testimony you thought the da-10 was the most superior close air support weapon that we have. >> senator what i said is our soldiers have the most confidence in the a-10, they're used to working with it. i also said that the air force has provided close air support with other platforms which has also been successful. >> does it give you comfort to know that the b-1 is one of the replacement ideas that the the air force has put forward presently in afghanistan? that would mean a six-hour flight from its base in a different country, as opposed to a minimum of one hour and those weapons are delivered from very high altitude.

>> senator, first off the air force understads the immediacy of necessity of close air support. i believe the systems they have in place will provide us that immediacy. again, as we use different platforms, we will have to work -- we will work through with the air force how we use those and how they're best effective in supporting our ground forces as we move forward. >> find it curious that you come over here with all the necessity for cost savings and the a-10 costs for flying air is $17,000 for flying hour, the b-1, $54,000 per flying hour. i as i said before, general welsh, i challenge you to find an army or a marine commander who is functioned in the field and needed close air support that would feel comfortable with a b-1 replacing the a-10. i'll look forward to you providing me with those

individuals. fact is that the b-1 is a much more expensive, it flies at high altitude, and it hit attacked static targets. that does not fulfill the mission of the -- of close air support as i know it. i'd be glad to hear your response. >> senator the b-1 also provides about five hours time on station up to 32 joint direct attack munitions. which -- >> $54,000 per flying hour. >> yes, sir. and in some scenarios, where the ground forces are not in direct contact with the enemy, it's an exceptionally good close air support platform and i would be happy to provide people who will tell you that. it's also not the planned replacement for the a-10, sir. the primary airplane doing close air support to take the place of the a-10 will be the f-16. it's already done more close air support in afghanistan than the a-10 has. and it will work with other aircraft if the scenario allows it, to provide the best possible close air support for our troops on the ground. we are absolutely committed to

it. we have been, and we will remain so. >> well, you've tried to get rid of it before, gentlemen, and didn't succeed and we'll try to see if you don't succeed again. finally, my time has expired, but i gave a speech again yesterday on the floor of the senate. you've now got 57% of the $300 billion that was spent last year in fiscal year 13, noncompetitive, 80 programs, according to the government accountability office with $500 billion in cost overruns that eelb air force expeditionary combat support system, over $1 billion which is now as no result, expeditionary fighting vehicle, $3 billion former marine helicopter, $3.2 billion,

the acquisition system and department of defense is broken, it still hasn't been fixed and when we as much as $3 billion cost overrun for a single aircraft carrier the american taxpayer will not sustain it. i thank you, mr. chairman. >> thank you, senator mccain. senator blumenthal. >> thank you, mr. chairman. thank you all for your service, your extraordinary dedication and contribution to our nation, and i join chairman levin in saying to you and the men and women who serve under you that we owe you a tremendous debt of gratitude both in peace and war. general dempsey i hadn't intended to ask this question but i'm encouraged to do so by one of senator mccain's questions. on the purchase of russian helicopters for the afghan

military what would it take to convince you that we should stop those purchases, literally, today, since the money that we're spending on them goes to russian arms export, the russian arms agency that in turn is fuelling and financing assad in syria, and also now the troops that are on the border with ukraine. what would it take you to -- what would it take to convince you that we should stop those purchases right away. >> an alternative, senator. we have -- i just came back from afghanistan on saturday. and afghan security forces did an absolutely rourkable job of managing their elections. they peak for the big events but they're not red i go to sustain themselves over the long term and we've got to get them a lift capability and an attack capability and currently there's no alternative. now we are looking inside the department to see if we can find

alternative supply chain and repair parts. believe me -- and by the way the other thing it would take, is if a sanction were to be placed against them, that would be the law, and we would have to react to that. >> a sanction against the russian arms? >> that's right. >> agency. >> the sector sanction. but at this point we don't have an alternative though we continue to seek one. >> is there a military reason we should not impose sanctions on russian export -- the russian export agency? >> the military reason is what i just expressed, a concern that we would leave the afghan security forces without an air component for some time. >> but can't we provide those components from another source and training to fly american helicopters? >> well, the american -- we've talked about the american helicopters, senator. that would take a very long time. much longer than it does to with the mi-17. but we're looking at alternative sources of supply and repair parts. >> i don't want to dwell too long on this issue and you've been very, very gracious in talking to me about it on

previous occasions, both on and off the record and i appreciate your attention to it. but i would like to follow up further with it, and i appreciate you responding. a question for you, general dempsey, and perhaps to general odierno, and general amos. one of the biggest factors in suicide, the cause of suicide, is financial stress. and the rates of suicide, i know, have been of great concern to every member of this panel. do you anticipate that any of these cuts or changes in compensation will impose greater stress and obviously that's an emotional term. it may not be objectively a cut in a standard of living. but the idea of stress comes with reductions in compensation and the threat of additional reductions in compensation so,

you know, i ask this question very cognizant of the fact that many of our best and brightest who are fortunately serving now go in to the military without the idea that compensation is going to be the key to their future, and as the father of two who have served, who are serving i'm well aware that the training and the challenge and the mission are the primary motivations or any young man or woman who goes in to the military. but in terms of retention and continued service aren't we creating additional financial stress which in turn aggravates suicide rates and other downsides, physically, and emotionally? >> i will let the service chiefs talk about the many programs in place to help service men and women deal both with stress and in particular with their financial well-being. i personally, senator, my belief is that the uncertainly of all

of this is a greater cause of stress than the slowing of growth that we've prepared. and as i've gone around in to town hall meetings that echoes. that resonates. they are more concerned because they don't know what the future will be in terms of our ability to raise and maintain a force over team. but let me ask if any of the service -- >> if i could i want to piggyback on what the chairman just said. their concern is, am i going to have a job? my concern is -- their concern is i'm still going to be part of the best army. am i going to have the best equipment? am i going to be ready when you ask me to deploy somewhere? certainly they're concerned about their compensation. but in reality we're not reducing their compensation. we're reducing the rate of growth. they'll -- their pay checks will continue to increase. so in my opinion, that's the biggest issue, sir. >> and can you talk perhaps general dempsey or general

odierno about the stars program the study to assess risk and reliance in terms of addressing the suicide issues in the army. >> i can, senator. so stars entered its fifth year of the program to date more than 100,000 soldiers have voluntarily participated and this allowing us to gain new data that's enabling us to see where the stresses are, what are causing soldiers to think about suicide. to have suicide ideation and in some cases with those who have actually attempted suicide. so it's really giving us high quality information that we're able to put back in our program. so we are continuing to fund that program because the information we're getting is allowing us then to pass that information to the commanders, and allowing them to better help and understand what the stressors are on our soldiers. so we're going to continue to invest in that program as we move forward. >> thank you. thank you very much. >> thank you, senator blumenthal. senator fisher. >> thank you, mr. chairman.

general dempsey, some have suggested that maybe there's other areas in the budget that we can cut, and i guess i'd like you to speak to that. i know that research and procurement funds have been cut, but do you believe that there are any additional savings in those areas or other areas that can offset these compensation changes? how do you weigh that? >> yeah, senator, not only are there other areas that could be cut, we have actually cut nearly every area. in fact, i'd actually prefer to allow some of the service agencies to talk about how they've tried to balance the reductions against pay compensation, heat care, modernization training, infrastructure, it's a -- there's five or six or seven places you can find money in a budget. they looked, there's nothing left under the mattress. we've got to do this in a balanced way. anybody want to add to that? >> general amos?

