vision of where we'll be as a nation at ten years from now in terms of budgeting. and that takes me back to she questionsation -- sequestration. it's my belief we're going to be dramatically under 3% of gdp if we keep this glide path intact, and in 15 seconds what are our allies doing in nato? are the people we fight with spending more or less in the next ten years on defense? >> in seven seconds, less. >> okay. so our allies are spending less. if we leave sequestration intact, we could be well below what we spend in time of peace. do you consider, do you -- what's the likelihood the war on terror will be over this the the next decade, admiral? >> we think that we're going to have to continue to suppress, contain, defeat al-qaeda until it collapses of its own internal contradictions, and that's going to the take some time, absolutely. >> likely not to occur within ten years? >> we would love for it to occur

within ten years, but i don't think we can count on that. >> so let's plan for the worst, right? >> yep. >> thank you. >> thank you, senator graham. senator blumenthal. >> thank you, mr. chairman, and thank you both for being here today. thank you both for your extraordinary service. to our nation. i would agree with my good friend, senator graham, in his assessment that we are on a path to repeal the very unfortunate and unwise cola cuts in retiree pensions that were a flaw in the bum agreement. i would disagree with him only on his reference to glide path which implies an ease and unimpeded track that is rarely pound in -- found in the congre. and i think it will take some doing to have of that path achieved, but i think the debate and discussion here this morning, and your testimony's been very helpful to reaching that path which i think we have

an obligation to do. i voted for the budget agreement like so many of my colleagues. i did so with the understanding that that flaw would be corrected. and that it would be corrected before the next ndaa, as soon as possible, right away. for all the reasons that you've outlined so well, the effect on the morale and really the dedication of our armed services and the brave men and women who serve us, they deserve better than this kind of cut without any provision for grandfathering. but the cut itself, in my view, so offensive. but i want to deal with the broader issue that has been referenced here this morning as well which is how we attract, recruit, retain not only new

best and brightest of their generation, but also the mid-level officer and noncommissioned leadership that is battle-hardened and perhaps battle weary, but one of our greatest assets in this country. because at the end of the day, and i would hope that you agree, they are as important as any weapons systems, any platform that we have. and i know that you've outlined well the impact that retirement and other benefits may have, but maybe you could give me a broader assessment, give the committee a broader assessment, admiral winnefeld, if if you could begin, and then i'd be interested in secretary fox as well. what are the incentives we need to offer? how cowe change, if we need to change? because we need to do it before 2015 and this commission report back. i think we need to do it now, right away. >> very good question, senator.

address recruiting and retension separately. on recruiting, we take surveys of people who have decided to raise their right hand and put on the cloth of their nation. and, you know, why did you do this? why did you come in? and it's interesting that the number one reason we're hearing back right now is pride, sell esteem, honor. the number two reason is better my life. the number three reason is duty and obligation. the number four through eight reasons are travel, future education, experience, and they want to be challenged. next comes pay, more discipline this their life, adventure and helping others. so that gives you -- that actually makes me feel pretty good -- do it's very encouraging. >> our young men and women are coming into the service for the right reasons. in terms of retention, particularly for those mid-grade officers and ncos, there are really two variables that i think are fundamentally -- the two most important variables are

quality of life and quality of service. so, and retirement, of course, is something that the soar folks look -- senior folks look forward to. but in terms of quality of life as we adjust the glide slope of compensation, we're going to tune it very carefully. we have to be watchful of that, and there are so many other things that go into what quality of life really means. how often do you move and your spouse get a job, that type of thing. we're hearing more and more from our people in terms of service that they're sort of surprised by all this. what really matters to them more than keeping this high rate of growth is they want to fight in a modern and ready force. they want to go to work every day, and they want to have parts in the bin where they can repair the thing that they are entrusted with, they want to be able to drive it or fly it or sail it, and they want to feel confident that they are on a winning team. that matters, it's an intangible, but it makes a tremendous difference for our people, and we have to look after that as well as the

quality of life piece. >> secretary fox? >> i would just add that i think admiral winnefeld laild it out beautiful through. these intangibles, i think, are important as we look at any changes to retirement, for example, going forward. i do believe we have really excellent -- i've dug into them -- models of the broad economics. and i am pretty convinced that whatever we do, we can find ways to tweak it with pays and incentives and so forth. it's very hard for those models to account for those intangibles. and the individual's view of what they're there to do and is what they're able to do given the way we support them in, you know, this broad term that's overuse, readiness, but that means the things that admiral winnefeld outlined about their ability to operate, their ability to have parts to fix it, their ability to show up for duty on a ship and have other people there. they're not trying to do three or four jobs. all of the things that i think

are eroding the morale of our force right now. >> and another way of putting it might be the sense that country appreciates what they're doing as well, that they're not only on a winning team, the best team, the gold medal team, but that the country appreciates the work that they're doing. >> you can't even begin to understand how important it is to our young soldiers, sailors, airmen, marine, coast guardsmen as they walk through airports, train stations, you name it. when ordinary americans come up to them and thank them for their service, it's huge. >> you know, one other question in the limited time i have left, i know that you do surveys that you try to apply some scientific method to assess the incentives and so forth that you've just described. and, of course, we all have our personal experiences. senator kaine has a son who is serving, i have two.

we know friends and so forth. i wonder how well you think those surveys, the scientific effort, are doing in measuring the kinds of incentives and so forth that are at play here? >> that's a good question. you always have to take any kind of survey or day with grain of salt. and if you're not listening to the drum beat that you're hearing from people anecdotally, what they're saying to you, what your senior enlisted leaders who are terribly important to this process are saying to you, then you don't get it. so we have to temper anything we hear in the surveys. i don't have a crisp answer on whether there's a dichotomy there, but i think in general it's what we're hearing, that they're both reflecting the same thing. >> and i do think we're very aware surveys can lag, and i do think that's why our service chiefs and our secretary spend

so much time out talking to the force, to the men and women in uniform. >> thank you. thank you for your excellent testimony this morning. thank you, mr. chairman. >> thank you, senator blumenthal. senator vitter. >> thank you, mr. chairman, and thank you both for your service. certainly, i want to express strong support for fixing this problem absolutely as soon as possible as well. i voted against the budget deal in december, and this issue is the single biggest reason why, so we need to get it fixed. and i want to express strong support for fixing it in a way that doesn't increase the deficit this any way. -- in any way. that would be doing through two steps what the huge majority of us vowed absolutely not to do. and so that would with a failure as well. so i'm very hopeful we'll get this done. i just have one question for both of you. this provision essentially

treated folks in uniform fundamentally differently and worse than federal civilian employees, all other federal civilian employees. it sort of penalized them, if you will, retroactively on this issue while the changes made for all other federal lows was prospectively only. do you think there's any justification for that different treatment? >> i think it was surprising. i don't think that the vast majority of our force actually, you know, thought that through. they weren't aware, i think. it was really just a cola minus one piece itself that registered with them. but it is definitely a difference. >> with sir, i think, again, that's why we support grandfathering and believe that you have you have to look forward. maybe there's a change. whatever change that is, it's for new people coming in. >> well, great. i'm glad most of them don't realize it, but my description,

unfortunately, is accurate, and it's the fact of it. and i just want to underscore that i think that's fundamentally wrong and inappropriate. thank you. >> thank you, senator vitter. senator, senator king. >> thank you, mr. chairman. in light of the fact that we have a second panel, i think i'll submit my questions for the record. i just have one observation. in light of senator kaine's comments, i always thought that the passing of the first budget out of a divided congress in 28 years was somewhat miraculous, but i think today we've established that this provision, this cola minus one provision confirms that because we can't find parenthood. it was a immaculate conception, i think, this provision. [laughter] immaculate misconception might be a better with term for it. but i appreciate your testimony, ask i'm going to have some questions for the other, for the other panel. i associate myself with everyone else here. i don't think we should wait until the commission, i think we should fix this. it's not a huge item.

it should be fixed, and i think our veterans and people that are receiving pensions for some odd reason may not fully trust us to resolve in 2015, so i think we should take care of it as soon as we can. thank you, mr. chairman. >> thank you very much. that will complete the questions with for our first panel, and we will now call up our second panel. thank you so much, both of you, for your testimony. [inaudible conversations]

