under the continuing resolution rules, it gets only the fy 2012 amount sequestration could cut an additional $6 billion. because the army has already spent $16 billion it world only have $8 billion throast be you through the rest of the fiscal year and high demands would require that the remaining funds be spent on overseas operations, leaving the army with only $2 billion for domestic operation maintenance during the next seven months. it is budgeted for $20 billion. so it would have 10% of what it needs for o.m.

for the next seven months. if the year-long sequestration goes into effect. that is just one of hundreds of examples. we're going to hear today that the military service was are already taking actions to mitigate the impacts of the continuing resolution and the impending sequester. for example, the department of defense has instituted hiring freezes, reduced or eliminated temporary or term employees and deferred facility maintenance and began postponing or canceling maintenance of ships, air and ground vehicles. they will also implement furloughs for most pleas, cut backs in flying hours and other military training and contracts. in addition, hundreds of investment programs, acquisition programs and research and development projects may become

unexecuteable. even if many of the short term actions are still reversible if we act promptly they will have long-term costs. the longer congress postponed action the higher those costs will be. for example, the army informs us if sequestration continues through the end of the fiscal year, two-thirds of it brigade combat teams will fall below their acceptable levels. air force will experience decline in the air drop and refueling capability. the strike groups will not be ready for scheduled doe employments for later this year, resulting in negative impact on moral and retention.

by the end of the summer, the department of defense says it will be unable to pay its bills and be in a position to deny service to military members' families and retirees. there are bipartisan solutions to both to continuing solution problem and the sequester threat. we cannot afford to look the other way and pretend there isn't a huge, looming problem. a year-long c.r. and sequestration will undermine the national defense. the danger of the international situation is highlighted again yesterday when north korea had a very provocative nuclear test. we cannot allow these actions of sequestration and a year-long c.r. to occur in the middle of

this kind of a world. it will create a huge problem for our men and women in uniform and their families and it is incumbent on congress and the president to find a solution together. senator? >> yes, thank you. we've talked about how to work through this morning's schedule. at 11:00, senators who are scheduled to have, perhaps four maybe even five votes. we're going to have very short question period after our open statements and after your opening statements. it is possible, at least, that we can finish after a few minutes after 11:00. if that doesn't happen, we will adjourn for perhaps an hour. come back perhaps 12:00 or so for another hour. i hope that doesn't happen but

it very well may. we have a large committee and everyone is interested in the solution to the sequestration and the year-long continuing resolution threat that looms before us. so that is the best we're going to be able to do this morning. i now call on the senator. >> thank you mr. chairman. there are 16 days remaining between today and march 1. 16 days that will define our military strength. secretary of defense announced he has indefinitely delayed the truman carrier strike in the middle east, denying the two carrier force presence that our commander has requested over long period of time. i'm going to run through this quick. the admiral made a statement "i know of no other time in history that we have come this far, this

fast in the defense budget. there could be for the first time in my career, incidents where we may be asked to respond to a crisis and we will have to say that we cannot do it. " the secretary of defense in the hearing that took place the other day on ben began city made it clear -- benghazi that we don't have the resources to product and defend and offer security to our people. that is not acceptable. the department of defense has absorbed almost $600 billion. we're looking at up to over this period of 10 years, a $1 trillion cut and it can't take place. mr. chairman, this hearing is critical to allow the joint chiefs to provide an honest

assessment to the services. the loss of capabilities or readiness in the mismatch of the resources we're going to have to work together to ensure the that the american people understand how serious this is. that's reason for this hearing today. last week led by the senator, senators mccain, graham, eni introduced a bill that will end sequestration that will provide the department to allow to work under a solution. it is not a perfect solution but it is better than doing nothing. there is growing concern that the president won't increasingly negotiate on a compromise until after sequestration takes place on march 1. each member of congress knows the pain that is affected on the constituent but the real pain will be felt in the men and women serving our country when they see they won't have the

resources to defend our nation. i will have questions and one of them is going to be specifically, i hope you will be covering this, this is the request, not to hold back, show how tragedy this is, show the increase of risk and the increase loss of life. that is what we expect out of this hearing. >> secretary carter? >> thank you, mr. chairman. i'm going to be very brief because i think what would like to get to and we would like to get to is the specifics of the impacts of these two budget circumstances that we face, first of all, sequestration and the possibility of the continuing resolution going on for the entire year. i thank you for this hearing and

i mean that from the bottom of my heart. we welcome an opportunity to describe these impacts. secretary panetta and i have been using the word "devastating" for 16 months now. i testified last august to the consequences of sequestration, if it was to occur. now the wolf is at the door. you, who know us, who understand us, and know national security inside and out by virtue of your service on this committee, are critical because i'm hoping when we describe what the consequences of these things are for national defense as we see it and give you the information that you need. you will be able to communicate to your colleagues in the congress and we can move in the direction of a comprehensive solution to both of these

problems that you referenced. slewly, we will provide -- absolutely we will provide that information. we still and will be working through the consequences of this situation. as we do we will provide to this committee as complete information as we have organized in any way you want. today is a start in that regard. the problem comes in two tears. the first is that sequestration, which is scheduled to kick in two weeks time, requires us to subtract from our budget for the remainder of fiscal year 2013, $46 billion. as the chairman indicated, to do it in the worst way namely, to

take equal shares or proportionate shares from each part of the budget, which is obviously not what you do if you're trying to to be sensible. secondly, the continuing resolution that we're operating under now going into five to six months creates a different kind of problem for us. it has enough money in it overall but it does not have enough operation and maintenance money. you put those two things together and in this year, there is a drastic shortfall in the funding that we need to do training and training in turn impacts readiness and that is our capacity to fight in other places than afghanistan. we're protecting funding for afghanistan and as you know, under sequester the president has decided to exempt military

personnel from sequestration. we made some other limitations in my direction to the department, we will protect wounded ware yur programs, we will protect operational needs. we will protect to the extent we can to capables that are critical but the reality is we can't protect much of, which is valuable to the country. in the near term of what you have is a true crisis in military readiness. if the cap is imposed a company's sequester are continued for the next 10 years as is the plan in the budget control act. we're going to change our national defense strategy. those cuts are too large, too sustained for us to implement

the strategy that we crafted under the president's guidance just one year ago. i understand, mr. chairman, and i have long under that the department of defense must contribute to the resolution of the nation's fiscal situation. that's why we have accommodated $487 billion in cuts last year. before that, under secretary gates we made several hundred billion dollars in additional defense spending by largely removing unneeded or under performing programs. we did an historic adjustment of the winding down of a decade dominated by the wars in afghanistan.

we're making that adjustment as well. i also understand that the taxpayer deserves careful use of every dollar we do get. that's why we have striven and continue to strive to get better buying power for the defense dollar and the acquisition system. both the strategic approach to reduction and the efficient use of defense dollars will be undermined by sequestration. what is particularly tragic that sequestration is not a result of an economic recession, it is not basis spending cuts is the answer to our nation's fiscal challenge, you can do the math. it is not in reaction to a more peaceful world. you refersed the north korea's nuclear test this morning. it is not due to a new strategic

insight or new technology, it is not because paths and entitlement spending has been explored and exhausted. it is not because sequestration was ever a plan that was intended to be implemented. all this is purely the challenge collateral damage of gridlock. for our troops for the force, the consequences are very real and very personal. i will give you a few examples, i told you that we intend and the president plans to exempt military spending from the sequestration but the troops will feel this in other ways. for example, you reference the cancellation of a carrier deployment. we had to do that because we had to recognize that we're going to run out of operations and funds in the navy later in the year.

we made the decision not to deploy the carrier but instead keep it here in the united states so that we would have the capacity to deploy it later, if we needed it. if we deploy it now, we would not have the capacity to have a carrier deployed there in the future. we had to make that decision. all the sailors on that aircraft carrier you were ready to go. their families made plans on where they were going to live, schools, all those things that go with sending a loved one on a deployment. all that needs to change within a few days. army units that are coming down, i visit them around the country, coming back from afghanistan are used to being at the highest state of readiness and what motivates them and what should is mission. by the end of the year, i think the general will detail this. they won't be training in the

way their profession requires them to. so it will have a big eaffect on our uniformed people. for the civilians, a lot of people think d.o.d. civilians are people who live in the washington suburbs who come in and go to work in the office building here. they are not. they are mostly people at depos and shipyards that are fixing our equipment. 86% don't live in the washington area. later in the year in two weeks time, we have to institute a process of furloughing them, which we will do consistent with the law and our requirements to you. the net of it is many of them will be furloughed for as many as 22 days before april 1 and

the end of the year. in other words a fifth of their paycheck. that is a real human impact. i've said i can't be furloughed under the law because i'm a presidential employee but i'm going to give back a fifth of my salary in the last part of the year if people are getting sequestered. there is a big impact here. the last impact i would like to call to your attention is that on our defense industry. you know we depend on our defense industry because it is second only to the magnificent people we have in uniform is what makes our military great. the affects of sequestration are going to be very significant and we see it already on the defense industry. we depend upon them to attract

and retain science and tech technology talent. we need them to be financially successful. but many of our industry partners are beginning to curve internal investment, maintain liquid position. the effects of this uncertainty are beginning to show up in terms of investor confidence in our industry. their ability to attract and retain workers and the requirement to stretch programs, reduce buy rates and all of that reduces the efficient in the procurement system. for the force, military, civilian, and the industry the consequences are very district, very devastating.

