my question is about asia. what about the role of japan especially in terms of self-defense? right now it's government is getting hard. buddies think about that? . .

good morning everybody. the committee meets this morning to review department of defense proposals relative to the growth of personnel costs. we welcome the joint chiefs of staff to testify on these

proposals to explain why they support them, what their impact is on the force and their impact on other areas of the defense budget. our witnesses on the first panel are general martin dempsey, chairman of the joint chiefs of staff, vice chairman of the joint chiefs of staff, general ray chiefs of staff of the army, admiral jonathan -- chief of naval operations, general mark welsh, chief of staff of the air force, general james amos commodore of the marine corps and also chief of the national guard bureau. we will have a second panel consistenting of nongovernment witnesses that i will introduce later. it's not often that all the members of the joint chiefs of staff testify before us in a single hearing. so it is not often that we have the opportunity to thank them as

one group. for the contributions that they and those that they lead make to the well-being of our nation. thank you, gentlemen. thank you for the service of you and yours. the distinguished nature of this panel reflects the importance of the questions before our committee this year. when we mark up the national defense authorization act for fiscal year 2015 later this month, the decisions that we make on compensation, for structure, strength, readiness and modernization will have a far reaching impact on the men and women of our armed forces and on the future of our military and our country. the department's 2015 budget request comes at a time of tremendous challenge and great uncertainty for the nation and for the military. the department of defense faces a highly constrained fiscal environment in 2015. the $496 billion top line for

the department remains the same from the funding levels in fiscal years 2013 and '14 and remains more than $30 billion below the funding provided to the department in fiscal years 2010, '11 and '12. sequestration has already taken its toll on training, readiness and modernization. and sequestration threatens to return full blast next fiscal year unless, hopefully, we act to mitigate its impact before then. these fiscal constraints have led the department to propose a number of painful measures to reduce future expenditures. the budget before us proposes significantly lower end strants for the ground forces through 2014 including a reduction of

50,000, more than had been previously planned in active duty, army and strength with smaller percentage reductions in the guard and reserve as well as a reduction of over 16,000 in active duty air force and strength this year alone. the budget calls for retiring the air force's a-10 and u-2 aircraft, enactivating half of the navy's cruiser fleet, reducing the size of the army's helicopter fleet by 25% and terminating the ground combat vehicle program. those are among other cuts. if the budget caps in law remain in effect in fiscal year 2016 and beyond, the department has informed us that among other cuts it would reduce -- it would request further reductions in end strength, the retirement of the entire kc-10 tanker fleet

and global hawk 40 fleet, reduce purchases of joint strike fighters and unmanned aerial vehicles, inactivation of additional ships and the elimination of an aircraft carrier and a carrier air wing. the legislative proposals we are considering this year include a number of measures relative to military pay and benefits, and that's what we'll be discussing here this morning. these include setting a pay raise for service members below the rate of inflation, freezing pay for general and flag officers, limiting increases in the housing allowance below the rate of inflation, reducing the subsidy to commissaries and making changes to tricare that would result inn in would result inn i increased fe and cost shares for most nonactive duty beneficiaries.

in all these pay and benefit proposals would result in savings to the department of over $2 billion in fiscal year '15 and more than $31 billion over the future years of the defense program. general dempsey and his senior enlisted advisor, sergeant major brian bataglia, recently wrote to this committee that "these charges will -- to address the growing imbalance in our accounts, allow us to invest in combat readiness and force modernization and still enable us to recruit and retain america's best." the letter went on that delaying adjustments to military compensation will cause additional disproportionate cuts to force structure readiness and modernization." now, we surely must do all that we can to minimize the adverse

effect of the personnel proposals, but as long as the statutory and budget caps remain in place, we do not have the option of simply rejecting the compensation proposals. under the statutory budget caps we would then have to make alternative cuts. i look forward, as we all do, to the testimony of our witnesses. again, we thank you all. and those with who you serve for your great service to our country. senator. >> thank you, mr. chairman. over the last decade our nation's depended upon the courageous service and sacrifice of our military members and their families for security. in return we have steadily increased their pay in benefits and rightly show. we should be proud of this. it's exactly what we should do for those who risk their lives to keep us safe. however, misguided fiscal priorities of the obama administration and the runaway entitlement spending have forced

massive cuts to national security spending such as we've never seen before. these cuts have driven our military into a readiness crisis, squadrons have been grounded, ships have been tied to piers, training rotations for ground forces have been canceled while much-needed modernization programs have been delayed or canceled. we all know this. retired navy admiral john harvey recently said we're sending the wrong signal to the force that is serving today, the one that fought two wars in the last decade and the force we are dependent upon to re-enlist tomorrow. we're telling them they just cost us too much. that they constitute a ticking time bomb and that their sacrifice is eating us alive. we are telling them that we are looking for a way out of fulfilling our commitments to them. this is not the right signal to send those who volunteered to serve in time of war. i think the chairman did a good

