cut this back so that eventually people on social security are going to lose their benefits. >> thanks for your call. anthony, republican, in boarding town, new jersey. good morning. you're on. >> caller: thank you for taking my call. i'm disappointed with the payroll tax increase because it's only going to lessen the amount of money that an individual would have at the point of retirement. and social security was supposed to be an aid to the people. and the people that will be getting this $20 or $40 a week are not going to save the money. and as the previous caller said, it's only going to increase the debt and the deficit of this country. and that is my comment. >> thank you. walden, massachusetts, up next as we talk about your reaction to the compromise made here in washington over the social security doc fix. the unemployment benefits and also the major provision, $100

billion worth extending the social security tax holiday. this is richy who is an independent in malden, massachusetts. >> caller: good morning. i agree with the other two callers about the social security and how that's going to affect it. but i don't agree in extending the unemployment. if you can't find a job in 99 weeks, then you aren't really looking. there's plenty of jobs out there and we have thousands of mexicans coming across the border to work. that really irks me. we have to stop giving, giving and giving and straightening the whole house out here. >> thank you, richie. the video you're watching is yesterday of the conferees, that is the house and senate chairman who are signing the legislation and max baucus, dave camp on the house side anderation their harms to show their unity. that's the message they were sending out during that public

signing of the conference report compromise. jan tweets us this morning about the doc fix. so they extend it to december. what happens between the election and the end of december? or kick it to the next congress? white haven, tennessee, up next. larry is a democrat. you're on the air. good morning. >> caller: good morning. i agree with the payroll tax extension. the key is to putting everybody back to work. once you put everybody back to work you can fix everything. that is the key. and right now, we need to do everything we can do to help the economy. >> so, larry, so you believe that this investment that people will spend the money and that will help the economy? >> yes, ma'am, i surely do. and you cannot cut the way out of a deficit. that is crazy. i'd never heard anything like that. if you cut all the jobs, what would the tax base be coming from? >> thanks for your call.

next up is martha, a republican watching us in chicago. good morning. you're on. >> caller: let them learn how to work overseas before killing everybody. that's what i say. take it from them and give it back to the american-born people. >> all right. thanks for your call. greenville, ohio, this is don an independent there. good morning, don. >> caller: morning. how are you? >> great. thank you. >> caller: i disagree with the payroll tax cuts because basically, i agree with what rosalyn said. and she pretty much said everything i was going to say. you i say they should be doing away with bush tax cuts and also this unemployment is just getting out of hand. it should have been 26 weeks and with 13 weeks extension and be done with it because there's a lot of people -- i was on unemployment. it was good. and i got a job, but i took less pay and took a job and that's

what these people are going to have to do, i think. they're just going to have to stop with this unemployment along the line. i think it only should have been 26 weeks of 13 extension weeks. so that's all i've got say. i agree with rosalyn about the payroll tax cuts, though. it's just hurting social security which you won't believe. and i'm sure they are not going to go back and say that john doe didn't pay so much into social security with this and give it back to him so they are actually -- people are getting hurt themselves by this. >> thank you, don, for your call. bill beatty tweets us, missing $100 billion social security funds replaced by general funds. that money will be borrowed to make it up. so what's the difference? let's listen to speaker john boehner talking about the compromise yesterday. >> the agreement that's been reached to stop tax hike on

middle class americans is a fair agreement and one that i support. i want to thank chairman kemp and all of our conferees for all the work and effort they've put into this bill. but let's be honest. this is an economic relief package. not a bill that's going to grow the economy and create jobs. tomorrow is the third anniversary of the president's stimulus bill. and yet another reminder that we need to change course and focus on pro-growth economic policies and the types of bills that for months republicans have been passing over to the united states senate. in december, the white house famously said that extending the payroll tax cut was the last must-do item on the president's agenda. according to the white house, when he signs this bill, he's finished. those that haven't noticed, the president checked out last labor day. and has been unengaged in

