>> i want to move to the water contamination issue. one of my top priorities has been to get help and answers for those individuals in the marines that have been affected by this water contamination at camp la ju lajuene and as many as a million families that were at the base in the 1960s and the 1980s have been affected by this water

contamination. we've finally gotten studies to shed light on this tragedy. as someone i know who served at camp lajeune, i hope you will make this a priority, and will you work with congress to work with this? i feel confident because we're working with atr and some other areas that overcome any of these hurdles that may halt or delay the pursuit of answers for affected marines and their families. >> absolutely, senator. and we'll do all we can to be transparent with marine families, and frankly, at the end of the day to do the nice thing. >> i think it's a powerful program that allows our service members to pursue education in their off time, and i think it enhances the professionalism and certainly helps prepare them for the civilian work force when

they transfer out. congress has sent a very clear message about the importance of this benefit and by restoring it in fiscal year '13 and reprogramming that in fiscal '14, and in the marine corps' '15 budget, the original proposal wanted to cut this by close to two-thirds and also included a 20% cost share by the individual marine. it's a program that i support and i suspended it. i was pleased to see that the marine corps quickly changed course and then fully funded this tuition assistance for fiscal year '15. if confirmed, will you continue to show strong support for the tuition assistance benefit? >> senator, i have taken a look at the guidance that's been provided, and if confirmed, the guidance i provide will be consistent. >> this is a benefit i think

these men and women certainly deserve and it would help from an educational standpoint for those individuals and when they transition out. thank you. i'll look forward to working with you on that. >> thank you, senator hagan. senator whitaker. >> thank you for your testimony and for your service. let me just try to follow up on a few things that have been mentioned. senator imhoff mentioned amphibious, and it's clear we're not near that. let me ask you about the program that was reduced to 11 vessels. this committee restored that to 12 lpd. it's my understanding that the appropriations committee has found the funds for that 12th lpd and that it's authorized in the house version of the national authorization act.

do we need that 12th lpd? >> we do, sir. >> what's your assessment of the risk to the marine corps and our troops' ability to execute objectives around the world and particularly the asia pacific if we do not get that number right. >> senator, we're both short the number of ships required to meet the combatant commander's requirements as well as to help marines conduct an amphibious assault, but i believe it will help mitigate the risk we have in both those areas. >> would it help you as the next commandant if we would go ahead and get these bills on the president's desk for signature before the end of the fiscal year? what problems does it cause when we let the fiscal year expire and haven't given you a national defense authorization act and we

don't have our defense department funded with an actual appropriation bill, but rather, a continued resolution? >> thanks, senator. and i know from my previous experience as assistant commandant, what that frequently requires us to do is break programs. it's actual ail vely a very inet way to do business if you don't have a bill passed by the end of the fiscal year. >> we have reported out of this committee that carl levin, defense authorization act, and i know that he would like nothing better than to get it on the floor this month, and i would join my colleagues in that. let me also follow up -- >> if i can correct that, i really wanted to get this on the floor last month. >> but that was yesterday and yesterday is gone. we need to get it done. i think you and members of this committee are on the same page. i just implore the leadership of

this congress to do what's necessary to get these bills on the president's desk in a timely manner. let me follow up, then, on the question of the pace of our drawdown. right now we have 30,000 troops -- u.s. troops in afghanistan; is that correct? >> that's correct, sir. >> and another 10,000 from various coalition allies for a total of 40,000? >> that's correct. >> at what pace are we going to get to 9,800? what will it look like at the end of this calendar year? >> it will be at 9,800 at the end of this calendar year, senator. >> a pretty rapid drawdown? >> it is, and this is the way it was planned so we could keep a maximum amount of forces on the ground through the election period as well as the fighting season through the summer, but as we discussed a while ago, the infrastructure has been a driver, and we've been working

on the infrastructure plan throughout the last year, so i'm not concerned about the pace of drawdown to get to 9,800. we have a plan in place and we'll get there. >> are we going to be at 9,800 in most of the calendar year 2015? >> that's the plan, sir. >> so by november of 2015? >> we will begin the drawdown by november of 2015. >> how many coalition allied troops will be with us there? >> we'll have 4,000 plus or minus that will be with us in 2015. as we collapse back to a cobblecentric approach in 2016, i would expect we would have at least half that number in 2016. >> so we'll have about 5,000 troops during 2016. >> the president said we would have about half in 2016 and

another 1500 is out there, but the president's guidance has been about half. >> and your testimony before the committee today, in your best judgment to the congress, is that the numbers that we project for 2015 will be adequate to provide security during that calendar year; is that correct? >> sir, it is correct. the numbers in 2015 are consistent with the recommendation that i made to the president. >> okay. and do you reserve the right, as i understand it, to look at conditions on the ground and change that recommendation as it goes forward beyond calendar year 2015? is that what i understand you to tell me yesterday? >> senator, i think any commander, and i certainly believe i have this responsibility, any commander has the responsibility to provide the president with best military advice which includes a continual reassessment of the assumptions and conditions that were behind any recommendation

that was made. >> i hope you will, and i'll tell you this, general. i think we're all impressed. we're impressed with your record, we're impressed with the answers that you've given us, and we think the president has got the right man here. i just have to say, i implore you, and i charge you with speaking truth to power. and if it looks like, as senator inhoff said, if it looks like we're not getting it right as we didn't get it right in iraq, i hope you will come back to us and tell us we're not getting it right and that something needs to be done. we need to know that. we didn't get the right advice, frankly. we got surprised in iraq. and i have here a news item which i think i'll ask to be inserted into the record.

it's a statement by general amos, your predecessor. and i'm going to do you the favor of not asking you if you subscribe to his views because i don't think that would get us n anywhere, but he says stepping into a political debate, the head of the marine corps of the united states doesn't have the luxury of isolationism and iraq's deterioration may have been prevented if washington had maintained a larger u.s. presence there. dr. amos offered strong views on both debates, and he believes the isis takeover of central iraq and the growing problem may have been avoided if the united states hadn't completely withdrawn from the country in 2011. i have a hard time believing that had we been there and worked with the government and worked with the parliament and worked with the minister of

defense, minister of interior, i don't think we would be in the same shape today, amos said during an event at the brookings institute. i agree with this distinguished military leader, and it breaks my heart, as it breaks the heart of general amos and other marines and other troops to see what has happened after all the blood and sacrifice and treasure the united states has spent, that if we had gotten the correct advice and we had been given a more realistic assessment, this disaster could have been avoided. it's up to people like you to help us understand the ways and means to prevent this type of disaster from happening in afghanistan. i believe you're the man to do it, but we look to you to come back to us and tell us the truth and give us your best guidance as the military expert on what we need to do to make this

situation work in afghanistan. thank you, sir. >> thank you very much, senator wicker. i join you in feeling the very strong level of confidence that that's exactly what general dunford would do. as he's testified this morning, he has the obligation to do if the assumptions which have been made don't turn out to be correct. so i join you in that feeling of necessity that we can count on our top military leaders to do just that. and i talked to general dunford about the same thing in my office, and i thank you for your commentary here today. senator cane? >> thank you, senators, congratulations on the appointment and thank you for your service. you have a lot to be proud of together with the work you've done with our american military and our coalition partners to enhance the capacity of the

ansf. i had a hearing recently in the foreign relations subcommittee that i chair about afghan civil life post 2014, and your predecessor general allen said something that kind of made us all sit back in our chairs. after talking about continuing security challenges, general allen said, but corruption is a bigger threat, existential threat, to afghan society than security challenges are. and he wasn't minimizing security challenges, he was elevating corruption challenges. we all were struck by that, but when i watched the playout of the elections in afghanistan, the taliban threatened them from a security standpoint, but as you pointed out, the ansf did a superb job in blocking the taliban from being able to disrupt the elections. but the challenge for the elections were allegations of corruption. the corruption threat proved to be more impactful on this election process than the security challenge, and i think that is proof of the adage that

general allen made, but it's also proof of the good work you've done and i applaud you for it. questions about your role as commandant should you be confirmed, and i have confidence you will be. you have to balance a lot of tough priorities: security priorities, personnel priorities, budget anterior prioritie budgetary priorities. the challenges of today are usually needs in modernation. what are your biggest concerns regarding readiness today in the corps? >> general amos has discerned that all marines are in a state of readiness, so those forces are well equipped and well trained. having said that, we paid the cost over the years for making sure those marines that are engaged are at a cost mission.