>> senator, in my service, we've taken testified 63 cents on every dollar goes to manpower. so that's -- we're the highest of all. that doesn't mean it costs more, we actually cost less because we're a younger service but it's a percentage of budget and percentage of top line. so, we are 63 percent so that leaves 27% available for readiness. so, you want me to be a highly -- in a high state of readiness so we can deploy today and we do that often, as you know. so that's 20%, 27 cents of every dollar applies to that. and then really all that's left over is for the most part is about 8%, which is equipment modernization, and you mentioned r&d. 4% is r&d and 4% is modernization. when you think about in our service we've been at war for 12 to 13 years, and 4% of my

entire, four cents on every dollar is going to modernize the marine corps after 12 or 13 years. so general dempsey's point is that we've looked in a lot of places, so for me, my manpower count of 63 cents on every dollar, 64% of that is pay, health care and bah. so if i'm going to make a change, if even it's a modest change for me i get a pretty high return on the amount of money considering the amount of money i'm paying for modernization. >> senator, if i could just add to that. so, currently we're only funding our installations at 50% of what it should be funded at. we don't have a brac we'll have to continue to sustain the number of installations that we have. we can't fund our installations fully. that's already the case. we're cutting the army by 34% in the active component. we're cutting the army by

potentially 20% in the national guard, 10% in u.s. army reserve. our research development acquisition account has been cut by 39%. we've slowed down every one of our programs, which is costing cost overruns. because we now slowed down how long it's taking us to procure aircraft and so what that means is each aircraft costs more because we've slowed it down and we reduced the amount of aircraft we're buying. so we are in to the process -- we're not only past deficiencies we're becoming more inefficient because of how we're trying to deal with the problems that we're dealing with. we're at the lowest level ever in the army right now. we've taken as many efficiencies as we possibly can to pay a $170 billion bill that we still have to pay over the next several years. >> we have strategic requirements that you have to meet. so just how far are you going to fall short of those if the sequester fins? >> well, so i mean, until we can

get the end strength out, which can get the in strength out, which can take us three or four more years, we'll be out of balance. the problem is, we're taking a portion of the force, a very small portion of the force and making them as ready as possible to meet our operational commitments. the problem is the rest of the force is paying a significant price in readiness. and what that means is as we get unknown contingencies we can't respond with the readiness we're used to responding. that's my real concern, senator. >> we talked about the commission out there and the recommendations they may come up with. are any of you concerned, i guess i'll start with you, general dempsey, are any of you concerned about the changes that you're proposing here, that you're contemplating for the budget? what happens if the commission rejects those and goes in another direction? how are you going to address that? >> the commission's work is on changes to structure of pay

compensation health care and retirement. and is a longer look at this than we're proposing right now. i think our suggestions are going to harmonize quite well with what they're doing. >> say, what -- what would you see for savings if the -- if the pay's going to be capped at an increase of 1%? down the line? >> i'm not sure i understand the question, senator. >> if you -- if you're looking at savings on pay. >> right. >> the budget you're proposing, you have -- you're talking about a 1% this year, is that -- >> that's right. >> for fy15 instead of the 1.8%. there will be savings there. do you anticipate that will continue into the future? and how far into the future? would you cap that? >> oh, i see. well, i think that's one of the things we would expect to get some advice from from the commission. because that's a structural issue.

the savings on the 1% versus 1.8% is $3.1 billion over the future of the defense plan and that's money we really need. >> okay. i see my time's up. thank you. >> thank you, senator fisher. senator donnelly. >> thank you, mr. chairman. thank you for all your service. i want to focus for a minute on the mental health assistance. i appreciate all your efforts and all the services trying to get this right. general, the natural guard is limited in its ability to provide medical ability to its members. you can't access defense health care fund programming and have to use operations and maintenance funds. does this impact the quality of mental health support that you can provide for your members? >> senator, we have 167 trained mental health clinicians across the states. those are primarily in the state headquarters, as well as in the

wings, the flying wings. thanks to congress we got a $10 million plus up for this year. we've been able to bring on additional clinicians we can put in high-risk areas, so that's been very helpful. my concern is probably more looking to the future, es and spesly as we bring men and women off active duty into the guard that have made had multiple deployments, coming back to their hometown and can we expand and provide the health care they need, as well as our own men and women. and in the past we've had a 50/50 split on prior service and nonprior. during the war that actually went down to a 20% prior service and 80% nonprior. so, we have to tackle this issue. >> well, you know, we continue to need to do a better job of assessing the mental well-being of our service members every year for every service member, regardless of whether deployed or not. this goes for active guard and reserve. general dempsey, i was wondering your views on conducting annual mental health examinations or

screenings for the active and reserve members. >> well, we have programs in place predeployment where we screen them. let me ask the service chiefs if you extend those into routine presence deployments. john? >> well, we have predeployment, as the chairman said. post deployment we have 30-day, 90-day and six-month checks, which include -- i don't know that i could call it a mental health screening, but delves into issues that -- of mental health that are individual. so, when you take that across a spectrum and folks deploy every two years or so, that's quite a few checks. >> general? >> we conduct assessment prior, then we do one during deployment and then we do one after the deployment. now we're making part of the routine sustainment, as we do physicals and other things,

behavior health is becoming a part of that. if i could -- two things with the national guard, if i could. we've increased telebehavioral health. we have to continue to invest in that because that allows them from external places to get behavior health. the other thing is the tricare reserve select, which is a low cost premium that allows them to get care. we're subsidizing that. we subsidize that by 72%. that's an investment we've made to help them to get care outside of the military health structure, which should assist our guard and our reserve in order to get the behavior health and other care that they need. >> you -- in previous hearings had had mentioned about the possibility or the use of off-base mental health assistance as well. that seems like in certain cases that could be a very good fit. >> we are trying to build civilian military consortium of capability that allows our soldiers and their families to get the care.

we're making some progress in that. we're also working with many outside organizations on our major installations in order to have this cooperative effort, because sometimes they'd much rather go to someone in the civilian community than in the military structure, because of their concern about stigma and other things. so, we're trying open that up as much as possible as we hoouf forward. >> general amos, i just want to ask you, you mention 63 cents of every dollar goes to personnel. 4% for modernization. with that 4%, how modern will that allow the marine corps to be in about ten years if it continued at that rate? >> sir, it's part of the decision we made last summer as we were facing sequestration. we said, what's good enough? so, in ten years the marine corps will not be a very modern service with regards to ground tactical vehicles. it will be with regards to aviation and a few other. but we will be living with legacy vehicles and ground

tactical realm. >> this is for all of you. is there ab upper limit, like on personnel cost? i remember admiral greenert we were at a dinner with you where you said if things don't change navy personnel costs will be two-thirds of every dollar and it will be very difficult to run the operations of the navy if that occurs. is there an x crosses y points for the different services? >> well, to -- that was at a rate we were on at the time. that would notionally rest itself. but i think what we're suggesting is to slow growth. so, for the navy, we're about right now at about -- at about 25% to 35%. if add reserves. i'm talking about sailors, reserves and civilian personnel. so, we're talking about arresting it to the area we are right now. >> all right. sir? >> so, for the army historically it's 42% to 45%. today we're at about 48% and growing.

and that's the concern we have. as the budget comes down, it will probably grow as a bigger percentage. we're still working the numbers but it will continue to grow if we don't watch this very carefully. >> senator, one of the concerns i have is that the percentage for the air force has stayed the same between 2000, 2001 and today. it's roughly in the mid-30s, 30%, 35% of budget we pay to people. the problem is we've cut 50,000 airmen during that time frame. our top line went up, cut 50,000 people and the percentage of the budget we put toward those people is exact lit same. that's the impact of the cost growth. >> thank you very much, mr. chairman. >> thank you, senator donnelly. senator ayot. >> thank you, mr. chairman. i want to thank all of you for your leadership in the military for your extraordinary service to our country during challenging times. i just have a comment up front and i want to echo the comments that senator mccain made.

this really is about sequestration. and as we look at these issues in terms of compensation and also the readiness issues and challenges that you're facing, right now, it seems to me that when we look at the overall budget, taking it out of the d.o.d. realm, 60% of what we're spending are federal dollars are on mandatory spending, entitlement programs, that if we don't get together collect-itively as a congress and address the bigger picture, those programs, by the way, go bankrupt and also continues to squeeze out the priorities in terms of defending this nation at a very challenging time. sequester, let's not forget, was set up to be something that would never happen. and yet here we are. so, i think we need to show an iota of the courage the men and women of uniform do every day and really address the big picture problem here with

sequester because we'll continue to face this down. and as i look at it, the one thing that worries me is that when we went through the c.o.l.a. discussion in the budget agreement, there seems to be somewhat of a disconnect. there were comparisons made between civilian personnel and the sacrifices our men and women make every day. well, when you're married to someone in the military and you've got to move around, you can't have the same acareer as someone who's on the civilian side. when you're missing those weekends, those holidays, it is not the same. so you cannot make those comparisons. we cannot lose sight that the 1% of this population, the men and women in uniform that go out and defend the rest of us, that the sacrifices they made are very different. so i would like to make sure that we don't lose sight of that as a nation and is that we actually hopefully can get this congress to the place where we're taking on the big picture heart questions that need to be taken on so that we don't diminish the best military in the world. so, that's my comment up front. and i know that many on this

committee share those sentiments and really what we need to address if we want to make sure that our men and women in uniform are supported and the defense of this nation is sound. i want to ask in particular just real quick to follow up on what senator mccain had asked general odierno, just so we're clear on the a-10, our men and women on the ground, do they have as much confidence in the f-16 in terms of the cast mission as they do in the a-10? >> if you ask people on the ground they will tell you they believe in the a-10. they can see it. they hear it. i think a lot of times they're not aware of the f-16 as much because it's not visible to them. if you ask them on the ground, they're very clear -- >> do you believe the f-16 is the equivalent of the a-10 on the ground in terms of reattack times, in terms of ability to go slow lowe and slow,

