sexual assault in the military, and budget cuts. they were joined by defense department comptroller, robert hale. this is just under two hours. >> good morning. the subcommittee meets this morning. i am pleased to welcome the secretary of defense and our form or colleague, the honorable chuck hagel. chairman of joint chiefs of staff, general dempsey, and the comptroller of the department of defense. we will speak today about budgets and more importantly about people. all of the services secretary said chiefs have appeared before the subcommittee this year and have expressed great concern ratethe sequestration

particularly how has the potential to hurt the nation's defense. the cost of fuel, overseas contingency accounts have reduced the department operation bait bentz by $26 billion in this fiscal year. the reason on the best running the subcommittee is reviewing dollarsfset 7.3 billion of the shortfall, but the army would still have a $3.5 billion bill for the war in afghanistan with limited flexibility in paying it. i would like to know the options being considered to fill this gap as well as more detail. for fiscal year 2014, the presence budget request $515 billion in base funding, 75 weight five early in dollars for oh go. you initiate a review to examine options for how the department would absorb the $52 billion in additional cuts under sequestration. i want to hear an update today and i'm sure i will. we cannot solve the budget

issues without being smarter and without making certain we have spending cuts that are reasonable. two weeks ago, i discussed the armies track record about the armies track record. an average of $1 billion spent every year for decades on programs that were later canceled. tomorrow, i am holding a hearing on the tuition assistance program, again to make sure that the department spending is focused on getting the best and for the buck. next week tom i am holding hearing on the joint strike fighter. quite simply, we don't have the funds for business as usual. if we wish to make investments across the government for a competitive workforce. i know you agree in the subcommittee is committed to working with you. i also want to hear from you on personnel. general dempsey, you said last

year at the national press club if we don't get the people right, the rest of it won't matter. that says it all from where i am sitting. this weekend, i attended a ceremony for a national guard unit in my hometown of springfield illinois. they just returned from theatre gateway operations in kuwait. it was a great illustration of why people are so important. , 10ittle over nine months soldiers to cure the needs of 100,000 service members. they also saw a little bit of everything, redeployments, medical issues, sexual assault cases. it was up to them to be leaders in the moment and they were. we are proud of the work being done by all of our military and today i would like to i -- i would like to especially salute the guard and reserve units who have taken up the responsibility so admirably. that leadership is what we need to maintain, but we have many challenges. how do we maintain the most skilled leaders across services? how do we reserve the guards

tremendous value as an operational reserve? air wingnce, the 182nd in florida is about to receive it six outstanding unit award since 9/11. nationalted, this guard unit, 300,000 combat missions while maintaining an exceptional 94 .7% mission capable rating. the issue of suicide -- last year we saw a death i suicide outstripped the number of troop combat deaths. in 2013, the is a suicide every 18 hours across our force. finally, sexual assault. this issue really threatens to undermine basic levels of trust in the military between personnel and trust in commanders to maintain discipline. i know neither of you take these incidents lightly, but the time for action is long overdue. there was a story that came fromto national guard unit

kuwait, the story of a young woman who was alleging as a member of the armed services as she was a victim of sexual assault. she was transferred to another unit before she was being sent back to the states to testify. the treatment she received during the transfer was awful. she was placed in a living arrangement where she literally had to walk through the men's latrine to get to the women's latrine grade this sexual assault victim was shattered by the experience. it was noteworthy that the prosecutor in the case said the first kind person she ran into was from this national guard unit who met with her in kuwait and tried to study -- tried to steady her nerves as she faced one of the biggest challenges in her life grade this culture has to change. these concerns cannot be taken to say we have a broken force, we don't. we have the best and strongest military in the world. i am proud to play a small role in the subcommittee to make sure they have what is necessary to be successful in keeping american -- keeping america

safe. you have many questions before i turn it over to senator cochran for opening remarks. senator andank you now secretary hagel and mr. dempsey for your service to our nation. mr. chairman, i am pleased to welcome -- lee's to join you to welcome secretary defense and joint chiefs of staff to review the 2014 budget request. in the current the school environment and the uncertainty of future funding levels, we need to know the consequences of sequestration and its impact on the department of defense and ultimately on our national security interests. our subcommittee has learned from the service chiefs who have testified and other department of defense officials about the challenges facing our military today, specifically in fiscal

year 2014. we thank you for your service and we welcome your suggestions. >> at this point, i would like to recognize secretary of defense hagel. your entire written statement will be made part of the record. chairman durbin, ranking number cochran, distinguished members of the subcommittee, thank you for the opportunity to discuss the presidents fy 2014 budget request for the department of defense. appreciate this subcommittee's continued support of our men and women in uniform and their civilian workforce and their families during -- and their families. as we discussed budget, numbers and strategic priorities, we will not lose sight of these women. their well-being depends on the incisions we make in washington.

526president has requested $.6 billion for the department 79.414 base budget and billion dollars for overseas contingency operations. my written statement, mr. chairman, contains details on both budget requests. this morning, allow me to very briefly focus on three areas before i take your questions. first, they can did you budget challenges facing the department and 2013 as as a result of sequestration, as you have noted as well as senator cochran. .econd, the 2014 budget request and third, how the department is preparing for the future budget uncertainty trade and the prospect of certain reduced resources as a result of sequestration. the department has been forced to implement deep and abrupt cuts in the current fiscal year because of sequestration.

according to the latest guidance, the department must cut dirty $7 billion in spending for the remainder of this fiscal year. with our internal decision to shift the impact of sequestration away from those serving in harms way and force readiness, the cuts fall heavily on dod accounts that train and equip those who will deploy in the future. the department is experiencing higher wartime costs than expected. as a result of these factors, the department is facing a than $30 of more billion in our operations and maintenance account for 2013. to deal with this shortfall, the department has cut back on facilities maintenance, instituted hiring freezes, cut overhead spending, reduced important but lower priority programs, directed for lows of 700,000 civilian employees and submitted a $9.6 billion

request to congress. we ask this simply for your assistance in providing rapid review and approval of this critical request. given the scale of the shortfall, the reprogramming we have taken to cut spending are not enough. while we have protected spending to sustain the war effort and defend america's vital strategic interest, the department activities will be significantly disrupted for the rest of the year. each of the military services has begun to reduce training and maintenance of non-deployable operating forces. as you both noted, you had the chiefs before this committee and they have made some significant, detailed reservations and accounted for these cuts. for example, the army has stopped rotations at its key combat training centers for all but deploying units.

more than a dozen combat coded air force squadrons either already have or will soon stop flying. the navy has curtailed many deployments. to avoid more significant reductions to military readiness, i directed furloughs for 11 days for most of the departments civilian personnel. i made this decision reluctantly. i made it reluctantly because i recognize the significant hardship this places on civilian personnel across our country. especially on their families great but the current budget environment is requiring difficult decisions and options. let me turn to fy 2014. the president's 2014 budget continues to implement the $487 billion in spending reductions over the next 10 years agreed to in the budget control act of 2011.

if the sequester related provisions are not changed, fy 2014 funding for national defense programs will be subject to an additional $52 billion of reduction in dod funding. if there are no changes, continued sequestration will result in 500 billion dollars in additional reductions over the next 10 years. fy 2014 budget replaces sequestration and gives the department the time and flexibility to plan and implement ending reductions wisely and responsibly. in particular, this budget enables the department to support troops still at war in afghanistan, protect readiness, modernize the military's agenting webbing's inventory in keeping with the president's strategic guidance and sustained a high quality of the all volunteer force that you noted in general dempsey's speech at the national press club.

