record. i just have one observation. in light of senator kaine's comments i always thought the passing of the first budget out of a divided congress in 20 years was somewhat miraculous, but i think today we have established that this provision, this c.o.l.a. minus one provision confirms that because we can't find erica. it was an immaculate conception i think this, this provision, immaculate misconception might be a better term for. but i appreciate your testimony and i will have some questions for the other panel. i associate myself with everyone else here but i don't think we should wait until the commission to i think we should fix this. it's not a huge item. it should be fixed, and i think our veterans and people who are receiving pensions for some odd reason may not fully trust us to resolve this in 2015. so i think we should take care of it as soon as we can. >> thank you very much. that will complete the questions

for our first panel, and we will now call of our second panel. vikki so much, both of you, for your testimony. [inaudible conversations] [inaudible conversations] >> we now welcome our second

panel for witnesses, outside with his so-called, retired army general john kelly junior, the chairman of the board of the military officers association of america. retired army general gordon sullivan, president and chief executive officer of the association of the united states army. retired air force master sergeant richard delaney, national president, retired enlisted association. dr. david chu, president and chief executive officer of institute for defense analysis. dr. chu served as undersecretary of defense for personnel and readiness under president bush in 2001-2009. now, we also want to note in our audience that we have with us a number of veterans, particularly i'm informed we would welcome

veterans from all our veterans, that would of these include a special group, veterans of rewards and iraq and afghanistan. we also have statements for the record from the following individuals and groups. they will be entered into the record, the fleet reserve association, iraq and afghanistan veterans of america, the american legion, veterans of foreign wars, the national military family association, and lieutenant colonel michael parker, u.s.a. retired, who is a wounded war advocate. we are now going to start with general tilelli. and by the way, this is a reunion of sorts. and we want to tell you that we are delighted to see you all here. and we, of course, very much treasured relationships achieve

have been established between the committee and all of you and the server should perform for our country. we thank you. general tilelli. >> chairman levin, ranking member inhofe, members of the armed services committee, thank you for the opportunity to appear before you today. i've also submitted a statement for the record, but it's about for me to speak today to you on behalf of those who serve and have served and their families. on a half of the 380,000 members of the military organization, i have the honor and privilege of serving as the chairman for the rest of this year. we thank the senate armed services committee for holding this hearing on military retirement programs. the purpose of our retirement program is to offset the extraordinary demands and sacrifices inherent in a service career. retirement benefits on a

powerful incentive as we heard today for those who serve 20 or 30 years in uniform, despite the sacrifices that they and their families have to endure over the period. the critical element of sustaining a high quality career military force lies with establishing a strong reciprocal commitment between the service member and the government and the people that they serve. and if that reciprocity is not fulfilled, if we break faith with those who serve, retention and readiness will inevitably suffer. the c.o.l.a. cut to service members come retirement date in a bipartisan budget act is a clear breach of that reciprocal commitment. although the recently passed on of those exempted after six when retirees and survivors from the c.o.l.a. cuts, we believe a partial deal breaks the sacred trust with the rest of the

entire retiree community and their families. we believe issued appealed now. the financial impact has been called in recent quarters as teensy-weensy and small. but for example, and we heard it today, a noncommissioned officer in the grade of e-7 retiring this year with 20 years of service with the cumulative loss of $83,000 by the time he or she reaches the age of 62. more than three years of his original retirement pay of $23,000 a year annually. the ongoing rhetoric about spiraling out of control personnel costs has emboldened some to propose that stick -- drastic changes to military benefits and compensation in the name of fiscal responsibility without fully understanding the unintended consequences of their action.

suggested cost-cutting proposals are gaining traction because critics continue to cite personal cost cuts in 2000 as a motive to get pay and benefits. while we think about that when you think about in the context of people, soldiers, sailors, and then and marines who are serving in harm's way every day rather than look at it in a budget context. we believe it's important to put the growth since 2000 context. have costs grown since 2000? yes. but using the 2000 a baseline without us local context is grossly misleading. first, it implies that 2000 was an appropriate benchmark for estimated what regional personnel and health care spending should be. we don't believe that's correct. at that time years of budget cutbacks have depressed the military pay, cut retirement

value by 25% proposed 1986 entrants. and booted other beneficiaries out of the military health care system. retention was on the ropes, as we recall, and at the urging of the joint chiefs of staff, congress fixed the problem to prevent a readiness crisis. congress worked diligently over the next decade to restore military pay comparability, repeal the retirement cut and restore promised health care coverage for older retirees. in other words, the cost of growth was essential to keep the previous cutbacks from breaking the career force. now many expressed shock that these fixes actually cost money. they forgot that congress deemed that these changes were less costly than continued erosion of our defense capability.

