if v.a. were to say we want you to look at these 30 cases, get us the data on them. we can easy do that because we've done that any way. >> doesn't it make sense to see the partners and have the resources out there to do that? to be able to do what he's saying as a collaborative effort. >> thank you. a couple of points on this issue. the pre-approved, if you will, institutions under law are not prohibitly from being visited. they are in the mix. they get compliance visits just like other people. the magnitude of the expansion, if you will, if i can give you

some numbers. last year we conducted without saa's being involved approximately 1700 compliance surveys. this year to date, this fiscal year to date, we've done about 2700. being able to use the resources of the saa's to do these kinds of surveys is truly been an expanse of the effort. the other thing to understand is the compliance surveys that they are conducting related to the post- 9/11 gi bill are a little more complex. they take longer to do. i'm not sure if that's what accounts for fewer numbers in the cases you've heard here. ta may account for some of it. as we look at these things, although it may be difficult to

determine the deceptive practices and those kind of things, the compliance surveys are able to identify in some cases, some serious enough misrepresentation or improper practices that the saa's are pulling approvals. >> thank you. thank you for your candidness to help us understand this. i appreciate it. >> i'd like to follow up on that. i'm not sure which one of you can answer that. these aren't just hypothetical situations out there. these are real cases that veterans are experiencing. as you're collecting that information, do we have a way of classifying them. do we have a way of categorizing these specific cases so we know what the problem is? is there a continual problem with a specific institution? is there a problem across the board that they are

experiencing? in one of the previous panels, mr. gunderson said the number one complaint he received at the school down in virginia was payment from the v.a. we're talking about aggressive or deceptive actions here. is there any way, do we have any categories? is this what the kexecutive ordr is requesting? any comments? >> we don't have the database, but we have the data points. every time we did a visit, we would know what we have seen and what we done. that was transmitted to v.a. we don't have nationwide database. i don't believe v.a. does. i'm not sure. >> mr. chairman, i'm not sure if we have a database to get at

what you're asking. again, as these things are identified as we go along, the more serious issues are addressed. smaller issues are addressed that aren't to the degree of withdrawal or suspension of a school. there's a lot of corrective actions that happen along the way. >> i'm trying to find if the number one complaint that we heard from all three panels, the one that was mentioned was payment. m problems that we are hearing about that veterans are experiencing. what we're hearing is aggressive tactics, deceptive practices. are they experiencing disappointment in the services

that they received? how are we going to address that? is there a plan? >> well, as you know, mr. chairman, there are many avenues for veterans to make their complaints known to us and we address those either through our call center or the website, and we take actions on that. where there are issues with payments or timeliness, we work hard to process claims in a timely way and to pay accurately. we're occasionally, like all humans, we might make a mistake. we work to correct that and restore the proper benefit to the veteran. >> would you say the v.a. has

tools in place to deal with add apples out there? are there schools that have had payments withdrawn or taken out of eligibility? >> there are schools who have either been suspended or withdrawn as g.i. bill approved schools based on things found through compliance surveys or through state inspections or reviews. >> mr. chairman, if i may give an example of something. v.a. has done a fantastic job of dealing with an extremely complicated benefit package. initially, there were lots of difficulties as there were with every gi bill and getting payments out. things are going much, much better. if the ask a military member how the is food in the chow hall, they're going to say it's not

mom's cooking. if you ask them how their v.a. payments are going, they'll say it's not fast enough. that's a fact of life. v.a. works quickly and well to try to resolve individual situations. i lost my train of thought. yeah, keep going. in any case, v.a. is doing a good job of catching up on things. i think at the school level there is frustration among the schools because they're not getting the help they used to get from state approving agencies because we're not out there as much. yes, we may visit them. we may do a compliance survey if v.a. assigns one to us. under our contract we will not be reimbursed of making the cost. that's why we're saying we're not doing the oversight that we used to do because we can't