this budget also continues the approach of targeting growing costs and support areas like overhead, acquisition, pay and benefits. over the next five years, dod has identified $34 billion in new savings across these categories. this includes weapon programs restructuring and terminations that will achieve $8.2 billion in savings, slow down and military construction and reductions in other lower priority programs. our military compensation package preserves the world- class pay and benefits while putting our military on a more sustainable path to the future. the tri-es changes to care program to bring the beneficiary cost share closer to the levels and visioned when the program was first implement it. the department of defense must be able to eliminate excess infrastructure. the president 2014 budget requests authorization for one

round of ace realignment and closure and 2014. , it is anrecognize imperfect process. there are upfront costs. but in the long-term, there are significant savings. the previous rounds are saving $12 billion annually. we cannot adjust -- we cannot justify supporting infrastructure where we are reducing our force structure. thanod has divested more 400 foreign bases and operations that we are on schedule to consolidate over 20 more overseas operations. although there are clearly opportunities to maintain savings, consolidations and reducing overhead, the scale of reductions will require changes. the fiscal 24 budget request seeks to further align programs

with the budgets strategic guidance. this budget investing key elements of our defense strategy, including implementing our balance to the asia-pacific region, maintaining a safe and secure nuclear stockpile, increasing and cyber capabilities and sustaining the growth of special operations courses grade finally, this budget seeks to have a combat ready force and sustain the all volunteer force. last point, the fy 2014 budget reflects dod's best efforts to matt and ways and means during a time of very intense fiscal uncertainty. it is obvious that significant changes to the departments topline spending would require changes to this budget plan.

consequently, i directed, as you noted, a strategic choices and management review in order to assess the potential impact of further reductions and plan for those continued reductions. i have received the initial internal results of this review and i am currently reviewing those options and choices. the defense department will continue to find new ways to operate more affordably, efficiently, and effectively. however, continued cuts on this scale and the timeline of sequestration will require significant reductions in military capabilities and the scope of our activities around the world. the president's fy 2014 budget sustains our military strength in an environment of constrained resources, and giving dod the time and flexibility to make the necessary reductions and adjustments over 10 years. ,ard choices, mr. chairman

will have to be made over these next few years. in the past, many modest reforms to personnel and benefits along with efforts to reduce infrastructure and restructure acquisition programs were met with fierce political resistance. they were never implemented. we are now in a different fiscal environment. new realities are forcing us to more fully confront these tough and painful choices. tomake the reforms necessary sustain our military strength and meet these new and complicated threats, we will have to do things differently. the continuedire partnership of congress. thank you. >> thank you great general dempsey, we have quite a turnout here this morning. we welcome you doubt to give your testimony. your full written statement will be made part of the record. .> thank you distinguished members of the

committee, thank you for this opportunity to discuss the budget proposal for fiscal year 2014. his hearing comes during a time of extraordinary uncertainty. risks to our nations security are increasing while the resources for an readiness of our force is decreasing. the will to win of our servicemen and women remains undaunted but the means to prepare them are becoming more uncertain by the day. this budget was purpose-built to keep our nation immune from coercion. investmentponsible in an unrivaled joint force that's ready for options in a dangerous unnumbered edible future. it supports are forward deployed operations, upholds funding for emerging capabilities like ciber and resources the conventional and nuclear forces that have proven essential to our defense. most importantly, it protects our investments in the true decisive advantage we enjoy, and that is our people.

,t treats being the best lead best trained military as the nonnegotiable imperative. it also makes our wounded warriors -- makes sure our wounded warriors receive first- class care. there are some things this budget does not do. it does not reflect the full sequestration amount. it gives us more time to implement new cuts. its attendant risks to our national security will gain clarity in the weeks ahead. the senate has asked us to provide our assessment of the impact on the joint force by the first of july. nor does the budget account for the cost of restoring lost readiness. we don't know the full cost to recover from the readiness shortfalls were experiencing this fiscal year. we continue to curtail or cancel training and exercises across all the services in four units

that are not preparing to deploy. as a result, we are less ready every day for an unforeseen crisis were contingency operation. in effect, we are foreclosing on options. is more expensive to come ready than to stay ready. this means the cost to recover lost readiness will compete in the next few years with those costs for building a joint force that we think we need for 2020. as our military power becomes or could become less sustainable, it will become less credible. risk breaking commitments and losing the confidence of our partners and allies, our defense industrial base, and our men and women in uniform and their families. this outcome is not inevitable. working together we can of hold the readiness and help of the force at an affordable cost. to do this we need the certainty of a predictable funding stream, a reliable top line. we need time to implement trade

offs and forced structure of modernization, compensation, and readiness, and the readiness to keep the force in balance. but cannot afford to postpone essential reforms such as compensation and health care. both should be allowed to grow more gradually. we should stop pouring money into excess facilities and unwanted weapons. real institutional reform is the only way to avoid repeating the mistakes of past drawdowns. we have an opportunity and i would suggest an obligation to do this and to account for any future budget in order to restore confidence. we have within us to stay strong as a global leader and a reliable player. thank you members of this committee for all you have done in the past to support our military. we are counting on you to continue to do so, and i look forward to your questions.

>> this morning front page of newspapers across the u.s. tells the story of edward snowden, who is an employee working for one of our premier national security agencies as a contract employee. the story that is told us that he is a high school dropouts, that he did not finish his military obligation and dropped out of committee college. it is also reported that he is being paid in the range of $200,000 a year to contract -- as a contract employee. i continue to be concerned about the cost of the contractor work force, not just in the u.s.a. but in the department of defense. recent reports have emphasized that the average contract employee costs two-three times as much as the average dod civilian employee for performing similar work. according to dot information of fy 10, contract employees comprise 22% of your

department's work force but accounted for 50% of its costs. 250 four dollars billion. now let's take a look at what is happening when it comes to the treatment of the work force. i wholeheartedly support the idea of exempting uniform personnel from sequestration cuts. we owe it to these men and women not to put a hardship on them when they are literally risking their lives for america. then if we take a look at the civilian work force in the department of defense, here is what we find. there has not been a civilian pay raise since 2011. i question to you is this. if we are setting out to save money, has the civilian hiring freeze resulted in more or fewer contract employees, and if so, how are you tracking the cost ramifications? as contractor pay increase during the civilian hiring freeze? >> mr. chairman, i will defer the specific numbers that you

ask as a question to the comptroller here in a moment. that we address your larger context of your question on contractors. we are currently reviewing all contractors, all the contracts we have, we have no choice, for all the obvious reasons. contractors are part of any institution. we need them. certainly -- certain skills and expertise. there is no question that we are going to have to make some rather significant adjustments, which we are. by the way, the furlough process does include contractors. in includes companies, acquisitions, contracts. your specific questions on the gaoo report, let me make one other point.

i do not disagree with any of your general analysis on contractors. i think you look at the build up over the last 12 years, and i was in this body during a significant amount of that, and as that build up occurred, the money flowed in two different departments and institutions, because we felt they were required for national security of this country, there will come a time where we have to make some hard choices and review them. if mr. hale would like to present a response on some of the significant numbers, i would be happy to do that. >> we are taking a sequestration cut in fiscal 13 that will come out of contractors, about $2 billion from furloughs, some from a hiring freeze is that will affect our civilian

employees. the majority will come out of contractors so we will see a drop in contractors. it will be a sharp drop. >> do you disputes this finding, the average contract employee cost two-three times as much as the ever civilian employee? >> it sounds about right. whether or not a contractor civilian is cheaper or better really depends on the circumstances. in some cases we simply do not have the skills and the department of defense that we need. i am hiring a lot of contractors because they know how to do audits. we do not yet. if you are going to have a job over a long time, you are probably better off to have a civilian government employee do it. >> when i was on the bowles- simpson commission we ask how many contract employees work for the department of defense and he said i cannot tell you, i just do not know. >> i will be the best number we

have. it is partly true because the feed to a fixed-price contract, the contractor has no obligation to tell you how many people are doing it. they just do the work and if it is satisfactory, you pay them. we are asking them to tell us how many people so we know better. we have about 700,000 service contractors right now, that is our best current estimate. >> i have found a sense of disdain toward civilian dod employees. if there is going to be -- if we want to save money it should not be at the expense of those who are willing to work in the civil service. >> you will not get any argument from me on that. >> i don't know whether to turn to my right or left. i will turn to senator mikulski. [laughter]

