budget. and later on, ed gillespie, the former counselor for president george w. bush speaks at the hispanic leadership conference network. saturday on "washington journal," reuters tax policy correspondent kim dixon looks at the tax proposals included in the $3.8 trillion budget that president obama released earlier this week. lar lawrence yun talks about the current state of the housing market. after that, "usa today" correspondent dennis kauchon talks about an analysis in a drop for spending for services, employee compensation and infrastructure upkeep in certain states and localities. plus your e-mails, phone calls and tweets. "washington journal" live saturday at 7:00 a.m. eastern on c-span. oh

army secretary john mccue testified before the house armed services committee friday on the budget request. the overall army budget request of $184.6 billion is down from 2012. but includes a 1.7% pay increase for soldiers. and a housing assistance increase of 3.9%. the total defense department 2013 budget request is $525 billion. a 1% decrease from 2012. this runs about 2 hours and 15 minutes. >> we just got notice that the role was voice voted. they were going to have a vote about 10:00. so they said final votes will be at about 10:45. so we'll get as far into it as we can, and then we'll go vote, and with your patience, we'll be

back as quickly as we can. good morning. thank you for joining us today, as we consider the president's fiscal year 2013 budget for the army. general mchugh, general ray odierno, thank you for your service. general, 38th chief 6 staff with the a.m., welcome to your first of your many posture hearings. i'm sure you're glad to hear that. our nation's very fortunate to have the two of you leading our army during these challenging times. we clearly understand the challenges the department of the army faced in crafting this budget request, and we know you probably wouldn't be here if you didn't strongly support it. what it boils down to is based on this budget request, what is the risk associated with the army-ability to meet the national security needs of this

nation. this is what we need your help with, not only the risks, but the critical assumptions behind these risks. many years ago the army testified in front of the house subcommittee on armed services. i'd like to read three quotes from the army's testimony. we have the best men in the army today that we've ever had in peace time. and although we have a number of critical equipment problems yet to solve, i can assure you that our troops, with the equipment they have, would give a good account of themselves if called upon. within a fixed budget, the army can obtain greatest effectiveness only by maintaining a delicate balance between personnel and equipment. we're supporting this budget that will provide only ten divisions because we realize the necessity to integrate army requirements with those of the other services within our national budget. and we will, of course, do everything within our power to lessen the risk that such a reduction must by necessity entail.

these statements were made in january 1950. six months later, a 500-man battalion sized task force from the 24th infantry division under lieutenant charles smith was sent to block the north korean advance. you know the rest of the story. task force smith was outnumbered 10-1, and although they inflicted 127 casualties, the task force suffered 181 casualties. it's worth noting that more soldiers weren't sent with task force smith because the air force didn't have enough transport planes. it's worth noting that 2.36-inch bazookas the task force smith fired at the north korean t-34 tanks just bounced off and had no effect. the modernized 3.5 bazooka had been developed at the end of world war ii, but was terminated

because of budget cuts. the point is, you can have a well-led trained and equipped force and it can still be hollow if it isn't properly modernized and if you can't get it to the right place at the right time. please help the members of this committee understand in the context of the budget, that the army is prepared to avoid the mistakes that led to task force smith. finally, and i really mean this, i can't think of a better team than secretary mchugh and general odierno to lead our army during these challenging times. again, thank you both for your selfless service, and i look forward to your testimony. ranking member smith. >> thank you, mr. chairman. i too, want to join you in your thanks and praise for the general and the secretary. we could not possibly have two more capable folks leading the army. appreciate your hard work on behalf of our country. we particularly appreciate all