survivability in close settings? >> they both have very different capabilities. they can both conduct the missions but the a-10 has certain characteristics that enable them to -- visual deter republicans, able to see the munitions but the f-16 has been capable of dwooping and -- >> let's be clear. the a-10 is -- the f-16 is not the equivalent of the a-10 in terms of the close air mission on the ground, is it? >> it's not the same. >> general amos, would you adis -- is the f-16 the equivalent of the a-10 in terms of close air support on the ground? >> senator, i can't comment on the ff-16. marines would rather have f-18s overhead than a-10s. i had 60 f-18s, 72 airiers and general mosser gave me a-10s every day. it was a nice blend. the a-10 nz those days were

nonprecision. that's taken care of. >> it's precision-guided now. >> that makes them a better platform. so, i think it's a blend but marines f you ask marine on the ground, they would rather have the f-18s and hairiers overhead. that doesn't mean they don't appreciate the hell out of the a-10s. i know for a fact that they did. >> so, i guess my question is, do you think that the a-10, the f-16 is the equivalent of the a-10 in close air support? yes or no? >> senator, i do this for a living. and i think they're two completely different platforms with overlapping missions. one is very old. the other one is not quite so old. i think what you'd probably like to do is have a blend, if we could afford it. we're at a point right now we're trying to make decisions on what we can afford and modernization. >> well, it seems to me when i think about what the men and women in uniform on the ground have told me when i visited afghanistan, we should be able

to afford what they believe is the best close air support platform, especially given the cost per flying hour and what we've previously invested in the a-10. i have a question for the whole panel that i haven't -- that i really think we need to get to the bottom of. when we add up the fy14, fy 15 and vha pay reductions, reduction in commissary savings and new track air fee structure, the military officers association has given us an estimate that an e-5's family of four would experience a loss of about $5,000 in purchasing power annually. thinking about their overall compensation package as opposed to just payer one area. do you -- do you all agree with that estimate? and have you -- have you done the analysis in terms of thinking about our junior enlisted officers and what it will mean for them in terms of

these proposals on a gradation? i haven't seen that. perhaps you produced it. but i think it's important for us to see, especially for the thinking about the sergeants in our army and marine corps, staff sergeants, petty officers, second class, all of those who are really at the junior enlisted level who are making a lot less money and, you know, some of them, unfortunately, in some instances i know in the past have been on -- it's a shame, but have been on food stamps and other things. so, i think those numbers are particularly important for us to see. >> senator, we'll take it in general for the record and give you -- we do have that data, but the cno actually has the specific answer to that question that you asked. >> if you look at the literal pay today, this is an e-5 in the navy, about six years in the navy, three dependents, they make $64,300. i'll give you this. i'll back up to this. in 2019, at the end of this pay

period we're talking about, they would make $76,000. now, that's just -- that gives them inflation. if you look at buying power, to be straight with you, they get about a 4% loss in buying power as a result of this. that's about $2500, not $5,000. does that make sense? >> yes. so basically you would say the estimate they gave us, your estimate would be half that? >> yes, sir -- yes, ma'am. >> i appreciate that. i think it's important to understand in the buying power dollars. that's how families operate, as you know. so we understand on the junior enlisted level that really they're going to have the toughest time with this. i want to understand that. >> senator, on the commissary issue, which is a sore point for me personally, the proposals -- the deca advertises 30% savings on -- across the market for us

out there right now. and they're saying as we go down and we put these efficiencies in, this -- whatever it is, 1 billion efficiency it's going down to 10%. that's a 66% drop in savings for my marines. i don't like that. i don't think that's the solution set. i think the solution set is to -- is to force deca to become more efficient and figure out how to do it and don't put that bur burden on our young enlisted marines, lance corporals, sergeants or seamen. i think the commissary piece is important. we don't need to turn our back on it, but i think we're going at it the wrong way. i think we need to force deca to do some of the things the services have had to do over the last year to try to live within our means, if that makes sense. >> it does. thank you. appreciate it.

i know i'm beyond my time. thank you, senator ayotte. senator hagan. >> thank you, mr. chairman. mr. chairman, i wanted to open just wanting to express my thanks to general amos, commandant amos, for his incredible leadership over the marines, as well as your wife bonnie for all she has enjoyed and been through over these so many years. but thank you for your steadfast dedication to our marine corps, to our country and to the state of north carolina. >> thank you, senator. i'll pass that on to bonnie. >> please. we certainly face difficult decisions in fiscal year '15, as we all know and have been discussing. it's something this committee will be closely examining in the weeks. in head, however, we also face the return of sequestration in fiscal year '16 and beyond. north carolina, as all of you know, has one of the largest military footprints in our nation so i'm particularly

concerned about the effect that it would have on our service members. and i am committed to finding a balanced solution that's going to put an end to sequestration in future years. my question, general amos, with this likely being your last appearance before our committee as commandant, i'm interested in your most blunt view of the impact that the return of sequestration would have on our marine corps in the future. >> senator, just trying to pull the figures out. we testified on this so many times in the past. there is absolutely no doubt in my service, particularly your state, you're losing -- you're going to go from almost 50,000 marines, a little bit more than that, down to just about 41,000 marines in your state alone. all as a result of the forced draw down, which is driven a lot by sequestration. so, it's not dollar for dollar, but it's significant. but i think more importantly

than that is you're going to take a force that is -- who's raised on debt is to ready today, to go tonight. and we'll continue to do that for about two more years. but if sequestration returns in '16, you'll see the readiness of those units that are designed to and assigned to be ready tonight, you're going to see the readiness in those units fall under sequestration. we haven't even talked about modernization of equipment and all that other stuff. just the o&m, readiness, ranges, fuel, the ability to train those young marines is going to fall over about -- starting in about two years. >> and that is certainly one of the very reasons that i think it's very, very important that we take notice of this, we listen to what y'all have to say and we certainly work very hard

together to be sure that we can stop sequestration. general dempsey, as i am chair of the emerging threats subcommittee, and i'm concerned about how, once again, the continued sequestration could affect our ability to meet the challenges in the future. if sequestration returned in fiscal year '16, what threats concern you the most in terms of our ability to be prepared? >> i think three things. one i mentioned to senator blooming that wibloom blooming blumenthal which is the ability to persist in the force. these are real people we ask to do this work. and we owe them a little certainty in their lives. secondly, if will affect our ability to maintain force -- forward presence to the degree we believe we should. when we -- when we're forward, we deter our adversaries and reassure our allies.

and if we have fewer forces forward, we will be less deter rant and less reassuring to our allies. as general odierno mentioned, should a con sin againcy arise, we'll have less in readiness back here to flow forward to respond to that crisis. so, those are the three things i would suggest we should take very seriously. and in the aggregate, they define a level of risk that at bca levels we believe to be unacceptable. >> thank you. i did want to ask a question similar to what senator ayotte was talking about, her last question. you know, unlike the private sector where most companies can easily recruit mid-level employees, in the armed forces, we don't have an alternative, but to build and develop our mid-grade officers and noncommissioned officers from within. and as our service members reach that midpoint of their careers, they are making these critical

decisions about whether or not to make the military a career. these officers and noncommissioned officers, obviously, have a wealth of experience with multiple deployments many times to iraq and afghanistan. how do you think they will view d.o.d.'s proposed compensation proposals? and i put this out to anybody. >> i can give you some numbers that are rough numbers. we find that in retention, which is i think the question you're asking, that a 10% pay increase historically, we've had more increases over the last decade than decreases, for first-term retention, increases retention about 10% to 15%. for second term retention, it increases 10% to 13%. and it increases career retention about 5%. so, if you were to take a 10% decrease, which is not at all what we're talking about here, we're talking about lowering the trajectory of increases. smaller increases presumably you would have a commensurate

effect. i think what we're hearing from our people, there might be some small impact on retention, but that based on the current economy and a number of other factors that we think we're going to be okay. we carefully considered that as we designed these proposals to not end up with a breakage in retention. right now the air force is reta retaining, and i would defer to the chief over there, but in 10 of 11 categories the air force is exceeding its goal in career retention they're at 96%, just as an example. >> thank you. thank you, once again, general amos. thank you. >> thank you, senator hagan. now, senator cain. >> thank you senator nelson and to members of the panel. thank you for your service and your testimony today. i just want to associate myself with the comments about sequestration, one of the first votes i cast when i came into the senate was to eliminate sequester as needless and poor budgetary strategy together with colleagues, senator nelson,

