discussion, i suspect, i understand, i understand the question of sequester. the cuts up until no. we need not to go any further because of the complicated defense situation we face ourselves with. i think the current defense spending is equal to the top three countries. will we still be greater than the 1,700? >> yes.

thank you. and then i guess the issue about health care has been addressed or our veterans, but the 4.4% reduction was a surprise to me. i said to my knowledge and i later found out that was inaccurate. how will we supplant and how will we be able to augment the services that tricaren is going to have to augment with -- >> what we have done in tri care, we don't impact the quality of care they receive nor the kind of care they receive, but we do require that they will pay additional fees for those services, that's the proposal

that we have presented. >> no change in benefits. >> no change in benefits. >> the fee increase, will that be doable for our veterans. >> we have tried to design it in a way that it would have minimum impact on people who can't afford to do that. this is still the best health deal in town in terms of the kind of coverage we provide under tri-care, it's not bad. what we felt is we have to at least -- right now the -- i've got to do something to try to control those costs, and this is one of the ways we thought it would make sense. >> in asia, we have had the issue of okinawa and some of the redeployment of marines and some are fixed wing and helicopters to different bases.

i would like to sit down with someone and get a full detail on that. but i have understand that levin and mccain had asked for a study of this security system, or what is the current security system that they wanted a study of that area before they would move forward on their budget. is that still in play and where are we with that study? >> i think they have always expressioned concerns about -- with regards to how we would relocate to guam and the amount of money that would be expended in that move. but we are in the process of working with japan in an effort to try to negotiate an approach that we think will make better sense. this is something we have been bouncing around for 18 years and we thought we would try to

resolve that. >> to the tune of three prime ministers. i appreciate that. are the two landing strips that they were looking at at one of the air bases, is that off the table? >> i think that's one of the things we were discussing. >> thank you, mr. chairman, good afternoon, gentlemen. mr. secretary i would like to get a ratio from you, when you think of the term war fighter or combat troop, troops for every one of those brave men and women, how many others are behind them, whether they're contractors, whether they're civilian employees, uniformed, noncombat, what's the ratio. >> we have about 750,000 civilians and on the order of

350,000 contractors. if you want to count the civilians and the contractors it would be 1.4 to 1. >> what is it? >> if you count all the contractors and civilians it would be about a million roughly and you've got about four in uniform. 1.4 to 1. >> i'm trying to be clear as possible, all support. >> that military personnel are providesing support. >> all support that would come of the out this budget. this is a budget committee. so what would the ratio be. how long will it be before the defense department is audit ready.

>> i directed that we try to develop our audit capability on a faster track. i think right now, the target was about to hit 2017. what i'm trying to do is at least begin to develop an audit capability by 2024. -- and just so we're clear, this is not where the military is able to pass annal audit that ought to be given to -- it's just getting the defense department to have an audit. >> you're absolutely right. spending the kind of money and not having the ability to audit where those fuchbds are going. woe as a decht need to have aud

i believe has a department for the -- >> we're all on the same team here, but, you know, we also have a duty to make sure that we're spending this one as wisely as possible. >> you bet. >> let me finish just by reading a letter from the kmoonder of the u.s. navy reserves. john pickerel. i want you to respond to it because i appreciate my democratic as well as republican colleagues would appreciate what he's sighing. this is after he talks about the 12 service members who are needlessly electrocuted because of faulty wiring and bad electricians by defense contractors. while stationed in the green zone i had a live in trailer thankful -- strublg up a conversation with them and found out that they had a job running network cable. when i asked how they liked it,

he said it was so great working there. he was making $300,000 a year. he could rert at 30. one of the officers assigned beneath me befriended a contractor and one day she came to me in tears. she couldn't understand why her boss was telling her to mark down 8 hours on your timecard. how much of all this spending was necessary for our national defense, was any of it necessary for national defense. >> i think the observation of that individual is of concern to all of us. i think taxpayers give us the

money to spend on defense, we owe them the responsibility to make sure that every dollar is being spent nord to take on this country. i'm not saying there aren't occasions like i pointed out in the letterman, where those are examples of people who abuse the system and what we have a spent to do is make sure sure there are no abuses and what's what i'm intent on doing. >> thank you mr. chairman, mr. secretary. i know that my colleague asked you about funding levels for israeli missile defense. i apologize i was not here when he asked that question. would you mind repeating and explaining what those numbers mean in terms of our overall security operation with israel and also explain those numbers as it relates to comparisons in

