ou address. it's a very important one. as we think about how to modernize the compensation programs, compensation programs for tomorrow, we are thinking about exactly what is required for the military to be able to recruit and retain people. and we have to think about the new generation, that they value and prefer. those are the kind of things that we listened to and heard as we talked to people. as it was already indicated to today, 83% of the enlisted force actually wind up leaving without any kind of retirement benefits, which is why we made the recommendation that we did, to be able to extend some of the retirement benefits for those service members who will serve and then move on to do other things from 17% to 75%. and i'd also like to point out

that a couple of things that we were told, specifically by the service members is that there's -- they're concerned about the service to their country and the gi bill. those are two things that were very important to them in terms of why they would come in, what they were looking for. get an education benefit, be able to take advantage of that, which is a strong recruiting tool, and then move on to something else. >> very good. thank you, mr. chairman. >> thank you, mr. chairman. thank you all for being here. i guess this would be to anybody who wants to answer the question. but my thing is, is that it's a very difficult position you're being put into and we all are because i don't think anyone questions the commitment the service people and all people in military have to the united states of america. i know in west virginia we feel very strongly about that, people willing to take a bullet. i've always been able to explain when i was governor, when they would explain or complain about whether it be our state police

retirement or our fireman's retirement, they're willing to put their life on the line for you. people are willing to pay a higher price for that but they still want it to be fairly comparable. do you all look at that from the standpoint -- in most all state budgets or municipality budgets, the firemen and police budgets are out of whack, they're under water and they're trying to get them back. there's going to have to be some sacrifices to the point ma we have to recognize the sacrifice they're making for us. how do you balance this out? what would i tell the national guardsmen of my state that have been deployed three and four times and we're looking at changing some of the compensation and what type of literacy training are we giving to them. on their retirement. and why do we have so many that leave at ten years of service in the military to go into private contracting for the extra pay

overseas in afghanistan and iraq. what's the magic number of ten years? i find most of our soldiers that leave our military that we've spent an awful lot of time and energy training them, leaving going for the higher pay. can you give me that magic thing at ten years what they lock in and what gives them that freedom to do that? whoever wants to chime in on this. >> yes, yes, yes, senator. senator, thank you very much for that question. we certainly have spent a lot of time talking about that. i'm going to ask commissioner kerrey, bob kerrey to share the specifics of that. [ laughter ] >> well, first of all, i think you would be having a difficult time retraining men and women to serve in the military had this congress not made all of the changes that it made since we've been fighting this war for the last 14 years. i mean if you just look at what you've done with pay and compensation, it is now better than market.

and it needs to be. the changes that have been enacted by republicans and democrats have not been given enough praise in my view. had those changes not been done, given the stress on families today, you know, i'm a proud geezer father, i've got a 13-year-old. if we think about having to move our son once every four or five years, it's a traumatic thing inside of our household. that's way more stability that anybody in the military gets. so the stress on the families has increased over the past 14 years. and thanks to congressional action the pay and benefits are quite strong and they need to be in my opinion, otherwise we're going to have a difficult time retaining men and women. second thing that's happened, the american people now are quite proud of their military. and they're quite confident that they're getting the kind of support that they need. but americans are a lot more patriotic and they care deeply about the men and women who are

serving. and i think that attitude make as big difference. people's willingness to serve. i would say the combination of patriotism and the combination of paying benefits, those two things together have made a big difference. when i looked at the recommendations, senator, that we're making, the two big questions that i ask are, are we keeping faith with the men and women who have served. and those of you who have, understand you give up your freedom. if you get ordered to do something or go some place, you do it. so are we keeping faith with who those have served and have serving. i answer emphatically yes. secondly to the recommendations that we make, will it enable us to continue to recruit and retain. and i answer yes. it is something that you constantly have to pay attention to. i think there's a qualitative difference in the pensions of the fire and police level.