afford to do it. we don't have state money that's flowing into our pockets. we are reimbursed by the contracts we have with congress through the v.a. that has been limited and we can't make the kind of visits we used to make. we would like to be out there more. we would like to head off the problems. we can fix them on the spot. we notify v.a. of the problems we find and sometimes they have to do a compliance survey. just as a bit of background, i was with v.a. for 23 years. i started doing compliance surveys in 1975. i was on two that ended very badly for the schools. we closed one school completely. it was a private proprietary operation that was not a good thing. we came close to closing a public community college and we

cost the president his job through the state approving agency back then. this is not new stuff. it's complicated more by chapter 33, the post- 9/11 gi bill and the many ways payments are made and so on. it's not that terribly new. with v.a. and the saa working together in the past, those problems have been dealt with for 65 years. now, we're not, we have not been in that kind of partnership recently. we want to be. we want to be able to help v.a. we want to be able to say we're looking at the educational quality. we're looking at all those things. we're looking at appropriateness of reporting. let v.a. look at the appropriateness of their payments. we don't feel we should be auditing a federal assistance payments or federal entitlement

payments. we are more than happy to provide them the information they need from our campuses to do their audits. we would welcome the chance to continue that relationship but do it for all of our schools like we have been doing. >> i'm sorry. >> if i might add historically there was a period of time that when some of the states, including my state, the state of missouri, oklahoma tin the aren of on the job training we had assignments and assisted with the compliance on that end which is what skip is speaking to as a possibility in the future. this worked extremely well. that practice was abandoned, but it was successful. >> thank you. any further questions or

comments? >> just a couple. that child in the chow hall may not be like mom's home cooking but it's a heck of a lot better than it used to be. >> i understand it's improved. i want to follow up with a question. i recently had the honor of flying with 12 world war ii veterans who served there with my dad. one of them is the president of the university of richmond. these were the original beneficiaries of the gi bill. a september 21st article. one of most aggregious reports involved a college recruiter.

a pbs program front line reported. the recruiter signed up marines with serious brain injuries. the fact that some of them couldn't remember what courses they were taking was immaterial as long as they signed on the dotted line. when i read that, i get furious because we dishonor every veteran when we allow practices like that to take place and don't find an effective way to swiftly and appropriately punish people who would do that to the men and women who defend this country. i'm going to give you the last word, and ask you how do we do a better job once these practices are identified. and getting that information to the appropriate agency for swift and effective correction action.

>> thank you. as a veteran myself with a son, i couldn't agree with you more. the particular issue that you talk about should be addressed as part of this executive order. perhaps not newly identified necessarily, but on the department of defense side the executive order will require more focus on access to educational institutions going onto military installations to put more rigor behind letting it happen in the first place which would be prevent it. in addition the executive order talks about through some kind of

centralized question. this takes more collaboration between the agencies. they all have one version or another of the system we use trying to address these types of issues. thank you. >> thank all of our witnesses here today. we appreciate your testimony. >> an example of this state if

large project and ongoing. this accreditation is not only severe, it's withdrawn. the action was to withdraw the approval for gi bills. study on campus. they will be meeting in june to consider that school's entire institutional accreditation. if they take that away, my first step will be to withdraw their approval as well and force them to re-apply as a nonaccredited school and we'll take a harder look at what they're doing. if we know about things like that, if we're told, we do take action. similar case in texas. i think senator durbin became ware of a deceptive practice. i can't think of the name of school. our state approving agency in

texas immediately suspended that school because it was in violation. when we find out about things, action is taken. it's a question more of how do we find out. >> thank you very much. i apologize for the microphone situation cutting in and out. thank you for your service and testimony today. we know the challenges. we got to find a way to make sure that our veterans are getting the services they deserve. if there is nothing further, i think we're going to call the meeting. i want to thank everyone who testified today. all members have five

legislative days to revise and extend their remarks. without objections, this hearing is adjourned. vrjts a look at the potential impact of cuts to the pentagon. the cuts are set to take place in january 2013. this portion includes speakers from general dynamics and the american enterprise institute discussing president obama's budget. this is just over an hour.