the hard work that our soldiers have done over the course of the last ten years, fighting two major ground wars and fighting them very, very well. they performed at the expectations, and i'm sure we all have for them. but still, very, very high level. we appreciate the sacrifices that all of the soldiers have made in the last ten years. and their families. and i believe the chairman laid out correctly the challenge that we face, as we've now drawn down in iraq and now begin to draw down in afghanistan. that means major changes for all of the services, but the army in particular as the largest force that was and is deployed in those locations. how do we do that responsibly, that as we change the size of the force, as we change where they're deployed, we meet the requirements of our strategy and of our national security needs. i completely agree with the chairman that that is most what we want to hear from you and will be working with you on in the months ahead. now, i think the reality is, and we have this debate in this

committee, is this being driven by budget or driven by strategy. i suspect that will come up a time or two during the course of the questioning. the truth of the matter is, it's as with any project, that involves money, it's driven by both. you have your strategy, and you have your budget. i have not yet come across the group that has an infinite budget. you have to live within what the budget is and figure out how to make the strategy work. but i do believe that the services did this the right way. they really started thinking about this six months to a year ago, putting together a comprehensive strategy in light of many of the facts that both the chairman and i have talked about. and put together a strategy that makes a great deal of sense and fits the budget. now, you would like to have more money. we would all like to have more money. but we don't. we ran a $1.3 trillion deficit last year. that's about 38% of the budget. and that is an enormous challenge. not something that can be ignored.

and it is also a threat to our national security. as you go back through history, you can see many examples of nations that ultimately lost wars because they didn't have the economic wherewithal to fight them. i don't think anybody in the history of the world has ever been 100% ready for anything that could possibly happen, but we also have to understand if we spend ourselves into such a massive deficit and economically weak condition, we then won't even be able to respond when the crises come. the rest of the story of korea, we did respond, just like we've done in every war we fought. we did not anticipate too many of them, if any of them. we have to be in a position to economically respond, to build the equipment and grow the force to meet that challenge. so we have to do both. and i recognize that you gentlemen are trying to balance those two legitimate needs, meet the strategy, but also make sure

that we have a budget that's going to work economically for this country so we don't so weaken ourselves economically, that we're not in a position to fight our wars and protect ourselves. that's a difficult challenge in this current environment. but as the chairman said, and i'll end on this note of agreement, we couldn't ask for two better people to help meet this challenge. we look forward to your testimony and the answers to our questions. thank you, mr. chairman. >> thank you. mr. secretary? >> thank you, mr. chairman. first of all, i'm humbled by your kind comments, and i'll try to work as hard as i possibly can to measure up to even half of them. but i'm deeply appreciative. and it's great to be back in this room. although those chairs are far more comfortable than these chairs are i found. but nevertheless, this is always an honor for me. and i'm honored to be here. i want to add my words to yours, mr. chairman, of appreciation

and welcome to our 38th chief of staff of the army. i hope i can keep this one longer than i kept the last one. but even in the relatively short time that general odierno has been with us, he's shown that he's more than up to the task. it's a pleasure to work with him each and every day. and i think, as you have said, both you and mr. smith, that we're blessed to have such a great leader. at such an important time. while i'm on the matter of thanks, i certainly would be remiss if i didn't thank each and every one of you. i may be somewhat biased, but after 17 years on this side of the potomac and now nearly two and a half op the other, i think i have a great appreciation, and i know i have a deep admiration for the incredible work that that committee does for the vital role that it plays, in building our national defense, and of course in the army's case making sure that we have the processes, the procedures, the

rules, the laws, the money to do the right thing by these amazing men and women, some 1.1 million strong. today, as has been noted, more than eve demanding fiscal environment requires us to have an even stronger partnership with this committee, with this congress. and i promise you, we'll do everything we can to see that that happens. we have a shared responsibility. one, do make sure we have the right resources to defeat our enemies, to supply and protect and support our allies, and make sure that our homeland remains safe. and we need to do it responsibly, decisively, and yes, we need to do it affordably. in the budget that you have before you, it supports these goals by laying the foundation for a gradual reduction of our military and civilian end strength, while at the same time supporting the vital modernization, training, soldier and family programs necessary so