they don't have a commander in chief that tells them exactly what to do. i've got orders to report to so and so location, i say yes, sir and go. in negotiation with the fire union and the police union, you have serious negotiations. i think there's a qualitative difference between the relationship of the american people and the men and women who have signed and sworn that oath, given up their freedoms and even in training exercises put their lives at risk. >> most states around the country are very committed to our military force and they want to make sure they're compensated and taken care of. they want to make sure we're doing anytime a sufficient manner. if we're giving them the literacy training to make decisions. >> well i would say, senator, i think the moment that ends, no matter what you pay men and women, they're not going to sign up. the moment that that attitude changes, as it was in the 1970s, it's going to be difficult to

recruit people to service. >> on our indian reservations, a lot of people serve three or four years and very rarely go for a career. i had a difficult time getting our native americans to go to the military academies. but it seems that aside from whatever we do, there is a tradition in our country of a lot of people wanting to serve three to five years. of course we need those people. and that's a particularly true in rural areas in states such as mine and with native americans. >> thank you, mr. chairman. >> thank you, senator mccain. mr. chairman, you've mentioned flexibility a couple of times here in your statements. and in the report it says that the force may benefit from a flexible retirement system that incentivizes them to remain in service longer than other occupational specialties when with regard to doctors, cyber

personnel. do you have specific proposals? i'd like to dig down a little bit into this. do you have any specific proposals that the commission recommended? and do you see each service setting a different requirement there? and if so, do you anticipate any problems? do you see competition among the services? >> thank you very much, senator for the question. i'm going to ask commissioner zycom to respond to the specifics of your question, first. >> thank you, mr. chairman. senator, as you know, each of the services has different types of benefits to keep them on. our proposal does not tell the services how they need do it.

what we're trying to do here is give them maximum flexibility so that if there are, as you pointed out, certain specialties that, frankly, like doctors, you actually get better with more time in your practice, then the services up front can decide that they want to recruit an individual and have that individual stay on longer than the normal term. essentially this is -- but it works both ways actually. it's not just to keep people longer. they can sign up with less. we wanted to give them flexibility. at the same time we're giving the individual choice, we're giving the services flexibility. again it goes back to the question about what kind of a force do you want to shape? the services are the ones who know that best, of course. >> when you looked at the surveys, were there any issues identified that the commission did not make recommendations on?

i guess i'm thinking specifically of the housing allowance and that has been a big issue in the past. the president has made proposals but yet it was not addressed by the commission. are there other instances there? and really why didn't you address the housing? we hear about that a lot. >> senator, thank you so much for the question. we indeed took a very, very hard look at the housing bah and b.a.s., and we actually looked at the pay table. we looked at the structure of all of those programs. and we clearly asked ourselves three questions. number one, were these programs delivering the benefits that they were intended to? number two, were the benefits being delivered in the most cost effective way possible? and thirdly, could this commission design a clear path for modernization to those

programs in terms of improving those programs. and after looking at those, we did not feel that we could design a clear path to modernization for those programs and instead we would provide a much better benefit to the service members and do it in a most cost effective way by making the recommendations that we've made. >> would it be fair to say the commission supports what the congress did, then, with the housing allowance, or do you support the president's proposal? >> senator again, thank you for the question. i'm going to ask commissioner higgins to respond to the specifics of that question. >> thank you. >> thank you, mr. chairman, senator. clearly, b.a.h., in our view, is operating effectively to provide

the housing that our service members need. there are a number of the elements of the compensation system that drew our attention very dramatically that we did not elect to meddle in if you will, because we believe they are operating effectively. others would include the pay raise mechanism. the pay table itself, we believe, is operating correctly. special pays and allowances. and b.a.h., i think along with that. now, on eaches if you believe that you need to save money then obviously the congress could act to produce programs and that's your choice. we were targeting our objective was modernization and systemized modernization where we go into the structure of a program. we do not believe that the structure of those programs were

deserving of modernization. if i could go back to your other question as well, senator. the service chiefs asked for flexibility. one of the primary complaints about the retirement system as it exists today is that it is overtly rigid inflexible. chiefs implored us to seek opportunities for greater flexibility. and we related to that section you're referring to are there some potential frictions between the services? would it cause some concern? do we believe it's going to be used instantaneously? no. there will be uncertainty, and i think that will keep that proposal in check, perhaps, for

years. but there will come a day when greater flexibility in the retirement system will be needed, and that provision will be there to deliver that to the managers. >> and it would also allow the services then to compete for the men and women that they need to perform in different areas, correct? >> always a difficult issue, enjoying competition between the services. the service cultures are indeed incredibly strong. you always want to endeavor to limit competition and create systems that operate for the best interests of the total force. but there will be some insecurity there. and i think that will cause this, as enticing as it may be to some people inside the pentagon, it would, you know, whether or not it rises to a level where it's implemented is a serious question that's going