senator king, we worked to reduce see questers in f14 and fy15. many of those will be trying to do the same thing with '16 and carrying it forward. general dempsey, just to open my questions in this vein about sequester, are the recommendations that are part of this budget, including the compensation recommendations we're discussing today, are they driven primarily by optimal defense strategy or by budgetary caps imposed by congress? >> there are some things in our recommendation -- you know, this is a bundling of reform. there are some things in there that we would have clearly wanted to do, whether sequestration was a fact or not. and then there's things that are very clearly the result of sequestration. so, you know, we are trying to recover from 12 years of

conflict, restore skills lost, rebuild readiness, recapitalize the force. and it's the -- it's really the aggregate of effects. i would certainly say sequestration has dramatically exacerbated our challenge. it would have taken us three years or more to reset the force, whether sequestration was upon us or not. but this really exacerbates it. >> that is -- i think that's an important thing. the optimum for the nation would be if our budgetary decisions were driven by our strategic choices, especially in defense. but in other areas as well. the distance second place is if we let strategy be dictated by budget realities. what we've really been doing is let strategies be dictated by budgetary uncertainties, gimmicks and that is the far distant third in terms of the way we ought to be doing defense and strategy, in my view. one of the issues, before i came to the senate the senate agreed as part of the 2013 nda to

embark upon this military retirement and modernization commission. one of the things i have found kind of compelling as folks have advanced it is regardless of the justifications for particular compensation type changes, and all those you're advancing seem to me to be good faith efforts to tackle budgetary challenges. nevertheless there's an argument being made that the senate kind of embraced a notion that there ought to be this full-scale 360 degree examination of these changes and a recommendation would be circa february 2015 and you should not make changes until then. what is your thought about whether we sort of break faith with a commitment we made even if these changes are made in good faith and they're justified, if we embark on those changes prior to the full set of recommendations from the commission early next calendar year? >> i think it's important to reiterate what chairman dempsey

said a minute ago. that is, we fully expect the commission to take a holistic look, not only at retirement structure but also the pay structure. how do we structure compensation for our people? what is bah? what is basic pay? all those sorts of things. what we're talking about here is tweaks to the existing structure, that we would not really expect the military compensation commission to say, well, we think base pay should be raised at this percent next year. i think they're taking a more fundamental look at how we structure compensation overall. we believe we need to get going now. we can't wait for this commission to report, to get r our -- the savings we need in order to give these young men and women the tools they need to fight. and we look forward to the military compensation's recommendations on structure. >> is it your understanding the commission, just to use one example, would not be addressing items like what should the level of subsidy be for the commissaries, do you think that is outside of the scope of the work they'll be doing?

>> it might address the level of subsidy there. they can address the full range of thing. our view is the principle role is what is the structure of compensation? let's take a fresh look at how we pay our people to see if we have this right in a 21st century. i would not want to rule out they would look at individual little numbers. we felt we had all the data we needed right now to get moving on this to get the savings we need sooner to get these young men and women the tools they need to succeed in combat. >> one of the things that's most important about the work the commission does is that they really have a great sense of, you know, kind of a scientific survey sense of what service men and women at all levels feel about the kind of relative priorities of compensation retirement items. senator cornyn and i today have introduced a bill, service compensation impartment act which directs them to make sure -- they may be already under way on surveys but we think that's important. let me ask you about this idea that the -- that the work of

this commission looks at structure. we had a wonderful hearing last week, general welsh, on the air force force structure analysis that really was getting at some of of these structural issues. there's more way to save money in the personnel systems than just adjust acola or salary increase. way to find savings and promote, you know, the mission as well. you talked about the continuum of services, an idea within the air force. are the other service branches doing -- i'm just curious -- things similar to the air force force structure analysis or is that more being done as part of this military retirement and modernization commission? >> senator, we look at our structure every single year. we do a comprehensive review of our structure and how it fits and what the cost is and how it fits within our requirements, so we're constantly doing this. we also look at optimizing the

great mralt within the structure. what are the right grades, the right leader to lead ratio. in the operational force versus generating force. we're constantly doing this assessment pvrp year we look at it anew to make sure we keep it in balance and have it right. that is part of this. but the army is in a -- we're all in different places. we're significantly reducing in strength and structure now so we're doing just about everything we can in that area and that's why for us it's important to take a look at some of these other areas as well. >>. >> we do a 30-year aircraft building plan, and so we roll into that the strategy of the department and the requirements of the combat commanders. then we do a force structure assessment where we balance the predominantly ships but we look at all capabilities. our ability to make the combat and commander's presence

requirements and the operational plans as well as scenarios of the department. we roll all those factors in. that is done every time we change the strategy or make a tweak to the strategy and annual defense review. >> briefly, jen amos. >> we've done three on the last three years. first one teem took over a year of force structure review effort going on right after i took this job. the last one was in the face of sequestration last year. that designed a force to come from 202 to 175. within that, though, we rooked at how we could afford that 175 force, we looked at pay grade. we're the youngest of all the services and so we have the -- we have probably -- we do, the lowest numbers of the top of six ranks. they're the most expensive in officer and enlisted side of the

house. so, we looked at, can we make it even more, you know, less top-heavy. the answer is no because we are so lean right now at that level. so, we've got about 11 enlisted marines for every officer. that's a ratio, i think, that's the best. the answer is, yes, we've looked at it. sir, we're about where we are. >> senator king. >> we have just a few minutes left before this vote, so i'm going to try to be quick. these hearings must drive you guys crazy. i've been coming to these hearings for a year and a half. we've been talking about sequester and we do nothing about it. we act like sequester came from mt. olympus. it's self-imposed. i call it the wlie e. coyote theo theory. you throw the anvil off the cliff, run to the bottom of the cliff, smile at the camera and

then it hits you on the head. we created this problem and we can do something but it, but i just -- i mean, you guys must go and tear your hair out. perhaps not you, general odierno, but it's -- it's -- >> actually, he did have hair before sequestration. >> that's right. but it's entirely self-imposed. we act like -- everybody around this committee, both parties, talks about how terrible it is and yet we don't move to do anything about it. general dempsey, i assume you don't want to make these cuts you presented but you have to because it's a zero sum game. isn't that correct? >> well, it is certainly in our best interest to be best steward's of america's resources. there are some things we would do, but as i said earlier to senator blumenthal, sequestration has made this almost a mind-numbing experience. >> the reality we're in this world -- it seems it's a new

reality for the congress, it is a zero sum game. so, if we don't accept your recommendations, then that's $2.1 billion a year, $30 billion over five years, that has to come from somewhere else. >> absolutely. and that's why i mentioned to the chairman, if we wait, we're going to -- we'll have to -- if we wait two years, it's $18 billion. >> and your professional judgment unanimously, and i heard on the personnel committee from the enlisted chiefs unanimously, was that this is a sensible alternative, particularly when compared to the cuts to readiness that would otherwise have to take place. it's not a -- it's not a both/and. it's an either/or. is that correct? >> that is correct. >> let me interrupt, if i could for one second. we have a vote. we're near the end of it. when you're done, senator king, if you could recess us, if there's nobody here for ten minutes, senator nelson is coming back. i know he's not had his first round, so if you all could stay during that recess, we would appreciate it.

>> i'm prepared. i think we can recess now, mr. chairman. i'm set. >> thank you. >> we'll recess for -- until someone else comes back. give you folks a chance. >> it's the story of our life, chairman. [inaudible conversations] reduc 16,000 -- >> thank you, mr. chairman. >> thank you, mr. chairman. makeould make a great chairman. thank you a all for being here today. first, we are having a tommission th bat is supposed to congress next the year bias out of the way. we're having a commission that's supposed to report back to the congress here, i think, next year, and i would like to hear from the commission before we

make any real substantial changes. i understand what you're telling the congress. you got some things that you need to do now because of budget cuts. senator mccain asked a good question. your big fear is sequestration. i want to turn it around a bit. even if you had all the money you could possibly ask for within reason, would you still want to make personnel changes? reform the personnel system? >> yeah, absolutely, senator. we've actually testified to that in the past. you know, we got a new demographic, different things appeal to different kids, and we would want to take a look at all that. >> and i think you got whatever personnel footprints you have, you have to make it sustainable. so, we're having a dilemma here. we're trying to make sure pay and benefits are consistent with the sacrifices, as much as possible, is good for retention, is fair, the tie goes to sailor, soldier and marine. it has to be sustainable. general grass, we offered tricare to reservists and guard

members, is that correct? >> yes, senator. >> how has that been received? >> 12% of our force has bought into it. >> i think more will buy into it. i think it's a good retention and readiness tool. when we deploy from guard and reserve, we find health care is the biggest impediment getting people in order. if a member could sign their family up to tricare, it's an inducement to stay in. that's an example of expanding benefits. when it comes to taking care of our troops, we're doing more on the sex you'll abuse issues yes. >> i like the way you're headed. we're providing jags to every victim. i think what we're doing on the sexual assault fronts will pay dividends. we've got ptsd problems. we've got suicide prevention programs. all these programs cost money,