that the army, though smaller, remains the strongest and most capable, most lethal land force anywhere in the world. as we implement what i believe can be fairly described as a bold new security strategy, i want to be clear. the army's combat expertise, adaptability and strategic reach will be more vital than ever before. over the last year, the army has continued to be the decisive hand of american foreign policy, and the helping hand of americans facing the devastation of natural disasters, from iraq in its deserts to the afghan mountains to the philippine jungles and korean peninsula, our soldiers, active, guard and reserve, have continued to fight insurgents, defeat terrorists, stabilize governments and support our allies. in deegs, after some eight years of combat and stability efforts, the army successfully concluded operation new dawn.

leaving behind a new fledgling democracy. in an unprecedented feat, our soldiers completed one of the largest retrograde operations in the history of warfare, removing over 3.4 million pieces of equipment. moreover, we continue to support the efforts of the state department as it works closely with the iraqi government to further freedom and prosperity and stability in that nation. in afghanistan, the army has made steady progress in fighting al qaeda terrorists and taliban and insurgents. as well as training thousands of afghan security forces. from conducting extensive regular and special operations to providing essential logistics, transportation, medical and communications support for the entire joint force. soldiers are at the forefront of the u.s. operations and success. but over the last year, your army did even more, with soldiers deployed on six of

seven continents and more than 150 nations around the world. beyond that, in 2011, we saw our citizens experience some of the worst natural disasters in our nation's history. from responding to wildfires and floods to hurricanes and tornadoes, our soldiers and civilians from all components were there to help protect, rescue and rebuild. simply put, our soldiers, civilians and families have once again proven why the united states army is the most capable, versatile and successful land force on earth, and it is this ability to adapt to threats both home and abroad that we maintain as we move forward in this new security and fiscal environment. this year's budget portrays an army fully embracing change by making hard decisions now, to lay the right foundation to the future. first, we are implementing a sweeping new defense strategy which emphasizes even greater engagement in the asia pacific

region and the development of smaller, more agile land forces. under this framework, which was developed collaboratively with the top military and civilian officials in our department, the army clearly remains the decisive arm of the u.s. combat power. our balanced and transformed force will be the most capable anywhere in the world. that is our standard. that is what the strategy requires and that is what this budget supports. second, we're implementing this new paradigm under the significant cuts under the budget control act. in doing so, we made tough decisions. but we are guided always by the following principles. one, we will fully support the current fight by providing the operational commanders in afghanistan and in other theaters with the best trained and ready land forces in the world. this remains our top priority. two, we will not sacrifice readiness for force structure. we must responsibly reduce our end strength in a matter that

fully supports the new strategy, but also provides the sufficient time to properly balance our training, equipment, infrastructure and soldier and family support programs with our mission requirements. next, we'll be able to build force structure and capabilities to handle unforeseen changes to global security. the army must be able to hedge risks through an efficient and effective force generation process, and access to a strong operational reserve component. next, we will maintain and enhance the army's extensive commitments in the pacific. finally, we'll not let the budget control act cuts be taken on the backs of our soldiers and their families. although we have and will continue to examine all of our programs, we will fully fund those support systems that work with special emphasis on wounded warrior, suicide prevention, behavioral health and sexual assault programs. based on these principles, our budget men mizes strength

reductions in 13 to support the current fight. emphasizes continued investments in vital modernization programs such as the network, ground combat vehicle and light tactical vehicle. delays eliminates programs that no longer meet urgent needs in support of our new strategy or transforming force and defers certain military construction programs. the army at its core is not programs and systems, it's people. each time before you, i come not just as a secretary, but humbly as a representative of our soldiers, civilians and their families. as everyone in this room knows so well, these brave men and women depend upon a variety of programs, policies and facilities to cope with the stress, injuries and family separation cautioned by war. sadly, tragically, our suicide and substance abuse rates remain unacceptably high, and we're aggressively pursuing multiple

