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[H.A.S.C. No. 107–2]



FOR FISCAL YEAR 2002—H.R. 2586






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JULY 18, 2001


For sale by the Superintendent of Documents, U.S. Government Printing Office
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One Hundred Seventh Congress

BOB STUMP, Arizona, Chairman

FLOYD D. SPENCE, South Carolina
CURT WELDON, Pennsylvania
JIM SAXTON, New Jersey
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JOHN M. McHUGH, New York
HOWARD P. ''BUCK'' McKEON, California
J.C. WATTS, Jr., Oklahoma
WALTER B. JONES, North Carolina
LINDSEY GRAHAM, South Carolina
JIM RYUN, Kansas
BOB RILEY, Alabama
ROBIN HAYES, North Carolina
DON SHERWOOD, Pennsylvania
KEN CALVERT, California
ROB SIMMONS, Connecticut
JO ANN DAVIS, Virginia
ED SCHROCK, Virginia
W. TODD AKIN, Missouri
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JOHN SPRATT, South Carolina
LANE EVANS, Illinois
GENE TAYLOR, Mississippi
MARTY MEEHAN, Massachusetts
VIC SNYDER, Arkansas
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
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JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California

Robert S. Rangel, Staff Director
David Trachtenberg, Professional Staff Member
Jarrod Tisdell, Research Assistant




    Wednesday, July 18, 2001, Fiscal Year 2002, National Defense Authorization Act—Secretary of the Army; Chief of Staff, Department of the Army


    Wednesday, July 18, 2001


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

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


    White, Hon. Thomas E., Secretary of the Army

    Shinseki, Eric K., Chief of Staff, Department of the Army


Forbes, Hon. J. Randy

White, Hon. Thomas E.

Shinseki, Eric K.

Skelton, Hon. Ike
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Stump, Hon. Bob

[There were no Documents submitted for the Record.]

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


House of Representatives,
Committee on Armed Services,
Washington, DC, Wednesday, July 18, 2001.

    The committee met, pursuant to call, at 10:00 a.m., in room 2118, Rayburn House Office Building, Hon. Bob Stump (chairman of the committee) presiding.


    The CHAIRMAN. Good morning.
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    Today, the committee meets to review the Department of the Army's budget for fiscal year 2002.

    I know, General, you have been here before and welcome back.

    And Secretary White, I know this is your first opportunity before the committee formally at least, and we welcome you this morning. We look forward to working with you.

    Unfortunately, we are going to have a vote in about 20 or 30 minutes, so we are going to move along as rapidly as possible. Perhaps we can at least get through your opening statements before it will be necessary to run over and recess, and then come back.

    But I have a statement that I am going to enter into the record to try and save a little time, and I would like to turn to my ranking member, Mr. Skelton, for any remarks he may wish to make.

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


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

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    Let me join you in welcoming Secretary White on his maiden voyage before us, and our old friend General Shinseki before us.

    Thank you again for being with us. We look forward to hearing your proposals regarding the needed funds toward serving the troops and achieving Army transformation.

    Let me tell you, Mr. Chairman, that I am concerned about the potential readiness risk of reducing the monthly flying hours and the tank miles for training. I also worry about the reports that the Army only received 10 percent of its procurement request from the Office of Management and Budget (OMB).

    And I am also concerned about the significant number of items included in the Army's 2002 unfunded requirements list. And as General Shinseki will tell us, I requested that list and it was sent to me recently.

    More than that, though, I believe we face a serious long-term concern: the size of the Army. In 1995, Army active duty end-strength was 532,000. In hearings before this committee on personnel requirements, now retired Lieutenant General Ted Stroup, who was then the Army's deputy chief of staff for personnel, testified that shrinking below that level would greatly strain the force.

    General Stroup made that statement before the American troops were deployed in Bosnia. In the period since, they have experienced continually high operations tempo, while maintaining their readiness to fight a major war if called upon. The Army has done all this with 50,000 fewer troops than we had in 1995.
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    And for the sake of those who serve in the Army and for the benefit of national interest, I believe we must set a new goal. We must strive to bring the Army end-strength back to 520,000 active duty troops.

    We need these numbers to ensure that the United States can act effectively in defense of our interests around the world. And we need these numbers to assure potential adversaries that we will have the ability to defeat them quickly and decisively if they choose to take us on.

    We need these numbers, too, for the important engagement and presence activities which are so very important. They decrease the likelihood that our troops will ever have to fight in the first place.

    The goal of greater end-strength is not a replacement for transformation. By the same token, efforts to transform the Army should not be conditioned upon cuts in end-strength. The goal should be a larger, but lighter, transformed force.

    And General Shinseki, I know you understand my concerns, and I commend you for your exceptional work in leading the Army's transformation effort, and I have had the opportunity to express my thoughts on the end-strength to each of you gentlemen.

    Mr. Secretary, I again welcome you and wish you very, very well and the very best in this very challenging effort that you have taken on.

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    Thank you, Mr. Chairman.

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

    The CHAIRMAN. Thank you, Ike.

    Mr. Secretary, congratulations on your confirmation. We are pleased that you are with us this morning. Your entire statement, as well as the General's, will be inserted in the record in its entirety. If you care to summarize or proceed in any way you see fit. And the floor is yours, sir.


    Secretary WHITE. Thank you, sir.

    Mr. Chairman, Congressman Skelton, distinguished members of the committee, I appreciate this opportunity to discuss the posture of America's Army.

    Mr. Chairman, with your consent, we will submit a much longer statement for the record and I will keep my opening remarks very brief, as will General Shinseki.

    The chief of staff and I want to talk to you today about the backdrop of President Bush's proposed 2002 budget and about our progress in achieving the Army vision. In our written testimony, we describe the magnificent work the Army has done in recent months, and identify the challenges we continue to face.
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    There is still much work to be done, but the Army has moved out. We are transforming in comprehensive and profound ways to be the most strategically responsive and dominant land power of the 21st century, decisive across the entire spectrum of military operations.

    That being said, I would like to be up front with all of you about what this budget does and what this budget does not do for the Army. First, the budget will put us on the road to recovery in some categories such as military pay, housing allowances, health care and other quality-of-life areas. We deeply appreciate your efforts, the efforts of this committee and the Congress, in supporting us in that regard.

    Second, the budget will start an improvement, but leave us decidedly short of our goals in other areas such as restoring infrastructure, which is urgently in need of repair and replacement.

    And third, unfortunately, there will continue to be shortfalls in a number of critical areas such as modernization and recapitalization of our current force, the Nation's strategic heads, as we transform to the objective force that Congressman Skelton referred to.

    For example, 75 percent of the Army's major air and ground combat systems exceed their expected half-life. Associated operations and maintenance costs are rising exponentially from this aged fleet, up 30 percent over the past four years.

    In fact, many of our platforms meet the 25-year rule required by the great Commonwealth of Virginia to qualify for an antique license plate. For example, the CH–47 Chinook helicopter, which I rode around in as a much-younger man in Vietnam, turned 40 last week.
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    Clearly, we need to arrest this deterioration and make certain that our men and women have the proper equipment, training, facilities and the most advanced technology available to them.

    Mr. Chairman, you and the members of this committee know better than almost anyone in Washington the shortfalls we are facing. After a decade of underfunding and overworking our force, we are clearly in a hole, and getting out will require a significant investment.

    So we need your help to get us on the path to correct the most serious deficiencies and to make progress toward transformation, so that our young men and women are ready for the new and different threats of the future.

    At the same time, we are obligated to do our part to look for cost savings wherever we can. Key to this effort is the freedom necessary to efficiently manage the Army and generate funds for reinvestment in the force. We need your support to give us the freedom to move dollars from waste to weapons, housing, training and modernization.

    Given the latitude, we will improve efficiency within the Army by adopting better business practices, focusing on our core competencies, out-sourcing or privatizing where it makes sense, and streamlining processes to reduce operating costs. Success will be achieved by the redirection of resources to fully fund the pillars of the Army vision: people, readiness and transformation.

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    We need your support in all these areas, and I look forward to discussing them with you today.

    Thank you, Mr. Chairman, for your kind reception.

    [The prepared joint statement of Secretary White and General Shinseki can be found in the Appendix.]

    The CHAIRMAN. Thank you, Mr. Secretary.

    General Shinseki.


    General SHINSEKI. Mr. Chairman, Congressman Skelton, distinguished members of the committee, thank you again for this opportunity to appear before you today with our new secretary to update you both on the posture of the Army and its state of readiness.

    Secretary White has already begun to make major differences in our efforts to achieve the vision that we articulated nearly two years ago.

    Today, nearly 124,000 soldiers are forward-stationed overseas, and on any given day about 27,000 of us are deployed away from home station for operations or training. We remain a war-fighting Army. That is our primary focus and our day-to-day duties tends to that war-fighting prowess.
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    We also provide versatile and agile solutions for the host of other challenges facing the United States. In the absence of better alternatives, we must provide the nation with forces that can cover that full spectrum of demands our country faces as a global leader.

    To meet these obligations, the fiscal year 2002 presidential budget amendment reflects a carefully crafted base program that allows the Army to adequately balance its readiness requirements in fiscal year 2002, while still sustaining the other key elements of our vision, those being our people and the transformation of the force. Still, we do allow some risks to sufficiently meet all of our requirements.

    With tremendous bipartisan support from this Congress, we have achieved sustainable momentum in transforming the Army. We are committed to making that momentum irreversible as we make the Army faster, more lethal, more decisive and more affordable.

    In the next 10 years, we must be prudent about accepting any more operational risks than we are already carrying today without good analytical foundations for such additional burdening.

    To date, we have moved out on our two interim brigade combat teams at Fort Lewis, Washington. And we have announced last week the locations of our next four interim brigade combat teams at Fort Richardson in Wainwright in Alaska, Fort Polk, Louisiana, Schofield Barracks in Hawaii, and the 28th Infantry Division Mechanized of the Pennsylvania Army National Guard.

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    Additionally, we are sustaining our momentum towards the objective force. Thanks to your help, the Army received generous funding in fiscal year 2001 for our initial science and technology efforts. Today we are investing in science and technology in ways that will enable us to begin research and development on those science and technology (S&T) initiatives in the 2003-2004 time frame.

    Our priority under the new budget is to extend the life of our legacy force systems through recapitalization and selective upgrades to our current war-fighting platforms, platforms we have on the force today.

    Today our major combat systems are aging, as the Secretary has pointed out; 75 percent of those systems exceed their expected half-life, increasing operations and maintenance costs, 8 to 10 percent a year, and over the last four years alone by 30 percent. Apache helicopter safety of flight messages alone have gone up 200 percent since 1995.