>> mr. chairman, in reviewing the request before the committee, i notice there is an operation and maintenance shortfall for the army's request in excess of $8 billion in the overseas contingency operations and maintenance account. why are we seeing such a huge difference between what is being requested and what is available for these activities? why this big disparity? >> i will respond generally and then asked the comptroller to be more specific on the accounts. i noted in my statement here this morning that the costs essentially of transitioning and withdrawing from afghanistan,

principally an army assignment as has been the situation the last 12 years, the army has had the ball of the manpower responsibilities in these wars in iraq and afghanistan. as we are unwinding those and equipment and maintenance, to get that equipment out, is not easy to get out, for a lot of reasons. the cost as been significantly more than what had been anticipated over the last two years. that is part of it, but there are other parts to it that i will ask the comptroller to dress more specifically, which will address exactly your numbers. >> the shortfall you are referring to is in fiscal 13 and the army is short as much as a billion dollars. we do these estimates two years in the advance and it is hard to guess what a war is going to cost that far in advance. sometimes we have asked for too

much money, but this year, regrettably, we did not ask for enough. we underestimated the level of operating tempo that would incur. we underestimated the transportation costs, as the secretary alluded to, to get equipment out. and a variety of other factors. so we are short as much as a billion dollars, coming at a time when sequestration has greatly limited our ability to cover that. we need this reprogramming, full approval or close. >> we appreciate your efforts to hold down the cost and try to eliminate unnecessary wasteful spending in this budget, even though we are involved in military operations and those are costly, more costly than when you do not have a war going on.

we understand that, but it struck me as a pretty high number and i was curious as to what the details were. in 2012, the department of defense -- i guess this is directed to the secretary. the department of defense announced a strategy that would shift focus on military capability to be pacific theater. since that time, the department has been forced to deal with a lot of uncertainty, sequestration included, and events such as what is happening in north korea and how serious is that, and are we going to incur knowable amounts of additional spending for dealing with that stressful area of the world? shipbuilding four and previous warship inventory -- if you look at some of the parts of the

budget that he would think might come in for increases, there will be decreases. the 30-year shipbuilding plant projects amphibious warship inventory will fall to 28 ships in fiscal year 2013. this could have a negative impact on our ability to protect our interests in the asia- pacific region. what is your assessment of this? >> thank you. i will respond and then i know general dnc will want to respond as well. first, your initial question about additional operating expenses based on threats in the asia-pacific, you mentioned specifically north korea.

we have had to place asset differently, reposition resources, capabilities over the last few months, essentially since i have been over there a little more than three months, a good deal of my time has been devoted to that part of the world, and that particular issue of north korea has consumed a good amount of it. so there have been additional cost and there may well be additional costs. part of what the comptroller is referring to in his general commentary on answering the chairman's question about uncertainties. you plan for uncertainties but you never know. we have had to protect our assets there, whether it is guam, hawaii, south korea. we need to continue to keep all options available for the president if we would be

required to take any kind of additional action. second, ship building. yes, there will be a difference in 2015 as we work toward the 300-ship navy and we are on course for that. the budget numbers play that out. you mentioned specifically why is there a decrease in some of these areas. there are decreases in most areas, as you know, because the resources or not there. so tough decisions have had to be made, and more will come. more in line with our strategies and commitments and our guidance, we are committed to that 300-ship navy. we are finding new capabilities in these new ships that we did not have previously, but as you go through that cycle of 30 years, and if the comptroller wants to go into more specifics

he can, you will find a couple of those years will dip because we are retiring old ships that would cost more to maintain them, as we are acquiring new technologies and ships. let me stop there and ask general dempsey if he would like to respond. >> if you are asking if the sequestration level cuts will have an effect in our ability to produce capability and capacity, absolutely. we are talking about 01 $0.20 trillion difference when you add up what was done in the gates efficiencies and sequestration. $1.2 trillion is going to leave a mark on what we plan to do. this strategic management review that the secretary does lead us through will allow us to identify the point at which the

defense strategic guidance that referred to from last year, where we will potentially render it in feasible. that work should become clear in the weeks ahead. >> thank you, senator cochran. chairwoman mikulski. >> thank you for your questions about mr. snowden and all of maryland is reeling from this. his mother's name was disclosed, workplace and home address. that woman had nothing to do with this incident and now she's being harassed. people are asking, what is the kid who could not make through a community college should make 200 grant a year and be exposed to some of our most significant secrets.

it is good to see you, secretary hegel and general dempsey. i want to knowledge all the work that you do and to stress -- the stress that you are under. it is enough to keep any one functioning at a 36-hour day. i just want to acknowledge we are in a very difficult transitional time. today i want to focus my question on the truth, their families, and their well-being. secretary hagel, i want to thank you for your participation, your prompt response, we look forward to working with you to cracked

the code on the military backlog. second is health care. as you recall in our confirmation hearing, i had hoped to work on these issues and i look forward to working with these issues with you. mr. chairman, there is in the budget request for something called a healthy based initiative. this is working on all the resources of the federal government, working with the private sector and the state to create a healthy base related to everything from nutrition, physical fitness -- i will be working with the chairman to fund it. and now you have selected 13 site, there is a national geographic tour. there are three in virginia and four in maryland. not a good thing to do. fort meade is in the news every day.

there are 39,000 employees, military and civilian contractors there. could we take a look at that? i would like to talk more about health care, but let me move on to something else, which is sexual assault. i have been working on this issue for 25 years, both as a member of the senate -- we had a hearing last week and there was robust response. let me tell you my focus. my focus is on the service academies. i focus on the training of this generation and the next generation of leaders. secretary hagel, when i read your testimony, you outlined several steps that you are taking. i wish to acknowledge those steps and appreciate them. you talk about developing military commanders performance.