moreover, military compensation studies have a ron weasley concluded that the cost trends of the last decade will continue indefinitely. we do not believe that's correct. now that they comparability has been restored, there won't be any further need for extra pay plus ups above private sector pay growth. which is in the law. similarly, congress won't have to approve another tricare for life program or repeal redux, which we had to do in order to maintain the readiness session and retention of the current force. those were one time fixes that won't be repeated, hopefully, and won't need to be repeated. yeah -- yet, we continue to focus on recent growth trajectory and have adopted a new budget cutting phrase on which is slow the growth. we believe the math doesn't add

up. military personnel costs, which have been derived from the omb data, which include military personnel and the defense health program, continue to consume the same amount of the pentagon budget for the past 30 years, about one-third. that's hardly spiraling out of control. even so, we are asking for deeper cuts. leveraging our people program versus readiness is simply a false choice of what th should be able to afford for its defense. they key to a ready force is and has been sustaining a top notch service member for midyear, noncommissioned officer, mid-level noncommissioned officers and officers for another 10 years. without existing military career incentives over the past 10 years of this protracted warfare, the all-volunteer force would've been placed in serious

risk. so in conclusion, we believe that the c.o.l.a. cut needs to be slowly repealed now, not wait until the retirement commission. secondly, we believe that any change to today's retirement program needs to be grandfathered to existing retirees and current force. and three, any further changes recommended by the commission must be fully vetted through this committee to determine what impact it will have on our world-class all-volunteer force. our obligation is clear, and that's protecting national security. and as it always has been, the most key element our national security are the men and women who serve and the family members who serve also. thank you again for the opportunity to appear before the committee. i look forward to your questions. thank you very much. >> thank you so much, general. general sullivan.

>> mr. chairman, senator inhofe, distinguished members of the panel, thank you for the opportunity to speak with you today as the president of the association of the united states army, and as a former chief of staff of the united states army. the association of united states army represents hundreds of thousands of members of the active army, army national guard, army reserve, the retired community, civilians, and the army families. 121 chapters worldwide. our members and i are very well aware of the fact that much of "the good soldiers" over the last few years would have been impossible without the commitment of this committee. and we are indebted to each and everyone of you and your

predecessors. your tireless and selfless personal stats, professional staffs, we appreciate their efforts. and we understand that in these fiscal times these are very challenging times for our nation. certain things need to be done. now, before i continue i want to acknowledge the bipartisan bill -- i've never been sure what it's been called so let's say it's the murray-ryan bill, or the ryan-murray bill, but whatever it was, the chips in the sequestration has been very important for all of the services, and i just want to add my voice to the banks for everybody to me that bipartisan bill and the budget and the return to somewhat normal order which is taking place here. and i remain hopeful that these

chips into the walls that surround money, known as sequestration, will end permanently. now in many ways this has been stated by countless people here this morning, the budget deal was good news. unfortunately, included in it was a broken promise. and the broken promise has been talked about repeatedly. in spite of the fact that the president, the chairman of this committee, several secretaries of defense and the chiefs of the military services and the senior civilians in the pentagon, whom you heard here this morning on the first ballot, that stated repeatedly that any changes to the military compensation and benefits package would be grandfathered for the currently serving force, and for current retirees would be grandfathered. yet it was changed. now, this one line in the budget

act has greater doubt in the minds of the very people who do not need doubt in the minds about the commitment of the american people for their well being and the ability to fight and win the nation's wars, whatever those wars may be. and, frankly, we now have them worried about things i never worried about in my 36 years of active service. and i cannot imagine that this point in history we need to cost them to be worried about their well being. the congressionally created military compensation and require the modernization committee that was tasked with reviewing potential changes to the military retirement system was directed to follow guidelines set by this committee, and the president, that included grandfathering the currently serving force and

current retirees. in my view, the commission should be allowed to do its job, and i recommend strongly that this provision which gets into the retired pay of those between retirement age and age of 62 be taken off the table now. and not passed to the commission. based on some hope that someone else sometime down the road is going to change it. i don't think it's ever worked in the past, and i doubt it would work now. and by the way, the longer it continues, the more uncertainty will be created in the minds of the people. and i think this will be a pain now pay later. i don't think we understand the full impact of what we are doing here. -- pay now/pay later. as the economy rights itself to this blow of earned defer compensation benefit will be an

enormous disincentive for qualified, i'll tested military personnel to remain on active duty. recruitment will also suffer because any decision to serve could be influenced by how the current force is treated. today's soldiers are tomorrow's retirees, and they are watching and they will speak. and the current retirees, many of whom are combat veterans themselves, will influence in some way recruits for potential recruits. in the case of the army, the army is a family business. and you will find a very high percentage of those serving on active duty today were influenced by either parents, grandparents, aunts or uncles. this cut in pay and benefits must be balanced against the long-term viability of the all-volunteer force. recent history which has been pointed out from the '80s and