    To combat the spiraling costs, we have identified 19 systems that must be recapitalized in order to extend their useful readiness. We must also selectively modernize those capabilities with systems like the Crusader and the Comanche, which will cost-effectively maximize the capabilities of the legacy force and also satisfy objective force requirements.

    We are grateful for this committee's devotion to improving the well-being of our soldiers and their families. You are making a difference. These initiatives will slow the rate of decay of our infrastructure, not totally reverse it, but significantly slow it. And as you know, for the first time in memory, we have taken some risks in operations tempo (OPTEMPO) readiness to bolster sustainment, restoration and modernization. And we must protect the dollars we have elected to shift to these accounts and remain vigilant in fixing these problems.
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    Mr. Chairman, the Army vision is about the future of American leadership for the country at home and abroad. Decisive land power uniquely and critically counters international threats and defends U.S. interests. And when resistance is overcome, land power ultimately guarantees compliance with terms of peace, and thereafter it enables the establishment of legitimate authorities in rebuilding in areas of conflict.

    In short, land power provides our national command authorities and the war-fighting Commander in Chiefs (CINCs) the flexibility they need to respond to and resolve crises.

    Mr. Chairman, thank you again for your invitation to appear here today. I look forward to your questions.

    [The prepared joint statement of Secretary White and General Shinseki can be found in the Appendix.]

    The CHAIRMAN. Thank you, General.

    Let me say to the members before we get started that you noticed that Mr. Spence is not here and, in fact, did not vote yesterday afternoon. And it is very rare that he misses meetings, however it was necessary for him to go up to the University of Maryland Health Center for some check ups. He will be back shortly, we hope.

    Mr. Skelton.
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    Mr. SKELTON. General Shinseki, in your personal and professional opinion, taking into consideration your experience, the challenges that our country has, the potential threats that we have, what, in your opinion, should the Army be sized?

    General SHINSEKI. Well, Mr. Skelton, let me just begin by answering the question this way. We are in the midst of a Quadrennial Defense Review (QDR) process that will attempt to get to a number. But given today's mission profile, the Army is too small for the mission load it is carrying, under-resourced for the size that it is. And that has created the challenge that we have tried to address here in a 2002 budget that answers a number of requirements, but not all of our needs.

    If that mission profile remains unchanged, this Army is too small and end-strength is an issue as I have testified. Our requirements would be significantly to increase the end-strength of the Army along the line of the numbers you have articulated.

    Of course, the size of the Army and the mission load, this is what is being discussed in the Quadrennial Defense Review process. And the Secretary and I have been personally and heavily engaged in making our requirements known, based on a strategy discussion of what this country's interests are, what we see the requirements on behalf of the Army to contribute to meeting that national security responsibility. And the end-strength that we have today does not satisfy the mission load that we carry or that we can foresee coming out of this review.

    Mr. SKELTON. Thank you.
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    Mr. Secretary, I know you have been on the job not quite as long as General Shinseki, but you have a distinguished Army history before you ever became the secretary. So I ask the same question of you that I asked General Shinseki.

    Secretary WHITE. I agree, Congressman Skelton, with the Chief. At the current mission load, the end-strength, that 480,000 active for the Army, is too small. And you can see that in the personnel readiness of commands like the Training and Doctrine Command. If you take the total number of authorized slots in the Army and then you add the transient account on top of it, the equation does not balance at 480,000. That is in addition to the issue of the OPTEMPO of the force and multiple deployments and so forth against the mission profile.

    So I, having only been here a few weeks, it is fairly obvious to me that at the current levels of commitment—and with our normal issue of how many people have to be in the pipe to support that force structure—at 480,000 there are not enough bodies to go around. And you can see that in the readiness reporting on a monthly basis.

    General SHINSEKI. May I add to that, Congressman? I think if we look at how we have used the reserve components in the last five to eight years, on the one hand you will see an increase in our use of our reserve components for the operational missions that we traditionally have looked to the active component to handle out of the inventory of capabilities it has.

    Now that is part of the mitigation of the increase in mission profiles that have gone up perhaps 200 percent at the same time the active component force structure was coming down, end-strength was coming down in the other direction by about 40 percent.
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    And our going to the reserve components, on the one hand, has been needed and I would say positive for both the reserve component and for the active component. It has given us a great opportunity to work together. But it does reflect the size of the Army, the active component, not being large enough to handle the mission load.

    Mr. SKELTON. Mr. Chairman, thank you.

    The CHAIRMAN. The chair recognizes the gentleman from California, Mr. Hunter.

    Mr. HUNTER. Thank you, Mr. Chairman.

    Let me ask you a couple of questions with respect to the ammunition shortage, General Shinseki. We have been down this trail a little bit before. But when we concluded our hearing last year, your testimony was to the effect we had a $3 billion shortage in ammunition requirements. My first question would be, do we still have that shortage?

    And second, are you participating, and Secretary White, are you participating in analysis under the Department of Defense's (DOD's) aegis, to reduce the two-major theater wars (MTW) standard to a different standard? And will that have the effect of eliminating a part of that ammunition shortage, if that occurs?

    Secretary WHITE. Let me take the first part which is the two-MTW discussions and the Chief of Staff can talk to the specifics of the ammunition. If that is okay.
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    We are looking, we being under the Secretary of Defense's guidance as part of the QDR, at a number of options for force-sizing metrics that would replace the two-MTW standard that has been present for the last six or seven years. No decisions have be made as yet. I am not sure of the thing.

    As you know, we have agreed in terms of reference as a part of the QDR. That includes the force-sizing mechanism and we are now in the business of looking at a whole host of various force structure options against that metric and against the overall strategy. But decisions have not been made.

    Mr. HUNTER. Okay, let me ask you on that question, do any of the options involve moving up in terms of force structure, increasing it?

    Secretary WHITE. Yes. I mean there are options across the whole spectrum of possibilities for all four uniformed services involved in the discussions.

    Mr. HUNTER. Okay. Let me just ask you one other question and before General Shinseki answers that on that point.

    You have got a distinguished career as an Army officer before taking this position as Secretary of the Army. In your personal opinion, do you think it is wise for us to move to any lower force structure than the current 10-division force structure? Because you have had 30 years to reflect on force structure of the U.S. Army, so you are a little different than the guy that comes in from industry, who does not have a military background or at least as thorough of a background as you have. What is your personal opinion?
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    Secretary WHITE. Well, my personal opinion is that the Army, at its current level, is the smallest it has been since 1950. And in 1950 we paid a price for a small Army in terms of the Korean War. So I am very nervous about shifting down any further.

    Mr. HUNTER. Okay, thank you.

    General Shinseki.

    General SHINSEKI. I share the Secretary's comments about the size of the Army in terms of structure and end-strength. And with the current mission load, as I have indicated, the Army is smaller than the requirements we are asked to handle.

    With regard to the ammunition problem, I think we have always had an unfinanced requirement in the area of ammunition. And understandably we buy ammunition primarily for two reasons: one to train with and one to set aside war reserve stocks for a future war that we do not quite see very clearly today, whether it is two MTW or something else.

    For example, this year we are spending $1.2 billion on buying ammunition. The majority of that $800 million of that is for training so that we meet our training requirements. About $300 million of that is against the war reserve requirement, of which we have already built a certain level of stockpile but we continue to buy in increments against that war reserve requirement.

    At the same time every year, we are demilitarizing about $100 million and it could go as high in some years $135 million, demilitarizing war reserve ammunition that has exceeded their shelf life. So this is, sort of, a balancing act that we have got.
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    Another important factor here is we never want the ammunition to be totally bought out, because if you do that you shut the lines down and you do not have the surge capability.

    Mr. HUNTER. No problem there. You are $3 billion short.

    General SHINSEKI. Well, that is $3 billion short over a period of five or six years. And I think the unfunded requirement (UFR) for 2002 is something significantly less, maybe $400 million, of which that $400 million would be war reserve ammunition.

    The fact that we have warm lines operating at a level that allows us to surge, would mean that if we needed in a crisis to produce more ammunition, we would go after those war reserve stocks that are currently unfunded.

    Mr. HUNTER. Okay.

    The CHAIRMAN. The gentleman from Texas, Mr. Ortiz, and then we will recess and when we resume we will start with Mr. Saxton and Mr. Snyder.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    Mr. Secretary, we would like to congratulate you on your new assignment and welcome you to this committee.
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    And, General, good to see you again.

    And I have a question for General Shinseki. How will your large unfunded requirements for recapitalization and sustainment system technical support, current force modernization, spares and depot maintenance affect the readiness of legacy systems, and what impact would that have on depot workloads and work forces in fiscal year 2002? Is it going to have a big impact?

    General SHINSEKI. Mr. Ortiz, I think I would start by saying, for the first time in my experience in serving here in the Pentagon, the Army this year has taken risk and OPTEMPO training readiness in order to put resources against recapitalization and revitalization of the infrastructure. So I would tell you that is not an insignificant investment on the part of the Army.

    We have traditionally put every dollar we needed against the training requirement and taken risk in these other areas. And over time, none of those other areas ever showed a spiked change in their readiness levels, but it has come to the point where this year we have to do something in recapitalization. We have to do something about revitalizing our infrastructure. And so we have taken risk in the training accounts.

    But that is going to allow us to begin the recapitalization of 19 systems that are part of this. Seventy-five percent of our war-fighting systems have exceeded their half life. And what this allows us to do is extend their useful life out to 2010 when we expect to have that future capability, that objective force ready to field. This will give us war-fighting readiness on these systems every day for the next 10 years and beyond because it will take us some time to go to full transformation.
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    I expect that this will work better than we have in the past, work load our depot requirements.

    Recapitalization this year is a $4.9 billion investment, something that we have not done in years. And in my experience as an Army, this is a major change. At the same time, we are putting $5 billion in our training readiness accounts. And so, in terms of war-fighting readiness, training, and the extension of our capabilities in these systems that we have in the force today, a major investment there.

    Mr. ORTIZ. One of the things that my good friends Duncan Hunter and Ike Shelton were talking about force structure and the necessity right now that this becomes a matter of priority. But how soon will you think would be the adequate time to maybe provide money to increase the force structure? Is this something that you see in the near future or is it something that you see further down the line? Where do you put that in priority?

    General SHINSEKI. I think we will get some of these answers out of the review that we are currently undergoing. And I think we will be well-informed by that.

    In any event, if a decision were made to increase end-strength, we would have to accrue that end-strength over time. We would have to recruit a larger force and that would take us some time to be able to achieve a final number. And so it would be a scheduled growth.

    Mr. ORTIZ. Thank you, Mr. Chairman.