to take time to resolve. >> thank you, sir. thank you mr. chairman. >> senator gillibrand? >> thank you for this hearing and to all of you for your very hard work. one of the most important considerations for me in terms of potential changes to benefits and compensation is that the approach be holistic and that we ensure that the lower enlisted troop the and their families do not disproportionately feel the impact. can you walk me through why you believe this is a holistic approach and how it will impact enlisted troops and their families? anyone can answer this. >> thank you, senator for your question. i'm going to ask commissioner careally if he will answer the question. >> i think we've done everything we can to make it holistic and make it apply to everyone. we have two charts that go into the retirement. one listed e-7 to show what his retirement would be under the

old system and what it would be under the new system. and i think it's clear that he or she would do much better under our proposed system than they would under the current system. we have one for officers that shows the same thing. i think when it comes to -- and i don't think just the retirement system you should look at. i think you should look at ha we're doing with health care. we're giving them the ability in health care to go out and immediately go to see a private provider that's in their insurance network, or if they would rather go to the mtf, they can go to the military treatment facility. today under most of the tri care programs it takes a period of time before you can get that tri care referral, and it's up to 30 to 40 days from the time you want to see somebody until you can get out and see them, if you can find a provider.

this applies not only to officers and warrant officers, it applies to our enlisted soldiers. so i think everything in our recommendations was geared to ensure that whatever we recommended was holistic and applied to both officer and non-commissioned officer in the same way. >> in a holistic sense we included exceptional family provisions and child care issues in our report which normally might not be in such a report but a lot of the lower ranking service members have a very hard time with waiting lists on child care and so forth. so we tried to be holistic in that sense. >> ma'am? >> yes. >> holistic was not only of the moment. we are very rev rent to the past for our military tradition and heritage. >> thank you. please? >> there's one area where we've not talked about. first of all, you've completely

destroyed me. i've tried to get everybody to stop using the word holistic and i've failed in that effort. one of the things you need to think about is that all of these men and women at some point are going to transition back into civilian life. and the changes we're making in the health care and retirement side make it much easier to do that. because there isn't an abrupt differential. >> so to continue along that line i'd like to understand better the health care proposal. part of if is to provide for health care based on the average family's out of cost for premiums and co-pays. so how do you account for families with extraordinary needs? will they pay more? and i'm especially concerned about parents with special needs dependants. children with special needs. >> we spend an inordinate amount

of time talking to families across the country about the challenges that they had with the exceptional family members. and i'm going to ask commissioner bowier commissioner commissioner commissioner boyer to talk about that. >> i'll do the health care and the extraordinary families piece. to the basic allowance for health care, you're correct. we want to, in order to make that determination, it will be decided by opm. opm will manage the plans, and they will take the average of those premiums of the plans that were selected in the prior year. they also, then, will look at the average to come up with the co-pays and the deductibles, and then that will set -- >> and does opm help families navigate it? because obviously it's a new system for them. >> you know, ma'am part of our recommendations with regard to literacy training, literacy is

not only for financial literacy because now as we move into the thrift savings plan and government contribution, there's a financial literacy piece, but there's also a health piece to help people navigate. and this really is calling for more empowerment of the individual. it goes to that opening question that mr. higgins really posed to all of us on day one, was we're very used to our military being paternalistic. and so as we look at the, what's happening in society and how dynamic these, this i want to say the new generation is not that they're the selfie generation, they are the generation that want to make greater controls about themselves. they watch their peers making contributions into 401(k). oh, how about me? i'm in the military i want to participate too. so we've come up with that blended. but with health care we are making that empowerment of choice and educating them on how to make the best plan for

themselves and their family. when we give them the financial literacy and the health literacy, when they leave the service, it is a much better individual. >> senator, if you don't mind, i'd like to have commissioner higgins to follow up on the latter part of the question. >> my time's expired. it's up to the chairman. >> that's okay. go ahead. >> thank you, mr. chairman. >> thank you, mr. chairman, senator mccain. senator, we had a great deal of concern about exceptional family members and how we would care for them. we have a proposal of course, that would add a new level of benefits for those families, and we would it's one of those areas where we would increase costs. so we were not all about cutting. we were about making life better for service members. in addition if you had a catastrophic situation in a family where you had extreme

costs that was related to an exceptional family member there's also a fund that we would propose to ensure that those out of pocket costs did not get excessive. and we plan on that for about 5% of the people. so there is help there. >> senator ayotte? >> thank you, chairman. i want to thank all of you for the hard work that you obviously and thoughtfulness that you've put into this commission and for having this important discussion with us. i do have to say, today i'm walking back and forth between this committee and the budget committee. and as i look at where we are, senator kerry, to use the word holistic, in a way, in a way that i think the point needs to be made here is if you look at where we are for example the president's budget that was just submitted, by 2021, our interest

