prevent sweden and finland and countries like them to make their full contribution to nato operations. and that's really my very strong view. what chicago will bring in this respect, i don't know. i'm almost certain the topic will come up. and i hope that this whole concept of a special relationship will be supported in chicago. >> thank you very much. i'm not as chair going to attempt to sum up the discussions we've just had, in part because i think julie did that herself when she said that chicago is an opening act. and also partly because we're continuing this capabilities debate tomorrow. i think you'll agree we've had a really good series of smart discussions today, and i would urge you all to join us tomorrow for continuation of these discussions. but i would like you to join me

in thanking the panel for their contributions this afternoon. [ applause ] and finally, also, would you stay and join us. we're having a reception that we hosted in the area. so we can continue some of these conversations. thank you very much. thank you. thank you very much.

this is c-span 3 with politics and public affairs programing throughout the week and every weekend, 48 hours of people and events telling the american story on american history tv. get our schedules and see past programs at our websites. and you can join in the conversation on social media sites. coming up in about a half an hour, author arthur herman recounts president roosevelt's call to industrial business magnates during world war ii to leave their private sector positions and lead the u.s. war production effort. william knudsen and shipbuilder henry kaiser used their connections to build a team of industrial mines and transform

the military's aircraft ammunitions productions. watch arter herman's remarks live at 5:30 eastern at book tv.org. >> we have a real demand for spectrum, but we would be fool fish all we did is rely on incentive auctions and the auctions of spectrum. >> i think it's important to have technological neutrality to assure everyone is competing on a level playing field. >> learn more about the two newest fcc commissioners with the policy reporter cecilia kong, tonight on the communicators at 8:00 eastern on c-span 2. a senate armed services subcommittee held a hearing thursday on u.s. military readiness and the defense department's budget. last august, as part of a deal to raise the debt limit, lawmakers agreed to $1.2 trillion in deficit reduction over ten years.

$600 billion coming from defense. the cuts, or so-called sequester take effect in january. the republican-controlled house thursday passed mostly along party lines a bill to replace the defense cuts with reductions in medicaid, food stamps, and other social programs. the senate is not expected to take up the measure, and the white house opposed to the offsets said it would veto the bill. >> the subcommittee of the senate armed services committee will come to order. i will have brief opening remarks. welcome to our important witnesses today. thank you all for taking time from what i know are heavy demands on your time to spend time visiting with us this morning about the overall holistic readiness of our military. and we look forward to your testimony. we are pleased to be joined by general lloyd austin, vice chief of staff of the army, admiral

mark ferguson, vice chief of naval operations, general philip breedlove, vice chief of staff of the air force, and general joseph dunford, associate commandant of the marine corps. gentlemen, i sincerely appreciate each of you adjusting your schedules at the last minute after we could not hold this hearing on the original date because we were voting. turning to the issue at hand, after more than a decade of combat operations in iraq and afghanistan, reported readiness levels of our armed forces have steadily declined even as defense spending has grown dramatically. our nondeployed forces have experienced serious readiness shortfalls in terms of personnel, equipment, and training. even our deploying units have struggled with not enough time to train for full-spectrum missions. now we're entering an era of declining budgets, forced structure and new strategies. as a result, our military services face a new set of challenges as they seek to balance the draw-down of forces, vital reset of equipment and personnel, and continuing combat

operations in afghanistan. i'm interested in hearing from the witnesses the extent of current readiness funding backlogs and the risks posed by these backlogs. we have been told in the past that the reset of our forces will require a few years of additional funding after the end of combat operations. i would like the witnesses to provide us with their latest estimates, timelines, and amounts in that regard. i'm pleased that the navy budget would fully fund the ship depot maintenance requirement for the first time in many years. it is my hope that this increased level of funding will lead to a decrease in the number of unsatisfactory inspection results from the navy's board of inspection and survey, nserv. at the same time i'm disappointed that the navy has failed to meet the 6% capital investment objective established by congress, the only military service that has done so. i would like to hear from the navy what their long-term plans are for making up this gap in investment. i'm also pleased that the army

and marine corps -- i'm also pleased that the army and marine corps has funded facilities sustainment, restoration and modernization at the 90% level, which is the dod's stated goal. unfortunately, the air force and navy funded this same fsrm at 82% and 80% respectively. i'd like to hear from the air force and the navy what level of risk they are taking on as a result of these lower funding levels and what steps they plan to take to avoid large bills down the road. finally, we have learned the department of defense will face at least a $1.3 billion bill as a result of the rise in fuel prices. this price increase has been exacerbated by the continued closure of the pakistan border, forcing supply convoys for our force in afghanistan to use the northern distribution network at an increased expense of about $38 million per month. given all of these challenges we face, we must strive to protect our readiness accounts, but we can also do a better job in

managing funds like operation and maintenance. we can improve the execution rates and unobligated balances in these accounts in addition to our operational readiness models. as the services continue to identify efficiencies in overhead, support, and other less mission-essential areas, i challenge the services to a better balance, a better -- to better balance the difference between cost savings and cost avoidance, as we owe to it the american people to be much better stewards of their tax dollars. gentlemen, i can't thank you all enough for your dedicated service and the sacrifices you have made on behalf of our country and the sacrifices your families have made. i thank you all for having the time to have this critical discussion, and i look forward to your testimony. i know each of you have prepared statements which will be included in the record. so we can have the full opportunity for an in-depth discussion, i would ask you to please try to summarize so we'll have plenty of time for questions. senator ayotte, do you have a statement you would like to make at this time? >> thank you, madam chair.