>> we now welcome our second panel for witnesses, outside witnesses so-called, retired army general john tilelli jr., the chairman of the board of the military officers' association of america. retired army general gordon r. sullivan, president and chief executive officer of the association of the united states army. retired air force master sergeant richard delaney, national president, retired enlisted association. dr. david chu, president and chief executive officer of institute for defense analyses. and dr. chu served as undersecretary of defense for

personnel and readiness under president bush from 2001 to 2009. now, we also want to note in our audience that we have with us a number of veterans, particularly i'm of informed that we would welcome veterans, all our veterans, but that would, only, include a special group that are veterans of our wars in iraq and afghanistan. we also have statements for the record from the following individuals and groups, and they will be entered into the record. the fleet reserve association, the iraq and afghanistan veterans of america, the american legion, the veterans of foreign wars, the national military family association and lieutenant colonel michael parker, usa, retired, who's a wounded war advocate.

we are now going to start with general the city hellly. tilelli. and by the way, this is a reunion of a sort. and we want to tell you that we're delighted to see you all here, and we, of course, very much treasure the relationships which have been established between this committee and all of you and treasure the service which you have performed for our country. we thank you. generality hellly. >> chairman levin, senator inhofe, members of the armed services committee, thank you for the opportunity to appear before you today. i've also submitted a statement for the record, but it's an honor for me to speak to you today on behalf of those who serve and have served and their families. on behalf of the 380,000 members of the military officers' association of america, i have the honor and privilege of serving as the chairman for the rest of this year.

we thank the senate armed services committee for holding this hearing on military retirement program. the purpose of our retirement program is to offset the extraordinary demands and and sacrifices inherent in a service career. retirement benefits are a powerful incentive, as we've heard today, but those who serve 20 or 30 years in uniform, despite the sacrifices that they and their families have to endure over the period. the critical element to sustaining a high quality career military force lies with establishing a strong reciprocal commitment between the service member and the government and the people that they serve. and if that reciprocity is not fulfilled, if we break faith with those that serve, retention and readiness will inevitably suffer. the cola cut to service members'

retirement pay in the biartisan budget act is a clear breach of that reciprocal commitment. although the recently-passed omnibus exempted chapter 61 retirees and survivors from the cola cut, we believe that the partial deal breaks the sacred trust with the rest of the entire retiree community and their families. we believe it should be repealed now. the financial impact has been called in various quarters as teensy wean si and small. but, for example -- and we've heard it today -- a noncommissioned officer in the grade of e7 retiring this year with 20 years of service would see a cumulative loss of $83,000 by the time he or she reaches the age of 62. more than three years of his original retirement pay of $23,000 a year annually.

the ongoing rhetoric about spiraling out of control personnel costs has emboldened some to propose drastic changes to military benefits and compensation in the name of fiscal responsibility without fully understanding the unintended consequences of their action. suggested cost-cutting roams are gaining traction -- proposals are gaining traction because critics continue to cite personnel cost growth since 2000 as a motive to gut pay and benefits. and when we think about that, we need to think about it in the context of people, soldiers, sailors, airmen and marines who are serving in harm's way every day rather than look at it in a budget context. we believe it's important to put the testimony two, the -- important to put the growth since 2000 in con texas. have -- context. have costs grown since 2000? yes. but using the 2000 baseline without a historical context is

twrosesly misleading. first, it implies that 2000 was an appropriate benchmark or estimating what reasonable personnel and health care spending should be. we don't believe that's correct. at that time, years of budget cutbacks had depressed the military pay, cut retirement value by 25% for post-1986 entrants. and booted ore beneficiaries -- other beneficiaries out of the military health care system. retention was on ropes, if we recall, and at the urging of the joint chiefs of staff, congress fixed the problems to prevent a readiness crisis. congress worked diligently over the next decade to restore military pay capability, repeal the retirement cuts and restore promised health care coverage for older retirees. in other words, the cost growth was essential to keep the priest

cutbacks from breaking -- the previous cutbacks from breaking the career force. now many express shock that these fixes actually cost money. they forgot that congress deems that these changes were less costly than continued erosion of our defense capability. moreover, military compensation studies have erroneously concluded that the cost trends of the last decade will continue indefinitely. we do not believe that's correct. now that pay comparability has been restored, there won't be any further need more extra pay plus-ups above private sector pay growth which is in the law. similarly, congress won't have to approve another tricare for life program or repeal redux which we had to do in order to maintain the readiness and

retention of the current force. those were one-time fixes that won't be repeated, hopefully, and won't need to be repeated. yet we continue to focus on recent growth trajectory and have adopted a new budget-cutting phrase which is slow the growth. we believe the math doesn't add up. military personnel costs which have been derived from the omb data which include military personnel and the defense health program continue to consume the same amount of the pent gone budget for the -- pent gone budget for the past 30 years, about one-third. that's hardly spiraling out of control. even so we're asking for deeper cuts. leveraging our people program versus readiness is simply a false choice. of what this nation should be able to afford for its defense. the key to a ready force or is and has been standing a topnotch

service member for mid-year noncommissioned authors, mid-level noncommissioned officers for another ten years without existing military career incentives over the past ten years of this protracted warfare, the all-volunteer force would have been placed at serious risk. so in conclusion, we believe that the cola cut needs to be fully repealed now and not wait until the retirement commission. secondly, we believe that any changes to today's retirement program needs to be grandfathered to existing retirees in the current force. and, three, any further changes recommended by the commission must be fully vetted through this committee to determine what impact it will have on our world class all-volunteer force. our obligation is clear, and that's protecting national

security. and as it always has been, the most key element to our national security are the men and women who serve and family members who serve also. thank you again for the opportunity to appear before the committee. i look forward to your questions. thank you very much. >> thank you so much, general. general sullivan. >> mr. chairman, senator inhofe, distinguished members of the panel, thank you for the opportunity to speak with you today as the president of the association of the united states army and as a former chief of staff of the united states army. association of the united states army represents hundreds of thousands of members of the active army, army national guard, army reserve, the retired community, civilians and the army families. 121 chapters worldwide. our members and i are very well

aware of the fact that much of good done for soldiers over the last few years would have been um possible without the commitment -- impossible without the commitment of this committee, and we are indebted to each and every one of you ask your predecessors. your tireless and selfless personal staffs, professional staffs, we appreciate their efforts. and is we understand -- and we understand that in these fiscal times, these very challenging times for our nation, certain things need to be done. now, before i continue, i want to acknowledge the bipartisan bill -- i've never been sure what it was called, so let's say the murray-ryan will, the ryan-murray bill. but whatever it was, the chips into sequestration have been

very important for all of the services, ask i just want -- and i just want to add my voice to the thanks for everybody who made that bipartisan bill and the budgets and the return to somewhat normal order which is taking place here. and i remain hopeful that these chips into the walls that surround money known as sequestration will end permanently. now, in many ways as has been stated by countless people here in the morning the budget deal was good news. unfortunately, included in it was a broken promise. and broken promise has been talked about repeatedly. in spite of the fact that the president, the chairman of this committee, several secretaries of defense and the chiefs of of military services and the senior civilians in the pentagon -- and you heard it here this morning on first panel -- have stated

repeatedly that any changes to the military compensation and benefits package would be grandfathered for the currently-serving force and for current retirees would be grandfathered. yet it was changed. now, this one line in the budget act has created doubt in the minds of the very people who conot need doubt created if their mind about the commitment of the american people for their well being and their ability to fight and win the nation's wars, whatever those wars may be. and, frankly, we now have them worried about things i never worried about in my 36 years of active service. and i cannot imagine that at this point in our history we need to cause them to be worried about their well being.

the congressionally-created military compensation and requirement modernization committee that was tasked with reviewing potential changes to the military retirement system was directed to follow guidelines set by this committee and the president that included grandfathering the currently-serving force and current retirees. in my view, the commission should be allowed to do its job, and i recommend strongly that this provision -- which gets into the retired pay of those between retirement age and age 62 -- be taken off the table now. and not passed to the commission. based on some hope that someone else sometime down the road is going to change it. finish i don't think it's ever worked in the past, and i doubt it would work now. and by the way, the longer it continues, the more uncertainty will be created in the minds of

the people. and i think this will be a pay now, pay later. i don't think we understand the full impact of what we're doing here. as the economy rights itself, this blow to an err and deferred compensation -- earned deferred compensation benefit will be an enormous disincentive for qualified, battle-tested military personnel to remain on active duty. recruitment will also suffer because any decision to serve could be influenced by how the current force is treated. today's soldiers are tomorrow's retirees, and they are watching, and they will speak. and the current retirees who are, many of whom are combat veterans themselves, will influence in some way recruits or potential recruits. in the case of the army, the army is a family business, and you are find a very high

percentage of those serving on active duty today were influenced by either parents, grandparents, aunts or uncles. this cut this pay and benefits must be balanced against the long-term viability of all-volunteer force. recent history has been, which has been pointed out from the '80s and '90s shows that precipitous pay cuts and benefit cuts have unintended, detrimental consequences. the prime example is the ill-fated redux retirement adjustments. actually, in just a few years we faced a recruiting challenge which congress wisely reinstated the old system. ..