costs, what we're paying in interest, is going to exceed the defense budget. and, as i look at what the work that you've done, bipartisan commission, and we look at what the biggest drivers in our debt are overall looking at the big budget, of mandatory spending for programs that we need to have similar looks at medicare, social security, that are very, very important programs to people appreciate that you've done all this work. i think we're looking at our military stepping forward first in making many changes and i think that we need to look across the entire budget too, because where we are is that we're going in 2016 to defense budget only 3.1% of gdp and 14.3% of federal spending, which is the bottom of historic range since 1950. and the reason i want to put

that into perspective in the big picture for everyone, we look at the sacrifices that our men and women in uniform make, the separations from family, obviously the sacrifices they make putting their lives on the line, all of that, and i think that the work that you've done is very important, and we look forward to delving into it more deeply, but as we get into the budget committee today, that we will be looking at the big picture and won't be looking at a situation where we continue to shrink the defense of the country because we won't take on the other hard challenges that need to be taken on for this nation. and it would be great for a group like you to look at the bigger picture as well. and i just want to say that and thank you for your work. in terms of a specific question i wanted to follow up on the retention issue because obviously that's important to all of us in terms of keeping the very best military in the world and wanting our best and brightest to join the military.

as we look at your proposals on recruitment and retention, what assumptions did the commission use regarding economic conditions in the country and operational tempo? so meaning what did you assume would be our the rest of the private economic growth, because that always drives what opportunities our best and brightest have and also operational tempo? >> senator thank you very much for the question. we took a quite a bit of time, actually looking at that and deliberating over those issues, and we actually had experts to come in and talk to us about the millennials and what that means as well as what it means with the social environment and those kinds of sew sigh tal changes. i'm going to ask commissioner correlly to speak to your

question. >> we d and a good example is at the 12-year mark with continuation pay. that's not a fixed amount someone's going to get. we're going to allow the services to set that amount based on the economic conditions that they have at the particular time to retain the retention rates, not only the total retention rate but the retention rates by specialties that they need to continue past that 12-year mark. so everything we did was based upon an operational tempo from peacetime to the fact that we would have to deploy the entire force. you know, if you had told me when i was in the army operations center on 9/11 that we would be able to maintain the all-volunteer force at the tempo we did for 13 years, i would have told you there is no way whatsoever, and we did. i had aviators that literally knew that 367th day of the year they were going to be back down

range. they would stay down for queer, come back and get another year at home before they were going back down range. and why they did that a lot of it is pure patriotism, love of country, and a mission that they believed in. and i think it's absolutely critical that in times when we don't have that operational tempo we give the services the tools they need. and i think you'll find throughout our report we have done that. everything we can to give them that flexibility to maintain those retention rates. i would argue in the earlier question, as i live around ft. lewis, washington today the biggest issue on retention today is uncertainty. they just don't know whether they're going to have a job tomorrow. and there is real concern in the force, as you wander around that post and see folks, how far are the cuts going to go? is there a future for me here? and i think our retirement plan speaks to that and puts us in a

much better position should we ever have to cut the force again to provide people who are leaving something when they leave. >> i want to thank all of you. i have some additional questions i'll smits for the record, and i'll just say, general that goes to the sequester issue as far as our overall readiness. and that's an issue we've already had hearings on and we're going to do something about, thank you. >> thank you. there was a modeling component to your question. i would like to take that for the record and get back to you, because we do have some very specific datas and details for that. >> thank you. >> general correlly i wish that every member of the senate could have heard your last comment, because, as you know, we're going to be in a very significant struggle here as regards to sequestration. you reflect the views that were expressed to this committee by

our service chiefs last week. and i thank you for that. senator donnelly? >> thank you, mr. chairman. i want to thank all of you for your service to the country. you've all done so many extraordinary things for us. my fellow hoosier congressman buier is here and thank you to all of you. i also want to say the importance of the extended care that you're providing for exceptional family members, what you have done in that area is really significant and will change lives for family after family. general correlly, i wanted to ask you about the unified drug form larry between d.o.d. and v.a. you have done exceptional work in trying to stop the scourge of suicide. and you have worked tirelessly to provide solutions and answers here. and if you would tell us a little bit the challenge when

you transfer from d.o.d. to v.a., with the drug form larry and what that is causing. >> well, thank you for that question, senator. i really appreciate that. when i was vice chief of staff of the army, i had no idea that there were two different drug formularies. i really believed that every soldier who used drugs the way they were supposed to and was taking an off-label anti-decemberanti december anti-depressant, that they showed up on day one, they would be able to provide that prescription to the doctor and he would automatically refill it. that is not the case. we have two dish drug form-- different drug form larrys. when an individual finally gets on the right drug and the right it dosage and goes over to the