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    The CHAIRMAN. Gentlemen, it will be necessary for us to recess, hopefully for no longer than 15 minutes. The committee stands in recess at the sound of the gavel.


    The CHAIRMAN. The meeting will please come to order.

    The chair recognizes the gentleman from New Jersey, Mr. Saxton.

    Mr. SAXTON. Thank you, Mr. Chairman.

    Let me ask a question about, Mr. Secretary and General Shinseki, last year or the year before, I guess last year, we worked real hard here with DOD to try to address the pay raise problem, or the pay raise issue; I thought it was a problem and so did many others.

    And as I look back through the history since the early 1990s, I see that we had pay raises of 3.7 percent in 1993, down to 3 percent in 1997, just 3.6 percent in 1999, and last year we worked real hard and got it up to 4.8 percent.

    Now, I see that this year the proposal from DOD is to have another increase, this time of five percent. Would you put that in the context of the total budget, how it relates, in your opinion, to other pay raises, and why you made this recommendation?

    Secretary WHITE. I think, Congressman, first of all having pay comparable for our soldiers to the private sector is critical. It is what people deserve when they serve their country, number one. And number two, it is what allows us to be able to compete in the highly competitive job market from a recruiting and retention perspective.
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    I think that the five percent pay raise that was a part of the President's initiatives with the 2002 budget, plus the targeted piece for senior enlisted grades and other portions of the pay table where we did not think that we were paying for the leadership or the qualities associated with those grades was necessary, I think this gets us on the right track toward addressing the people issues in the force.

    And I think our recruiting reflects that. We are having a very good recruiting year, and I think that in part reflects the fact that people are stepping up and recognizing that the compensation has to be appropriate.

    Mr. SAXTON. And how would you visualize moving forward into 2002, 2003?

    Secretary WHITE. I would say at this point you are going to see another significant pay raise coming as a part of 2003. No question.

    Mr. SAXTON. General Shinseki?

    General SHINSEKI. I would just add, Congressman, as many times as I have been here to talk about taking care of our people and the well-being issues, in my opinion you can never do enough for a soldier, not for what we ask them to do and how well they do it for us, and the load they carry for this country both at home and abroad.

    And I do think this is much-needed attention, and I thank the Congress for helping us in this area. And I agree with the Secretary, there is still work to be done. But we have come a long ways in the last two years to address some pay issues that have needed to be addressed for some time.
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    Mr. SAXTON. Thank you.

    General Shinseki, you mentioned the increased role of operational missions of the reserve force. Obviously, training becomes extremely important in terms of making sure that our readiness level in the reserve component is up to what it needs to be in order to deploy reserve forces.

    Fort McCoy, Wisconsin, and Fort Dix, New Jersey, are two reserve component training centers that I believe are unique in some respects. Would you tell us about those bases and how their ability to meet our readiness standards is, in your opinion?

    General SHINSEKI. Well, first of all, McCoy and Dix are key installations where we do significant training. And with the realignment of reserve forces, more and more of these installations are becoming training ground for more and more units. These installations are handling more of the training load. So I would say McCoy and Dix are key to our reserve readiness issues.

    Mr. SAXTON. Are there plans to establish other reserve component training centers like McCoy and Dix?

    General SHINSEKI. I am not aware that we have identified others. But as you know when we describe our requirement to mobilize to handle a large surge in training requirements, if we were to go to crisis someplace in the world, there are other training areas that we would be moving reserve components to, some of them active component installations that we operate off of today. The Hoods, the National Training Centers would also become part of the mobilization profile.
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    I would be happy to provide you a more detailed answer for the record that talks about specific reserve component installations that are intended to be addressed in terms of upgrading.

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

    Mr. SAXTON. Finally, Mr. Chairman, if I may stretch my time just a bit to ask one final question relating to the budget request for anti-terrorism/force protection, it shows a shortfall of $306 million.

    While I am told the best information we have is that the anti-terrorism/force protection item is $128 million, which is what I am told is about 30 percent of the requirement. This seems, in light of recent events around the world, to be an area that this shortfall seems relatively important.

    Can you share your thoughts on this issue?

    General SHINSEKI. Certainly. We have been assessing our anti-terrorism/force protection requirements worldwide for an Army that has forces and families stationed in a variety of locations. Some of those locations, over the years of the Cold War in Europe, we, by philosophy, had a design that said we would put our families and integrate them into the local community. So this review of our terrorism and force protection requirements has forced us to go back and take a look.

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    And it has taken a bit longer than I wanted, but this year those numbers for fiscal year 2002 I think are the numbers you are describing here, about $450 million, of which we were able to take $128 million and fund the most critical requirements. We do carry about a $300 million unfinanced requirement, which we will continue to work and try to address during the course of this year. But for the long term, the force protection requirements are fairly significant and could go as high as $1 billion-plus.

    Mr. SAXTON. Thank you, sir.

    The CHAIRMAN. The gentleman from Arkansas, Dr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman.

    Good morning, gentlemen.

    General Shinseki, I want to ask a question about national missile defense. We are having a hearing here on Thursday, and some very good technology was demonstrated over the weekend. But I wanted to ask a context question.

    I am in my third term now, and like Ms. Tauscher and Mr. Reyes and some others on this committee, we have learned a lot about a lot of different weapons systems and a lot of different military issues. But it seems like the issue of missile defense has assumed a life of its own that has surpassed any of the issues that you all have talked about in either your oral or written statement.

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    If I can ask an unfair question, but unfair questions still deserve fair answers, do you have concerns, from your perspective, trying to fund some massive changes and transformation, plus fund current needs, do you have some concerns that the national missile defense is perhaps a bit out of context in comparison to both other needs of the military and national security concerns around the world?

    Now what I mean by that is, it has almost become a religious icon for some folks, both out in the, you know, there has been this mobilization for it. I do not have people back home coming to me and saying, ''We really need to fund the transformation of the Army; we really have to do something about infrastructure needs in the Army.''

    But I do have people, you know, that are mobilized to talk about missile defense, and I think the result of that is it is going to fund perhaps the result of that it is going to fund missile defense out of context with what our overall military and national security needs are.

    And so my unfair question is, do you share any of those concerns?

    Do not look at the political guy there, General Shinseki. [Laughter.]

    General SHINSEKI. I was just checking to see whether the Secretary was leaning forward toward the mike. [Laughter.]

    I think you have asked the policy question, Congressman, and let me answer it from an operational sense.
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    The Army has a missile defense program. We always have had. I mean, it is things like theater high altitude air defense (THAAD) and PAC–3. And when you describe missile defense, you are talking about a broad range of capabilities that started trying to decide whether you want capability to attack a threat at the boost phase, where it is shortly after taking off at the mid-phase, or has the Army has always had a responsibility at the terminal phase? And it has been our interest to spend some of our resources in that area because it involved the protection of our troops.

    Dr. SNYDER. The issue is the balance of the spending of the resources.

    General SHINSEKI. That is correct. And we have invested in the terminal-phase missile defense program. It is a significant cost, and we have had to balance that requirement even with our own programs. So I am concerned about available funds to do what the Army must get done, some of the challenges I have described earlier in this discussion.

    Dr. SNYDER. General, you also make, on page nine of your statement, you say, ''The Army would prefer to divest itself of excess infrastructure and use the savings to maintain installations and repair critical facilities, as well as address other Army priorities.'' That is your statement in support of more base closings; is that correct?

    General SHINSEKI. It is my statement in support that the Army would support a base realignment and closure (BRAC). We have excess capacity, and whether that excess capacity is addressed through realignment or closure, I think still is to be determined. But we do carry some excess capacity that would, if we were allowed to address it, would allow the Army to focus resources in much-needed areas that today we are describing as shortfalls.
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    Dr. SNYDER. Mr. Secretary, I wanted to ask you your unfair question for the day, and again it goes back to this money issue. I asked your counterpart in the Navy the other day if he had some concerns looking ahead over where the money is going to come for the things that we all want to do or think we want to do. And of course, I did not support the tax cut. I think it is going to be a massive problem for us in the future that you all are going to deal with for the rest of your career.

    But the Army, perhaps more than all the other services, is going to have to have great amounts of money for current needs, but also great amounts of money for transformation, because it is an expensive process. And so my question to you is, do you have concerns?

    You know, of course, a day or two after I asked my question to the Secretary of the Navy, Billy Kristol called for the resignation of Rumsfeld, I think just to get some attention. I think he likes Secretary Rumsfeld. But his point was that you all in the Administration have not been advocating enough for these money needs.

    Now, do you all have some concerns, do you personally have some concerns about, as you look ahead and you see what is happening with the tax cut, when it kicks in, what other needs are going to be, what missile defense is going to be, is there going to be adequate resources there to do the kinds of things you all are talking about on your wish list?

    Secretary WHITE. Well, that is a great question. We have, as you know, significant challenges as we look ahead to support transformation, repair our infrastructure. So we have over spent the peace dividend, I guess, is a simple way to put this, over the past 10 years, and we are now faced with some very, very hard decisions that will require significant resources no matter which option you pick.
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    Whether you choose an option that expands the Navy or you choose to fund ballistic missile defense at certain levels, there are some very, very tough choices that are going to have to be made as we look to the future. And I think everybody in the defense establishment is concerned about how that is going to play out, no question.

    General SHINSEKI. Mr. Chairman, may I just add a comment here? If you were to look long term for the Army based on where it is today, coming out of a Cold War experience with platforms that we have articulated as heavier than we would like and difficult to deploy, the strategy today for two MTWs requires us to stockpile equipment in order to meet the time lines. And therefore you have equipment stockpiled Southwest Asia, Northeast Asia and afloat.

    I think today it would be safe to say that the stockpiled equipment is about $15 billion, of which we spend maybe $500 million maintaining every year in the event of crises. And if we continue to follow this strategy, we would be stockpiling more and more equipment over time because we could not solve our time line challenge on deployability.

    This is why the Army two years ago said you cannot afford to go in that direction. We need to challenge ourselves to get a force that is more agile, so we do not have to continue to go down this road and hopefully husband the money we would have spent there for other things that both the Army and Defense could use it for.

    The CHAIRMAN. Gentlelady from Virginia, Mrs. Davis.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you, Mr. Chairman.
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    And thank you, Mr. Secretary and General Shinseki.

    We have heard a few references today to training. And, General Shinseki, this question is to you. I am led to understand that the Army may be critically short on maneuver space and is unable to afford the loss of any more. And in particular I am concerned about the Army's ability to train their troops on water. And how would the Army design maneuver space in the future?

    Will it include the space which the Army utilizes to train the troops on waterborne and naval support operations? And would you, General, would the Army be willing to study this issue and report to the committee and to me what the Army's capabilities are to train soldiers for waterborne and naval support operations?

