so that we can be in the position move forward on ironclad on what the nato membership mean. i would like to see us start i are building that and talk about the importance of completing a -- start talking about a desire to get countries that are interested in that. but i think we have to be realistic. we have to build that back up. let my close our session by posing to the panelist. s a framework. we have closing remarking to the audience. if you are sitting in the white house today, what would you see like that see come to the nato summit that would fundamentally realign or reinforce the alliance endures capacity?

>> i'll start from -- -- sip the fact we're going have to deal not only with nation states that are going to have crises and groups and individuals that are highly empowered and able to bring threat against nation of the capability most addressing the likely. the second thing, we have to

bring down the alliance on strategic deterrent and increase the reliance on other capability and tools diplomatic and military for strategic defense. the technology and capabilities and the architecture that would allow us to have those kinds of capabilities at the strategic level to deter conflict and increase other options so that our state options don't run out prematurely or less than effective against the wide range of threat. we have to increase the tools on the state craft to prevent these thick -- things.

making sure it's still an element of membership and nato. you commit to your defense goals. the second thing i would say is to really look at those things which could enable nato at large to take greater advantage, i think, of its various abilities. and to focus on some of the new strategic enablers. not necessarily new but things nato hasn't totally taken advantage of. things like cyber. doing those things that are important. making sure that even the nato networks are solid and protected that the networks of the nato members are solid and protected. so all of these things that need nato to be able to operate are there. the networking are protected. and the other one look at -- only in the province of one country to provide.

so really looking at is that the way to balance some of the capability. with there other countries that can provide capability and other eye testimons. how do we spread some of this around? i spent a career listening to what is a real threat. every ten years it gets redefined and real threat become real treat. have the capacity to engage individuals. individual groups surrogate groups, and loon ak the deterrence from a point view in some cases unfortunately where it is in a state you're trying to deter. it's a terrorist group. in this case i could disagree more with kurt's point that doesn't have a deterrence

effect. whatever the terrorist groups try to use and have the capacity. >> thank you. three things. i look far renewed consensus on completing your -- we have to get together. it could mean an invitation or two. it could be getting the allies together. this is where we want to go. second, i would want to see a renewed commitment exercising and planning the capabilities needed for nato's article five collective sense. we have a lot of building blocks in place. we need to put a strong package over it. we know we're not going do certain thicks. answering the question what are you prepared to do and putting that in concrete terms.

and the third thing is to be using nato as a place to discuss the raging crisis that are going on around nato. following on libya and iran and so forth. ic we drifted over the twenty years or so from nato being a central place where we dealt with challenges we're worried about to. to a place we don't talk about strategically anymore. >> thank you very much. let me thank my panel for their comment and insight. i think dmom straited as a lot of people call conventional missile defenses old thinking. it may be long standing challenge and threat and tools. they are linked via cyber and terrorism and other dimension that define the strategic environment today. with that said,let give o

>> the house and senate budget conference this meeting today to hear from congressional budget office director doug elmendorf. you can see the committees negotiations live starting at 10 a.m. eastern on c-span3. >> this weekend booktv looks back at the life and death of our 35th president on the 50th anniversary of his assassination. beginning saturday at 1:30 p.m. plus authors been a real lives november 22, 1953. it's all part of booktv this weekend on c-span2. booktv's book club for november wants to know what kennedy books you're reading. post your thoughts at our chat room at booktv.org/bookclub your. >> leaders of the four branches of these military testified

about the effects of automatic spending cuts on the defense department. this hearing of the senate armed services committee is to enhance ours. >> -- is the two-and-a-half ours. >> good morning, everybody. the committee meets this morning to consider the impact on our national security ofestration sequestration required by the budget control act. weelco we welcome today our nation's service chiefs. chief of staff of the army of general raymond odierno. chief of naval operations, admiral jonathan greenert.l jam commandant of the marine corps,h general james amos. and the chief of staff of the airie force, general mark welsh. i like to thank our witnesses on behalf of the committee for nation, andiceo our for the service provided by thed men and women with whom they serve. many of whom as we meet here are

in harm's way. we also appreciate the importany contribution made by our 800,00 dod civilians, a talented workforce that has been hard hit by both sequestration and the government shutdown. sequestration is arbitrary and irrational. arb irrae we will learn more today about its impact on our national defense, with sequestration,ith with continuing resolutions, government shutdowns and the recurring looming threats on the fall of our nation's that we no only failed to sustain our national security, but also fair to meet our shared obligation, to protect and promote public safety, health, transportation,o education and the environment. when we allow this to happen but risk much of what we do and stand for as a nation, and weunm undermine our position in the world. throughout the two years since the enactment of the budget

control act, the provisions are sequestration of our military leaders have been warning us of ess harmful consequences.ratiou if sequestration continues, thet services will have to cut activn and reserve components in strength, reduce force structure, defer repair of equipment from delay or cancel modernization programs, andw allow training levels too seriousloy decline, which will ility erduce our ability to respond th global crises, thereby increasing our nation's strategic risk. tion's s sequestrationtr has raisedquestm questions among our allies about our ability to manage ouron affairs. it's introduced uncertainty into the availability of resources, to support operations in afghanistan and around thethe world. it has accelerate the decline of a nondeployed force whose readiness was seriously underfunded for more than a underf decade before sequestration, and has painfully furloughed much of our dedicated defense civilian

workforce. i know our senior military deers are leaders are deeply troubled by the impact of sequestration on morrell.on on both our military and suprems worekforce. tell it makes little sense to tell my members of our military that we will pay their salaries but we we can't afford to train them. and and we can't justify telling our dedicated civilian workforce rk, many of whom are veterans, and some of whom are disabledveterat veterans, that they arel and thy essential, that they're going to be furloughed and they are not going to be paid. another year of sequestration only compounds the damage that will be done to our forces and our national security. if sequestration is allowed to eque continue into fy '14 and beyond, we will be left with a small and less ready military that is significantly less capable of sign protecting our interests around the world. i look forward to the testamente of our witnesses and the impact of sequestration is already having and will have on the departmenttr of defense, and onl

our national security. we're all delighted to have jim inhofe back with us today in f full force and orlooking terrif senator inhofe. >> thank you, mr. chairman.inh i appreciate very much.appreciae i've made a request to have thi hearing and another one before e this after the house have their skimming.chai, it's my concern, mr. chairman, everything he said is true but the general public is just not aware of it, the crisis were faced right now. over the last to get the significant cuts to our nationag security spending has forced our dan and women to endure as deep and damaging dropping capabilities andma readiness. we will have a chance to talk about this during the questions. historic lowest level. the army shrinks to a force we haven't seen since the turn of the 20th century. as our security is being threatened by terrorism, the

rising china and roman nations like iran, north korea and men and women charged with protecting this nation are being undermined and forced to endure devastating cuts to the tools they need to keep america safe. we have been told that over the next three years as much as $150 billion of cuts will be taken from accounts used to make sure that our military men and women are better trained and equipped. we'll show that with these charts. i know some americans are wondering why this matters and these cuts may affect their everyday lives if they really do and the simple reality is that the world around us is not getting any safer. i've often said that recently i look back at the days of the cold war. we had things that were predictable. and that's not the case anymore. we have rogue nations have the ability and develop the ability to develop weapons of mass

destruction and we know that's happening. hopefully this hearing will bring this to the attention of the american people. it's america's leadership, trust in american security partners and our ability to protect this country is receding. we have seen the effects. we're at a point where our allies don't trust us and our enemies don't fear us. as america retreats from its role as a global leader, we'll have more failed states like syria and libya as breeding grounds for terrorism. we'll have more brutal dictators acquiring weapons of mass destruction and more aggressive adversaries like china attempting to bully our partners in the south china sea but we'll have fewer options of how to deal with them. this is why i'm so troubled with the disastrous path we're on in face of the mounting threats to america we're crippling our military and people that are vital to our security and our military leaders use the term

hollow to define the forces of the future. the chairman of the joint chiefs warned us that continued national security cuts will severely limit our ability to inplemt our defense strategy and put the nation at greater risk of coercion and it will break face with the american people. i think another quote that i carry with me is one that admiral, our number two person in the overall military that we have, he said there could be a time -- be for the first time in my career instances that we may be asked to respond to a crisis and we'll have to say that we cannot. this faith is sacred to me. our nation relies on our population to volunteer to risk their lives on our behalf. the faith is being threatened by a growing divide between security our nation expects and the resources being provided

then to give us that security. our witnesses testified before the house in september about the potential of not having the readiness capabilities to succeed in one operation. that's something that all of us assume and most americans assume that we still could defend against two ncos. that's just not true. if we have to go through sequestration, we may not be able to do either one. that's why it's so important that we hear from you folks that have the credibility to make sure that the american people understand this. i think about peace obtained through strength. we know that ronald reagan is probably rolling over in his grave seeing what's happened to the military sdrent of this country. that's what this hearing is about, mr. chairman. and i look forward to this being an opportunity for all of us at this table to use the information that comes from this