today our stations are in the greatest state of readiness. that's largely an equipment readiness issue. today as a result of the years of war and wear and tear on our equipment. so certainly one of the key things would be to ensure that we had the resources necessary to reset that equipment that will be coming out of afghanistan, and as you may know, senator, we've identified a minimum of two years as a window of time where we continue to need funding for that very reason, to reset that force and have the force be what you would expect it to be, which is not halfway ready but completely ready to do what the nation asks it to do. >> what are your top priorities for force as you come into commandant? >> i think broadly speaking, the critical thing is you expect us to be a naval force of readiness, you expect us to come to sea in a wide range of conditions, again, in every time and place. i think today there is a number

of areas where we're going to have to focus to ensure that we do have the amphibious capabilities necessary to fight tomorrow's war as well as today, and i think balancing those requirements for modernization with today's readiness is going to be a significant challenge, and i know you'll help us with that, senator. >> indeed. one of the challenges you have in the modernization side is acquisition programs, some that are working successfully, some not so successful. what will be your role as commandant to make sure the technology and equipment are well spent? >> where i've seen acquisition programs work is where leadership is purposely and decisively engaged in the acquisition program. if confirmed, i can assure you on the major defense acquisition programs that the program manager, if not, in fact, but certainly in practice, will be me. >> talk a little bit about the

progress the marine corps has made in opening up combat bases to women since secretary h hernandez' announcement in 2011? >> we will be prepared to make recommendations to policy. i think the marine corps has taken now a responsible and measured approach and it's exactly the one that i would take were i to be confirmed, and certainly at the end of the day, you can be sure that the recommendations that i would make would be based on the impact of the combat effectiveness of the marine corps in order to meet the standards that you would expect the corps to meet. >> and finally, general, just a compliment. often as i travel, i'm traveling in a foreign relations capacity, not an armed services capacity and i interact with armed

security guards at various embassies we have around the world. that is a critical program that has been enhanced in the aftermath of the accountability review board's recommendations following the tragedy in benghazi. but i've just been enormously impressed with this program and with the marines' ability to scale it up to meet the recommendation. it may be one of the few billets in the marines where you get to serve without a commissioned officer telling you what to do. i think all cos enlisted have personnel, but they do a superb job. we just need to make sure we continue to pay attention to that program, help the marine corps as it needs budgetary resources to staff it up. but i just want to tell you the appreciation of state department for the great work the security marine folks do are high, and i share that. >> thank you, senator. >> thank you, mr. chairman. i want to thank you, general

dunford, for your incredible leadership in afghanistan and i can't think of a better man to serve as commandant, and i also want to thank your wife ellen for everything she's done for our country and the marine corps. i wanted to ask you, general, if we follow the course of action that's been announced by the administration in afghanistan, without any changes in the reduction of forces, in other words, 9,800 to have at the beginning of '16 to about a thousand embassy presence in the beginning of january of '17, what's the best case scenario for what happens in afghanistan? and then i would also like you to answer, with no changes to the pace of withdrawal, what's the worst case scenario so we can understand what the two possibilities are? >> thanks, senator. the best case scenario for the next couple years would be that

first we have successful political transition this year. the afghan forces continue to be successful coming out of the fighting season. they have increased confidence and capability in the fall of 2014. the international community made some tokyo and chicago commitments so we had the resources necessary to sustain the force and the efforts that are critical to afghan's future, that the relationship between afghanistan and pakistan improves such as they have a cooperative relationship in dealing with extremism and that we minimize the risk of malaysian actors being involved inside afghanistan as they grow and develop. the afghan security forces in the best scenario would be sustainable in 2014 such as a very small presence inside the u.s. embassy in what we describe as a security cooperation office that would manage foreign military sales, engagements and so forth with some amount of

ministerial capacity advising as well would be there. but in effect, by 2017, we would have addressed those gaps that have identified the afghan forces. they would be sustainable, and again, we would have stability as a result of political transition. the worst case scenario over the next two or three years would be, first, it starts with the political transition and we don't have successful political transition. i think that's a foundational element to any success we're going to have. we also begin to lose international community support over time. the relationship doesn't go the direction we want it to and both states fall short in terms of where we want them to be as partners, both from a capacity perspective and a will perspective. if we found ourselves in 2017 without a decisive presence in the region and without effective ct partners in the form of pakistan and afghanistan and those two partners working with

each other, i think what you would see in 2017 is the space that al qaeda would need to grow stronger in operations against the west, something they haven't been able to do in the last several years because of a combination of the pressure, largely the pressure that our u.s. government, interagency partners and special operations have placed but also contributed to the support we had from pakistan and afghanistan. >> let me follow up on that. so with the announcement by the administration, you talked about the 9,800 troops that are our contribution and in 2015 you're satisfied with, and the administration has announced that would be cut in half in 2016. if that is followed through in terms of cut in half, one of the things you said in answer to senator chandliss, one of the important missions we've had in afghanistan is ensuring that al qaeda couldn't replicate 9/11, and the way we've done that is

to keep continued pressure not only on those who would want to threaten us in afghanistan, but for example, their counterparts in the network in afghanistan. so if we go down to half in the beginning of 2016, the ct presence has been beyond kabul, correct? >> it has been. >> absolutely. and it would be in 2015. what happens in the beginning of 2016 if we cut them in half? are we -- where are we located? >> in 2016, senator, in accordance with the plan right now, we would have a centrally kabul approach. the bases outside of kabul would be closed or transferred to the afghan forces or the afghan government by 2016. >> so if we do that, that's pretty soon, actually, if you think about it, that that would be the beginning of 2016 we would go to a kabul-based presence. what does that do overall to our ability to keep pressure on

those networks on the ct mission, assuming something doesn't dramatically change with regard to those who would want to threaten us from pakistan and afghanistan? >> senator, that would reduce our collections capability, our signals intelligence, our human intelligence and our strike capability, so it would be a significant reduction in overall counterterrorism capability. >> and if we had that significant reduction in our overall counterterrorism capability beginning in 2016, what does that do in terms of threats that we could potentially face to our homeland? >> senator, i think the equation -- you have to look at it in perspective of what is afghanistan's ct capacity and what is afghanistan's ct capacity and will with the nature of the threat? from my perspective, we would have to be in a position to close the gap between the pakistan and afghan ct capacity and will in 2016. while i don't know what the threat will be in 2016, my sense

is we'll still need an effective counterterrorism capability based on my prediction of the threat and based on the growth of afghan and pakistan ct capacity and will. >> just to be clear, an effective ct strategy really has to go -- unless the conditions dramatically change between now and the beginning of 2016, really has to be beyond kabul for us to ensure that we can keep that pressure to protect our homeland. is that true? >> the only way it will be successful for us to be in kabul, and probably a different way to say it, would be if afghanistan and pakistan are capable of dealing with the threat in 2016. >> so let me just ask one final question, which is if we think about the presence in kabul and what's happening with regard to the counterterrorism strategy, what is it that they would have

to accomplish between now and then? it seems like it would be quite a bit. and if we wanted to change course when would we have to make that decision, because if we're -- obviously we have presence outside of kabul and we're pulling into, if we cut the troops in half in '16 back into kabul, so that takes some time. when would you or general campbell, who will be the new commander on the ground, have to come to us and the administration and say, we really shouldn't pull all back into kabul, we're going to have to keep a greater presence. what's our time frame for that so we understand? >> i'll answer that and then go back to the first part of your question. the time frame from my assessment, and again, it's based on closing of infrastructure, would be in the september time frame, october time frame of next year would be the latest time when you could actually affect a change. because what would happen subsequent to that is you begin to draw down the infrastructure, close or transfer those

facilities that currently house our forces outside of kabul. so about a year from now would be when that discussion would probably have to take place. with regard to what the afghans would have to do to be successful in a counterterrorism fight in 2016 is really two critical gaps that affect their ct capacity. one is their aviation capability and then the other is the intelligence enterprise as a whole. and while those are developing, we still expect that the aviation enterprise will still have some capability gaps in 2016 as well as the intel enterprise. those are longer term challenges that we are addressing. >> i thank you, general, and i also would point out i think you've said that some of our ct missions we conduct independently because our interests in protecting the homeland -- well, the afghans we have a great partnership with them, but ultimately it is our interest and those need to be focused on as well, so their ct mission may not be as focused as we would be on that particular

mission. would you agree with that? >> senator, there are operations we conduct in the region unilaterally, yes. >> thank you, general. >> thank you, senator ayotte, and also thank you for pointing out that it will be general campbell who will be responsible for giving us his best military advice next year. both senator wicker and i have commitments from general dunford that he'll make those honest assessments, but it really will be general campbell in terms of afghanistan who we got the same assuran assurance from, by the way, as we did from general dunford, but thank you for pointing that out. >> thank you, and we know that general campbell hopefully will call on general dunford for his advice. thanks. >> thank you for smoothing over that little omission. senator herono? >> thank you, mr. chairman. general dunford, i join my colleagues in thanking you for your decades of distinguished

service and now taking on this new challenge. and i'd like to also take this opportunity to say to the folks at the hawaiian bay, there are 2,000 sailors, 14,000 civilian employees at the marine base, so i certainly want to give a shoutout to them. you asked the question earlier about the january 2016 date to provide standards for the occupations within the marine corps for which all personnel, including women, will have the opportunity to compete. and i just wanted to ask you, who in the marine corps is the lead person or persons coming up with these standards and where are you in this process? >> senator, the lead person who approves those standards is general amos, our commandant. and i know from my previous experience as the assistant

commandant that he's been personally and decisively engaged in approving those standards. so there's certainly a staff down at quantico that works this for him, our integration command is involved, but at the end of the day in our service, the commandant is the one who approves the standards. >> thank you. i think you also mentioned during your responses that training is very important, of course, to all of our services but to the marine corps. and i understand that the availability of training ranges, and we have a big one on the big island. could you share your thoughts on the importance of training ranges, especially as we rebalance to the asia pacific? >> senator, thanks for that question, and in two previous assignments, i was involved in what we describe broadly as the pacific laydown, and one of the critical elements as we reviewed the laydown, was to ensure that