    General SHINSEKI. For specifically waterborne amphibious operations?


    General SHINSEKI. Let me address the first piece about land and for land component. Land is our environment, and so the training lands we have today are important to us, so important that we have taken on the responsibility of being good stewards from land management perspectives, as well as the environment.

    You know, we are not perfect in this arena, I do not claim to be, but we have invested heavily in ensuring that as we use the land it is not abusive, and there is rotation as well as the opportunity for land to recover from the kinds of operations we conduct.
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    As we describe a movement toward transformation formations that are faster, more decisive, and therefore weapons with a greater range and the ability and the requirement to see further if you are going to fight this kind of formation, the land we have is mighty important to us today.

    I do not know, until we get through the science and technology investments in the next three to four years, whether or not the land we have today is sufficient. But I do know that the land we have today is pretty important.

    In terms of waterborne operations, I think all of our services have responsibilities, and in the past have demonstrated our requirements to be able to operate off of a surface fleet and be able to project across a beach. We did it in Normandy, in the operations in Haiti. And I think that requirement will continue to exist for mission-specific requirements.

    I do not know that on a day-to-day basis we are able to dedicate the time and the energy and the assets to be able to do this as a full-time requirement for training readiness, and certainly the Marine Corps does that very, very well. But I think the Army in its, you know, in its doctrinal thinking about its war-fighting responsibilities does reserve waterborne operations for a part of that discussion.

    And if you would like us to provide a more complete answer for the record, I would be happy to do that.

    [The information referred to can be found in the Appendix.]
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    Mrs. JO ANN DAVIS OF VIRGINIA. I think a lot of people, like, you know, I was not as aware that the Army used the water for training.

    General SHINSEKI. We do.

    Mrs. JO ANN DAVIS OF VIRGINIA. I know you do. I have been out and visited the post in my area.

    General SHINSEKI. Sure.

    Mrs. JO ANN DAVIS OF VIRGINIA. And Fort Eustis is one that has been identified as one of the Army's 15 power projection platforms. And I guess that is where I was going with my question, if you could explain the importance of this base in terms of geographical location and its ability to facilitate the rapid deployment of personnel and equipment in support of sustaining the training.

    General SHINSEKI. Okay. Thank you for the focus.

    The assault operations are primarily responsibilities of Navy and Marine Corps formations, but as the Army expands through port operations the ability to very quickly expand our footprint into a foreign location, those are primarily Army operations.

    And it involves bringing naval vessels up to what we would call a green line, so to speak, and from that point in it is an Army operation in terms of off-loading, securing a port, expanding a port, creating port operating facilities, not just for the Army, but for any other throughput coming behind our operations.
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    And so that is very much a part of our doctrine, and we do have a requirement to maintain proficiency there, we do train to the standard. And so operations where we train today are important, ability to train.

    Mrs. JO ANN DAVIS OF VIRGINIA. Will we still have this ability to train with the cutback in the dollars for training? I guess my concern is the shortfall I saw in the 2002 budget, the money that was taken out of the training. And I think someone else alluded to it, but where does that leave us with our readiness with our Army?

    General SHINSEKI. Right. The risk that we took in 2002 budget in terms of training readiness was to move money out of the 800-mile OPTEMPO and the 14.5-hour flying hours program. And we would reduce the 800 to 730 miles of training OPTEMPO for our ground formations, and we would go to 14 hours per crew per month in training. There is some risk there. It is about 94 percent of our training requirement. So we have taken a risk of about 6 percent.

    I have not cut back on the requirement to train to the 800-mile standard or the 14.5-mile standard. The instructions to the force are train to that standard, take your risk in the fourth quarter, and give me, you know, enough time here to be able to work out that decrement that I have imposed on them. And I do intend to fix that before the end of the year. So training standards will be met.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you.

    Thank you, Mr. Chairman.
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    The CHAIRMAN. Gentlelady from California, Mrs. Tauscher, is recognized.

    Mrs. TAUSCHER. Thank you, Mr. Chairman.

    Mr. Secretary, welcome. Good to see you.

    Secretary WHITE. Thank you.

    Mrs. TAUSCHER. I want to pivot off my colleague Mr. Snyder's points, from Arkansas, regarding national missile defense. I am actually a big proponent of a limited deployable national missile defense.

    But I have got to tell you, I am increasingly concerned about this near theological proportion of this out-of-context national missile defense rhetoric that is out there coming out of the Department of Defense and the Pentagon that has, I think, caused many of us to worry about the public policy implications of having it become basically the only message that the American people are hearing and the potential of it becoming a political litmus test for whether you are for a strong national security and for the right things for American working families' security versus all of the things that we know are out there that are tremendously important and things, frankly, that General Shinseki and others in the Joint Chiefs have been leaders on for many years.

    I know that it is a tough position for you to be in. It is your team that is doing this, by the way. But the point is that I think eventually many of us are concerned that this is a tsunami that is going to wash over the limited ability we have to get the political will of the American people to be for a bunch of things that we know we have to get them for.
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    So I think eventually many of us of good will are going to have to come together and find a way to get other messages out there, and look forward to working with you on those issues. And I will not put you on the spot any longer.

    Secretary WHITE. Thank you.

    Mrs. TAUSCHER. General Shinseki, I understand the Crusader is intended to be the prime tool in the future to shape the battlefield. However, there are rumors that the Crusader is on the funding hit list. And critics claim that it is outdated and a relic of the Cold War, which I do not agree.

    Can you shed some light on this and give me a sense for how the Crusader fits into the overall Army transformation plan? And second, would you also say that there is a void in direct fire support without the Crusader?

    General SHINSEKI. Congresswoman Tauscher, thanks for that question, because I think it is an important one, and certainly there are lots of discussions out there about the Crusader, and I would like to put this in perspective.

    I said earlier that the strategy discussions are about war fighting. I mean, there are lots of things we use our forces for, but the one thing that our forces must be able to deliver each and every time the Nation asks is success in battle.

    After the Desert Storm experience we discovered there were a couple of major shortfalls in our operational capability. One was this ability to deploy the force in the way we would like. And we could get light forces there early, but we had to wait for heavy forces.
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    We have addressed that with the interim brigade combat teams. With significant help from the Congress, we were able to shore up that responsibility. And I am confident that our war-fighting capability, because we have done that, once we start fielding the interim brigade combat teams, solves that operational problem.

    The other operational problem we discovered coming out of Desert Storm was a shortfall on fires. It was made very clear to us that when we went on the offensive with our tanks our artillery pieces were not agile enough to keep up.

    And so you had to slow the attack to have the artillery close. And when they did close, they were out-ranged by the other guys, they were outnumbered by the other guys, so they in essence were outgunned. And the only reason we did not pay a higher price was the lack of adeptness on employing artillery.

    We knew we had to do something about it. So between the time of Desert Storm and today we have reduced the size of the Army; 18 divisions, today we have today 10.

    In order to afford better fires, we took 25 percent of our artillery and retired it and reinvested those monies in future capabilities, did not even know what to call it, but it was a better set of fires, so that we would not have our front line troops exposed to enemy artillery without the ability to counter.

    That became known as Crusader. And as Crusader began to demonstrate the capabilities it has, it fires a sustained rate 10 times the Palladin, which is the current system, does today; out-ranges all of our adversaries' artillery; and so it fixes that problem.
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    But because Crusader offered an opportunity for war-fighting potential that would make a difference, we also decided to take some risk in our direct-fire systems, tanks and Bradleys, and we reduced 25 percent of our war-fighting platforms in our infantry and our armor battalions.

    Armor battalion commanders today are expected to meet the obligation of fighting and winning their portion of the fight with 25 percent less capability.

    We shored this up with the ability of Crusader to compensate in the fires, and also what you have often heard about as digitization, our ability to distribute our fires, command and control our formations in a way that we bring more effects into the fight. And between Crusader and digitization, this was intended to make us leaner, more lethal, more capable.

    We have lived with this fire shortfall now since 1991, 10 years, and we are about to realize a fix to it. I just do not know how to describe extending the risk that we have carried for this long another 10 or 15 years.

    Before another committee I addressed this question this way. When we go to the next war I hope we go with the biggest and the best Air Force, and the biggest and best Navy, and certainly the best Army. We are the ninth-largest army today and seven of the top eight are potential adversaries. We do need to keep our edge, and Crusader is part of that keeping the edge.

    Mrs. TAUSCHER. So, General, you say that the Crusader system is a ''have to have.''
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    General SHINSEKI. Yes.

    Mrs. TAUSCHER. Thank you.

    Thank you, Mr. Chairman.

    The CHAIRMAN. General, I think Mr. Skelton needed a point of clarification.

    Mr. SKELTON. Yes, and I hate to interrupt, Mr. Chairman.

    But in essence did you say that we were outshot by enemy artillery in Desert Storm?

    I did not quite understand what you were saying.

    General SHINSEKI. Out gunned.

    They had the potential to out gun us because they had the capability to fire at longer ranges. They had larger formations. If they wanted to mass artillery, they certainly would have been able to do that. They did not.

    They had the capability. They could not bring it to bear. But it did point out to us 10 years ago, that we had fires problem that we needed to fix.
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    Mr. SKELTON. Thank you.

    General SHINSEKI. And we have been able to.

    The CHAIRMAN. The gentleman from Georgia, Mr. Chambliss.

    Mr. CHAMBLISS. Thank you, Mr. Chairman.

    Gentlemen, thanks for coming over and visiting with us this morning.

    Mr. Secretary, we on the Readiness Committee, have been dealing with a very sensitive issue for about the last three years regarding the way we contract out the moving of our personnel. And we compromised with a pilot program last year that is in effect this year, went into effect in January as you know.

    And we are hearing that in your budget you are going to propose pulling that pilot program. And I wish you would address that.

    Secretary WHITE. I will do that. I am not aware of the specifics of this, but I will take a close look at this and I will get back to you on this if that is okay.

    Mr. CHAMBLISS. Thank you. That is a very sensitive issue for our personnel and if it is a decision of dollars, let's talk about dollars. But we need to let that pilot program run its course.
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    Secretary WHITE. I will do that.

    Mr. CHAMBLISS. Second, there is a problem, Mr. Secretary, that is festering out there that has been more than heightened by the recent decision that the Secretary of Defense and the Air Force made with respect to the B–1 issue. It does not have anything to do with the Army. But it has heightened an issue regarding the attitude of each respective Secretary towards the Guard and the Reserve and their integration into the active force.

    And frankly, there is a feeling out there among the Guardsmen all across America, that they are being looked at as second class soldiers. And that simply ought not to be the case. I do not have to tell any of those folks sitting with you or behind you the great job that our Guard and Reserve are doing.