i support that. i support everything you have in your testimony. but let's go to the service academies. i agree that leadership trains leadership. the tone is set by the superintendent of the academy. as you look at how to evaluate military members performance and establish a command, of dignity and respect, what you saying your testimony, incorporating sexual assault prevention in the selection of superintendents for the united states military, the now are would you consider really evaluating their performance, how they did their job and how they retain their jobs, that this be a matter that is included in the command performance evaluation. >> absolutely. yes. as you know, there is an evaluation process before any of

these individuals are given these assignments. however, to your point, there has been merrill emphasis on this issue, but that is -- there has been very little emphasis on this issue. training, attitudes, the entire context of this issue. i have redirected that effort and recertified and revaluing of our senior people from recruiters, all the sexual prevention office heads, anybody in those offices across the board. this also includes all our leaders at the academies, the superintendent, the commandants, and that will go down into instructors as well. that is a proponent of this problem but it is not the only part of the problem. >> i would like to focus on the

superintendent of the academies. for 25 years, i have watched the superintendent's and i have seen some duds. 50% of the general's graduated from west point. 90% of apple's graduated from the naval academy. it shows what the pipeline of leadership is. that is why we spent $400,000 educating these very talented men and women. they need leadership that is contemporary and understands the contemporary work force. i am very concerned that in their selection for being a superintendent, what this is. i support everything having your testimony, but i need a focus on the superintendent. could you give us a list of the

criteria on selecting the superintendent? >> we will provide that to the committee and once again have my absolute commitment, and our entire leadership, on getting this right. we will get it right. i understand exactly what you are saying and we will provide that information. >> my time is up. every year you get a report that was mandated in the dod authorization when the sexual assault at the service academies the board of visitors is enormously uneven. there are inconsistent policies, in consistent implementation of the policies. could we really focus on the service academy? i could go through the numbers and statistics. >> we will, we are, and we will continue to update the committee. we would be happy to come and give you a briefing on

specifically this issue any time your request. >> would you support senate confirmation of the superintendents for the service academies? >> i don't have any problem with that at all. >> thank you. >> thank you, mr. chairman. first, i want to associate myself with the comments of the chairman of ayer appropriations committee. it seems to me that her. about the service academy are very important and i appreciate her bringing them up today. secretary hagel, you testified this morning that the shortfall in the military readiness accounts for the remainder of this fiscal year is about $30 billion. since unanticipated work cut its

not per sequester account for at least 25%, and perhaps up to one-third of the shortfall in the readiness account, and about 50% of the shortfall in the army readiness accounts, should we not be addressing this portion of the fiscal 13 budget shortfall with a supplemental oco request? we understand that war is uncertain and it is extraordinarily difficult to accurately estimate but the costs are going to be, particularly in the situation we find ourselves in in iraq and afghanistan. but there is a direct link between the unexpected, unfunded war costs and the furloughs, because they are funded from the

same account, the readiness accounts. you mentioned, as has secretary hale, the reprogramming request that you have before our committee, but that doesn't give you more funding, it just allows you to shift funding around. my question, mr. secretary, is this. will the department be submitting a supplemental request to congress to address a higher than anticipated war costs? >> senator collins, as you are aware, one supplemental to address this issue is not going to fix this problem. the only thing that will fix this problem is a change in the sequestration, as i know you have heard countless times.

now to your specific question. we have not considered a supplemental. i have not discussed a supplemental. if that occurs, then we would look at it. but that is about as far as i can go. we just have not moved at that as a possibility. well, i would encourage you to do so. also, i do not support the sequestration process and believe we should be setting priorities. i am very worried about the detrimental impact on the department of defense. the fact is, that is not the total calls up the shortfall in the readiness account, and overall, across the department's come up between approximately one-third of the shortfall is not due to sequestration it is due to higher than anticipated war costs.

even if we abolish sequestration today, that does not solve the problem of your legitimately needing more money to deal with the unanticipated, underestimated war costs. so i would ask you to look at the possibility of submitting a supplemental request. let me just make one more comment, to talk about the 300- ship navy being on track, and i am happy to hear that given the new defense policy focusing on the pacific that the president has revealed, the assistant secretary of the navy recently testified about the 10-ship plan for destroyers and that the marginal cost to acquire that

10th destroyer of makes it an extremely affordable acquisition, and would contribute to the cost efficiency of the overall multi year. in fact, due to sequestration, the department is about $306 million short, despite the fact that a dish for your cost considerably more than that, but there are real economies of scale due to the multi-year procurement plans that the congress has approved. do you support continuing with that multi-year procurement plan? >> i am familiar with the specific situation.

we are currently closely examining whether a commitment to the 10th ship should be made, for the reasons you just mentioned. the decision, as far as i know, has not been made yet. i will ask mr. hale to respond to this. it is part of the overall larger strategic interest, as we are moving 60% of our naval assets into the asia-pacific area. do you want to respond? >> there are specific problems with sequestration. we are trying to solve them. there is a small amount of money in this program to help. but we have to look at this in light of what happens in overall sequestration before we make the final decision. we would like to finish it. >> thank you, mr. chairman. >> i could not help but think of one of the earlier questions about sexual misconduct. at the naval academy and

elsewhere, at least it was reported in the press, in most of those cases where nothing was done, that it was outside a military reservation. local prosecutors would be prosecuting people. there would be people going to jail. i would hope any local prosecutor who knew what they were doing would not be taking the position almost of blaming the victims that we saw in some of these cases. i mention that because i know there is some reluctance expressed in making the chain of command more responsive. but with all of you here, let me tell you, there is some thought, and this is a matter before the judiciary committee, to removing

the exemption, and allowing state prosecutors to move in on those cases. i realize that would be quite controversial. but i throw that out as a matter as a warning to the military chain of command that this -- if they do things as they have always been done, it is not acceptable. there are many of us on the judiciary committee who had the opportunity to serve as prosecutors, of parties, in earlier careers. i just throw that out. i am not looking for an answer. i know the armed services committee and others will get it. mr. secretary, i was heartened

by your very, very strong statement in this area. general dempsey, i know of your concern. i will be revisiting this with you privately. but it is something that we are considering. i think we have talked about what our troops have accomplished in afghanistan. i include the 86th brigade. they fought with great bravery. several lost their lives. with syria, iraq, and much of the muslim world descending into sectarianism, i wonder whether afghanistan faces a similar fate. i ask you -- can our efforts be sustained in the afghan army when we leave?

and is it possible that we leave earlier than we now plan? >> thank you, senator leahy. a brief response to your sexual assault comments. you summarized it pretty well. you know what i have done, in cooperation with our chiefs. there are going to have to be changes made. there will be changes made. but as we make those changes and work with congress on this, we need to be sure that the consequences that will come from one at that -- from whatever decisions are made by congress to make those adjustments we need to make, and you know and agree with that, in many ways, that they are thoughtful. as you know, the congress instructed the department of defense in 2013 to put together

a panel, which congress appointed 4 representatives to that panel. department of defense, five are firstt panel.that panel will hs meeting in the next two weeks. i have talked with them a couple of times. the objective of that panel is to go down to every aspect of this issue -- chain of command, authority -- and make recommendations to the congress and the department of defense on what needs to be changed, what they think needs to be changed. these are qualified, experienced people, men and women of all backgrounds. i add that as a last point. we are working, to this point, very closely with them. as to questions on afghanistan, let me respond, and then i will ask general dempsey for his

thoughts. we are building toward a transition with our allies. i was in belgium last week. this issue was very much a focus of the 50 member isap afghanistan. many will continue to have a role in a transition effort, which we will lead, the united states. as you know, it is train, assist, and advise. a number of countries came forward at the nato meeting and committed -- germany, italy. the turks were looking at the consideration of being a framework nation. i mention that, because this is going to continue to be an international effort. they your question, can succeed, that is the question. we have a very strong feeling

that they can, they will. they are going through a very difficult fighting system now, as you know, every day. our lead combat role is now extinguished. there will be a formal handover to that effect in two weeks in kabul. the secretary-general of nato will be there to represent the isaf forces of nato. we continue to help with their army, navy, police. big problems, questions, uncertainty, of course. but we are doing everything we can to assist that successful transition, and a peaceful, prosperous, and free afghanistan. longerll submit a answer, for the record, in deference to your time. one could make a strong argument that what hangs in the balance in afghanistan right now is the confidence of the afghan