>> i'm direct the 21st century defense initiative here at brookings. i'm very excited to welcome you back. as i wrote about in a recent article in politico, i'm a bit frustrated by a strange thing that's happening in defense politics today. now, rather than focusing on the very compromised of both, i'll say the word, tax rather than revenue and entitlement reform that the congressional super committee was for, it seems to be a cross between two strategies. one is a deliberate strategy to maximize the level of panic over what it might mean for the u.s. military and national security. i can't resist throwing across the idea of having more than

150,000 marines, but they would still not be able to carry out a single contingency or the idea that the navy would be the size of it was in 1915, but the equal amount of effectiveness as it was in 1915. i would much prefer to have a virginia class of today than one of the submarines back then. while we've got that going on on one side, we also have a second strategy, to deliberately not plan or prepare for the very nightmare contingency that we're laying out there. if this was the movie spinal tap, the volume would be set to 11 while pentagon planners are being told to wear earmuffs. unfortunately, operation hysterical ostrich may make for good politics but it's a really poor way to approach national security discussions and

planning. today, this panel is very much intended to get our way past that. to bring together a group of some of the nation's top experts and really dig deep into what potential implication might mean for the industry and for national security as well as talk about and solutions, to treat it seriously rather than just turning the volume up to 11 and hoping something good happens out of that. so the panel today features first dr. rebecca grant. she has her phd in international relations from the london school of economics, after which she worked for the rand corporation and the air force chief of staff. she's presently the director of the general billy mitchell institute for air power studies, which is an air force association non-profit dedicated to studying all forms of air power. as well, she's president of iris independent research. performing strategic planning for both aerospace and government clients, including the air force and the navy. then we'll hear from mackenzie eaglen. she received her masters from

georgetown university and served as the presidential management fellow in the office of secretary of defense and joint staff. then she served as a research fellow over national security at the heritage foundation as well as a staff member on the 2010 quadrennial defense review and independent panel. she's currently a fellow in the maryland ware center for security at the american enterprise institute. finally, we're welcoming back to brookings tom davis, who is notably a former brookings federal executive fellow. behind that, a graduate of the u.s. military academy, has a masters in international security economics from harvard university. as an army officer has was a program analyst for the army, military assistant to the secretary of the army. he also commanded a battalion in the third gulf war as well as an assistant professor at west point. currently he's vice president for strategic planning at general dynamics.

so a set of really great experts to dig into an important issue. so first we'll hear from rebecca, then mackenzie and then tom. >> thank you, peter. it's really great to be here today and to be on the panel with mackenzie and tom. so we're going to have a lot to talk about with the defense sequestration possibilities. i want to review two things very quickly, which you probably all know. one is, i think, that we probably all share an assumption that it's time for the defense budget to come down. as you know, we have been spending at historical highs. you've probably all seen the chart that looks at the d.o.d. top line. what always strikes me is that our spending in recent years has been higher than it was during the korean war. if you're like me, you pinch yourself and say, how did we get into this situation? but the fact about sequestration itself is really a frightening one. you talked about "spinal tap," peter, but i was trying to think about a movie that would somehow give us a sense of what this is like.

the only one for me that came to mind for me was the old james dean movie, "rebel without a cause," where at the final moment in the drag race the losing driver catches the sleeve of his jacket on the car, and it's fatal for him. there's simply no way to bail out of this. in fact, what we've seen is d.o.d. starting to try to bail out by throwing some programs over the side, by making some cuts. the hard thing about sequestration is that we have come off a period of three rounds of budget-driven cuts. again, we may all agree that cuts are in order. the problem here is that we don't see these tied to a national strategy, to strategic decisions about how we will direct these cuts. so sequestration is tough, then, and it's tough in its mechanics. as the first panel mentioned, sequestration means quite simply a cut, probably about 10%, to