'90s shows that precipitous pay cuts and benefit cuts have unattended detrimental consequences. the prime example is the ill-fated redux, retirement adjustments. actually in just a few years we faced a recruiting challenge, which congress wisely reinstated the old system. the current coal account provision which some say will help tame the wild, quote from wildly out of line military pensions, will hit hardest on the enlisted force. and in most cases i would point out that these people, grade staff sergeant e-6 or sergeant first class the seventh are not fully employed in lucrative retirement positions in today's economy. for me, their depleted retirement check is their main

source of income. after decades of service, which i hasten to add could had involved repeated, repeated tours of duty in conflict areas. this puts them in a bad position employment lives, so forth and so on which i won't go into today. the fact of the matter is a compensation package in place today recognizes compensation which has been earned by over 20 years of arduous service. and by the way, this competition was designed to encourage a career of service in the all-volunteer force based on personal qualifications. and this force has performed magnificently over the last several decades, and certainly the last 12 to 13 years in active combat. and by the way, without the support of their families, this

thing would have fallen like a deck of cards. and i think we need to pay particular teaching to the families and their role in all of this, and the children have seen their mothers and fathers can go to serve this country. they need to be taken care of going forward. in addition to patriotism, what has kept professional soldiers in the army and professional sailors or airmen or whatever the case may be in their service, has been the assurance that the benefits which they understood they received would be forthcoming. and i will tell you, i never worried about retirement. it was just there. and somehow we have created a doubt in their minds. the last people in the world you want worried about that kind of stuff are those who are out there climbing in helicopters and airplanes and ships, and jumping out of airplanes in the

middle of the night, is whether they or their families are going to be taken care of. i am troubled when i hear we are paying the troops too much, and that this is the reason we had to cut back on training, readiness, modernization of the force. at the end of the day the force is people. it is people. we are talking about high quality men and women dedicated to their nation. and they are not the problem. a message they hear though is that they are contributing to their own unreadiness either mere presence. we must change this narrative. america can afford a defense it needs. it is simply a question of priorities. shifting the burden of the nation's fiscal problems onto the backs of the troops is unnecessary, and in my opinion, wrong. the instability caused by this cut will reverberate for years,

unless it's taken off the table. we're going to feel the pain now pay later. i understand very clearly the concept that is shared responsibility. by the federal government and all americans must remain true to the promises made to our military personnel. we understand the military programs are not above review. i understand all of that. but always remember the nation must be there for them, those who answered the nation's call. and those only a handful, less than 1% of the american people. this committee, this committee right here safeguard the welfare of america's military personnel on behalf of the nation. and i want each of you to know that we appreciate what this committee does. and we also appreciate the fact that as has been stated earlier, i think general tilelli said it, you are the ones who look at what the commission comes up with to ensure that it meets

your goals of protecting the all-volunteer force. i urge you to find a bipartisan solution that will remove the under 62 military retiree cola provision, and do it now. my recommendation is to take the issue off the table and send a signal out there to the force now so that people sitting around the stove in the middle of afghanistan in the middle of the night will not be talking about this issue. this is not the kind of issue they need to be worried about. this system was really created in the force. it probably deserves to be looked at. there's no doubt about it. they don't need to worry about it. and there will being at this point. i think it has a hugely destabilizing effect on the force, and i urge you to take it

off the table now. at i will do whatever i can, and i'm sure these are the people will also. to testify to that respect. thanthank you very much. >> thank you so much, general. now we've got sergeant delaney. >> chairman levin, ranking member inhofe, and members of the committee, good morning. on the national president of retired enlisted association. the largest association that was created exclusively for enlisted personnel. from all branches and components of u.s. armed forces. i appreciate the opportunity today to address your concerns the military compensation. specifically the c.o.l.a. reduction for military careers. i am greatly concerned about the recent actions this congress has taken. quote, when you freeze salaries, eliminate bonuses and change their health care benefits, it's folly to think that is not going

to impact on the workforce, end quote. that's a quote from bradford fish, president and ceo of the congressional management foundation, not two weeks ago in political. he was i talking of military retirees of course. he was speaking about the congressional staff and the effect that eliminating traditional health care is going to have a members of the congressional staffs leading and pursuing other opportunities. according to a recent survey, 90% of staffers said they are concerned about the benefits, changes under the new health care law. in that same survey when asked if you look for another job in the next 12 months, four in 10, 40% of chiefs of staff and state and distant -- district directors to just. quoted these predictions come to pass, it would likely be the largest brain drain the talent of congress has ever seen, end quote. what makes anyone think that reducing benefits for military careers will not have the same affect on their decisions about whether to remain in the

service? congressional staffers are dedicated, conscientious hard-working professionals who care about this nation and institutions they serve. the same is true of military careerists. but unlike congressional staffers, military personnel assigned an employment agreement. that obligates them to serve for a specific amount of time. what's more, military careers can be sent to prison if he or she fails to go to work. i believe a multitude of cuts in benefits for military careers that are being urged by the dod as well as the current c.o.l.a. cut will have a strictly negative impact on our nation's defense posture. and senior staffers senior officers and the committee are critical to your being able to fulfill your duties and responsibilities as members of congress. together, they hold the institutional memory as well as the subject matter expertise that are indispensable to the functioning of congress.

the same is true of military career personnel who the c.o.l.a. attack has been aimed at. the largest single segment of retired personnel is the sevens, who make up 29% of all military retirees. the noncommissioned officers make up 47% of all of retired personnel. if you add in i-5 and e-6 commute reached 73% of all military retirees made up of incivility and e-7 receives about 23,000 are to you but the fact is there someway to retire for military and at the same standard of living that existed while on active duty without getting another full-time job. and to be here with a c.o.l.a. cut it works out to about $83,000. that equates to a loss of four years of retirement pay nearly. a c.o.l.a. look at will degrade the livingston of the military retirees affected by it. without the c.o.l.a., inflation would eat away nearly half of the retired pay value for 20 retiree at age 62.