is that right, general dempsey? >> they do, senator. and it's money well spent. >> a couldn't agree with you more. on one side you're increasing benefits based on reality of retention and problems associated with long-term service and a very dangerous world. on the other side we're trying to create sustainable pay and benefits. that takes us to the big -- from the marine corps point of view, what percentage of your budget, general amos, is personnel cost? >> sir, it's 63%. >> navy? please, everybody, answer that question, if you could. >> it's about a third, sir. >> 48%. >> it's roughly 48% with military and civilian together. >> okay. general dempsey, one of the things we're looking at is prospectively maybe redesigning retirement. you're going to wait on the commission as far as that's concerned, is that correct? >> that is correct, senator. >> and count me in the camp of putting retirement on the table,

making it more sustainable, more efficient but still generous. the real big issue, i think, is tricare, is that a fair statement? from all of your perspectives? >> i think the big three are actually pay, tricare and -- as well as bah. >> okay. so as we look at the big three, we're going to be looking at trying to make the pay benefit system more sustainable but yet still appropriate for the sacrifice. is that correct? >> yes, sir. >> and you're asking the congress to be a partner in this? >> yes, sir. >> i'm asking the congress to keep an open mind to our vsos. we will listen to you. we should. but we've got to get a handle on this because over time tricare grows very -- becomes a larger part of the budget, is that correct? >> that's correct, sir. >> very much like medicare. i mean, we're going to have to deal with the cost of health care in a responsible way. so, if we make these personnel

changes and we adopt a reformed package like you just spoke, some kind of reform, how much money do you think it would save over time for the department of defense? >> the submission that we've currently proposed -- >> no, i'm talking about pay, benefits. what's your goal? >> i think the goal is to actually slow the growth so that we -- as you noticed, each service has a different model. >> right. >> and each service would probably be better able to answer that question. >> so, what's your goal in the marine corps after all these reforms, general amos? >> senator, i'm -- i'm looking at -- well, right now in this i'm looking at $1.2 billion over the next ten years. excuse me. >> you don't have to answer this question today. pick a number that you think is a sustainable cost, a percentage of your budget, and let that be your goal.

>> okay. >> so, the goal is going to be each service is going to pick a percentage of your budget. what do we have to do to get there and we'll all talk about whether or not that's -- that's running the place like a business. personnel costs have to be managed. let's pick a fair amount of the budget to go to personnel, understanding that's the heart and soul of the military. they have to be well taken care of. their families have to be well taken care of but it has to be sustainable. now, i'll end with this. once you put these -- all these numbers together, can you please, for the 555th time, tell the congress that if no amount of personnel reform is going to save the military from being a hollow force if you don't fix sequestration. is that still a true statement? >> it's truer today than it was the last time we had this conversation. >> does everybody agree with the chairman's assessment? >> yes, senator. >> let the record reflect everybody nodded in the affirmative.

thank you. >> senator graham. senator harono. >> i got back in the nick of time. i thank you for your service, of course. i join my colleagues in saying we need to get rid of sequestration because it's done so many damage to readiness and other aspects of the military. i'm with my colleagues who are going to commit ourselves to getting rid of sequestration. i have a question for general amos. regarding the commissaries because the commissaries, that is a -- something that our service people understand. their families go to the commissaries. they know what the price differentials are. general amos, you said we should force deca to be more efficient rather than raising prices so the differential becomes so much less. i'm completely in agreement with you. does that mean that you know of

examples or perhaps any of the other chiefs, do you have examples of where commissaries need to find efficiencies? what is inefficient that they're doing that they should just address right away in your view? >> senator, first of all, you've got -- you're absolutely correct on what our families are saying. the commissary issue itself is radioactive. again, our efforts never, ever even suggested closing commissaries. that was never on the table and it's still not today for us. but we've already talked about some of the efficiencies. admiral winnefeld talked about that. my sense -- >> are you talking about the generic drug? >> yes. >> i completely agree with on you that. i do not understand why we don't allow generic drugs to be sold in the commissaries. >> it's not just drugs. it's generics across the board. i used drug example because i could compare it to the exchange

which doesn't sell food but similar stories across -- >> thank you for that clarification. so that's a change that should occur. you're saying that you can't do it on your own. that it would require some change in the law? >> that's our understanding. and we'd like to see it happen. i can give you the example -- you know, i went out -- because my knees hurt. i use ibuprofen. i went out in town to a chain store. >> yes. >> $8.99. commissary sells it for $7.98. pretty good deal. but the chain store sells a generic for $4.99 and the commissary sells it for $2.49. there are substantial savings we could put right back in our people's pockets that would offset a portion of any subsidy. >> i agree with you. that sounds like low hanging fruit we ought to pick immediately if not sooner. general amos, do you have any others where you can see efficiencies by our commissaries? >> senator, i don't have

specific other areas but i will just say this across the board. years ago our exchanges, marine corps exchange, and i think it was that way in the other services as well, received what they called appropriated funds. in other words, they were subsidized so they weren't forced into making good business decisions. a little like senator graham just talking about, being a good steward of your money. that's not the case here. this is a subsidized institution. and i think it's time to -- i think it's time to change that. i think it's time to force them to go back and do things economically. now, economically, in my mind, doesn't equal taking the 30% savings away from our families. that's not what i'm saying. i'm saying, figure it out. and we can't sit at a hearing and understand all the -- all that that means, but i'm

confident that they can, the same way that our marine corps exchange did years ago. you can go to the marine corps exchange today and you still get a pretty good bargain. >> i agree with you. because in earlier hearings, the savings -- price differential would go down to 10% instead of 30%. that sounded like that was going to be the result but now you're saying, no, there should be some other avenues before they start raising those prices. so, i completely agree with you. i hope we're all on the same page on that pap that. >> ma'am, one of the things i mentioned in my opening statement we exempted commissary from 20% staff cuts we're all taking. we did that to help with the first year's $200 million. i'm not even suggesting they can make 20%. they have to run their enterprise. distribution network and they have stores they have to man, but we think they ought to look there, certainly, as one of the efficiencies you talked about. >> general dempsey, you said that for you to come up with the

kind of suggested savings and personnel costs, it was a one-year process. and it included most senior officers and enlisted leaders and select midgrade service members. that says to me that the vast majority of our service members are not aware of your suggestions. maybe you are doing something to get the word out because i think it's really important to educate our service members, explain to them that the cuts that are being made are not mainly coming on their backs. because it begins to feel like that if their housing allowance is not what it is, or that the commissary prices are going up, or that their pay is slowing down. i think it's going to be very important going forward knowing these cuts represent just a smaller percentage of what personnel costs actually represents, 30%, versus these cuts, 10%. i think it's important to get

the word out to the service members, because believe me f that doesn't happen successfully, i do think we're going to start hearing from our constituents. pretty soon it's going to be hard for us to support these cuts. so, can you tell me what you all are doing to get the word out so we know we're all in the same boat here? >> well, we've -- all of us and those behind us and those at every echelon of command are engaging our population on this very subject. whenever i travel, and i travel quite extensively, i'll always hold a town hall meeting. this is always a topic of conversation. i offer the chiefs the opportunity to elaborate, if you'd like. >> senator, chief mass sergeant cody and i have been visiting air force bases all over the world. like the chairman, we hold large audiences and forums everywhere we go. we talk about this subject every time. we take questions about it. we answer concerns. we make sure they understand what the proposals are and what they are not.

