weapons at the right time, at the right mix and all. We have done a lot of work over the last couple of years throughout the ordnance command system to gain some efficiencies, to cut down on headquarters staff, to lean it out, if you will. So in that context, I feel pretty good about the path we have taken and the improvements and efficiencies that we have made.
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    Are we through looking at it? Practical answer is no, but I think right now we are in much better shape than we were even a year ago. So I am encouraged by that.

    Mr. PAPPAS. Thank you.

    General REIMER. May I start on the second question?

    Mr. PAPPAS. If you all could comment on that, that broader picture.

    General REIMER. The broader. I think in terms of the greater risk, I would certainly agree that there is greater risk in the near term. I think we made some decisions to reduce the size of the force, and I think that assumes a greater risk, I think, although I would argue that there are at least in the Army's case less risk in the future because we have beefed up the modernization account and put more

    Admiral JOHNSON. I would agree with that, sir. There is an increased level of risk, but right now from my perspective within the Navy, I consider that to be an acceptable level of risk if it allows us to recapitalize ourselves for the Navy needs of tomorrow. Within that, I am comfortable.

    General FOGLEMAN. If I understood your question, you asked if as if the Secretary of Defense said, if you had more funds, you could reduce the risk, and how would that manifest itself? I think there is a relatively good discussion in the QDR that talks about the three approaches to this thing that really faced all of us to include the Secretary. You know the one says, well, you can just keep going doing business the way you are, and if you do that we know from history that funds migrate out of procurement. We have pop-up contingency funding, these kinds of things. And in the near term we will be okay, in the mid-term we would probably be okay, but in the long-term we are going to be in deep trouble.
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    The second approach that everybody looked at was, well, let us just really dramatically increase the risk in the short-term, really bring the forces down, take those dollars and put them against the long-term type of thing. And then the third one was kind of the approach that the Secretary tried to have us take on, which was kind of keep your combat forces up, try to go take infrastructure down and do a little bit of both, be able to shape, respond and prepare for the future. So if we had more money, I think that where we would end up reducing the risk would be in many of the things that were addressed here today and that is just in the risk that is associated with can we get base closure? Can we get legislation that allows us to go do outsourcing and privatization, those kinds of things, because if we do not get those, then we are going to have to go back to migrating money or decreasing combat capability.

    General KRULAK. Sir, from the Marine Corps perspective, we have never been a two MRC force. We have never claimed to be one. We cannot do two MRC's. We have had to swing in each instance. So when the Secretary spoke with me about force reductions, I recommended, and he accepted my recommendation, that no troops would be taken from what we call our trigger pullers, the operating forces. All of our cuts will come from what are called the infrastructure. With that in mind, I believe, as General Reimer, that the freeing up of resources to allow us to get to this what I would call the path to the revolution that I think we will be able to reach around 2003 to 2005 was the way to go.

    The CHAIRMAN. Mr. Ryun.

    Mr. RYUN. Thank you, Mr. Chairman. First of all, I want to thank all of our generals for staying. I know it has been a very long day, and I appreciate your patience in hearing all of our questions. I want to go on record as simply saying I am very concerned about the QDR and the direction that it is taking us. I know that I am looking at national security from the standpoint of where the country is going and what we might be looking at in the future, and I know there are many other of my colleagues on both sides of the aisle that share that same concern, concern about what risk really means, too. What does that say to our country and to our young men and women that are fighting for us.
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    But I really want to address my question to General Reimer. Under forces and manpower, the QDR proposes maintaining ten active Army divisions, and part of that is going to be in the process you are going to reduce active duty personnel by 15,000, in part, through the drawing down of heavy divisions, as the Army integrates those results into their warfighting experiments. Could you please offer some sort of an explanation as to how these heavy divisions may be downsized such as what jobs and functions may be eliminated? That is part one of the question. Part two is how would you then look at that reduction? Would it be widespread across the country and on these particular divisions?

    General REIMER. Thank you, Congressman. First of all, the reductions that we have programmed in the QDR, the active component strength of 15,000, does not touch the ten divisions, does not go inside them, does not make any changes in their configuration. What we are doing is with the advanced warfighting experiment looking at different configurations of our divisions, and we may come out of there downsizing them. Those would if the experiment shows that they will give you the capability that you need at a smaller division, those cuts would apply across the force, but they have not been programmed in this QDR.

    We have some other issues that have to be addressed, and any savings there, I would ply back into other areas that we have cut too much. For example, in the training and doctrine command, we have taken that down dramatically and we need to kind of beef it back up a little bit. So not looking at, first of all, cutting any of the ten divisions and not looking at taking those savings and using those as reduced end-strength.

    Mr. RYUN. What about the heavy division aspect of it? I know that there is——
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    General REIMER. That is the one we are looking at, the heavy division. It is the only one we are looking at right now in terms of reducing the size. That is tied to the advanced warfighting experiment. That would only be done if we prove from the experimentation that we could do that reduction and still have the same capability. So that would be a figure or a reduction that would take place in the outyears.