i want to close with an appeal that i ask you to convey to your colleagues in congress. we need to deal quickly and broadly with our deficit problems in a balanced way that the president can support and congress can support. we need to detrigger sequestration, we need to appropriation bills for all agencies for that matter. i understand there is probably not enough time to accomplish all of these far-reaching actions before sequestration is triggered on march 1. but i urge at least that congress delay sequestration, but as i emphasize the cloud of uncertainty hanging over our nation'ses defense affairs is already having lasting and irreversible effects.

ultimately the cloud needs to dispeled and not just moved to the horizon. however this is done, the magnificent men and women of the department of defense deserve no less. they need to know that we will meet our commitments to them. our partners in the defense industry and their employees need to know that we're going to have the resources to pro cure the world-class capabilities that we can do efficiently. most important, allies, partners, friends, a and potential foes, the world over need to know we have a political will to implement the defense strategy that we put forward. thank you. >> thank you secretary carter. general dempsey? >> thank you so much for holding this hearing on such an important readiness matter. if sequestration occurs it will severely limit our ability to

implement our defense strategy. it will put the nation at a greart risk of coercion and it will break faith with men and women in uniform. we have and continue to be part of the nation's economic recovery. we're committed to remaining responsible as treasuries. to do this, we need budget certainty. that is, we need the opposite of sequestration, a steady predictible funding scream. we need time to implement reductions over a manageable timeline. we need the flexibility to transfer money to our highest priorities. readiness losses, everything needs to be on the table. failing to act is a choice of itself. one that will eventually require a progressive contraction of

security commitments around the world and a less proactive approach to protecting our interests. when i testified before this committee last year, i said if we failed to step off properly on this budget we will reduce our options and increase our risks. our military power will be less credible because it will be less sub stainable. we're a few days away from making that a reality. we can do better. our service members and their fam lis expect us to do better. -- families except us to do better. thank you >> thank you very much general dempsey. do you have anything at this point? ok, thank you. general? >> thank you mr. chairman. nearly 18 months ago you charged me with leading our army and providing my best military

advice. over the course of my 36-year career i have commanded at every level. i know what it takes to prepare this nation's sons and daughters for war. i know what takes to grow leaders in our army. i know what is required to send soldiers into combat. i've seen firsthand the consequences when they are sent unprepared. i began my career in a hollow army, do not want to end my career in a hollow army. today, the global environment is the most uncertain i've seen in my 36 years of service. it is unpredictable and dynamic. we simply don't know when we will have to deploy soldiers to fight again. but history tells us that we will. we owe it to them to ensure they sister the proper resources to

be ready when needed. the fiscal outlook with the u.s. army faces in fiscal year 2013 is dire and to my knowledge, unprecedented. in addition to the cuts to the army lev vied by the budget control act of 2011 the combination of the continuing resolution, a shortfall -- excuse me a shortfall in oversees in funds for afghanistan and sequester in fiscal year 2013 has resulted in a $17-$18 billion shortfall to the military's operation accounts. as well as $6 billion cuts to other programs. all of this will come in the remaining seven months of this yeared the fiscal year 2013 situation will have impacts of

readiness on all forces not serving afghanistan and forward in korea. impacts that will have a significant impact well into fiscal year 2014 and beyond. just a few actions we will be forced to take are for example, we will curtail training for 80% of ground forces. this will impact our unit'ses war fighting skills -- unit's war fighting skills. it will impact our ability to recruit soldiers into our army. we have districted an army hiring freeze and we will terminate 3,800 employees. we will furlough up to 150,000 civilians for up to 22 days. we will cancel maintenance which will lead to termination of

employees and delay in equipment readiness for six divisions. for fiscal year 2014 and beyond, sequestration will result in the loss of at least, an additional 100,000 personnel, soldiers from the active army, the army national guard and the u.s. army reserve. combined with previous cuts this will result in at least 189,000 personnel from the force, but probably more than that. these reductions will impact at the army base and every insulation in the army. sequestration will result in delays to every one of our 10 major modernization programs, the ability to reset our equipment and unacceptable reductions in unit and training. these cuts will be felt across

the entire country. since 2008, the total army budget will be reduced by 37%. if sequestration is enacted it will be greater than 45%. in my opinion, sequestration is not in the best interest of our national security. it will place an unreasonable burdenen on the shoulders of our soldiers and civilians. we won't be able to execute the strategic guidance as we developed last year. i understand the seriousness of the country's fiscal situation. we have and will continue to do our part but the significance of these cuts will reduce our ability to sustain readiness today and into the future. we cannot take the readiness of our force for granted. if we don't have the resources to train and equip the force,

our young men and women will pay the price, potentially with their lives. it is our responsibility, the department of defense and congress to ensure we never send troops into harm's way that are not trained, equipped and well led. we must come up with a better solution. thank you so much for allowing me to testify in front of you today. >> thank you so much general. now admiral ferguson. >> chairman, thank you for the opportunity to testify on this important issue. simple stated, a combined effect of a year-long continue resolution and sequestration will reduce our navy's overseas presence and impact the material readiness and the profinscy of our force. of equal concern, we will

irreversibly damage the base that under these circumstances we assess your navy will be limited in its ability to provide the capability and capacity called for in the current defense strategy. the navy will be unable to execute all the naval force requirements of the combatant commanders. the impact of the continuing resolution is already being felt across the force as we reduce our operations and maintenance spending by 4.6 billion dollars over the remainder of the fiscal year. because we are operating under a continuing resolution, we do not have congressional authority to initiate new programs or address funding for ongoing programs. over $5 billion in planned fy 2013 investments are expected. will be compelled to delay the start of construction of john f. kennedy, the completion of

america, as well as completion of a class destroyer and hundreds of weapons. the carrier abraham lincoln must remain mourned at naval station norfolk -- moored at naval station norfolk. these effects will be compounded by the devastation of sequestration, should it execute in its present form on march 1. on that date, the navy will face an additional reduction in this fiscal year of $4 billion to our operations and maintenance account and a reduction of over $7 billion to our investment counts. -- accounts. we anticipate reducing flight operations on underway days for our deployed forces, canceling deployments, differing more maintenance on ships and aircraft, suspending most non- deployed operations such as

training and certifications, along with other cost-cutting measures. we will immediately eroded the readiness of the force. over the long term, the discretionary budget caps under sequestration will fundamentally change our navy. we will be compelled to reduce our force structure, and investments as we lower funding levels in the altered landscape of our industrial base. like many americans, our sailors, civilians and families are experiencing increased exam day -- anxiety. we must be mindful of the corrosive effect of this uncertainty on the morale of our people and be vigilant regarding the ca potential effect of sequestration. we will make every effort to sustain family and sailor support programs. we ask that congress act quickly to reduce the magnitude of these

reductions and replace the mechanism of sequestration with a coherent approach that addresses our national security interests. we request that congress enact and fy 2013 appropriations bill or other legislation that provides appropriate authorities for new starts and transfer authority between our accounts to address our immediate shortfalls. we look forward to working with the congress to resolve this fiscal and certainty, and we must ensure that our navy remains ready and capable to protect our nation's security per prosperity -- prosperity. i look forward to your questions. >> general amos? >> chairman, committee members, thank you for the opportunity to testify before this committee on the potential impacts of sequestration. this topic is one of high importance, with implications not only to our fiscal health,

but also our nation's necessary leadership in the global community. speaking as a member of the joint chiefs of staff, a critical measure of the effectiveness of our armed forces is its readiness. sequestration, by its magnitude, its timing, and its methodology, will have a devastating impact on readiness. both short term and long. combined with the effects of existing continuing resolution, sequestration creates unacceptable risk. risk to our strategy, risk to our forces, risk to our people, and lastly, risk to our nation. regarding strategy, maintaining a free economic system and a just international order are linchpins to our defense strategic edits. distraction to this global order are readily observed in roller coaster energy prices --