why, after doing the job that less than 1% of the entire population is willing to do, is congress are going to punish military careerists? y. under this law would pashtun with a single out for immediate cuts? why would they not grandfathered in as the federal civilian employees were? what have they done to earn this slap in the face? according to former command sergeant major of the army's communication electronics command, quote it is the noncommissioned officers who are the ones keeping up with a change of technology, then using their leadership capabilities to bring that technology to the soldier in the field. he also continues, it is true, ncos are the backbone of the army. the nco is the one who is a teacher how to do it right our teacher how to do it wrong. for over a decade we've heard american servicemen and women described by elected officials and others as the best trained and best led and best equipped force in our nation that it is okay. who do you think trained and let those servicemen and women?

it was the ncos. the very people who are suffering the hardest blow because of the actions of congress. i confess i'm beginning to think that much of the praise from some members of congress was self-serving and nothing more than lip service. so i asked those tentatively these c.o.l.a. cuts are nothing more than a small adjustment, and, therefore, reduce or rescinded, please stop by but how great you think our armed forces are. to the members who agreed all the cuts should be stopped am i ask you to put aside partisan and ideological differences and agree o on a way to pay for the c.o.l.a.'s. i know many ideas have been put forth by many members and the task now is to agree on one. the department of defense is the only federal department that is unable to be audited. we urge congress to at a minimum sustained cuts and personal benefits until dod can audit its books and see whether it's really truly spending its money. the men and women who have served in our armed forces on to agree to shoulder the sacrifices they were asked to endure. is it too much to ask our

citizens and our government to now we pay that debt? i pray it is not. president coolidge said the nation that forgets his defenders will be forgotten. please, members of congress, don't forget our nation's defenders. thank you. >> thank you so much, master sergeant. and we very much heed your testimony. next is dr. david chu. >> mr. chairman, -- >> welcome back. >> thank you, sir. ranking member inhofe, members of the committee, it is indeed a privilege to appear before you again this morning. i should emphasize the views i offer our and on my own and they do not this is reflect the research by the institute for defense analyses or the department of defense. i do have a formal statement which i hope might be made part of the record. the limitation asks that i focus on the evolution, special recent evolution of military compensation but how do we get

to where we now are. i rg3 important forces that have created the compensation system that is the subject of discussion this one. first of course the longer history of military pay and benefits. especially explains the fact that so much of noted compensation is deferred and a substantial part is offered in kind as opposed to in cash. second, there's desire by the country to recognize the reward, those who have served in the military that explains the very substantial growth in a series of benefits of the last 15 years or so to repeal a redux, tricare for life, the expansion of g.i. bill and the decisions you make some of its benefits transferable, and the substantial relaxation of the century-old ban on concurrent receipt of federal annuities. the third force of course has been emphasize this morning is

the need to ensure that we have a high quality all-volunteer force. that was the source of other witnesses have emphasized that the targeted pay raises that congress enacted at the end of the 20th, beginning of the 21st century. also the source of expanded authority to pay bonus special incentive pays department used to ensure that all phone to force is success in the current conflict. those things have been reduced as those conflicts have waned in imports. the issue going forward as we all know is the question of change. and i agree wholeheartedly with those who argue that we ought to use the commission, the commission process, to take a holistic view of change as opposed to piecemeal changes such as the ones being discussed this morning. i do argue that a prior question in that changed ought to be of some of the questions this would have emphasized much force as a country want in the future.

what level of quality, what differences in skill, background and skills are required to retain our essential to secure our national security in the years ahead. you could obviously have different compensation systems with the present one. it might well be argued those might be more efficient than the present one. saying they could sustain the same force at less total cost to the taxpayer. added to think to impor importat issues in regard our weather so much of the compensation should be deferred, particularly because of fairness perspective, for several benefits, most military personnel will never actually collected those payments. and also the issue of whether so much of the compensation should be offered in kind. as those changes are contemplated i do think it was emphasized that it is critical to keep in mind a circumstance the military family. it's different from the circumstance of most american families. while we cannot change the

reality of the burdens of deployment, do you think we have to be sensitive to the fact that the family circumstances importantly affect the military persons decisions to stay with the military over time. and above all as that there is testifies to they have stressed, i do think it is critical to pay attention to the transition mechanism and to the question of the expectations of those who have served in the past and those who are serving now, and with the changes that are proposed are consistent, or put particularly, those who are affected by them can accept the changes that we wish to make. i look forward to your questions. >> thank you so much, doctor chu. we're going to have to have a short first round of questions because we are going to be able to get to all of our senators. let me ask about the commission, which is going to be reporting to us. and the connection of our