job of listing the systems we have that we're no longer going to be able to keep and the effects of these cuts are undermining the military's ability to prep the nation, our military leaders have painted a stark and troubling picture in this reality because of misguided fiscal priorities we are now being forced to make false choices between paying our troops and their families what they deserve and giving them the training and capabilities required to accomplish their mission and return home safely to their loved ones. this is an irresponsible and reckless choice. if we spent what i think is necessary on national security, we wouldn't be in the mess that we're in today. so i'm looking forward to hearing from our witnesses. thank you, mr. chairman. >> thank you very much, senator. general dempsey, welcome. >> chairman, thank you. ranking member and other distinguished members of the panel. you're right, chairman, we don't often appear as a group before you. and in particular with our senior enlisted leaders right

behind us. and what i'd like to do at the beginning here is since it's unlikely we will see you as a group in your role as chairman between now and the end of the year -- at least i hope not, we would like to thank you very much for your steadfast and passionate support of america's armed forces, the men and women who serve and their families. so thank you. >> thank you very much, general. >> yes, sir. i want to thank you all for the opportunity to discuss military pay and compensation, but as you mention this is only one part of a much broader effort to bundle reforms in order to keep ourselves in balance. this particular issue, pay and compensation and health care, is important and deeply personal issue for our service members and their families. as i've testified in the past, we're working to make sure that the joint force is in the right balance to preserve military options for the nation in the face of a changing security environment and a declining budget. we've been tasked to reduce the

defense budget by up to $1 trillion over ten years while upholding our sacred obligation to properly train, equip and prepare the force. this requires carefully allocating our resources across the accounts, restoring the readiness we've already lost and continuing to make responsible investments in our nation's defense. as i've testified before this requires certainty, it requires time and it requires flexibility. while we have a degree of certainty in our budget for the next two years, really for this year, we still don't have a predictable funding stream nor the flexibility and time we need to reset the force for the challenges ahead. we can't do this alone. our recommendations have lacked congressional support. notably our request to reduce base infrastructure and retire weapons systems that we no longer need and cannot afford. in the meantime we are continuing to hemorrhage readiness and cutting further into modernization. risk to the performance of our mission and risk to those who

serve continues to grow. as one part of a broader institutional reform, the joint chiefs, our senior enlisted leaders and select mid grade level leaders have examined pay and compensation options for more than a year. we support the three department wide principles guiding our proposals to rebalance military compensation. first, we're not advocating direct cuts to troops pay. rather, this package slows the growth of basic pay and housing allowances while reducing commissary subsidies and modernizing our health care system. second, we will ensure that our compensation package allows us to continue to attract and retain the quality people we need. if we step up on this path skprks we'll watch the way the force reacts, and if it reacts, we'll be back to you with recommendations on how to adjust. but we have to take that step. and third, the savings will be reinvested into readiness and into maryland modernization.

in all cases we'll continue to prioritize our efforts that focus on warriors and on the mental health challenges facing our force. we have not requested any changes to military retirement, as you know. we are awaiting recommendations for the military -- from the military compensation and retirement modernization commission expected in february of 2015. but to be clear and to restate it, we do support grandfathering any future changes to the retirement program. we're seeking $31 billion in savings in pay compensation and health care over the future year defense program. if we don't get it, we'll have to take $31 billion out of readiness, modernization and force structure over that same period. delaying the decision until next year will likely cause a two-year delay in implementation which would force us to restore approximately $18 billion in lost savings. in short, we have submitted a balanced package that meets

budgetary limits, enables us to fulfill the current defense strategy and allows us to recruit and retain the exceptional talent that we need. our people are our greatest strength and they do deserve the best support we can provide. as leaders we must also exercise proper stew ardship over the resources entrusted to the department. we have enough information to make these changes now. we remain committed to partnering with congress to make these and other difficult choices facing us. thank you. >> thank you very much, general. admiral. >> chairman levin, ranking member inhofe, thank you also for the opportunity to appear today. i would like to add some additional context to chairman dempsey's introduction. i think it's important to recall that in the 1990s military compensation had fallen to a deeply unsatisfactory level relative to the rest of the working population in america. with the help of the congress we took action to close that gap,

which involved raising the trajectory of our compensation well above inflation. those increases worked. in 2001 u.s. median annual household income equated to the direct pay of an average e-7. today, it's roughly the direct pay of the average e-5 and trending towards the average e-4. now surpasses the u.s. median annual household income about eight to ten years earlier in his or her career than before and also receives health care, family services, leave, educational benefits, that well surpass the civilian sector along with the potential for a generous retirement. in the process, the c-5 has moved from being in the 50th percentile of civilians with comparable education and experience in 2000 to be around the 90th percentile today. i don't think any of us at this table would say our people are overpaid. and we'd love to be able to maintain that level of compensation.