destruction to this global order are readily observed in roller coaster energy prices. failure to provide leadership in the collective security of this global order would have significant economic consequences for the american people. worse, the lapse in american leadership would create avoid in which old threads would be unaddressed and new security challenges would find room to grow. there should be no misunderstanding. the combined effect of continuing resolution and sequestration will have dilatory is effect on the stability of the global order -- deleterious effects on the stability of the global order. sequestration should not be viewed solely as a budget issue. our collective actions in the next months will be scrutinized on the global stage. even the perception of a disruption over a nation's ability to protect its global interest could have strategic consequences. regarding risk to our forces,

the linkage between resources and readiness is immediate and visible. the scale and abrupt implementation of sequestration will have devastating impacts on readiness. sequestration believe ships and ports, aircraft grounded for want of necessary maintenance, and flying hours. units only partially trained and reset after 12 years of continuous combat. and modernization programs canceled. because of our special role as america's crisis response force , marines placed a high premium on readiness. i have done everything in my authorities to date to preserve the tenets of a ready marine corps. i will continue to do so. under continuing resolution, i have kept deploying units ready, but only by stripping away the foundations of the long-term readiness of the total force. while these short-term

adaptations are possible, the enduring effects of some of these decisions put us at an unsustainable tipping point. by the end of this year, more than 50% of my combat units will be below minimal, except bowl levels of readiness for deployment to combat. -- acceptable levels of readiness for deployment to combat. this pattern inevitably leads to a hollow force, and its impacts are already being felt under continuing resolution. the most troubling and immediate risks are those that sequestration imposes on our people. sequestration does not hurt things. it hurts people. the qualitative edge that the american service member takes to the battlefield is the fundamental advantage that differentiates our forces from our enemies. this qualitative combat edge will be severely eroded by the impacts of sequestration,

leaving marines and other service members with inadequate training, degraded equipment and reduced survivability. while military pay and allowances have been exempted in this round of sequester, the quality of life for the all volunteer force and their families will inevitably suffer as we reduce family programs and installation maintenance. our civilian marines will likewise be impacted. the 95% of our civilian workforce that is employed well outside the confines of the national capital region are the guards at our gates, our budget to pay our bills, the therapists who treat our units and the experts who repair our commitment, and finally the teachers to instruct our children. -- to instruct our children. -- who instruct our children. protecting our ability to keep

faith with our wounded warriors is a top priority in my marine corps. this most sacred of responsibilities will increasingly be placed at risk. in closing, allow me to articulate one set of risks. the risks to our nation. in the final analysis, sequestration asks the most from those who have borne the greatest sacrifice. it invalidates the careful planning of the services to manage a predictable resource line, replacing it with a dramatic resourcing cliff that guarantees inefficiency, waste. putting the nation security on a vector that is potentially ruinous.

these are all risks that demand our immediate attention and action. by scaled timing and inflexibility and implementation, sequestration aggravates our national risk profile, all at a time of strategic rebalancing and change. i urge the committee to consider the full range of risks created by this legislation, and ask for your assistance in mitigating them to the extent possible. i look forward to answering your questions. >> thank you, general amos. general welch? >> thank you. it is always an honor to appear before you. in line with what you have already heard, sequestration threatens to carve crysta crucil capability. sequestration represents a potential $12.4 billion topline reduction for the air force in fiscal year 2013, affecting

every account and program. if it occurs, it will significantly undermine the air force's readiness and responsiveness. it will impact the air force civilian workforce and its impact on modernization will affect the air force's future capability. i know your staffs have the specific example from all the services, but just to highlight a few, sequestration will result in a a furlough that will affect 180,000 civilian airmen. it will result in loss loss of over 200,000 flying hours. but we will protect flying operations in afghanistan and other contingency areas, nuclear deterrence in our initial flight training, roughly 2/3 our units will curtail compensation beginning in march and will drop below readiness levels in mid-may.

sequestration will cut 30% of our remaining weapons systems a statement funds, which means we will need to postpone approximately 150 aircraft and 85 engines, creating a backlog that could take years to recover. vigilance, reach and power, the strategic responsiveness requires a high state of readiness. sequestration will have an immediate affect our ability to respond to current operations around the globe. longer-term, it cuts the modernization. these program disruptions will cost more taxpayer dollars to rectify contract breaches, ray's unit costs, and delay delivery of validating capabilities to more fire --

ray's unit costs, and delay delivery of validating capabilities in the field. we find ourselves stuck in the and a viewable trade space between readiness and modernization. -- an enviable trade space between readiness and modernization. -- unenviable trade space between readiness and modernization. i look forward to your questions. >> now, general grass. >> it is an honor and privilege to be here today. the greatest threat to the national guard today is the continued uncertainty over the budget. i provided a summary of near- term measures to assist in mitigating budget risks and threats to our readiness. however, without near-term relief, our ability to respond to domestic and other

contingencies will decline. in personal, we are implementing a civilian hiring freeze and not redoing temporary civilian employees. -- rehiring temporary civilian employees. the national guard is reviewing every bit of overhead across our force. we are continuing conference attendance -- curtailing conference attendance that is not mission essential. full sequestration and a year- long continuing resolution will directly impact the readiness of our units and will have an impact on the full range of national guard activities. in the area of personnel, a technician hiring freeze compounded by a possible 22-day furlough will limit our ability to train and maintain our national guard force. current backlogs coupled with the loss of reset dollars will

reduce national guard equipment availability and readiness. in the area of facilities, sustainment, restoration and modernization cuts will degrade and already aging armory infrastructure. the continuing resolution prohibits any new starts on our military construction, further threatening armory and facility modernization master plans. in the area of training, a near- term lack of operations and maintenance funds will cut our flying and reduce our vehicle miles in operations and maintenance, causing reduced readiness. if not addressed, we will be forced to park vehicles and aircraft. in a matter of months, our readiness as an operational force our nation's defense and as an immediate homeland response capability available to the governors will erode. thank you for the opportunity to appear before you today. >> we're going to start with a

three minute first round and see whether or not that may actually get us to where we need to go. i'm going to yield to senator cain. >> thank you. i appreciate your courtesy. yesterday, unrelated to this hearing, i visited one of the premier medical facilities in this united states, the fort belfour committee hospital -- community hospital. i had a roundtable session with wounded warriors, and i said, i am a new senator. what would you like to either tell me or ask me? i expected i would do a lot of talking about medical care for active duty and veterans. they wanted to talk to me about budget uncertainty. they asked how budget uncertainty would affect the medical care they are receiving right now, and the care their comrades are receiving. they wanted to talk about

budget uncertainty and tri-care benefits. full-timen who ise civilian job is a dod civilian job wanted to talk to me about what furloughs meant. this was a hearing where i expected to be talking about medicine, but what i heard and what i ended up talking about was the effect of budgetary uncertainty. this follows the testimony of secretary panetta and general dempsey last week. i want to ask a couple of questions focusing on some a/v issues. the announcement last week dealing with the truman and the lincoln -- navy issues. the announcement last week dealing with the truman and the lincoln, decisions that are in fact reversible should congress

do our business, some of the decisions you have already announced, how long can we persist down that path before these decisions start to have an irreversible effect on our readiness and shipbuilding capacity? >> beginning unfair brey gray 15th, we will begin notification to private -- february 15th, we will then begin notification. those maintenance actions will be deferred with continuing resolution. if we do not get the authorities to start work on the new construction carrier and complete overhaul or start the overhaul -- three carriers are tied up and delayed because we do not have authorities. those are reversible with congressional action. on the sequestration issue and with truman, we had to look at what happens to the navy under sequestration.

we effectively stopped training and certifications of our air wings. we shut down four air wings on mar. in our assessment, it was more prudent for us to delay truman, be able to deploy later this summer and for george bush to deploy later this year or early next year to provide continuous coverage in the middle east rather than have two carriers and then fall off completely in fiscal year 2014. the impacts under sequestration, the longer we go, the greater impact on readiness and the longer recovery time and greater expense. >> think you very much. >> i enjoyed visiting with you yesterday. i think you are hit as hard as anyone. there is a document here that i know has not been circulated to everyone.