previous administrations. >> first of all, obviously our support to israel is unshakable and we have reflected that in our budget request. the budget request is done in collaboration very closely with the israeli government. since taking office, we have -- the administration has requested money for a number of missile systems that they have. the ballistic sling missile defense programs as well as the iron dome system which is a very effective system for defense against short range rocket attacks. the total amount of assistance that we provide israel is $650 million which is more than double that was provided in the last administration which was at a level of $325 million. so we are making a significant

contribution to israeli defense. >> thank you. and since actions speak louder than words which i think is a pretty universal truth, could you describe the administration's actions to date to deter iran's nuclear ambition and their process towards developing and deploying a nuclear weapon? >> the administration, the president has been clear that we will prevent iraq to gain a nuclear weapon. nobody should make a mistake about our intent here. what we have done is to work with the international community to make clear that iran, that they have to deter from the effort that they are making to develop their nuclear

capability, they have to stop the -- what they are dock in terms of promoting violence abroad. providing assistance to terrorists abroad. they have to stop any kind of an effort that would close the straits of who muse. hormus. diplomatic sanctions and economic sanctions. those sanctions are biting, they're isolating iran. they're impacting on their economy and impacting the ability to govern their own country. the whole point of the sanctions is to mutt pressure on them to -- they have to join the international community and live up to their international responsibilities. if they don't, we have put every option on the table to make

clear to them that there is nothing that we will hesitate to do to stop them from developing those kinds of weapons. >> and we have applied the toughest sanctions that iran has felt to date, with the most international buy in in effohis? >> the anations we have just applied impact on their energy, impact on their banking system, and those will continue to take effect. the combination -- >> thank you, mr. secretary and also thank you for your long time service to our country.

>> secretary panetta, there were signs about the sequester, the president of the united states did sign the deal that included that, but yet there's no provisions in your budget to implement a sequester. did the president direct you to ignore that particular law? >> the position of omd was that we were not to plan for a sequester at this time and that's the direction we have been given and that's what we have been doing. couldn't it have many different types of consequences by refusing to plan for that long. >> as we pointed out, this is pretty unusual to have a sequester mechanism. the point of it from the very beginning was to be so drastic and so insane that it would force the congress to do things right. that's the whole purpose of

sequester. i don't think that congress intended sequester to actually happen. >> did the president direct you to ignore the directive. >> we were told not to plan for the sequester, particularly after coming up with $5 billion in deficit reconnection. >> when would you plan for the sequester, and the president's involved here, it's not just congress, obviously. the president would have to supply a plan that could suspend that. so we're just hoping that that doesn't happen? is that what we're doing now? >> i would hope that you would hope that doesn't happen. >> there is no answer to the question.

the -- you hope by 2014, maybe by 2017, what exactly does that mean if you're not audit ready? >> it means that the defense budget is not auditable, and we are the only agency that's not auditable and that's a shame. the first thing i did was to direct the comptroller that we have to move on a faster track to develop auditable books. >> what assurance do we have that you're spending hundreds of billions of dollars where you're telling us you're going to spend it today. you're essentially saying we do not know that? >> auditing, is ensuring that what we say, how we say we're spending dollars is in fact audited to confirm that is the case. we do have audit in the

different agencies, it's not like we don't carry on auditing for the different services. but for the department as a whole, we do not have auditability and that's what needs to be corrected. >> and i had -- my constituent contacted me today about a news item. did you know that our federal taxpayers are paying for a $750,000 soccer field at gitmo? is that something that the department of defense knew about? >> i'm sorry that -- >> a $750 million soccer field at gitmo. were you aware of that? >> no, i wasn't aware. >> and are you aware that the military owns five separate luxurious resorts that service members can attend as well as perhaps a million tourists can attend as well. is that something you knew that

the department of defense owned? >> no. >> is it proper to sight see european castles, shop in seoul's exciting shopping districts, the best one, to go to walt disney resort. answer the question. >> that's nonappropriated funds first of all, which means it's not a part of the defense budget. but a lot of the facilities are provided for men and women who go into battle and who have been deployed overseas and you know what? i think at the very least we owe them is the ability to enjoy whatever time they take off from going to war. >> this i plies to a million civilians who have never seen war, and for folks who do not live in these particular areas, they can't jump on a plane.