    I was in Bosnia this weekend. We have got 1,200 National Guardsmen from Georgia over there today. They are doing a fantastic job of keeping the peace. Everybody from General Ralston all the way down to General Sharp all up and down the command totally agree that without the National Guard and without the Reserve being seamlessly integrated into the active force over there, we simply could not be doing the job that we are doing today.

    And I hope not only is this perception that is permeating through the Guard today as we speak, I do not think it is true, certainly, but I hope there will be some proactive movement on the part of each one of our service secretaries to ensure those folks, to ensure their families, to ensure their employers that we know and have the respect that those folks are as fine of soldiers we can put on the field today.
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    They are getting more training than ever before. They are getting better prepared before they are called to active duty than ever before. And with what I have heard today with respect to the size of the force structure, we are going to call on them forever and ever to be integrated into the active force in times of conflict.

    So I say that just to say that Mr. Secretary, as I found out when you and I were up at West Point for graduation, you are the original A-man.

    Secretary WHITE. Indeed.

    Mr. CHAMBLISS. And I hope that you will add Air National Guard (ANG) on that cape that they gave you up there and be just as active of supporter for the National Guard and the Reserve as you are for the active Army because they are critically important and they need to know that.

    Secretary WHITE. Well, I absolutely agree with you 100 percent. Having been gone 10 years, 11 years and coming back to the Department and being familiar with what the relationship with round-out brigades and active divisions was in 1990 and looking at the readiness of the National Guard and Reserve today and how it has been reconfigured and how it has affiliation with the active side has been restructured and then looking at the success of first the 49th Division in a Bosnia deployment shortly, the 29th Division going in there and having met with that division commander as well, we have made enormous progress here.

    And we absolutely must sustain it. When we have an active force of 480,000 and we have the mission profile that we have, there is absolutely no alternative to Guard and Reserve fully integrated, one Army, stepping up to the challenges of this OPTEMPO. And they are doing a magnificent job and I intend, for one, to see that they are recognized for that.
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    Mr. CHAMBLISS. Thank you.

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

    Mr. REYES. Thank you, Mr. Chairman. And Mr. Secretary, welcome.

    Secretary WHITE. Thank you.

    Mr. REYES. And General Shinseki, welcome as well. We appreciate your time here. There are several things that I would like to ask for you to comment on.

    The first one, Mr. Secretary, is I want to do some follow-up on a couple of issues that I brought to your attention at the Army Caucus breakfast, one of which was contract bundling, and I think my colleague Solomon Ortiz mentioned. The other one was ensuring that minority businesses get their fair share of contracting as well. Well, we will do some follow-up on that.

    Secretary WHITE. Okay.

    Mr. REYES. Would appreciate your support on that.

    I know there have been a number of my colleagues that have brought up the issue and their concerns about the end strength of the Army and just wanted both of you to know two things.
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    First, I want to go on record as echoing their concerns. And second, that it is important for you to know that there are many members of Congress that share that concern about the end strength of the Army. And I think our ranking member asked for a figure in terms of what you felt the end strength of the Army should be.

    And I would ask that question again from you for a specific number. And please understand that I do so because not just in my district but all across the country as I go and visit military installations, Army installations, there are concerns about the OPTEMPO, all the way down why we cannot furnish a proper burial detail to veterans that have served our country honorably and either retired or were just veterans of the Army .

    So there is a lot of concern there about that.

    One of the things, and this is why I would like to comment on the second portion, one of the things that there is an impression out there is that we are currently re-evaluating our deployment worldwide. And so I would like for each of you to comment on the number for the end strength of the Army first. And the second one, to answer the question, are we in any way, shape or form in any manner, reevaluating the world wide deployment of our soldiers?

    Secretary WHITE. Well let me, on the end strength question, there are two ways to look at this. The first one is to say if we have a TLE plus TDA structure, in other words authorized spaces in the Army of about 417,000, what cushion do you need above that to cover transience and all of the rest of that sort of thing in order to make that equation work so that the entire Army is C–1 for people.
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    If you look at the current overhead, it is not adequate to support at 480,000 the 417,000 in TLE and TDA and that is why you have people like United States Army Training and Doctrine Command (TRADOC) because the Chief has made the courageous decision to fully support the manning requirements of the 10 divisions. That is why people on the TDA side are grossly short of people in some cases.

    So to fix that piece of it, I think that you have got to have at least another 10,000 people in the Army just for that piece of it.

    Then if you say, if you assume the current deployment requirements around the world, that the Chief talked about, 126,000 forward stationed, another chunk in forward deployed and you apply a reasonable OPTEMPO pace to that so that we do not wear out families, and we treat people the way they ought to, then you get an additive number of top of that.

    So from what I know about it, I cannot argue with what Congressman Skelton puts on the table as somewhere around 520,000; certainly not, the 500,000 is the right answer if you do not change any of that.

    On the deployment question, the deployment scheme of the Army is a function of the national military strategy. It is a function of the President's decisions, which are a little above my pay grade as we used to say.

    But the fact is that the Administration is reviewing deployment requirements. We are doing it in the Department of Defense as a part of the national military strategy review and the QDR process. And we will see where that comes out because there is a general consensus from all concerned that not only the Army, but the Navy and the Air Force are facing severe OPTEMPO challenges the way things currently are.
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    General SHINSEKI. I would just add, Congressman, that given the profile of missions today, the number that Congressman Skelton put on the table, is an appropriate number to address the kinds of missions we have.

    For the Army, our challenge is not just going to meet a commitment that is unanticipated. It also has the back end of that—and that is we tend to stay. We have been in Kosovo now over a year, five years in Bosnia. It has been 10 years since Desert Storm is over and there are joint forces in the Gulf. But every day there are a 1,000 soldiers on the ground training in Kuwait and providing force protection.

    We have been in the Sinai 18 years, two battalions worth of soldiers. We have been in Korea now 50. And so those requirements over time attack the inventory of available forces you have to handle additional contingencies. So given that kind of profile, the numbers we are talking about are appropriate.

    Some would look at our presence in Europe and wonder what the two divisions in Europe are doing. They are doing a lot. I mean they are part of the continent that goes to Bosnia and to Kosovo and they rehearse in the event of crisis to have to go to places like Southwest Asia.

    So they have a full requirement of activities. Add to that the new members added to the North Atlantic Treaty Organization (NATO). Somebody has to move forward with competent, professional capability and work with our new NATO members and demonstrate to them what it takes to join our formations. And many of our units in Europe are doing that, both in training and in mobile training teams.
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    The CHAIRMAN. The gentleman from Virginia, Mr. Schrock, is recognized.

    Mr. SCHROCK. Thank you, Mr. Chairman. Mr. Secretary, General, thanks for being here.

    Let me follow up on one thing real quick that Ms. Davis commented on, our water craft. And as a retired naval officer, it grieves me to admit that the Army has more water craft than the Navy. [Laughter.]

    But I guess if I am going to be here and succeed, I am just going to have to get used to that. So that is a fact, believe it or not.

    I was glad to hear the General talk about the quality of life issues. Frankly, I think that those are the first things that we have to address or we are not going to keep our troops in. And I was privileged to accompany four other Members of Congress to the carrier Kennedy over the weekend. And the thing they talked about was pay, parts and quality of life. And I am sure that is the same thing with you all, if we are to keep these young folks, we are going to have to pay what they are worth.

    We have hired them to do a certain job. We better make sure the equipment and the parts are there so they can do it. And we need to give them a decent place to live. And as I have talked to both of you, you know that Fort Story in Virginia Beach, that is a big thing for me to get the 168 housing units that meet no congressional, that are all wiped off the face of the earth and new ones built. And that is something that I am going to be working on, I can assure you.
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    Everybody has mentioned training. That is key. If we do not have training, we have got nothing else because when the red flag goes up, if they are not trained, we are going to lose. And I heard you all, I think the General say, that the Army is too small for the mission that you have been given. And I agree with that.

    Right after I was elected in November, I was privileged to sit in on a hearing that the Readiness Committee had down at Fort Monroe with General Abrams and hearing the problems TRADOC is having with the C–3 and C–4 ratings, which is grim, and I think that is because there has been so much neglect over the last several years and is going to take a lot to get that back up again. But I think that will be addressed.

    Let me ask a question. I read in the paper that the possibility exists that two divisions will go away and that just gives me goosebumps when I hear that. I do not like that and I just want to know if that should happen, what does that mean for the Army? What does that mean for the mission you have been carried out to do and how it will impact the entire armed forces? Both of you, if you want to comment on that.

    Secretary WHITE. Well, first of all, I share all of your concerns about quality of life and so forth. I and General Shinseki raised families on military installations, went to DOD schools, shopped in commissaries and so forth. So this is a labor of love for me to be back here and deal with these things.

    Mr. SCHROCK. Me too.

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    Secretary WHITE. And you as well. There are a whole host of options in terms of force structure and strategy matches that are being considered by the Secretary and all of us as we argue these cases out that include both going up in numbers and down in numbers.

    And it is too early to predict where it is going to come out. I think the whole point of the review, though, is to get consistency between what the strategy is and what the force is to support it, because the general consensus today is that there is a mismatch between the strategy and the deployments and everything else associated with it, and the available force structure to execute it.

    And one of the fundamental goals that Secretary Rumsfeld has in this QDR process is to align the strategy with the force. And if we fail to do that, then we will perpetuate this problem that has been killing us for the past eight to 10 years, and that is a fundamental goal that he is after, and we support him.

    General SHINSEKI. I would add that a fundamental tenet in the discussions about a strategy review has been the assumption that there will be strategic surprise for this country. It was true in the last century and it is the one assumption we ought to make, and then have the capabilities to absorb that and prevail.

    And if strategic surprise, the assumption, is appropriate, then you do not want to be too perfect here. You need robust capabilities that allow you to anticipate that you are going to be surprised.

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    You are not going to be able to figure out every scenario that could happen. And you need flexibility: flexibility for our decision makers; flexibility for the Nation. And under those discussions, a reduction by, whatever, two divisions as you indicated, does not compute.

    Mr. SCHROCK. It sure does not. I think the troubling thing is, we knew what we were dealing with in Vietnam. We knew what we were dealing with in Korea. And of course as you said, Mr. Secretary, in 1950, you were down to a level where we are now and you were surprised.

    The thing is, we do not really know who the enemy is in many cases. We have these rogue nations and these terrorists who are doing all sorts of horrible things, and the fear is that they are going to do it on our homeland here pretty quick. And it is just impossible to plan for that, and I guess to further downsize when we know that threat is out there and the potential is there, really does bother me.