our force is actually aware of what's going on. i don't think you'll find any individual who says he likes the idea of anybody slowing cost growth if it benefits their family but they also would tell you they would like to have the best tools in the world. they would really like to be trained better than anybody else. they take great pride of being the best in the world at what they do. if they can't do that, they will find other employment. >> that's reassuring. thank you. i believe my time is up. >> thank you, senator hirano. senator nelson. >> thank you, chairman. general dempsey, some have suggested instead of changes in military compensation that we should cut the civilian workforce. and some estimates are that you'd need to cut 100,000 in the civilian workforce. do you believe that cuts of those magnitude -- that

magnitude of civilian workforce is a feasible alternative? >> no, i don't, senator. i do think -- in fact, it's been our advice in these conversations with the department that the reductions in the size of the in strength of the combat power of the nation should be matched by commensurate reduction in the overhead of the department and includes out into what we call the fourth estate, you know, the defense agencies. and by the way, general secretary hagel has directed a 20% reduction across the board. so, but i think the kind of -- that would devalue the contribution of the civilians who are -- who are our wingmen and fox hole buddies and swim buddies in this enterprise. >> mr. putin continues to be

very aggressive. and whether it's uniformed personnel on the border of ukraine or whether it is the nonuniform people that are proxies that are stirring up things inside, he's now moved on odessa. can you share publicly what are the plans -- let me rephrase that. what can you share publicly are the plans of the united states armed forces as well as nato with regard to this aggressive action by russia? >> well, what i can say publicly, senator, is that the united states has three instruments of national power -- economic, diplomatic and military. they're all being applied to

this they're all being applied to the challenge with respect to russia. the military instrument at this point with regard to the ukrainians is support in terms of nonlethal assistance, intelligence-sharing at some level, and the military instrument is principally involved in reassuring our nature row allies by the deployment of additional resources the deployment of planners, the conduct of exercises to assure our nato allies that we will live up to our article 5 responsibilities under nato. >> increase in ship presence,

deployme deployment. as it relates to poland. >> thank you very much, sir. >> thank you very much, senator nelson. senator sessions. >> thank you, and all of you for your service. you have been given a thankless task. you have led us magnificently in combat, all of you have, and i know how many hours you work and when you think of how much you should pay a person in the military, often they forget there's no overtime. there are weekends and full deployments of months at a time often, and dangerous areas, and we're asking them to undergo, and i do believe there's a bond that the american people must have with those we send into dangerous places and we ask them to leave their families for an extended period of time. it can't be broke. i'll tell you, i think that's fundamental. i'm on the budget committee, and

i had to leave to go to the budget committee where i'm a ranking member of the budget committee, so i'm seeing this from both sides. i know how much of a danger this nation faces from debt. >> last year we spent $221 billion on interest. he projects ten years from today we'll pay $875 billion in interest in one year. that's a $650 billion increase in the amount we pay for interest over this period of time. it's going to threaten your education budget. i guess, first of all, i think

this department is taking this seriously, and i respect you for it. i believe that you're 1kd to do more than anybody else is being asked. you think the numbers will show that, but it is a huge department. we agreed to a certain budget on spending. murray earlier this year, and i'm hopeful that would be sufficient. with the help from that act. maybe not. we'll just have to hear from you. that really worries me. it keeps me up at night. if i was the -- i would also say we increase any spending for the

defense democratic, we have to increase non-defense spending in equal amounts. definitely that will crush the budget that he signed. he is the commander in chief. you think he would be here more forcefully advocating priorities that need to be set. members of the defense department, and there's questions civilian personnel, i believe, senator nelson mentioned that earlier. one estimate i heard that i think is accurate is that after 9/11 we added about 100,000 of civilian personnel. that would presumably to support increase in acting duty forces, which was considerable, but as

those active duty forces return to a level which i understand your plan accounts for -- returns to a level of what it was in 2011, why shouldn't we be able to reduce civilian personnel by 100,000? >> well, senator, there are three groups of individuals all of whom make up the total force. this is, of course, the service men and women, civilian department employees and contractors, and contractors will take a first significant cut followed by the d.o.d. civilians and uniform military. this has to all be done -- >> on a percentage basis, the personnel, won't you be reducing military personnel in a bigger percentage than civilian, or is that -- >> that would probably vary slightly -- not slightly. it will probably vary service by service. you do know, senator, that 90% of the people we are talking about are not in washington d.c.

they're out in shipyards and depots and training areas. i mean, they're doing important work. >> if you want to talk about that aspect the way they built -- >> let me just say, i completely respect the contribution. they'll deploy, and they go many of them from alabama were in iraq and afghanistan as assisting the military in their mission. however, it may be a bit hard personnel-wise to reduce awe civilian employee as compared to a military employee. as for me, i don't think that should be. i think we should make sure that civilian personnel face the same evaluations that uniform people do. >> i agree with that, senator. i want to talk about the civilian aspect of this.

>> we're reducing it as military, sl, contractors. military is much easier because the space has a face, and it's very ease where i to understand. we also have the budget on a contractor. cut the budget on our civilians. that's what controls civilians and the number of dollars allocated. we've come down 20,000 civilians so far in the army, and that will be eyaul to what our military numbers will come down as we continue to look at out year budgets. we'll also look very hard at reducing our contract support to our sustained maintenance and try to do more with uniform personnel, and we're looking at that very carefully. we're also looking at contracts we have that were shvs related that can be done by others, but all of these things are -- if there's a contract and

installation, then i have to use military manpower, and it's one or the other. if i cut the contracts from cutting grass and doing other things, then i have to have military cut the grass. i have to have them working in dining facilities and doing these other things that contractors have been doing. >> the army -- >> it's all things that have to get done. we can cut contractors xshgs we will. if we do, the military is going to have to take over some of those responsibilities. so it's just stuff that has to be done. again, i would just throw out there right now we're not reducing any installations because there is no brack. we're reducing 150,000 men, and we have to sustain these installations, and it's costing us a lot of money, and so we have to hire contractors. we have to hire civilians. if we can't do that, we're going to have to use military manpower to do it. that's the bottom line.

>> thank you. i'll submit some questions. my impression is that you have a larger percent of reduction of uniform personnel than we are in -- >> you give us that service by service for the record. >> thank you, mr. chairman. thank you all for your service. thank you for testifying today before -- i'm very grateful. obviously these are very tough times, and we are all concerned about how we manage our operation to the best of our abilities, and as the chair of the personnel subcommittee, i'm very worried about trade-offs we're making in terms of military families. >> can you tell us mauer about the savings that --

>> you know, i would like to take that one for the record as well, but i will give you one example because it would cross all services. let me take one that's not at all with controversial, the a-10. if we -- if we retire the a-10, it's $3.5 billion in savings to the defense plan. if we don't, we have to find $3.5 billion someplace else. but, i mean, each service has an example of something like that. >> thank you, and i look forward to your full response on record. the other thing i care deeply about, and general dempsey we've talked about it, and that's the men and women who serve in our military and their families, and the sacrifices they make to do

that. one of the sacrifices i don't think they should have to make is not being able to afford treatment for their kids who have autism or other developmental disabilities. i think it's so unfair that just because you will sacrifice everything for our nation and serve for our nation that your kid, your child who needs these important therapies to learn, to grow, and to develop are denied it because dwoent want to make them a priority. i think that's a mistake. i think it's morally wrong. we're finding all the programs specifically for autism. i haven't seen what that's going to look like yet, but i want to know are there going to be barriers to care for children with disabilities and particularly autism.

i believe we're on track. if want, i want to know about it because this is something that's terribly important to us. sflu don't want federal employees' kids having better abbing stoes medical care than the military kids have. it's a painful thing to make sure your child gets the education they need, and a lot of the therapies are developmental. it actually affects how their brains form and whether they can reach the level of capacity that they can. >> osd health affairs tackled that, and i want to make absolutely certain. >> thank you. similarly, as i meet with the troops around my state, both national guard, active duty, and reserve, the stress on mental health access is very high. access to mental health services to treat post traumatic stress disorder and traumatic brain swrr is still quite intense.

my question is as we've had a number of families coming home under the current care requirements, there are co-pays for these services. do you believe that those co-pays will cause barriers to care specifically for the mental health of our troops and their families? and i have begun to -- i have a hearing to develop the increase in suicide rates, 11 suicides a day in our military, but there's also an increase in suicide of family members because of multiple deployments, because of ptsd, of service members coming home. that raises serious concern to me. i would like to see if he see barriers to care here. >> if i could, i think we're doing a good job of increasing behavior health for active forces and try to get more access to -- my concern i think is where you're headed with this, and i agree with you is for family members because,

frankly, it is even under tri-care, it is difficult to always get care covered for behavioral health under tri-care for our family members. sometimes it's accepted. sometimes it's not. the behavior health care needs to deal with that because of the affect the war has had on our families and specifically our children. i know in specific cases where a lot of out of pocket expenses is being spent because it's not covered or there's a co-pay because they don't recognize certain treatments or they don't recognize, so in my mind this is something we have to absolutely get after. >> i would like your commitment on this. my last set of questions are for any who wants to take it, but what is the department's plan for the increased demands of the medical treatment facilities? does dod plan to hire more

medical providers to help patients at the mts, and what will the active reserve who did not live near the medical treatment facilities? are they going to be penalized for not being able to use the mts? >> well, i will give you a general answer. the defense health agency, dr. woodson. i will tell you that our recommendation on our support for forming a single tri-care system as opposed multiple systems that are not interoperatable with each other is to try to encourage use of ntf's and then in service care or in network care and then only out of network care as a last resort. that's our role here. we wanted to make sure that while we're doing that, while we're incentiveizing use of ntf's, there might be another

process that's trying to reduce the level of care at an ntf, and we're deeply involved in that process right now. >> thank you all. >> thank you very much, sir. general, thank you. thank you for all you do for our nation, for our troops and their families, and we will now move to our second panel. thank you. >> okay. >> what time do we have? >> a little short of members. it's 12:05. [inaudible conversations]