avenues to provide our personnel with the best medical and personnel support available. we must never forget that our success in both iraq and afghanistan has come at an incredibly high price to our army family. providing the means and resources for whatever challenges they now face is, in my opinion, the very least we can, we must do. as a final note, regarding our army family, i would be remiss if i failed to mention the devastating impact that sequestration would have, not only on the army programs, systems and readiness, but also on our soldiers, civilians and their families. sadly, they, too, would bear the cost of continued inaction leading to sequestration. to use an ax to cut half a trillion dollars from defense spending would be perilous enough, but to do so without providing the department with any means of managing those reductions would be beyond risky. to say this would be

unacceptable is at least in my opinion an understatement. in conclusion, on behalf of the men and women of our army, let me thank you again for your thoughtful oversight, unwavering support and partnership. the army is making progress in afghanistan, and i feel this budget demonstrates is poised to transform into a new smaller and more balanced force, ready to meet the needs, all the needs of this nation's national defense. i want to be clear, very clear, these are extraordinarily challenging times, globally and fiscally. our strategy in this budget reflect very hard decisions, impact communities, industry and people. we know that. we know it well. and i promise you we'll do everything we can to minimize these effects. but in the end, to make a properly balanced army that can stay ahead of our competitors and support our greatest asset, our soldiers, we must

restructure, we must reprioritize. we have begun this evident, aff with your continued leadership and help, we will succeed. thank you, mr. chairman. >> thank you very much, mr. secretary. general odierno. >> thank you, mr. chairman, and ranking members of the committee. it's an honor to be in front of you today and i want to thank you for the incredible support you've continued to give our soldiers as we fought in wars and afghanistan and around the world. we couldn't have done it without your support, your guidance and your partnership that we've had. i want to -- i appreciate the vote of confidence from the secretary mchugh, but in reality, it is i who is relying strongly on his wisdom through my first posture hearings as the chief. we are very fortunate to have secretary mchugh leading our army. he deeply cares about our institution, and its role in providing our nation's security, and i could not ask for a better boss.

so together, here today, both of us, it's a true honor to be here today representing our 1.1 million soldiers and our nearly 280,000 department of the army civilians, and the 1.4 million family members. i'm extremely proud of the commitment, professionalism and dedication of our soldiers and their sacrifice and accomplishments. today they continue to be in over 150 countries around the world, collectively they are a truly globally engaged army. with 95,000 soldiers deployed, and another 96,000 soldiers forward stationed, conducting a broad range of missions. but our army's primary purpose is steadfast and resolute. to fight and win our nation's wars. as the army continues its transition, we will ensure the president's 2012 defense strategic priorities that are

implemented, by first meeting our current commitments in afghanistan and ensuring a highly well-trained and well-manned equipped force. now that operations in iraq are complete and we continue surge recovery in afghanistan, we will help shape the regional environment in support of the combatant commanders as well as our strategic environment. in the asia pacific which is home to 7 out of the 10 largest land armies in the world, we will provide an array of tools through rotational forces, multilateral exercises and other innovative engagements with our allies and new partners. we currently have some 66,000 soldiers and almost 10,000 civilians in this region. in the middle east, we continue our strong commitment to sustaining and building partner capacity, to ensure stability. and in europe, as we decrease our footprint by two brigade combat teams, we will use a series of engagement tools that would include rotational forces to conduct training and

readiness exercises with our allies. this will serve as a model on how i see us doing things in the future. using a low-cost, small footprint approach by utilizing rotational regionally aligned forces and pre-positioned stocks. as we move forward, we will ensure our national guard and army reserves remain resourced at an appropriate level to build on the competencies and experiences that have been gained over the past several years. we are committed to maintaining an operational reserve to meet future security requirements. we will adapt our progressive readiness model to do that. we will build on the integration and synchronization gain over the past ten years between our conventional and special operations forces. the army's investment in our special operations community in counterterrorism, and other key operational matters is significant. going onwards to 35,000 elite warriors that provide specialized and unique capabilities. as we look forward, and the