vvlgts a. many times, anti-sigh anti-psychotics anti-psychotics, they have a situation where the doctor looks at them and says, i'm sorry,ki not refill that prescription. i continue to have sailors and marines come to me today, just last week i met one with coffee that had the exact same thing happen to them. if there's anything to get at the suicide problem once we get a kid on the right drug at the right dosage wherever he goes in the system he is able to get that same drug and not be told i'm sorry, that's not in our drug form larry. >> isn't there also a confidence factor for that person, that they feel comfortable with the drugs they're receiving, with the treatment they're on, and changing it up is like a life-changing experience? >> most of them don't senator. what they do is they go find a

private doc to go ahead and give them the prescription, and they pay for it out of pocket. so here we've told them we're going to take care of you. we really care for your service. this is your benefit, and they go over and they say, i'm sorry, you can't have that drug. and i'm telling you, no one cares if you get st. joseph aspirin in d.o.d. and bayer aspirin in the v.a. that's not an issue but on this drug form larry for anti-psychotics, pain medications, these things that you have to be weaned off of we should not put our men and women in this position. and if it's not on the drug form larry, someone should hand them a card and say go to your local pharmacy and get the drug. >> as you know, we are losing 22 veterans a day to suicide. in the active duty, we lost 132

young men and women to combat in 2013 we lost 475 to suicide. almost four times as many. so your efforts on this are life changing. and i would like to then, follow up with a question. as we transition from d.o.d. to v.a. for a number of our men and women, obviously there are electronic health records challenges, what are the next challenges you think we need to tackle and knock out? >> senator donnelly, thank you very much for the question. we spent a lot of time talking about d.o.d., v.a. collaboration, what it really means and what effect it has on the health care for veterans. i'm going to ask commissioner boyer to speak to the specifics of that question first. >> great thank you. >> when you look at our is recommendation eight, senator donnelly, we're asking that the

joint executive committee that has authority, just doesn't have power now. and that's a pure heterodox. and we're asking that you give it statutory power to actually implement the recommendations. and when we metcdonald two things we heard. this wantsn't in our recommendation i'd like to have parity. so when the joint executive committee meets you have the deputy of the vvlgts a. meets with the undersecretary of personnel. it's not the same. and if you raise that so that the deputy secretary of the v.a. and the deputy secretary of d.o.d. meet at the joint executive committee and give them power with their authority and the power to implement, big difference. so with regard to the blended recommendations and the exact anti-depressants or anti-psychotics or pain medications, let the experts

make that decision with regard to where in the form larry it should be blended. with regard to large capital projects, never again should we have the scenario whereby we all struggled trying to get the timelines for the building of an army hospital and a v.a. hospital. that shouldn't ever occur to us again. with regard to, your specific your question, what do you really antis pay the, see that's, the biggie that's going to happen next? it really is this challenge as the country moves to set these national standards for the electronic health record. so we have the scenario whereby you are responsive with regard to the v.a. and the scheduling debacle. we said that we'll move we'll move to this choice program senator mccain that you talked about. and we'll have this increase of more non-v.a. care. when you look back, when you're on the committee in '04 in the veterans affairs about the

'04/'05 time frame we were spending about $4 billion, today? $6 billion. it's going up. d.o.d. wants a contract let to create their own new version of the electronic health record. v.a. is doing the evolution of vista. and they want to make sure as they move to new programs that they have data standards to be bidirectional. statement, the v.a. is doing more non-v.a.-based care in the private sector and in order for there to be continuity of care those docs have to be able to communicate, then, with the v.a. so we're talking about bidirectional so they can communicate. that's a huge challenge. now in d.o.d., as they go to their electronic health record and as we make recommendations to you as to the selection of plans, there's going to be a lot of care provided in the private

sector. so this setting of national standards on how the country will communicate is extremely important, and that's what i would see, senator donnelly, as what's the biggie that's about to come? it's about your leadership, about setting those national standards. >> thank you to all of you, and thank you for your extraordinary service across the board. thank you, thank you mr. chairman. >> senator sullivan? >> thank you, mr. chairman, and i want to also thank the members of the commission, the great work that you've been doing for the country now and before. i first want to get a sense of kind of the big mac row issues the competing issues that you have seen mr. chairman as part of your mandate. and in particular what i was interested in, is there a concern about the projected growth of benefits, of retirement that ultimately will be or could be taking away from