our so-called outside witnesses. strange word for folks who have been inside just about every important military operation or thinking that we've done in the last two s. decades.oard the chairman of the board of the military officers association retired army general gordon sullivan, president and chief executive officer of the association of the united states army. retired vice admiral john, association of the united states navy. retired air force general craig mckinley, president of the air force association. gentlemen, we thank you for your past svrs. we thank you for your current service to our service members that are retired and their

families. i believe that the order that we are calling on you is to first call on general tellelli. thank you for being here, and please give us your statement. >> chairman levin, ranking member. >> i'm sorry. i make -- i apologize for that. i should know better. please carry on. >> members of the senate armed services committee thank you for the opportunity to discuss the 2015 year budget affecting the entire military community. on behalf the over 380,000 members and survivors and retirees of the retired officers association of america, i have the honor and privilege of being here today to represent them. at the heart of the pentagon's budget challenges is the

devastating affect the sequestration that we've heard that several times today in the budget control act of 2011. while debt reduction is a national property, we believe that such a disproportionate share of this burden must not be imposed on the defense department and especially on the backs of the military members and their families. mole believes that continued sequestration cuts for 2016 and beyond will place national security at risk when we strongly urge congress to eliminate sequestration and fund our military to levels that enable all components of the armed forces to adequately be manned, trained, equipped and compensated. and it's the sustainment of the top quality of our force.

the past 12 years of unprecedented demands and sacrifices highlight how radically different conditions are from civilian life. these are the things that many budget analysts and think tanks don't understand. the time the all -- it's been due to military cutbacks and compensation packages that gave insufficient weight to the extraordinary demands and sacrifices inherent in the service career. they state the personnel costs have risen above 40% more than growth in the private sector since 2000 and are squeezing out dollars for training and equipment. we believe that pitting pay and benefits against greatness is a

false choice, and it is important to put the growth since 2000 in context. the all volunteer force is a key to readiness. have costs risen since 2000? yes, they certainly have. using 2000 as a base line without reflecting that historical context is misleading as it implies that it was an appropriate benchmark for estimating what reasonable personnel and health care spending should be. nothing could be further from the truth. what caused personnel costs to grow higher than in the private sector? by the late 1990s retention was on the ropes because years of budget cutbacks had depressed military pay to where there was a 13.5% pay gap. we cut rye tirmt value by 25% for post-1986 entrants.

we had military families paying 18% to 20% out-of-pocket for housing costs, and we moved beneficiaries over 65 out of military health care facilities. this committee worked diligently, and i thank them for that over the next decade there was pay comparability, retirement cuts, zero out housing costs and restore promised health care coverage for older retirees. we thank you and all the members thank you. since 2010 congress has already implemented changes to slow the growth. in fact, the growth has slowed. these have included significant health care fee changes and stress reductions, pay raises that have either mirrored the private sector or in the case of this year have been capped below the private sector. the fact is that between 2000

and 2011 personnel and health care costs experience an average 7.8% rate of growth, but that cost was essential to keep the previous commitments and avoid retention and reenlistment issues. and from breaking the volunteer force. however, between 2011 and 2014 personnel cost growth has not just slowed, but it has declined an average of 1.9% a year according to omb historical tables. the growth has slowed. in fact, it's negative at this point. when you look at the d.o.d. military personnel costs, which include military personnel and defense health programs, these costs average 30% of the overall d.o.d. budget. between 2014 and 2015 pay caps

have promised housing reductions, the planned reductions in the comisary savings and a new health care consolidation and fees, an e-5 family of four. that's a sergeant with ten years of service looking at the pay tables would lose $5,000 in purchasing power. in 2003 a captain ar army or marine corps captain, not -- a family of four would experience a loss of $6,000. that's a large percentage of their overall pay. contrary to when i came into the military, we have a married force today. it is not a single force. the budget proposals would be a major step backwards towards repeating some of the mistakes and measures that led the retention and now readiness

problems in the past and it needed the improvement that is congress put in place since 2000. again set us up in the future for another parody issue that we'll have to be resolved. these piecemeal reducks are doubly -- we will be offering even more proposals next year. america will remain the greatest power only if it continues to fill its reciprocal obligations, though the only weapon system that has never let our country down are extraordinary dedicated top quality volunteer men and women who served our ask the and the families who stand behind them. now that we are drawing down from afghanistan, we cannot place these volunteer members of our armed forces in our rearview mirror. they listen. they know what's going on.

thu every they do not agree with these proposals. i look forward to your questions. i thank you for your service to our country, and i thank you for all ewe done for our men and women who serve. thank you, sir. >> thank you so much, general. general sullivan. >> mr. chairman, ranking member inhoff, honorable members of the committee, before i begin my formal remarks, i want to thank each of you for your personal support. certainly the three of you that are in front of me right now who were here when i was battling times such as this back in the early 1990s. we appreciate your support now. i want to note during that time for some reason we seem to have more stability primarily due to the appropriations and authorization which reflected

regular order, and i always felt as if you had an open ear for me when i came over to talk and give you a problem, and sometimes you at least believe me and gave me more money if you had it, and if you could get it, but you committed us to navigate difficult terrain without a lot of constraints, such as the chiefs have now. you set limits on funding and manpower and let us strike the balance as we saw fit and gave us the latitude to act. for that i thank you. senator levin, i probably won't see you in this kind of a role again. i want to thank you publicly for everything that you have done for the services and everything you have done for our country. >> thank you so much, general.

>> thanks for the opportunity. the association of the united states army. this committee has, as i said, provided extraordinary support on our active duty guard and reserve, veterans of the army and the other services, their families and survivors. and your efforts are very positive and have bakted the life -- the lives of the entire uniform services community. we are keenly aware that the congress and the administration have had to make difficult choices while bolstering a weak economy and addressing budget deficits. while we recognize that debt reduction is -- ausa believes that a disproportionate share of this burden has fallen the department of defense requiring that 50% of mandatory budget cuts come from defense even though the defense budget is only 17% of the federal budget

is in my view misguide and misdirected. how can such a system be permitted to continue the result is the defense officials, most of the uniform people uncertain times are demanding agility and adaptability by these defense leaders here in washington as well as on the frontlines wherever they may be. on after all, look at what is happening now in eastern europe. yet, the funding policies in place that are guiding them are so constraining and damaging to our long-term national security that continuing this formula for

the better part of the next decade defies logic. the usa has urged congress and our elected and appointed officials to eliminate sequestration or modify these unrealistic rigid budget control measures in ways which would enable responsible and accountable leaders to exercise their responsibilities in a manner that is consistent with the challenges we all face. now, providing for the common defense in our government to tell you what i, but i need to say it for the record, i guess, is a shared responsibility among the american people. the congress, the president, those of us in uniform, and the citizens of the united states. sometimes i often get the feeling that shared responsibility is a concept which has disappeared somewhere.

shared responsibility and accountability is what we're talking about here, and each one of these people who sat here is actable to the american people, and they are being asked to make tradeoffs. the usa believes that the primary source of the budget challenges that face the department of defense is a devastating affect of sequestration and the provisions of the budget control act of 2011. the budget act of 2014 is one of the chiefs pointed out, i think it was chief 6 staff general -- when he said he cool would i back readiness because of think remain in effect and will exacerbate the situation that existed before the murray-ryan bill that you heard the general

saying he would have to -- he would see readiness of some of the those brought back, and it is adding a profoundly adverse affect of the defense of this nation, and it will do so well into the next decade. over the last two years sequestration has set america to reduce our national security. they're rapidly shrinking of military forces to unacceptable levels thereby creating unready forces. it's created unnecessary divisiveness within the armed forces as they struggle to meet

budget goals and juggle requirements around, active guard and reserve. we must enable all components of the armed forces to equipped the focus on the mission and not fighting over an arbitrarily depressed defense budget. one of the chiefs mentioned that there were a couple of them that developing three alternatives in a year is really destabilizing both within the pentagon and it ripples down to the field. the people at they know when the pentagon is coming up with different alternatives. >> when it comes to compensation

and benefits provided to all service members and families who make up the all volunteer force. sequestration affects the industrial base, and whether thereby -- whether everybody understands that that the industrial base today or the industrial base is much more sophisticated and diverse and some of the weapons cannot be made overnight. i believe the services are being forced into a posture or whether designed inadvertently, but if we become involved in any kind of a large scale operation we must turn inward to enhance ourselves. that's active guard and reserve and interestingly enough, it took the active army multiple