hearing to make america aware of the problems that are facing us. thank you, mr. chairman. >> thank you, senator inhofe. general? >> chairman levin, ranking member inhofe and members of this committee, thank you for the invitation to speak today. if you'll just indulge me for a few seconds i'd like to begin by recognizing the service of ike as the chairman of the house armed services committee he was an incredible leader, mentor and champion of our soldiers, civilians and their families. what was interesting though in his farewell address he made a comment that i think is appropriate for the conversation we're having today. when he remarked, i've always considered each young man and woman in uniform as a son or daughter. they are national treasures and their sacrifices cannot be taken for granted. they are not chess pieces to be moved upon a board. each and every one is

irreplaceable. and i think those words are very important today as we talk about the readiness of our force and as we consider future budget cuts and their impact on our national defense. it is impairtive that ke keep foremost in our minds the impact that this has on the young men and women, our soldiers who we ask to go forward and protect this nation. previous draw downs have taught us that the full burden of an unprepared and hollowed force will fall on the shoulders of our men and women in uniform. we have experienced this too many times in our nation's history to repeat this egregious error again. it it may be popular to proclaim that we are entering a new age where land wars are obsolete. yet history leaders never knew would be fought. in the summer of 1914 a british journal declared that the world is moving away from military

ideals in a period of peace, industry and worldwide friendship is dawning. new technology such as airpla airplanes, machine guns, dynamite and radios were sent to ridiculous and impossible. and yet the next year we will mark -- but next year we will mark the 100th anniversary of the war to end all wars. i can give you an example of that for every major conflict. there are many comments that said we would never fight wars again. we would never send our soldiers into harm waes east way, but we did. it was significant consequences to the men and women who wore the uniform. whether it it be in korea with task force smith or whether it be in vietnam in the initial days of vietnam. we cannot allow that to happen again. throughout our nation's history the united states has drawn down military forces at the close of every war. this time, however, we are drawing down our army not only before a war is over but at a

time where unprecedented uncertainty remains in the international security environment. the total army, the active army, the army national guard and the u.s. army reserves remains heavily in operations overseas as well as at home. as we sit here today, more than 70,000 u.s. army soldiers are deployed to contingency operations with nearly 50,000 soldiers in afghanistan alone. additionally there are more than 87,000 soldiers stationed across the globe in nearly 120 countries. during my more than 37 years of service, the u.s. army has deployed soldiers and fought more than 10 conflicts including afghanistan, the longest war in our nation's history. no one desires peace more than the soldier who has lived through war. but it is our duty as soldiers to prepare for it. as chief of staff, it's my responsibility to man, train and

equip the force to provide america with the best army possible. as a member of the joint chiefs of staff, it's my responsibilit advice to ensure the army is capable of meeting our national security needs. if congress does not act to mitigate the speed and reductions of the budget control act with sequestration, the army will be forced to make significant reductions in force, structure and end strength. such reductions will not allow us to execute the 2012 defense strategic guidance and will make it very difficult to conduct ooen one sustained major combat operation. from fiscal year '14 to fiscal year '17, as we draw down and restructure the army into a smaller force, the army will have a degraded readiness and extensive modernization program shortfalls. we'll be required to end, restructure or delay over 100 acquisition programs, putting at risk programs such as ground

combat vehicle, armed aerial scout, production and modernization of our other aviation programs, system upgrades, manned vehicles and modernization of our command and control systems just to name a few. from fy '18 to fy '23 we'll begin to balance modernization. this will only come at the expense of significant reductions in the end strength and force structure. the army will be forced to take additional end strength cuts from a wartime high of 570,000 in the active army, 358,000 in the army national guard and 205,000 in the u.s. army reserves to no more than 420,000 in the active army, 315,000 in the army national guard and 185,000 in the u.s. army res. this will represent a total army end strength reduction of more than 18% over seven years, a 26% reduction in the active

component, a 12% reduction in the national guard and a 9% reduction in the u.s. army reserves this will also cause us to reduce our brigade combat teams by 45%. ultimately the size of our army will be determined by the guidance and funding provided by congress. it is imperative that congress take action to mitigate and ease sequestration reductions. i do not consider myself an al armist. i consider myself a realist. today's international environment's emerging threats require a joint force with a ground xoet that has the capability and capacity to deter and compel adversaries who threaten our national security interests. the budget control act and sequestration severely threaten our ability to do this. in the end, our decisions today and in the near future will impact our nation's security posture for the next ten years. we've already accepted nearly $700 billion in cuts to the

department of defense. today we have the premier army in the world. it is our shared responsibility to ensure we remain the premier army and the premier joint force in the world. thank you very much, chairman. i appreciate the opportunity to talk. >> thank you so much general odierno. admiral greener. >> chairman levin, thank you very much for mentions our civilian personnel. those are our ship mates. we still have quite a few still hurting from the tragedy senator inhofe, thanks for being here. distinguished members of the committee, thank you for the opportunity to testify on the short and the long-term effects of sequestration and our perspective on the strategic choices and management review. this morning i'll address two moin points, our budget situation and our plan for fiscal year '14 and the near and the long-term impacts of sequestration.

mr. chairman, presence, that remains our mandate, your navy's mandate. we have to operate forward where it matters and we've got to be ready when it matters and we have to be able to respond to contingencies with acceptable readiness. recent events this year alone have clearly demonstrated our ability to do that with deployed forces. navy assets were on station within a few days where needed and offered options to the president whenever the situation dictated, north korea, egypt and syria as an example. this ability to be present reassures our allies and ensures that the u.s. interests around the world are properly served. in 2014 sequestration will further reduce our readiness and surely reduce our ship and aircraft investment. the budget control act revised discretionary caps will preclude our ability to execute the 2012 defense strategic guidance both in the near term and the long term.

restrictions associated with a continuing resolution preclude transfers funds across programs, increasing needed program quantities and starting important new programs. the impacts of sequestration will be realized in two main categories, readiness and investment. there are several operational impacts, but the most concerning to me is that reduction in our operations and maintenance will result in only one non-deployed carrier strike group and one amphibious ready group trained and ready for contingency response. our covenant with the combat commanders is to have at least two carrier strike groups and two amphibious groups deployed and have them ready to respond to a crisis on short notice. so, for example, right now we have one carrier strike group deployed in both the arabian gulf and the western pacific. and our one response carrier

strike group, the nimitz is in the eastern mediterranean. because of fiscal limitations and the situation we're in we don't have another group trained and ready to respond on short notice in case of a contingency. we're tapped out. in 2014 we'll be forced to cancel aircraft and ship maintenance that will result in reduced life in our ship and aircraft. we'll only conduct essential renovation of facilities further increasing the large backlog in that area. we'll be required to keep a hiring freeze in place that will further degrade the distribution of skill and balance in the civilian workforce which is so critical. we won't be able to use prior year funds to mitigate like we did in fiscal 2013. without congressional action we will required to cancel the plachbd procurement of a virginia class submarine a literal combat ship and an

afloat forward staging ship and we will be forced to delay the delivery of the ford and delay the overhaul of "the george washington." mr. chairman, the key to a balanced portfolio is a spending bill, and secondarily top shun to propose to the congress the transfer of money between accounts. this at least would enable us to pursue innovative acquisition approaches, start new projects, increase production quantities and complete the ships we have under construction. just to meet minimum, that readiness needs, we need to transfer or reprogram about $1 billion into the o and m account and about $1 billion into our procurement accounts, mostly for ship building. we need to do this by january. after the strategic choices and management review was completed, our focus has been on crafting a balanced portfolio of programs within the fiscal guidance that

we were provided. further details of our approach into what we call the alternative palm are outlined in detail in my written statement which i request be entered for the record. in summary, we will maintain a credible and modern sea-based strategic deterrent, maximize foreign presence to the extent we can using ready deployed forces and continue investing in ace met tick capabilities while with this committee's help we'll do our best to sustain a relevant industrial base. however, there are several missions and needed capabilities specified in the defense strategic guidance that we cannot perform or keep apace with potential adversaries. these will preclude us from meeting the operational requirements as currently written and defined by our combat commanders with acceptable risk. these are also detailed in my written statement. applying one fiscal and prom attic scenario we would end with a fleet of about 255 ships in 2020. that's about 30 less than we have today.