leading our country ever since. >> that's house speaker john boehner yesterday. politico has a behind the scenes story that i want to share with you. payroll deal a boehner production. here's what he writes. here's the story john boehner wants to be told about the payroll tax deal. he had little to do with the negotiations. he divorced himself from the house senate conference committee talks, ceded his power to others allowed them to release an agreement. boehner, his staff and other top leaders have their finger prints all over the pact. while tax writers dave camp and max baucus were crit dool the deal, boehner's senior aides helped negotiate key provisions of the deal. later on it says consider how a provision to sell broadband spectrum, a key component that paid for the extension of jobless benefits came together. it wasn't resolved until around 10:30 p.m. on wednesday night

when senator majority leader harry reid's chief of staff david krone and boehner's top aide barry jackson reached an agreement. the two had been at loggerheads over how much money the spectrum sales would raise. jackson pegged the figure higher than krone believed it to be. krone offered to fill any gap with money from increased fees on fannie mae and freddie mac. payne boeh boehner's camp rejected that offer. the two sides agreed and that part of the deal was done. that's a little behind the scenes from jake sherman pof lit co. back to your calls. next up is a call from columbia, south carolina. good morning to jim, a republican. you're on the air. >> caller: good morning. how are you? >> great, thanks. >> caller: i wanted to say, the reason they capped the payroll tax at $100,000 or so is because they limit the amount of recipient can earn later on on social security. what kind of person would put money into a retirement plan when they weren't going to get

the return on their money that they deserved. i mean you cap social security at $24,000, what makes you think you can just take any amount from somebody who happens to make and work real hard and make good money and i don't make $300,000 a year, but if i did, i wouldn't want to pay 9% on $300,000 when i could only make $24,000. they limit me on my earnings later on. people need to know that and understand that. and secondly, the -- you are talking about people. 49% of people don't pay any federal income taxes. now they want a break on their social security tax. what more do they isn't and i know that people are in a bind but if they're voting for democrats for unlimited benefits, then they have to pony up somewhere and the last thing is that both republicans and democrats are just giddy with giving the american people what they.we the american people keep voting for tax cuts but yet spending, it's insane. and they stood up there yesterday. the democrat and republican acting like they had accomplished something. they are just putting us in more

in debt and putting us down the way of greece for funding things we can't afford and acting as though they are saving the country when they're just buying our votes. and we fell for it and we elect them. it's really a sad situation because again, if you are going to vote for democratic issues and you want democratic platforms, then pony up some of your money. at least pay 500 bucks instead of zero on your federal income tax notice. and when people say that they are only in a 15% tax rate or romney is but they're not -- if they take their marginal rate, very few people are in a higher bracket than 15%. and so few people really understand this. i have a -- somebody the other day told me that they were retired at 40 years old and paying 3 grand in federal taxes. that's only a 9% rate and he thought he was paying more than romney was. there's so much uneducation about this. and again if you make good money and you are limited on your --

what you can earn later on from social security, how the heck can you expect someone just to pay more over $100,000? i mean, that's like taking from them and getting to the point where you are just being ridiculous. >> jim, are you in the financial services field? >> caller: i'd rather not say. >> thanks for your call this morning. columbia, south carolina. joan is watching us in randolph, vermont. and she sends this e-mail. i agree with the caller who said the long run solution is to lift the cap on income tax for social security. the issue now is short term. we desperately need an increase in demand and the payroll tax extension will do that. next call, lancaster, pennsylvania. john, an independent. good morning, john. >> caller: how are you doing, susan. >> great, thanks. >> caller: there's kind of a painless way and i'm not sure why they haven't talked about this to take care of social security. take the -- because i agree with the first woman from california about debt and extending the

amount of tax. take it up to, say, up to $200,000. people -- yeah, take it up to $200,000. then if you make over $500,000. you only pay 2% more. you know, over a million. 1.5% more. and over time, that would take care of the shortfall and it really wouldn't hurt those people at all. you know if you think about it. 2% 1.5%. but take it all the way up to $100 million for the wall street guys. 1.5%. and that takes care of a lot of folks. >> thanks so much, john. appreciate your call. with our pay going down, cost of goods and insurance going up, property values going down, we need any tax cut we can get. joshua oakley has this. it's not perfect but it's a godf losing worse than in 2006 and 2008 this year. maybe the people evenn starting that constantly saying no to everything is not good policy.