years to create the fourth brigade of 101st and the fourth brigade of other divisions. this stuff that it does not happen overnight. there is a great american myth that you can just ring the bell in the village green and everybody shows up and off we go. the world doesn't work quite like that anymore. we must rely on the force we have in being active guard reserve, and we need a balanced force. n now, i would note, interesting things were said this morning. general dempsey said if the budget control act kicks back in, it will cause unacceptable risk, unacceptable risk, he said. the chief of staff secretary cue

and their testimony last week said risk a number of times, and it's more than the signed mission in the -- this is a huge step, and i don't believe everybody is appreciating the implications when the chiefs of service and the chairman of the joint chiefs says unacceptable risk. we have to pay attention to these words. they mean something. they do not say these words lightly. not only a sequestration combined with being combined with a declining defense budget, having an adverse affect on military readiness, we're seeing an emergence of international doubt. you can see it on the covers of

the economist this week. can you see it in all of the national papers on whether the united states is a reliable ally and partner. credibility in this context was found in the perception of strength and national resolve to be responsive to not only commitmen commitments. adversaries are watching us a o also. >> we must maintain a viable all volunteer force. despite xeerd demands men and women in uniform still answer

the call. thanks in no small measure with the strong and consistent report of this committee. this is only now at the cost of ever increasing personal sacrifices. >> principal number one. we all know that. you know that and i know that. the most important element of national security is sustainment of the top quality career force backed by dedicated department event civilians. now, by the way, i serve with general tellelli for a number of years, and interestingly enough we did not collaborate on what i'm going to say now.

i acknowledge that the power of high-tech equipment and new equipment, but i am convinced after being in or around the army for 60 years that it is not equipment that wins wars. it is high quality men and women, our most adaptive weapons system, our most loyal and people who will never quit. it fulfills their training, their well being, and their education. our xeerdly dedicated top quality all volunteer force is critical, and you have consistently recognized the cost of sustaining this current

military career in senate packages far more acceptable and affordable than any alternative. in a matter of compensation, i want you to just -- i would say in passing, that we do support the military ausa does support the retirement modernization commitment. we do not want to see a return of recent era pay gaps. at this critical juncture, but it is imperative that it be available in some modernization. pay caps must not be pertinent. military pay comparability is important to the recruiting and retention of high quality soldiers and will become more important in the future. we're committed to military pay raises that match eci, but this year because of sequestration,

funds freed up by a slightly smaller pay increase is the price that had to be paid for soldiers who are train and ready. i do believe that cuts to colas must be reflective of decisions made each year based on the dynamics of the economy and the dynamics of -- within the department. i want to end my testimony as i began it. sequestration is patently unresponsive to the needs of this nation, which is part of the rapid changing world in which we can not predict the future. we never could predict the future. people a lot smarter than me have said that. not the least of whom was a former secretary of defense gates. i mean, countless people. we all know. it's a slow-moving -- it's

irresponsible. no one seems to be accountable. sometimes it's like -- people don't listen. the chiefs are saying the chairman of the joint chiefs of staff said unacceptable risk. b.a. and the department of energy, which are included in that particular budget line. the impact on our national security writ large must be considered. i urge you to pursue some kind of a modification of this

budget, which is being used. if we can get back to full order so that we can have a dialogue like we are having here today, decisions can be made -- appropriate decisions can be made based on the needs of our nation for our security and our national defense. >> thank you very much for your patience. essential we at ausa appreciate anything you can do to get rid of the burdensome sequestration. there has to be a better way. >> thank you so much, chairman sullivan. admiral. >> we're going to have to leave here until about 15 minutes to

go to -- what time is it now? about -- >> it's 25 minutes -- >> well, we all have to leave a few minutes before 1:00, so we want to leave some time for questions, so if you can adjust accordingly, that would be great. we don't want to cut you short. >> i'll endeavor to do that. thank you very much. ranking member inhoff, members of the committee, it's always a pleasure to be with you, and thank you for your service to our country and the things you've done for our men and women in the military. i will cut through part of this just a big -- to highlight a few things, the first is that we lafkly heard a lot of people say today that cuts will not harm the quality of life for our navy families, but i would say that all aspects of compensation, not just pay, are part of what they look at as their pay, and it's going to definitely impact decisions they make when they're out there trying to live their lives. especially things like vah, that

are reductions in what they take home each month to be able to pay their bills. we basically are the voice of sailors at ausn, and we did a recent study basically asking some people to tell us what they thought about these impending kinds of changes that d.o.d. has, and 90% of them did not like what's being proposed. a little bit contrary to what i think the chiefs are hearing when they go throughout, and by the way, we don't envy the chiefs the position they're in to try to make this balance if they're trying to make today. it's just that we think there's a bigger impact to our force than they are seeing when they go out and hold their all hands calls. another one said i think that

the d.o.d. is breaking faith with what we signed up for. things are going backwards. you may have seen today that military.com had a survey that said the same thing ours said. 90% of those surveyed -- they surveyed 8,400 service people -- do not like the proposed cuts. what the chiefs are hearing when they go talk, maybe it's not what the real thing that's going on. i would tell you also that the sequestration as general sullivan says makes big impacts to our readiness, to our force structure, and to our training, but it also has an impact on navy families because as cno said, we are now forced in the longer cruises and we retain people, and we don't retain just that service person. we retain the family, and the families will vote with their feet. i believe that the committee doesn't need to be reminded of

that fact. i will cut to the chase so that my colleague to my left has a couple of moments to spend, but i would tell you that for the last 30 years the cost of personnel in the military has remained constant at 30%, 35%, 33%. just the pb is 33 pefrz, and to say these numbers are -- you've got to be including some things that military compensation doesn't include, like the civilians or something else that's in those numbers that you heard today. so in summary, we think that there's -- that really the biggest factor today that's keeping people in the military is the poor jobs market on the outside. you couple these kinds of changes with that, we are actually going to see people walking with their feet despite what the chiefs are hearing.

with that, thank you very much for your attention, and i look forward to -- >> thank you so much, admiral. general mckinley. >> thank you, chairman levin, and i agree with my colleagues to thank you for your great service to our nation. it's been nothing short of exceptional. thank you. >> thank you. >> ranking member and members of the committee, thank you for staying so late with us today. it's been a long day, but a very educational day. i'll try to hit the wave tops because i know we have some questions from you, and we would like to hear those. on behalf of the air force association's 100,000 members and our chairman george mulner, i would like to thank you and the entire committee of support for our active duty, guard, civilian, retirees, and veterans of the ash force. their families and survivors and for the significant concern and effort you have put forth for our national security. afa is grateful for your unwavering commitment to the men and women who defend our nation and appreciate the priority congress has given personnel

issues in the past decade. we also acknowledge the increasingly difficult choices before our nation. it's an honor to be here with you and my fellow colleagues. i know we are all committed to the defense have this nation, to those who serve and have serve and their supporting loved ones. our airmen and retirees dwefsh e deserve every dollar they earn. however, as you have heard today, personnel compensation costs continue to climb at unsustainable rates and for the air force we have a much smaller force. if not addressed, they will consume much of our combat training and modernization spending over the next few decades. we along with the other associations believe that sequestration provision of the budget control act of 2011 is destroying military readiness and endangering national security. it has normalized a dangerously low level of defense spending constrained defense decision makers and the new normal has created an unhealthy competition for resources within d.o.d.'s

base budget. i'll cut to the chase. i believe we can never pay a military member enough for his or her willingness to risk their life for this nation. however, we can insure military members are competitively compensated to enable us to retain the all volunteer force. thanks to increases in compensation and benefits since 2001, our military members are compensated equivalently with their civilian counterparts when all benefits are included. to conclude, with last we're's grounding of 13 combat squadrons, lost opportunities for real world training and numerous course cancellations, to include our premier red flag exercise, our air force is at a crossroads. sending airmen out to any contingency without the best training and equipment, we can give them could imperil the mission and jeopardize lives. this is unacceptable. our members, stake holders and indeed our airmen are committed

to keeping faith with the american people by providing them with an air force that is capable, ready, and resourced appropriately for the future. thanks again for inviting us over here today. i look forward to your questions. >> thank you so much, general. let's just do five minutes here -- four minutes. okay. i take that suggestion. make sure we all have a chance to do this before 1:00. >> you all right? we're back to five now. percentages of the numbers are not what you think are necessarily on target, and what you would do is welcome any or all of you on that subject or any other subject, but on that subject for the record just for

the record that would be helpful. you have heard me and others say that it's an abominable way to budget, and it was never intended take effect. we're going to be offering alternatives to sequestration. we will be talking about this new for a long time. working on alternatives for a long time. many tax loophole that is i believe and others believe should be closed. we also have to do something in the entitlement area as well. all of the burdens so far of reductions have fallen on discretionary accounts -- fallen d