it's about 40 less than was planned in our program -- our president's budget '14 system and 51 less than our assessment we validated and submitted of 306 ships. mr. chairman i understand the pressing need for our nation to get its fiscal house in order. it's imperative that we sustained the appropriate war fighting capability, the appropriate forward presence and we be ready. those republican the attributes we depend on from our navy. i look forward to working with the congress to find the solutions that will ensure our navy retains the ability to organize, to train and to equip our great sailors and our civilians and their families in the defense of our nation. thank you. >> thank you so much, admiral. now general amos. >> chairman levin, ranking member inhofe, welcome back. committee members thank you for your consistently strong support for your military forces and for

your obvious love of our country and justified concern for its defense. all of us sitting before you this morning, my colleagues are mindful of your collective and individual sacrifices and are grateful for your unflagging fidelity. the sequester defense budget falls short in meeting the marine corps's requirements and those of the joint force. your marine corps is ready today. in order to maintain readiness within the current fiscal environment, we are mortgages the readiness of tomorrow's marine corps to do so. we are ready today because your marines are resilient and determined to defend the united states of america. despite year after year continuing resolutions, the budget control act, furloughs and the government shutdown, the monday and women who wear my cloth are patriots first. the defense of our fellow americans and our way of life is our number one priority, even over the comforts of self. last month's furlough of more

than 14,000 of our civilian marines was a grave disservice to an honorable and dedicated workforce who wants nothing more than to advance the security of the american people. our civilian marines are a vital part of our team. they are the technicians, the experts, the teachers, the clerks in our commissaries and our exchanges. they are our corporate memory. they are our surge capacity or depots who provide unique skills in support of the active and reserve force. they deserve better, quite frankly. i'm ashamed of the way they've been treated through the furloughs and the uncertainty. during the first year of sequestration i have realigned fund within my authority to maintain unit readiness to the highest extent possible. my priorities have remained consistent. first and foremost, the near term readiness of our foreign deployed forces. followed thereafter by those that are next to deploy. this readiness comes at the expense of infrastructure

sustainment and modernization. we are funding today's readiness by curtailing future voemt in equipment and in our facilities. this year we are spending approximately 68% of what is required bare minimum to maintain our barracks, our facilities, our bases and stations and our training ranges. this is unsustainable and it can't continue over the long term. if we are to succeed in future conflicts, we must modernize our equipment and maintain the infrastructure that enables our training. we must also invest in our people. to meet the requirements of the defense strategic guidance, we need a marine corps of 186,800 active duty. a force of 186.8 allows us to meet our steady state operations and fight a sij major war. it preserves a one to 312 for our marines and families. under the 2011 budget control act, the $487 billion reduction

cut our strength further to 182,000. with sequestration, ki no longer afford a force of 182. in february we initiated a parallel study to the department of defense's strategic choices management review. our internal review determined the foresize i could afford under a fully sequestered budget, this was not a strategy-driven effort, it was a budget-driven effort, pure and similar. our exhaustive research backed by independent analysis determined a force of 174,000 marines quite simply is the largest force that we can afford. assuming that the requirements for marines remain the same over the foreseeable future, a force of 174,000 will drive the marine corps to a one to 212. it will be that way for virtually all my operational units. six months deployed, 12 months home recuperating, resetting and training and six months deployed once again. this is dangerously close to the

same tempo we had in iraq and afghanistan while fighting in nullity theaters and maintaining steady state amphibious operations around the world. the 174,000 force accepts great risk when our nation commits itself to the next major theater war. as there are significant reductions in my service in ground combat and aviation units available for the fight. under sequestration we will effectively lose a marine division's worth of combat power. this is a marine corps that could deploy to a major contingency, fight and not return until the war is over. we will empty the entire bench. there will be no rotational relief like we had in iraq and afghanistan. marines who joined the corps during that law will likely go straight from the drill field to the battlefield without the benefit of pre combat training. we will have fewer forces arriving less trained, arriving late tore the fight.

this would delay the buildup of combat power, allow the enemy more time to build its defenses and would likely prolong combat operations altogether. this is a formula for more american casualties. we only need to look to 1950 and the onset of the korean war to see the hazard and the fallacy in this approach. thank you again for this opportunity to appear before you. i'll continue to work with the members of this committee to fix the problems we're faced with. >> thank you very much, general amos. general welsh. >> thank you, chairman. ranking member inhofe, welcome back, into hope you have your landing currency reset. it's an honor to be here. thank you for everything you do. the real and i'm projected impacts of sequestration are sobering. if it remains in place for fy '14 our air force will be forced to cut flying hours to the extent that within three to four months many of our flying units won't be able to maintain full misread dins. we'll cancel or significantly curtail major exercises again

and we'll reduce our initial pilot production targets which we will unable to avoid in fy '13 because prior year unobligated funds helped of set about 25% of our sequestration bill last year. those funds are no longer available. while we hope to build a viable plan to slow the growth of personnel costs over time and to reduce infrastructure costs when able, the only way to pay the full sequestration bill is by reducing force structure, readiness and modernization. over the next five years, the air force could be forced to cut up to 25,000 airmen and up to 550 aircraft which is about 9% of our inventory. to achieve the necessary cost savings in aircraft force structure we'll be forced to divest entire fleets of aircraft. we can't do it by cutting a few aircraft from each fleet. we'll prioritize global, long range capabilities and multirole platforms required to operate in a highly contested environment. we plan to protect readiness as much as possible.

we also plan to prioritize full spectrum training. if we're not ready for all scenarios we're accepting the notion that it's okay to get in the fight late. we're accepting the notion that the joint team may take longer to win and that our war fighters will be placed at greater risk. we should never accept those notions. if sequestration continues, our modernization and recapitalization forecasts are bleak. it will impact every one of our programs and other time these disruptions will cost more money to rectify contract breaches, raise united costs and delay delivery of critical equipment. we're looking at cutting 50% of our modernization programs. we'll favor recapitalization over modernization whenever that decision is required. that's why our top three acquisition programs remain the f-35, the kc 46 and the long range strike bomber. your air force is the best in the world, and it's a vital piece of the world's best military team.

that won't change even if sequester persists. but what and how much we'll be capable of doing will absolutely change. thank you for your efforts to pass a bill that gives us stability and predictability over time. those two things are essential as we try to move forward. my personal thanks for your continued support of airmen and their families. i look forward to your questions. >> thank you all of your testimony and through, also, for -- by the way, we're going to have a fairly short first round because we have votes at 11:45, two of them. and we also have a large number of senators here. we're going to have to start with a six-minute first round. thank you for mentioning congressman skeleton. most of us have worked with ike skelton for a long time. our memories of him are extraordinarily fond and warm. he was a unique and wonderful

human being. we really appreciate what he did for this nation in war and in peace. we're grateful that you made reference to him. it's something, frankly, i should have done and have already done in a different way, but should have done here. thank you for that reference. the successful conclusion of the budget conference between the senate and the house is essential if we're going to address the problem of sequestrati sequestration. they are hopefully looking at various alternatives forgetting rid of a mindless, a rational way of budgeting for 2014 the way it was for 2013. but much is going to ride on their success in finding a different approach to deficit reduction. many of us have made suggestions

to them as to how to come up with a balanced approach to deficit reduction which can substitute a sensible approach for an irrational approach called sequestration. we're not going to ask you to get into that kind of detail in terms of the work of the budget committee because the conference, because number one, i doubt you are privy to it, but secondly it's a little bit off the subject here today which are the impacts of sequestration the clearer those impacts are laid out -- and you have laid them out very clearly -- the more likely it is, i believe, that that budget conference will find a path replace the sequestration in '14 with something that makes sense in terms of fiscal responsibility, but something that makes sense in terms of the

security of this nation. as you have very powerfully pointed out in both your oral testimony, your written testimony and your prior testimonies, sequestration is damaging to the national security of this country. in fiscal year '13, the department was able to minimize impacts in part by using unobligated funds that were carried over from previous years, in part by deferring program costs into future years, in part by utilizing short-term cost reduction measures such as civilian furloughs and reductions in training and maintenance rather than making program decisions that would be more difficult to reverse. so my question of each of you is, if sequestration continues into fiscal year 2014 and bey d

beyond, will the department be able to continue to rely on those types of temporary measures or, as i think you've clearedly testified, would you have to start reducing force structure and canceling or curtailing major acquisition programs? i think you've given us the answer to the second half, but can you go into the first half of that question? we were able to scramble around -- you were, to a significant degree in 2013, are you going to be able to rely on those temporary ad hoc measures if sequestration continues into 2014? general odierno. >> thank you, chairman. as we -- as you put it very well, scrambled in 2013 to come up with with the dollars to meet our sequestration marks, there's things we do to mortgage our future. we had to take money out of two

places, readiness because we could do that very quickly, so we stopped training. we stopped sending individuals to be prepared at the national training center, joint readiness training center. you can't ever recapture that. what that does, it delays the buildup of future readiness. we will have to pay that price somewhere down the road because we simply cannot ever get that back. so although we were able to do for one year, it comes at risk, our risk to respond, our risk to -- if we have a contingency, will our forces be ready? that's incredible risk that i am definitely not comfortable with the second piece is we've had to furlough individuals who have worked for this government. frankly, they're beginning to lose faith in our that government, are they able, will they be able to continue to serve? those are temporary measures we do not want to revisit again and that we have to have more personal nentd solutions.

