but at least it would have given us an opportunity to hear what the answers would have been. i want to get to the bottom of this too. after all, it's been more than nine months and i want you to be reminded that mr. george, the i.g., who was -- we -- appointed by a republican president said that in all of his work he found no political motivation and he found no white house involvement a yous whatsoever. a you you a you a as you members of the democratic side had their say. we were basically shut out completely. remind people that each one of us represent 700,000 people plus.

we bring something to this table to and we want to make sure that we get to the truth. i am tired of cherry picking information, of sending a few lines from various transcripts. what we want is the truth. that is all we want. we saw another example today. here we were ready to listen. our members wanted to hear from her. just for the ranking member to andble to make a statement the chairman was well aware that i wanted to make a statement and answer the question. we are better than that. we are better country than that, we are a better committee than that and i said to the chairman that whencasions things like this happen it goes

against the integrity of the committee. when we do not speak cultures and nothing but the truth and we cherry pick and he goes against the integrity of the committee. i remind you and as i close with this this is a committee of oversight and government reform. in order to reform you have to have all the facts. you cannot just leave out the fact. not like it including the ones that you do. it does not work that way. should operate like that. we're better than that and hopefully we will move forward in a way where we are working together. >> [inaudible] >> you saw what happened. it was not pipe -- bipartisan. not one member of the democratic side had an opportunity to say one scintilla, one syllable before the chairman.

that is not bipartisan. ,hen the negotiations were out we were not invited to that. democrats were not invited to that. there was an issue this morning. the prescott the report -- the press got the report. we still do not have it. is that bipartisan? no. >> have you heard anyone say shut it down. >> only in this committee. it has happened once or twice. >> chairman issa said this was not political, there is no politicalcp connection to this investigation. s have you had any conversations with senior members about how this will play out? >> i have not. am out have done and i of my members of the committee.

they have come here seeking the truth. we really do and i said this many times. it is important for us to make sure that government operates properly and operates effectively and efficiently and all of our members are determined to make that happened -- make that happen. no matter where the evidence mainly let's go down that path. seent do the things i have issa do. if he does not like something he does not presented. -- present it. theman who started this, conservative public and who said this is not political. he was trying to figure out how to deal with the c4's. will move forward from here but i wanted to make

it clear as to what happened in there. thank you. i'm not going to get into this. i've been practicing law for 40 years. you see these kind of things but the thing we are determined is not to be distracted, to get to the truth. i see it as a distraction. i do not worry about disrespect. >> [inaudible] >> i do not. based upon the experts we talked be counsel for ethics, house counsel said [inaudible] and it comes to rights think we have to be careful with people's rights. shekeep in mind that before came in the first time her lawyer sent a letter saying that she was going to take advantage of the fifth amendment rights. came in and said

the same thing. her intention was definitely to do that. there may be differing opinions but we felt comfortable and keep in mind, one of the things i asked for before we voted the last time was to bring in experts and let the committee have the opportunity to hear from the experts. chairman isaiah refused that. i have to go, guys. is one of our favorite times of the year at c-span. the time when we get to announce the winners of our annual student documentary contest. it is called student cam. the 2014 theme for students who are interested in entering is what is the most important issue that congress should consider in 2014? this year we received a record number of entries. 2000 355 entries that came from 46 states, the district of onvia, taiwan, and from the united arab emirates. students from around the country and some internationally.

8416 students participated either individually or in teams. one of the things that was special about the contest is we andled the number of prizes the amount of money. it went from a $50,000 contest to us giving away 100,000 dollars in prizes. that meant 150 for student documentarians, 50 prizes for whohers, and 97 students received honorable mention. the grand prize this year, $5,000 for the winning entry. there are three first base high school injuries divided regionally and each one of those top winners in the regions will receive $3000 and there is one first lace at the middle school level also receiving $3000. one of the reasons we do this is to hear what is on the minds of young people and the topics that students choose are a good way to measure what they are thinking about. here is the list of the top categories, top issues we

received from students. number one, kids are thinking about the economy and they told us about this and their message to congress. second was gun legislation. third on the minds of students was education and education issues. the next in line were documentaries about the environment and the next after that to my immigration. we will tell you about the grand prize winners this year. it was a team area their topic was called earth first, fracking second. it was a -- a three person team polytechnic high school. they are served by charter communications. the three team members in that , we will be talking by phone with one of the embers of the team, emma larson, right now. what was your reaction when you heard that your team won the grand prize this year question mark >> we were shocked.

we were in the room and we looked across at one another and we all could not believe it. finished the documentary, did you have a sense of how good it was? >> no, we did not. >> tell me how you got interested in the first place. who introduced you to it? >> our ninth grade government teacher. >> how did your team come together, were you able to pick who served or did the teacher assign them question mark >> we did pick our team members and we chose other people that we have known and we were comfortable and knew that we worked well together. >> when you joined forces had any of you done documentaries before? >> no. >> how did the learned how to do them? >> we watched a lot of videos about how to make the documentaries and tips about editing and things like that. >> how did you choose the topic? >> we chose the topic by in our government class we have to complete these current events. i

read an article about fracking and was immediately interested. local us, we saw in our paper and article about fracking happening twos miles away. without that was crazy and when to start researching about it it becomes a fascinating topic. >> long beach has long had an oil industry because it is a big port and there is also a lot of oil drilling. you were surprised to find out that fracking was happening there as well. >> yeah. the thing about fracking it is -- is it isn't regulated. there is no techniques, there is is reallyesting, that dangerous. >> is that the primary thing that you learned when you researched fracking? >> yes. >> what is the message you would like to have congress hear from the three of you as young people about fracking? that want congress to know our country has a problem.