we had sufficient ranges so we can do the kind of combined arms integrated training that allows our marine ground task forces to be successful in combat. so it would not be an overstatement to say that training ranges, the opportunity to actually develop the skills of integrated combined arms are inexplicably linked to our success on the battlefield. >> we were told that the marine corps spends 63 cents on the dollar to pay for benefits, health care and other personnel costs. so there is a challenge to balance readiness and personnel costs. if confirmed, how would you come up with this balance of personnel costs with readiness while meeting the mission requirements of the marine corps? what would be the questions you would ask to come up with as balance? >> first, i view all the money

we spend in the marine corps to go towards marines. some is in the form of compensation, some is in the form of making sure they have good equipment, some is in the form of good training, some goes to ensuring that the infrastructure that supports marines and their families is in good shape and provides the sfr services necessary. i think your question is how would i balance it. i would consider each of those variables to deliver an effect, and that effect is we would have the force and readiness that you would expect your marine corps to be. >> i think the sense is that 63 cents of every dollar going to personnel costs is not necessarily the kind of balance that you would want to have in order to make sure that your readiness needs are met. >> senator, there is no question. in fact, our procurement account, to put it into some context, is about 8% in the current fiscal environment. so clearly in a perfect world, we would have more money going

towards modernization and we would have more money going towards infrastructure. those are the two bill payers right now as we focus on ensuring that our marines are in the fight today, are fully employed and have good equipment and good training. the bill payers have been our modernization account as well as our infrastructure account. >> my best to you in achieving the balance and meeting the needs of the marines. i want to turn to our force structure because there are going to be a lot of questions asked about what is the appropriate mix for the active reserve units in the marine corps. other services are having to ask those questions themselves, so with the challenges to personnel drawdowns in the marine corps in the future, what do you believe would be the best approach -- best approach -- to achieve a balance for active and reserve components in the marine corps?

>> senator, thank you for that question. i actually believe over the past decade we evaluated both the size, the organizational construct as well as the method of employment of our marine reserve force. i wouldn't see any significant changes. i do know that the commandant now has chartered a group to review the capabilities and capacities inside the marine reserve so we properly incorporated the proper mix of corps and reserves, but i believe that the mix right now is about right. >> this committee spent a lot of time on the issue of sexual assault in the military. you responded to a series of questions that have been put to you regarding the marine corps' efforts in combatting sexual assault in the military, and you noticed that while you are satisfied that you are proceeding ahead, but there is much more work to do. and i wanted to ask you, based

on the changes that we made to the statutes that apply and the marine corps' own efforts, how would you determine the success or the effectiveness of what the marine corps is doing to, one, prevent sexual assault, and two, when they occur, to take appropriate action and prosecute? >> thanks, senator. and i think the areas where i'm encouraged even from the outside looking at the marine corps and what they're doing is the changes in the command climate as it pertains to sexual assault. in both the surveys that have been conducted have indicated increased trust and confidence in marines in reporting sexual assault, confidence in the chain of command that proper action would be taken, and the other statistic that is encouraging to me is the numbers that have reported sexual assault. while it's increased, i think we all recognize that historically it has been underreported, so increased reporting in the next couple years is a positive step in the right direction. but with regard to your question when will i be satisfied, i will

be satisfied when there is no sexual assault. so the effect we're trying to achieve in a safe climate, the effect we're trying to achieve to ensure that all marines are treated with dignity and respect, the results we expect out of all that and the results we expect from decisive leadership is that we won't have sexual assaults in the united states marine corps, and i think that's when we would be satisfied. >> that's very commendable. my question has to do with, of course, as we've all gone toward that goal of zero sexual assault, how will you ensure that's happening and how will you make sure you have a commitment to see those changes come about? and i assume your answer is yes, that you will have a continuing -- >> senator, and i think probably the key piece from my perspective is that it's all about commanders, it's all about leaders, it's all about standards and it's all about

holding people accountable to those standards. >> thank you. thank you, mr. chairman. >> thank you, senator hirono. senator graham? >> thank you, mr. chairman. mr. dunford, you've done an outstanding job in any assignment you've done. the president has made a great choice in commandant, and you deserved it and earned it into your family. thank you for your service in our country. as to afghanistan, do you agree with me that if there is a failure to get this election closed out in an acceptable fashion where somebody acknowledges defeat and there is a form of unity government thereafter, no amount of american troops is going to make afghanistan successful? >> i agree with that, senator. >> if that didn't happen, i would be the first one to say get the hell out of there. so to the afghans, in case you're listening, that's for

you. that can all be accomplished and i think it will. ct and training numbers. you're okay with the numbers in 2015, correct? >> i am, sir. >> you're okay with the original approach in 2015? >> i am, sir. >> let's talk about what we lose over time. we have about 7,000 special forces tied in the mix right now on the ground today. >> we do, sir. >> by january of 2015, it will be 3,000. >> approximately, senator. >> by january 2017, it will be basically zero. >> it isn't determined at this time, sir. >> yeah, it is. it is determined at this time. the president has announced he will go to a security cooperation force in 2017, or did i miss something? >> senator f you're talking -- >> i'm talking about the plan in place. i'm not talking about changing the plan, i'm talking about the plan the president has adopted. do you believe it will be

virtually zero? >> certainly close to that, senator. >> now let's look at the threats we face. do you see by the end of 2016 any reasonable possibility that the al qaeda types, al qaeda corps, al qaeda affiliated groups, other groups that live and thrive on the afghan-pakistan border will be contained in such a fashion as to not represent a threat to the homeland? is that remotely possible? >> i don't see it at this time, sir. >> so your views that the threat by the end of 2016 that we face in the homeland is going to be extinguished, i could not agree with you more, but our ct forces will be unless somebody changes this. do you agree that's a high risk strategy given the likelihood of a threat? >> unless it's mitigated by afghan or pakistan -- >> the whole paper is a high risk strategy. >> from a ct perspective. >> let's talk about the delta to

be filled in from 7,000 to zero. if you had to grade the afghan-pakistan working relationship on anything, particularly counterterrorism, what grade would you give it? >> today a d. >> a d. the dimfference between our counterterrorism capability and the afghans, how would you rate that difference? >> significant. >> yeah. okay. now, let's talk about the other aspect, training and advising assists. you were asked to evaluate the plan on paper, and you said if everything works out well, that by 2017 on the training and advising assist plan, we might be okay. >> it would be possible to obtain sustainability by that time. >> there are assumptions that have to be made, right? >> yes. >> some of these assumptions are pretty enormous, right?

>> they're significant assumptions. >> to hit all the gates, is that akin to making a 65-yard field goal? >> senator, it would be difficult to hit all the gates exactly as we outlined. >> i think it's hitting a 65-yard goal into the wind, but that's just my assessment. this is on paper, so my statement to the committee is on paper there is a disaster in the making to our homeland and to losing all the gains we fought for inside afghanistan by drawing down too quick and not being able to help the afghans in a reasonable fashion. if it does change, i'll be the first to applaud the changes. but if it doesn't change, it is a complete, absolute disaster in the making. as to political reconciliation between the two candidates, are you optimistic that this will

work out? >> senator, i am. >> are you optimistic that the afghan people will continue to want us around? >> i'm absolutely optimistic about that. >> so there is absolutely no reason for any american politician to believe that we're not welcome to stay in afghanistan? >> senator, both presidential candidates as well as the vast majority of the afghan people support the bilateral security agreement in continued u.s. presence. >> if al qaeda is able to regenerate in this region and our presence goes down to virtually zero, would you expect an attack on our homeland in the next five years? >> certainly based on the intent of the enemy, i would, sir. >> lots at stake, right? >> there is, senator. >> now, as we go into evaluating our force structure, what have we done to the marine corps, in your opinion, if we get back on the road to sequestration?

>> senator, as i've looked at what sequestration does to the united states marine corps at a forced level of 175,000, it really gets to the issues that we've talked a little bit about here this morning. it's an inability to balance the need to be ready for today's crises with a requirement to meet at least a minimum threshold of investment for modernization, infrastructure and other programs that support marines. and i think you're really on a path, without overstatement to use general meyers' comment from the 1980s, you're really on a path to a hollow force if you have sequestration and you maintain a corps of 175,000 marines. i don't think there is any question about that. >> would you agree with me that congress will have done more damage to the marine corps than the enemy that you could face on the battlefield? >> senator, there is an enemy that has had much success against marines, so i would agree with that. >> thank you for your great service. i look forward to seeing you in the future.

>> thank you, senator graham. senator donnelly. >> thank you, mr. chairman. general, thank you very much for your service. you've done extraordinary work. i've had the privilege of being with you in afghanistan and have seen firsthand what you've done. to your family, i know you missed them but we were grateful to have you there with us. sir, as commander of the marine corps this past year, we are so impressed by what you've done and you're going to get an overwhelming vote. as you walk in in the last year, 45 marines we lost to suicide. i think this is a critical issue. i hope you do, and i was wondering your intention to work with your team to try to make a difference here.