plus, lying about everything isn't very good, especially when people are actually paying attention. there's a story about the gop and it's in the "baltimore sun" this morning. gop image on taxes takes hit, and this is lisa's story from the tribune service. once firms stanned -- >> "washington journal" is live every morning at 7:00 eastern on c-span. going back live to capitol hill for the hearing on the budget for the army for 2013. we're resuming testimony from army secretary john mchugh and chief of staff general ray odierno. >> -- by 50 this drastic cut. how you arrived at 50%? particularly since the budget is documented itself says we have a backlog of equipment that has to be reset. >> well, we do have a backlog, as we retro grade out of -- we've retrograde out of one theater and retrograde out of the other. but we had to fit in the reset

program within our entire budget allocation. we tried to do it in a way that would ensure that the rates are sustainable so at least in the near term, we're not causing any work disruption or work interruptions. so it was both a strategy but also a budget decision that, you know, was one of those hard ones that i spoke about. but we think it will keep the lines open and progressing as we go through this fit. >> 50% will be able to keep the lines moving? >> i think -- it's a steep hill to go off. >> in the base budget, we sustain 50% but there's also a piece of oco that will be used to fund this. that's where the rest of this will come out of iraq and afghanistan. >> i they're she sentiments of mr. reyes when he talked about not letting this base go cold and what it can mean to us.

the army depot has the largest public/private partnerships of any installation in the country. and we worry very much when you talk about stryker being one of those lines that would go cold, about losing those folks. >> i was just -- i'm sorry. i didn't mean to interrupt you, mr. rogers, but the chief makes a good point. a lot of what we need to do, a lot of what we hope to be able to do will be dependent, not just after or up until drawing out of the theater in iraq and afghanistan but for two or three years afterwards in terms of sustaining oco. and it's not just in the kinds of things that people often think about. it is critical for our depots to have those funds available for our reset of equipment as we draw out of afghanistan as well. >> so based on this core budget and oco funding, do you believe you're going to be able to meet your requirements as outlined in

title 10 for combat vehicles? >> the issue becomes, oco is a one-year -- we don't know what we get from year to career. what we're getting in '13 we have enough to do what i think we need to do. what we don't know is what the oco would be in '14, '15, '16 and '17, two or three years after we finish coming out of afghanistan. we are making it clear we need support for reset in those years in order to not only -- it would not only support the depots but also is about the readiness of our capabilities. >> i have had several conversations with general dunwoody and general stein about my concerns over our depot network and readiness. as the secretary knows, when we went into iraq and afghanistan, our depots were not up to speed and it took us 18 months. and general dunwoody has assured

me you all have learned those lessons and will not let that happen again. but when i look at these numbers, it worries me because you all know we could be in iran or somewhere over there in the next six months for all we know. i want to make sure that you're confident that you've got what you need for a surge capability. and nobody knows a surge capability more than you. and if these numbers aren't working for you, you've got to tell us. because that's our problem, not your problem. so we count on you to tell us what you need to be ready. when you made your comments about being leaner going forward and you outlined your numbers for end strength, let me ask, do you think you are going to be prepared to deal with another theater of war that may open up in three years at those numbers? >> congressman, i do. i think with the size of the force we conduct combat operations. we'll have the capablity to do that. where we have a little bit of risk is if it gets extended.

so what we are not -- what we don't have is a force that could do long-term stability operations over a long period of time. so if that occurs, we're going to have to relook growing the force again. but we'll use the reserve component as a buffer in order to have them help us to the time to grow the force, if we get engaged in another major theater of war. >> great. and i do hope that you all vigorously pursue the fms because this is a way for us to keep some ofse hot. >> chairman conway. >> i want to just make a comment. appreciate the continued commitment to the win-t program, the jitters communications program because i think those are important to leaner and more adgile. those are the tools that allow you to do that.