if you're not audit capable and you're here asking for more money. my constituents are very interested in how that money is spent. >> the fact that we're not audity doesn't mean we can't do there a series of auditors, and i have made it a major area of everyo emphasis. i can tell you where we're spending the money, i can't go through all the detailed things that are required by an audit. they do $150 million accounti i

transactions a year. >> he was able to answer. >> i let him answer your question. we have a vote hit it about five and about five other members. >> general dempsey thanks to yoyou for your years of service. secretary panetta, you've been on both sides of this, it must be interesting for you to -- you have been on both sides of this as well. you have stated the fact that many others have stated in other areas as well. you can't just -- education for instance, there's been years and years of just throw more money at it and it will fix the problem. just to throw more money at it

doesn't give you any better outcomes. there needs to be some things that occur and that may not necessarily mean throwing more money at a it. so i want to ask you about a couple of those. where are we a far as the total number of uniform, when you have mentioned force reduction, what are we talking about between all branches and force reduction. >> we're talking about 120,000 that will be reduced over these next five years, between now and 2014. where are we on civilian predictions. >> they are pretty modest, they're about 15,000 over the five-year period. >> that is a question, obviously, you're dealing with a significant why. when you've got 120,000 in

uniform reductions and 115,000 civilian reductions. why is there a disparity between the two? >> i hope we tied that to efficiencies, getting rid of overhead, getting rid of the contract operations that we don't need. so the reductions on the civilian side are purr suchbt to a list of efficiencies that we have got to put in place that hopefully will produce more with regards to reductions in that area. >> so your 15,000 has a floor rather than a celling? >> yes, sir. >> are there any key areas, you mentioned a couple of them in brotd terms. for instance if we closed down a like of aircraft, obviously there's civilians that handle that area. isa what you're talking about? >> i'm talking more internal of

the operations within the defense department because where there are duplicative operations, and frachbingly we request reduce number of people at. but in addition to that, as pointed out by the comptroller. we have got a large number of contract employees and those contracts that we can reduce will reduce obviously the contract employees. >> how do you not only -- go ahead. >> from 12 to 13, the reduction in civilians comes out of the territory. but we're out of time. >> i know that feeling extremely well. >> bear was. >> that is pending possibly

another proposal? >> i think the 13 money is pretty reasonable, but beyond 13, we go through a five-year planning process each year. >> you talked a lot about procurement, reforms, and a lot of innovation, so i get a feeling there's this push and pull between procurement. we have got to come down on -- so we need some in in. so how are you balancing that up between these two. >> one thing we're looking at is multirole, shorter procurement

timelines. when i was chief of the staff of the army, i get briefed on programs where the requirements were established until 2013. and we're not going to deliver until 2014. making it a certainty that we're going to deliver something either late or doesn't spiral in new technology. as you spiral in texas, the requirement zbos up much closer merger of requirements and material solutions, with senior leader involvement and shorter horizons. we haven't gotten industry on board with that and we haven't gotten the congress of the united states on board with that. but that is the answer. >> mr. young? >> i want to comment the secretary and under secretary on the audit ready initiative. i'm happy to serve on the audit

readiness panel in the extent -- lend a critical eye as your efforts play out, but we want to help however we can. very important. i'm concerned that some of these proposed cuts to our defense budget may not be strategy based. and i'm open, i'm open to all manner of cuts, identifying efficiencie efficiencies, changing how we do business, with respect to health care with our service members and veterans, looking into retirement, all manner of different things. based and i know you would agree with that first you have to clarify the vatty, based on current threats, i think you have characterized the process of adaptding the existing qdr to

current circumstances. you're looking for cost efficiencies within the d.o.d. budget. >> is that a fair character trags? and thin the second process is translating that strategy, requesting appropriations based on that redeclared strategy. i think more work would be done to the asia pacific region, why we intended more rrc i don't want to be too -- it's is second part, translating strategy and requesting where iy little idea what the department of defense and the administration more generally came up with each of those

spending requests. that sort o clarity, i think many of us are inclined to fall back on back of the envelope sort of shorthand things, what percentage of gdp are we spending on military. that strikes me as a superficial way to determine how much we ugt to be spending on our military. would you agree with that statement? that's not a strategy based assessment, a percentage of gdp? >> no. >> what about imps to the level of military spending in other countries, is that also superficial? >> it is. >> so in following our oversight role here. like all in congress, we would benefit from your analysis here. how you translated your strategy

into spending requests. i sense this is a frankly, we went through that process with each of the service chiefs, we can sit down with you, we actually have a report that lists based on each of the strategies, what decisions in the budget were made pursuant to those strategies and we can walk through that with you. there there will be certain technologies that overcome access that we will have to go closed. but most of it