nation, and i'm concerned that there is a disconnect between our military capabilities and the number of the budget that you have been handed under the budget control act from congress. secretary panetta said, "let me be clear. you can't take half a trillion dollars out of the defense budget and not incur additional risk." there is no margin for error. as president reagan said in 1983, we must make sure that any adversary who thinks about attacking the united states or our allies or our vital interests concludes that the risks to him outweigh any potential gains. i don't believe that creating a u.s. military with no margin for error is the best way to assure our allies or to deter our potential enemies. and that's what i'm worried about. america and the world are safer and more prosperous when the u.s. maintains military power and strength beyond challenge.

and i think it is the preeminent purpose of today's hearing as much as possible in this unclassified context to drill down and ensure congress and the american people that they understand the risk of this budget that we would incur with what you have proposed today, and to our war fighters and to our country. finally, secretary panetta has described the defense sequestration cuts as catastrophic, inflicting severe damage to our national defense for generations. he compared the cuts to shooting ourselves in the head. even with these compelling statements, i'm still amazed that congress has not mustered the courage to make the tough decisions now to avoid these serious risks to our national security. based on these statements by our secretary of defense, we need to hear from the witnesses and the

leaders that are before us today about the impact of the $500 billion in defense sequestration cuts on each of your respective services. i would also like to hear from each of your services when do you have to start planning for this? because i think there is a view around here that we can suddenly wait until december on the sequestration issue. but there is a lot of planning that would have to go into this, not only for you, but for the defense industrial base. so i would like to know how urgent this is in terms of congress addressing this issue. while i recognize that the defense department must play a responsible role in overcoming our debt and the spending crisis we face, which is no doubt as admiral mullen said the greatest threat to our national security, i am concerned that the size and scope of the budget cuts will expose our military forces to an unacceptable level of risk. and this risk is being assumed

at the precise time we are asking our military leaders to plan for an increasingly difficult set of circumstances around the world against a widening array of risks and question marks in terms of things that are happening around the world right now. we cannot repeat the mistakes of history by cutting our forces so much that we are unprepared for future contingencies. our military and the american people deserve better, and it is my hope that today we can discuss these important issues. and i thank all of the witnesses for being here, and i want to thank the chair for holding this important hearing. >> senator ayotte. we will begin the testimony now. and first we will hear from general lloyd austin, vice chief of staff of the united states army. welcome, general austin. >> good morning. chairman mccaskill, ranking member ayotte, senator inhofe, thanks for the opportunity to appear here today to discuss the

current readiness of your united states army. i've submitted a statement for the record, and i look forward to answering your questions. these continue to be challenging times for our nation's military, and we've been at war now for over a decade. in fact, at no other time in history have america's servicemen and women fought for so long a period with an all volunteer force. and as you are well aware, we are still heavily engaged in operations in afghanistan. we recognize that our military and interagency efforts there are extremely important. in spite of the heavy demands placed on our personnel and equipment, i'm pleased to report that ours remains a remarkably resilient force. our soldiers are continuing to do an outstanding job, and they and their families have routinely done what we have asked of them. and after more than a decade of war, hard-fought in two separate theaters, america's all volunteer force is highly

capable and well led. this is due in no small part to the encouragement and the strong support of congress. i want to take this opportunity to thank all of you for your continued and steadfast commitment to our soldiers, army civilians, and their families. we're certainly proud of all that we have accomplished as a national security team, which is comprised of our military services, our interagency partners, and allies and friends around the world. we also recognize that much work lies ahead of us. while our priority continues to be fight ongoing in afghanistan, we're doing everything we can here at home to help heal and alleviate some of the stress on our personnel. likewise, we begun to retrograde replace and reset our equipment. the demands of the uncertain future security environment dictate that we continually prepare for the next fight. and accordingly, we are reshaping our army and making necessary adjustments to our force structure and our training programs, recognizing that as