service groups and our veterans groups to that commission. i think it's the intent of everybody that have spoken, all the senators that have spoken, is that in terms of this cpi plus one language that it is our intention and believe that it should be immediately repealed, soon after immediate as humanly possible in a legislative body. i don't think that from anyone i've heard here at least today there is any intention to wait until the compensation, retirement modernization commission reports. to clear the air on that or to remove the item at this time. but my question then turns to the commission as to whether or not your organizations feel that you will be contacted, that your

advice will be solicited, whether, for instance, that you looked at the members of the commission and feel it's a representative group. so why don't we start with you, general tilelli? >> mr. chairman, first, the military officers association of america has had one meeting with the commission. we think it's relatively representative of the force as determined by this committee. whether or not we will be asked to go back again and discuss with them some of their final recommendations, i can't answer that. i don't, we have not yet been informed of any such opportunity. >> all right. if you feel, this goes for any of the organizations, the once represented here today but the others that are out there, feel

that they are not being, that their advice is not being sought, that they do not have an opportunity to express their views, we would welcome hearing about that because the commission should be soliciting the views of those organizations that represent our troops, represent our retirees and our veterans. so let me now ask you as well, general sullivan. >> senator, we've already been before the commission wants -- the commission wants, at the national level. i believe some of my people out in the field, they have been doing some field interventions. ..

>> our organization has spoken twice to the commission. we are comfortable with the way it is operating. and we are hopeful about an outcome. obviously is too early to tell what the outcome will be. we will have to wait and see. we are happy with the commission. >> thank you. we are facing a real budget crunch, although it has been kind of deferred for a year-and-a-half or so. nonetheless, the law requires that basically the sequestered approach be packing full blast. a study in 2016. we have acted the best we could in terms of 2015. we will face the same kind of horrific problem to 2021 starting in 2016 unless we take

steps to avoid it. and that means that we will have a place if we don't act roughly a trillion dollars in cuts to the defense budget that were enacted as a part of the budget control act two years ago. have those cuts have already been implemented. the other half are what we would face basically. so i am wondering if you have fox not just about that subject. as think we can infer what your thoughts would be. if these budget caps, currently mandated by congress continue, as you have any thoughts on any approach to how to deal with the balance between pay and benefits as well as the need to train and equip and so forth? any thoughts on that?

and i think you have probably -- well got let me start with you and then we will quickly go to the others. >> yes, sir. i think the key question in that regard is the mix of personnel the you believe are best suited to the nation's security needs. i would say the balance of our active duty personnel, reserve combat person out of the federal civilians and contractor personnel. maybe more mileage long-term and getting that balance right. might be discussed in terms of the compensation. not to put the commission's work aside. it is important significant in terms of operating costs over military personnel. but i think this question of the demand side, so to speak, best suited to security needs, could you, for example, make way to

use of federal civilians? i think there is a number of evidence to suggest that is the case. reserve military personnel for the surely military functions of the apartment. >> any of the want to add a comment to that before we turn it over? >> senator, i think it is the profound question for which i'm not sure i have a profound answer. that depends on how much risk you want to take. until somebody comes up with the defense strategy, national security strategy, i don't think you can wave the equation. and i think then you have to ask yourself what kind of a prediction we can make about the future. and right now i think we are out there. in my view we -- it has always

been hard to predict the future, but i think we are making -- we are taking risks without understanding the future. i will just leave it at that price of me turn to the center now. i would call on the others because of the time limits. >> one question to my but that the question. i want to offset some of the accusations they you hear people and service organizations. my feeling is that those of you heading up this service organizations if you had to choose between an adequately strong national defense and a maintenance of the current military retirement compensation levels which would you choose if you had to? real quickly. that is an easy question. >> i would always vote on the side of a strong national

defense. >> agree with that. >> we all took an oath to protect and defend the united states of america. >> that's good. >> the reason i say that, and you hit the nail on the head. american can afford the defensive needs. it is a matter of priorities that is my position in a nutshell, something -- o lot of people don't believe that. there are people serving right now i think that we really don't believe in a strong national defense and all of us agree with. let me make sure that everyone understands, there are 15 members to ask questions and made statements in this hearing on the first panel. you guys came here because you want the 1% corrected. we all agree. i, i make the statement. a moral issue. i was in the army, something

like that, they were -- commitments were made, and you can't come along later enchains those. now, we want a comprehensive reform, want to get into all of these things. first we want to make sure we correct it. as you said, we want to correct it now. so do all of us. i just want to make sure that the three of you or anyone else who might be here from the military are representing, a participating in one of the services understand that we agree with you. that's it. >> thank you so much, senator. we will be next -- we don't have much choice. >> thank you, mr. chair. thank you for your testimony. i believe we will fix this and fix the problem. i want to ask you a question about the next issue down the

road. as we start to think about what we might hear back from the commission in early 2015 from conversations primarily knew people in the military, i have a youngster. the way they talk about the compensation and benefits is that they have a feeling that somewhere promised. contacted. retirement. some were reasonable expectations. a reasonable expectation without knowing the budgetary tumpline. of a functioning system. some are sort of less than a promise or even a particular expectation. there may be up for a desire. so what with the premier will be for our retirement health