>> admiral? >> mr. chairman, first of all we have a $2.3 billion carryover. '13, we deferred into '14. here we go. you can't defer it. these are contracts and things of that nature. that's one. two, in '13 we actually had a quarter of maintenance and training, because we didn't start dealing with this until the new calendar year. we got a lot of maintenance done there that we won't be able to get done this year. so 34 out of 55 ship maintenance availabilities, that will be gone. training we were able to get training done there, we can't get that there. we will have air wings. of the nine air wings we'll have five of them in what we call minimum sustaining tactical. the one that will affect us the most will be vaemt. what concerns me the most is our

ssbnx. that is our top nuclear stra teaming irk deterrent follow-on. the fact of nat ter, it's on continuing resolution. because we want to grow that program in '14, we're $500 million off in '14. so that comes to roost in the schedule of that and we're heel to toe. other ship building, we'll lose a virginia class submarine, literal combat ship and float forward staging base and a lot of costs to continue. the forward carriers werks need about $500 million to finish that carrier and by spring we stop work on it which is not very smart because it's almost done. thank you. >> thank you. general amos, can we continue the kind of of temporary actions we took fy '13 into '14. >> there's no more money in carry over. we were 99.8% obligated at the end of '13. there's no money to bring over.

we're going to live with what we have and 14 other continual resolutions. we've taken measures in the past. civilian hiring was frozen two years ago. we've already gone through our travel accounts. our reserves have been taken off active duty to reduce the t.a.d. costs. there's no more fat on our owns. >> general welsh? >> i echo what you already heard. we paid about $1.5 billion against our sequestration bill last year. that was about 25%. that will not be available this year. we start on a cr for the beginning of 14 that is roughly just in our own account, $500 million less than we had programmed for '14. the program didn't include the funding required to recover the readiness we set aside last year. we are behind the power curve and dropping farther behind the power curve. >> thank you very much.

senator inhofe. >> i appreciate you bringing up skelton. during the years i served in the house we sat next to each other every thursday morning at the house prayer brerk fast and got to know him quite well. he's sorely missed. i asked to have this chart placed up here so you can see it. i think the four of you can see this. this chart was put together by both the minority and majority on the senate armed services staff to kind of put into perspective where we are and where we're going with this thing. i know a lot of improvements have to be made. we had a discussion yesterday on the republican side about some of the things that will have to be done with personnel, with tricar and some of those things. all of that you would find in

the blue section down below. it's not going to really address the we have even though it is important. force structure, i think we individually have that same chart up here. you're talking about fiscal years '14, '15 on through fiscal year '23. so the force structure is a very serious modernization program. the mod defrnization -- we all know when things get tight modernization is one of the things that goes. by far of greatest concern is the orange area. it shows clearly that that is where readiness is. that's where training takes place there. i would like to have each one of you respond to your concern about that particular part of this chart, the orange part. i've also said readiness equals

risk. risk affects lives, lives lost. i'd like to have each one of you kind of tell what you think in terms of the people being at risk and lives lost might be affected by what you're going to have to do in this next fiscal year according to this chart. >> thank you, senator. this chart describes exactly the problem that the aefrm has. we're taking down our end strength. we're looking at speeding um taking down our end strength. you can only speed up so fast when you start to lose the money that you game by taking end strength out. we have a huge readiness issue between '14 to '17 that we frankly will significantly impact our ability to respond in the way we expect to respond. the other pieces will have to stop some of our modernization programs which means we'll delay getting new equipment five to ten years. we'll have to stop programs and restart them later on when we

get back into balance. for us it is significant readiness issues. we will not be able to train fem for the mission they're going to have to do, we veal to send them without the proper training and actually maybe proper equipment that they need in order to do this. it always relates to potentially higher casualties if we have to respond. >> admiral greenert? >> for us it is force structure -- we man equipment, senator. and so what that means is to redu reduce to deal with a reduction, we'd have to reduce force structure. this chart indicates how much we'd have to give up in the near term in order to garner savings. that means what do you do now? for me it's forward presence. i make sure the forces forward are ready, but those that are there for crisis response, right now i'm sitting at two-thirds reduction in that alone. so you have to be there with

confident and proficient people. if they're not confident and proficient, you're talking more casualties and you have to keep a pace with the capabilities of the future or you're unable to deal with a potential adversary. that's increasing casualties. we will be slipping behind in capability, reduced force structure and reduce contingency response. if we're not there, then somebody is out there and they're going to have increased casualties. >> general amos, you covered this in a lot of detail. anything you want to add from your opening statement in terms of readiness sacrifice, how it relates to risk and lives? >> snt senator, as you know as i said in my opening statement, we moved moneys to maintain risk. each service has a different orange wedge. mine is smaller than that, but that's for the near term right now because i'm paying that price to maintain that readiness to be your crisis response force. but that will only last probably not later than 2017. i'll start seeing erosion in about a year and a half.

we're paying that with other moneys, infrastructure training. >> that's what you referred to when you said in your opening statement, you used the phrase, a formula for more american casualties? >> absolutely, yes, sir, senator. we are headed towards a force in not too many years that will be hollow back home and not ready to deploy. if they do deploy, they will enter harm's way, we'll end up with more casualties. >> in responding to the question, general welsh, i heard yesterday someone talking to you about an experience you had in alaska. can you share that with us. i remind people that the cost not necessarily for an f 22, but to get someone to a level of proficient see f 15, 16 is about $7 million. talking huge rents in personnel. would you like to repeat the

statement you had made? >> senator, i've actually had this conversation multiple places in the air force. one of our bases recently i was talking to a group of young pilots who where eligible for our aviation career incentive bonus. of that group there were six to eight in the group. none of them accepted the bonus to that point. >> not one? >> not one. that doesn't necessarily mean they're planning to leave the air forces but certainly means they're keeping their options open as a minimum. it's not just pilots. i was at another base where a couple of very young airmen told me they love the air force but they were bored. their particular squadrons were not flying. they were sitting on the ramp because of the reductions last year. they said at the end of their enlistment they planned to find work that was more exciting. i haven't heard anybody in the military say they were bored in quite some time. >> i appreciate that. i just want to read one of the most alarming concerns that we

had, have raised, was the belief that your service may not be able to support even one major contingency. i'd like for the record -- when you stop and think about the collective service of four of you is 156 years. we're talking a lot of experience, a lot of history. i'd like to have you for the record respond to that in terms of not being able to meet even one major contingency operation. >> thank you, senator. senator reid. >> thank you, chairman. thank you gentlemen for your service to the nation. i think one of the issues we have to ask because so much of our readiness is ready for what? that will be answered in some respects in the qdr which will be affected by the budget regardless of whether we're able to work our way through these obvious problems. so could you give us a sense, general odierno from from the

army's perspective in terms of ready for what? >> thank you, senator. as we learn from the past and look to the future, it's about having the capability to do a multiphase combined arms joint campaign that operates in a very complex environment that includes conventional opponent, irregular warfare, counterinsurgency. that's where future warfare is going. we have to train our forces to do that. right now the army is great in counterinsurgency. we want to continue to keep that expertise. we've got to build our combined arm joint capability to do a multiphase campaign for a major contingency operation. we were supposed to begin training for that in '13. we were not able to because of the cuts we had to make in our training dollars. we're now behind. that's the problem we have. right now we have limited number brigades that are capability of doing that right now and we're falling further behind as we move forward.

>> one of the reasons that we are so well schooled in counterinsurgency is we invested over the last decade billions of dollars in counterintur genesee. looking forward, is that going to be is that going to be a primary mission or ancillary mission in qdr? if that's the case we invested a lot of money in a capability that we're not going to be using. >> i would say it's capability that's going to be needed but will not be at the forefront as it has been in the past. >> admirable greenert, the same question. >> for us it's to ensure we have a sea-based strategic deterrent on track. subject to my comments in my opening statement, this issue we have with '14 to get the resolution -- we need to grow the program. i can't do that until we get a bill in '14. sequestration, we lose the

ability -- $150 million. it sounds sort of nagging, but we have to get design engineers hired. even when we get the money, you can't click your fingers and hire 600 specialized assign engineers. we've got to keep this coherent. we're on a very tight schedule when the ohio phase is out to deliver on time. for us also it's the undersea domain. we have to own it quite simply. it's my job as the navy, and to keep that on track. i'm concerned we fall behind in anti-submarine warfare keeping apace of our potential adversaries. that's a priority regardless of sequestration. we will invest in that. it's integrated air and missile defense. that gets into the electromagnetic spectrum, cyber, bringing those new capabilities in from jammers to cyber warriors, et cetera. it's also just flat out presence. quaunt has a quality of its own, and being sure we have the right

ships with the right capability with my partner to my left, the navy-marine corps team, we can be where we need to take care of the little crises day in and day out so they don't fester and become bigger crises and we get in the situation of a major contingency. >> general amos and then general welsh? >> the requirements for the marine corps is to respond to any crisis today, not a week from now, a month from now, but to day. as we move moneys around to maintain the level of readiness, we're trying to keep a balanced force. as we go forward into this sequestered force, qdr force, what we need to have in my service is a balance between modernization readiness and personnel, the right amount, not hollow, but high state of readiness forces. so to do that we are balancing this thing down, dialing all the dials trying to make sure we end up with something that is not a hollow force and that is a ready force. amphibious combat vehicle, the

replacement for our 40-plus-year-old tractors is the number one priority for me, followed by the f-35b which is performing well. as we go forward, my focus, regardless of how big the marine corps ends up being as a result of how much money i get, will be a balanced high state of readiness force, ready to respond to today's crisis today. >> general welsh please. >> the choice we face is readiness today verse as modern tomorrow. the air force is no different. that's the thin line we're trying to walk. for us we have a requirement for readiness to respond rapidly that's what what we bring to the joint force. we have read dins to be viable ten years from now. we are a high tech force. we are plat formed based much like the navy. we have to invest now to make sure we have the proper capability ten years from now.

that's why modernization of is so critical to us. the other thing that is a major concern for me is getting back to full spectrum training, much like odierno is worried about. we walked away from that because of the demand on the war in afghanistan. last year we canceled our red flag which is high profile and even our weapons instructor courses because we didn't have enough money to conduct them. that's where we train our phd level war fighters to lead and train the rest of the force. we have got to get back to that. >> thank you very much. a final brief comment, from the appropriations perspective, giving certainty in terms of a budget, not a cr -- because that would be very difficult in terms of no new starts, no anything, two years of certainty, total relief sequestration would probably put you in the best position. i see let the record show, nodding heads. >> thank you, senator reed. senator mccain.