the army continues to adapt, we must be ready and capable of responding to a broad arrange of missions with fewer people. in the years ahead, america's army will be smaller and leaner, yet it will also be sufficiently agile, adaptable. this is critical to ensuring our ability to deter aggression and to dicively defeat any opponent. these characteristics will also enable us to grow capacity as needed in response to unforeseen contingencies. key to our success as you frequently heard from our secretary, secretary mchugh, and our chief of staff odierno is rebalancing the force structure, modernization and readiness. and that is where we're focusing our efforts. one area in particular where we'll need congress's help is ensuring overseas contingency funding for in strength about 490,000. this funding is imperative to our ability to manage a gradual

reduction to our end strength over the next five years from 560,000 to 490,000. lack of oco funding will draw us to a steeper drawdown, primarily through involuntary separations and other means that could hut in significant hardship for thousands of army veterans and their families, and generate a large bill for unemployment and other related costs. likewise, we'll need to fund reset for two to three years after we completed the retrograde of equipment from afghanistan. this is a request that this subcommittee has heard many times, but it bears a bit of repeating. absent this funding, we will be required to accept risk in other areas at significant costs with a negative impact on readiness. we are confident that the strategy we've developed will enable us to achieve our objectives, and that said, we must continue to wok together to ensure our battle-tested army remains the nation's force of

decisive action. i'm confident we are on the right path at this time. i thank you again for your continued support and demonstrate a commitment to the outstanding men and women of the united states army and their families. and i look forward to your questions. >> thank you so much. next we will hear from admiral mark ferguson, vice chief of naval operations, united states navy. >> madam chairman, senator ayotte and distinguished members of the committee, it's an honor to represent the men and women of the navy and review the readiness of the force with you today. as we prepared our fiscal year 2013 budget request, our decisions were driven by the new defense strategy and our sailing directions for the navy, emphasizing war fighting, operations forward, and readiness. we focused on funding the critical elements of readiness as we balanced our investments in future capability, operations and maintenance, personnel,

training, and spares. our budget proposes reductions in force structure and delays in the procurement of some new platforms to ensure the wholeness of our remaining force. importantly, we invested in maintaining a sustainable deployment model to allow for the reset and stride of our forces between rotational deployments, as well as in selected ordnance and training for the fleet. we also focused on enhancing our forward presence to mitigate a reduced force structure, such as placing four destroyers in spain and planning for the forward stationing of combat ships in singapore. quite simply, we prioritize readiness and capability over capacity to ensure we deliver a ready and relevant navy now and in the future. this budget submission, which includes baseline and overseas contingency operations or oco funding, supports the requirements of the commanders as adjudicated by the joint staff and the global force

management process with some available capacity to provide surge forces in support of our major operational plans and other emergent needs. it is important to note the combatant commander demand for naval forces is much higher than approved in the gfm process and is steadily growing. we have been operating at a war time tempo for over ten years and continue to stress the force as we draw down from two land campaigns. our forces are ready, but show the strain of this pace. let me give an example. today the navy is surging to provide two aircraft carrier strike groups in the middle east while at the same time sustaining a continuous carrier strike group presence in the western pacific. in response to heightened tensions, we are augmenting our forces in the central command area with additional mine counter measure assets, patrol craft, and a float forward staging base support vessel, the refitted "uss ponce." this agility of naval forces to

respond to crises is to our reserve maintenance and training. supporting this current level of surge above our program budget levels is not sustainable over the long-term within our current level of resources. to sustain this high operational tempo, we will face the choice between reducing the maintenance on our platforms and shortening their expected service lives, reducing the training on our personnel, or increasing the stress on our force through longer deployments. today we are dependent upon the receipt of oco, or similar supplemental funding to sustain our readiness. this year, the added costs of providing these surge forces, given fuel cost increases, is placing pressure on our readiness accounts and execution. we're working with the department of defense to address the challenge of these additional costs without affecting our overall readiness. madam chairman, senator ayotte and distinguished members of the committee, you can proud of the