and after decades of service which i hasten to add, could have involved repeated, repeated tours of duty in conflict areas. this puts them in a bad position employment wise and so forth and so on, which i won't go into today. the fact of the matter is the compensation package in place today recognizes compensation which has been earned by over 20 years of arduous service. and by the way, this competition was designed to encourage a

career of service in the all-volunteer force. based on personal qualifications. and this force has performed magnificently over the last several decades, and certainly the last 12 to 13 years in active combat. and by the way, without support of their families, this thing would've fallen like a deck of cards. i think we need to pay particular attention to their families and their role in all of this, and their children who have seen their mothers and fathers can go to serve this country. and they need to be taken care of going forward. in addition to patriotism, what has kept professional soldiers in the army and professional sailors, or whatever the case may be, in their service, has been the assurance that the benefits which they understood they received would be forthcoming. and i will tell you, i never

worried about retirement. it was just there. and somehow we have created doubt in their mind. the last people in the world you want worried about that kind of stuff by those who are out there climbing into helicopters and airplanes and ships, and jumping out of airplanes in the middle of the night, is whether they or their families are going to be taken care of. and i am troubled when i hear we are paying the troops too much, and that this is the reason we have to cut back on training, readiness, modernization of the force. at the end of the day, the force is people. it is people. we are talking about high quality men and women dedicated to the nation. and they are not the problem. the message that you're though is that they are contributing to their own unreadiness by their mere presence. we must change this narrative.

america can afford to do things it needs. it is simply a question of priorities. shifting the burden of the nation's fiscal problems onto the backs of the troops is unnecessary, and in my opinion wrong. the instability caused by this cut will reverberate for years unless it's taken off the table. we're going to feel it, pay now/pay later. i understand very clearly the concept of shared responsibility, but the federal government and all americans must remain true to the promises made to her military personnel. we understand the military programs are not above review. i understand all of that, but always remember the nation must be there for them, those who answer the nation's call. and there's only a handful, less than 1% of the american people. this committee, this committee right here safeguard the welfare of america's military personnel

on the half of the nation. and i want each of you to know that we appreciate what this committee does. and we also appreciate the fact that as has been stated earlier, i think general tilelli said it, you want the ones who will look at what the commission comes up with to ensure that it meets your goals of protecting the all-volunteer force. i urge you to find a bipartisan solution that will remove the under 62 military retiree cola provision, and do it now. my recommendation is, you take the issue off the table and send a signal out there to the force now, so that people sitting around the stove in the middle of afghanistan in the middle of the night will not be talking about this issue. this is not the kind of issue they need to be worried about.

this system was really created in the '40s. it probably deserves to be looked at. there's no doubt about it, but they don't need to worry about it. and their well being, at this point, i think it has a hugely destabilizing effect on the force. and i urge you to take it off the table now. and i'll do whatever i can, and i'm sure these other people will, too, to testify to that effect. thank you very much. >> thank you so much, general. now we've got sergeant delaney. >> chairman levin, ranking member inhofe and members of the committee, good morning. i'm a national president of the retired enlisted association, the largest association that was created exclusively for enlisted personnel per from all branches and components of the u.s. armed forces.

i appreciate the opportunity today to address your concerns, of military compensation. specifically the cola reduction for military careerists. i'm greatly concerned about the recent action this congress has taken. quote when you freeze salaries, eliminate bonuses and change their health care benefits, it's folly to think that it's not going to have an impact on the workforce, end quote. that's a quote from bradford pitch, president of the congressional management foundation not two weeks ago in political. he was not talking about military retirees, of course. he was speaking about the congressional staff and the effect that a limited traditional health care is going to have on members of congressional staffs leading and pursuing other opportunities. according to a recent survey, 90% of staffers said they are concerned about the benefits, changes under the new health care law. in that same survey when asked if they would look for another job in the next 12 months, 40% of chiefs of staff and state and

district directors suggest. quoting mr. pitch again, if these predictions come to pass, it would likely be the largest brain drain, the talent of congress has ever seen. what makes anyone think that reducing benefits from a literary careers will not have the same effect on their decisions about whether to remain in the service? congressional staffers are dedicated, conscientious, hard-working professionals who care about this nation and the institution they serve. the same is true of military careerists here but unlike congressional staffers, military personnel signed an employment agreement. that obligates them to serve for a specific amount of time. what's more, military careerists can be sent to prison if he or she fails to go to work. i believe the multitude of cuts in benefits for military careerists that are being urged by the dod as well as the current cola cut will have a strictly negative impact on our

nation's defense posture. the senior staffers in your offices and the committees are critical to you being able to fulfill your duties and responsibilities as members of congress. together, they hold institutional memory as well as the subject matter expertise that are indispensable to the functioning of congress. the same is true of military career personnel who the cold cut has been aimed at. the largest single segment of retired personal a season to make atonement% of% of all military retirees. the top enlisted grade, senior noncommissioned officers make up 47% of all retired personnel. personnel. if you adding i-5 antisex you've reached 73% of all military retirees made up of ncos. the seventh receives retired pay of about $27 a year. there's no way to retire from the military and that the same standard of living that existed while on active duty without getting another full-time job.

to be your with a c.o.l.a. cut works out to about $83,000 that equates to a loss of four years of retirement pay. the cola cut will degrade the military stand up without cola inflation would be to wait nearly half of retired pay value for 20 retiring at age 62. why after doing a job less than 1% of the entire population is willing to do it comes to going to punish military careerists? y. under this law were they singled out for immediate cuts? why would they not grandfathered in as federal civilian employees were? what can be done to earn this slap in the face? according to former command sergeant major of the army's communications electronics command, quote it is noncommissioned officers who are the ones keeping up with the change in technology and using their leadership capabilities to bring the technology to the soldier in the field. he also continues, it is a true

ncos are the backbone of the army. the nco is the one who will teach you how to do it right or teachers how to do it wrong. for over a decade referred american servicemen and women describe elected officials and others as the best trained, best live and best equipped force in our nation that it's ever had. who do you think trained and led the servicemen and women? it was the ncos. the very people who are suffering because of the actions of congress. i confess i'm beginning to think that much of the praise from some members of congress was self-serving and nothing more than lip service. so i asked those dems who believe these c.o.l.a. cuts are nothing more than a small adjustment and, therefore, please don't talk about how great you think our armed forces are. to the members who agreed the c.o.l.a. cuts should be stopped, i ask you to put aside partisan and ideological differences and agree on a way to pay for the c.o.l.a. i know many ideas been put forth by many members and the task now is to agree on one. the department of defense is the

only federal department that is unable to be audited. we urge congress to at a minimum suspend cuts in personal benefits entailed dod can audit its potency whether it's really spending its money. the men and women who have served in our armed forces voluntarily agreed to shoulder sacrifices they were asked to endure. is it too much to ask our citizens and our government cannot repay that debt? i pray it is not. president coolidge said the nation that forgets its defenders will be forgotten. please, members of congress, don't forget our nation's defenders. thank you. >> thank you so much, master sergeant. we very much need your testimony. next is dr. david chu. >> center and off, members of the committee it is indeed a privilege to appear before you begin this morning. i should emphasize that these i offer are my own.

they do not necessarily the research by the institute and department of defense. i do have a formal statement which i hope might be made part of the record. the limitation asks that a focus on the evolution, the special -- especially recent evolution of military competition but how do we get to where we now are. i rg3 important forces that have created the compensation system that is the subject of discussion this morning. first of course the longer history of military pay and benefits, especially expunge the fact that so much of military compensation is deferred and substantial part of military compensation is offered in kind as opposed to in cash. second, there's desire by the country to recognize and reward those who have served in the military that explains the very substantial growth in a series of benefits in the last 15 years or so.

the repeal of redux, advent of tricare for life, expansion of the g.i. bill and the decision s you make some of its benefits transferable, and the substantial relaxation of the century-old ban on concurrent receipt of federal annuities. the third force, of course, has been emphasized this morning, is the need to ensure that we have a high quality, all-volunteer force. that was the source, as other witnesses have emphasized, of the targeted pay raises that congress enacted at the end of the 20th, beginning of the 21st century. it's also the source of expanded authority to pay bonus, specialist and pace, that the department used to ensure the all-volunteer force success during the current conflict. those have been reduced as those conflicts have waned in importance. the issue going forward as we all know is the question of change. and i agreed wholeheartedly with those who argue that we ought to

use the commission, the commission process, to take a holistic view of change as opposed to piecemeal changes. such as the one being discussed this morning. i do argue that a prior question in that change ought to be at some of the questions this morning have emphasized, what force does the country want any future. what shape of experience, what level of quality, what differences of scale, background and skills are required to retain our essential to secure our national security in the years ahead. you could obviously have different compensation systems with the present one. mib will be argued those might be more efficient. saying they could sustain the same force that was total cost to the taxpayer. i do think two of the important issues in that regard our weather so much of the compensation should be deferred, particularly because of fairness perspective, for several benefits, most military personnel will never actually collect those payments.