>> senator, thanks for that question, and i will be personally engaged as i was as assistant commandant for two years. in the beginning of the war, our understanding of mental health was rudimentary at best, and over the past decade we've learned quite a bit. i think one of the most encouraging things is the center of excellence that's been established up at walter reed to really do some great research into both traumatic stress and traumatic brain injury. so in terms of mental health, i'll certainly be engaged in that. with regard to suicide, of course, there are other factors because most of the suicides aren't related to the combat experience, but we'll do all we can to ensure that we have leadership that recognizes the warning signs of suicide, we'll make sure we have proper medical care available when those warning signs are identified, that the leadership gets marines to proper help, and we'll continue to work at what is, in effect, discouraged.

>> one of the things we saw in iraq was that a lot of the generals we had worked with, helped train, were replaced by, in effect, pals of the people in charge. and as we look at afghanistan, you know, we're trying to learn from the lessons we've seen in iraq. we have abdullah abdullah. obviously president karzai still has a great amount of influence. do you feel confident -- obviously we think we have the right generals in place in the afghan army now. do you feel confident they can avoid that same type of situation where talent and ability is taken out so they can have friends, in effect, come in? >> senator, thanks. confident but not complacent in that particular area. both candidates made a commitment to pick the right people in the security ministries. i thought one of the more encouraging things to come out of this weekend's discussion is

that in many areas they talk about in terms of the political track and the accommodation they would make, one of the things was to stabilize the leadership in the minister defense and period of transition. so they both recognized the importance. i know from dr. ghani, he was my counterpart in doing the transition last year, and he certainly recognizes the importance of selecting the right leadership inside the security ministries, and i've had enough conversations with his people where he recognizes the same. it won't have an effect on appointments inside afghanistan. that will be the case for some time to come, but what we have today in the form of brigade commanders and inside the military with our police leadership is a recommendation by senior leadership that while they may have other factors besides merit that would cause people to be selected for senior leadership positions, there has to be a foundation of merit for

each of the appointments that are being made. so i'm encouraged by that, but that's certainly something the next governor of afghanistan is going to have to continue to emphasize and focus on. >> you had a very specific assignment with afghanistan. now as commandant of the marine corps, obviously all over the world. as you look at this, through your experience, where do you see the biggest threat to our country right now, the greatest source of potential danger to an attack here and where it would be coming from? >> senator, i think the greatest challenge today is the numbers of failed and failing states that provide sanctuary for extremists who create a threat to this country. and, of course, it's not any longer geographically focused, it's focused in any area where the enemy has the space to conduct operations in the west. i think at this point this is a near critical threat to our security. >> have you seen an indication, for instance, in a group like

isis? they're involved in iraq, but from everything you've seen, do they still cast an eye toward coming after us as well? >> senator, i think the very change they made to their name indicates the risk greater than iraq. they changed their name to the islamic state and calibrated inside iraq and that clearly indicates actions globally. >> to go back to afghanistan for a second, we've seen pakistan pushing harder in the tribal areas trying to go after a lot of the pakistan taliban. how has the effect of that been on afghanistan? has it pushed more over into the region that oou beyou've been i charge of or that you've been working with the afghans on? how do you see that long term having an effect? >> the near term, senator, we have seen a large number of

refugees. the estimates are probably between 70,000 and 100,000 refugees. we're also certainly aware of enemy forces moving from pakistan into pakistan into afghanistan and we've had a disruptive effect on the extremists. so there's a positive effect as well as those challenges of the enemy moving to afghanistan. i think what remains to be seen and what we're watching very closely is what will pakistan do as these groups start to move back north. we have a commitment from our pakistani counterparts right now that they will not allow those groups to come back. they've taken visible measures to destroy the efforts as a whole. frankly, that's something that is to be determined and we're watching that closely and i think it's going to require that we stay engaged with our counterparts to be sure that that does not happen again. >> one final question. what do you think will be your

greatest challenge in inheriting this position as you move forward? >> senator, i think the greatest challenge is going to be to continue to provide a ready force of the marines to the country today and at the same time make the kinds of decisions and the kind of investments that ensure that we have a ready marine corps tomorrow. >> thanks again. you've been an inspiration to not only marines but to our service members all over the country and to us as well. we're very, very proud of your work. >> thank you, senator. >> thank you, senator donnelly. senator cruz? >> thank you, mr. chairman. general, thank you for being here, thank you for your testimony, and thank you for your service to our country. i'd like to ask you questions about several national security threats across the globe, starting with what you and senator donnelly were just discussing which is the situation with isis. right now in iraq roughly how

many americans are on the ground in iraq, both civilian and military? >> senator, i'm not sure how many exactly. i think it's somewhere short of 1,000. >> how would you characterize our ability right now to ensure the safety of those americans? >> i'm confident that general austin, the commander of the united states central command who i speak to several times a week has taken proper measures to provide force protection for those forces and in the environment that he's put them in, he's made sure that there are measures to mitigate the risk to the force. certainly a dangerous combat environment, always a risk, but i'm also confident in his leadership to he's done all he can to mitigate that risk. >> what about the american civilians who are in iraq? what is our ability to ensure their safety. >> senator, at this time. i'm not aware of our capacity to provide security for the civilians in iraq unless you're talking about u.s. government

civilians in which case they're part of the whole comprehensive protection on the ground for our diplomatic personal as well as our uniformed personnel. if you are talking about people that are there in a private capacity, i think our ability to provide security to them on a day-to-day basis is fairly limited. >> to what extent is our ability to maintain security both for civilian and military personnel dependent upon the shia militia that are there? >> senator, i think the security conditions in iraq as a whole are absolutely linked to the political process and the viability of the government. i think that's how we get in the situation we're in. it's a manifestation of a lack of inclusive government in political challenges that spilled over into security. i think it shows the inextricable link between stable stability and security as well as viable governance. >> general, i will share with you, i am deeply concerned about

our ability to protect the americans who are there, particularly as the situation seems to be deteriorating. we find ourselves between two im plaquable foes -- isis who are so extreme that they were thrown out of al qaeda which is a pretty remarkable feat, and who have expressed an open desire to attack and kill americans. on the other side, the islamic republic of iran who, likewise, or rapidly anti-american and have the same desire. what nobody wants to see is a reprise of what we saw in the late 1970s, another hostage situation of americans who find themselves in an incredibly hostile situation where enemy forces capture americans and

hold them hostage. so, number one, i would certainly urge you and urge your colleagues in the military to continue doing -- and i know you're endeavoring to do this but to continue to doing everything humanly possible to prevent such a situation and to do everything we can to mitigate the risks of it spiraling out of control so that american citizens are not caught between two warring factions and trapped in a place from which we have no ready exit. >> i'll do that, sir. >> let's shift to a neighboring country, which is very much involved right now in what is happening in iraq and that is iran. in your military judgment, how significant of a threat would

you characterize the possibility of iran acquiring nuclear weapon capability? >> i think that would be extraordinarily significant, senator. >> in your judgment, what would happen if iran were to acquire nuclear weapon capability? >> i think they would use the leverage of nuclear weapons to meet their objectives and destabilize the region. >> if, god forbid, iran were to acquire nuclear weapons and made the second decision of being able to use those weapons, based on the radical religious extremism that motivates some in iran, in your view how much damage could iran do to america or her allies if iran was willing to use nuclear weapons to maximize the damage? >> senator, it would be hard for me to envision how they may use

those or what might happen, but i can say that clearly that would be a threat to our vital national interest which is the protection of the homeland and the home of the united states. >> if iran, say, were able to use a nuclear weapon launched from a ship offshore of the united states into the atmosphere to create an emp on the eastern seaboard, what would the impact be to this country? >> any nuclear weapon that would go off in the united states would have a horrific effect on people. >> an emp in particular, how would that impact the civilian population if an emp were detonated in the atmosphere above the eastern seaboard. >> emp would essentially shut down our communications network, would be one of the more significant outcomes of emp.