following up on mr. rogers' comments and perhaps page 7 of your summary, under listing army components, you list the reserve component as one unit. and maybe we can start that conversation about why we have a reserve and a guard. not today. but it may make sense given a look at it. i was near '05 and watched some of the struggles of converting the guard and reserve from a strategic force with a domestic mission to a tactical force that was used extensively to today, down range, you can't tell -- unless you know the patches and understand the org chart, you can't tell the difference between a guard unit and aiskt duty unit. over the next five to ten years, will you have in place the right readiness matrix to make sure that that guard reserve component stays ready for the fight and how we look at

rotating the -- for lack of a better phrase -- quick reaction force because if you do that extended deal, somebody has to be first. how do you keep those guys ready and rotate that readiness issue through that system in order to make sure that we don't have those growing pains we experienced in that original conversion. >> i think as most of you -- as we went through this process continuing to meet our commitments in iraq and afghanistan, we developed army force generation model which put both active and reserve component units, national guard, army reserve, active through a sequence of preparing themselves to get mobilized, to get ready and then to deploy. as we come out of iraq and afghanistan, we are going to adjust that process. we're not going to walk away from it. we're going to adjust it and keep a process where active and reserve component units will be in a reset phase, a training phase and an available phase. we're still work -- >> you said reserve. that is

includes reserve -- >> national guard and u.s. army reserves. and what we will do is for an active unit, cycle would be 24 months and they spend six months in reset, 10 months in training, 12 months available and then for the reserve component a bit expanded because maybe over 60 month period but allow home to rotate through so we would always have a portion of the national guard and u.s. army reserves ready to go. and what it also does is it will enable sustained readiness across the force over a long period of time. so that's the intent of our process. we're working through the details of this and how it's funded and how we sustain them over time and i think we'll able to do this. we're working very closely with mainly the national guard but also u.s. army reserve on this concept. >> would the readiness reporting program that you have more events that can show us this

side of the table where we are at any one point in time with respect to notice >> it's going to have to and have to do it for the total army. >> right. thank you, mr. chairman. yield back. >> thank you. mr. hunter. >> thank you, mr. chairman. thank you mr. secretary for your service and general odierno for your service and your family's sacrifice as well as you. the jail tv, i want to run through a few things. the new requirements don't reacquire blast or underbody protection for the same stringent requirements that they were originally stated. first question is why relax these requirements. why do we relax the requirements, why do we relax the weight limit. if you're over 13,000 pounds, it makes you less mobile whether it's air mobile or if you are putting these because the marine corps will use them too, they will be on ships, heavier on the

ships as well. from what i could see from all the different people, all the different vendors applying for this, their vehicles come in at 14,000 to 16,000 pound or more when you add on their army gear. you can't carry them. my specific question is ford motor company. my district is san diego. ford is not there. i have no dog in the fight or horse in the race. ford offered to build the next humvee. they offered to spend $400 million of their own money to do it. they've come in with multiple proto types to give to you say here's what we have. this is the second largest car manufacturer in the narks manufacturer that goes back to world war ii and korean making american products for american military personnel. let me run through a few things on ford. they can come out at $225,000 per vehicle and what's more important ford estimates because they make cars and trucks for a

living, their original estimates will be within 4% of their actual production cost. so there's not, as we look at these different programs we know it's pretty hard to get within that 4%. ford can do that. what they tell you now is what the vehicle will cost twin future. they can save us over $100 billion in taxpayers, congress and the army and marine corps over lifecycle costs and production costs over the life of this vehicle. the most troubling aspect of this is this. this is a quote from dod, talking about why the procurement date for this is set up for this june. the main question is ford asked for an extra 12 months so they can compete for this. they were turned down by dod. dod said no. here's what they told ford. ford could come in with more armor at less weight and provide more bang for the buck. in source selection no credit will be given for proposed