training and readiness? i think we all want to make sure we're taking care of our troops. i think, though, sometimes what gets lost is ultimately the best way to take care of them is to make sure if and when they need to go fight that they come home alive. and was that is that an issue that the committee, the commission has had to deal with on a broad scale this kind of tex between competing issues that we're looking at with regard to military expenditures. >> mr. chairman can i take that question? >> senator sullivan, thank you very much for your question. i knew that commissioner kerrey would want to answer this question. so i'm going to ask him to respond. >> well, since i'm notoriously holistic in my thinking about such things. i argued and i think the commissioners were persuaded that for us to address this problem that you are you've

identified, without addressing the big one, the big one's social security and medicare. that's what's crushing all the appropriations accounts. and it would be unfair to identify military retirement at big problem, because it isn't. the big problem is social security and medicare. so it seems to me to address military retirement without going after social security and medicare is basically saying we're going to balance the budget on the back of our military retirees, and i think that would be a wrong thing to do and send a terrible signal. >> can i jump in here? >> yes, sir. >> since i had to deal with exactly that question at d.o.d. when i was comptroller. first of all, there's a huge misunderstanding as to how much is being spent on our military as part of the defense budget. people think it's 50%. it's not. it's 29%. we write about that in our report. if you add the civilians, the defense civilians that's about

40%. that's a whole other category, not something we focussed on. the whole issue is can you modernize what you are offering to your military at the amount of money that you're spending? and if you can spend a little less and modernize a little more, so much the better. and that's where we started. we started with modernizing choice, what my fellow commissioner doesn't like -- holistic approaches. but that's where we began. and we looked at how things fell out. and it turned out that you could save the government money as well. you could actually do better by your people and still save the government money, which tells you how inefficient the current system is. and the reason it's inefficient is not that it was deliberately so. when the all-volunteer force started, who was in it? mostly young men unmarried. now look what we have? a completely different kind of

force. so we have to be concerned about eco programs, child care, a lot of different things that just weren't paramount in 1975. that's how we approached it. and we did save some money, but that wasn't the driver and it shouldn't be. >> senator, i'd be very careful getting sucked into this debate of people versus procurement. >> i'm not just talking about procurement. i'm talking about hard training for our troops. >> again that, this isn't the way, frankly, this is not the issue, because the amount of spending on personnel has been level. the real problem, and i think senator ayotte pointed it out and several others there's just not enough money going to defense, full stop. that's the issue. >> when you hear that personnel costs are unsustainable, the baseline that's used for that is year 2000. why was, the question you should ask is why was 2000 chosen as the baseline to prove that

somehow personnel costs were unsustainable? well, congress made a lot of conscious decisions to improve the personnel system so we did reduct reform. we improved the we did the v.a. form larry reform. we changed the pay tables, and we did tri care for life. and then as you go into war, we did the gshlgts i. bill and the pay raises. so there's a reason, a clever reason why year 2000 was chosen. >> and i would only add, and i'm telling on myself now, my staff used to tell me to come up here 21 times and if you go back and look at my testimony, i always quoted the fully burdened cost of a soldier. and i learned through this commission work that the cost of a soldier hasn't really gone up. it's what you hang on that soldier. look at an m-16 rifle and what it looked like in vietnam, and look at that same weapon system

today with all the sights and bells and whistles. and you're rolling in the additional cost of other things and applying that to personnel accounts, which i was totally wrong in doing that. and i apologize. >> and one last point. one last point which is really important. general correlly pointed out that he couldn't imagine, neither could i when i came in in 2001 that we'd be at war for 13 years and be able to keep all the people we kept. well, if congress and the executive branch had not done what it had done as congressman buier said in 2001 2002, do you think we would have kept them? >> let me add to that, that when this commission was created legislatively, we were very limited in the sense that we had to assume an all-volunteer force and that we would not take away from anybody who has it now. so really a lot of the commissioners might have had

great, grand ideas, but we tried to stay within the confines of our legislative directives. >> thank you thank you mr. chairman. >> it's very rare we get an apology from a general before this committee, and we hope we'll mark this as a historic moment. i thank you. >> mr. chairman i'm surprised balloons and confetti didn't drop from the sky. >> thank you, chairman. i want to thank all of you. lord knows what a difficult charge this was. and coming from a state with incredibly high rates of volunteerism, i want to say how much i appreciate the fact that you came to these recommendations unanimously. serving in this body right now we don't hear that word unanimously as often as we would like to. but i wanted to ask you if you could elaborate a little more for everyone who's here and certainly for this panel about the process you used in terms of