security forces, and of the afghan people in them to preserve a measure of stability after our departure. i think that everything we do, in the next year and a half -- that is really what we are talking about now -- should serve to reinforce their confidence -- a bilateral security agreement, commitment to our enduring presence, accelerating the enablers we provide them. anything we do to discourage that will probably make it a fake accomplish -- a fait accompli that they will not succeed. >> thank you. i am concerned that, for example, in the past, we have cut things off. secretary gates shut down the joint forces command. they moved most of it. i do have a specific question of what happens. are things shut down, or moved

around? general dempsey, i look forward to hearing your answer. i understand it is a very complex issue, but i also worry about just what is happening there. and, well, my time is up. >> thank you, senator. tomr. senator, welcome back the senate where you spent a lot of years. i want to get in the area of north korea. a lot of us are very concerned, and i know you are, about the developments in korea. they run hot, and it cools off a little bit, that we have a very unstable regime, i believe, there. what role could china play if they chose to do so, with north korea? they have, at times. they have let them go at times. and how important do you think

the developments in korea are to our national security? >> senator shelby, thank you. thea, as you all know, president spent a couple of days with the new chinese president in california a few days ago. obviously, north korea was a significant heart of that agenda. i was in singapore about a week ago, sharing a dialogue. exactwith my -- not level, minister of defense level, but senior representatives from the ministry of defense. general dempsey has met with his counterpart. we have a number of tracks we are working with the chinese on. i say that because specifically

it will address your point about north korea. there is very little question that the chinese have more influence with north korea than any country. without veering off into the secretary of states province -- state's province, i would say the chinese have been helpful in dealing with the north koreans. we have different issues, different agendas, different interests. we also have many of the same interests that are parallel and intersect. north korea is one. how dangerous is north korea? dangerous in the sense they are unpredictable. they have capacities. we know that. we have allies there, starting right on the border, the dmz, where there are allies in south korea. we know the kind of armaments

and artillery they have lined up, the north koreans, against soul -- seoul. weapons capacity. japan. that is why responded, the last three months, the way we did, to protect our assets. some other, which the committee is familiar with, decisions we have made, the president has decided on. we have to be prepared for every option, every contingency. we see this up and down diplomatic track. there will be something occur, and then there is a diplomatic track. the south koreans and north koreans sat down for the first time in six years a few days ago. i think any of those dialogues in any of those venues are helpful, important. but north korea remains a dangerous and unpredictable country, and we need to be prepared for that. i do not know if general dempsey has any response to that. >> you asked about our national

security interests on the korean peninsula. one, to defend the homeland. they are seeking to acquire the ability to reach some of our territorial interests in the pacific. we have a clear interest in that national security. secondly, preserve the armistice. we are responsible by treaty obligation to preserve the armistice that has existed there for 60 years. related to that, we have 29,000 servicemen and women and about 4000 families living on the peninsula to achieve that purpose. third, they are a risk to our security in the way they proliferate technology, whether it is nuclear technology or ballistic missile technology. fourth, i would say we always have an interest in ensuring secure and confident allies. our commitment to our republic of korea allies is a reflection

of our commitment to the region. >> i just have a few seconds. you might have longer to answer. cybersecurity. we are all interested in cybersecurity for industries, private businesses, and so forth. we are being attacked everywhere. i know you are being attacked through defense installations everywhere. how important to -- i think we all know the basic answer -- cybersecurity is important to services. so much of what you do is waste on the internet. can you comment? >> i will. in the interest of time, i will be brief. it is one of the few areas of the budget where we have asked

for increase, for obvious reasons. i have said many times -- i said it when i was in the senate. i think the cyber threat is probably the most insidious, dangerous threat overall to this country, and there are a lot of threats. but it crosses every line. you do not know where it is coming from. you do not know when it is coming. this is a very significant threat, and i think everyone understands that in the congress. we do. as you noted, it takes down industrial-based secrets. it can essentially paralyzed economies. >> it can change the whole equation. >> it could change everything. as you know, the president spent considerable time with the chinese president on this issue. i made, in my statements and my speech in the dialogue in singapore last week -- i made that a big part of my speech. i specifically noted that we are aware that many of these attacks are emanating from china. i do not think we can minimize

this threat. it is going to be with us. threat- it is as big a as i think we have out there, in every way, to our country. it is not just unique to this country. it is unique to every country. >> i have other questions to submit for the record, if i could. >> senator reed? >> you and your colleagues have made difficult decisions in this budget. one of them takes us back to the benefits, and particularly care fees. one of the realities is that there are expectations in the active and retired force, based on great sacrifice and service, that they would receive these benefits or something equivalent to it. 10 you give us the rationale again about what is compelling you to take these steps? >> yes, i can.

i may ask the comptroller to give you a couple of numbers on this. first, as i said in my opening statement, and everyone on this committee knows this -- as the chairman noted in a speech that chairman dempsey gave at the national press club, your people are your most important assets. we have made commitments to our people. our country has. we have asked them to sacrifice. you know all about that. anrefore, we have obligation. veryri-care program is a central part of the benefit package to our people. not unlike social security. not unlike our entitlement

programs generally in society. when you look out over the next few years, how are we going to sustain these programs? what we are looking at is finding ways to make some modest adjustments now so that we are not faced with abrupt cuts we will not be able to sustain. we can continue to play out the kind of benefits we have now, but what that is going to mean is a much smaller force, because we are not going to be able to afford the same kind of benefits. what we are proposing is modest increases in the enrollment fees. affectway, it does not any of the active duty members. mainly, those would be affected in the still working age after they leave the military, before 65. we are asking for a modest increase in that fee, a co-pay increase for prescription drugs. even if we got those, that benefit package, and rightly

so, by the way, would probably be still the best and if it package i am aware of anywhere. so, we have to do this, or at least think about it, because we are just not going to have the resources to sustain it through the years that we are making these commitments. i will ask the comptroller if you wants to -- >> just to follow a point, do you have a deliberate sort of strategy to engage these different groups -- retirees, active forces -- not just you, but the chairman and others -- so that they understand and they have the opportunity to communicate with you, and give their impressions, together with their ideas? i think, ultimately, there is a

real question here, 10 years from now, whether the soldiers -- and there is no one more invested in the success of our military forces then these individuals -- will have the training, platforms, and support they need to do the job. are you going to do that? >> we do do that. we do it working with our military associations, who represent, certainly, our retirees. we do it with veterans groups. we reach out to congress. we are in touch with members of your staff and all the appropriate committees, think tanks. we ask for ideas. we ask for input. we give everybody an opportunity to weigh in. the last point i would make on this is, unless we are able to -- some of the comments we have made in our testimony this

morning, and others, and will dempsey and i -- to slow the growth of some of these programs -- it goes to what you just noted. what we will find is, we are going to cut our combat power significantly. that is one thing that, as you know, is the centerpiece of readiness, capability, and options for any threat in the world. we have got to balance this, and we are trying to do that so we do not hurt people, so we keep our commitments to people, we do the right thing. if we get at it early and make these modest adjustments, we can work through this. >> we cannot do this one year at a time. these things come up once a year, and we keep resubmitting them, and we do not get them. unless we look at the impact of sequestration over the course of sequestration, and recognize

the trades -- strategy is about choice, and we have got to make a choice. how much readiness? how much modernization? how much compensation? we have to look at it over this 10 year period. we have to do what you just suggested. >> my time has expired. if you have specific data, i would take it now. >> by 2018, our proposals save two point $5 million in that year alone. if we cannot do that, it is about 25,000 troops cut. we need to slow the growth. thank you. >> thank you. >> about five years ago, we had a group in the military associations, a summit about health care. i think we need to do that again i would volunteer to be part of that.