you throw the navy in there, you're out of business. i would like to ask all the other services that did not provide us with this particular information in this format -- it shows every state how each is affected. could you try to get that for me? i assume that is a yes. you heard what i said about admiral winfield. do you agree with his statement he made? okay. secretary carter, i understand the administration is putting towards an end of march release of the fiscal 2014 budget. will your submittal to omd include cuts from sequestration ? yes or no is fine. >> no. >> when you do this budget, you would be willing --paying nine

times as much per gallon for the navy -- for the record, would you send me something as to what your intentions are and putting things in the budget that did not really provide for our defense? we do have a department of energy. would you do that, for the record? >> absolutely. >> you and i have talked about this at fort smith, the problems we are facing with the halloween of the readiness in terms of pilot training, number of hours -- halloween of the readiness -- hollowing of the readiness in terms of pilot training, number of hours. readiness signals risk, equals lives. -- equals risk, equals lives. what this could cause in terms of lives or of risk, would you

make sure that we get that? >> yes, sir. >> both you and generally most talked about readiness. i appreciate that. readiness, risk, and lives. will you do the same thing in your services or have you done this already? >> yes, sir. >> lastly, general dempsey and ferguson, as i mentioned in my opening statement, when secretary pineda announced the indefinite delay of deployment of the lincoln -- panetta announced the indefinite delay of deployment of the lincoln, what does it mean for ongoing

operations, will you do that for us? >> yes, senator. >> thank you very much. >> senator reed, secretary cartwright, i want to clarify part of your testimony. if you're able to avoid sequestration, there is still significant issues with the budget control act going forward, is that correct? >> right. sequestration per se, the item by item cut, only applies to fiscal year 2013. the budget control act does a lot more than cut the 2013 budget. it cuts the defense budget by large amounts, roughly $50 billion, and every year for the next 10 years. that is the part that turns a readiness crisis into a change of strategy. it is a lot of cuts on top of what we have already done. >> the immediate challenge, sequestration, and on the bus or

continuing resolutions for the rest of the year -- omnibus or continuing resolutions for the rest of the year that we have to reevaluate. >> we would have to go back into our national defense strategy rat trade >> you have can crunch wil charge will obligations. -- contractual obligations. is that something you will continue to build equipment, aircraft, ships etc. while at the same time eroding the readiness of the force? >> sequestration and the cuts only apply to on obligated funds. we have entered into a -- unobligated fudnsnds.

we have entered into a contract. will be more affected his contracts that we intend to enter. multiyear contracts, because they are more efficient, those kinds of things we are not going to be able to do. as admiral ferguson pointed out , a lot of our ship actions are constrained accounts by account in the continuing resolution. he cannot do anything. he is only allowed to build the same ship he built last year, according to the continuing -- it does not make any sense. >> assume the resolution somewhere down the road, you

will probably have to spend more money restarting activities, recalling personnel, making up for training by doubling up not only the air, land, sea forces. is that another consequence? the savings disappear quite rapidly when we go back to business. >> this costs money because it wastes money. starting, stopping, stretching out programs is inherently inefficient. all of our managers who tried so hard to use the taxpayer dollar the best way to get things just so to work with their industry partners to get a good deal for the government, all that goes in the wastebasket in these instances. it is really a shame. >> thank you, senator reed. senator mccain? >> thank you to all the witnesses for being here.

it is kind of orwellian experience here. we are looking at these draconian cuts, some of the manifestations of requirements have taken place. it is the day after north korea tests another nuclear weapon. iraqis unraveling. iranians just rejected the vice president's proposal last week and for one-on-one talks concerning nuclear weapons. libya is obvious. a state ofgypt in unrest. now tunisia. we are probably in a more unsettled period since the end of the cold war and certainly i have ever seen. would you agree? >> i absolutely agree. >> meanwhile, the signal we are sending to the iranians is, don't worry. this aircraft carrier is not coming. this is really a disconnect the

likes of which i have never seen before. i want to talk about the sequestration, because senator graham, senator a yacht -- ayotte travel around the country warning about the effects of sequestration. men and women of the military have said to us, how can we possibly do this, cause this uncertainty? the cancellation of the deployment of the aircraft carrier? the president of the united states said, it won't happen. during the campaign -- it won't happen. we were worried that it was going to happen. it is disgraceful to treat the men and women in the military so we all speak with such advocacy and passion on their behalf, to be subjected to this kind of day-to-day kind of uncertainty that they volunteered to serve this

country. but we owe them a certain amount of certainty as to how they're going to be treated, what their assignments will be, and what their future will be. would you agree? >> absolutely. then i think wouldn't you say that -- i the way, -- by teh .he way, omb said, don't worry the act requires in some instances 90 days notification to employees that they will be laid off. i think we have just placed the federal government in a state of very significant possibility of owing a lot of money to a lot of the military. i do not expect you to respond to this, but we elect presidents for a reason. and that is to lead. it seems to me that it is time for the president of the united

states to call the to call the leaders of congress over to the white house and say, if you accept the word of every one of our military leaders as the effect of sequestration, if you accept the fact that the world is becoming more and more dangerous, this is the worst time. we should sit down and come to an agreement if only -- not only if the national security but the benefit for the men and women who are serving this nation. i would be glad to hear any response you might have. i know that is differently to spond to one of my -- respond to one of my assertions. >> thank you. thank you senator graham, i remember when you took that trip and we we were grateful to you. i felt like we were voices crying in the wilderness now for 16 months. this committee is an exception because each and over one of you

knows the department of defense, knows national security, and can be aware of what we face. there was a time when i thought that sequestration wasn't likely either. i used to say that i was hopeful and optimistic then i said i was just hopeful. now i'm not even hopeful because we're only two weeks away from it. so we now -- we have for some time not only been planning for it but taking action. that's what you hear described. even though it has not kicked in, in other words -- in order to take action you're seeing it in other things. if sequestration goes away after

march 1 all of these actions were unness but we feel like we have to take them now because we can't rule out the possibility that they are really going to do this. >> i think our witnesses can agree that this can have a long-term effect on retention. >> senator? >> thank you, mr. foreman chairman. one of the things that is good about when we have to compromise and yelling about how was got here in the first place. i want to point out for the record that both the ranking republican on the senate armed committee and the chairman of the arm service committee voted for the budget control act. so when we voted for this and there were 28 republican senators that voted for this, we

knew there could come a day of reckoning. we would have to sit down and compromise. i certainly hope that the testimony that you have given this morning will help us get to that place. we will not avoid the sequester, if we all draw lines in the sand and awe're not cutting anything or we're not going to do any revenue. if we're willing to acknowledge the price that our country will pay is not one that we're willing to pay, it seems to me this is the moment of compromise. the reason we were so optimistic that it wouldn't happen that many of us thought when the time comes we'll compromise. sign me up for the compromise, painful cuts and some revenue. we got money right now we're paying out to farmers that we all acknowledge is a huge waste of money, billions of dollars that they -- it isn't really

going to farmers. they are getting paid for whether their making a lot of money or not making a lot of money. that is a great example that we can all agree that we need to cut that, we need to do it in the next two weeks and we need to make sure that money goes towards defense. having said that, i would like someone to tell me, if we gave you the ability -- there is a lost folks that say this year's cut $46 billion out after $460 billion budget ought to be manageable. if you have the authority to cut it where you want to cut it instead of the way we're halving you under the sequester, where would that come from if you had the ability, which i think the senator is advocating and i agree with him in that regard. on a minimum we ought to give you the discretion to cut where

you would do the least amount of harm. >> if i may, you're right, obviously, that the mechanism of sequester makes us cut everything in proportion is dumb for any kind of manager yull point of view. i have to say at this point in the fiscal year, it doesn't matter that much. we have to go everywhere to get that $46 billion. at this point, we have to -- anymore you can get the money we have to go and get the money. remember, in many places we can't access it. we can't lay people off, can furlough them, key can't furlough them more than 22 days but up to 22 days. the president has, rightly exempted military personnel. by this time the fiscal year a

certain amount -- a large amount of the o.n.m. funding has been obligated or constrained. so all we have left is the room where the unobligated reserve, which the general explained for the army is tiny. he has no room to go. so he's less con trained by the mechanism of sequester and right now we have to go everywhere there is dollars to take. so it does not help that much but i appreciate anything we can get but it does not help all that much at this point in the year. >> if there is any specifics you can give us about whether or not it would help to at least give us that discretion. any specifics you can give us that would be great. my time is up. it is very rarely that we have all of you here at one time. if you have not yet seen the

dammitary of "the invisible war" i hope you all see it before the next chance i have to visit you. i would love to hear your specific ideas. i'm determined to make a difference in that regard over the next year and if you haven't seen the movie, it is nominated for an oscar for one of the best documentaries and i hope you all see it. thank you. >> mr. chairman, let me correct the senator from missouri. i did not vote for the budget control act. >> i should have said at the time it was voted for senator mccain and the represent both voted for the budget control act. they were the leading republicans on the armed services, i should have made it clear. it it was ranking republican at the time we took the vote.