>> would there be additional impacts in terms of transportation, in terms of distribution of food, in terms of distribution of basic means for survival? >> all those things, senator, are impacted by our ability to communicate. so my expectation is that all of them would be adversely affected. >> let me finally shift to afghanistan. how significant would you characterize the threat right now of radical islamic terrorism both in afghanistan and in neighboring pakistan? >> we are managing the threat to the homeland now as a result of the pressure that we're putting on the network, so i believe we are at moderate risk as a result of the extremists in the region, but again, that risk is assessed in the context of the forces that we have on the ground inside of afghanistan and our

efforts with pakistan. >> so the final question on exactly that point, if we proceed with the plan that the president has laid out in 2016 to drop our forces to roughly 1,000 and in 2017 to drop it to zero, what will be our capacity to engage in counter-terrorism to limit the threat from the radical islamic terrorists in that region? >> the tools that we'll have able to deal with or conduct counter-terrorism in 2017 in the scenario that you have outlined is the willing capacity of pakistan and afghanistan. >> we would be dependent on their forces and unable on our own to defend ourselves from terrorist threats emanating from that region? >> again, senator, if you're projecting a threat and projecting that we would no the have any forces there, then we would be dependent on afghanistan and pakistan. >> wow, that's a deeply

troubling scenario. thank you, general. >> thank you, mr. chairman. welcome, general. i want to talk a little bit about gender integration. if confirmed, what is your goal with regard to combat integration into the marine corps? >> senator, i'm aware of the direction that secretary panetta put forth in february of 2013 and since that time general amos has outlined a deliberate and responsible and measured approach. there's analysis that would inform any recommendations for an exception to the direction that secretary panetta outlined in 2013 and i'm aware that that recommendation would have to be made by january of 2016. any recommendation that i make would be informed by the research that's being done and by the impact on the combat effectiveness of the marine corps. >> is the research that you are referring to the review of creating general neutral standards that reflect the

physical needs of the task? >> that's a piece of the research that's being done, senator. >> if confirmed, do i have your commitment to keep my office apprised of how that review is going and what the time line for integration is and whether there will be any exceptions? >> you do, senator. >> what phase of implementation is the marine corps in now? what is your expected time line? >> senator, i would have to get back to you. i know that we're prepared to make a recommendation by the deadline of january 2016. i know the marine corps has just initiated an integrated task force that will in part inform any recommendation for exceptions to policy, so i believe we're on path to make a recommendation by the deadline but i'm not -- >> i thought the deadline was to actually have integration completed by january 2016. >> senator, my understanding was the recommendation was due by 2016, but i'd ask to take that

for the record and get back to you. >> that would be helpful. turning to afghanistan, we've seen a few difficulties with regard to the afghanistan presidential election. do you believe that's going to have an impact in our post 2014 planning and if so how? >> if we did not have successful political transition, it would have a significant impact on our post 2014 presence. i would quickly add that right now in the wake of the agreement made over the weekend and where we are, in fact i'm happy to report that we started collecting balance yesterday and our forces are currently supporting the auditing of the balance that we're on a path to have effective political transition and frankly, on a positive sense, effective political transition i think will increase the prospects of our success in a post 2014 environment. >> what do you think the major challenges will be for the next

commander? >> the major challenges, senator, would be to address the capability gaps that the afghan's security forces have now. first is what i broadly described as minute tier yal capacity, the ability for the ministries to do the planning, budgeting necessary so they have the spare parts and the ammunition. the second capability gap is in the aviation enterprise. we still have a couple of years to go before we complete the aviation enterprise. we have a number of pilots that have been trained and the aircraft delivered but the overall enterprise requires additional work. the third gap is the intelligence enterprise. much of the intelligence that the afghans have had available over the last few years has been a result of the coalition so their organic capability to produce and have intelligence drive operations is another capability gap area. and then the fourth area that i

think my successor would have to focus on would be their special operations capability which are linked as well to that aviation intelligence capability. those four areas are the areas i think are primary focus for post 2014 presence. >> do you think there are any lessons we can learn from iraq in terms of our withdrawal there that we could apply to afghanistan? any lessons learned that we should be mindful of? >> i do. there's a significant lesson learned and that is the need to do a transition to develop sustainable afghan forces and to oversee the establishment of effective governance as opposed to withdrawal. i think our withdrawal in iraq did not allow us the time to develop sustainable iraqi forces and to provide the environment within which effective governance would develop. >> now, in terms of our drawdown in afghanistan, what do you think the impact will be on the

region? do you think it will undermine our ability to do anti-terrorism work? will it undermine any other broader security interests? >> senator, in 2015 the force that we have envisioned that will conduct both train advise assist to the afghans as well as counter-terrorism operations i think actually will have a stabilizing effect on the region. most have encouraged the united states to maintain a presence in 2015. i think the size force that we have in 2015 will allow us to accomplish those two tasks that i just outlined but they'll also contribute to a positive psychology in the region and the confidence that afghanistan will not deteriorate. >> what are your largest concerns in the region right now? >> the single biggest concern i have right now is probably the sanctuary that al qaeda has right now in pakistan. i of course, senator, was focused strictly on afghanistan and pakistan.

clearly if you look at the region as a whole, you would have to be concerned with what's going on in iraq today as well as what's going on in iran. >> with regard to pakistan, what would your recommendations be? pakistan has been so difficult to work with, and they really have been reluctant to do missions we've asked them to do, to crack down on terrorist networks when we find them. they're very unwilling partners. what would your recommendation be to the president on how best to address the terrorist concerns in pakistan? >> i don't think any of us have an easy answer in pakistan other than continued engagement based on support that we would provide with regard to specific conditions that have to be met. i do believe that pakistan recognizes that extremism is an exist shall threat. i think they lack the capacity to deal with that threat completely and i don't personally see any other option other than deal with those problems inside of pakistan as

well as contribute to regional stability. i think we've seen what we did in the 1990s when we isolated pakistan in the wake of the pressler amendment which is the other alternative we can take at this particular time. i don't think the results of our disengagement in the 1990s would want us to go back to that. i think continued engagement would be what i would recommend to the president with a clear framework within which we would have a partnership. >> thank you. thank you, general. thank you, mr. chairman. >> just a couple questions from me. in terms of the counter-terrorism after 2016, you indicated we would be dependent upon afghanistan and pakistan and that area. does that answer not assume that none of the thousands or so people that we would have at the embassy would have a counter-terrorism mission, and does it not also assume something else which is that we

would not have a cia capability in that area? >> chairman, thanks for the opportunity to clarify on the 1,000. as i made an effort to say earlier and unsuccessfully, some number of those would be involved in counter-terrorism i would assume, but more importantly, those 1,000 that would be envisioned in the embassy in 2017 would also be contributing to afghan security force counter-terrorism capacity. one of the key tasks after 2017 would be continued development of those key elements of their special operations capability, the aviation intelligence being two of the more important. >> in terms of the possibility of cia capability in that area? >> chairman, i don't know what the cia would envision. we certainly know that unless there was a different laydown of forces in afghanistan in 2017, they wouldn't have any significant basis in afghanistan

in 2017 i think as the president's plan right now. >> some of the 1,000 could be assisting them in a counter-terrorism effort if they so decide? >> if we have joint special operations capability i would assume they would operate in a collaborative manner with other elements of the government. >> that would be part of the 1,000 as well? >> part of the 1,000 could be in support of the other elements of the u.s. government, yes, chairman. >> in terms of the -- there was a statement i think that senator mccain heard from some afghan military leaders that they feel abandoned by us. that's not the sense i got from military leaders, afghan military leaders. i got the sense that obviously they would like us to stay for a much longer period of time, but they are very grateful, number one, and that they feel that they have a capability going forward. i sense some sense of disappointment, obviously, that we're their brothers in a lot of

ways but they also feel strong and capable as well. how would you describe the afghan military leaders in terms of their feelings towards us? >> chairman, in the wake of the announcement some were obviously disappointed that it was not longer. but the truth of the matter is that on a day to bay basis right now the afghan leadership is a lot more focused on the security challenges in 2014 in working with us to develop sustainable forces in 2015, but it's not a topic of routine conversation with our counterparts right now. >> you're talking about the military counterparts? >> the military counterparts specifically, chairman. >> thank you. senator king? >> a quick question and observation. the question is, general, how long were you in afghanistan? how long was your assignment? >> senator, i'm still there. i've been there 18 months. >> and when would you, if confirmed, when would you make the transition to comandante?

>> chairman, i think probably -- senator, some time this fall. >> this is a thought that's crossed my mind several times during these hearings but it's really come into focus today. this man is one of the most capable, intelligent, proven successful commanders that i've ever worked with or seen, and more importantly, he has tremendous experience in afghanistan. any management system that arbitrarily moves somebody out of a job after 19 months given what he knows and experienced -- and i'm sorry to his good wife -- don't worry, i'm going to vote to confirm him. that's nuts. that's a crazy management system. this is one of the most important jobs in our country right now, and we're taking a guy who really knows how to do it and has learned how to do it and the experience goes away. i just think this is something the committee ought to talk about. i understand the goal of the military of turning over assignments and not having

people get stale and those kinds of things, but to get to the level that he's gotten to and with his leadership, i just think it's a management mistake to arbitrarily say, okay, no matter how well you're doing, no matter what your experience is, we're going to move you on. i just want to make that observation. >> thank you. i think that's obviously a huge compliment to you, general dunford. probably your predecessor, we could have said the same for him, because he also had that huge experience which we didn't want to lose. nonetheless, you came and provided amazing capability and confidence and your successor will as well in afghanistan. we have that confidence in general campbell. general amos has been a fabulous

comandante. his successor who i'm looking at right now will add another extraordinary chapter in marine history. what you're raising, senator, is a fascinating issue. i don't have an easy answer to it, other than so far we've seen a succession of amazing commanders in afghanistan. i won't say we've lucked out because i think the system has produced those. it's not a matter of luck. it's a matter of real intense effort to have a system which produces great leaders, and we've done that. it is sort of ironic, however, to be looking at a general who has done an amazing job, and you and i have seen that first hand in afghanistan. but on the other hand, i got at least for the next set, both in afghanistan and as the comandante, i think this amazing

capability, confidence, loyalty, patriotism to our country will continue. i know your experience in afghanistan is not going to be lost in any event. it's going to be very much available. what senator king is raising is a very interesting issue, which perhaps other circumstances we would have to say, well, whoops, is this really what we want. i think in the current circumstance at least, senator king said he's going to be voting very affirmatively for you for your confirmation as i think every member of this committee will. his compliment is intended to be exactly that what all of us feel about you. what he said is a huge compliment to you and to the marines and to the system which produces a leader such as yourself. we thank you, your family. we look forward to confirmation which is timely so that the

general amos who deserves a great successor will have one quickly and general campbell can take his job and his responsibility over. we will stand adjourned.

this afternoon here on c-span 3, alliance for health reform looks at the adequacy for healthcare provider network including cost, access and quality. we'll hear from representatives from the health insurance industry. our live coverage begins at 12:15 p.m. eastern here on c-span 3. at noon, live on c-span 2, politico looks at the climate heading into the fall's midterms

and the implications for the presidential election. we'll hear from political consultants and reporters live at 12:00 p.m. eastern live on c-span 2. the congressional budget office recently released its long-term budget outlook report. it says that the nation's deficit levels are unsustainable and the nation's debt is 74% of the gdp. director dug elmendorf said changes will be needed such as medicare. his comments came during his testimony before the house budget committee. this hearing is about two hours and five minutes.