performance above the threshold or objective levels. if you make something that's clearly superior in protection, maneuverability and weight we don't care we're going to do this anyway. the only reason dod says to exclude ford that i've seen from the documents i've read is that the money may, it may be taken out of the budget by congress. i think the nature tried to kill this last year. it was a fight. the money was put in there anyway. so the only reason we're doing this now this year even though the vehicles won't be fielded until we're out of afghanistan the money may be taken out of the budget. i'm not getting this at all in this climate. we'll be out of afghanistan. we need be more maneuverable. i don't see how we make a humvee in the future that doesn't have underbody protection and can't come in under 13,000 pounds and theirs is called the joint marine/army vehicle. they are asking for 12 months so they can compete. that's it. i guarantee you if you look at

what was more people in this room, if you told them that just give us 12 more months and we'll give you something a lot less and provides more bang for your buck we can guarantee you because for god's sake it's ford. i don't drive a ford. my dog is even out of this fight. i drive a chevy. i don't understand. i'm asking for clarification or explanation and why can't we work together on this and get it right this time and show how you can be a shining example for the rest of dod and the military procurement system and say here's how we did it. >> as you know, congressman hunter, the program and whatever changes made in the requirements came about as a result of discussions between the marine corps and the army. there was a back and forth as to levels of protection, weight tradeoffs, et cetera. that certainly defer to the chief as to some of the specifics on that. i do drive a ford. it's a great company. and has done amazing things in

difficult times. when this rfp hit the street, i was very hopeful that they would choose to participate and to go ahead with the program. they chose not to. that was a disappointment to us. but we had set the ground rules. we had put out the rfps. every competitor and we have six companies now that are all very credible and have played by the rules that were set out, and from a general acquisition perspective i think and i can't speak for dod it would be a very tenuous decision to pull back an rfp based on a single manufacturer saying what they may or may not be able to do when they chose not to compete. now, ford can submit at any time during the process an unsolicited program that we'll fully consider. we can't pull plugs on developmental programs when

everybody sells playing by the same rules because the single competitor as great as ford is here's what we'll promise you we're going to do. it's just, i think, would be a bad precedent to set and that was part of our problem. i'm not even sure, frankly, it would be legal. i don't know if the chief wants to answer that. >> i don't think we'll resolve this today. let's call this kind of an opening gambit. mr. kauffman. >> thank you, mr. chairman. thank you for your service, general odierno, and mr. secretary. i'm concerned about -- i agree with you in the bottom line cuts. i believe cuts can be made to the department of defense. i don't believe, i believe the sequester goes way over board. there's no disagreement in that in this committee on either side. but let me just say, express to you some areas that i think i would like you to look at

because i'm concerned they were cutting capability and by cutting capability we're increase risk to our national security. one is i just think that there's a nature to our military across the board. if we look at the ratio of flag officers or general officers to the number of soldiers and this is in every branch of service, i believe, it's just -- we're too top heavy. we really need to look at slimming that down. next, i know there's talk about that we ought to slow down pay increases. moving forward as a cost savings measure. i disagree with that. let me give you another area that i would like to you look at. they are slowing our promotion system down. first i think it moves too fast. we would increase not only have a cost savings but increase the professionalism of our military by slowing down the promotion system, allowing soldiers to

spend more time in grade in their respective military occupation and specialties before they move on. when you have an organization that has the kind of quality that the army, united states army has today which is extraordinary, and you have the kind of retention with highly qualified soldiers wanting to remain in the army it only makes sense that we do the math and we slow down the promotion system. next i think guard and reserve, i'm very disappointed we have cuts in the guard and reserve. envisioned in your plan. where i think what we taught be doing is increasing the size of the guard and reserve, quite frankly, through reductions on the active side. i mean, secretary of defense gates before he left warned this committee of the trajectory of personnel cost and how it was eating into acquisition costs irrespective of the cuts that are before us now.