exceptional service of the men and women of the navy. our sailors are our highest quality force in our history, and they make us the finest navy in the world. i appreciate the support of the committee for our navy and its readiness, and appreciate the opportunity to testify and i look forward to answering your questions. thank you. >> thank you, admiral ferguson. next we'll have general joseph dunford, the assistant commandant of the united states marine corps. welcome, general. >> madam chair, thank you for the opportunity to represent the marines this morning. i'd like to begin by just making a few key observations regarding our current and future readiness. today of the 197,000 marines on active duty and the 39,000 selected marine corps reserve, 26,000 are forward deployed. 18,000 of those are in afghanistan. our number one priority is assuring that our forward deployed forces are wellmaned, trained, and equipped. and as a result of your support, i can assure you that those marines and sailors that are forward deployed are at the highest state of readiness. but a forward deplayed units have personnel and equipment

requirements that exceed standard allowances. the additional equipment is due to the nature of the fight in afghanistan and the very distributed nature of operations. the additional personnel required to support staffs and trainers for afghan security forces. we meet these additional requirements by pulling equipment and personnel from units at home stations. as madam chair mentioned in the opening remarks, our units at home station continue to experience significant personnel and equipment shortages. in fact, over the past several years, approximately 2/3 of our units at home station have been in a degraded state of readiness. home station readiness is a particular concern for the nation's expeditionary force and readiness. the forces at home station represent our capability to respond to unexpected crises and contingencies. over the past two years, units in home station have responded to several unplanned requirements. in these cases, marines had days, and in some cases hours to respond. and we were reminded that crisis response is a come as you are event. as we draw down our forces in afghanistan, we'll begin to

address these deficiencies at home station and improve our ability to respond to unexpected crises and contingencies. the critical element is the reset of equipment coming out of afghanistan. we currently estimate the ground equipment reset liability at $3.2 billion. this is our strategic reset liability. this forecast is primarily based on the replacement of combat losses, the restoration of items into serviceable condition, and the extension and service life of selected items. we believe it will take two to three years of overseas contingency funding to complete reset once our equipment returns from afghanistan. additional to the strategic reset we have asked for $1.3 billion in our fiscal year 2013 budget request. this is to cover what we call operational reset. it addresses the current cost of war to replenishing missiles, ammunition, depot level repair of certain equipment, and the replacement of destroyed equipment. as we work to meet current requirements and set the

conditions to improve readiness, we're also ensuring that we have the right training, organization, and modernization to meet future challenges. our current plan is to develop and maintain an active force of 182,000 marines in the selected marine corps reserve of 39,500 marines. we believe that structure filled with high quality marines and combined with our aviation and ground modernization initiatives will allow us to meet the requirements of the new strategy. with your continued support, that force will be manned and equipped as a force of readiness. it will designed to be forward employed and forward engaged and will be prepared for a wide range of crises and contingencies. thank you. i look forward to your questions. >> thank you. finally, general philip breedlove. welcome, general. >> madam chairman, senator ayotte, distinguished members of the subcommittee, thank you for your opportunity to be here today and tell our air force story. these are challenging times, and i depend you for your leadership and your efforts to ensure we have the best equipped and best

trained military on the globe. it's on honor to be here to serve on behalf of our 690,000 active duty, guard, and reserve civilian airlinemen who serve alongside their soldiers, sailors, and marine guardsmen. i would like this time to share important items with you today. first, the readiness of your airmen after more than 20 years of continuous combat ops. and second, the steps we're taking to ensure a superbly train and equipped force which is ready to support our new strategic guidance, and bottom line, to avoid a hollow force while balancing risk. the american people are fully aware that our nation has been at war for over a decade. for our air force, however, we've been conducting combat ops continuously for well over two decades. december 17th, 2011 marked the first time in 20 years that the air force did not fly an air tasking sortie over iraq. madam chairman, senator, i would like to point out that over 2/3 of our uniformed airmen have