that problem is the regulation fractionating. there is huge economic potential. it has to be regulated. it has to be safe. >> one of the things is to show both sides of the issue and you reference the fact that there is great economic and if it. give people listening a sense of why the economic aspect of this are important so you feel we have to get the regulation right. to researchg , fracking will create 2.5 million jobs by the year 2020. that is a huge number. that can do great things. we are in the middle of economic bad times and fracking and the oil industry could pull us out of that. >> who was the most interesting -- person you interviewed? >> terry greenberg. -- greenwood.

how fracking affected him. we researched people who were being affected and his name kept coming up. he had done so many interviews and youtube videos that he is an expert on the subject. >> what do you plan to do next with what you have learned either from the younger feed part or from the fracking lesson? talk to the we can local city officials in our city and have them regulate the fracking that is happening two miles away from our house. >> what are you plenty to do with the $5,000 and how did your school arc your win? >> with the $5,000 we're putting that to a trip that the three of us will go on after we graduate from high school. recognizing us, they get the money to spend on video cameras for next year and everyone is very excited and we can tell that people are proud

of us. >> congressional nations -- congratulations to you for your national win. we are proud of all the students that entered. we got some great entries this year. it was terrific that your team number one.s congratulations. >> thank you. >> let's tell you more about the other winners that were chosen but before we do that to give you a sense of what the grand prize was like in comparison, let's watch a clip. >> dear congress. >> dear congress. >> dear congress. hydraulic fracturing is really important area in for the growth of our economy. if you want the critical support of the american people, some things we could change. a need to investigate the impact that -- of hydraulic fracturing on seismic activity and the use of recycled water instead of freshwater. you need to regulate testing of water.

importantly, the halliburton loophole needs to be closed. you need to require public disclosure. >> just a short glimpse of the documentary.inning graderseam of ninth from long beach, california. i mentioned there are many winners across the united states and this year we did three regional winners at the high school level.

we will tell you more about who won the top prizes for high school. getting with the top prize in high school, diagnosing the problem. three 12ers and graders in phoenix, arizona where they are served by cox communications. the topic on mental health diagnosis and treatment. people: genetically modified." by andrew demeter. time warner cable is their supplier. "murky future." and that is a team of ninth -- 10th-graders from silver spring, maryland. they are served at compat -- comcast. their topic was water pollution. the first prize and there is only one of these at the middle school level is on the nsa. that was done by a team of

eighth graders from eastern middle school in silver spring, maryland and in the washington, d.c. suburbs. their customers of comcast cable and there's was on the big debate over government surveillance. we congratulate all the entrance -- and trent -- entrants. prizes are on view for you to see on our website. >> we will talk to a former health care advisor in the obama administration. about the implementation about the health care law. his recent book is " reinventing american health care." and a discussion of the president's 2015 budget proposal and the gop alternative. on c-span. journal" you can join the conversation on facebook and twitter.

>> the three elements of the triple packager first, a sense of exceptionality and you can get it from lots of different sources. you areeeling that special and destined for special things. the second element is almost seemingly the opposite. of insecurity to offset that exceptionality. a feeling that you have not quite done and the fbi. you're not quite good enough yet. the third element is impulse control. or self discipline and the ability to persevere and resist temptation. >> individuals grow up in america, who have these qualities, they can predictably have an interesting, creative destruction all relationship between their culture and american halter such as second generation kids in immigrant communities start looking back

at their parents and grandparents generations and say we do not want to do success the way you told us to. we are not interested in those jobs you said are the only ones. they make their own decision. het we found is aspirational , these same qualities can help them at -- achieve very different kinds of goals create the triple -- package. saturday night at 10 eastern and sunday at nine on afterwards. "after words." new biography the of stokely carmichael. defense secretary chuck hagel was questioned about proposed cuts laid out in the president's budget plan for the pentagon. the obama administration wants todo reduce defense spending

490 $5 billion in fiscal year 2015. that is $113 billion less than last year's budget proposal. secretary hagel was joined by joint chiefs of staff chairman general martin dempsey, carl levin chairs the senate armed services committee.