    Mr. RYUN. Thank you, Mr. Chairman.

    The CHAIRMAN. Thank you. Gentlemen, I think I can just wrap it up just for a minute.

    Mr. TAYLOR. Two minutes back?

    The CHAIRMAN. Sir?

    Mr. TAYLOR. I was kind of cut short because of the vote.

    The CHAIRMAN. You have never been cut short, Mr. Taylor, but anyway go ahead if you want to prolong it.

    Mr. TAYLOR. You are a gentleman and a scholar, Mr. Chairman. Commandant, I want to follow up on our previous conversation. It is my understanding that there could well be another destroyer added for industrial based reasons to the budget this year. A destroyer, to the best of my recollection, is about $800 million. Well, I guess the first question is what is more important to the Marine Corps, an LPD or LHD, if you had to have—I am not asking either/or. I said which is more important to that ARG?
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    General KRULAK. The LHD is the centerpiece of the ARG.

    Mr. TAYLOR. If it is the QDR's decision to go to 12, and I want to open this up to Admiral Johnson, since there apparently has been an industrial-based decision to add another destroyer above the original president's request, would not the industrial base be better served by a multi-year procurement of an eighth LHD instead of an additional destroyer since apparently the destroyer industrial base is not in that much trouble? And I realize you are talking about a little bit more money, but it takes about 3 years to build an LHD, about 2 years to build a destroyer, So your cost per year would be about the same, but you would be picking up a third year's cost factor.

    Admiral JOHNSON. Right now I would tell you, Mr. Taylor, that as the Commandant has said, the LHA/LHD is the centerpiece of the amphibious ready group, and the plan is that we will have 12 of those with 12 LPD–17's with LSD–41/49's. That is the composition of the ARG of tomorrow and that will do exactly what we need. Now, in the near term, right now, to my knowledge, the idea of the 13th DDG has not been settled. If you are asking me as the CNO from a requirement standpoint if I would like another DDG in next year's budget, my answer, sir, would be yes.

    Mr. TAYLOR. How about the LPD?

    Admiral JOHNSON. The LPD? Quite honestly——

    Mr. TAYLOR. The LHD.
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    Admiral JOHNSON. The LHD, quite honestly, sir, because we are at a force level of 12 LHA's and LHD's when we get LHD–7 in place, I haven't looked at that. I will be happy to do that.

    [The Department of the Navy did not cooperate in providing a timely response for the record.]

    Mr. TAYLOR. Would you? And again, Mr. Chairman, you have been very generous. One of the things I am hearing is that there will be an incredible expense of shlepping one of the LHAs. I would like you to compare the schlep cost of the LHA versus the industrial based considerations of the LHD.

    Admiral JOHNSON. We are doing exactly that, Mr. Taylor. That work is ongoing.

    Mr. TAYLOR. Mr. Chairman, you are a gentleman and a scholar. Thank you, sir.

    The CHAIRMAN. I do not want to prolong it myself, but in wrapping up, you have heard a lot of people today that expressed concern about the QDR in different ways, and I guess mainly the strategy most people seem to go along with and agree with it, fighting and winning, I think you always say fighting and winning two MRCs. And I pointed out earlier about the fact that we can have all the military might and the equipment, even the funding, the budgets that we need maybe to fight these contingencies that you call them, or wars. But the political decisions that enter into these things throw the whole thing out of kilt.
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    I will make my point this way. The other day somebody approached me when I was trying to recount our military over the years and what we have done for this country and saved the country and kept us free, and the only things we have had trouble with has been civilian leadership. And he pointed out to me, he said, you know, the last three wars we fought, we lost two of them. And that kind of stopped me right between the eyes. I had not really thought about it that way. He said throw in Somalia and that makes it even worse. With all of our military might, we did not have a budget problem back during Vietnam, we had all the stuff. We were throwing in whatever we wanted. Back in Korea, General Krulak, I am reading about Chechipula [phonetic] right now, a Marine, in his book about Korea, and he just said we got the fool kicked out of us. And still we talk ourselves into believing that we won, I reckon, somehow or another, looking back on these things, we do not want to live with too much.

    We want to dismiss this picture in our minds of people reaching up for that last rung on the ladder for that helicopter leaving in Saigon. I hate to even think about that. But all of our military might in Vietnam and all the strategies we used and all the rest, that was the end result. And that is not a question. I could not answer this fellow when he asked me to answer that for him. If we really did not lose those two out of three, I could not answer it. Maybe you all can have some kind of wrinkle on how you could answer it, but I will not ask you for that. But that is just the point. I think people are apprehensive when we make all these plans and strategies with that fact of life thrown in. We always worry about it. And I worry about it. Thank you, again, for being here so long and I appreciate all you are doing. We will see you later. Thank you.