>> the committee will come to order. make sure every witness knows that it's against the law to provide false testimony to a committee of congress. we've begun this practice by swearing in our witnesses. please know this does not reflect on any distrust we have in any witness. we're taking this step because of a recent legal guidance we have been given from the department of justice. so please just raise your right hand. do you swear that the testimony you're about to give will be the truth, the whole truth and nothing but the truth. >> i do. >> let the record reflect that the witness answered in the affirmati affirmative. glad we got that over with. we are going to discuss cbo's long term budget outlook. i want to thank you for your hard work. this is a very important piece of work that cbo does and we're pleased to receive it again.

i have to say your report is sobering. just take the first line, quote, between 2009 and 2012 the federal government recorded the largest budget deficits relative to the size of the economy since 1946 causing its debt to soar, close quote. later it says, quote, with deficits as big as the ones that cbo projects, federal debt will be growing faster than gdp, a path that will be ultimately unsustainab unsustainable, close quote. that pretty much says it there, unsustainable. our national debt is bigger than our economy and it's going to get even larger. our economy is already too weak to create the jobs we need and yet it's going to get weaker. people already can't find work and yet there will be even less opportunity. the average numbers of hours worked is shrinking. we know what the problem is, spending keeps growing. our economy can't keep up. the debt is weighing down working families. over the next 20 years real

spending will grow by 27%. i'd like to point something out. we will be taking in plenty of taxes, frankly a lot more in taxes and an even greater share of the economy than historical average and we will still be spending a lot more than we take in, a lot more. the reason that spending is growing so fast is our safety net is broken. medicare and social security are going broke. social security's unfunded liability now stands at 25% higher than about. if we do nothing, we could have a debt crises. and if we did, the most vulnerable are the ones who will be hurt the first and the worst. i understand some of my colleagues might not be all concerned about the government spending more money and the soaring debt. we hear lots of rationizations but here's what should concern everybody. if we spend all of our money on entitlements, we will have no money left for anything else.

if we do nothing, spending on social security, our major healthcare programs and just net interest payments will take up almost all of the budget. total spending on everything else will fall to 7% of the economy by 2039. that will be the smallest share of our economy since the 1930s. here's another serious concern. cbo warnings that our growing national debt could compromise our national security. edward mullins said the same thing not a few years ago. if we don't take action now, we will have less to spend on national defense and we will be less prepared for future challenges. so the answer is very simple. repair our safety net, cut wasteful spending, prepare for the future. don't raise taxes. the way i see it, we shouldn't force families to pay more for washington's problems. we shouldn't make hard working taxpayers pay more for washington's mistakes and

procrastination. hard working taxpayers deserve more than that. we need to expand opportunity for everyone in this country. we can start by getting the budget under control. that's how we can make the federal government more accountable and more effective. i'm pleased he's here because i was going to filibuster for a while longer. but with what i'd like to yield to the ranking member for his opening remarks. >> thank you, mr. chairman. i want to thank dr. elmendorf for appearing before this committee again and for all the work you and your colleagues do at the congressional budget office. before we discuss the long-term budget, i think it's important to note the progress we've made so far on the deficit. in recent years congress has acted to reduce projected deficits by over $3 trillion, with more than three quarters of those deficit reductions coming from spending cuts. in addition, actual deficits, not just projected deficits but actual deficits have fallen

dramatically from 1.4 trillion dollar and are expected to continue shrinking in the near future. but as the congressional budget office's long-term report makes clear, the deficit will begin growing again in the long term. the question, mr. chairman, has never been whether we need to reduce the long-term deficits. the question has always been how we do it. as i look at the choices in this report, it's clear that the only rational way to tackle the long-term deficit is through the balanced approach that president obama and congressional democrats have been proposing for years, a combination of cuts but also cuts to special interest tax breaks and other tax expenditures. unfortunately, we do not have a partner when it comes to closing tax breaks and loopholes for the purpose of reducing the deficit. our republican colleagues continue to refuse a single tax

break, including those that encourage american companies to move jobs and capital overseas in order to help reduce the deficit. in fact, this year the house has already passed more than $500 billion in unpaid for tax cuts with $300 billion more awaiting floor action. i don't think we've seen such an increase in the deficit in the space of 30 days in many decades. they've not paid for a single penny of those permanent tax cuts, meaning that other americans are going to have to shoulder the load in the future. by the way, mr. chairman, it violates the republicans' own budget resolution. so given our republican colleagues' unwillingness to take a balanced approach to reduce the deficit, we've got to do what we have to do. we should be focused on trying to grow jobs now and have jobs

that pay living wages. we've made some progress on this issue. 288,000 jobs were added to the economy in june, and we have seen 52 consecutive months of private sector job growth totaling 9.7 million new job. we've got to do more and invest in our national infrastructure. we need to do a permanent fix to it as has been discussed. rather than the short-term band-aid approaches that do not allow for long-term investments and decisions. we've got to boost the minimum wage. it's a scandal that you can work 40 hours a week all year long and still have to raise a family in poverty in this country. and we should pass comprehensive immigration reform which the congressional budget office has indicated will reduce our long-term deficits and boost economic growth. so we need to deal with the short-term crises. part of the reason we're seeing the short-term crises is the failure and inability of this

congress to pass comprehensive immigration reform. i would note for our colleagues that we've seen some important good news. cbo has projected federal healthcare spending in the year 2039 has actually fallen by nearly one fourth. from 10.4% of gdp to 8% of gdp in the estimates before us today. this is not a time to reverse course on the important gains we made in healthcare policy, including reducing per capita healthcare costs. just in conclusion, we should be working together to reduce the deficit. enough governing by crises, enough threats that we'll default on our national debt obligations, enough government shutdowns. now let's focus on some really long-term solutions that not only boost jobs but make sure those jobs provide families with a wage that can support them and

allow people to have a life-style that allows them to meet the pieces of the american dream that are so important to everyone. i look forward to the testimony, mr. elmendorf. thank you, mr. chairman. >> thank you. dr. elmendorf. >> thank you chairman ryan and congressman and all the members of the committee. i'm happy to be here today to talk to you about the budget for the long term. the federal budget deficit is shrinking this year to its smallest size since 2007, roughly $500 billion in our estimate. federal spending will equal 20.5% of gdp which is close to its average over the past 40 years. as a result, the deficit will also be close to its 40-year average of three percent of gdp.

however, if current laws governoring taxes and spending say generally the same, deficits will become notably larger again after several years. the debt held by the public would also start to rise again more rapidly than gdp and because such debt is larger at any period in u.s. history except for a brief period around world war ii, further increases in the lightning term could be especially harmful. in 2039 federal debt held by the public would exceed 100% of gdp we project. the upward path of debt relative to the size of the economy could not be sustained. we've extrapolated our ten-year baseline projections through 25 years and with even greater uncertainty through later decades. that shows federal spending rising from the current 20.5% of

gdp to 26% in 2039. that ib increase would occur because federal spending for social security and the government's major healthcare programs -- medicare, medicaid, the children's health program and subsidies provided through insurance exchanges under the affordable care act would rise sharply. we project that such spending would represent 14% of gdp by 2039, twice the 7% average even over the past 40 years. because of the combination of the aging of the population, growth in per capita spending on healthcare, and an expansion of healthcare programs. the government's net interest payments would also be larger than their past average, primarily because the debt would be larger. in sharp contrast under current law spending for all other federal benefits and services would be on track to make up a smaller percentage of gdp by 2024 than at any point in more than 70 years.