>> i want to thank the witnesses. i wish every member of congress and ef yes american were tuning in to your testimony today so we would have a sense of urgency that unfortunately is certainly not significant enough to bring us back into i think a rational approach to our nation's defense. i thank you for your service and i'm very appreciative to be around americans who have respect and admiration of the american people. i share all of your views, but you've left out a couple of items one of them is the continued cost overruns of our weapons systems. admiral greenert, you just talked about you needed 500 additional for the gerald r. ford. is that correct? you just mentioned that? >> that's correct. >> you didn't mention we have a $2 billion cost overrun in the gerald r. ford.

tell me, has anybody been fired from their job as a result of a $2 billion cost overrun of an aircraft carrier? >> i don't know, senator. >> you don't know. actually, you should know. you should know admirable when we have a $2 billion cost overrun on a single ship, now you're asking for $500 million more. i would ask the same question of general welsh. has anybody been fired because of the cost overruns of the f-35? i don't think so. we've had hearing after hearing in this committee concerning the first trillion dollar defense acquisition in history. the numbers are astronomical as to the size, increase in size of your staffs. we have seen double and redoubling size of the staffs of the major commands and your own. that's never been brought under control.

we now have 1.5 million civilian contractors and employees -- civilians and their contractors' employees and only $1.3 million -- excuse me -- 1.3 million uniform personnel. that's got to be cut back. the number of civilian contractors and personnel have got -- they don't fight. they do great jobs, but they don't fight. you're going to have to -- this committee may have to impose cuts in the size of your staffs. they've grown astronomical, by the thousands. finally, i guess i would ask my -- the witnesses, despite what some may think, i agree with former secretary gates who said the, quote, entitlements are, quote, eating us alive. major one being health care costs consuming a larger and larger percentage of our budget.

i'd ask if you would favorably be inclined to address, one, retirement as far as increasing gradually, prospectively the number of years before retirement. two, imposition of increase in fees for tri-care which there hasn't been an increase since 1989 and also perhaps even looking at things like the contribution that used to be made for off-base housing and other costs that have grown so dramatically. maybe i could begin with you, general odierno. not only would i like the answer to that question, bide glad to hear you respond to my comments, particularly about cost overruns. >> first, on compensation, we have to grapple with compensation within the military. the joint chiefs are working very hard with this issue.

the cost of a soldier has doubled since 2001. it's going to almost double again by 2025. we can't go on like this. so we have to come up with compensation packages, not taking money away, but reducing the rate of increase of pay increase. basic housing allowance you brought up, look at the commissaries, look at health care. we have to have a total package that allows us to reduce the cost. >> could i interrupt one second. do you know of a sij soldier, airmen or marine that joined the military because of tri-care? >> it would be difficult to answer that question. what i would tell you, though, senator is they do come with very large families and health care is a big issue for them. that doesn't mean we can't work with them on that. in terms of cost overruns, i agree with you. we are tackling this problem.

i would tell you we're holding people accountable, but not holding them accountable enough. we have to continue to work that, specifically with the issue that you brought up. >> senator, these attributes of changes to compensation i would look at favorably. you're speaking at least my language. i'm sure my colleagues feel the same way. about 50% of every dollar d.o.d. goes to personnel predominantly as compensation. if we keep going this way, it will be at 60 and 70 in a decade plus. we can't do that. i think it's our responsibility to take a hard look at it. when i talk to my people, they say my quality of life is pretty good, that's the pay, the compensation that you mentioned. they say my quality of work, i need help. i got gaps. i want training. where is my chief? i want to go to the bin and get spare parts. >> it's been referred to, some of the best and the brightest are considering their options

which is something that never shows up on a profit and loss basis. is that correct? >> yes, sir, you're absolutely right. if i could talk to headquarters staff just a second. we've been assigned a goal of 20% as we're working to build our budget. we're going beyond that. we got a goal of money, we're looking at four times that reduction. we were looking at -- we had a goal of 400, for example, of civilian personnel. we're looking at five times that. we're taking a hard look at that. we're working our way down to the subhead quarters. as you look at this orange and you look at the blue efficiencies, our piece of that, to get at that, we're looking at about 25% of our reduction is in overhead and contractors. we're taking a pret stay robust look. we look forward to briefing your staff when that time comes. >> senator, you'll find i think a ready audience up here for benefits. it's more than just the try care. it's everything.

it all fits underneath the personnel. i pay 62 cents on the dollar right now for manpower. that's not because marines are more expensive. it's just my portion of the budget is smaller. that's going to go well over 70% by the end of the fid dip if something is not done. you'll see the joint chiefs come to congress through the president talking about a package of cuts and reductions, how we can cut that down. so that's en route. as you're aware, the folks are looking at the retirement. we're open to just about anything. it's in our best interest and our nation's best interest. we're reducing the marine corps if we stay on the sequestered budget by 28,000 marines. inside that, well over 20% of headquarter reductions. i'm eliminating entire marine expeditionary force. it goes away. reducing infantry battalions,

regiments, air groups pretty significantly. we're pairing that down, senator. as it relates to somebody getting fired, i can't speak to that. i can talk pretty intimately about the maneuvering around among the f-35 program, both with the management at lockheed martin and my service. there have been cost overruns, but our vector is actually heading in the right direction on the program. >> senator, the short answer is yes, absolutely need to get entitlements and benefit reform. there's no question about that. i hope we would roll the savings we could make from that back into the tools and training our people need to be fully ready. if we did that, they would understand the reason and they would see the result in a meaningful way. if we take the money and use it for something else, it will be a bigger problem for them. cost overruns and growth, i agree with everything you said. we're looking at every staff. we're in the process of

internally reducing two four stars, 15 three-star positions and decreasing the number of people in headquarters. we have to take this seriously, senator. there's no other option. >> thank you, senator mccain. senator udahl? >> good morning, gentlemen. i'm frustrated this committee has asked you to come up and testify about the harm in sequestration. we in the congress have created this monster. we keep dragging you up the hill to have you tell us how much damage it's done. i met recently with my constituents in the great the great commu they're tired of congress' unwillingness to compromise and solve the problem and that view is echoed everywhere i travel. of the bottom line is we all know that we've done serious harm to critical programs in our people and it's very clear none ofkn this will really save us ay money. i think you all made that case very powerfully.

it will cost us more in the long run if we buckled down and put place strategic budget architecture based, for example, on the simpson-bowles plan. you and people you lead are paying price for our failure to lead and act. i'm sorry for that. i apologize for that. but what we've been hearing from our con at this time cents and you -- constituents and you, we need a bipartisan agreement, pass at budget and get back on track. let me in that spirit, general welsh, turn to you, in your opening statement you said that if you were given the flexibility to make prudent cuts over time we could make the savings required under current law. could you me more specific about kind of flexibility you're asking for? i've been working with senator collins and others for pushing for better budget flexibility when it comes to making cuts governmentwide. it is important to know how we can get this right and how it can be most helpful.

>> senator, my view, i think everybody in the room would agree, sequestration is a horrible business model. the mechanism of sequestration is a horrible business model. nomo successful business would y to downsize its product line or its costs doing it this way. anybody would take a time period, determine what kind of savings you needed over the time period, what kind of reductions you needed over the time period, you take the beginning of thatd. time period to actually close product lines, reinvest the capital, manpower, and force structure saved and into the successful product lines you want to continue, restructure your organization and create savings at the back end of this. if we had nothing more than a 10-year period to save whatever the number is, we understand we have to be part of the solution for the nation, financial solution for the nation. no one is resisting that. of this mechanism making us big chunk of money first two years isfi readiness versus modernization dilemma. overall cost of sequestration reduces our capability and capacity over time but it doesn't break us.