but if our force is to be modernized and kept ready to fight we're going to have to place compensation on a more sustainable trajectory. we don't want to return to the 1990s. we're only asking for gradual adjustments to ensure we can recruit and retain the best our nation has to offer, while doing everything else that's required to fulfill our obligations to protect the united states within the means we're given. these changes would only account for about 10% of our planned cuts within an area that accounts for fully one-third of our budget. the other 90% of our cuts are going to come out of the other two-thirds of our budget. we carefully thought through every one of these recommendations over the course of many meetings. even though they're fair and they're gradual there's still some disinformation out there. for example, some say we're cutting pay. that's not true. as chairman dempsey said, we

quickly eliminated any proposal such as reducing the overseas c.o.l.a. that would do that. others say we're trying to renege on promised health care benefits. again not true. we're actually trying to simplify a we buildering system while incentivizing our people to help us contain costs. we will continue to provide the same high quality health care to our troops and our retirees, and it will continue to be free to those on active duty. still others say a 1% pay raise isn't fair when the employment cost index is going up at about 1.8%. but i would point out that our dod civilians have just been through three years of no pay increase, and they just received 1% this year. finally, some are also suggesting that we want to close all statewide commissaries. we've never considered that in any meeting that i've ever attended. in fact we believe our commissaries are important part

of the benefits we offer our families. but we want those stores to have to work as hard as our unsubsidized exchanges in providing a good deal for our people. when think deca can find at least the first year's savings through efficiencies, not price increases, especially since we exempted them from the 20% staff cuts that everyone else is taking. congress should also repeal legislation apparently lobbied for by the food industry that prohibits the sale of generics at our commissaries which takes money right out of our people's pockets. it really does. i recently bought a generic bottle of ibuprofen at a post exchange, which is not prohibited from carrying generics at a 73% savings over the brand name that the commissary is required to carry. right next door. efficiencies in generics could easily offset the savings we're asking for in 2015 from our commissaries.

savings that will enhance the combat readiness of our warriors that they count on us to provide. now we weren't confirmed for these positions by the senate to only make the easy choices. we have to make the hard ones, too. choices that have only gotten harder with recent budget cuts. and we need your support. my service colleagues will now describe what will happen if we don't receive that support, and we have to ask our young men and women to fight with $31 billion worth of smaller, less modern, less ready force. thank you again for the opportunity to speak today. and i look forward to hearing your views, and your questions. thank you. >> admiral, thank you so much. general odierno. >> thank you, chairman levin, ranking member inhofe and all the other committee members. it's always a pleasure to be here to discuss these important issues. i've had the privilege to lead our men and women of all services in both peace and war. i've witnessed firsthand the service, dedication and sacrifice. the all-volunteer army has performed phenomenally during

the longest conflicts in our nation's history. but it's imperative we discuss and understand the appropriate level of compensation. not only to recognize the sacrifice of our soldiers and their families, but to ensure we sustain the premiere, all-volunteer force. pay and compensation benefits must remain competitive in order for us to recruit and retain the very best for our army and the joint force. however, pay and compensation must be balanced along with end strength, readiness, and modernization of our force. thus it is necessary that we take a experiencive look at every aspect of our budget. i fully endorse these department of defense proposals that do not directly cut our soldiers' pay, but slows the rate of growth for many allowances that are simply unsustainable. additionally, it's essential that we gain a more efficiencies in our commissaries and our health care, specifically tricare.

i believe the proposals recognize the incredible service and sacrifice of our soldiers and their families, while allowing us to better balance future investments in readiness, modernization, and compensation. these are difficult but necessary decisions. taking care of soldiers is not just about providing them competitive pay and compensation benefits, it's also about having the right capacity in order to sustain reasonable personnel tempo, invest in the most modern equipment and maintain the highest levels of training readiness. if the army does not get the $12 billion in compensation savings we will have to look at a further reduction in end strength, lower overall readiness posture, and slow even further our current modernization programs. it is my opinion that if congress does not approve our compensation recommendations, that you must end sequestration

now, and increase our top line. we must keep in mind it's not a matter of if but when we will deemploy our joint force to defend this great nation. we have done in every decade since world war ii. it is incumbent on all of us to ensure our soldiers are highly trained, equipped, and organized. we must balance our resources effectively to do that. if we do not, our soldiers will bear the heavy burden of our miscalculations on the battlefield. i am proud to wear this uniform and represent all the soldiers of the united states army. their sacrifices have been unprecedented over the last 13 years. we must ensure we provide them with necessary resources for their success in the future. thank you, mr. chairman. >> thank you very much, general odierno. admiral greenert. >> thanks, general levin and many thanks to you and barbara for your service through the years. senator inhofe and distinguished

members of the committee i'm proud to represent 633,000 navy -- excuse me, sailors, navy civilians and their families, and especially the 50,000 sailors deployed around the globe today along with their fellow marines. their dedication and resilience continue to inspire me on our citizens can take great pride in the daily contributions of their sons and daughters in places tat really matter. when i appeared before you in march, i testified that we were compelled to make some difficult choices in our submission. 90% of the reductions in our press bud 15 submission focused on procurement, force structure and modernization, as well as overhead reduction, contract deficiencies and buying smarter. the area of last choice that we addressed in the budget was cost growth of our pay and compensation. now, for over a year as the chairman mentioned, the master chief petty officer of the navy was with me today and i traveled around the fleet and bases and