>> thank you. >> i want to thank all of our military leaders for you being here today. i want to thank you for your service and everything you do for us. to put it in a bigger picture here, sequestration on a scale of one-10, one being the least dangerous, 10 being the most dangerous. how dangerous is sequestration in terms of this country? >> i will take a shot at that, senator. from where i sit today it feels like a 10. some think tank around here might want to negotiate me around an eight but it is really serious. >> i'm asking for your professional judgment. is there any disagreement on that? so we're at a place right now where we're facing dangerous times around the world. would you all agree to that? >> absolutely. i didn't get a chance to

respond. the issue of the mechanism is one thing, the magnitude -- even if we got all of the authority in the universe to deal with it, this would be the steepest, biggest reduction in obligating authority for the defense in history, at a time i will personally attest that it is more dangerous than it has ever been. >> i thank you. i think it was mentioned on the co-sponsor of this panel on a bill that would come up with alternatives savings to provide, at least a resolution of sequestration for the end of this fiscal year. there are many of us who are trying to work towards solutions. as senator mccain mentioned, we did travel around the country over the last 16 months, having heard from all of you about the concerns about what this would do to our men and women in uniform. i want to ask about a particular

impact and this is on the virginia class submarines and the attack submarines fleets. what do you think that would be the impact on the shipyards and the submarines? >> senator, i believe under a c.r. and sequestration you will see us take action to defer the repairs of miami and other shipyards. you will make every effort -- those will be uneffected and determined. however, there is longer term consequences, there is a more training ship that is effected by c.r. and sequestration that has an impact in training our nuclear on operators. if a few years if we don't get authority to build that training, we will lose ip operators every year. by the end of this year, we lose

about 350 workers a week, 1,400 a month and we'll be down 3,in our shipyards. if -- 3,000 in our shipyards. if we furlough, will do that wall the submarines and really impact the readiness going forward. i thank you. i'm sure my colleagues share my concerns about the impact and the importance of our shipyards, and of course, the important work done at the ports shipyard and maintaining our submarines. i appreciate the insight you provided us there. again, another impact showing us why this is important that our men and women in uniform and national security is not impacted by sequestration. i have additional follow-up questions, i'm hopeful we have a second around or i will submit

additional questions for the record. i want to know if we will have to pay damages because of the guidance issued on the warren act. >> thank you. >> good morning, gentleman. thank you for being here. it is clear from your testimony that sequestration will have real threats to our national security, it would harm our military communities and it will damage our military readiness. as always is the case, our soldiers, sailors, our maremen will be the bill payers if we fail to meet our onably investigations. -- obligations. in the summer of 2011 to avoid defaulting on our good credit rating. it is on our shoulderers to the

nation's interests ahead of the sniping that is going on in this town. if we allow this kind of harm to be done to our country, it won't make a damn bit of difference who wins the majority in 2014. let's solve this prom. if we can't reach compromise let's work with you to mitigate the effects. general, if i could, i would like to turn to the army's training budget. i understand that if sequestration takes hold that training above the battalion level will essentially stop except for units preparing for afghanistan. if you see that take hold, there's a ripple effect that might result in increased tour lengths for deployed troops. i believe we're trying to increase the amount of time and i believe we break faith with

the men and women in uniform. could you speak to that. >> currently, we have funded the next group of units that will go into afghanistan. we cannot fund the group that comes after them. that will be done in the later part of 2013. what that means is the initial replacements that go in the beginning of 2014 are funded, those that come after are not. we'll have to make a decision somewhere along the lines to extend those already there or send people there that are not ready. i choose not spend people there that are not ready. that is the cascading impact that we have on this real problem in the 2013 budget. in operation and maintenance funds. >> thank you for that clarification. another reason we have to get this right here in the congress. general welch, we host a command in colorado springs.

last week you issued a press release that warned that sequestration could lead to major cuts to essential programs "some missile warning and space surveillance to eight hour per day operations, impacting space awareness and intelligence community kfments that would indicate that space command could not fulfill their basic mission requirements if sequestration goes into effect. is that an accurate assessment? i would add, our friends in north korea are at it again, they just had another test. you might speak specifically about that situation as well. >> thank you, senator. in their space operating budget has the advantage of having a wide latitude of where to take

the money from under the cuts of sequestration compared to our other accounts. what they have done is removed -- when you talk about going 24/7 coverage on some of these sites to down to eight hours as opposed to 24 hours a day that decreases them to have redundancy. but the redundancy in that capability is impacted in the babbed. it is the operating funds to power radars for 24 hours a day. when they are cut we have to take that money from some where. the secondary capeabilities are those major radars that is what is happening. >> thank you for that clarification. i want to urge the committee that is known for bipartisan to lead the way on finding a compromise that could involve revenue, strengthing our

entitlement programs, and targeting spending cuts. we can do that in this committee and show the senate the way forward. thank you. >> senator fisher? >> we're going to need you to use another mic. >> thank you mr. chairman. i would like to begin thanking all of you for your service and i thank you on behalf of the people of this country. i would also like to recognize the men and women that you represent by being here today. thank you. i would like to visit with you some about our nuclear modernization and readiness. dr. carter, as you know the president has committed to modernizing the nuclear

deterrent and the cost anonymities we're provided -- estimates that we're provided was $56 million to sustain that over five years and $156 million over 10 years. is that still accurate and do you believe that is an affordable that americans should be making? >> we do need to have a safe, secure, reliable nuclear deterrent as far into the future as i can see. that does require that we have the engineering base, the facilities, and the life extension programs and other things we do to keep the nuclear arsenal going.

if the bubblet cuts that begin with sequestration extend over 10 years, i can't imagine that we won't also have to look at the nuclear part of our frore structure to accommodate some of those savings. you know that is true also with the department of energy, which we don't have responsibility for but they are going to get hit with budget cuts too. the only thing that will i say is nuclear deterrence is important so that is the last thing you want to do serious damage to. i would immain ma gin that the department of energy will try to protect their nuclear capabilities to benefit extend as possible. it is not critical, he's still able to do the mission but he's doing a little bit less than he

used to do. i think you will see in that in the nuclear programs. >> we're looking at severe cuts to convention forces, but if i'm hearing you correctly you would say that our nuclear deters rant would be a national priority >> >>i think is a national priority i don't think it will escape entirely of these cuts of this magnitude. i wouldn't say that. it is something that we would value pretty highly. look what the the north koreaians are doing today and so forth. >> thank you i will have a follow-up question in round two. >> thank you senator fisher. >> thank you, mr. chairman and thank you all. >> i'm sorry.

she slipped in on time. i apologize. >> gentleman, we do appreciate all service for the country. it is a denver stating impact that sequestration -- def straighting impact that skegs the laid out i appreciate the candid and that plays an important role. i chair one of the sub committees on this committee and i'm very concerned about the possible impact of the sequestration and a full year c.r. on our special operation forces. north carolina is the home to the headquarters of the u.s. army special operation command, joint operation command and the marine corps as well as thousands of special operators and their families. admiral as noted there is a

greater demand for special ops today than any time of our history. as we prepare to draw down in afghanistan special armed force will likely remain. as long as al qaeda remains a threat our special operations will remain engaged. i understand the combined impact of the issues could cut around 23% and 9% in their investment accounts. espermly returning the command to 2007 spending levels or $2.4 billion budget requests for 2013. dr. carter and general dempsey, if these cuts go forward, how will they impact the readiness of our special operation forces? >> it is devastating and i will let the chairman speak to it

more. the reason they get hit especially hard is tame reason that the army gets hit especially hard. namely they have a lot of funding in the overseas operation account. that gets hit too by sequester and we have to protect the wars. so you protect the part of it that is working in afghanistan or deployed right now. the rest of it has to pay a larger price. i would say, you know, our strategy is not to shrink our special operation forces, our priority is to grow them. we said last year we're going to take $487 billion in cuts, that strategy actually -- our plan is, still is, to grow our special operation forces. now all of that is obviously in question now because of sequestration.

but if skegs is diverted and we -- sequestration is diverted then i think we'll grow from 56,000 to 72,000, if i remember the numbers. it is a priority in our strategy. >> it's a priority and we're counting on these individuals and we're looking into the special operation forces and it seems that we think we can count on that at the same time we're looking at a 23% cut. >> i'm with you. >> i would only add to it that in the first round of these cuts, the $387 billion budget control act we did advantage the special on operations but if sequestration occurs, everyone

will be affected. >> obviously, special operations didn't rely heavily on the general purposes counterparts, enabling support, including the intelligence, surveillance, medical evacuation and assistance. so i'm running out of time. as representatives of our military services, how is sequestration in the full year c.r. how does that impact your ability to provide these critical enabling capabilities to our special operation forces? >> if i could go first. as i said, it is reduction in training and all of these will have an impact on enabing a lot of these resourses we provide. we're going to loss 47,000

flying hours. that will take a while to recover from. as we have to go through and re-evaluate and meet our gates for our pilots to include the reductions. >> we set up a special operation six and half years ago. the amount of marines is about 2,500. we did a review about two years ago and due to the requirements and the need in the real world, i agreed to grow that force another 1,. we're not there. sequestration and c.r. continue and persist especially over the next 10 years. it is unlikely i will grow the force to the extra 1,that i said and certainly the people and the equipment won't be available.