each account. that means in it's 06, 02, 8675390, spending $350 million on basic r & d and take-out laser, it's take out 10%. it's such a difficult way to go about cutting the defense budget that it's simply, i think most of us would agree, a non-starter in terms of sound, fiscal management. so i want to talk about two ways that we might see this unfold and tell you why we really need to avoid sequestration and get to the place we need to go, which is a strategy-driven, hard set of choices about our future defense budget. when we think about the worst case of sequestration, the image for me that comes to mind is a fire base in afghanistan or any place else that's not able to get its c-17 or c-130 airdrop of water, wood, blood, ammunition, whatever those troops have asked

for, but there are other parts of the defense budget that are also likely to suffer. the one i want to talk about here is the r & d accounts. rtd & e, research, test, development and evaluation. you all know what those accounts are about. they are comprise about $70 billion. so even if we have a stay of execution on program line sequestration, one possibility is for congress to go back to d.o.d. and say, all right, we're not going to make you cut 10% out of every one of these thousands and thousands of programs. we'll give you a bogey of about $50 billion for purposes of discussion and let you find a way to go at it. well, when you've got $70 billion in r & d, maybe that's a tempting target. let's talk first about the basic part of that, the science and technology piece. 6-1 and 6-2 money. for those of you who are into that sort of thing. these are perhaps the little

billions of dollars, but they comprise some of the most essential money for innovation. they include basic research carried out at universities and applied research that attempts to take new developments in nano technology or cyber and convert them into something with a useful military application. these little cuts can be quite important. if we have a case where we see them simply go away, we pay the price as a lost technology opportunity. but there's another problem, and that's in the remaining 50 or so billion left in the r & d accounts. this is money that goes into what the military likes to call demonstration and development. 6.4, 6.5, 6.6, 6.7 for the technocrats among us. what sort of things are in those programs? well, they are pretty important. the army has some work on patriots and its smaller air defense systems. the navy has big accounts in its

joint tactical radio system. the air force, which has about $25 billion of that, covers some classified programs in that category. i think those are usually a lot of space programs. and also things like high energy laser and gps control. then defense y, there's another $17 billion in that part of the r & d budget. it includes things we really like. things like cyber. things like homeland security crossover initiatives and also ballistic missile defense initiatives. in short, these are not the kind of things we can afford to blindly slash, either through program level sequestration or through attempting to direct a big $50 billion bogey in one year into the r & d accounts. here's the reason we shouldn't do it. take something like the f-35 program. that's a program that along with many other major systems still has some r & d money, although it's also largely a production program.

and what we learn about other programs going forward, for example, to use another air force one, long-range strike, is pretty compelling about the costs of doing insufficient r & d. a rand study that was completed in 2011 found that insufficient r & d was a major cost driver in four major programs. those included f-35, the navy's now cancelled ddg destroyer, the satellite and the army apache helicopter. take money out of r & d in the wrong place, and you'll essentially bank on more cost to that program when and if you restart it again. we could talk more about o & m and some of the other things. i think sequestration could also mean a tempting desire to take a lot of money out of that operations and maintenance portions of the military, stand down the aircraft, bring the ships back to port and do things like that. i think what we can see as soon as we look at concrete examples

is that we agree the defense budget needs to come down. we need to look at what goes on after iraq and afghanistan. but slashing through the r & d accounts is not the way to do it. time to get to a strategy discussion and make those hard choices. >> okay. thanks. mackenzie. >> thank you, peter and michael, for having me on the panel and thanks to rebecca and tom for letting me sit up here with you guys. i'm going to take a little different angle. rebecca is a good friend. we've published together and agree on a lot of things on national security. not everyone in the room agrees the budget has to come down. for debt reduction, if that were even the case. unfortunately, the defense budget cuts have not been allocated to defense. that's the big elephant in the room. we're cutting defense and the military is owning up to it and they're patriotic and the chiefs are standing up to it and saying we're doing it for debt reduction. actually, that's not the case. the president's budget that's on the hill right now proposes a generous net increase for every othefe