gathering feedback from our service members, from their families, at military instillations, and veterans service organizations because that was one of the things i was concerned about in this process but i was quite impressed with the level of sort of feedback, as you move towards your recommendations. >> senator howard thank you so much for the question. we've spent a lot of time traveling across the country meeting with different military meeting at different military installations. we met with service members, that is active service members, reserve component members as well as retirees. we held citizen sessions, town hall meetings. we had public hearings as we traveled. and we would spend a lot of time trying to really listening. we listened very careful to the

comments that the service members and their families shared with this commission. things about they really were concerned about. they talked about up-tempo the challenges with that. they talked about the long waiting list of trying to get their child into a child care center. they talked about the, not getting access to health care and the problems they had with trying to get specialty care and waiting to get the, waiting to get through the referral system. all of those kind of things is what we use. and we received tens of thousands of comments that came in to the office from across the country from service members about things that they were concerned about. and then we also received many, many responses from this survey. the survey was a very, very

instrumental part of this process, and we september out survey to over 1.3 million retirees. we sent it out to our active components and reserves. we received over 150,000 responses back that says here is what it is that is important to us. here's what we prefer. here's what we value. they basically stacked order one benefit over the other, so we have a pretty good indication of exactly what's important to them. >> and i want to thank you for that. and i want to move my next question to senator presser because i really appreciated your comments about about the culture of service that exists in our native-american communities, and certainly, that is one of the reasons why new mexico has had such an enormous overall rate of military volunteerism over the years and i was wondering if you had

looked at the recommendations in terms of having this sort of tsp model and a contribution portion at if you serve as an enlisted person for four years, very much at the beginning of your lifetime career, and you build that early nest egg through this process, what that looks like at age 65 plus, whenever you actually retire and what impact that would have on tribal communities as well as rural communities where there are very high rates of volunteerism. >> yes, well, excuse me i have an allergy not a cold, so you won't catch it. we do have a problem in the sense of our native-americans, and i just couldn't get mine to go through the academies, but they do join the service for three or four years and they have a very high rate of

service, and they're very proud of it. and you go on the reservations and i know in your state they have american legion veterans and vietnam veterans groups and so forth. this component that they would take out at least, and most of them go with no retirement but they would have at least 1% that the government would contribute to a tsp, and they can, after two years, one of my colleagues might correct me they can contribute up to 6% i mean through match. but when they are elderly they will have something, something. it won't be because it depends on how fast, how our stock markets work out, but i think that in our country we have to depend on the citizen soldier, and in my view, it isn't just to retain everybody for 20 years. it's to retain them for three, five, six in my case i served for three years. i got no retirement, but my percentage counted when my

federal service retirement so i got 2% a year for the time i was notice military. and most native-americans don't get that. and we also have the compounded thing that most of them do not go back to careers. they go to unemployment and they do have all the problems that you know about. and for them to have some connection to some small retirement benefit at the end, i think, would be a very good thing for us to have in our country. >> senator, i'd like to have commissioner higgins to also follow up on that question if you don't mind very quickly. >> that would be, chairman, i'm out of time would you be willing to indulge? thank you. >> thank you, mr. chairman. mr. higgins? >> thank you, chairman. senator, tapping into the economic power of the united states through the savings plan is indeed a really powerful financial incentive. we looked at your point about examining what kind of growth

would be experienced when the individual arrived at retirement age, say 67. in an individual who had done no personal contributions would still, if they leave at eight years of service would still have $18,000 available to them in a thrift savings plan. and, but if they contributed and received the full matching of a 5% of their base pay, they receive at age 67 over $90,000 in benefit that would be available to them. so it's a pretty powerful mechanism. and i think would serve any community, including native-american. >> thank you, mr. chairman. gentlemen, i most certainly echo the message from the rest of the committee up here when we talk about the work that you've done. senator presser and i have been on the campaign trail together for a couple of months in the

last year and we've met with a lot of members of the native-american tribes and they truly are a warrior society, and we respected what they have provided to our country in terms of service to the armed forces. my question to you today is that you're trying to put together a system that, while it is similar, at least you want similarities for servicing being provided you're trying to provide these services and benefits to a whole lot of different groups. you've got the folks that are over the age of 65. those between 60 and 65. retirees that have left the armed services with 20 years of service but have not yet reached retirement age. then you're also looking at those individuals that are still there within the military. and then you're looking at those who are looking at coming into the military. how do you transition this? from what it is today? i got a letter from a man who