>> for us it is two areas, people and platform. the people we will continue to support and provide the enables but on the platform piece and the ships they might operate from, you will see a d decreased presence because of sequestration and the c.r. >> thank you. >> here's where we're at. the votes that were originally scheduled for 11:00 are scheduled for 11:30 which means we can safely go to 11:40. so we can hopefully finish our first round and have a second round if necessary. our goal is to complete this hearing by 11:40, it is five after 11:00. >> mr. chairman, can we make sure our staff that our member knows so they can come down

here. >> i would ask our staff to notify our members that there may be a few minutes for a second round. if they are interested let us know. the meeting of our committee on the haguele nomination that was scheduled at 2:30 will begin at 2:45 because we have two votes at 2:15. two votes at 2:15 this around. so we're going to begin our meeting this afternoon at 2:45 instead of 2:30. i would ask everybody to vote early on that second vote so we can begin promptly at 2:45 this afternoon. now i'm going to call senator graham. >> thank you for coming and thank you chairman for having this hearing. i can't think of a better topic

to talk about. have you run out of adjectives to tell us how bad this is? >> i've a degree in english from duke university and the answer is yes. >> i don't know what is going to take but we have to keep trying to. maybe bases closing seems to get everybody's attention in congress. from a navy perspective will we have less naval bases? >> senator, that falls under the base closure re-alignment process. >> how many ships will we have? >> if sequestration is enacted with the budget caps over the nine year period we expect it to shrink by 50 ships and two carrier air groups -- carrier strike groups and some other groups. >> in english how many is that? >> 220-230. >> the air force, are we going

to have less airplanes? >> we're going have to have less airplanes. >> what is the bottom line? let's say sequestration goes fully into effect. >> we'll have to look at complete program. >> it is going to billion hard to modernize? >> we'll have to completely remodernize. >> will it be prevent us from going into iran? >> yes we'll be kicking the dirt. >> from the army, will we have less army bases? >> about a 40% reduction with sequestration. >> 40% reduction in combat power? >> we will have to look at closing bases if we do this. >> has anybody thought about resigning in protest? >> you ask me that a lot, i don't know if you're trying to

send me a message. [laughter] >> i want to make this real to people up here. >> none of us walk away or run away from a crisis or a fight. that's not our nature. i will tell you personally, if ever the force is so degraded and so unready then we're asked to use it will be immoral to use the force unless it is well-trained, well-led, and well equipped. >> are we on that path to creating the dill lem that? >> we're on the path. >> please thauns colleagues. we're on the path to require our military in the future to protect us in a circumstance where they know they don't have the ability given what we're doing to the training, the readiness of the force and general dempsey, i can't say it better. do all of you agree to the

general's statement? please say yes or no into the mic. >> yes. >> yes. >> yes. >> thank you for yourselves. >> thank you senator graham, before you leave, your question as i understand it is a good one, referred to the current nine-year sequestration. >> we're on the path. that's a good point. sequestration is putting us to a path of putting our military leaders in a great moral dilemma, knowing they can't spend people into battle urn ready, knowing that people are going to die understand necessary. that is the issue. >> i understood that and i agree with that. i want to make sure that is the nine years? >> yes, sir. >> it is bad enough that the first year is bad enough. ok. >> thank you, mr. chairman and thank you all for being here and

your candor in terms of your response to what has clearly been irresponsible on the part of congress. i voted for the budget control act as did the majority of my colleagues in the senate and the majority in the house. i thought we were going to be responsible about how we then responded to come up with a long-term solution to address this country's debt and deficit. the fact that we have not i think means, each and every one of us in congress should take a second look at what our jobs are in this body. the fact is, with we can come up with a long-term solution that avoids the impact of sequestration, that avoids the devastating toll that all of you are talking about this morning on our military aband on our defense. but in order to do we have to be

flexible, we have to look at the entire budget, we have to look at spending, revenues and our mandatory programs. i will pledge to you that i will do everything i can to be flexible about that and willing to look at all the options we have to get a solution. this is not just, as you point out, about our military readiness and about the country's national security. it is also about the future of the economy of this country. anybody who looks at those economic numbers from the fourth quarter have to understand that if we continue on the path we're on we're going to put the economic growth of this country and everything that means, in terms of unemployment, impact to defense, and all the other sectors of our academy, we're going to put that back at risk. i can understand your frustration, i share it, and i don't blame you one bit.

now, i have a question. you've talked about the impact on our men and women who are serving and on our security. but i want you, if would, talk a little bit more on the impact on this country's industrial base. i know that we have heard from some of the small businesses in new hampshire. there's been one firm quoted as 20,000 small businesses in its pipeline would be affected if these cuts are not addressed. i wonder if you could elaborate of the reverse ability of sequestration in the industrial base and the small businesses. >> well, thank you for the question because this is a very serious impact. i talked about larger companies

are telling me that they are, as i said, maintaining more liquidity, not making internal investments in defense. but they have a capital structure that allows them to survive. remember that 60-70 cents of every dollar that we contract ends up in a subcontracter. many of these are small businesses they don't have the capital structure to with stand blose and be turned on and off and so forth. i am concerned and our industry partners are concerned that some aren't going to make it. then you don't have a supplier for a critical component. so both the magnitude and the abruptness of the impacts and just the uncertainty that looms over the little companies. small businesses are important because they are the source of a

lot of innovation. they bring new ideas, new people into the defense field, which we need. so many of our most dynamic ideas and new system originate in small businesses. >> senator, if i might add. another concern for the navy is the people involved in the repairing the ships, the highly skilled traftsman, it takes years to develop a nuclear welder, for example. they have to find employment or they are furloughed. they might make a choice to retire or level federal service. we have my suppliers that if we cut off the development and the construction of these systems, they don't have work for them because they are single source for some of these critical compose negligents.

>> that could have a significant impact on jobs and the economy that that is dependent on. >> jobs to respond to a crisis in the future. >> i share the concern and we're seeing it at the naval shipyard, the potential impact this could have. thank you very much. >> senator blum. >> let's talk about jobs on the worse force a little bit. just so be sure that i understand what you're saying if the shipyard people get furloughed some of them will decide this is not my long-term career path? >> think is the potential outcome. >> general welch i asked the other day about the team line in st. louis, that's the big line i'm familiar with. we have a lot of little defense

contractors in missouri. i did a tour last year and one of them was out in the county and the always was at one time a dairy barn. everything is run on computer, very sophisticated, very purposeful, but if they don't have that contract -- i'm sure they are not conditioned in a way that allows them to just wait until the next contract. that business would go away. what about, like the big lines. if i've been told that if that goes away that's why some of our foreign military sales were so important to keep the line open. what are your concerns if you have to say we're not going to be able to follow through with our plan for the number of planes that we've ordered? >> some of the major defense contractors have the ability to absorb some of that work force inside their house.