taken an oath to defend our nation and have joined our service during a time of war, during a time of continuous operation. and for that i couldn't be more proud to serve alongside these dedicated airmen and americans. these airmen are fully joined to the fight and consistently z co demonstrate their support. last year we saw this commitment at full capacity as our airmen simultaneously provided humanitarian support to our friends in japan, executed a large presidential airlift in south america, supported the nato no-fly zone to protect lives in libya, and all the while fully employed with counter insurgency operations in iraq and afghanistan. our force capacity of the future may not support this high level of sustained seemle tainious operations. hence i am immensely proud of how our airmen have performed for the past 20 years and across

all spectrums, and with what you have seen a very high tempo. this intense level of performance has not come without a cost. our force is stressed. we have continually gotten smaller. next year we will be the smallest we have been since the inception of the united states air force in 1947. our aircraft are old, older than they've ever been, with the average age of our fighters at 22 years. bombers at 35 years. and tankers, the oldest of the fleet, at 47 years. what really concerns me is the challenges we face to get our full spectrum training. we are proficient in the current counter insurgency fight. we have had to put high-end full spectrum training on the back burner which has the greatest effect on our combat air forces. other kerps are the increase in fuel prices and the higher than expected overseas contingency operations costs. together they have resulted in a current year bill that is significantly greater than we

expected. we are working hard with dod leadership to address the shortfall to avoid actions that might harm readiness. but if unable to real locate funds with congressional approval, we will have little choice to shift resources within our operational and maintenance accounts, which could have detrimental effects on our readiness. despite these fiscal pressures, there continues to be increasing demand for airspace and cybercapability, which is evident in our nation's new defense strategic guidance. in order to keep faith with the american people and provide our unique capabilities upon which the entire joint team so greatly relies, it is imperative that we balance our force structure to preserve our readiness and maintain our risk balanced force. in doing so, we must rebalance our active mix to ensure we can meet joint force requirements while not exceeding the ratio across the entire force.

while no plan is free of risk, our analysis tells us that we are at increased but manageable risk as measured against this new strategic guidance. we are concerned that efforts aimed at retaining force concerr not accompanied by sufficient support and funding will lead us to the road of a hollow force. force structure is a key to our future. as we responsibly rebalance this force we remain committed to advancements in technology and future investments to continually sharpen our sword. although we will be smaller, we will remain an effective and ready force. madam chairman, committee members, i am confident in our ability to succeed through the tough times ahead. because i believe in airmen, sailors, marines, coast guardsmen are dedicated to excellence, selfless service and sacrifi sacrifice. thank you for your continued support of your united states air force. and of your airmen.

i look forward to your questions. >> thank you very much, gentlemen. since the turn of the century we have been involved, heavily involved in combat operations which have required, required our personnel to deploy frequently and caused incredible wear and tear on both people and the vital equipment that we need for readiness. we have had little time to train for anything other than counter insurgency. notwithstanding the steps taken by congress to increase investments, reported readiness rates have significantly declined over the 10 past years. record funding in still significant decline. in past readiness subcommittees we have been told by your pred associat -- predecessors. now we have the draw down in iraq. and surge recovery, in afghanistan, this year.

and phased draw down there after. can you give tuesday what your best protections are as to when we will see a more positive readiness trend in light of the draw down that is currently under way? >> thank you, chairman. from the army's perspective. we are already beginning to see that as the tempo as we have come out of iraq, certainly we have more opportunities to train at home station. we are taking advantage of those opportunities. again, as we retrograde our equipment and put that equipment through reset, more equipment is being, being made available. so, we all already beginning to reap some of the benefits of the slow down. and as you know, i was -- the guy at the-- the very end there, in iraq, who was -- charged with

overseeing that, that reposturing effort, and i can tell you -- that -- that was very well done. and, and -- and magnificent job by our joint force to do that. but as we -- as general dunford and i have both pointed out it will take two to three years beyond the complete retrograde of our equipment, out of afghanistan to reset the equipme equipment. and the funding to do so and any help you could do so in doing it. >> madam chair, as you pointed out. there is really three components. the training piece. the people piece. and the quinn piece. we will begin as we have started to recover forces from afghanistan our deployment has expanded. we are at a point where our squadrons and battalions were