and also the issue of whether so much of the compensation should be offered in kind. as those changes are contemplated i do think emphasized that it is critical to keep in mind that military family. they are different from the circumstances of most american families, and while we cannot change the reality of the burdens of deployment, i do think we have to be sensitive to the fact that the family circumstances importantly affect the military persons decisions to stay with the military over time. and above all that there is testimonies today have stressed, i do think it is critical to pay attention to the transition mechanism and to the question of the expectations of those who have served in the past and those who are serving now, whether the changes that are proposed are consistent with expectations or whether put differently, those who are affected by them can accept the changes that we wish to make.

i look forward to your questions. >> thank you so much, chu. -- dr. chu. will going up have a short person questions here if going to be able to get to all of our senators. let me ask about the commission, which is going to be reporting to us, and the connection of our service groups and our veterans groups to that commission. i think it's the intent of everybody that has spoken, all the senators that is spoken, is that in terms of this cpi plus one language that it is our intention, belief that it should be immediately repealed, soon after immediate as humanly possible in the legislative body. i don't think that from anyone i've heard from today, i don't think there's any intention to wait until the compensation and

retirement modernization commission reports. to clear the air on that, or to remove the item at this time. but my question been turns to the commission as to whether or not your organizations feel that you will be contacted, that your advice will be solicited, whether, for instance, you've looked at the members of the commission and feel that it's a representative group. so why don't we start with you, general tilelli? >> mr. chairman, first, the military officers association of america had one meeting with the commission. we think it's a relatively representative of the force as determined by this committee. whether or not we will be asked

to go back again and discuss with them some of their final recommendations, i can't answer that. i don't -- we have not yet been informed of any such opportunity. >> all right. if you feel -- this goes for any of the organizations, the once represented here today, but the others that are out there, feel that they are not being, that their advice is not being sought, that they do not have an opportunity to express their views, that we would welcome hearing about that because the commission should be soliciting views of those organizations that represent our troops, represent our retirees and our veterans. so let me now ask you, as well, general sullivan. >> senator, we've already been before the commission wants -- before the commission wants at

the national level. i believe some of my people out in the field have been doing some field interventions, and some of our members have participated in those. so i think our views are well represented with them. and i'm comfortable with the representation on the board spent thank you. master sergeant? >> yes, sir. our organization, retired enlisted association, has spoken twice to the commission and we're comfortable with the way its operating, and were hopeful about an outcome. obviously, it's too early to tell what the outcome will be, but we'll just have to wait and see. but we're happy with the commission. >> thank you. we are facing a real budget crunch, although it's been kind of deferred for a year and a half or so. nonetheless, the law requires that basically the sequestered

approach be back in full blast start in 2016, unless we act. we have acted the best we could in terms of 2015, but we're going to face the same kind of horrific problem through 2021, starting in 2016, unless we take steps to avoid it. and that means that we will have in place, if we don't act, roughly $1 trillion in cuts to the defense budget that were enacted as a part of the budget control act two years ago. half of those cuts have already been implemented. the other half are what we would face basically. and so i'm wondering if you have thoughts, not just about that subject, i think we could infer what your thoughts would be about trying to avoid sequestration, and that approach in those years, but if these

budget gaps that are currently mandated by congress continue, give any thoughts on any approach to how do we deal with the balance between pay and benefits, as well as the need to train, equip and so forth? do any of you have any thoughts on that? dr. chu, i think you're probably -- let me start with you on this one and they will quickly go to the others if they have a comment. >> this or. i think the key question in that regard is the mix of personnel that you believe are best suited to the nation's security needs. let's say the balance among active duty personnel, reserve personnel, federal civilians and contractor personnel. and there may be more mileage long-term in getting the balance right than any other kind of change that might otherwise be discussed in terms of the

compensation system. that's not to put the commission's work beside. very important, very significant. i would argue terms of looking at operating costs for military personnel, active, and to help preserve are considered, too. but i think this question of the demand side, so to speak, the mix of personal is best suited to the security needs. could you, for example, make greater use of federal civilians and is true today? and i think there's a number of evidence that suggest that is the case. and reserve military personnel for the truly military functions of the department. >> to any of you want to add a comment to that? before turn it over to senator an off. >> senator, i think it's a profound question, for which i'm not sure i have a profound all answer -- a profound answer but that depends on how much risk you want to take. but until somebody comes up with a different strategy, a national security strategy, i don't think

you can way the equation. and i think then you have to ask yourself what kind of a prediction can we make about the distant future. and right now i think we are out there, because in my view, we -- it's always been hard to predict the future, but i think we are making -- we are taking risks without understanding the future. i'll just leave it at that. >> lelet me turn to senator inhe no. i will call on the others because of time limits. >> i'm going to ask one question. i have hypothetical question because i want to offset some of the accusations you hear from people in service organizations. my feeling is that those of you, any of the service organizations, would fall down

on the side if you had to choose between an adequately strong national defense and a maintenance of the current military retirement compensation levels, which would you choose, if you had to? just real quickly. that's an easy question. >> i would always vote on the side of a strong national defense. >> the other two of you would agree with that i would assume. >> i make him look, we all took an oath to protect and defend the united states of america. >> very good. >> that's what we do. >> i think you hit the nail on head, general sullivan, when he said america can afford the defense it needs. it's a matter of priorities. that's my whole -- that's my position in a nutshell. that's something that we have, but a lot of people don't believe it. the people serving right now who think that we really don't believe in a strong national defense that all of us agree with. let me make sure that everyone

understands, there are 15 members to ask questions and make statements in this hearing. primarily on the first panel. you guys have one. you came there because you want the 1% corrected. we all agree. in fact, i made the statement that it is a moral issue. because during the years when i was in the army and people woull talk about reenlisting or something like that, commitments were made to them, and you can't come along later and change those. yes, we want a comprehensive reform, with want to get into all these things, but first we want to make sure we correct it. and you said, general sullivan, we want to correct it now. so do all of us want to correct it now. i just want to make sure that anyone, the three of you or anyone else who might be year, from the military, or representing, or participating in one of the services, understand that we agree with you. that's it.

>> iq. >> thank you so much, senator inhofe. who will be next? we don't have much choice. senator kaine. >> thank you, mr. chair. thank you all for your testimony. i believe we'll fix this and fix it probably. i really want to ask a question about the next issue down the road which is, as we start to think about what we might hear back from the commission in early 2015, from conversations with, you know, primarily new people in the military, i've got a youngster in college. the way they talk about the compensation and benefits is that they have a feeling that some are promised, almost contracted, a retirement after a few serve a full career, that's in the promise zone. some are sort of reasonable expectations, if i'm in the military and i have an injury, there's going to be a va system

there that will be functional and i have a regional expectation without knowing what the budgetary top one is, it would be a functioning va system. and some are sort of less than a promise or a particular expectation. there may be hope for a desire. so, for example, what would the premium level be for a retirement health policy, if i take -- for a health insurance policy that i would pay, if i get to that? most are not thinking about those issues. they are not really contracted for at a particular premium level. so obviously the commission is going to come back with recommendations about all these kinds of things, things that were in the promise zone. that might be perspective, not retroactive. things that are in the regional expectation some. and things that, frankly, newcomers probably don't think about that much. i would be curious, the only question i have is, talk to us about how we out to be thinking about these issues in prep for getting that report and then

having to make some decisions a year or so from now. >> if i might, thank you for the question, first, i think what the commission proposes, i think we have to review every aspect of it. in full and open review and vetting it. secondarily, general sullivan said i think with a look at in the context of what was a force to be in the future. we do want an all-volunteer force. but you focus on an issue which is key critical in the surveys that we do not carry, military families, ma and that's health care. military families and service members believe that military health care or health care is a promise. they don't see that as optional. and certainly when you were young and you believe that you're immortal, military health care is not as important as when you get to be a little older and you're looking at it from the family aspects. so in the context i think we

have to be very careful, because it is a slippery slope. we have already cut military health care. we have already increased the co-pay. we have already increased pharmacy fees. so we've already done things that are detracting, if you will, from what service members and their families perceived to be an unearned -- and earned benefit if you will. >> that really gets at the nub of my question. if there is a belief that health care is a promise, and i believe that it is, is there also an expectation from your survey that that promise extends to a particular premium our particular premium that's an annual one that would change over the course of retirement? ..