secretary already touched on this a bit, there are several focus areas that will help us guide the way ahead. foremost, we will remain committed to our 67,000 war fighters in afghanistan, and continue to provide trained and equipped soldiers to win that fight. we'll be responsible governmental stewards through energy cost savings and institution al and acquisition reform and continue our equipment reset program to restore unit equipment to a desired level of capability, that is commensurate with their future missions. there have been over 1.8 million pieces of equipment reset to date, which equates to approximately 31 brigade equivalence annually. finally, we'll be become leaner. with a leaner army, we have to prioritize. yet, we must never sacrifice our capability of meeting a wide range of security requirements. this requires a delicate balance of end strength, modernization and readiness as we cannot afford to reduce too much too

soon. with the end of operation new dawn, and new defense priorities, we will reduce our end strength in the active army from 570,000 to 490,000. from 358,000 to 353,500 in the army national guard, and from 206,000 to 205,000 in the army reserve. it is imperative for us to sustain a gradual ramp, that will allow us to take care of our soldiers, continue to provide forces for afghanistan, and facilitate reversibility if necessary over the next five years. this helps met gate strategic risk as we continue current operations and simultaneously reset for the future. we will also reduce our end strength by a minimum of eight brigade combat teams in the active component. this drawdown based on the objectives will be done with deliberate consideration, to the impacts on combatant commander

requirements, as well as considerations on local communities and infrastructure. we are in the process of reviewing our brigade combat team design, as we analyze lessons learned for the past ten years of combat, and look to what future capabilities we will need to be successful. while we are a few months away from decision, initial analysis indicates we can eliminate some unnecessary overhead while sustaining more robust adaptable brigade combat teams. this could result in additional bct headquarters reductions while sustaining combat capability at the battalion level. army unit readiness is measured by the level of its manning, training and equipping. as a component of readiness, we'll continue to provide first-rate support for all our families, wounded warriors, and our veterans. additionally, the secretary and i pledge our support for the proposed reforms in military compensation programs. we are reinforcing the

professional ethics centered around trust and respect, in order to establish a climate with sexual harassment, sexual assault and hazing will not be tolerated. this misconduct is inconsistent with the core values of our profession. accountability will be enforced at all levels. similarly, the secretary and i are relooking at the woman in combat, as they comprise 15.6% of our active duty work force. this will start with the opportunity for women to serve in their designated field regardless the type of unit. it's about managing talent, and putting our best people in critical and developmental positions. as we continue to transform our modernization practices through a holistic bottom-up approach, we must achieve our priorities of the network, which is critical to our ability to manage information, and command our forces at all levels both home and abroad. the ground combat vehicle for infantry fighting, that can

accommodate a squad and balance mobility and survivability, and provide unmatched lethality on the battlefield. the survivable network tactical vehicle which both myself and general amos agree is necessary given the last ten years of fighting, and what future operations may entail. and finally, we must have continued efforts to give our squads superiority on the battlefield with advanced soldier systems and weapons, communications and protections. the secretary and i will continue to assess and make adjustments to our budget strategy while addressing any potential risk incurred as we adjust our forced posture. i'd like to leave you with one last thought. sequestration is not in the best interests, in my opinion, of our national security. it would significantly decrease

our readiness and detrimentally impact our modernization programs. mr. chairman, and members of the committee, thank you again for the opportunity to speak here today. this committee affords our all volunteer army to be the most decisive land force in the world. we could not do it without the support you give us. it is an honor to work for this great nation. the strength of our nation is our army. the strength of our army is our soldiers. and the strength of our soldiers is our families. and this is what makes us army strong. thank you very much. and i look forward to your questions, mr. chairman. >> thank you very much. general, mr. secretary. last year, we passed the deficit reduction act that was the -- that took a two-pronged approach to attack the huge deficit problem that we've built