the mechanism is what breaks us. so i would just say if we had the trust available to believe that the department would return years andon over 10 we could show you a plan how to do that, eliminating this abrupt nature the mechanism at the front end would bept a much, muh more sensible approach. >> general, that's very helpful and i know this committee is going to listen as we move forward. let me turn to the economies of the military communities. if sequestration remains in place i was thinking about, general odierno, the situation you face, cutting down to 450,000, perhaps as low as 390,000. there could be real damage done to cities like come springs and many -- colorado springs and many around the country. same woulder apply, general wele to the air force if you're forced to role back criticalpa space in aviation missions in colorado last couple years we

had real challenges. we had to battle flood and wildfires. without the incredible support from soldiers and airmen i can't imagine how much worseed the losses would, have been if we didn't have the assets like the aviation brigade at fort carson and great airmen at petersen. you comment on that and where those studies have been done and what additional information we might need to how smart these cuts have to be made. >> what people don't understand, in many cases fort carson in colorado, fort hood in texas, fort bragg, in north carolina, fort campbell in kentucky they are some of the biggest generators of the states periodn as installations go away you're just not losing soldiers whaton they do, all the businesses around thosest installations foe probably 50-mile radius are impacted by a shutdown and loss of the impact of these installations losing people. so the impact to the local and

state governments is substantial. we have studies, i don't have the numbers with me, for every installation, but we have numbers for every installation. when i to visit they always brief me, this is the first, leading employer in the state, either first, second, third very close to the top of lead are employer in the state, people, many forget o about this as we lookle at these reductions, in addition to what i'm concerned about the national security impacts it as. >> general welsh, would you care to comment? >> senator, $1.3 trillion reduction in dod over 10 years will leave a bruise in a lostd. places of the we hav ie to understand the impact of each place before we make final decisions but i think it's going to affect a lot of people and a lot of places. i was just in colorado, by the way, sir, visiting with a bun of firefighters from fort carson, colorado springs and air force academy and sleever and

petersen, looking at battles fighting fires this year andat lasttl year. i was struck by the contribution to the communities they make every day, not just when disasters occur. nobody wants to reduce the contribution. we lost as a furloughs last year, corporate body, 7.8 million man-hours of work. double that for the government shutdown, impact on the civilian workforce. is 7.8 million hours of pay that doesn't go into theli community which those peoples live. start to see the effect when you have the short-term losses of income. long-term it would be more dramatic obviously. >> thank you, gentlemen. if i could, see my time's expired i want to make a couple very quick comments. i want to thank the members of the national guard units whoe came to colorado, kansas,fr montana,om utah, and colorado guard formo incredible work done immediately after the floods but to help rebuild the highways. we're reopening highways months ahead of schedule. it is a testament to the work

ethic andah team work that those units brought to our state. secondly i want to thank y'all for coming. i'm sorry we're under these circumstances. i'm pleased to see senator inhofe here. he is a too tough to let a few blocked arteries from keeping his work and comments about congressman and chairman skelton. he was a wonderful man. he was a mentor to me. he had a habit of saying i'm just an old country lawyer but thats withit the moment i would really listen to what ike skelton had to say, i know everybody that served with him felt the same way. mr. chairman thank you for convening this important hearing and we've got to get this right. thank you. >> thank you, senator udall. senator chambliss. >> thanks, mr. chairman. likewise thanks to you for being hear today, gentlemen. in my 20 years serving on the house armed services committee and senate armed services committee we never had in my opinion four finer leaders of

our respective branches than the four here and thank you for what you do every day. as we look what we're going to do relative to defense spending i'm one of those without question we need to spend more money. sequestration as each of you said will become a bigger and bigger problem. i also feel very strongly about the factal that whatever we're able to add to dod spend we have to offset it somehow. we have got to get our fiscal house in order. i think we do that the first place for g offsets is at the department of defense itself. we asked in a hearing that senator ayote, that senator shaheen called on tuesday of this week, we asked of general dempsey, senator manchin did, for a list of programs or expenditures that the department does not want to spend money ont that have been mandated by

congress. we thought we would have that list by today. i understand now we're not going to get it until next week but i think for certain one item that will be on that list, general odierno, is the purchase of abrams tanks that you have been somewhat vocal on, that congress keeps demanding that you buyoc thaw don'tal need. my understanding is that you were requesting a delay or halt in production until 2017. and at the cost of that was going to be, savings would be somewhere between 436 and 3 billion over three years. i don't know what the exact number is. either one of those is pretty significant s that still the case that you would prefer toth spend thater money somewhere ela >> itbt is. we have the most modernized tank fleet we ever had right now. it is in great shape. in fact we're reducing our force structure. so we'll needless tanks yet we're purchasing more tanks that we don't need. so the savings would be, couldee be used in many different areas

of the modernization programs that we need, for example,s aviation. >> as we go into the authorization bill. rest assured issues like that will be addressed of the as we talk about sequestration, i know a lot of these programs, they have taken years to develop and produce. so these programs that i'm going to mention weren't necessarily created or authorized or authorized on the watch of the four of you, but they are significant. general welch, i understand there are 12 brand-new c-27j spartans rolled off the assembly line and immediately mothballed. dod spent $560 million on one of these airplanes, but only 16 have been delivered. a majority are sitting in storage somewhere. also, there were 20 c-27as that cost the taxpayer $596 million.

they are sitting unused in afghanistan and slated to be destroyed. there may be some movement to send those to another agency or entity. the maintenance contract on those airplanes, i understand, was canceled in march of this year, and therefore, they're unuseable. the army spent $297 million for the multiuse intelligence vehicle which is a blimp-like aircraft that could hover over the battlefield and canceled after one test flight and back to the contractor for $301,000. the army and the marine corps are moving ahead, as i understand it to purchase 55,000 trucks known as the joint light tactical vehicle to replace your current fleet of humvees, which probably understandable, but also my understanding that the

committed cost of these per vehicle was $250,000. now it's gone to something like $400,000 per vehicle, not unlike what senator mccain alluded to earlier. general welch, also a recent audit by the dod inspector general found a contractor overcharged dla for spare aircraft parts. it was one part aluminum bearing sleeve that should have cost $10 that dla paid $2,286 per item. it resulted in a $10 million overcharge. again, as i say, those are items that weren't necessarily created on your watch, but you're in the process right now of looking forward with respect to weapon systems. i just hope you'll keep that in mind. there is one other area i want to mention as we look for savings. that's in the area of medical

research. i'm a beneficiary of the research that's been done in this country on prostate cancer and i'm very thankful for that. they do a great job at nih on prostate cancer research and every other cancer research. i don't understand why the military is spending $80 million a year on prostate cancer research. why we are spending $25 million a year on ovarian cancer research and $150 million on breast cancer research and doing lung cancer research. if there are particular needs the military has regarding military research, and there are some because of particularly the casualties we suffered recently, i can understand it, but these are types of research that simply have no place, in my opinion, at dod. they ought to be done at nih. i understand further that there is not real coordination between

the research done, medical research done at nih and what is done at dod. mr. chairman, that's not an item these gentlemen have a lot of control over, but an item we need to look at. the money would be better spent as a replacement for sequestration. a good friend to a lot of us senator ted stevens who first asked for prostate cancer research go to dod. several years later, he announced on the floor of the senate he made a mistake. he should never have done that and that money ought to be spent on research, but it ought to be spent at nih and not the department of defense. as we go forward, gentlemen, with the defense authorization bill and the next couple of weeks, i look forward to seeing that list that general dempsey gets to us with respect to items that come out of each of your

budgets that hopefully we can have the spine to stand up and say, irrespective of parochial interests, we've got to look after our men and women and they need this money to be spent in our areas rather than areas the military themselves say we don't need to spend it. thank you very much. >> thank you, senator chambliss. senator now senator shaheen. >> thank you, chairman for holding this hearing today. thank you gentlemen for being here. i would hope as the sentiments expressed by some of our colleagues that this congress would deal with sequestration in a way that means you don't have to be here year after year after year talking about the challenges that our military faces because we haven't done our jobs here in congress. admiral greenert, i would like to begin with you because we believe that the portsmouth navalship yard is the premier

ship yard for modernization and maintenance of our nuclear fleet. i have a letter here from paul o'connor who talks about the impact of sequestration on the workers. i want to read two phrases from this letter because i think it epitomizes the challenges they are feeling from sequestration. he says, with 9 1/2 more years of sequestration hanging over our heads, 9 1/2 more years of furloughs and lay-offs, how will we attract the best and brightest young men and women to our most technologically sophisticated complex, precision-based industry? he goes on to say, the security, instability and volatility of sequestration on our ship yard and national work force cannot be understated. the personal impact, mission impact and national security impact are real and contrary to the best interests of america.