    Let me ask, recapitalization: The Air Force has talked about it; the Navy has talked about it; and now you talked about it briefly this morning. Exactly, specifically what would that mean for you all? I guess I just would appreciate understanding more of the detail of that.

    General SHINSEKI. In balance with what we do in terms of training and readiness, our training accounts in fiscal year 2002 are about $5 billion. In terms of recapitalization, the amount of energy we have put against it is about $4.9 billion to address 19 systems that over the course of the last 10 years have exceeded the half-life. They have not been rebuilt.
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    And if we are going to ensure that the force we have today is capable of handling our war fighting requirements out through 2010, when we intend to have future capabilities that will begin to replace them in time.

    To keep our war fighting systems today capable of meeting our anticipated threats, this recapitalization is essential to get under way. And it will address 19 systems to begin to chip away at the 75 percent that exceed the half-life, the kinds of increases in safety of flight messages up 200 percent in the last five years.

    The CHAIRMAN. The gentleman from Texas, Mr. Turner, is recognized.

    Mr. TURNER. Thank you, Mr. Chairman.

    Welcome, Mr. Secretary.

    Secretary WHITE. Thank you.

    Mr. TURNER. Looking at these numbers, I certainly share a deep sense of concern about the funding for the military. We noted, General Shinseki, back in February of 2000 you came before this committee with a list of unfunded requirements for fiscal year 2001 of $5.4 billion. You came before this committee just a few weeks ago and presented a similar list of unfunded requirements which was almost twice the amount that you submitted a year ago, $9.5 billion.
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    I know the Administration took office pledging to strengthen defense, but these numbers do not seem to carry out that pledge. I look at the underfunding for the OPTEMPO account, which everybody acknowledges means less flying hours, less training time for the military. I look at the fact that the procurement account under the President's budget would receive $11.2 billion, an increase of $200 million. That is a 2 percent increase in this year's budget proposal.

    The research and development (R&D) account receives only a 6 percent increase. Those are the two accounts that are going have to be strengthened in order to carry out the transformation project that you have so vigorously advocated and which I support. So I am very concerned about the numbers that we see.

    Several members of this committee have expressed concern about the additional emphasis on national missile defense, which I have always supported, a limited missile defense system, but the seeming emphasis in this budget for more money into national missile defense and to take it away from the readiness and procurement items.

    I notice, for example, you had requested and stated that the Army's requirement for PAC–3 missiles for next year is a total of 72 missiles. When I note that from what I am told that the Secretary of Defense only approved 10 percent of the Army's procurement request for 2002, I wonder in your list of procurement items how many of those 72 missiles you will be able to procure?

    I would like to know if it is possible, General Shinseki, for you to submit to us a list which would break out the procurement items in the list that you submitted to us in July of the Army shortfalls—the total of $9.5 billion.
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    How much of that is procurement, because it does not seem to me that you are going to be able to transform the Army if your hands are tied and you do not have the money to do it. And I think many of us on this committee share that concern, and we would like to know how much of this list is procurement shortfall.

    I also noted that in order to strengthen the funding for national missile ballistic defense that you have been given the responsibility now for funding out of the Army accounts the PAC–3 missile program—the one missile program that is proven to be effective, that does need to be deployed, that is ready.

    And yet no longer will it receive funds directly from the Ballistic Missile Defense Office, but from this point on, apparently under this budget, the Army will be solely responsible for funding it. And I suppose that now has got to come out of your inadequate procurement budget.

    So I am greatly concerned about all of those issues, and I would welcome your submission to the committee of a good list that we can see. After all, as I said in the beginning of my comments, if only a year ago you said that we were over $5 billion short of adequately funding the Army, and this year you come back and say it is $9.5 billion, obviously we are going in the wrong direction.

    General SHINSEKI. Sir, I would be very happy to provide that for the record. We are about to assume responsibility for the Patriot program, and as you might expect, our great interest is to get that back-funded, without additional bills to address. And we are in the midst of those discussions now.
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[The information referred to can be found in the Appendix.]

    Mr. TURNER. Thank you, General.

    The CHAIRMAN. The gentleman from Virginia, Mr. Forbes.

    Mr. FORBES. Thank you, Mr. Chairman, and Mr. Secretary, General, thank you for being here today.

    You heard a lot of discussions about the budget and people's ideas about the budget, but we all know as you move to conduct your transformation, you are going to have to train and equip three separate forces, obviously the legacy force and the interim force and the objective force.

    And we know you are going to have to upgrade your current legacy weapons systems, procure new equipment for the interim force, and in addition to that do the research and development for the objective force.

    We have looked at all the figures in the budget. I would just like your opinion. Do you believe that the Army can train, support and maintain all three forces with the level of funding that we see in the budget?

    Secretary WHITE. Well, I think we have been clear that we see the balancing of these requirements as we go forward as a significant challenge. And I think we have argued clearly that we are making tradeoffs today that does not adequately fund all the pieces of the vision. So it is a concern both to the Chief of Staff and I as we go forward as to whether the resources will be available to support the transformation—precisely the issues that you are talking about.
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    Mr. FORBES. That is all, Mr. Chairman.

    The CHAIRMAN. The gentleman from Mississippi, Mr. Taylor, is recognized.

    Mr. TAYLOR. Mr. Chairman, could I pass and come back to it?

    The CHAIRMAN. You pass? Certainly. The gentleman from Hawaii, Mr. Abercrombie.

    Mr. ABERCROMBIE. Mr. Chairman, thank you.

    General Shinseki, I want to clarify some of the commentary that just took place. Is it your contention that where the Patriot missile defense is concerned that there is underfunding there?

    General SHINSEKI. I do not know that final numbers have been identified, but of course my interest is getting back a fully funded program so that the continuation of the good work that is gone on in PAC–3 does not somehow become a bill that the Army has to assume responsibility for.

    Mr. ABERCROMBIE. Is that because the Patriot missile defense system is that which is most immediately useful to the Army in engagements that it is likely to be involved in?
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    General SHINSEKI. It is a functioning system. It is the enhancement of the PAC–2 system that we had in the Gulf in Desert Storm, and as we learned the hard way, that having a blast fragmentation capability to address incoming missiles when you are at the receiving end, the terminal phase, is not good enough.

    You can take an incoming missile warhead out of its trajectory, but it is going to land someplace. And so we have spent a great effort in the last 10 years to come up with a point-kill system, which is a missile-to-missile hit, and that is what PAC–3 is about. We have demonstrated great improvements in this area, and we think we have a system that meets the needs.

    Mr. ABERCROMBIE. I understand that. I simply want to reiterate, that is because this is the most likely scenario that potential involvement of the Army would face. Isn't that correct?

    General SHINSEKI. That is correct.

    Mr. ABERCROMBIE. Well, this is not a question for you to answer, but I make an observation, then, for the committee. We have got to take very seriously the questions of the allocation of funding with respect to missile defense. I support missile defense. But I do not want to see area and theater missile defense, and the most likely scenarios that armed forces of the United States will be facing, particularly the Army, or could face, get submerged or marginalized with respect to more—I am not going to say theoretical—but more abstract considerations with respect to missile defense experimentation. That is the point.
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    I am not asking you to defend it. We have got to do that. You are making a case, and I think I want to emphasize for the committee, a case of what you have to deal with right now, and I am positing now not so much an either-or, but try to establish a context of priorities because one of the reasons you have underfunding is obviously something has received a priority over it. Is that a fair statement in terms of congressional policy manifested in funding?

    And so when we get these lists every year of underfunding or non-funding or unfunded projects, it is because something else got the money. Now, it is not that those things were lacking merit. It is a question of priority. And when it comes to missile defense, my point, Mr. Chairman, simply is that we are going to have to be pretty hard-nosed when it comes to where we are going to emphasize the placement of funding with respect to what the strategic necessities are for the existing armed forces.

    In the time remaining, and this probably goes to the Secretary, Mr. Secretary, again you were very kind to indulge my observation with respect to the A–76 program. That has also been raised this morning in a broader context, for example, of contract bundling. I do believe that much small business can bring not only innovation, but vigor as well as competition into the picture. Contract bundling is not necessarily more efficient. Would you agree?

    Secretary WHITE. Not necessarily. It depends on how it is put together, certainly. But contract bundling does not necessarily negate the opportunity for small business to compete for their chance either.

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    Mr. ABERCROMBIE. It does when the armed forces say, well, the prime contractor's been paid. It is up to the small business to try to collect.

    Secretary WHITE. Well, that is true.

    Mr. ABERCROMBIE. The subcontractor, rather.

    Secretary WHITE. Yes. But on the other hand, my personal experience is that the local small business is a subcontractor to a prime that brings capital and resources that we need to have as a part of, say, a broader out-sourcing than just labor. It can be done very, very effectively where it is a win-win for everyone concerned.

    Mr. ABERCROMBIE. Well, would you grant though that this ought to be situation specific rather than simply jammed into a one size fits all situation?

    Secretary WHITE. Oh, absolutely. What I am after, to be absolutely clear, is the best business case for the Army. Whatever makes sense on a local basis is what we are going to chase, the best value proposition just like a private sector business with and it will definitely vary by location.

    Mr. ABERCROMBIE. Fair enough, fair enough.

    The CHAIRMAN. Mr. Abercrombie, if you would please, time is about to expire. Your time has expired. We have about four more people and a vote scheduled for about noon.
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    Mr. ABERCROMBIE. Thank you, Mr. Chairman.

    The CHAIRMAN. Perhaps we could squeeze it in. If you would be a little more brief, please.

    Mr. ABERCROMBIE. My only observation, Mr. Chairman, is the business of the Army however is the national defense and business practice per se does not necessarily advance the strategic interest.

    The CHAIRMAN. The gentlelady from California, Ms. Sanchez.

    Ms. SANCHEZ. Thank you, Mr. Chairman.

    There is actually a lot I would like to ask this morning, but I know I only have five minutes. Just to follow up with my colleague from Hawaii. I think this contract bundling situation is one that we need to really take a look at. I know that the Small Business Committee has taken a look and you before and you know, had not seen any indication that this is actually a cost-effective way of doing business.

    I have a lot of small contractors and medium sized businesses that are being pushed out, part of it being because of contract bundling. But more importantly I think, you know, the innovation that small companies can make is important because larger prime contractor, you know, it is harder to move them. And so I would just caution you that this is I think becoming a very serious issue for many of the members, not only of this committee but of other committees. I would ask you to really take a look at it and work with us on that, Mr. Secretary.
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    Secretary WHITE. I will do that.

    Ms. SANCHEZ. I would also like to piggyback on something that my colleague Mr. Turner spoke about and this is to our Chief, the General over here. First of all, always good to see you before us.