we listened to our sailors and families. especially those who would be most affected by these proposed changes, both the increases, and the decreases. the vast majority of our sailors and families told us that they believe their total compensation package matches well with and in some cases exceeds their civilian counterparts. but let me be clear, i don't believe our sailors are overpaid, nor do they believe that. our sailors and families are not enthusiastic about our compensation reform. but they were clear to us that their quality of service, their work environment, needs to improve. they understand that in this fiscal situation we face hard choices. we couldn't have it all. the reality within this given budget is the one that we've been given is we can't sustain our current personnel cost trajectory and we need to address this problem sooner than later. today our total force personnel costs to about 40% of our given budget and that's up from 32% in

2000. that share continues to rise. in fact, since 2001, we reduced navy's end strength 60,000 sailors. but the growth in personnel costs loan consumed 60% of those savings. in other words, although the navy manpower has shrunk significantly, at the same time we reduced 25 ships in our inventory, our personnel costs have spiked. and that's been a burden in our ability to balance our investments. the department's compensation reform proposals would generate savings to the navy of $123 million in '15 and $3.1 billion. we would intend to reinvest any and all these savings into the sailor quality of service enhancements and that includes increasing sea pay, a critical skills incentive pay to assure retention, improving 30 barracks, training buildings, morell welfare recreation and fitness centers, constructing barracks, fitness centers and

trainers. providing schools and travel for about 7500 sailors. purchase and spare parts, improve tools and providing more maintenance opportunities. all of these reinvestments would address the dissatisfiers i mentioned our sailors quality of service. they're designed to help sailors get their jobs done effectively and safely while addressing our critical man, train and equip challenges. the congress denies authority for all the compensation savings, however, navy would be forced to back out this $3 billion of sailor quality of life improvements, and we would also face an additional $4 billion resulting from pay increase -- pay raises reversing to the employment cost index. that would compel us to reduce readiness, ship building, and aircraft procurement even further. we cannot afford the equivalent of another basically $7 billion bill. our navy would be less ready, less modern, and less able to execute the mission's outlined in our defense strategic

guidance in the collective annual defense review. mr. chairman, this is a tough decision, but it's also an opportunity. not seizing the initiative now means billions of dollars of additional costs on other programs that we can ill afford. and given our current situation, i think it's necessary to better balance our sailor's needs to ensure our navy remains forward, and more importantly, ready, where it matters, when it matters. i look forward to your questions. >> admiral, thank you so much. general welsh. >> thank you, mr. chairman. ranking member inhofe, and members of the committee it's an honor to be here especially with the members of this panel. mr. chairman might i add from all the men and women of our air force thank you for your distinguished service to this country. >> thank you. >> you are a statesman sir and you have the respect and admiration of everybody on this panel. >> thank you. >> for the past 23 years united states airmen have maintained an extremely high operations tempo deploying routinely alongside their joint partners to the middle east, nonstop since operation desert storm ended in

1991. and they performed spectacularly well. i believe they've earned every penny they've made. and you have been remarkably supportive in increasing their pay and benefits over time. but today, we're in the precarious position. per capita costs for an airman have grown over 40% since 2000. last year our readiness levels reached an all-time low. as we struggle to recover, we don't have enough units ready to respond immediately to a major contingency and we're not always able to provide fully mission ready units to meet our combatant commanders routine rotational requirements. our modernization forecasts are also bleak. roughly 20% of our aircraft were built in the 1950s and '60s. over half of the others were built more than 25 years ago. and now, due to sequestration, we've cut about 50% of our currently planned modernization programs. and we can't ignore the fact that the law as currently written returns us to sequester level funding in fy-16. this has forced us into some very difficult decisions. pay and compensation reform is

one of those very tough decisions. no one takes this lightly. but we feel it's necessary to at least try and create some savings. if we're not willing to make some tough calls, our air force will be neither ready to fight today, nor viable against the threats of tomorrow. my most sacred obligation as chief of staff of the air force to my airmen is that when we send them to do difficult jobs in dangerous places, that they're prepared to succeed, and to return home safely. although slowing the rate of pay increases kwrad usually reducing bae rates relative to the market reforming tricare, reducing commissary subsidies will certainly hurt. what my secretary and i owe the nation, the joint team and our airmen more than anything else are the training and tools necessary to fight and win and survive. if the proposed compensation reforms are rejected, the air force will be forced to cut $8.1 billion from readiness modernization and infrastructure accounts over the next five years.