if you take the last business about the medical, the young person who comes into the service today, the concept of retirement might be different than the concept that we had which was developed in the '40s. after all life expectancy now is

77 i think, males anyway. but okay, so there is a model for retirement. then there's a model for medical. whatever the model is in my view should be, if there are increases it should be stated right up front. those interests, those increases will be within the cola, the world famous cola. it is the cpi is such that, whatever increase you pay might be with inside that, as opposed to this wildly fluctuating medical inflation. i mean, very quickly, you could take an e-7 off the table if you bo to medical inflation. so i think there has to be a model and a concept. when they bring their system forward.

and as gentle lilly said -- generaltilleli said. we said it was capped at 30. and medical, we just went to the, got an aspirin or whatever. tylenol, a couple of tylenol and a cup of black coffee and you were golden. >> that is making us all hungry for lunch. thank you. senator ayote is next i believe. >> thank you, mr. chairman. i want to thank all of you for your leadership on this incredibly important issue. here is what worries me when i think about how we end up where we are. you have a budget agreement that the only group that really take as hit right now are our men and women in uniform. so what worries me, is it we

grandfathered the federal employees, meaning only new hires, would they get impacted by it. but our men and women in uniform who have taken the bullets for us, they got the cuts right now to their cost of living increase. is it because only less than 1% of the population defends the rest of us? is it because the federal employees and other groups around here have stronger lobbyists and voices to get, you know, we'll protect our people? what worries me about this is that it was a huge disconnect from washington in terms of those who have sacrificed the most that they would be the one group targeted in all of this, and i just wanted to get your thoughts on all of it as leaders of our military organizations because as i think about the big picture on this what's the lesson we need to learn from

this? that really worries me when i think about the big picture of the message that we are sending to our men and women in uniform when we have been at war, iraq, afghanistan. it has been a tough time for them. >> i think the problem we face is that a lot of people view the military as an easy target. we're a small group. they say, okay, we'll take some money from them and over a five or 10-year period rather than saying, okay, let's adjust it, if we're going to do it let's grandfather it and wait a little longer to get a return on our money but when i reenlisted in 1972 which would take me over the halfway point, yeah, i would get medical care when i retire. when i retired, they said now you may not be able to get in the base hospital there but they're there for active duty. fine, i can deal with that but i still got my medical care off base. now they're looking at ways to change all that. there is bunch of targets on our

back. commissaries talking about closing those and looking tricare for life. i pay for part b and now i have to pay for tricare for life too? increasing co-pays on medical cost. co-pay raises or even freezing pay. a lot of things seems we're an easy target. that's what really bothers me. >> general sullivan, general tilleli, what kind of message do we send from this and what kind of message do we learn from this? >> as i said in my remarks we're causing our people in uniform to think about, to think about the issue. to think about an issue which they don't understand. and by the way, i don't want to ascribe any motives to anyone on whatever happened. >> did we forget? i'm worried. what are our priorities? >> well, i think that's it.

you have to decide how will you, how will we spend the national budget? where will we spend it? will we spend it on our security or on other things? and i think that's a decision that has to be made. and right now it appears, i'm sure it appears, to some of the troops that all of this and their family, all of this is being placed on their back. go out here and fight for the last 25 years beginning in panama, right through to this day when we're fighting in afghanistan. and oh, by the way, now we changed the formula. i don't get it. >> senator, i think you make a great point. first of all i think we awe have to understand that our servicemen and women and their families are getting a message and the message is being sent every day. you can read it every day in any

number of periodicals, starting with the minus 1%, the commissary the co-pays, the tricare and they see there is deaf solution if -- devolution in support of them. the servicemen and women and their families their contract is with the united states of america. they count on the congress to take care of them. they don't have a union. they depend on us to take care of them. and when we look at it, they're willing to do extraordinary things for this nation and each other and put themself in harm's way, be without a family, not have equity in a house, change six or eight times kids out of school and do all those things and count on the congress of the united states and america to take care of them. an they are getting a serious message now. i can tell you what the moa end,

the amount of emails we get from family members on all of this would choke a horse. that they are very, very concerned about all of this. >> but i don't think, and i'd like to clear the air here on one point. i don't think they're asking more than they deserve. i don't get that feeling at all. i think all they want is a fair shake. >> right. >> and they want to know that people like you are, and you are, by the way, to your credit, paying attention to what's going on. i thank you for it. >> i thank you all for being here and i will also add when people call things like an $80,000 cut to a sergeant first class whose average retirement is 23,000 teensy weansy like "the washington post" did or miniscule, it's offensive and we should fix this and we are sending the wrong message.

thank you. >> thank you very much, senator ayote. senator king. >> i'd like to follow up a bit, a lot of discussion about keeping faith, about contract about all those kinds of things. cast your mind back, if you would when you signed up. what do people who sign up sign? what are they told? is there something that says, if you sign here, you will get health care? if you sign here you will get a certain level of retirement benefits? what are people told when he they sign up. >> there is no contract signed. you are oath of office to defend and support the constitution of the united states and do whatever you're told to do. the fact it is the nuanced

business of all of those things that are told, that are not in a contract. retirement pay for example, medical care for life, for example. commissary for example. all those things that are never put down on a piece of paper because folks who serve are not serving to become rich. they're serving to serve the country. and the fact of the matter is that, and maybe general sullivan's menries are better than mine but i remember signing my oath of office to be quite frank with you and that was it. >> any other -- >> look, i may look younger than him and i'm a little bit older and my memory is not better than his. over time i learned since all my buddies retired and retired 2 1/2% a year, 50%. i didn't sign a piece of people. i signed up to serve and took my oath. >> even if it wasn't on a piece

of paper, what were the expectations? >> well the implicit, the implicit contract was that i would have a retire pay, if i stayed for 20, it would be 50% of what my last pay slip said. and, that i would have medical care or that would pick me up off the battlefield and, either myself or my remains and bring them home. >> i think it's clear from this hearing this morning and i'm sure you were here for the first panel, that everybody on this committee, a, didn't agree with this piece that was in the budget deal, two, wants to fix it, three, wants to fix it now and four as we go forward wants to work off a principle of grandfathering of, what's in the law. i mean i think that's where this committee is. now, dr. chu, i would like to follow up on one of those points. there has been a lot of talk

about grandfathering. if everything is grandfathered and nothing changes except prospectively, what does that mean in terms of budgetary effect? we operate around here on a 10-year budget window but, my simple-minded way, if everything is grandfathered that means there will be no savings for 20 years. first savings will be 20 years plus one day, if something has changed at the beginning. by the way i think there should be something at the time of enlistment, that says, this is what the expectations are and that this is what the benefits will be so there is some clarity on that, but doctor chu, how do we grandfather and do anything at all with regard to personnel costs? >> i should begin by reminding all of us that grandfathering does not necessarily even preserve a change. so redux, the retirement change made in the 1908's by congress,

congressional initiative, grandfathered everyone, including cadets and mid ship men at the military academies. that did not preclude congress reversing course when the first savings were going to take effect, the first cohort that would have slightly small annuity that came up to that point. so i think this issue of expectations, the issue of buy-in so to speak from the affected party's that's crucial to a successful transition, different regime. to your immediate question how do we save if everything is grandfathered, i would point out the grandfathering we discuss is mostly one-sided. so any reduction, raise issue of grandfathering, but a new benefit is not generally awarded only to those who will serve prospectively. that has been actually the way new benefits have been award. it has been awarded to everyone regardless of the period of service in general. one issue of grandfathering when

new initiatives are taken more thought would be given to whom do they really apply, what is the purpose of the benefit and what kind of effect do we wish to achieve. from a purely technical perspective, tricare for life changes and annuity changes would show up in the dod budget as a saving immediately if they were there were reductions as to say because those are both funded by set-asides. >> even though the savings -- >> even though the cash savings are not 20 years or whatever. you would get immediate dod budget savings. the treasury would not see a saving because the treasury would have a smaller receipt from dod for the payments by the larger outlay. so, yes, through a technical perspective you see dod budget savings for those things that are subject to prefunding which is in the military, just the