policy, for health insurance policy that i would pay if i get to that. most are not thinking about those issues. they're not really contractors for it. obviously the commission will come back with recommendations of all these kinds of things that are in the process of. the prospective, not retroactive , things that are in the reasonable expectation zone and things that frankly newcomers are we don't think about that much. and i just would be curious. you know, talk to us about how we ought to be thinking about these issues for getting that report and having to make some decisions. >> certified thank you for the question. first, i think what the commission proposes we have to review every aspect of. it'll and open review and that think. secondarily, as general sullivan

said we have to look at in the context of what we wanted to be in the future. we do want an all volunteer force. but you focused on an issue which is key critical in the surveys that we do, the military and military families and health care. military families and service members believe that military health care or health care is a promise. they don't see that as optional. certainly when you are young and you believe that you are immortal military health care is not as important as when you get to be all little older and they're looking at it from the family aspect. in that context i think we have to be very careful. it is a slippery slope. we have already cut military health care. already increased the copay, increased the pharmacy fees. so we have already done things that are distracting, if you will, from what service members and their families are perceived to the and earned benefit, if

you will. >> just following upon that because that gets at the number of my question, if they're is a belief that health care is a promise and i believe that it is those coming in believe, is there also expectation from your survey id that promise extends to a particular premium amount to a particular premium that is an annual one that would not change of the course of retirement? >> i don't think we ever got to that point. i do think that reasonable is of variables that must be considered. and that must be considered in the context of retirement and what that individual is going to get. think about the context that you heard today. as sergeant first class. getting a retirement of toxic $3,000 a year and as a family of three or four. he is at the poverty level star with. so do to -- to require him to

pay an exorbitant health care fee is very problematic. >> other comments? >> i think if you just take that last business about the medical. the young person service today, the concept of retirement might be different than the concept that we had developed in the 40's after all, life expectancy, 77, i think, males. so there is a model for retirement. whenever the model this, if there are increases is should be stated right up front. those interests, those increases

will be within the collection of the world-famous,. whatever increase you play might be within sight data opposed to this wildly fluctuating medical inflation. i mean, very quickly, you could take seven off of the table if you go to medical inflation. think there has to be a model and the concept. we did not worried about that. it was retired, 50 percent of 20 plus, then after 20 years and then it was capped at 30. and medical, we just went and asked for whatever.

tylenol, a couple of tylenol, a couple black coffee and you were golden. >> that is making us all hungry for lunch. thank you. senator ea is next. >> thank you, mr. chairman. i want to thank all of you for your leader and for being here today on this incredibly important issue. what worries me as i think about how we ended up where we are. in you have a budget agreement that the only group that really takes a hit right now i men and women in uniform. so what worries me is that we grandfathered the federal employees, meaning only knew hires would be impacted by. but our men and women in uniform who have taken the bill is for us, they got the cuts right now to their cost of living increase. is it because only less than

1 percent of the population defense the rest of us? is because of federal employees and other groups around here just have stronger lobbyists and voices to get -- you know, we're going to protect our people. what worries me about this is that it was a huge disconnect from washington in terms of those who has sacrificed the most that they would be the one group targeted in of this. and i just wanted to get your thoughts all of this as leaders of our military organizations because as i think about the big picture on this, is a lesson we need to learn from this? that really worries me as i think about the big picture, the messes that we are sending to our men and women in uniform. we have been at war. it has been a tough time for them. >> i think that the problem we face is that a lot of people view the military as an easy

target. crs blog group. okay. we will take some money from them. it is over fiver teniers rather than saying, okay, let's just the spirit as grandfather it. wait a little longer to get a return on our money. but when i read in less than 1972 it would take me over the halfway point. yakima going to give medical care when i retire. when i retired they said, now, you may not be able to get into the hospital here. they're there. fine. i can deal with that. rest of my medical care. now they're looking at ways to change all that. the budget targets on our back, sarah talking about closing. they're looking at putting enrollment fees on try care for life. i have to pay for part b. now i have to pay for that to. increasing copay for medical costs. copay raises, there is confusing the paper read a lot of things, it just seems to me, we are an

easy target. that is what really bothers me. >> general sullivan, what kind of messes to resend with this? what do we need to learn from this? >> well, as i said in my remarks to we are causing our people in uniform to think about the issue , to think about an issue which they don't understand. by the way, i don't want to go describe any motives to anyone on whatever happened. >> did we forget? ram worried. what are our priorities? >> i think that is it. you have to decide how we will spend the national budget. where we spend it? will we spend it on security? and i think that is a decision that has to be made. and right now, it appears -- i'm sure it appears some of the

troops of all of this and their families, all of this is being placed on their back. go out here and fight for the last 25 years beginning in panama right through to this day when we are fighting in afghanistan. oh, by the way, now we changed the formula adopted it. >> senator, i think you made a great point. first of all, i think we all have to understand that our servicemen and women and their families are getting a message. and the messages being sent to every day. you can read it every day, and the number of periodicals starting with the-1%, the commissary, the copay, the director. they see that there is an evolution, if you will, support for them. the other issue is the servicemen and their families, their contract is with the united states of america.