    I am really worried about, I think as you probably heard from many of us, this whole issue of the underfunding that is going on in particular with the Army. And I guess I would you know, after having seen the numbers, $5 billion last year. I mean in February of 2000, now $9.5 billion. And I know Mr. Skelton asked each of the departments for underfunding lists. But I guess I would ask this: What do you think is creating this if we have gone from less that about a year ago saying, less than a year ago, saying ''We are $5 billion underfunded; now we are almost $10 billion underfunded.''

    We put almost $1 billion in the supplemental recently. What is causing this? Is it just that we have a $10 billion increase from 2001 to 2002 in over the budget for your department? What is causing this? Is it that we have missed things? Is that we are transitioning so that it is costing us money? Is it that the underfunding is in particular programs? Are we having overruns? Is it procurement? What is causing this to happen?

    General SHINSEKI. I think there is some, a good number of the things you cited. If I could go back to February of 2000, I would remind that in October of 1999 the Army declared that it was going to change direction. It set a vision and said it would get about the process of describing its transformation. And by February of 2000, we laid out where we thought our requirements were. But we also said that the funding requirement to achieve transformation was going to be a better number in time. By September of last year in testimony before the Senate Armed Services Committee (SASC), when all the Chiefs were asked about how we saw our unfunded requirements, the Army did state for the record a $10 billion shortfall and a requirement for that kind of a plus up to get done the kinds of work that needed to be done to achieve transformation.
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    As I indicated earlier, the Army in terms of a strategy for meeting its two war requirements was launched in a direction that said we would put prepositioned equipment in various places to handle the unanticipated emergencies. Well, that really settled in Northeast Asia and Southwest Asia and the brigade set afloat to be able to go in a variety of directions.

    We have about $15 billion of that kind of investments. And I just do not think that for the long term this is where the strategic interests, the capabilities of the Army resides. We have to change that. And in order to change that, we have to put the investments in the transformation program so we can begin to scale back what has been investments and prepositioned stocks and war reserve equipment.

    I would say as early as September of last year testimony of a $10 billion shortfall was provided as a requirement.

    Ms. SANCHEZ. Okay, well, I will have staff go back and pull it and see where we were on that.

    Another question for the Secretary. This whole issue of missile defense, as you probably know a lot of it is created in Anaheim, California, which is my district. So I have been a proponent of a limited, at least a basic structure, which I know the Army has been at the forefront of actually doing that piece.

    Do you believe, and I guess this question would be for both of you, that by trying to increase the pace of trying to get this system on line, the basic portion that is coming out of the Army, the land base et cetera. I am not talking about space and you know, the higher priced piece. Do you believe that by trying to put this online faster that we are actually cannibalizing monies that would otherwise go into this transformation of the Army?
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    Secretary WHITE. Not necessarily. I think what the Secretary has said is that we ought to explore thoroughly and in a more comprehensive way in the past, whether it is possible to field an effective ballistic missile defense and pay the R&D bill and do the testing to figure that out. And the President and the Secretary, I think, have been consistent in citing that as an objective.

    The tradeoffs in the Department beyond that priority are a matter of where the strategy comes out and the decisions we made on the forces to support the strategy. So I do not necessarily see a direct linkage between the two.

    Ms. SANCHEZ. Well, Mr. Secretary, I would just caution you that when you go in and you fight for what is going on in those meetings you have, that this larger system that is being sold to the American people is really, I think, is going to create a backlash, not just in the money.

    Secretary WHITE. I understand.

    Ms. SANCHEZ. And I know you have heard, Mr. Snyder, mention it earlier that even on this committee is a problem.

    The CHAIRMAN. The gentlelady's time has expired.

    Ms. SANCHEZ. Thank you, Mr. Chairman.

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    The CHAIRMAN. The gentleman from Pennsylvania, Mr. Weldon.

    Mr. WELDON. Thank you, Mr. Chairman. Mr. Secretary and General, welcome. Congratulations.

    Secretary WHITE. Thank you.

    Mr. WELDON. I apologize for being late, but I did read the testimony. And I am happy to be with you for a brief period of time.

    First of all, let me comment. The shortfall is not a surprise to any of us on this committee. I mean, for six years I chaired the R&D Subcommittee and what I would say has happened over the past year is the gag order was removed from military officers.

    I mean, we would get a number that was provided by the White House that the Defense Department had to live with and every service leader came to us individually and begged us for more dollars. We were not stupid. Members on both sides of the aisle knew that the Administration was grossly underfunding the military at the same time they were rapidly increasing the deployments.

    We had a gross mismatch and all of us for the past five years have been saying, including members of on the other side, ''We are going to face a train wreck.''

    Well, the train wreck is here. This is not something that just occurred over night, within the last several months. The problem is we have built up to this level by taking resources and committing those dollars to commitments where President Clinton told us we would be out of Bosnia in Christmas three years ago .
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    I do not think we are ever going to get out of Bosnia. You have to pay the price tag for that.

    My last check was that we spent $16 billion of extra dollars out of the defense budget to pay for Bosnian operation. So it is not a surprise.

    And I want to respond to my good friend and colleague, Mr. Abercrombie, on missile defense.

    First of all, it has been this committee's approach to fully fund the layered outline that has been given to us by both the Clinton Administration and the current Administration. And the layered approach means we deal with the cruise missile threat, the theater missile threat and the broader inter-continental ballistic missile (ICBM) threat. And if it was not for this committee, I do not know where we would be because in each of the past six years, we have plussed up a billion dollars a year over the President's request just for missile defense alone. And the bulk of that money went for theater systems.

    We would not be talking about a PAC–3 today if we went with the President's budget for the past six years. We would not be talking about the THAAD program today or the Medium Extended Air Defense System (MEADS) program because he underfunded missile defense by the billion dollars a year that we added in, which is a total of $6 billion that this committee added in and insisted upon with strong bipartisan support and with strong bipartisan support from the other body .

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    And to somehow say that this problem has been created by current movements, I think, is incorrect. And we will prioritize again. And as you pointed out, General, the largest loss of life we have had in the past 10 years from an Iraqi SCUD missile and we will deal with that threat first because it is most immediate.

    My concern, and this mainly is aimed at you, Mr. Secretary, is I have been here 15 years. And the service that I think that has gotten the shortfall continuously in the inner workings of the Defense Department budget process has been the Army. I think part of it is because you do not have the sexy big ticket items like the B–2 or the new aircraft carriers or the submarines and because the bulk of your money goes into tanks and the equipment to let our soldiers deal with the kind of turmoil we put them in the midst of.

    And what I would ask you to do and you are the perfect person to do this, is to use your role and your position to articulate the concerns of the Army aggressively within the Department. All of us acknowledge that in spite of the increases we are still woefully short in our total defense budget.

    It is unrealistic, when every major poll shows defense dead last, to think that the President is going to dramatically increase defense overnight.

    So the battle comes within the Department and to accomplish what General Shinseki has laid out, which I fully support, and that is the transition, the interim force, and then the objective force. The Army has got to receive, I think a larger share of that pie of money within DOD. And I think you will find this committee will be supportive. And through your personal efforts I think we can help you accomplish that.
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    My main concern is also with two key new technology programs, the Comanche and making sure that in fact continues to be your top priority and what you foresee as the role in terms of future technology of the Crusader. The Crusader has been subject to some criticism.

    As the R&D chairman for the past six years, we tried to make sure that new technology was being put into place with the Crusader. So I would ask you to comment on what role you see the Crusader playing in terms of future technology with the object force.

    And one final thought: The Army has done, I think, the best job of any of the services on information dominance. And I have said that repeatedly. The information dominance center down at Fort Belvoir, is a model for all of the services. Please do not lose that leadership role. You set the tone for the services.

    Some of the other services want to take that away from you. Do not let it happen because you have the model in place of how to deal with the information concerns and threats that we face in the 21st century. And I want to make sure that we continue to fund support for that.

    If you do not want to answer all of these today, you can do it for the record, but I wanted to get those questions on the table.

    Thank you.

    Secretary WHITE. Two quick thoughts. First is, the reason I came back was to make the Army's case forcibly, with the Secretary of Defense, so I will do that.
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    Second, Commanche is vital to us. We have got all of these OH–58s that I used to fly. That is how old they are. Those have got to be changed out.

    Third, Crusader robotic capability, ready fire, cross-country movement, all of the things the Chief of Staff talked about, we have been traditionally outgunned since as long as I have been associated with the Army. It is time to fix that, and I agree with you on information.

    The CHAIRMAN. We have eight minutes left on a vote. We have four members to be heard. Mr. Simmons, are you coming back?

    Mr. Taylor and Mr. Hill, okay.

    We recess then, gentlemen, for another 10 to 15 minutes.


    The CHAIRMAN. We are going to go ahead. The gentleman from Connecticut, Mr. Simmons.

    Mr. SIMMONS. Thank you, Mr. Chairman.

    Welcome, Mr. Secretary, General Shinseki.

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    I agree completely with the comments of the previous speaker that one of the reasons we have shortfalls is the operations tempo. Obviously, if you are out there operating, it costs money and it is a pretty obvious thing. And speaking as somebody who served as an Army Reservist and who has deployed troops, soldiers overseas, the operations tempo that we have experienced in the Reserves has been far higher over the last decade than at any time previously in my Reserve career which would be the preceding 20 years.

    So that creates financial stresses on the system. It also creates stresses on the personnel, and that is one of the things that I wanted to ask you about. We have in this package the authorization for a pay increase. I began my military career as a private E–1, $68 a month. My sergeant at the time said I was being paid too much because I had food, clothing, housing; all my needs were met. It was a waste of money, $68. What was I going to do with all that money a month? But we did find a few ways to spend it.

    But today, with the all-volunteer force, money is an issue. If you have a high OPTEMPO, money is an issue. If you are moving, money is an issue. I am of the opinion that a flat across-the-board pay increase is not the way to go; that we need to target those members of our military that we value highly and we need to target those who are not making enough to make ends meet, and certainly target those that we want to bring into the force.

    I wonder if the panel could comment on that issue? And I wonder also if we could have a comment on the underfunding or the shortfalls in the reserve component and what impact that may have not only on their readiness, but on the ability to retain people in the Reserves? So two questions, Mr. Chairman.

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    General SHINSEKI. On the business of pay, as I have commented earlier, I just do not think you can do enough for our soldiers, for what we ask them to do, and then how well they do it, far beyond our expectations. We are a married force today, and so that is a different element here. Single soldiers, great members of our formation, but the fact that we have increased in our married soldier population, pay has other responsibilities. You are looking after families.