i thank you for calling this important hearing on the current readiness of u.s. forces in review of the defense authorization request for fiscal year 2013 and future years defense program. i foremost want to thank the witnesses that are before us today as we confront challenges around the world. i know that each of you have been tremendous leaders. and all of the soldiers that serve below you deserve our respect and admiration. and i thank you all for what you're doing in very difficult times, both fiscally and also with the national security challenges we face. so thank you. on march 23rd of 1983, president ronald reagan delivered an important speech in the oval office. and in his speech he said what seems to have been lost in all of this debate is the simple truth of how a defense budget is arrived at. it isn't done by deciding to spend a certain number of dollars. we start by considering what

must be done to maintain peace and review all the possible threats to our security. there is no logical way that you can say let's spend "x" billion dollars less. you can only say which part of our defense measures do we believe we can do without and still have security against all contingencies. anyone in the congress who advocates a percentage or specific dollar cut in defense spending should be made to say what part of our defenses he would eliminate. and he should be candid enough to acknowledge that his cuts mean cutting our commitments to our allies or inviting greater risk or both. as i consider the national security threats facing our country and as i review the president's proposed fiscal year 2013 defense budget, i worry that we are falling into the very trap that president reagan warned us to avoid. i worry that president obama's proposed defense budget is based more on, in my view, what was irresponsible and what we did in the budget control act and what

the office of management and budget has handed you in terms of a number that treats all federal expenditures the same rather than a clear-eyed objective assessment of our u.s. national security interests and the kind of military that we need to protect those interests and the american people. as i consider this year's budget request, i have some serious concerns and a lot of questions that i look forward to discussing today. let me quickly highlight some of my leading concerns for each of the services. while we would certainly expect an army end strength drawdown after withdrawal from iraq and with a phased drawdown from afghanistan, i would like to know what the reductions of 72,000 from our army and strengths do for our forces and our national security needs. at a time when much of the army has failed to achieve sufficient dwell time between deployment,

that is essential to allowing units to reset and retrain, i have serious questions about the 72,000 number. i'm also concerned about the army's plans to involuntarily separate thousands of mid-career officers and noncommissioned officers in order to achieve this drawdown. we talk about not breaking faith with our troops, and i'm concerned about with this drawdown and with the position that we're taking in our plans to provide many of our mid-career officers involuntary separations, what does this do in terms of the morale of our all-volunteer force, and also the strength of that force? at a time when there is consensus that our military needs to do more, frankly, the risks around the world, that we need to be more agile and responsive, i'm also concerned in not only looking at the 72,000 reduction in the army,

but i would also like to have the same questions answered with respect to the 20,000 reduction of the marine corps as well, as well as the marine corps' decision to eliminate one maritime prepositioning squadron, which we've talked about at length before. at a time when we are increasing focus on the maritime dominated asia and pacific region, when the navy has approximately 30 fewer ships and subs than it has said previously our national security requires, and when the navy is failing to meet 39% of our combatant commander requirements for attack submarines, i also remain concerned for our navy about postponing the procurement of the virginia class submarine. i'm also concerned about the mismatch between our stated strategy that features an increased emphasis on the asia-pacific and the navy's continued shortfall in ships and submarines. and i think these are important questions that we need to understand, and the american

people need to understand what risks we're incurring under this budget. at a time when the air force is working through the wear and tear of 20 consecutive years of combat operations with a fleet that is already 32% smaller and 43% older than in 1991, my concerns there are about our air force end strength by approximately reducing that end strength by 10,000 airmen and cutting 246 aircraft from the air force's inventory. to be clear, i am not one who opposes all cuts to the budget of the pentagon or our military. there is no question that there are reductions that need to be made. but as we seek to address our nation's fiscal crisis and reduce federal spending, there is no doubt that we need to understand what decisions are being made here in light of our constrained resources, what risks we are taking on as a

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 this subcommittee and today's hearing as much as is 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 till 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've 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, and responsive. this is critical to ensuring our ability to deter aggression and to decisively 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 general odierno is balancing 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 operations or oco 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 result in significant hardship for thousands of army combat 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've 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 work together to ensure our battle-tested army remains the nation's force of decisive action, ready for today

and prepared for tomorrow. i'm confident we are on the right path at this time. madam chair and members of the subcommittee, i thank you again for your continued support and demonstrated 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 literal combat ships in sang pour. 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 wartime 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 countermeasure 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 preserved through our investments in 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 our 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, ranking member ayotte, members of the subcommittee, thank you for the opportunity to represent your 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 well-manned, 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 our forward deployed 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. and 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 two-thirds 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 in improving our readiness 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. in addition to the strategic reset we have asked for $1.3 billion in our fiscal year 2013 budget request. and this is to cover what we call operational reset. it addresses the current cost of war to include replenishing missiles, ammunition, depot level repair of certain equipment, and the replacement of destroyed equipment. as we work to meet current