thus, the increase in federal spending relative to the size of the economy would occur not because of general growth in the size of the federal government but because of growth in just a few of the largest programs. federal revenues would also increase relative to the gdp under current law, but more slowly than federal spending. by 2039 revenues would equal 19.5% of gdp we project compared with 17.5% today. that increase would reflect the gradual shift of income into higher tax brackets as income gains outpace inflation, as well as the effects of new tax provisions and other factors. with a widening gap between spending and revenues, deficits would grow and accumulation of deficits would push up federal debt. by 2039, according to our estimates under the extended baseline, federal debt held by the public would reach 106% of gdp without factoring the

harmful economic affects of that debt and 111% of gdp including those effects. beyond the next 25 years the pressures caused by rising deficits and debt would become even greater. to put the federal budget on a sustainable path for the long term, lawmakers and the public will have to accept significant changes. either reducing spending for a large benefit programs below the projected levels, or letting revenues rise more than they would under current law or of course some combination of those approaches. the size of such changes would depend on the amount of debt considered appropriate and the timing of the changes that would be made. for example, you might set a goal of braking debt down in 25 years to the average percent of gdp which is 39%. one way to meet that goal would

be to phase in deficits. the amount of deficit reduction in 2024 as a percentage of gdp was continued there after. if you aim for lower debt or delay taking action, the policy changes would need to be larger. if you aim for higher debt, then the required changes would be smaller. our report gives estimates of the size of needed policy changes for a large number of scenarios that you might consider. to be sure, a long-term projection are quite uncertain. we examined how the projections would differ if we used different estimates of future productivity, interest rates and growth of healthcare costs. we found that the projections would differ quite a bit. nonetheless, the main implication of our projections applies for a wide range of possible values for those key factors. specifically, if current laws remained generally unchanged, federal debt which is already

high by historical standards would be at least as high and probably much higher 25 years from now. thank you. >> thank you. i want to get into a few areas, dr. elmendorf. let me start with healthcare. this year's report suggests that in order to address the short fall on medicare, you would have to increase payroll taxes or cut medicare spending by about a fifth immediately and permanently in order to bring it back into balance. >> for the next 25 years. >> right. >> do you consider this program sustainable? >> those would be very large changes and as you know the growth of medicare and other healthcare programs is the key driver, the key source of upward pressure on federal debt. but we talk about unsustainability of the budget as a whole so we don't try to

isolate programs but big changes are needed in these programs or taxes will have to go up. >> so we basically have this 50/50 split between public and private healthcare spending. 53% of total spending on healthcare came from private sources while 47% came from public sources. your report shows that healthcare spending is supposed to go from 16% of gdp today to 22%. do you expect the current 50/50 split to stay as it is? what do you project is going to change? >> the federal share would grow but we have not continue -- quantified that. it would grow because of the age of the population. >> but you don't project where the split comes down? >> we have not done that projection. we can do it for you. >> i think that would be helpful.

let's go to social security. this report, of all the things i'm a little concerned about, it's your new projections on social security. last year you said the unfunded liability was 3.4% of payroll. the year before you said it was 1.9% of payroll and the year before that it was 1.58% of payroll. this year you say it's 4% of payroll. that means that the unfunded liability of social security has grown by over 150% over just the last three years. so for someone who is 55 today, can they expect to see their benefit cut in 2030 when the trust fund goes bankrupt? and how much if so? >> you're right, mr. chairman. our estimate of the unfunded liability in social security has increased considerably over the past few years. we've taken on information about mortality rates, disability rates, interest rates and many other factors. if nothing else were done, then when the trust fund ran out of

money, payments out under current law we think would equal revenues come in, last year we estimated that would be a cut of about one quarter in benefits the moment that occurred. >> acrossed board? >> across the board. we have not done that. we'll do that in a few months. >> a lot of proposals we've always had were to exempt current beneficiariebeneficiari. if you were to exempt them, what would that mean to future beneficiaries if you had to distribute the cut only to those who are not yet retired? >> we haven't been able to do that calculation either, but it wouldn't change that much in the sense that the first year certainly the new beneficiaries would be maybe five percent. if you have one quarter cut in total benefit payments, then if you gave nothing to new

beneficiaries you would still need to cut the benefits. >> the entire population, with longevity growing as it is, the pool of people you're distributing the cuts to is a lot smaller. >> yes, exactly. you can't satisfy -- you get past that date, you get to 2031 or 2032, even if you gave nothing to new beneficiaries you would still need to cut the benefits to current beneficiaries. >> so it's not doable. that's amazing. interest rates, your projections go down about 50 bases points. i'm curious to the rationale on that. you say the ten-year note is about 2.5%. last year you said 3%. i'm curious what's behind that projection. what if interest rates rose and have you done -- we've asked you to do interest rate simulations many times. what if they go back to the

historic average of 3.1 what would the budget outlook be then? that's question two. number one is why the downward revision of 50 basis points? >> we did a comprehensive re-examination of our interest rate projections. a lot of discussion with researchers and among the people in the community about what interest rates will go back up to when they go back up. we assessed a number of factors, some which we thought would push interest rates down relative to their historic average, for example, slower growth of the labor force which reduces the number of people who are coming to work with any piece of capital essentially and reduces the productivity of that capital and pushed down interest rates. we looked at the lower productivity growth we have slightly, a greater share of income going to high income people, increases saving, a number of factors relative to

their history. on the other hand there are factors we think will raise interest rates and one of those is federal debt. we think there will be a slightly less capital inflow that will tend to push up interest rates. we did our best using the evidence that exists to assess the relative sizes and we thought on balance interest rates were likely to be somewhat lower over the next 25 years than over the last 20 or so years. so we took down our projection of the rate we end up by about half a percentage point. if we put that back up, we didn't do precisely the experiment you asked, but if interest rates were half a percentage point higher to three and over the entire 25 years, we changed the projection only beyond the first ten years. if they were half a point higher for the entire 25 years, then the debt to gdp ratio at the end of the 25 years would be 135%

instead of 111% including the economic feedback. >> i thought it was 106. >> without the feedback from the bad economy. >> is the biggest driver labor force participation? >> that's the biggest source of downward pressure relative to the past. when i spoke with people in the bond trading business in the spring, their principle criticism of our forecast for the next ten years was that we had interest rates looking too high in the second half of the decade relative to what a number of them thought. there aren't a lot of participants who are focused on developments 25 years out, so we can't draw on that directly. but the move that we've made is consistent with what we've seen in financial markets for the second half of this decade and what we think is likely the case given these facts beyond that. >> labor market participation is an issue we're going to have to

get into. we're going to have to deal with that here in great detail. i have one more question. i want to talk about generational accounting. i know you're familiar with the professor who studied this issue in great depth. without getting into the details of that particular proposal, do you think it would be valuable, can you produce the analysis that would give us a better of idea of how this problem could affect current and future generations? you're the only game in town that can give us a sense of what our current policy trajectory looks like for the next generation. our goal here as policy makers is, yes, not only to make a difference for the time being, the now and the here, but it's also to try and preserve a better future for the next generation and give us a better sense of the decisions we're making today and how they affect

the next generation, i would argue generational accounting is one of the best tools we can use. what's your reaction to that? is this something you could do, something that you think is valuable? >> so we think that we can and should do more to illustrate for you how different ways of addressing the unsustainable current path would affect people in different generations. we did a report on this four years ago where we looked at the costs of waiting to address the budget imbalance and different ways of addressing it after one waited and we illustrated how delay would affect people and in particular would hurt people in later generations. since that point we spent a significant amount of time building up our modelling capacity for this sort of work. we have another report well under way that will expand very significantly on what we presented to you four years ago. we hope to have the other report done by the end of this year. beyond that we'll respond to whatever feedback we get from this committee and the senate

budget committee and others in congress different scenarios and different ways of quantifying these affects you would find the most useful. i would mention two quick cautious. one is that the effects on different generations depend a lot on when you act and the way in which you act. so what we'll give you will be a set of results for different -- for a range of scenarios which is very important. the second caution is that these kinds of projections are very uncertainly just like the projections we're giving you today are uncertainly. today we focused on 25 years, we give a sense of 75 years. we don't go beyond that. in this work we'll try to think of ways that make sure that the results aren't unduly dependent on arbitrary assumptions by us in what will happen in the very, very distant future. >> thank you. >> thank you, mr. chairman. >> thank you, mr. chairman and mr. elmendorf, thank you for your testimony. we are here talking about a long-term budget outlook and the

deficit projections, ten-year window mark in 2039. this is based on your current law projections, is that right? >> yes. >> so you have not taken into account, i take it, the more than $500 billion that house action would have added to the deficit over the last six weeks through unpaid for tax cuts, is that right? >> that's right, congressman. >> if those became current law, your projections over the long term would be worse than they are. >> that's right, congressman. >> this budget committee filed something on the floor of this house saying that house rule should make sure that no bills came to the floor, that violated the budget resolution here. that budget resolution said there would be no unpaid for tax breaks, and yet we've seen an

avalanche of unfunded tax breaks, $500 billion to date and another $300 billion worth according to the tax committee coming through the ways and means committee. it's one thing to talk about what we're going to do to reduce the deficit. it's another to do it. what we've seen in the house over the last six weeks is moving us in the wrong direction when it comes to reducing the deficit. on that point, we heard the chairman say that the average revenues as a percentage of gdp historically speaking is 17.5%. is that roughly right? >> that's right. >> i note that in your budget projections you say in the year 2024 revenues will be 18.3% of gdp and much farther out for the reasons you stated revenue would be 19.4% of gdp, is that right? >> yes. >> i would note that does not take into account the number of times we've actually balanced