deploying seven months, home for seven months and redeploying. it is 11 to 14 months between deployments. that has helped us on the training side. as you recover, the force, will start filling personnel gaps we have had. and before you actually start to see increase readiness reporting from our moments of home station is going to be the equipment piece. that's two to three years from the time the equipment actually gets home, not from the time the units redeploy. our best estimate right now, based on 2014 draw down from afghanistan would be, sometime around 2017 is when we would start to see significantly increased reporting. i mention that 67% of our units at home station were degraded readiness. really what i was referring to was c 3, c 4, scale of one to four. units report the lowest level of readiness in manning, training and equipment. so 61% of the units that report

degraded readiness as a result of short falls. not only do we have to get the equipment homen't . we have to reset the equipment, going through depots or replacing equipment destroyed. procurement process. depot maintenance process. our best estimate is two to three years, not from the time the marines come home, from the time the equipment comes home from afghanistan. >> the navy and air force disagree with the two, two to three year assessment? or does that -- sound about right for from your perspectives also. >> madam chair, from our perspective, the force demand is different on the navy as we withdraw out of land campaigns. we have sustained training our forces through this ten year period? what you saw in the budget, we invested in training. we invested in depot maintenance. brought it up to 100%. we remain reliant on the funding and we see that it will take at

least two to three years for a transition, perhaps longer for us to sustain readiness levels. >> madam chair, the difference for us, much as you saw, after we came out of desert storm one and desert two. immediately following a combat, a change in mission, like we are seeing in iraq now, the actual requirement for air forces goes up. in order to facilitate that retrograde, to cover with, kinetic fires and isr, reduce the risk for the ground combat soldiers and marines as they do that mission. and we are seeing that now. even as we are coming out of iraq, about three months ago. deployed fighter squadron was 8 1/2. it is up to 11 1/4 now. that's much what we expect. also, on the lift side of the house, especially if we do not get movement in the pac g-locks, as you know, much of the job of bringing home all the equipment that marines and army will need fall to the back of the air force to haul out. there will be a considerable

amount of time, as the we affect this retrograde, especially if it is an increased by the air, before the air force will even beef gin begin its retrofit, refit. so our start time could be significantly different than what you heard from my co-- compatriots. a year, year and a half through the training cycles we need. >> suns you touchince you touch problems on the border, back stback -- pakistan. let me go to the question. it is relevant to the draw down the we pull equipment, men, women out of afghanistan. it is obviously very important in terms of fuel costs. you know, we -- it its a huge bill that we i think people forget that nobody buys more fuel in the world than we do.

and when it's expensive, it really is a gut punch to the budgets of our military. i know that we have to pay almost three times northe norma rate through the distribution network we typically expend going through pakistan. what effect is this closure going to have on -- on -- getting, getting equipment out. get everything out. we need to go out. and more importantly, on, getting the fuel in we need to, to continue to support the mission that we have ongoing in afghanistan? >> i will take that. first, all, in this current year, as you are aware, the reprise on fuel is going to cost us -- approximately $1.3 billion that was not in our original plan. that will be money we will have

to find in other sources assuming you approve them inside of our budget. so fuel reprise is a big deal for us. second of all, if the pac g-lock do's not open and we cannot count on the flow that was planned for that, when we originally budgeted for our fuel for this next year, and now we have to increase the amount of fuel we use to -- to begin to fly out much of this retrograde by air. that will again be an unplanned bump up in the requirements for the air force. >> madam chair, i add one quick point to the points you made and the general made. goes back to the previous question -- when would we be reset to a high level of readiness. obviously the longer it takes to get our equipment out of afghanistan and northern distribution network would take longer to get our gear out, the longer it will take to restore. so in addition to implications of cost, factor of