we'll take significant cuts to flying hours, and weapons systems sustainment accounts. reduce pro-significance munitions buys and lower funding for training ranges. digging a readiness hole even deeper. we'll likely have to cancel or delay several critical recapitalization programs. among those probably impacted will be the combat rescue helicopter, and the tx trainer. abandoning the tx program would mean that future pilots will then continue to train in the 50-year-old t-38. we'll also be forced to cut spending on infrastructure beyond the $5 billion we've already recommended to cut over this item. of course these cuts would be on top of the difficult recommendations we've already made. some of which the chairman mentioned this morning. lowering our end strength by nearly 17,000 airmen next year, divesting the entire a-10 and u-2 fwleets and divesting the kc-10 fleet, as well. none of these options are good ones but we are simply out of good options. it's time for courageous leadership. we simply can't continue to defer every tough decision in

the near term at the expense of military readiness and capability over time. we need your help. >> thank you very much, general. general amos. >> chairman levin, ranking member inhofe and members of the committee, the current period of fiscal austerity is exacerbated and imbalanced across the marine corps's budget. i nor my fellow service chiefs and more importantly the men and women who wear our service's cloth, those who have served our nation so faithfully, did not set the conditions for the fiscal calamity that we find ourselves in. as service chiefs we are obliged to live within the budget and the laws passed by congress. senators, none of us like where we find ourselves today. we've spent the greater part of a year restructuring each of our services under the cold reality of a fully sequestered budget. while the bipartisan budget act

provided much-needed relief in '14 and '15 i'm advised by many of your colleagues in congress to expect a return to full sequestration in '16 and beyond. we've made difficult choices, all of us have, as we've attempted to build a balanced and combat ready force. we have restructured and downsized our services to live within our means. we have done all of this knowing full well that the world that we live in is a dangerous one. and international landscape that is simply getting more challenging as each day goes by. i see no indication there will be a peace dividend once we complete the mission in afghanistan later this year. chairman, we will not do less with less in the decade to come. we will do the same with less. from a personnel perspective, our men and women have been compensated appropriately for their many sacrifices over the past decade of war. i make no apologies for that. they deserve every penny that

congress has afforded them. they have faithfully fought our nation's battles, all while successfully keeping the enemies of america far from our shores. because of my loyalty to them, they're as much about today's discussion on compensation reform proposals that frankly, i do not like. but i'm stuck with them. i'm stuck with them because i have rated every other pot of money available to me to pay for a ready marine corps. as a service chief, i am first and foremost responsible for the defense of our nation. that task comes before all others. it is the sole reason why america has a marine corps. to accomplish this, the marine corps must maintain a high state of readiness. that's accomplished by having combat units that are highly skilled and highly trained. it is done by having the right equipment in the hands of warriors, who may be headed into harm's way. the most important way that we can keep faith with our men and our women is to send them in to combat with the best possible

training, and the freshest of equipment, and to take care of them then when they come home. my challenge lies in balancing readiness, manpower, and modernization, all under the umbrella of sequestration. our goal of consistently fielding a highly trained and combat ready crisis response force for america is pressurized by military personnel account that has grown to 63 cents of every appropriated dollar. balanced against readiness requirements, and an anemic military construction account, the marine corps's modernization and investment accounts comprise a near 8%. eight sents on the dollar. this is the lowest it's been in well over a decade. at the end of the day, i'm ultimately responsible for taking care of the marines, the sailors, and our families. this includes ensuring our people are well compensated for their service. while also afforded the best

training and equipment available to fight and win our nation's battles. for marines, their quality of service is as important as their quality of life. to understand that they must be prepared for uncertainty and they must be prepared for their next mission. thank you for the opportunity to represent your marine corps and its men and women. i thank the committee for continued support, and i stand prepared to answer your questions. >> thank you so much, general amos. general grass. >> chairman levin, ranking member inhofe, distinguished members of the committee, it's an honor for me and chief brush my senior enlisted adviser to be here today representing the men and women of the national guard. the men and women of the guard serve with distinction as a primary combat reserve of the army and air force. we're also the first responders, first military responsers on site in times of domestic crisis. i echo the concerns of the chairmen and my colleagues regarding the critical need to

achieve fiscal balance across the force. future fiscal challenges will dramatically constrain decision making about the size, shape and roles of our military. this certainly will be the case when budget control act funding levels return in fiscal year '16. therefore, it is important that we act now. despite the guard accounting for only 8.4% of the defense compensation, and benefit budget, these proposals will significantly impact operational guard. the guard we have today is equipped, trained and tested over the past 12 years of combat. modest investment keeps your army and air national guard ready. but if we do not act now to rebalance military compensation, we risk future training, readiness, and modernization cuts across the joint force. our success is unquestionably due to our most important resource, our people.