what percentage of dod spending will healthcare consumed in the next decade if we do not change? >> it is about 10% now. a lot depends on what happens with the overall budget, but it is going to grow, because it looks like the budget is heading down. >> i heard it could be up to 20% in the next decade. >> it could be, especially if the defense budget falls. >> when is the last time we had a premium increase? >> two years ago, but prior to that, it was the mid-90's. >> i want a generous benefit, but a sustainable benefit. do you agree with me that tri- care is not sustainable? >> i believe if we are going to sustain it, we will have to have a much smaller force, and one that is less modern. that is not the balance we want. >> we are not going to fight enemies with a good health

plan. general dempsey, when it comes to afghanistan, are we winning or losing? >> i sincerely believe we are winning. >> i do too. what happens if we lose? >> the region will become unstable. i think there will be problems on the border of pakistan. iran will be encouraged to become even more regionally aggressive. >> kandahar could fall back? >> we could find a reemergence of violent extremist groups. >> the difference between winning and losing is what we do between now and 18 months, would you agree? >> the difference is certainly what we do between now and the end of 2014, but also, i think, the commitment we make beyond that. >> i think we need a residual

force to maintain confidence and capabilities the afghans do not have, so we can end this war well. the election in 2000 14 in afghanistan -- how important would you say that is, in terms of developing a safe, secure, prosperous afghanistan? >> i think it is a key component. self about confidence, governance, writes. >> don't you think the enemy will do everything they can to disrupt that election? >> they will, and they are doing it now. >> if sequestration is fully implemented, how would you describe the kind of military we would have 10 years from now? >> that is the effort the secretary has us undergoing

right now. at full sequestration -- >> you said some dramatic things. do you stand by them? >> this will not be a force that will be adequate to the task. >> do you agree, mr. secretary? >> i do. iranians believe the are trying to develop a nuclear weapon or peaceful nuclear power? >> i think we stay focused on our policy. that is preventing the iranians from acquiring any capability to weapon eyes. lex do you think what they are doing and what the centrifuge is designed to produce nuclear weapons material, or just peaceful power? >> it is certainly giving them options to move in that direction. >> do you believe the iranians

are trying to develop a nuclear weapon? >> i do not think they have made the decision. they are positioning themselves to preserve the option. >> can you imagine why they would be doing all this if they were not trying to make a nuclear weapon? >> leverage in all different areas. >> do you think they are developing a medical isotope reactor? >> i think that is probably part of it. but i think it is increasing their leverage. >> i just find it odd that if you are going to have a peaceful nuclear program, you would build it at the bottom of a mountain. do we have plans to deal with the iranian nuclear program if military force is necessary? >> we have options both for their acquisition of a nuclear weapon, but also the other things they are doing. >> does israel think they are trying to develop a nuclear weapon? >> i believe that if you were to ask my counterpart, he would say yes. >> is that true? >> i think so. he will be here this week. >> i think it is important we say to the world, as a nation, that we think they are trying

to develop a nuclear weapon, and we are not going to let them. i just think that is important. finally, about syria, how does serious affect the war? >> syria affects everyone in the middle east. >> it affects israel, certainly. what i worry the most about is the king of jordan becoming the first pick them up syria outside of syria. is that a rational thing for me to be worrying about? >> it is very rational. >> what would it mean for the region if the king of jordan were deposed? >> i think a destabilization of the entire region. anyway you would judge it, it would be very bad news. >> last question. is iraq getting better, worse, or the same? >> iraq has had probably the

toughest month in its history since the end of our time in iraq. malek he just met with barzani for the first first time in two years. it is very good news. but they are understandably can pressure from al qaeda. >> i agree with the general. there is a lot going on. >> al qaeda has risen. >> has risen. you saw the stories this morning about the fracturing of the army unit. they have got problems. yourank you all for service. you have a amazing hard decisions ahead of you. isuestration, to, unconscionable. we need to find a way to fix it. thank you all for your service. >> it is a joy to join this committee, and i look forward to working with all of you. i am happy to be here.

thank you for your service. let me associate myself with the prior remarks of the senator from maryland, who has been absolutely a champion for victims of rape, domestic violence, and child abuse. excellente made an point earlier about really focusing the secretary on the academies. i had the pleasure to serve with senator reid for several years on the west point board of visitors. he chaired it. five or six years ago, we had a discussion at that level about the training in sexual assault. i will send you materials i know were not at the west point academy. i do not know if i can speak for all of the academies. but i think it is a good place to start training the next generation, as well as other actions that can be done by this chairman and the chairman of the armed services committee,

and the women that are serving on these committees. it is shameful, and it needs to be addressed in the most direct and effective way. i want to ask you, following up, about north korea. i know we are all concerned. in the newspapers, it is about their nuclear capabilities and long-term intentions. and the dysfunction of the society. mr. secretary, what concerns me terribly is the recent -- what concerns me terribly is the existence of these concentration camps. i know that there are articles that have been coming out, a flurry lately, that talk about the 24 million people in north korea that live in horrific general circumstances.

humanen reports from rights activists say there may be as many as 200,000 or 300,000 people in concentration camps. and the way you get there is by knowing someone who is thinking wrong way. your whole family gets sent there. there was a remarkable story about a 23-year-old man at escaped miraculously. a lot of this is based on his personal eyewitness account. is there anything you can do with south korea and with china to try to bring some level of relief and focus on these concentration camps? i do not want to sit here, as a member of this committee, like some people did in the 1940s, and closed their eyes to what was going on in germany. is there anything we can do? because i think this is a serious human rights issue. >> as you know, north korea is probably the most closed country in the world. our access to that country is essentially zero.

there are some things that have been ongoing, and then they stopped. one i noted earlier this morning is the resumption of talks between the south koreans and north koreans, the first time in six years. one facility has been an opportunity to start and incorporating. it does not deal with the problem you are talking about. limiteduse we have such influence and ability to change anything in the country, it puts us at, obviously, a significant disadvantage to do much. >> i understand. there is a lot of respect and cooperation between south korea and our military, for many years. remarkableorea is a country. i've visited it, as many of our

colleagues have been. it sits next to this country that is virtually closed and dysfunctional. but if there is anything our military can do to bring relief to these horrible caps, i am going to continue to work with you on that. that is going to be one of my focuses on this committee. training our soldiers jointly -- you and i spoke about this. expansion, communities so encouraging of the joint training base. the budget has been reduced for training, significantly. the army reports it has canceled between six and 10 rotations in response to the overseas operations shortfall, senator collins was

referring to. how concerned are you about impacts to our military readiness over time reducing the training that goes on at some of our career -- premier basis, light -- like fort polk, louisiana? >> i am very concerned about it, as is general dempsey and all of our leaders. as general dempsey often says, we are consuming our readiness. comments earlier this morning about the cost alone it is going to take us to get the readiness back -- it is a huge cost to us, and our readiness, capabilities, and our future. we are mindful of that. but we are living with the realities we are living with, and our first priority has to be the capabilities of our readiness -- where the threats are, and the prioritization of that. unfortunately, the training is at the back end of that, because you do not need it now. the we will need it. general dempsey has made that point every time he has a

chance. >> thank you, general. my final question, for the record, is about the role of the national guard in our cyber fight. we need a million new cyber warriors. the guard has 460,000 general strength. not only preventing attacks, but responding to attacks that could cause civil panic. they are in a particularly important role. i am going to ask in a written question what you view as the national guard role in the cyber fight. >> one image i want to leave with you -- you are talking about the joint readiness training center at fort polk. these are army. other services has similar -- have similar training centers. i will use the nba playoffs. what we are doing at local camps is training individual trainers on a basketball team, but not giving them the opportunity to scrimmage before we might at some point put them

in the game. that is a bad place to be. >> i would like to underscore that there are only a few joint training centers. i do not mean to be too parochial. but that is perfect. how ready can you be if you have not practiced together? that is the question. and it is really a problem. >> i would like to echo many of the comments my colleagues made about sexual harassment -- rape and other similar actions. i think that ground has been covered. mr. secretary, welcome to the subcommittee. it is always good to see you. when we ask you about something that barely predates you, something you have inherited. it has to do with the critical manufacturing capabilities and

capacities in the organic industrial base. in the bill, we asked for a report that was to be do about three point five months ago. i know you have extensions, so i am not picking on you about that will stop but i think the way it currently stands is, the army has identified the critical manufacturing capabilities, in accordance with the report, but has not identified the level of work to sustain those capabilities. that is the second part of this we need to complete the picture. we have part of the picture, but not the whole picture. these arsenals are very important for our national security. they make things in these arsenals that the private sector does not want to make, too dangerous or too small volume. one example i know you are familiar with is white phosphorus, made him kind bluff, arkansas.