and they count on the congress to take care of. they don't have a union. they depend on us to take care of. and when we look at it, they are willing to do extraordinary things for this nation and for each other and put themselves in harm's way, be without a family to my change six or eight times, kids out of school. count on the congress of the united states and america to take care of them. they are getting a serious message. i can tell you, the amount of e-mails that we get from family members fifth which open horse. there are very concerned about all of this. >> with i don't think -- i would like to clear the air here on one point. i don't think they're asking more than they deserve.

i don't get that feeling and all. i think of a one is a fair shake and they want to know that people like you -- and you are, by the way, to your credit, paying attention to what is going on. i thank you for it. >> hi thank you all for being here. i will also add that, you know, when people call things like and $80,000 cut to a sergeant first class whose average retirement is 23,000 to my teensy-weensy, like the "washington post" did or miniscule, it's offensive. we should fix this. we are some in the wrong message . >> thank you very much. senator. >> i would like to follow up a bit. there has been a lot of discussion about keeping faith, about contracts, about all of those kinds of things. cast your mind back, if you would commit to when you signed

up. what did people who sign up sign ? what are they told? is there something the says, if you sign here you will get health care? if you sign here, you will get a certain level of retirement benefits. i just am asking, what are people told when they sign out that the government is committing to them? >> sir, i think there is no contract signed. what you sign a zeroth of office to support and defend the constitution of the united states. to whenever you're told. in the fact is, it is the nuance business of of of those things better told that, not in the contract, return pitbull, medical care. all those things. not serving to become rich.

the fact of the matter is, maybe they're better than mine. i remember signing my oath of office, to be quite frank. and was it. >> i may look younger than him, but i'm a little bit older. my memory is not better than as. over time i learned, retired at two and a half% to year, 50%. i did not sign a piece of paper. i signed up to serve. i took myself. >> even if it was on a piece of paper, what were the expectations? >> the exclusive contract was that i would have a retired pay if i stayed to 20. it would be 50 percent of what my last pace live said. and i would have medical care

pick me up off the battlefield. bring them home. >> i think it is clear from this hearing this morning -- and assure you were here for the first panel, everyone on this committee did not agree with this, once a fixes, wasser fix it now, and as we go forward wants to work off of principle of grandfathering of what is and all. i think that is where this committee is. now, i would like to follow up on one of those points beverage there's been a lot of talk about grandfathering. if everything his grandfather and nothing changes except prospectively what does that mean in terms of budgetary effects? we a predator in your budget window. my simple-minded way, if everything is grandfather that means there will be no savings

for 20 years. if something is changed at the beginning. there should be something at the time of and was meant. this is what the expectations are. this is what the benefits of these. there is some clarity. powdery grandfather and at the same time do anything and all with regard to personnel? >> well, begin by reminding that grandfather and does not necessarily even preserved a change. so the retirement change made in 1980 by congress, grandfather everyone including the cadets and the military academies that did not preclude congress from reversing course when the first savings. the first cohort that would have a slightly small annuity and came up to that point.

the issue of expectations, the issue of by ins, so this peak, from the affected parties, it is crucial to a successful transition of the regime. to your immediate question, madam we say it was grandfathered? i would point out that grandfather and discusses mostly one-sided. so any reduction is not generally awarded only to those with perspective. that is in the way new benefits have been awarded, regard -- reported to everyone regardless of service. so when new initiatives are taken when thought might be given to it to whom did they apply. the purpose of the new benefit of what affect we wish to chief. from a purely technical perspective try care for life changes. annuities changes would show up in the budget as a saving

immediately if there were deductions. because those are both funded by set asides. >> even though the savings. >> even though the cash savings enough for 20 years. >> the set aside. >> you would get an immediate the part of the fence treasury savings. the treasury would have a smaller receipt for the payments but a larger out larry. so yes. from a technical perspective you can see the budget savings for those things that are subject to pre funding which is in the military just the try care for life program and annuity payments for longevity of service. >> thank you. ladies and gentlemen, thank you very much. this is important testimony. as i say, think it's safe to say you can see from the hearing today that this committee is

firmly committed to fixing this problem. >> thank you. >> thank you very much. senator gramm. >> thank you. i think we all firmly committed to fixing this problem. without those e-mails are not too sure we would be as committed as we are. i just want your to know that it matters a u.n., did you go visit people, that congress is friendly to our military, sometimes we make decisions upon a second look. the fact that we are responding appropriately, i think, is a good thing. did not underestimate. >> is there a social contract even though is not in writing? >> individuals will not have to be drafted because of this will

come forward and do the job voluntarily give readers and that the deal? and i don't know what that's worth the somebody up there. your son or daughter does not have to be drafted. i don't know how you put a number on that. think about it in terms of the family budget. what would you pay if you had to to avoid his family from being drafted? that is kind of an odd way to look at it. your trying to put a value on something. it's hard to actually put a value one. so when we talk about their retirement, a master sergeant, is that right? what was your retirement? >> 21,000 year. >> now here's the deal. $21,000 after 20 years of service, multiple departments, would never risk comes your way, that is a good retirement but by no means an age of retirement given the value to the country,