mr. chairman, i would like to ask this letter be entered into the record. admiral greenert, i wonder if you could talk about what you're seeing with respect to the long-term impacts of sequestration. you mentioned some of those. if you could elaborate further? >> thank you, senator. i'm glad we get to see that letter because it very clearly states the debilitating effect of doing this year after year. it's inefficient and you lose productivity. this fine gentleman described there, you can't hire people so you can't distribute your work force. you furlough them here and there, so they are going to go elsewhere. somebody has to write the contract, somebody has to get the logistics done. those are the people who regrettably we furloughed. you can stand here with a wrench in your hand and welding rod, but you need to pay for work. it's all a team and a long

chain. we think we are saving costs. we are avoiding costs and we aren't doing that. we are deferring cost and it's a one-point fill in the blank factor later on that. there describes the maintenance conundrum we have. by the way, that's in a nuclear ship yard which is one of our more stable enterprises out there we hire people longer term, long planning. it is a premier ship yard. we have lots of use for it in the future. i'm concerned about -- and i didn't mention earlier but the shore infrastructure. we have reduced dramatically the shore infrastructure. to keep forces forward. we went from 80%, if you will, of our motto which is nothing unnecessarily all excited about down to 55%. we are deferring work that is going to come to roost. fortunately in fiscal year '13 we are able to meet thanks to congress programming and getting that 6% requirement done to

recapitalize it. in fiscal year '14, i'm very concerned. we have $1 million. we need to get to do that right. hopefully, we'll get reprogramming or a means or bill to do that. that infrastructure is very important us to. >> thank you. general welch, senator chambliss talked about some of the areas where there is money being spent a that may not be most efficient. one of the things we looked at on the readiness subcommittee is the air force's proposal to spent $260 million for two hardened hangars in guam. they cost about twice as much as those that are not hardened. i wonder if you could prioritize the need for that versus the other needs that you and the other members of the panel have identified with respect to

readiness and training and the other challenges that we are facing. >> thanks, senator. i don't think it's a matter of comparing them in every case. in this case, the hardened facilities on guam are responsible to provide more resilient capability on guam because of an increased threat of surface-to-surface missile attack. he didn't request everything be hardened, just those key facilities you couldn't impro advise for if there was damage on an air field. that's what those facilities are based on. we are trying to support u.s.-specific demand in that effort to meet his war plan requirements. the readiness and modernization requirements are bigger than $260 million. i don't think that's the reason we can't be more ready today. every dollar will help. the readiness problem we face over time is significant. to fully restore our normal readiness levels would be almost $3 billion.

so we are looking with sequestration at a long-range problem that is significant. it's going to take us ten plus years to get readiness back to the level we want. we'll only get there reducing the force enough to keep a smaller force ready, which means less capacity, less capability to respond globally, less options for national decision-making. >> we certainly all appreciate that. as senator chambliss ticked off a number of projects that have significant costs to them, this one also has significant cost. when you add up those $250 million projects, pretty soon we are talking real money. i do hope this is one you will continue to look very carefully at. >> yes, ma'am. >> thank you, mr. chairman. >> thank you very much, senator shaheen. >> i want to thank all of you for your service and for your leadership during these challenging times. let me just echo what my

colleague from new hampshire has just said about the portsmouth naval ship yard. where are we if as we go forward with sequester in terms of fleet size and the attack submarine fleet? i know you mentioned in your opening testimony that one less virginia class submarine would be built during the period we would like to build it. can you give as picture what the overall fleet looks like? >> well, as i mentioned, the undersea domain critically important. we need 45 to 55, our goal is 55. we would be down to 48 submarines in 2020. yeah that as a benchmark year. unfortunately due to sequestration we lost the "uss miami" which was a project portsmouth had. the overruns, the furloughs and need to have to go to a commercial work force instead of using federal work force was just too much.

we couldn't afford that submarine and continue to do the other. >> my understanding is we aren't meeting combatant commanders' needs with requests they make for the fleet now. what is the rough in terms of where we are now? >> the combatant commanders as they look at the world distribution of submarines for intelligence surveillance and reconnaissance, they need about 19 submarines any time deployed. we can support about 10 to 11 and we broker how that works. we are about 50%. that is reflective of the overall fleet request versus what we can provide today. >> thank you, admiral. general welsh, when do you expect the f-35a to achieve full operational capability? >> we hope that happens in 2021, senator. >> okay. thank you. general odierno, we talked about

it when we met. what is your assessment of the a-10 and its closer support capability? how important is the a-10 to the army? >> thank you, senator. as i know general welsh would say a-10 is the best support air force platform we have today. in afghanistan when they put the lightning pod on it it became the most complete support system and rover capability and gun systems. it's performed incredibly well in iraq and afghanistan. our soldiers are very confident in the system as it goes forward. it's a great close air support aircraft. >> thank you. we talked about these savings issue. something i know this whole committee signed off on and i fought very hard to not get money appropriated for, but i think it highlights the issue you heard from senator chambliss and you heard as well from senator shaheen on some examples of we're all concerned about sequester but also making sure we use the money allocated in

the best way possible for our men and women in uniform. one of them, at least to my end is the miad program where we spent $1 billion between fy-4 and 11. i just hope we are not going to continue to spend any more money on programs like that. please tell me we aren't. >> we have to make tough choices. we have to spend money on programs that are best for us. i would make one comment and i'll make a general comment. you have to remember that as you look at cost per vehicle, things like that, the reason some are going up because we are purchasing less of them because we have less money and less force structure. that drives the cost up on some programs. we are looking very carefully. it's only the programs we need that we are going to invest in. we are not investing in programs we do need so it's important we don't use money for programs

that aren't going to directly impact our soldiers. >> i want to ask about a topic particularly general odierno, afghanistan. how do you assess the situation in afghanistan right now? i'm worried that so many of our colleagues, frankly, aren't focusing on the fact we still have men and women serving in afghanistan. what is it we need to do to secure our interests in afghanistan? can you tell us where are we on this decision on what the follow-on force structure will be? with that decision, can we get to a point wherever whatever that follow-on is is too small to make sure we need to achieve not only the isr issues we have to address in afghanistan, but ensuring that our own forces are protected. general, you and i talked about that. where are we on afghanistan? >> thank you, senator.

first, until we get the bsa approved, that's when we'll start discussing what the end strength is post 2014. we are certainly hopeful we will get that agreement with the afghan government that allows our soldier, sailors and marines continue to operate in afghanistan. what i would say is, the other thing i would say is, i believe we are making incredible progress in afghanistan. we don't talk about that a lot. the afghans have taken over. it's working. they have taken responsibility. we have to stay with them. it's important we stay with them and they continue to have the confidence with the multinational force behind them, both united states. that is key as we move forward. as we make decisions on residual forces, there comes a time if we get too small and our ability to protect our own forces is at risk. we have to make sure we communicate that to the president and joint chiefs had these discussions. we will communicate that as we move forward.

>> i understand certainly the feeling that people have given the conflicts we've been involved in of wanting to withdraw. so what are our interests that are at stake in afghanistan in terms of getting the bsa right and getting the correct ratio of follow-on forces? i know my time is up. i think this is an important question. >> first off, we need the bsa to protect our soldiers. soldiers, sailors and marines operating there. that allows them to do their job and continue supporting the afghan. in afghanistan, it has come so far. it is hard to describe to someone who has never been there how far that country has come. the progress made, the security that the people feel. the fact that the afghan security forces are stepping up in a big way to support their own people, but they're not ready to completely do that on their own so it's important that we have to provide new kinds of support, training, advising,

building their institutions, making sure they continue to move forward because there are those that want to go back and take control and there are extremist organizations that will directly threaten the united states. we have come too far and invested too much for us to back away from that now. we are close on the cusp, i think, of being successful. i think it's important that we understand that and we should draw lessons from what we are seeing in iraq to that as we move forward. >> thank you. >> thank you very much, senator ayotte. mr. donnelley. >> thank you, mr. chairman. it is an honor to have you serve and lead our country. general odierno i was privileged to serve with ike skelton. he was the model of how to serve with dignity, humble, hard working, incredibly smart. as i know you know his reading list was also required reading for the rest of us, as well.

the question i have is in this ties in admiral green to a conversation we once had. you mentioned earlier today about at one time paying benefits was 1/3, looks like it's heading to 2/3. for each of you, what is about the proper balance in terms of those kind of costs around everything else? general amos you mentioned it's at 70% now. what is the right balance for each of your forces? general odierno, if you would like to start? >> best case we want personnel costs to be somewhere between 42% and 45% of our total budget. we are past that now. we are over that at this point. >> admiral? >> i agree with general odierno. we are right now at about 50%. i think that's okay. that's about right. then we need to look internally and say which growing the fastest and what does it mean to

our constituency? does it really affect them that much and what makes them a better sailor, soldier, airman, marine? there is that piece of balance across those entitlements. >> senator wrig, i would be thr if i was in the low 50s. >> we recognize it's different for each force. >> it is. it is a shared budget with our department and the navy. it's a function of being able to get that down. there are ways we can do that. we absolutely have got to commit ourselves as department of defense and congress to help us do that. that's going to erode my buying power to the point. saw a study, we took a brief three or four weeks ago that said if we stay on the course we're on, somewhere around 2025 we'll have 98 cents of every dollar going for benefits. you project it out, extrapolate. >> right.

>> senator, depending on what you include of your accounting, we are somewhere between 38% and 50% right now. the problem for us is that range would be fine. it's the growth we are worried about. i think we owe you and other members the incredible job you've done compensating all the great men and women who served in our military service the last 20 years. the growth in that category is the thread to modernization readiness. we need to control that growth over time. >> as a follow-up, it would be helpful to get your best ideas how to accomplish that on our end, as well, as we look forward to how we put these budgets together for the future to hit that proper and right mix. does flexibility help all of you and how significant would that be?