    My sensing is the most appropriate thing to do right now is a targeted raise against those members of the force that day-to-day do a significant portion of our heavy lifting, our noncommissioned officers, our junior officers who are deploying and carrying this mission load that we have described as having increased in the last 10 years. If you go to Bosnia, I will guarantee you on those patrols, there are no generals or colonels. They are being run by noncommissioned officers, young soldiers and captains and lieutenants. And I think we ought to ensure they understand that they are valued members of this institution and our readiness rides on their shoulders, and I think that is an appropriate way to demonstrate that.

    In terms of the reserve component requirements, we have put funding against training and readiness accounts. Where we do come up short is some of our reserve component training programs that have to do with inactive duty training (IDT) training and also the full-time support, which I think we over-corrected during the years of the draw-down and probably went too far in cutting back full-time support, at the same time increasing the requirements for use of our reserve components. And as you know, day-to-day readiness is very much a product of full-time support manning.

    We would like to get back to a better number. We just cannot get back there overnight. We have built a ramp-in. I am told that the ramp is okay, but if we can do better, we ought to do better. Some of that is reflected in our unfinanced requirements. And I listen to Tom Plewes and Roger Schultz on this, and they tell me this is an important priority, and so we have addressed it.
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    Mr. SIMMONS. Thank you very much, Mr. Chairman. I should also note for the record that General Plewes is wearing three stars today and looks mighty fine.

    Thank you, Mr. Chairman.

    The CHAIRMAN. The gentleman from Mississippi, Mr. Taylor is recognized.

    Mr. TAYLOR. Thank you, Mr. Chairman.

    General Shinseki, Mr. Secretary, I want to thank you for staying here.

    General Shinseki, let me compliment you before I do anything else. I think I have been waiting 13 years to hear an Army Chief of Staff saying he did not have enough people, and I finally heard it. And I want to compliment you for it, because with the many missions that you have, I have just been dumbfounded over the past 12 years that people kept asking for fewer people, and it just did not seem to work. And it is probably not easy for you to say, but I want to compliment you on saying it.

    The second thing is a concern that has been raised to me that I do think will affect armor morale, as well as morale throughout the Department of Defense. One of the things the committee sought to accomplish last year was to fulfill the promise of lifetime health care for our military retirees. We felt like we had done that, first with the Warner language for the folks who do not live near a military installation, with the Medicare and TRICARE pair to each other, so there would be no out-of-pocket expense, and then for Medicare subvention for those who do have a base hospital.
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    It is my understanding that more than half of the retirees live near a base and therefore would prefer to use a base hospital. I was told, as I passed on to you last week, that the negotiations between HCFA, the Health Care Financing Administration, which is a fancy name for Medicare, and the DOD have broken down over the reimbursement rates, which means that if they do not reach an agreement, I fear that on October 1, when our military retirees start showing up at your Army medical treatment facilities, and all the other medical treatment facilities, that they are going to be turned away, and I think you are going to have some furious retirees on your hands.

    They can be one of two things, General. They can be the best recruiters that we have in the Nation, or they can be our absolute worst enemies as far as getting young people to join, because they have credibility, they have respect in the community. If they are out there telling young kids to join, they are going to have a tendency to join. If they are out there saying they have been betrayed again, that can really hurt, and all the efforts that you have and all the other service chiefs that have to get kids to join, they are going to be some really hurt.

    And it is the right thing to do. The Nation made the promise. Great nations keep their word. This great Nation has to keep its word. What can you do to allay my fears on this? And if you cannot allay my fears, I am asking you in a public forum to get me the language that your guys need, that your Surgeon General of the Army needs, to have in the law placed in this year's authorization bill so that HCFA will reimburse them at a rate that he needs to take care of those retirees at his base hospitals.

    Secretary WHITE. I agree, Congressman. We made this promise and we have to follow through with it. Period. I know in 2002 for the first time in a long time, the Department has fully funded the best estimates of what the total health care costs are going to be, not only for those on active duty, but also for all the other claimants and constituencies we have to support.
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    And that has resulted in double-digit increases both on the direct military care side and on the contract side.

    So it is the intent of the Department to pay this bill and we will get back to you from our Surgeon General's perspective if there is language that needs to be crafted to make sure that that happens.

    But I am with you 1000 percent.

    Mr. TAYLOR. Mr. Secretary, you know our time is short because I am sure the chairman does not want his defense authorization bill double referred. We do have a little bit of extra time in that this would be most appropriately handled on the House floor.

    Secretary WHITE. Okay.

    Mr. TAYLOR. Okay, so that buzz buys a little bit of time but not much time because it is my understanding that the chairman would like to bring that bill to the House floor before the August recess.

    Secretary WHITE. Good.

    Mr. TAYLOR. Thank you.

    General Shinseki, congratulations on being the first person to ask for more people. It is the right thing to do. [Laughter.]
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    The CHAIRMAN. The gentleman from Indiana, Mr. Hill.

    Mr. HILL. Thank you, Mr. Chairman.

    Mr. Secretary, General, thank you for being here. I want to ask a big picture question if you allow me. And the reason why I am asking it is because quite frankly I get asked about it back in my district quite often, from adults and school children. And I think I know the answer to the question but since I have this opportunity to actually ask you this question, being a Member of Congress, I am going to ask it.

    But we spend probably five times more than anybody else in the world on our military operations. And my constituents want to know why we spend this kind of money .

    And I think I know the answer to this question, but it is a big picture kind of question. But why? What can I tell my constituents back home why we spend this kind of money on our military when other countries are not willing to spend anything close to what we spend on the military.

    Secretary WHITE. I think that the simple, straightforward answer is that we are the only superpower on the face of the earth and we have global responsibilities unlike any other country on the face of the earth. And consequently, we have unique security requirements that require funding at levels that other countries do not have to suffer from. So I think that is the long and the short of it.

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    And sustaining our national interests on a global basis is unfortunately an expensive proposition.

    General SHINSEKI. I would only add, Congressman, and I do share your, their concerns about cost and being good stewards of the money we are provided to provide in return, the service that we believe the American people deserve and expect and that is their security. The one non-negotiable contract I think we all understand we have and that is to respond to the calls to go and defend the nation and to do that decisively when the time comes at least expenditure of American lives.

    To do that takes a certain robust capability and also the ability to hone that capability. So there is a certain investment and readiness.

    If we were to look back at how the 20th century ended, I think we would be quite proud in saying that the United States ended up a global leader, lead nation in the world, strong economy, strongest in the world, most respected military. And if you look at the 100 year history that we navigated to be able to get to 1999 to make that statement, I think we would find that the contributions of our military were very much a contributor to the first two items and that is global leader, strongest economy.

    And I think this is part of the course that is not clearly visible, but if 2099 we would like to make the same statements, I would contend that our military would be part of that discussion as well. And that is what the investment is about.

    Mr. HILL. Your answer to me is the answer I have given my constituents, and I have kept my promise. I promised them that as a member of this Armed Services Committee that I would actually ask the question and you have answered it like I thought that you would answer it.
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    I guess what my constituents are not seeing is the threats in the world today. They do not see the Chinese as the threat. They do not see the North Koreans as a threat. They do not see the Iranians as a threat.

    The real threat in my view is the threat of terrorism. I think that is the major threat and that is kind of the answer that I give. But I would like for you to embellish upon my comments.

    General SHINSEKI. I think if you look back over the last 10 years, we have seen the 21st century. As an old mentor of mine sort of described the last 10 years, constant white water, you know, no clear periods of peace, no great spike in threat as we faced during the Cold War, but constant white water, being alert, being attentive, making sure that you had the capabilities you needed in case the spike came faster or sooner than you anticipated.

    And one of the premises in this QDR, this strategy review, does expect that strategic surprise ought to be something that we assume will happen.

    And then, how do we deal with it? And if you are going to address that with, clearly then it is about investing to have flexible capabilities whenever that strategic surprise occurs.

    The CHAIRMAN. The gentleman from Illinois, Mr. Kirk.

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    Mr. KIRK. Good to see you. I served in Allied Force and spent a lot of time in the 31st wing in Aviano talking to the task force hawk liaison, who went through a difficult time. But the lessons I learned is that the Army had very bad maps. They did not know where the wires in Albania were and Apaches got tangled up into it. The Apache was an extremely difficult system to deploy and was not well suited to operate in that environment.

    The Army Tactical Missile System (ATACMS) turns up a lot of ground, but we could never guarantee that the on site engagement area was free of refugees and we knew that Cable News Network (CNN) would be on that site in a second. And so we could not use a very effective weapon because we were possibly going to churn up a lot of civilians.

    And of course the big one, as NATO began the planning for the ground operations, which even in naval aviation we thought was going to be necessary, the heavy track vehicles were too heavy. We needed a massive public works program from the Port of Tirana to the Kosovar border, to sort of say to the Serbians, ''Please do not shoot; do not mind if we spend the next three weeks rebuilding these bridges and then we will get back to you.''

    Those are the lessons I took. Is that your understanding of the Army's experience in Allied Force?

    General SHINSEKI. Let me take the first point of that. I think what you described in a general nature I think we would all accept. But when you say ATACMS could not target and neither could any other large munition, not even a precession munition because unless you have the ability to clear a target, that means eyes on, it is awful hard to make that decision to go ahead and shoot. So all of us were encumbered.
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    In terms of Task Force Hawk, you have been in Tirana. You know it is a Mach of 1 as being shared with a refugee relief operation and the decision makers provide 70 percent of that airfield capability to take care of the refugee population and only 20 percent to Task Force Hawk, you immediately begin to impact on the arrive time lines that Task Force Hawk could possibly achieve.

    And when I asked the CINC whether or not this was in keeping with his time line, he said it was. And so I would have wanted to see the flow of Hawk faster, but I think it met his requirements.

    On top of that, at the end of the airfield where Hawk went in, probably the most challenging conditions I have seen and I think any of us have seen, hip deep in mud. You had to bring in rock with engineering capability to build roads so that you could bring in the systems that would support the attack helicopters.

    All of that said, there is not another army in the world that could have done what Hawk did or those soldiers who deployed Hawk in 30 days in to probably the most challenging physical environment. There is not another force, there is not another army in the world that could have gotten in there in 30 days. And yet our youngsters did.

    So the bright note here is the American soldier is still a big hero in my book for what they are able to do .

    Mr. KIRK. Thank you, General.
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    Thank you, Mr. Chairman.

    The CHAIRMAN. Gentlemen, thank you very much. We have about four minutes to make our last vote. We appreciate your patience.

    If there are no other question or any closing remarks?

    Secretary WHITE. No, sir. Thank you, very much.

    General SHINSEKI. Thanks, Mr. Chairman.

    The CHAIRMAN. The committee is adjourned. Thank you.

    [Whereupon, at 12:40 p.m., the committee was adjourned.]