tricare for life program and annuity payments for longevity service. but you would not see savings from other things. >> thank you. thank you, gentlemen. thank you very much. this is important testimony and, as i say, i think it is safe to say you can see from the hearing today this committee anyway is firmly committed to fixing this problem. thank you. >> thank you very much. senator king. senator graham. >> thank you. i think we are firmly committed to fixing this problem. without those emails i'm not so sure we would be as firmly committed as we are. i just want your membership to know it matters that you weigh in, that you go visit people. the congress is very friendly to our military. sometimes we make, you know, decisions that upon a second look maybe we're not that smart. the fact that we're responding appropriately i think is a good

thing but do not underestimate how urging helps. now, isn't there a social contract even though it's not in writing, your kids, your sons, your daughters, individuals, will not have to be drafted because others will come forward and do the job voluntarily, isn't that the deal? and i don't know what's worth to somebody out there, knowing that your son or daughter doesn't have to be drafted. i don't know how you put a number on that. but, think about it, in terms of the family budget. what would you pay if you had to, to avoid your family from being drafted? that is kind of an odd way i guess to look at it but you're trying to put a value on something that's hard to actually put a value on. so when we talk about the retirement, you're a master sergeant, is at that right? what was your retirement when

you first retired? >> 21,000 a year. >> okay. here's the deal. $21,000 after 20 years of service, multiple deployments, whatever risk comes your way, that is a good retirement but by no means an exorbitant retirement given the value to the country. given to the fact that your son, your daughter, your loved one doesn't have to go, would you be willing to pay somebody $21,000 or contribute your part to it? i think most americans would say yes. having said that, now that we're going to right this wrong, and we will, who is advocating for the defense budget in a time of -- you're out there talking about the troops and their quality of life and what we should be doing in terms of tricare in the future and how we should be sensitive to any changes we make to the benefit package because that is who you represent. who is representing the equipment?

who is representing the number of people? if not the congress, who? >> well, at the risk of breaking in -- >> please. >> i will tell you the association of the united states army is advocating for that. we're advocating for mission accomplishment and that is a very finely-tuned relationship between young men and women who are developed as leaders and trained to fight and their equipment, and, the doctor and so forth and so on. >> that is true for everybody else at the table? >> well, i don't know. >> i'm asking them. >> yes, sir, i think it's true of all of us because when you look at readiness for the country, it is not only the people, it is modernization. it is equipment. it is also the training. so it is a triad i think we all support that. i think the reason we're not talking about that today is because of the subject of the

panel. >> okay. can i make a proposal to you? that if you believe as i do at the end of end of sequestration period of time, we'll have a greatly reduced military capability at at time we may need it the most. is it unreasonable for a member of congress to say, over the next decade, that the gdp we spend on defense should be at least consistent with peacetime spending? is that an unreasonable position? >> no, i don't think it is unreasonable. i think it is also not unreasonable to ask all of the people who are suggesting otherwise, or we continue with this sequestration to say, could you please tell me what you think you're getting for a defense establishment at the end of this journey? >> what kind of capability? >> what kind of capability are we going to have in 10 years or 15 years if we have this

mineless approach to budgeting and programing? >> as my time is about to expire, i guess what i'm trying to suggest is, that historically we've been spending around 5% of gdp in time of peace, more in war. i would like some organization out there to start advocating for a 10-year number consistent with the threats we face so i know you're here to ask about the cola changes and they need to be changed but i'm asking you to think even bigger, to come back up on capitol hill and remind us all, who many haven't served, who are great people, what kind of defense capability if you have if you keep invoking sequestration and look where the average has been and see how far away? would you be willing to help that in endeavor? i feel incredibly lonely in this exercise. >> i got that. i will be up soon. >> absolutely.

>> thank you. god bless. >> thank you so much, senator graham. senator vitter. >> thank you, mr. chairman and thanks to all of you for your testimony and for your service and for the work of your organizations. it is very important. and certainly i'm committed with the others to fixing this, absolutely as soon as possible in a responsible way, would certainly includes finding other real and not fake savings. i wanted to just use my time briefly to highlight another smaller issue but important issue, that hopefully can be fixed at the same time and, at the urging of me and others that is already in some of the bills to fix this cola issue. and that is, a problem created when cbo changed their scoring rules with regard to have. a clinics and how they were scored and worked into the

budget. not to get into the weeds but out of the blue, cbo changed those rules. it made it far more expensive, quote, unquote, to get these important community-based clinics built because it so ared much more up front. i've been working for well over a year to try to get the va to respond to this and to put solutions up. unfortunately they have not been responsive in a positive way. but many of us on capitol hill have been. and the house passed a bill that would appropriately deal with this scoring issue so that these clinics are built. 27 clinics immediately, slow down and impacted nationwide including two in louisiana, which should have been already built but for a separate screw-up and delay by the va. this house bill passed 346-1.

it is very fiscally responsible. it deals with the issue and at the urging of me and others this provision is already included in some of the bills dealing with this cola issue including the sanders 'bill. i urge you all to put that put that in the middle of your radar and i urge my colleagues to get this pretty simple, should be non-controversial fix done so we move forward as we had been planning to with these va community-based clinics and i believe it can be and should be done at the same time which is immediately as this cola issue. thank you. if any of you have any response to that would love to hear it but just wanted to put that on the record. okay. thank you, mr. chairman. >> thank you, senator vitter. all right, we've i think had a really good hearing. we appreciate your contribution to it.

we thank you all for your service and thank all the vets for their service, whether they're here, within earshot or out there somewhere else and we will now stand adjourned. >> thank you, mr. chairman. [inaudible conversations]

>> bringing attention to what women do or how women have contributed always returns to the question of the body. so for one thing many people object to bringing women's studies or women's history into a middle school, high school classroom because there's an assumption that women's studies is only about sex, birth control, abortion and actually it's also about women in politics, women in law. women working on farms, queens, prime ministers, and my job is to break down the fear many people have. what goes on in a women's studies classroom.

>> he was someone, as i say, who grew in the office. he was badly burned by the cuba bay of pigs experience. he had listened to the experts see. cia, joint chiefs of staff, and he said, and he went to see degaulle in france. he did that trip in may, june, of six at this one. -- 61. degaulle said you should surround yourself with the smartest possible people.

listen to them, here what they have to say, but at the end of the day you have to make up your own mind. and he, kennedy remembered what harry truman had said, the buck stops here. after that bay of pigs he was absolutely determined to make up his own mind, hear what these experts had to say, weigh what they were telling him, but at the end of the day, he was going to make the judgment and he was the responsible party. and you see that, you see that, that was abundantly clear when you listen to all of those and read the transcripts of all those tapes during the cuban missile crisis. he was his own man. he was one who was making his own mind. he held the joint chiefs, taylor, at arm's length. they wanted to bomb, invade and he didn't want to do it. >> an inside look at the kennedy administration sunday night at 8:00 on c-span's q&a.

>> this house is where the clintons lived when they were professors in fayetteville. after hillary's first year of teaching here, bill was driving her down the road to go to the airport. they saw the house and saw it was for sale. and hillary pointed at the house and said, that's a cute house. bill took her to the airport around picked her up from the airport a month later. i bought your dream house because you have to marry me and live there with me because i could not be alone. that was fourth time he proposed. there was small ceremony. nothing made mention that hillary was retaining her own name. bill wasn't bothered by this when they told virginia, she gasped and when they told hillary's mother she cried. fayetteville was the place where they really settled in. they really thought they had arrived. they had gotten married. they bought a house. they had successful jobs as law professors and finished law school. they reached a plateau where they achieved a lot of things

they set goals in life. watch our program on first lady hillary clinton at your website, c-span.org/firstlady. live monday the series continues with first lady laura bush. the house wrapped up work this week so the republicans meet for their annual retreat. they meet at hyatt regency in cambridge, maryland. they are attending this three-day retreat which comes to a close tomorrow. unone of invited speakers, former college football coach, lou holtz and, pollster, frank luntz. republican leaders are in the area. it should start in a moment. much live coverage here on c-span2.

[inaudible conversations] [inaudible conversations]

>> we're live at the house republican retreat in cambridge, maryland. it's a three-day retreat that will come to a close tomorrow. we are here live this morning, waiting house republican leaders as they're holding a press conference. it should get underway in a couple of moments. we'll have it for you when it starts. quick reminder the senate will be back in this morning at 10:00 eastern. they will continue debating flood insurance, a bill that would delay federal flood insurance premiums i am r included in the 2012 bill. w he expect hearings and four votes on amendments to that bill. final passage expected to come up later today as well.

we'll have live coverage for the senate as usual when they governor develop in this morning a 10:00 eastern here on c-span2 this very quickly, president obama will tour a general electric facility near milwaukee this afternoon. he will talk about job training. that will happen about 12:20. more coverage on c-span networks. before he heads back to the white house the president will go to a high school in nashville, tennessee. that is set you would for 5:20 eastern. again live coverage on c-span.