every service member, active guard and reserve, deserves the best we can provide within a fiscally sound solution. i believe the proposal before you provides the level of compensation and is consistent with a ready and modern force. mr. sharp, senators, the national guard has been and will remain always ready, always there. thank you and i look forward to your questions. >> thank you so much, general. i think we'll have a good -- really good turnout here. we also have a vote at 11:00. one vote i believe. let's start with a six-minute first round. a number of you have mentioned the impacts of these budget caps, and the impacts of sequestration. these are legislatively required

gut we need to do something about them. i can assure you, members, that we will have an opportunity to do something about the looming sequestration for the next fiscal year. i hope we take that opportunity. in the meantime, as you all put out, put it very well, very clearly, we have to live with the current year's budget caps, and that's what you're trying to help us do with your recommendations. by the way, i believe, admiral, you mentioned something about generics in our commissaries. we're going to check that one out. we don't think that the law requires it. we think it's that the commissaries have to be competitive. and so we're going to try to find the origin of that additional cost to our men and women in uniform.

we have a budget in front of us, which must meet the caps in law, we have no choice. again if we don't adopt these particular reforms or some of them we're going to have to make up for it with reductions somewhere else. the somewhere else is taking a bit hit already as you have pointed out, our readiness, our modernization. we have a responsibility of being law-abiding, and we have the responsibility to the security of this country, we'll do the very best that we can to accomplish both goals. chairman dempsey, you've mentioned that what the impact would be if we delayed these kind of changes. can you be a little more specific? you said it would be a two-year

delay, for instance, if we waited the final report of the military compensation and retirement modernization commission. why would that be a two-year impact? and be a little more detailed as to why you believe that you've testified that you have sufficient information now to make these recommendations, even though when it comes to the retirement issues, you believe that we can delay any changes in that until that commission reports. >> we believe it will be a to-year delay because the commission won't report out until february of 2015. and that's inside of our decision cycle for the submission of the budget. so, waiting until february seems to us to make it clear we would actually have to move along with two years at our current state, and prevent us from making the changes that we know we need to make right now. and then in terms of the -- >> your preparation and recommendation it would be a

two-year delay but from the congressional perspective, we would have time in the next fiscal year, if we get those recommendations in february, to take those recommendations into account, is that correct? >> it -- it seems to me that is correct. i know less about your process than i do about our own. and preparing the budget, as you know, is a justification book level of detail is a pretty remarkable enterprise every year, and by the way, for the past few years, we've had to prepare budgets against alternative futures. so, it would -- i would be surprised if you could act that quickly on a recommendation that came to you in february. but more importantly, to the second part of your question, we've spent the better part of a year analyzing direct and indirect compensation with the team that you see here represented here today, and our programmers, and we believe that the recommendations we've made, we can articulate what the

impact would be at various grade levels. an e-5, an o-5, both what it would do to them today, and what it would do to them across the course of a career and we have all the information we need, and we've actually provided it, and we're ready to move on it. because we need hat $18 billion. >> you have taken steps, you've assured us, to consult with others in making these recommendations, including your senior enlisted personnel. >> we have, sir. >> i would just say this, that, they're all sitting here behind you, i believe you've told us, and we have special thanks for their service, as well. but i would just invite them, any of them to personally contact me if, in fact, they not agree with any or all of these cuts.

very difficult for us to ask them here today or to put them on the spot generally, but it is important that we hear from them, and i would assure them that i would keep the privacy of their remarks, i would share them to the best of my ability, and guaranteeing that privacy and anonymity, share them with my colleagues to the best i could. but i would welcome any personally delivered comments from those senior enlisted personnel to me. >> sir, if i could, they testified before the personnel committee. i'll also attest to the fact that there's not a bashful one among them, and you don't have to ask for their views, they've will provide them, and they're free to do so. >> good. well we would welcome that, and i'm sure our personnel subcommittee would also welcome any privately delivered comments that might differ from their testimony or from your testimony.

thank you very much. senator inhofe. >> thank you, mr. chairman. not a bashful one among them. let's see how bashful they are here. first of all, a lot of us have seen this coming and i know we don't talk about it very much, but when we see money that otherwise should have gone to in to our military, in to our defense, we see the construction of the biofuel refineries, $160 million. see the navy purchased the greenfield at $26 a gallon, could be purchased on the market for $3 a gallon. the climate change initiatives have gone up now $120 billion since president obama's been in office. i commented the other day, general welsh, that for the $120 billion we could buy 1400 new f-35s. food stamps. $40 billion -- $42 billion additional every year. so, i would like to ask you, in

this climate, and i'm going to submit for the record, because there isn't time to read them all, all the quotes from everyone, up to and including secretary hagel about the dilemma that we're in and the fiscal situation that we're in right now, could each one of you briefly describe something in concrete terms that this fiscal climate means in terms of what your service would not be able to do to adequately train men or women to deploy and bring them safely home? now if you can't do that, i'd like to ask some specifics if you can't do it now. i'd like to get that for the record. would any of you, general odierno have a specific thing you would want to do. you're going to have to sacrifice in terms of training. >> well, senator, thank you. beginning in -- first in '15, we have to reduce home station training which is the