boeing is an example with a large production capacity. we're facing a more immediate problem with sequestration, especially just for the rest of this year. if we stop, for example, the 150 airplanes and 85 engines if sequestration occurs, we will furlough not just furlough the work force that are working in the facilities but the work load will also stop. many of the small business contracts that provide parts and people to come in and do specialized work as part of that depo maintenance -- >> this would be a furlough not combrurse furloughing people because of sequestration, combrurse furloughing people that sequestration because they did not have any work to do? >> it would be both. >> let's talk about the other part. general grass, we visited the other day and your uniform personnel because of the way you

function, you have civilians wearing uniform. but on your civilian personnel, what are you thinking you would have to do in terms of telling them not to show up for work for the next six months? >> if full sequestration were to kick in and some of the information we passed on to the generals right now, to plan on is one day a week maximum for the rest of the fiscal year starting probably in april. we have not implemented that, we're looking at that. what it mean for the national guard, the bulk of our maintenance is completed each day by our civilian technicians, the ones that wear uniforms to work each day. as we draw those down for that time period, we see a decrease if our readiness across the nation. i did a study the other day and looked at a 10% reduction of our

rolling stock in the next six months and that is on top of the depo shut down that will cause us problems. >> i may have more questions in writing. i have one last question, i'm out of time. i appreciated your sense that even if you're given flexibility now the time is so short and what money is left that might not do what you need to have done. when you submitted your budget were you asked to submit a alternative for sequestration for next year? >> no, we were not. >> all right, thank you. >> senator blumenthal is going to yield for a question. >> how do you think the u.s. should respond to this dangerous and unprecedented action by

north korea? >> well, there is nothing more provocative than what the north koreaians did. they did it to coincide with the state of the union. they had several other holidays this week they could have taken advantage of. they tend to like to do this on holidays. in all seriousness, it is very dangerous. we will take action to condemn and get the rest of the international community to condemn this test by north korea. i'm particularly looking to china to join in that. they have a pivot role in influencing the future here for north korea. that is an extremely dangerous situation for us and the chinese have significant influence over it.

they need them to use it. >> thank you. >> thank you mr. chairman and thank you each one of you for your service to the country and your extraordinary performance under very, very difficult conditions, not only fiscal conditions but the nation remains at war. you carrying for the men and women in uniform has impressed me beyond words, your dedication to them, whether it is health care or family pe we and say here that our people are the most important asset and you have lived that concept in that way and you have led by example. i'm very grateful to you. on that score, i want to ask you secretary carter, in terms of people you outline in your testimony the effects of the try

care. that it may mean cuts of $2-$3 billion in the health system for our military men and women may not be able to pay its bills. can you tell us briefly what you see the efeblingts are on the potential sequester for the men and women in uniform? >> i will say something and perhaps i can ask secretary hale to add to that. under this scenario that we fear so much, by the time get to tend of the year we're out of money. it is hard to cut back health care, the way you can cut back depo maintenance or training. you can't just tell people they can't be sick or they can't see a doctor. you can do a little of that with elective procedures and so forth but the reality is by the end of the year, by our estimates a few

billion dollars short and that will mean either, trying to kick bills into the next year or we're going to have to simply cut back on the care we can provide. >> let me ask the secretary. >> we're looking for a way around on what i view as a crisis. our best way by far, either detrigger this. but let me add my voice to that. we need to not do this. >> my understanding is, the navy is continuing to -- with this program of two submarines, is that correct? >> only in 2013. the 2014 we don't have an appropriation bill and a that issue is unresolved for that submarine. the two boats in 2013 are under contract and proceeding is

questionable based on the congressional outcome and the proper authorities. >> i'm very concerned as my colleagues have said about the affect on our defense, our work force, our skilled working men and women who build the joint strike fighter or submarines or all around the united states and maintaining that work force if we're faced with sequester. i thank you for your service. thank you. >> mr. chairman, we talk about furloughs and it is worth noting that we need to find $46 billion under sequestration between now and the end of the year. furloughing everybody, all of our 800,000 pleas for the maximum allowable under the law gets $5 billion.

even if we do that, we have $41 billion to go. that shows up in contracted services. that's where the money will come from. and it will affect all of those people that work for us, works for national defense but they are not employees of the department of defense. we do depend on them, they build our systems, they provide some of the expertise that we can't keep in house. that $41 billion, much of that will go to cutting their work for us. >> if i could add to that? >> yes, general. >> in the army we have to reduce purchase orders over 3,000 small companies. 1,100 are in moderate to high risk of bankruptcy if we execute this year. we're not talking a the impacts

of the small companies that exist all over the large insulations that are dependent upon the insulations as we reduce the dollars that are being spent in every one of our insulations. the depos, we said we're going to cut 5,000 but we believe if sequestration goes into effect it will be woverl 10,000. if we have to move out of our depots, so the impact on our civilian team that we built between depos and the civilian assistance that we get from contracters will be quite significant. it will -- from an army's perspective hit the small companies, which i think is devastating for us. as we move forward. >> that is very important. athank you. >> there's been a number of questions that have been referred to.

there will be additional ones i'm sure. because of the real shortness of time before that sequestration is executed that you respond to those questions within five days. thank you. senator donly. >> thank you mr. chairman and i want to thank you all of you for your service to our country. obviously, in indiana we have a large national guard presence. you touched upon it briefly, but i was wondering if you could detail in terms of our national guard the impact that sequestration will have as we move forward. >> are senator, the major impacts in the near term of sequestration will be the reduction in our maintenance and our maintenance readiness will decline drastically which will require us to depart vehicles. we're so closely tied on the army side with the contracts that they have in their depo

maintenance and a lot of requipment returning from overseas, there is already a backlog. if we furlough or if we have a hiring freeze, we will reduce the amount of maintainers at army level, if which further degrades our services. with that, that time to respond to the disaster if your home states begins to increase. we had 2,500 guardsman from four states that responded, we will be able to do the smaller ones. i'm concerned about the longer regional one, the more stronger catastrophes. >> thank you. do you have a number you can live with in terms of reductions? 487 is too high, what is a

number that you can live with? >> we have said we could live with 487 and we worked very hard last year to accommodate an adjustment that large. as i said, that cut was on top of the cuts that secretary gates imposed were were another several billion dollars. we understand that we need to play a role in deficit reduction. we understand that t country can't afford to give us the amount of money they have been over the last 10, 11 years. what we're saying here today is that -- we're now -- we were able to do that but we're now on the edge in many of our capabilities areas. the suddenness, the scale, and

the arba trareness of the sequester is what causes these effects that you're hearing about today. >> if i would just add and the magnitude. the magnitude of another half trillion dollars on top of the $47 trillion would put the current strategy at wisk. not at risk, it would make it infeasible. the question back to you will be, what strategy will you as a member of the congress will be able to live with to a degraded capability? any additional cuts will change the strategy. >> just want to answer real quick. in terms of suicide prevention programs. we lost, as i mentioned last week, four men and women to suicide, i wonder what the

impact will be on the promises. >> squex has an impact on everything. we've invested money and time to try to get after the issues we've had with suicide and many other issues. we have counselors that we've increased in every one of our insulations that helps our family and soldiers to work through coping mechanisms and problems they have. that will be affected. we will not be able to afford the number of counselors we have today. that is simple. we can't do it. that is one of our high priorities, we will try to sustain it at the highest level possible as we go forward but it has to take a reduction. these are serious as you know. although the effort we put into it we have not put a dent into our suicide problem. this is a deep concern as we

move forward. it also impacts our other family critical program programs. as our families have sacrificed so much, those will have to be reduced as well. we're looking at this carefully to define where the critical ones are, where the ones that are still important but not as critical. but in any case, we will have to reduce all of these programs. >> thank you senator. senator king? >> thank you gentleman. this hearing must feel bizarre to you guys. it is one of the most strange hearings that i've ever been anywhere the portion of the united states government is talking about going out of business because of decisions made somewhere else in the government. senator mccain talked about it owellian i would say it is more "alice in wonderland."

i'm glad you used the word dumb. you gave me license to use it. this whole thing is dumb. march 1 has nothing to do with what is going on in the economy or the credit of the united states, it is a self-imposed deadline. the impacts will be drastic. in my small state of maine, 7,000 jobs is the calculations. george mason university did a study on what the impacts will be state by state. 7,000 jobs in maine, 4,000 in the defense sector. it is a disaster. it is a self-imposed disaster that we don't have to do. it is also hitting the wrong targets. your budget as a percentage of g.d.p. is stable and in fact, it has been declining.

the growth in our budget over time and the deficit problem relates mostly to health care. the sequester has nothing to do with that whatsoever and we have to be having that discussion. it is terrible timing because it is hitting at a time of a fragile economy. i don't know if it could push us back into recession but it won't help with the thousands of layoffs and furloughs. it is going to kill the confidence of the economy in this institution of the united states government that we can make decisions on a timely basis. i believe and some of you have testified today it will increase long-term costs. in the navy by getting rid of multiair procurements the ships will cost more. defer maintenance is not savings, it has to be done eventually. that is what is going to happen here.