[inaudible conversations] >> well it could be a moment or two before this news conference with house republican leaders gets underway. while we wait we will hear more about this week's republican retreat. we spoke with a "washington post" reporter on this morning's "washington journal." >> host: what's the goal of the republicans getting together at this retreat and where are they going?

>> guest: good morning. house republicans today are meeting in cambridge, maryland. they will be there for a couple of days. they have two key items on their agenda. first is immigration reform which has been a controversial issue in the party for quite some time and also the debt ceiling. that is coming up next month. the republicans will try to come up with some kind of a strategy a different approach than they had last year in the government shutdown as they look at this issue. >> host: we're watching them gathering yesterday to get on a bus to head out to cambridge, maryland, is that right? where are they going and what exactly is on the agenda? what do they do at these gatherings? >> guest: they're on the eastern shore and this particular resort has been used for past retreats for both parties. democrats met there over the last two years. as a reporter i've been at numerous house republican retreats and these are closed-door sessions, closed to the press. very little opportunity to mingle with lawmakers unlike how

it is at the u.s. capitol which it is quite open access. the real agenda here is for speaker john boehner to come up with a 2014 plan for legislation and because the house republican conference is so large, over 200 plus members, you really, this is his time to meet with members, especially back benchers and committee chairman, hear from inspirational speak es, former notre dame football coach lou holtz will be there among others and a session on immigration reform, my sources tell me the speaker will look at page of principles, likely only a one-page memo that goes over the republican ideas on the issue and it will not have any kind of a comprehensive reform but more of a piecemeal process, a process that looks at things like the d.r.e.a.m. act, the republican version of the d.r.e.a.m. act and minor reforms for border security. >> host: so, are they likely to come out of this three-day,

two-day retreat with a gameplan on immigration and the debt ceiling? will we know something about their strategy? >> guest: oh, i think we will know a lot more by the end of this week what republicans plan to do. the sense among republicans that even in the ranks that don't want to do much on the issue, they know that because of the 2014 midterms, something on immigration has to move toward the floor eventually in the spring and i think you're going to see paul ryan from wisconsin play a critical role. he grew up as a mentor to jack kemp. he is very pro-reform. i think he is going to be someone will be like a conservative whisperer for speaker john boehner and help usher the issue through. house majority leader eric cantor is also looking to do things on immigration reform. the conservative bloc in the congress are very uneasy about this. they sense momentum among boehner and cantor, they would

like the whole movement to pass some immigration reform to stop. conservative groups are also getting very active right now, very uneasy about the prospects. >> host: so, who attend, as you noted, democrats have these sort of retreats as well, it is not just the republicans to have these strategy sessions when they get together. beyond members of congress, who else attends? you said reporters. are lobbyists there? who else gets to go to the retreat? >> guest: each party usually brings about a dozen speakers and these speakers are not only like lou holtz, the football coach, who will give pep talks but you see motivational speakers. dennis prager, who is conservative radio host spoke at recent republican retreat. you have pollsters. david winston, runs a polling group in washington, he will be

at the house republican retreat. he will go over polling data with republicans and give members so busy with their schedules most of the time to give inside look at politics what they're working on, comment on the polling about some of these key issues. it is part political strategy session, it is part motivational speaking, part social. they have a lost dinners together, chance to really connect on a human level with their colleagues. >> host: do you know, robert costa, do lobbyists attend? >> guest: no. that is not to say a few may be pop up as guests but this is very much a unique event because the press is kept out. lobbyists from what i can tell at previous retreats are very much kept out. this is members only and there is strict security around really a time for the house republicans and house democrats when they have their own retreat in the winter to meet amongst each other. >> host: and, robert costa, we're asking our viewers about the behavior of congressman

michael grimm and whether or not he should face an ethics review for violating what watchdog groups say is house rule number 23. do you think the republican leadership will weigh in -- >> great opportunity ahead of us this year in this retreat for our republican members is just the beginning. and i think in order to maximize our year it's important that we show the american people that we're not just the opposition party. we're actually the alternative party. we passed dozens of bills this year that would help the economy, would help improve education, improve energy production in america. mostly sitting over in the united states senate. but i think republicans have to do more to talk about the better solution that is we think we have that will help the american people grow their wages, have opportunities at a better job, and clearly, have a better shot at the american dream.

listen, we know that the president's policies are not working. that's why we need to show the american people that the policies that we're in favor of really will improve their lives. you know one of the president's priorities is trade promotion authority and i have made clear over the last several months that the president needs to engage in this issue. now this morning the senate majority leader said he was not in favor of trade promotion authority. trade promotion authority allows the administration to negotiate with our colleagues and allies around the world to expand trade. expanded trade means more opportunities for americans, more exports. the question is the president going to stand up and lead on this issue? we can not pass this bill without his help and if this is one of his own priorities you would think that he would have the senate majority leader working with him to pass trade promotion authority in order to expand opportunities for our

fellow citizens. >> well, this is, welcome to cambridge and thank you for making the trip. this is our opportunity as republicans to come together here at the beginning of the year and talk about 2014. we heard the president say this should be a year of action and that is our goal also. we join the president in this effort to make this a year of action and over the next couple of days the republicans are going to be looking at a variety of issues that face the american people, largely focused on those public policy decision that is will help get people back to work, get our economy growing. whether it is policy related to health care and making sure it is affordable and it is not costing jobs. whether it is energy. whether it is immigration and the need to fix what is a broken immigration system and honor what has been a history of legal immigration in this country.

also at the retreat this year we have brought in some innovative, outside of the box speakers. some top speakers that we've seen to provide a little, a little creativity to our members as we think about solving public policy decisions. they really have been inspiring and well-received and our goal is to be think offing of those way we can impact people's lives, make their lives better through the initiatives that we move forward this year. >> good morning, thanks for joining us. the, the other smite night we heard from the president's state of the union address and i think clearly he indicated that he wants to try and help folks who are struggling right now. i think many polls have suggested and i think all of us know that america is not working for a lot of this country right

now. the health care is not working. too many americans are out of work. the opportunity to advance for upward mobility is not just reality for too many people. and, you know, we believe and i think that the discussion at this retreat is going to be not just about opposing the policies of this president has been about over the last several years, in an america that is not working for people, but it is to craft an alternative for the people of this country so that we can see an america that works for everybody and, you know, the president did say the other night, he said, look, in america it has always been if you work hard and you're responsible you get ahead. well we agree. we republicans have been talking about that for years and years and so we want the president to work with us to try and solve that, to make sure that that promise of working hard and getting ahead so that the next generation has it better than we

do is a reality for all americans. and, this leadership team has put forward and sent the president a letter, and what this basically says is, mr. president, in response to your suggestion for your a year of action the house already acted on several things thaw mentioned in your speech. the president talked about the need for skills training. well the house has passed a skills act. it is sitting over in the senate and ma juror leader there -- majority leader there refuses to take it up. the president says in his speech he wants to call a commission to review all the federal programs having to do with worker training and skills. well the gao has done that already. that's where we pulled our skills act from. so we say to the president in this letter, please, sit down and work with us. if you have other suggestions in this, towards this bill, making it better we're all ears. we want to help people. we also mentioned in here the issue he raised on regulating

natural gas. we've always been the party that said we want to maximize natural gas production in this country to help diversify our energy sources, to help us compete in america and put people back to work. we want to do that. the president mentioned, you know, dual income families, working moms having difficulty holding jobs and raising a family. we have already passed the working families flexibility act. martha roby, that was her bill coming out of the education and workforce committee. why doesn't the president ask the senate to pick up that bill? we're ready to sit down if he has suggestions on that as well. the president also talked about federal reserve and the need for to us prioritize research in basic science. we republicans have already said we believe in that too. we want to solve the problem and unlock the mystery to curing disease. not only can we save lives, but we can help save costs as well.

we just recently passed the gabrielle la miller kids research act. why doesn't the president join us in that? if you have more answers or more problems or suggestions to that bill, we're all ears. so with that, i'm hopeful to have a really productive year. i know along with our speaker and leadership team, thank you. >> good morning. hope you all are staying warm. the president's state of the union said he had a phone and a pen. i think the first phone call actually has to be harry reid to talk about trade. might want to have to get his own party in line. the pen can be used as the leader just said, as you talked about places we could grow together. there are four bills already passed the house. in that phone call with harry reid he can say, move those four and i will use the pen to sign those. this conference is unique. it is a time to come together to debate issues, find policies of

what we want to find solutions but the speakers we had are innovative. they're not looking for a concept of a short time frame. they're looking what the world holds. will the next century be the american century? what are the challenges that we'll face from education to innovation, to research, to the fundamentals of economics of growing an economy? if you watch inside, which you don't always get to see, but inside these conferences, a lot of debate, both sides, challenged. i think that is the direction that the end of this time that you will see a clear direction of a policy that moves the country in the direction for the next century being the american century. >> we understand a whole lot of americans are hurting right now. thanks to the president's policies, higher taxes, more spending, more regulation and we're unwilling to accept the status quo. that's why we are anxious this week to talk about our

priorities that can get the economy moving, get people back to work, get more money in people's pockets. i look forward to having a discussion about tax reform. our proposal to lower the rates, simplify the code, make it fairer, flatter, simpler, close the loopholes and alongwith that comes millions of jobs. i think we'll talk about energy policy and our proposals, opening the keystone pipeline, which is going to help put us on a path to energy independence and create 100,000 american jobs. and talk about our health care proposals. we need to do away with things like this 30-hour work requirement that puts 2.3 million people at risk of having their hours cut. so -- for these people.