collective -- it all affects the collectively level of training which the motion for our forces and it's the ability to synchronize and integrate air, ground, and the many different types of maneuver that we have to do in case we have to respond. whether it be in korea, whether it be in the middle east, whether it be in europe. and so we've had to cut back on this training. so what that means is we have less capability and readiness levels than we would like to have in case we're asked to deploy. if we -- this will continue to exacerbate itself in '16, in '17, in '18 until we get our end strength down to a level that would enable us to balance. that will not happen until about fy-20. if we don't get these, we now add another $12 billion bill that i have to find, so that means you might even have to take more end strength out. and i've already testified to the fact that i don't believe we have enough end strength now if we go to full sequestration in order to meet our national security needs. and so this will further exacerbate this problem. >> okay. general welsh, you think of anything specific in terms of

grounding of units or -- >> senator, last year was a pretty good example of what sequester level fundings will do to our air force. we grounded about a third of our combat coded squadrons, we canceled red flag exercises, both u.s. red flags and coalition red flags which is the full spectrum high-end part of training for the united states air force. it's what separates us from other air forces. it's where we integrate with the other services and with ground forces and with our allies. we've cut weapons school classes where we develop our ph.d. war fighters. all the things that take us from doing low intensity work to being able to fight a full spectrum fight were affected dramatically. >> i think we saw after that after the grounding of the squadrons that the cost of getting them back to a state of readiness, as well as the equipment was grounded with them exceeds the amount that would have been saved at that time. is that accurate? >> senator, that is accurate. >> yeah, yeah. anybody else? maybe. yes, sir. >> senator, when you and i

discussed this in my hearing posture hearing, you were down in norfolk. you talked to our people and they said these long deployments are killing us. >> yes. >> the problem is if somebody's deployed and we need another carrier to deploy due to a contingency, syria, or the issues in europe, those that are out there now have to stand that watch, because we don't have the response force for a contingency that we would normally have. the folks aren't trained up to do that. it takes longer to train them up to deploy. so we're kind of deploying just on time. we need a better contingency for us to deal with the contingencies today. >> okay. i appreciate that. general amos, anything specific comes to your mind that you cannot do now in terms of preparing properly these -- >> senator, we have made decisions, as you know, to move money and training and readiness of our units. so those readiness, those units are at a fairly high state of readiness and will be so for the

next two years. to do that, though, we've pulled money out of all our other accounts to include procurement. that's where we're feeling the pinch right now. we have 983 million dollars total, to reset the marine corps and buy new -- modernize the marine corps for this year. that's less than 4% of our entire total budget. so we're feeling it in the modernization, senator, because we paid the bill for readiness and training out of that account. >> i bring this up because i know this is a hearing on compensation, but if you change that that doesn't happen in a fact umm. it can be a bit expensive, as you say our modernization -- my time is about expired. in terms of our combat readiness codes c-1, c-2, c-3 and c-4, because we've already experienced some losses that in terms of our readiness cape 5b89, are any of you -- how are

we doing now on those that were deployed, general odierno in terms of -- should be c-1 we they're deployed, that's correct? >> that's correct. we make progress so we're beginning to increase the readyness of our brigade combat team. we've added -- >> are they all c-1 or c-? >> they are. the problem is, in 15 and 16 that goes down again because of the sequestration and if we lose what we've asked in the compensation savings, tat will bring the readiness down further so it will impact readiness in the out years significantly. >> readiness, risk, lives, right? >> right. >> thank you. >> thank you, senator inhofe. >> thank you very much, mr. chairman. thank you, gentlemen. general odierno, you are, i think, for the first time in decades actually involuntarily separating personnel this year. and that will continue if some

of these savings aren't realized. >> that's correct, senator. we are involuntarily separating captains, majors, lieutenant colonels, colonels, and also noncommissioned officers. it's also the first year that people who are eligible to re-enlist will not be able to re-enlist because of the reduction and size of the army. >> you know, there are a lot of issues at play here but we're already seeing the effects of these constrained budgets in terms of the opportunities of people who are competent, capable, of their ability to serve at least retirement and to refire. >> that's correct, senator. >> and some of that's savings, if they're realized, will help alleviate that pressure, won't end it but will help alleviate that pressure? >> it won't end it but it will help alleviate it. we don't get it- >> accelerates it. admiral, we talked about the savings. let's assume for the moment you get some savings how would you apply them this year? somewhat specific programs could

we see or general savings applications? >> betting those savings. it would be career sea pay and special pays and allowances, incentive pays, and it would be increases to our base ops. our ports shut down, they kind of run 9:00 to 5:00. so we want to keep them open so when ships complete training they can come home friday, not go anchor out and then come in saturday during daylight hours. the next year, that's '15. that's about $123 million right there. in '16 it's again starting to repair 30 barracks, by trainers and simulators for small arms, for our submarine trainers, for our surface trainers to put mon i in to get people to training, that is travel money and trainers. and that's about 7500 sailors that we just have backed up. this is the quality of their service, senator, as i was saying. this is what they're asking. spare parts. >> and one of the points i think that senator inhofe's question of general walsh is, it's a more efficient use of resources, too,