all of the arsenals make various important pieces. it is important that these arsenals continue to thrive and to be there when we need them. i am curious if you can give me an update on the report, and if you know when the workload piece of this will be made available. >> senator, i cannot give you an update. i do not know. i will certainly get back to the record. let me ask bob hale. >> like i said, you have some extensions, so i am not picking on you. but i think it is important. some of us have these arsenals and other facilities that are very important. mr. hale, let me ask you, on healthcare -- i want to follow- up about that. senator graham talked about a premium increase.

questionan important about our health care for men and women in uniform. how should we go about reforming our health care system for the military? are we looking at some sort of blue-ribbon panel? are we looking at congress doing it? are we looking at a situation where someone comes up with a package of recommendations that we say yes or no to? >> i think we are looking at a number of options. some of them go to making the health care system more efficient. for example, in this budget, we have undertaken as preparation an overview of our military treatment facilities, some of which are very low levels of utilization for a variety of reasons. a number of efforts we have

made to try to make the health care system more efficient, to deliver the benefits at less cost. as you know, we believe some modest increases are appropriate for the retirees especially. when congress set it up, retirees were paying 27% of the cost of healthcare. it is now 11%. we believe we need to move back in that direction. we are developing a package. i do not know that we need a blue ribbon commission. we will need the support of the congress with almost all of these. they require laws or at least the consent of congress. >> general dempsey, let me follow up with you on one of senator graham's questions. he asked about iran, and i see iran's effort to get a nuclear weapon as a threat to u.s. national security. i would just like to hear from

you how you feel that is a threat to u.s. national security. >> thanks, senator. iran is a threat in many ways. not simply their move toward the potential to develop a nuclear weapon. and i choose my words carefully, because the intelligence community has not yet come to a conclusion that they intend to build a nuclear weapon. they are certainly building on their options to do so, which should be a concern to all of us, and is. we have been clear as a nation that we are determined to prevent them from acquiring nuclear weapons, because it would be so destabilizing to region. they are also active in cyber. they have surrogates all over

the region and the world. they proliferate arms. they are a disruptive influence globally. i do consider them a threat to our national security. >> a follow-up. you used the term destabilizing. can you explain how that event would be destabilizing, and also how it might change the balance in the middle east? >> the acquisition of a nuclear weapon? this is all coming out of the context of a broader sunni- shiite -- shia conflict across the region, that stretches to baghdad. iran is very active in fomenting the violence on the that equation. if they were to contract a nuclear weapon, it is possible

somebody on the sunni side of the ledger would feel compelled to do the same, leading to a regional arms race. >> may i respond very briefly? there is a panel, to your point earlier about tri-care, someone, set up by the congress, as a matter of fact. it was chaired by former senator john kerry and senator bob pressley. senate members. their objective is to look at future compensation benefit packages. that has not been filled out yet. i think there are still a couple of members yet to be appointed. but that panel will be very active, and they are preparing to fill that out. thank you. >> thank you. senator murray? >> thank you for coming before the committee, and your service as well. secretary hegel -- last year, i ask secretary panetta to begin a review of how the department diagnosis mental health conditions, and he agreed to do that.

the army recently completed their review, and there are some really valuable lessons we got from that, and it really underscored the need to complete the entire review, and identify gaps in care, and improvements that need to be made. given the number of suicides we have already seen this year, and our continued winding down from afghanistan, i think it is really important to stay on track. i wanted to ask you when you expect that review to be completed. >> i am well aware of the review. i am absolutely committed, as secretary panetta was, to the review, and addressing it, as said very clearly. when you look at the latest number, we had 350 suicides last year. and all the other extenuating dynamics that play out. it is, as director panetta noted, one of the great internal problems that we have. as to your question, when is it going to be due out, i do not know. we will get back to you. >> i would like an answer.

i think we have to make sure we stay on track and get the diagnosis correct, and respond right. on the same line, the army recently released some statistics saying there has been 100 nine potential suicide so far this year. that is just in the army. that is really high, compared to last year, and continues a disturbing trend you just referred to. we are losing more servicemembers today to suicide than we do in combat. we have passed initiatives and legislation to combat this problem, and to provide additional access to mental health resources. i want to ask you -- what progress has the department legislativeing the requirement to create a joint, comprehensive suicide prevention program? >> let me ask bob hale or general dempsey. i kind of got in the middle of

it. the progress report -- i do not know. i assume he made progress. i have gotten briefings. i know it is ongoing. i know we are doing it. i know chief brodeur now is focused on it. anything else? >> i do not have the dates, and i cannot give you a progress report from memory. we meet as the jcs. we get periodic in progress reviews. i would like to take that question and give you the proper answer. >> and in your testimony, you say dod is protecting funding for mental health. can you quickly say how those funds are going to be used? are there programs that are going to be expanded? >> i am going to ask the comptroller to answer. >> we will not sacrifice any of the quality of healthcare because of sequestration. we will find ways to meet all of our key healthcare needs. there may be some reductions in programs, but health care for individuals will not be optimized.

>> and the mental health care side? >> the same. >> all the current programs we have will be funded. >> in particular, wanted warriors will be our highest priority. we will be nothing to effect that -- to affect that. >> i do not want to lose track of the mental health side of this. my last question is more strategic will stop over the last 10 years, military installations across our country have grown dramatically to sustain two wars. i have seen a joint base in my state grow by 64% since 2006 to meet the demand. as the military shifts its focus to the asia-pacific dod is going to

increasingly rely on installations in our western states. i wanted you to discuss how dod is taking advantage of the investments we have now made over the last 12 years, and the strategic value of our installations in western states, like the fairchild air force base in washington state, to facilitate long-term strategic decisions. >> i will make a general comment in response to your question. if general dempsey and the controller would like to add anything -- comptroller would like to add anything. the assets in the western part of the united states have always been important, but become more central, due to that shift of our priorities, based on threats and interests, and our ability to defend those interests in the asia-pacific. i do not think there is any question that that is going to continue.

that means infrastructure. that means all that goes with it. that does not mean that there will not be any adjustments or considerations of consolidation. until we get down into some of these things, as to the implementation of the strategic guidance, and the asia-pacific rebalancing -- my general assessment of it is that they will remain critically important to that strategic shift. >> the only thing i would add, senator, is that i align myself with the secretaries general impression that our rebalancing in the pacific will certainly advantage that part of our infrastructure that tends to exist on the west coast. it is worth mentioning that the army, for example, has not yet announced how it will go from its current strength, which is just over 550,000, down to 490,000, based on the last budget cut. there will have to be some

number of brigades cut. the army has not announced, nor shared with the secretary yet, which of those -- where those reductions will come from. that will affect every -- i predict that will affect every installation in the continental united states, and most of those overseas. >> thank you, mr. chairman. thank you to all of you. >> we talked about a lot of ways the department of defense is going to envision saving money. some of them more painful than others. we have not spent much time this morning talking about the acquisition strategy at the department of defense, which consumes a substantial amount of taxpayer dollars each year. are you envisioning, mr. secretary, any changes in approach either to existing acquisition projects or future projects that could save us money and still keep us safe with the best technology?