    [Whereupon, at 1:47 p.m., the committee was adjourned.]
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    "The Official Committee record contains additional material here."

QUESTIONS SUBMITTED BY MS. FOWLER

Contract Advisory Services

    Ms. FOWLER. Now yesterday we had the Secretary of Defense and the Chairman of the Joint Chiefs before us on the QDR, and Representative Bateman raised the issue of contract advisory services. Now these are consultant fees and expenses that the department is currently procuring. The figure given was $2.9 billion annually on such expenditures, a 248 percent increase. Now, for the record, could each of you provide information regarding the level of contract advisory services procured by each of your services? Could you tell us how much of that figure is dedicated to contracting out for the service of non-governmental advisers to provide information on whether we should contract out DoD operations? In other words, how much are we paying contractors to tell us whether or not we should contract out current government functions? So for the record, if you could submit that, I would appreciate it.

    General REIMER. The total funding level of contract advisory services for the Army for fiscal year 1997 (FY97) is $552 million, as identified in the FY98–99 President's Budget, exhibit 15, entitled ''Advisory and Assistance Services.'' This represents a 12 percent increase in price and program growth over the FY96 execution level. The FY98 budget request is also $552 million, the same level as FY97. Department of Defense directive 4205.2 prohibits use of these funds to contract for study of ''activities or services that are reviewed and/or acquired in accordance with the Office of Management and Budget (OMB) Circular A–76 (Performance of Commercial Activities).'' Therefore, none of these funds are used for conducting outsourcing studies in accordance with OMB Circular A–76.
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    The Army, from separate funding sources, has budgeted $12 million for FY97 to contract with analytical consultant firms to assist in conducting A–76 studies. The contracts provide technical expertise, but not advice as to what should be contracted. The responsible Government agency will compare the cost of the best commercial offer with the ''in-house bid'' to determine whether it is more economical to have the activity performed by contract or by the in-house most efficient organization.

    To date, the Army has not reprogrammed anticipated savings from future outsourcing and privatization initiatives in either dollars or personnel authorizations.

    General FOGLEMAN. The Air Force procured $999M in FY97 of Advisory and Assistance Services (A&AS) to include funds spent on Federally Funded Research and Development Centers. The functions performed include mostly engineering, but also some cost analysis assistance, scientists, and program management support. However, the Air Force does not use A&AS to determine whether or not workload should be outsourced. The only instance in the Air Force to which you might be referring is our use of a support contractor at both the depots at Kelly AFB and McClellan AFB to gather industrial base data to allow the government to perform a risk assessment for privatizing depot workload. This is the only example and is an exception to how the Air Force employs Advisory and Assistance Services support.

QUESTIONS SUBMITTED BY MR. SNYDER

Infrastructure

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    Mr. SNYDER. Thank you, Mr. Chairman. I am sorry that I had to leave. I am on the Veterans Committee. I have not figured out how to be in two places yet, but I am learning the traffic patterns on Pennsylvania Avenue very well. But one question, please, if you would do this, I will say it for the record. I really hope that means it will be delivered to my office and as a courtesy to me if you would deliver it to Mr. Hefley's office, too, please. But I do not really know—I hear a lot of this number being thrown around when we talk about BRACs, 36 percent reduction in force, and only 21 percent reduction in infrastructure. I do not really know what that means. 21 percent of what?

    General REIMER. The Department of Defense Report of the Quadrennial Defense Review, dated May 1997, and the Army have reported a 21 percent reduction in infrastructure. The Army figures are based on the number of major installations closed in the United States since the first Base Realignment and Closure (BRAC) initiative in 1988. In 1989, the Army had 133 major bases in the United States. Since that time, four rounds of BRAC approved the closure of 28 of those major Army installations.

    General FOGLEMAN. The first four rounds of base realignment and closure will result in an approximately 21 percent reduction in department of defense plant replacement value in the United States. Of interest, that number increases to approximately 26 percent if we consider all Department of Defense installations, worldwide.

QUESTIONS SUBMITTED BY MR. PAPPAS

    Mr. PAPPAS. Your observations of present Naval Ordnance system and whether the QDR will bring any changes to the naval ordnance and weapon stations systems.
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    [The Department of the Navy did not cooperate in providing a timely response for the record.]

QUESTIONS SUBMITTED BY MR. RILEY

Army Depots

    Mr. RILEY. Based on that, and looking at the overall picture now, if we are at 60–40 today, how many Army depots do you think that we need today to have full utilization and to be able to serve your branch of the armed services?

    General REIMER. The Army continues to evaluate the impact of Quadrennial Defense Review recommendations on Army depots. There are currently five Army maintenance depots, two with somewhat limited missions. Due to a steady decline of funded workload, the Army can reduce operating costs, sustain core capability, and improve capacity utilization by retaining three distinct maintenance depots for ground combat vehicles, communications-electronics equipment, and rotary-wing aircraft.