rather than keeping a ship just standing idle off port to bring that ship in, let the troop -- the crews see their family, and let the ship be, you know -- >> yes, sir. obviously they'll be happier they're back home. and their families waiting for them rather than just hanging out overnight. waiting for the port to open. >> this is a very difficult issue. i don't have to tell anyone around this table, at the witnesses, there's one view, and i think very reasonable view that there's no way you can pay these young men and women and their families what they do, there's no benefit, there's nothing. but at some point we have to make very difficult judgments about pay allowances, et cetera. one of the other impressions i've had is that the really key to the morale, and to sense of service is training and having the best equipment. and ironically, you know, we could be, you know, increasing

compensation, but with poor training, poor equipment, et cetera, the morale, and satisfaction, and the sense of pride would deteriorate. is that unreasonable, general dempsey? >> no, it's absolutely correct, sir. i've said before, and i believe that today, as well, that today's readiness problem is tomorrow's retention problem. if you came in to this military to, you know, be a man or woman of action and go to sea and fly, and train, and you're sitting around watching your equipment, or just simply maintaining it with no possibility of training on it, you're not going to stick around very long. >> i -- you know, my experience is limited, was that good training was one of the key factors of any unit, and if you didn't have it the other was important, but not as critical. but, let me ask a question general dempsey about the

commissaries. there is -- the sense of your testimony is that you would like to get some efficiencies out of the system, and that they can generate these efficiencies. if that's not the case they're going to have to curtail some of their operations. have you thought about criteria for curtailment in terms of identifying or something other than just we'll get some efficiencies? >> we have, sir. in fact, and i will tell you that commissaries has been the most difficult issue to wrap our arms around, because it's very difficult to understand the functioning of the commissary. and the effect that a reduction in the subsidy will have until you make the decision to do it. that's why we're supportive of taking this first step this year, $200 million, and as the senior enlisted when they do talk to you, senator, will tell you, let's see what happens. let's see how much efficiency we can wring out of it in order to gain some savings.

but, left unaddressed, you know, we'll be providing a $1.4 billion subsidy in perpetuity and that doesn't seem to be a reasonable course of action. >> so your first step and the number's about $ 00 million, would be to essentially charge the system with coming up with efficiencies, either through operation techniques, different purchasing approaches, different managerial approaches that would save the money with no idea -- no thought in this first year of closing any commissary, is that fair? >> let me ask the advice -- >> i'll be very quick. we have not directed any commissaries to close. that's not part of the plan. what would happen, as you correctly point out, look for efficiencies first. whatever they can't wring out of efficiencies would be a price increase. so you might go from the 30% claimed, you know, advantage right now, if all 200 million in the first year came out it looks like that would go to 26%. okay.

we think we can do better than that. and then, you look at the competitiveness of the commissary and the market in which it exists and most of them, i think at 26% savings will remain very competitive. if not, then there are probably situations where you might close one or two. but that's not what we have specified. we're, you know, i think a lot gentler than it looks. >> thank you very much. thank you, mr. chairman. >> thank you, senator reed. senator mccain. >> thank you, mr. chairman. i thank the witnesses, general amos, with all of these proposals that we are examining today, it seems to me from previous testimony that the biggest problem really is sequestration. would you agree? >> yes, sir, i would. >> by far? >> by far. >> general odierno? >> i agree, senator. >> so unless congress and the president act together all of these savings will pale in comparison in the challenge that you will face as a resumption of sequestration, would you agree?

>> i think we've said before that under sequestration we can't meet defense strategic guidance we have many concerns and also affects compensation, and other things we want could accomplish within our budget. >> by the way on commissaries had the thought. why not have people compete to provide those services? why not just open it up for competition? no subsidy, see who wants to provide the best services. that might be a thought you might consider. general welsh, should we be purchasing rockets for our eelb program from russia, including the fact that the person in charge of that aspect of russia's defense has been sanctioned by the united states of america, and a federal judge has ruled that that is a process that should not be pursued?

>> senator as you know we already have purchased some of those rockets. we have a backlog. we're certainly not purchasing them currently as we work through -- >> you have a backlog? >> sir, i'm sorry, we have an inventory that will cover the next two years of planned launches if we are allowed to use them. >> so, do you think you should continue to purchase them? >> sir, it's clear that right now we may not continue -- >> i'm asking your opinion whether you think we should continue to purchase them? >> sir, i think the best answer for the united states of america is to have the option of an organic booster. >> thank you. general grass, do you believe that the movement of apaches out of the guard is a wise move? >> senator the general submitted a proposal to me that i submitted to the army about that, and we actually agree with two-thirds of the move of the trainer and also moving the high

waters and we submitted a proposal to keep strategic debt of the apaches in the garden. >> so it's your view that the apaches should remain in the guard? >> a certain amount, sir. >> general odierno you mentioned a couple times in previous 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