>> how do you think this might be a different moment for you? >> go back to the day after the 2012 election, i said, it is time for the congress and the president to deal with this very important issue. this has been problem has been around for the at least the last 15 years. it has been turned into a political football. i think it is unfair. i think it is time to deal with it but how we deal with it will be critically important. it is one thing to pass a law. it is another thing to have the confidence of the american people behind that law as you're passing it. that's why doing immigration reform in a common sense, step by step manner, helps our members understand the bite-sized pieces and also our constituents build more confidence that what we're doing makes sense.

>> [inaudible] >> listen, we'll talk to our members today about the principles that the leadership team has put together. i'm not going to, i'm not going to get out any further. we're going to have the conversation today and i'm sure you will hear all about it. >> what are you -- [inaudible] >> well, we'll, i'm sure we'll hear about it today from our members. >> border security, what would that look like? >> well, listen, you can't begin the process of immigration reform without securing our borders. and the ability to enforce our laws. everyone in our conference understands that is the first step in terms of meaningful reform of this problem. how confident are you that your conference with the republican alternative on immigration? >> well, i don't know. we'll have that conversation today and we're going to outline the principles and have the

discussion. we'll make some decisions after that. >> but if you can't -- how do you show that you have an alternative if your party is still divideed? >> we'll outline the principles. i'm sure you will have a chance to look at those as well. >> last question. >> mr. speaker, on the debt ceiling, do you envision any scenario where a debt ceiling increase passed house with at least, without at least some provision dealing with spending or debt or some other reform dealing with -- >> we'll have the conversation about the debt limit. we know what the obstacles are that we face. but, listen, we believe that the defaulting on our debt is the wrong thing. we don't want to do that. and so we're going to have a conversation this afternoon about the way forward on this issue. >> thank you, sir. alternative party, do you expect to have a alternative health care bill on the floor this year? >> you know, we had an alternative when they passed

obamacare, consisted of eight or nine points which we thought would make the health care insurance system much more cost competitive than what we have today. it was rejected. that bill is still out there. but we've got other bills that have been introduced over the last year by various members of our conference. so we're going to have a conversation today about the way forward on obamacare. we still believe that obamacare is not good for the american people. it is not good for our constituents. it is raising costs. it is pushing people out of the health insurance business. they're losing their doctors. they're losing their access to quality care and there has to be, in our view, a better way forward. so we'll have the conversation about what that alternative looks like, and decisions about how we would deal with it. thank you all, very much.

>> and wrapping up here with house republican leaders holding this news conference on this second day of their three-day retreat in cambridge, maryland. the conference being held in congressman andy harris's district near the eastern shore in southern maryland. the leaders giving reporters a look ahead at some of the issues they will talk about during the retreat and focus on for the rest of the year. reporter russell berman of "the hill" has tweeted out, boehner will face growing skepticism from reform-minded conservatives when they pitch immigration principles. we'll continue to bring coverage from this retreat as becomes available on the c-span networks. the u.s. senate will be back in this morning at 10:00 eastern. they will continue debate on flood insurance that would delay federal flood insurance premiums approved in 2012 for the national flood insurance program. at 11:15 the senate will hold a series of four votes on amendments to the bill. live coverage from the senate as they gavel in at 10:00 eastern here on c-span2 another bill that could come up in the senate this week is the farm bill. the house passed the america sure yesterday.

vote was 251-156 a house-senate compromise, been under negotiation since the previous farm bill expired in 2012. a new bill setting agriculture programs and food stamps for the next five years. here is an exchange from the house floor yesterday between two democrats, one for, and one against the compromise. >> thank you very much. yeah, i guess for some people,ah you know, you just can't do enough. i would argue respectively to a lot of my colleagues that the work that has gone on both sides of the aisle over the last two years is actually pretty exemplary. the farm bill is always a difficult bill to pass. i believe last one was vetoed a couple timesas and had to be overridden. this bill we'red not that point and we had a lot of bumps along the road. it could be better, it could be better. i never yet seen legislation is exactly what i would perfectly like to be voting on at end of the day. strides in this

bill. there were draconian cuts to the snap and food stamp program that are no longer in here. there wereon onerous requiremens and incentives to get people off food stamps no longer in here. for those that say people will automatically be cut as a result of this, that is not accurate. if the states step up and put 20 bucks towards the heating assistance for low-income folks that t hopefully need that, they get a reduced benefit. yes, it's a reduced benefit. they stilld qualify for their base benefit in this bill. moreover, if they just bring their hooting and cooling bills in they can still get the expanded benefit. just requires a little more diligence, hopefully put faith in america that their food stamp and snap program is going to those thatam really need it. as far as subsidies go, hey, maybe we should change that we w should work on that some more. there will be a another farm bill in four or five years. we made huge strides. we get rid of the direct payments program. that is monumental, folks. we've been trying to do that for 20 years.

subsidies, milk program is totally new. we're on a margin insurance program. i think america understands that type of thing. we maddse huge strides here. there are some good things for some of my colleagues on the democratic side of the aisle, at end of the day it is pretty imperative we made huge strides in the specialty crop provisions. we made itwi so that american farmers can continue to produce the best food and fiber with a safety net that makes sure that the people in this country get the food they need and deserve and can do the best economically on the global trade scene. i think this is a great opportunity. people here should be voting yes onop this bill after all the ha, bipartisan work. >> gentleman's time is expired. gentleman from minnesota reserved. gent man. >> i yield two minutes. >> jent from oregon is recognized for two minutes. >> well, i deeply respect my friend and colleague frommy oregon. have a slightly differentha

perspective on this because i think the bill that is before us today it absolutely the least that can be done and get the bill passed. it has a number of items i do support like specialty crops we've been working on for some time. i'm pleased organics have the opportunity to get to crop insurance but this bill, as i i say, takesns allegedly the savis from direct payments that have been opposed for years but takes the savings and plows them back in to an enriched crop insurance program. it cuts $6 billion for conservation. yes there are some improvements in terms of administration but it, at end of the day cuts land and water is under pressure and needs it most. this is shortsighted. it's very likely going to cost a lot more in the long run for the reasons my friend from wisconsin pointed out in terms of setting

theseco targets higher. it is more generous in terms of rejecting a provision that was included in both the house and senate version to limit payments to individual farms to $50,000. the conference committee increases the limit to $125,000, and reopen as loophole closed in both the house and senate billse allowing the payments to be collectedll by multiple people. it is just one more example of where the conference committee i think had one meeting, and sort of massaged these things to put the pieces together to secure a majority on the floor but is not, any stretch of the imagination in the best interests of most farmers, certainly not for the environment and for the american taxpayers. i respectfully urge its rejection. >> c-span launched the first

c-span school bus in 1993, raising awarers in how c-span covers politics and government with the public affairs programing. today, 20 years later the c-span bus continues on the road, on the campaign trail and visiting book festivals, history events, education conferences and schools. look for us on the road and online on our website, c-span.org. you can also follow us on twitter, all brought to you by your cable or satellite provider. this winter, university students will get their chance to visit the c-span bus and join us mornings live on "washington journal" as we hit the road for the big 12 conference tour. the u.s. senate is about to gavel in to continue work on a flood insurance bill delaying increases in the increases in federal flood insurance premiums over 2012. the at 11:15 the senate will vote on four amendments to the bill. a final passage vote could come later today. little coverage of the u.s. senate here on c-span2

the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal spirit, we don't know all that this day holds, but we know that you hold this day in your sovereign hands. lord, we praise you that even though we only have a feeble hold on you, you have a mighty grasp on us.