given the fact that your son, daughter call laughlin does not have to go. would you be willing to pay somebody $21,000 or contribute your part? i think most americans would say yes. having said that, we're going to right this wrong. who is advocating for the defense budget? you are out there talking about the troops in the quality of life, we should be doing in terms of try care in the future and how we should be sensitive to changes. who is representing the equipment? who is representing the number of people sit, if not congress, who? >> well, at the risk of breaking into my will tell you the association the united states army is advocating. we are advocating for mission

accomplishment, and that is a very finely tend relationship between young men and women who are developed as leaders and trained to fight in their equipment. the doctor. >> everyone else of the table? >> i don't know. bella the modernization of equipment. i think we also -- the subject of the panel. >> can i make a proposal to you? if you believe, as i do, at the end of the sequestration we're going to have a greatly reduced military capability at a time when we may need it the most. is it unreasonable for a member

of congress to say over the next decade that gdp we spend on defense should be at least consistent with peacetime spending? >> adelle think it's unreasonable. i think it is now an unreasonable to ask all the people are suggesting otherwise or that we continue with the sequestration, could you please tell me what you think you're getting for a defense establishment at the end of this journey? >> what kind of capability. >> what kind of ability and we going to have the engineers are 15 years if we just have this mindless approach to budgeting and programming? >> as my time is about to expire, i guess what i am trying to suggest is a starkly we have been spending around 5% of gdp on defense and time of peace. more and more. i would like some organization

out there to start advocating for a 10-year number consistent with the threats that we face. so i no you're here to ask about the changes, and they need to be changed, but i am asking you to think even bigger, to come back up on capitol hill and remind us all and many have not. what kind of defense capability both you have if you keep invoking sequestration? and look where the average has been and see how far away? would you be willing to help us? lonely in this exercise. >> absolutely. >> thank you. god bless. >> thank you so much, senator gramm. >> a cue, mr. chairman. thanks to all of you for your testimony and your service and for the work of your organization. and certainly i am committed with the others to fixing this absolutely as soon as possible

in a responsible boy would certainly includes finding other real and not fake savings. of wanted to just use my time briefly to highlight another smaller issue but an important issue that hopefully can be fixed at the same time. and at the urging of me and others that is already in some of the bills to fix this issue. and that is a problem created when cbo change their scoring with regard to the clinics and how they were scored and worked into the budget. not to get into the weeds, but out of the blue cbo change those rules. made it far more expensive for them to get these important community-based clinics bill because it scored much more. i have been working for well over a year to try to get them

to respond to this and to put solutions up. unfortunately they have not been responsive in a positive way. but many of us on capitol hill have been and the house passed a bill the would appropriately deal with this goring issue so that these clinics are built, 27 clinics immediately slow down and impacted nationwide including two in louisiana which should have been already built but for a separate scrap been delayed. this house bill was passed 346- 346-1. it is very fiscally responsible. deals with the issue. and at the urging of me and others this provision is already included in some of the bills dealing with this issue, including the zander's bill. so i just urge you all to also put that near the middle of your

radar. i urge my colleagues to get this pretty simple noncontroversial fixed on so that we can move forward as we have been planning to with these community-based clinics. and i believe it can and should be done at the same time which is immediately. thank you. if any of you have any response would love to hear it. i just wanted to put that on the record. >> thank you, mr. chairman. >> thank you, senator. all right. and think we have had a really good hearing. we appreciate your contribution. we thank you all for your service. here, within earshot, out their somewhere else. and we will not stand adjourned. >> that you, mr. chairman.

[inaudible conversations] >> here is what is coming up on c-span2. the congressional committee hears testimony on postal service oversight. another hearing on chronic illnesses. and later the 2016 political outlook from washington journal. >> join us later for more book tv. a look at the book industry. this is the gaithersburg book festival. discuss the future brick and mortar bookstores at 8:00 eastern. on an c-span three at 8:00 american history tv.

tonight's the music industry with a program on world war one an american music. discussion on music as a catalyst for social change. on c-span at 8:00 voting rights and election law with a panel discussing the topic. and in our later ethnic and racial innuendos and political campaigns. part of a conference on ethics and campaigning at 9:00 eastern also on c-span. >> this weekend on the c-span network friday night native american history. then saturday live all the coverage from the national book festival. a debate on scotland's upcoming decision on whether to end its political union with england. sunday q&a with judge robert kinsman. chief justice of the second circuit court of appeals. he shares his approach to interpreting laws passed by congress.

on c-span2 friday at 8:00 p.m. in depth with former guardsmen ron paul. then on saturday of a live coverage of the national book festival from the history and biography pavilion. speakers, interviews, and viewer call-in with author. sunday at 9:00 p.m. eastern after words with william burroughs. talking about his book the astra threat. on american history tv eight massive -- nasa documentary of the 1969 apollo 11 moon landing. saturday on the civil war. a look at election laws and the supreme court case. finer television schedule at c-span.org and let us know what you think. carlos. in dallas. join the conversation.