our budget historically, that's right? >> that's right. >> if you look at the actual four years we balanced our budget, revenue as a percent of gdp were considerably higher than they will be in 2024 and actually around the range that you project way out in 2039. in fact, in the year 2000 revenues percentage of gdp was 19.9%. >> yes. >> now, i note in your report that on page 20 that you're anticipating that the number of americans over 65 is expected to rise by more than one-third. that's right? >> yes, that's right. within this next ten years. it's even starker over a longer term. >> i just hope our colleagues would consider the fact, the last time we actually balanced our budget, revenues as a

percent of gdp were 19.5, 20% of gdp for that four-year period. that's when we had a lot fewer americans on social security and medicare than before. i hope our colleagues will also recognize that the last time we balanced our budget before that, before 1998, was 1969. so when you talk about revenues percentage of gdp having an average of 17.5, it's totally detached of what our colleagues argue as the other priority is reasonable deficits as a percent of gdp. democrats have argued that in order to reduce our long-term deficits we need to continue to make smart cuts in reductions and reforms, but we also need to close some of these special interest tax breaks. the chairman mentioned that those tax breaks would put a greater load on american

families. i would argue that eliminating some of the special interest tax breaks like those for hedge fund owners or those that actually reward companies that move jobs overseas would be good for american workers to get rid of those tax breaks and invest the savings right here at home. i want to turn briefly to healthcare. before i do that, let me just point out in the context of my earlier point, on page 23 you, cbo, actually break out the contribution to the increased deficit as a result of different components of the healthcare and social security picture, right? >> yes. >> if i look at page 23 in that box, you point out that by the year 2039, 55% of the spending increase will be as a result of the aging of america in social security and healthcare, is that

right? >> that's right. >> you point out with respect to healthcare, 39% of those increased costs will be simply because we have more older americans, is that right? >> that's right. the cost to each individual is going up sharply in this country because many more people will be eligible for those benefits just because they are moving over the age of 62 or the age of 65. >> the only way to address -- and these drivers on page 23 are the major drivers of the long-term spending, right? >> yes, absolutely. >> the majority of that is simply demographics. >> yes. >> our colleagues sometimes talk as if we're adding these new spending programs, but as you've indicated, this is the cost of providing more americans with current benefits, that's right? >> more than half of the increasing costs for social security and the healthcare programs are providing the same benefits essentially to a larger number of people. >> if we wanted to reduce the deficit in this area we have two

choices -- either you cut benefits or raise revenue to support existing levels of benefits, is that right? >> yes, that's right. >> let me ask you on the healthcare piece. while it is over the last five years. as i pointed out in some of your earlier long-term projections, the cost of health care in the year 2039 were over 10% of gdp, is that right? >> that sounds right, congressman. i don't have the 2009 numbers with me. >> now they're down to around 8%? >> that is our projection 2039. >> which is a huge savings. >> right. >> if we were to reverse some of the mechanisms we put in place to have savings in that health care area, your deficit numbers would go up works they not? >> yes, that's right. >> let me just close on the

question of immigration because we have a crisis at the border and i think we need to deal with that in the immediate sense, but it's partly a symptom in my view and i think the view of certainly my democratic colleagues that it's part a symptom of failure to pass comprehensive immigration reform. and the congressional budget office has looked at how comprehensive immigration reform would reduce long-term deficits and increase long-term economic growth. have you not? >> yes, we have. >> and your projections of that increased economic growth and reduced deficits are not part of this long-term report, are they? >> no. they are not in current law. >> just as your estimates reflected what the house did in terms of providing unpaid for tax cuts, it would actually increase your deficit projections if you had embedded

the senate passed bipartisan bill or the demorcratic the dem in the house we asked coo to look at. >> that's right. >> can you talk about your earlier efforts to quantify economic growth benefits as well as deficit reduction benefits of comprehensive immigration reform? >> song mcongressman, the house proposal was similar to it and we provided a more -- sorry. we provided a briefer description. for the senate-passed bill, we thought that would reduce deficits by a couple of billion dollars over this decade and a great deal more in the second decade from now. we primarily because the legislation would increase the size of the u.s. population, the size of the u.s. labor force, we thought it would, over time,

push up average wages by raising productivity. so we did both a detailed budgetary analysis and complementary macroanalysis to some detail. that would increase the size of the u.s. economy and reduce federal. >> if we voted on and passed comprehensive immigration reform which the president said he would sign today these numbers would be much better, we would have lower deficits and higher growth. if this report included the action the house has taken the last six weeks providing unpaid for tax breaks on a permanent basis, this report would look a lot worse. so we hope everyone will join together in a bipartisan way to do the right thing for the country. reduce the deficit, increase economic growth. >> thank you.

i want to thank you and your group for the work that you've done on this long-term budget outlook. before i get into a few questions, i want to just latch on to the comments made by the gentleman from maryland about those days when we balanced the budget, and remind him it was a republican house and republican senate, and a democratic president that we could actually work with and actually was interested in solving problems, unlike the one that we currently have. i also want to mention the go-to spot for our friends on the other side tends to be increasing taxes. in your report, you state on page 65, 66, you conclude, "on balanced higher marginal tax rates discourage economic activity." you stand by that statement, do you not? >> yes, congressman. >> i'd like to talk about -- always get in these arguments about revenue and spending.

what to increase. want to raise taxes or decrease spending? i want to talk about in the relationship to this long-term outlook. review for me please, if you will, the projected increase in revenue or projected changes in revenue you have in your long-term outlook. >> so congressman, over the next 25 years we think we project total federal revenue was rise about 17.5% gdp to 19.5% gdp under current law. the biggest component of that is simply we have a progressive income tax in which the brackets are indexed to inflation, but if real income growth outpaces inflation, which we expect it will, more income gets shifted up to higher tax brackets. in addition, there are expiring tax provisions under current laws and new tax provisions coming in and other factors. >> the absolute number, the absolute amount of revenue coming into the federal

government and the percentage of gdp is actually increasing over this period of time? >> yes. absolutely. >> we've got an increase -- taking in more, the federal government is taking in more revenue than ever before in absolute numbers, correct? >> in dollar terms, yes. >> so if that's the case then we must be decreasing the growth in the debt, are we not? >> no, congressman, as you know. >> we are not. we are taking in more money, but we are not reducing the increase in the debt. help me understand that. >> well, congressman, federal spendinges rising more rapidly than federal revenues would rise under our projections under current law. >> i've got this straight then, right? revenues going up, more money being sent by hard-working taxpayers to washington, d.c., yet our debt continues to increase and you mentioned it was going to rise to 111% of gross domestic product?

>> yes. that is our projection of 2039. >> if i read between your lines, 111% is a dangerous level, is that accurate? >> yes. we've been explicit in this report and previously, we don't know of a particular tipping point we don't think economic analysis can tell you what a particular level is you can't go beyond. there are dakers, the costs and risks rise long-term as debt rises relative to the size of the economy. >> let me turn then to solutions. because i'm interested in the alternative fiscal scenarios you talk about and how it relates to the kinds of things we've been working on. one of the alternative scenarios you identify on page 70 in your report states that if there were a $4 trillion lowering of the deficit over the next ten years then gnp would increase in real terms for real individuals by about $4,000 per person. interest rates would decrease

0.75% and debt held by the public would get down to that rate that looks to be much more attractive, that is 42% gdp as opposed to 111%. do you stand by those numbers? >> yes. those are the effects we estimate, yes. >> you understand the budget we put forward here would reduce in this last year, would reduce the deficit over the next ten years by $5.1 trillion. if we are looking for a budget that actually solves problems, gets us to greater gnp, lower interest rates, lower debt than the republican budget is one that would accomplish that, would it not? >> as you know, we don't study budget resolutions in great detail that. fits the detail of the republican budget, yes. >> let me close by urging our colleagues to work with us on solutions to the challenge we face instead of trying to identify the differences between us. thank you. >> thank you.

>> thank you, dr. elmendorf. good to see you again. i want to follow up on mr. van hollen's questions regarding the recent activity this congress has done and talk about offshore profits and inversions as it affects some of our revenues. clearly in your report, there is not much we can do about an aging population and some of the spending increases. there are things congress could do. we all know congress doesn't do a lot lately, but one of the things we have been doing is passing these various bills that have passed off, i think $500 million tax bills are going to go to the deficit we haven't funded and $300 million in ways and means. >> i think billions. >> billion dollars sitting out there the question specifically around that is how does this legislation worsen our long-term fiscal outlook directly and through negative economic

feedback because of higher rates of government debt? >> those bills were enacted into law and no other changes were made to revenues or spending, then the larger deficits would, over time, crowd out private investment to some extent and would push the level of economic activity down below what it would otherwise be. just like the deficits we project under current law, but a little more so. >> larger spending cuts or tax increases to make up for the revenues? >> yes. for any given target of federal debt you and your colleague was like to reach down the road, the bigger the hole you dig, the farther out you have to climb. >> let me just shift, if i can, in my time to a report just over a month ago that talks about american corporations telling the irs the majority of their offshore profits were in 12 tax