>> mr. chairman, yes. we are constantly evaluating that. we are currently evaluating. we have to, if for no other reason than the reality of resource limitations. they have to align with our strategic interests, with the strategic defense guidance of the president. what kind of assets to we project we are going to need out into the future? this is a constant evaluation. i think when carter was the undersecretary for acquisitions, he started a number of new programs that have by the current undersecretary, frank kendall, which bob hale will be able to provide numbers on. they have given dod significant savings, at the same time enhancing our capacity and ability to align our assets and resources with our strategic interests and defending those. let me stop there. general dempsey may want to say something, and the comptroller may want to add some numbers to

what i have just noted. >> i do not have a number for better business practices the secretary was referring to in my head. i know we have had success in sharpening our pencils and getting our suppliers to do the same, like the f 35. we have also proposed restructuring of weapons that will save about $8.2 billion over the five year period. the space system was one, and a major restructuring of the ground combat vehicle. i see that continuing regardless of whether we see budget cuts, and accelerating if we see cuts in the budget from sequestration. >> when i speak to contractors

for major acquisitions, virtually all of them have an argument that goes along familiar lines. the marginal cost of the next x, whatever it is, is dramatically less, so if you will keep buying, it will be cheap. unfortunately, it is like going to the store and saying, i am just going to buy sale items. it turns out everything is on sale. you have to decide with the most important thing is. a briefing on one of these systems reminded me that what are trying to do is stay a step ahead of the potential enemy. the cyber war makes it more complex. our enemies are stealing the best ideas from us. particularress that issue, in terms of the theft of this technology, the cyber security issue, and how it keeps forcing us to try to run to try to catch this rabbit?

>> as i noted in some earlier comments and answering questions here this morning, i put the cyber threat as high up on the list of threats to this country as any one thing, there are a lot of threats. threats,uclear terrorism, and so on. one reason i do is the very reason you just noted, mr. chairman. you read about it almost every day in the papers, about the theft of industrial-based secrets, and all that goes with that. so yes, we do have to stay ahead of it, and we do have to work closely with the private sector. there is a mix, and there is a balance on this. we constantly try to achieve the right mix, with resources and priorities, and the technology. technology drives it all.

>> when you provide me with the information about the contractors' employees, i would also like to know about their salaries. >> will do. >> thank you. thank chairman, let me the panel. i think the hearing has been very informative, very straightforward. i appreciate the fact that they have been responsive to our questions. and in situations where we do not have the exact dollar amounts for a request, they are getting back to us with more explicit requests. we want to be sure we cooperate with the department of defense. i do not know of any other responsibility we have here in the senate to try to be sure we get this right, protecting the safety and security of our american citizens, our highest priority. i think we need to convey that

from this panel, as well as to expect the same commitment and attitude from the panel of witnesses before us. >> thanks, senator cochran. senator shelby? >> i have one question. i think i will direct it first to mr. hale. there will be, as i understand it, a significant increase in the number of ground-based interceptors located in alaska. as the department of defense prepares to increase this number, as i understand it, 30 to 44, which we believe is the right thing to do -- nearly a 50% increase -- what steps will be taken to implement the fly before you buy policy? and how will this impact the unit cost of each ground-based interceptor in the near term? >> we are certainly committed to making sure the interceptors

work. the testing goes on. it has been more successful lately. we are hopeful, i should say. i do not have in my head a unit cost. as you know, our plan is to refurbish one of the missile fields for operational use, and to buy additional interceptions, and to refurbish some that are now in storage. this is not going to happen immediately. that will give us time to finish the testing program. we are committed to making sure this works before we expand those numbers. >> thanks to our witnesses today, and all of you. we will be working with you in preparation of the budget. this subcommittee will reconvene tomorrow, wednesday, at 10:00 a.m., for a hearing on voluntary military programs. the committee stands in recess. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> on friday house debated and passed a bill authorizing the 2014 defense programs. $640thorizes an estimated billion in funding for the military, weapons, aircraft, ships, and personnel. return fornd senate business on monday. toward a pairing of judicial nominations at 5:00. both of those are expected at 5:30. later in the day we will turn to the immigration bill with amendments being offered and debated. gavels in at noon eastern with speeches starting

at 2:00 p.m. among the issues the house is on, a bill work banning abortions at 20 weeks and a farm bill. watch the house live on c-span, the senate live on c-span2. >> monday, the center for strategic and international studies hosted an event on the national guard's capability on future operations. the head of the bureau will provide opening remarks. >> i know from my small people,ce you do see older journalists that would not cut it today.

that does not mean that they are not good at what they do but the demands of our generation are very different. i think that older people who decry what the media saturation is doing to us in terms of the constant news streams, i think that as a valid complaint and the argument of taking your time and get your facts right, that is always going to be true. we saw in the health-care ruling, in the boston marathon bombing. the pendulum swings back and forth and that -- and now we are reconsidering how fortunate it is to get your facts right. >> more with patrick gavin tonight at 8:00 on c-span's "q&a." secretary john mchugh talks about reducing and

eliminating sexual assault in the ranks. from joint bases andrews in maryland, this is 20 minutes. >> apologize for running late. i see a lot of familiar faces. you're familiar with the pentagon's pace and rhythms. by pentagon time, we're not doing too badly. but we're trying to get you back on schedule. the other thing i want to do is thank the chiefs of staff and the airports and the colleagues and secretary mike donnelly for lending the palatial facility. now that you've seen how the other half lives, we hope you stick with the army. we do appreciate the joint aspect of this. most importantly, i want to thank you. i deeply appreciate this chance

to share some time with you. and i appreciate even more the tremendous effort that each of you have put forth these past few days to better help us the tackle what i know we all agree is an extraordinarily painful and extraordinarily important scourge in our ranks. during these sessions, you heard from victims. you've heard from advocates. and i know each of them brought their own very personal perspective on this problem. but we have to remember that when it comes to perspective as an army, we had a singular purpose, to reduce and to eliminate sexual assault and harassment from across our ranks. now i'll be the first to state the obvious. this is no easy task.

it's darn hard work. but this much we know, yours, ours is an organization built on values, loyalty, duty, respect, service, honor, integrity, personal courage, and sexual abuse and sexual assault in all of their forms are abhorrent to each and every one of those values. if we're to live by those standards, it's our duty and responsibility to act and do more each and every day. just a few days ago, i had the opportunity along with secretary hagel to attend the ceremonies at west point. dave, thank you to your and your

bride for your hospitality. but along with the superintendent and along with the graduating class of cadets, i heard the secretary when he secretary when he very correctly stated i think as he put it, quote, sexual harassment and sexual assault in the military are a profound betrayal of sacred oath and sacred trust. the scourge, he said, must be stamped out. and as i listened to the secretary's words that morning, i thought of the parents of those young cadets. mothers and fathers who had entrusted us with their sons and daughters and the tremendous responsibility that we all hold to be worthy of their sacrifice, to be worthy of their support. and i thought, you know, in e