>> senator, depends how you define flexibility. if you're saying flexibility within each budget year it help as little bit. in my mind it helps around the fringes. probably different for every service. what we need is flexibility across the whole sequester action. as general welch mentioned earlier, that's helpful because the front-loaded nature of it throws us off skew how we sustain our balance. if you gave us year to year flexible, there are some things we can do. that's only around the edges and doesn't solve the problem. >> this will be to all of you in particular. i was in afghanistan late april/early may, hillm manhelma province, as well. we had metrics saying if we could keep on these metrics by

december '14, we'll be in a position to basically turn everything over to the afghans with some presence of residual forces. there was some controversy -- not controversy, but disagreement by some there, are we able to hit these metrics and say on target? i was wondering if you could fill us in on where we are? >> we are ahead of those metrics. we turned over responsibility to the afghans and really over 90% of all afghans. there are only a very few places where they have not taken complete control of their own security. in my mind, they are ahead of the metrics we originally established back in that time frame. they continue to move forward and do better than we expected. faster than we expected. >> we are exactly the same position. we transitioned about a year ago to training advise and assist missions instead of offensive combat operations.

we changed the training of marines going in there. we put more senior leaders on the ground so they could partner with the afghan battalions. we built that structure and put a one-start general in charge specifically to focus on that. we cut that force back by 50%. not because we are trying to cut the force structure but it's been met with such great success. by december 2014 will it be phenomenal? no. it will be -- i'm confident we will have set the conditions with the greatest opportunity for the afghan people to take charge of their lives. i feel good about it. >> thank you. i see my time is up, mr. chairman. >> senator vitter. >> thank you, mr. chairman and thanks to all our witnesses, particularly for all of your service to our country. we all appreciate that.

i understand you all have clearly articulated real problems and readiness, number one, and number two, that lack of readiness costs lives. lives are directly at stake. that concerns us all. i think the last time this possibility of a real hollow force and significant lack of readiness happened was in the 1990s. general odierno, would you consider that challenge then -- excuse me, let me rephrase it. would you consider our challenge today greater or lesser than that challenge? >> i believe our challenge is much greater today than it has been since i've been in the army in terms of readiness. this is the lowest readiness levels since i've been serving the last 37 years. >> general, i agree.

i think the numbers confirm that. for instance, in the 1990s, this general episode i'm describing at that problem, the military described 80% of conventional and unconventional forces as acceptable with, quote, pockets of deficiency. today in contrast, at least on the army side, you have said only 15% of army forces are acceptable, with 85% being below that, is that correct? >> that is correct, senator. >> today's situation is much worse. in the 1990s there was a response to that. the administration, president clinton's administration made a specific proposal and worked with everyone, including republicans in congress to get

$25 billion allocated for readiness. will there be a specific administration proposal any time soon to this far greater challenge? >> i can't answer your question, senator. what i would say is it has to do as the chairman said earlier, the negotiations going on for the bunt deal. out of that we hope there will be something that comes back to the department of defense that allows us to deal with this three to four-year window we have of readiness challenges we have and get rid of this sequestration as everyone said here numerous times a horrible way to do business. >> i'm familiar with those negotiations. i don't think anything is being discussed currently that approaches a specific concrete response to this particular problem. i would urge, i know you all aren't the ultimate decision

makers, but i would urge the administration to put forward a specific proposal as president clinton did in the 1990s in a situation that i believe you're correct in saying was far less challenging, although it was serious. general, i also want to ask about some readiness issues regarding joint readiness training and the like. i have a particular interest in that because some of that happens at ft. polk in louisiana. sequestration forced the cancellation of several combat training center rotations. can you describe how important those rotations are and the impact on that readiness? >> in fy-13, we had to cancel seven rotations. what that means is usually it's a force of about 5,000 to 8,000 men and women who go there who

get a chance to train and really get certified in the kind of operations we think they might have to deploy and weren't able to do that. not only that, you lose a significant amount of experience that are gained by leaders. for example, that equates to about 250 company commanders, about 50 battalion commanders and seven or eight commanders that did not get the training necessary for them to do the operations. that also includes their soldiers. if that keeps happening, it continually degrades the readiness. in '14 we have to focus all of our dollars to seven brigade elements. at least i can get seven brigades trained. that's the only money i have to do that. everyone else is going to go untrained. they will not be able to do the training necessary. >> if that is accomplished for seven brigades only and no more, how would you describe the impact on critical core

competencies and readiness? >> we'll have about a little over 20% of the force, maybe 25% of the force that is trained in its core competency and the rest will not be trained in core competencies. >> general, i want to underscore the specific training we are talking about is the training that's most relevant to the sort of operations we face today, is that correct? >> that is correct. if we had to deploy in the middle east, if we had to deploy to korea or anywhere, that is the training they are not receiving. what keeps me up at night is if something happens and we are required to send soldiers, they may not be prepared the way the american people expect us to have them prepared. >> a final question for any or all of you. has the standards in terms of what we are preparing for, in fact, been lowered over the last few years? the requirements,ed readiness

requirements? >> let me -- i don't know if i would say lowering. let's take afghanistan, for example. the units are getting ready to go to afghanistan are training differently today. as general amos mentioned, they are being trained to do training and advisory missions. they are not training to do full spectrum operations, which we would normally train them to do because they are just going to do them. they have not been trained in the things we think are important as we develop the readiness levels in order to respond to contingencies. >> i guess what i'm asking, let me try to be clear. overall in 2010 and the qdr, the requirement was to fight two wars on multiple fronts and win while engaged in significant counterterrorism operations. hasn't that bar been lowered

significantly? >> it has. >> as that bar has been lowered significantly, do you think the world has become a safer place? >> no. as i stated earlier, i believe this is the most uncertain i've ever seen the international security environment. >> thank you. that's all i have. >> thank you, senator vitters. senator geraldo. >> thank you all for your service and acknowledging the contributions and service of congressman ike skelton whom i had the privilege of serving in the u.s. house. you testified with quite a lot of specificity about the negative impacts of sequestration. i look at the defense strategic guidance and i think each of you acknowledged that this is an articulation of future threats, challenges and opportunities. we face enough challenges, i.e. cost overruns of the cost of energy to the department of defense, increasing personnel

costs with that, and meeting the goals of dsd without the mindlessness of sequestration. so there are some who say that we should just give you more flexib flexible, but in my view giving you flexibility which takes sequestration as a starting point is like moving the deck chairs on the "titanic." would you agree with that? >> flexibility is not the ideal solution. it's getting rid of the mechanism of sequestration. >> yes. we need to replace. >> flexibility is a help if we can't do that. >> so would you all agree what we need to do is replace sequestration with a more rational approach to what you all need to do? >> absolutely. >> all of you agree with that? >> yes, ma'am. >> there were some questions relating to the unsustainability of the percentage personnel

costs with a regard to all your budgets. you must have done some thinking on what factors would you apply and making recommendations to changes to your personnel costs. what would be your philosophical prospective going forward making your recommendations? >> senator, i'll take a crack at it. for example, if we were to slow pay raises or something to that regard, something when done look at the impact on the constituency and can that be reversed because we have to maintain the all-volunteer force. that's very important. two, it has to be transparent. our folks, we have to speak to them and make sure they understand why, what, how and what is the purpose and where this all fits in and their families so they see that. three, i believe there has to be

a balance. i alluded to this before. pay housing, tricare, tuition assistance to get a degree is the quality of their life, but also when they go to work, what is that quality? do they feel appreciated in that job? do they have what they need? tools, personnel, oversight, leadership and the train something they are proud of what they do? we need to balance those as we look at it. >> senator, within i think from my perspective a couple of categories. internal controls on things like bonuses and everything from reenlistment and things we do to recruit and assess marines. we have gone back into that in the last 12 months and culled out significant savings. internally, those are the mechanisms that we are balancing with regards to retention and

recruitment, but to admiral greenert's point, this holistic package of kind of the force. i've got a piece we are writing on be careful we don't break the all-volunteer force. whatever we do, there is plenty of room to maneuver before you get there. i'm not advocating there is not. we need to be mindful we had this all-volunteer force. we asked a lot of it. they've done remarkably well. it's probably a model for every nation around the world. inside of that, there is room to maneuver on health care costs. we talked about tri-care benefits, not benefits, premiums. there is room to maneuver perhaps on pay raises. there is room to maneuver on basic allowance for housing. how much is right now it's typically on a 2% to 3% rise every year. do we need to do that while we are in this? there are things like that we

are working on. >> my time is almost up. i take it that all of you would make these recommendations with a view that we are really mindful of the need to support our troops and to support their families so that we are not going to take away kinds of benefits, programs that they rely upon, as you move forward to decrease these personnel costs? sxwrshgs senator, that is exactly right. we have to take into consideration what it takes to maintain the all-volunteer army. that is forefront in our minds. if you get out of balance, the best way to take care of a soldier and his families, make sure he is properly trained and when he goes some where he comes back to his family. we've got to balance that part of it to make sure they can live the quality of life some the service they are giving to our nation. we understand that. it's finding that right balance. we think we have methods to do

that, senator. >> mr. chairman, my time is almost up. i do have some questions i will be submitting to do with how sequester is impacting the research and development efforts across all of our services. and making sure we maintain an industrial base as one of you, i think it was admiral greenert who mentioned that it is really important to maintain our defense industrial base and the impact of sequester on that goal. thank you, mr. chairman. >> thank you, senator hirono. senator lee. >> thank you, mr. chairman and thanks to all of you for service to our country. on behalf of the constituents i have back in utah, i express my deepest gratitude to you and those who serve under your command. for the last two years, we heard a lot from a lot of high-ranking military officers like yourselves who have come