had served over in iraq, and he 20 years in. came back. he says after sequestration, the message he gets is my retirement, because i've done my 20 years but i'm not yet 60, is i get my retirement, but instead of having an inflation factor i get an inflation factor minus 1%. the savings to us was $6 billion. but he says in the middle of sequestration, the first thing that people do is come back to the service men and women who have served to be the first to give back. why are we the first in line to get cut? and now today i think that the challenge that this commission has and the challenge that this committee's going to have is to go back to a lot of those same individuals and say gee here's $12 billion that's being reduced or at least being reallocated. are they doing it on our backs? and how do we, those of us that came in and thought we had a deal, knew what we had for

retirement, knew what we had for health care, what is it how are we being taken care of? and is there a transition plan that says we get a chance to choose a or b? so, if you could, please, i think the work you're doing here is important to do but i think the challenge that we're going to have is how do you convince these men and women that are serving or have served that they've got sol options available, and is there a transition plan that you've thought about for those individuals? >> senator, thank you very much for the question. we indeed spent quite a lot of time talking about that very issue that you raised in your question, and as we thought through all the transition assistant kind of challenges that a service member face when they're transitioning out, we took all that into consideration. and i'm going to ask commissioner chris carney to talk to the specifics of that. >> thank you, mr. chairman.

once again, you know, with my colleague right here to my right, the holistic approach that we took to consider the retirement and to make sure that we, first of all, did no harm, one of the mandates given to us. and, you know and senator kerrey also mention the something very important and that is that we don't try and balance the bank on the backs of the military and we try not to do that. so in terms of specifics, some of the programs, and we can talk about this in further committees later on if you want to, but when we talk about ramp programs, we don't transition automatically into something that might cost a little more to a retiree or service member that there would be build ups over 15 years for example. but one of the things that we thought was vitally important, in all the things that we

recommend, is a good since of financial literacy. so if our recommendations are adopted, there would be a very robust financial literacy component for all the troops. and that starts at their when they are in boot camp. a sailor or basic training. and at various points in their career, so they can make good financial decisions going forward. what the federal government does often impacts them and that cannot always be accounted for. you know promises have been made, and sometimes promises have been -- i don't want to say broken, but perhaps bent a little bit. but when you do the financial planning when you enable the service member to have the tools at their disposal to make good financial decisions, the impact of the bending of the promise by the government may be reduced

somewhat. so i have a son who's a lance corporal in the marine corps. and he's making a little bit of money now, and he came to me on his last leave and said, dad, what do you know about ford f-250s? i say i don't know much but i know you can't afford one. but a lot of kids are making those decisions. they're going ahead and buying that expensive vehicle so that they don't have the money necessary later on. we want to have a robust, as i said before financial training system, so they understand the value of money. they understand the value of money later in their careers so when they hit the 12-year mark. and they're making that decision, do i want to stay in and continue on, or do i want to go off the money is there to make a good financial decision for them. so to try to reduce the impact of maybe a bent promise we want to empower the service member with the ability to make good

financial decisions to kind of reduce some of that. >> i would only add also the specific thing you said sir, about somebody who served 20 and is retired is grandfathered into the current system. they will not be part of the system. now in the area of benefits that may fluctuate and change that might affect them co-pays, but that's done over a period of 15-year ramp, medical co-pays but that 20-year person is grandfathered into the current system, and it would not change. >> thank you, mr. chairman. i just would say i hope when we're all done with this that the thought of bending the promises is one that we try to get away from. >> well, that was certainly our intent, senator. yeah. >> and i think you should see the recommendations, too, senator, as a continuation of what congress has done for the last 13 years. our goal is to improve the

quality of the of paying benefits for our military. that was the primary objective of the commission. and we've set a group of holistic recommendations to you that we do think accomplish that objective. >> senator, we really, honest to god, tried to keep the faith. >> senator let me just say that i think in just summarizing what my colleagues have said here is that everything that we did was totally done to protect the benefits, protect the interests of the service members. i wouldn't want anyone to get the impression that we're implying that we were actually cutting benefits of the service members. it was quite the contrary. even though we yield savings as a result of the approach that we took in reforming the structure of those programs, there is there is absolutely no interest on our part to, to reduce the benefits of the service members. in fact it was to support those and improve those benefits, and

i'd just like to make that point. >> senator mccain? >> thank you, mr. chairman, and thank you for your service. this is an incredible topic a difficult gun, maybe even a thankless one. i see a lot of real positives.