so i would, again, associate my comments with senator mccain. i think there is one person who can help us resolve this and that is the president of the united states. he needs to come up with a solution. physical i were him, and believe me, there is no chance that would happen. i would have the helicopter running on the capitol this evening and take the leadership of congress and the leadership of this committee to camp david and say nobody leaves until we get this thing solved. i hope he takes the initiative because right now we're slouching towards a catastrophe in the country, in terms of its economy and military readiness. i thank you for what you've done today and hopefully the message you have given us will have some impact throughout the congress and on the other end of pennsylvania avenue. we can solve this. this is ridiculous you've louse

to be at this stage at this time given the seriousness of the danger. thank you very much. >> i suggest that the senator go and vote and the first vote and try to come back. so he can have his turn. it is the senator and then on our side senator gillibrand. if you can stick to three minutes we might be able to pull this off. >> i join all my colleagues in thanking the panel. it is clear that we need to avoid sequestration because the harm to our military as well as the civilian side and the nonmilitary spending will be quite devastating. so -- it is going to take us

sitting here with the president to get out of this gridlock. we have many situations and the one taken by north korea is troubling. the administration is correct in rebalancing with an emphasis of rebalancing. last week secretary panetta said it would cut naval readiness by a third. i would like to ask about the ability to carry out missions if the sequester is put in place. >> first as i talked about 80%

of our force had to stop training this year. that included or forces -- our forces in hawaii and in other places so they would have degraded capabilities. addition allie, the army is responsible for providing communication support, intelligence support, and logistic cal support. their ability will be affected by sequestration in 2013 and beyond. we've tried defense capability to make sure it is at the highest readiness level but the cuts in family program, cuts in our soldier programs will also impact korea as well. for us it has a significant impact in our ability to on operate in the pacific for the

next several years. >> for germ dempsey, i'm glad -- general dempsey, i'm glad we can protect some of these programs. i think there was mention about other programs, such as counseling, family related programs. how are those programs be negatively impacted by sequestration? >> i should mention, by the way, in the impact in the pacific army, we're in the process of moving united states marine corp. forces into the pacific and the general can speak to that. speak of it this way, base operations, that is to say the support services whether it is any of the things you've

mentioned or, you know, teachers in the clinics or teachers in the school, medical professionals in the about 30% of that will be d graded. -- degraded. >> we might miss the first vote. these are three-minute votes. -- i mean, three-minute questions. senator jill ran. -- gilibrand. >> thank you. on december 2012, senator chuck hagel was the nominee to become the next secretary of defense. he had an interview with the financial times. when he was asked about that outgoing secretary secretary panetta's comments, you replied

as followed, "the defense followed in many ways and has been bloated. it has gotten everything it has wanted the last 10 years and more. we have taken priorities, dollars, programs, policies out of the state department and put them over into defense. the abuse and waste and the fraud is astounding. the pentagon needs to be pared down. me the pentagon to look at their own priorities." we are pressed for times. -- the pentagon needs to look at their own priorities." we are pressed for times. you agree with this general perception that senator hagel -- chuck hagel made. that would be great. >> that is a good question. it is a fair question. i cannot speak for senator hagel.

my interpretation is that it is along the lines of something that secretary gates used to say. we had accumulated over the decade post 9/11 when our budget was going up every year. when your budget goes year and year out, it is fair to say we have a management problem, all of our managers, it was easy to reach for more money to solve your managing problem, whether it is a technical problem in a program or something like that. it was noticeable to me that the logistics in some places that have accumulated over the decades. that is my secretary gates

started his efficiency initiative, which i was part of. our efforts to reform the system improved our performance. in parallel, we have absorbed billions of dollars in budget cuts anyway -- in a way that we could still accomplish the mission of the nation, and that speaks to the fact that we could do with a country needed with less. we have made that accommodation. what we are saying today is that we cannot do that strategy if there are further cuts. we have accommodated substantial budget adjustments relative to a .ew years ago an it we cannot take another major cut and sustain that strategy. >> thank you. i see my time has

expired. i defer to my friend from new york a. the comment was made recently in december. >> thank you for your testimony. it is incredibly distressing to hear the statements you have made today. as a senator from new york, i'm very concerned about emerging pets. new york city is a top target. some programs are being cut. that puts us as great risk. we have a lot of national guard contingencies and operations throughout the state, which is essential for recovery efforts. what an amazing job they did during hurricane sandy. withery concerned that these kind of cuts we are exposing ourselves to very grave vulnerabilities. i also have concern about fiber -- ciber. that is one of our great threats.

i'm worried about our training. we need to keep those resources available. i would like you to briefly talk about if you could quantify how are our wrist elevated because of these cuts? -- risks elevated because of these cuts? >> let me answer. you asked the right question -- how is risk elevated? what we provide is a deterrent against enemies and an assurance of our allies. we cannot and do as much deterrence or assurance as we need to. there is risk. we will be less forward. we will have less forces to provide that assurance, or meaning the risk go up and we could find ourselves what i

described as vulnerable to coercion. any chiefs that want to comment? >> senator, i applied the great work of new york around sandy and this past weekend. as we continue to drawdown in our ability to train at regional hubs and the combat training centers, we will reduce the efficiency of our leaders and of our operators. many times when we respond to a situation like hurricane sandy, those helicopters are flying in extreme missions. it would affect their ability to fly. >> senator, he asked that you answer the question for the record. sorry for the interruption, senator. >> my time expired.

my second question -- al qaeda needed afghanistan as a base of operation to plan and execute 9/11. we have had their presence found a lover the world. i know the president -- have found -- have been found all over the world. i know the president will be pulling troops out of afghanistan. do you imagine having a lighter footprint long-term to be able to deal with these emerging threats will divide will be something that you recognize as a way to to shift money and in what way? >> it is part of our strategy to maintain what we call a liked footprint residence in

many parts of the world where terrorist groups could seek ac paving. that is exactly part -- good seek a safe haven. that is exactly part of our strategy. there were discussions -- decisions we were discussing earlier. our decision if the sequester does not go through would be to maintain or even slightly increased the number of special operation forces so that they could maintain that wider global footprint as things in afghanistan wind down. >> billing thing i would add is that the question you ask is exactly what this group at the table does. balance global responsibilities and looking at ways to do things. sometimes directly ourselves and sometimes through partners in a region during -- reading.

-- region. >> we will call a short hearing until the chairman returns. thank you. >> this meeting will come back to order. a senator will put his questions on the record. he has kindly consented to do that. i thank the panel for the powerful testimony. it is incumbent upon those of us who are elect did to do that country's business to avoid sequestration and avoid the

year-long c.r. as well. they are not intended to become operative. they are intended to force us to do what needs to be done. hopefully they can still perform that role. as of right now, that it remains. it is incumbent upon the congress and the president to remove that right -- both rights because they are real threats to the will be of this country both in terms of our security and also in terms of other important programs that the federal government helps to fund. again, we appreciate answers within five days of these questions because of the time constraints that we have. we are grateful to you for your service and for those whom you serve and their families. we will stand adjourned.

[gavel] [captions copyright national cable satellite corp. 2013] [captioning performed by the national captioning institute] >> i think what has happened is incredibly serious. because of that, we have to take everything under consideration.

>> should students be considering something else for next to marfall? >> i hope not. i think it is important that we recruit the best. we need the best kids possible. .hat is very important durin >> soldiers would be trained and --

>> it would take the second group longer to get ready. that could delay their deployment. >> do you think that will have a substantial impact on the career flow? do you have a large pool of soldiers who are not eligible because they did not get the training? >> i think we will have to wait and see the long-term impacts. we will have to cancel some of our schools. we will not be able to send everyone to school. it could cause issues. we are trying to my the gate that as much as possible. -- mitigate that as much as

possible he. it is a combination of both. >> what do you think will be the impact on the community? >> i think significantly. billions of dollars of impact on surrounding communities. as we reduce the grounds, it will impact all of the small businesses that surround all of this ie facilities. >> will bases be closed? >> if we have to execute full sequestration, we would have to look at that. we will have to see if we can save money by reducing the structure.

it is problematic. because we are reducing the infrastructure, any decision we make -- [indiscernible] >> if they implement the size of cuts, they had to do it early or he comes inefficient. -- they have to do it efficiently or it becomes inefficient. >> where do you stand? >> i think this is a really important issue. i think for a lot of reasons people have not paid enough attention to it.

it could be one year or two years from now you re. i'm concerned that we have not taken action. i hope that will change. thank you. >> the economy and sequestration were the topic of the weekly addresses today. president obama talk about the puzzles about growing the economy and alabama representative delivered the republican address just and talked about sequestration and the republican alternative in the house. >> this week i have been traveling across the north carolina and georgia and went to my hometown of chicago. i talked with folks about the important task i laid out in my state of the union address. state of the union address.