>> good morning, everybody. we meet today to hear from you about the fiscal year it 2015 and we do so at a time of extraordinary challenge and uncertainty for the department of defense and for the nation. members of this committee are well aware of the threats that face our military around the world today from an unreliable arner and the president of afghanistan to a dangerous and unstable situation in ukraine from an al qaeda resurgence in syria and iraq to a new set of challenges in asia and the pacific rim. hanging over all those issues is a fundamental question.

the budget proposal before us makes clear and stark terms. the question is whether the resources that were providing -- we are providing to the department of defense are adequate to enable our military to meet its national security missions. the proposal before us makes reductions and structure and compensation that will be difficult for many to support. these reductions are driven by the top line of the budget, a top line that congress dictated when we enacted the budget control act of 2011. and reaffirm with minor relief for the department of defense in theer agencies bipartisan budget act we enacted earlier this year. the top line of $496 billion established in law for the budget is5 defense unchanged from the funding level 2014.cal years 2013 and

andrew means more than $30 billion below the funding provided to the department in fiscal years 10, 11, and 12. put simply, the spending caps included in that legislation seriously challenge our ability to meet our national security needs and to meet our obligation to protect and promote public safety, health education, justice, transportation, the environment, and other domestic needs. the budget control act cut $487 billion from the department of defense budget over 10 years and the sequestration cut another $500 billion on top of that. the bipartisan budget act that that wetly passed means will partially avoid 15uestration for 2014 and but only partially. while we have made some progress against the deficit, we have

done so not by making these structural reforms to revenues and entitlement programs that would put us on a sound financial footing, but by continuing cuts to the funding that the department of defense and other federal programs need to meet important national priorities. this shortfall requires painful trade-offs and just about every area of the department of defense budget. for instance, the budget proposes significantly lower and strengths for the ground forces including a further reduction of army and active duty strengths with smaller reductions in the guardian reserve. the budget restricts the pay raise for service members below the rate of inflation, freezes pay for general and flag -- freezes pays

for general and flag officers, begins a phase reduction in the growth of the housing allowance that will result in service members paying five percent out-of-pocket for housing costs, reduces support to commissaries and makes significant changes to the tri-care benefit. the budget also calls for retiring the air force's a-10 and u-2 aircraft, and activating half of the cruiser fleet, reducing the size of the helicopter fleet by 25% and terminating the ground combat vehicle program. if sequestration budget levels remain in effect in fiscal years 2016 and beyond them a the department of defense has informed us that it will request further reductions in end strength, the retirement of the entire tanker fleet and the global hawk block 40 fleet and

reducing joint start fighters and unmanned vehicles, the inactivation of ships and produced purchases of destroyers and the elimination of an aircraft carrier and a carrier air wing. the argument for these cuts is that they are needed to pay for the restoration of some of our reduced readiness and protect the investments in technology and equipment that we need to ensure that our men and women in uniform will continue to be the best prepared, best equipped force in the world in a time of sharply reduced budget. the department has wisely chosen to increase its investment in the areas of cyber operations and special operations. need for increased capability is most clear. the department has also correctly recognized that while our military may need to be smaller, it must not the hollow. what ever it size.

actinghacking -- as the deputy secretary of defense told us last month if we do not provide enough funding, the latest technology they need, we're doing them a disservice and when we send them into harms harm's way, that the service can quickly translate into a breach of trust created we went to restore funding cuts proposed in the president's budget, we have two choices. we can raise the statutory findng caps or we can other savings in the defense budget to pay for any proposed cuts that we do not want to make. the budget proposal itself takes the first approach with proposed spending above the statutory caps. this is the so-called opportunity growth and security initiative which would provide an additional $56 billion of funding government wide in fiscal year 2015, including an

additional $26 billion for the department of defense. in addition, the future years capsassumes that the established in the balanced budget act established in law would be modified and that the department would receive $115 billion above the statutory caps for the four years starting in fy 15-16. we're told the administration has proposals to pay for these increases but we have not yet seen the details. the many other program and budget issues that we need to address, we are interested in hearing more specifics from today's witnesses about proposed funding above the statutory caps. the $26 billion in the so-called

opportunity fund for fiscal year 15 and $115 billion above the .aps in subsequent fiscal years we need to know how this additional money would be used to help restore more of our military readiness and what the consequences would be if congress fails to provide this additional funds. while these funds would not be -- fully offset the damage that spending caps have done, the added money would hopefully help make our looming collision lessbudget reality damaging. the corner that the budget control act has painted the department into has forced you to make some difficult choices. we will scrutinize the

recommendations. i have no doubt that in some cases our choices will differ from yours. that should not distract us from the larger issue. that is the budget caps are not -- now in law provided department of defense and the entire federal government with resources that are unequal to the mission that we expect you to carry out. up hope that we can come to an agreement that will provide more adequate funding to meet our national security and other vital priorities. you to commentk as part of your own statement on the current situation in ukraine and to inform us and the public as to what your view is on these rapidly unfolding events. >> the recent events across the middle east and ukraine has

brought into sharp focus the reality that president obama seems unwilling to accept. that the tide of war is not receding. u.s. national security is being charged in ways we have never seen before. during a recent trip i made through africa and europe and afghanistan meant -- and met with our foreign partners to my they made clear that the global security environment they're facing a small -- more volatile and complex than anytime time in recent memory and growing or dangerous by the day. ukrainept invasion of only underscores his troubling reality. the director of national intelligence told this committee in february that looking back and -- and-century intelligence i have not experienced it time when we have not been more beset by crises around the globe.

women are being robbed of tools at a time when we face the most damaging threats to our national security. we are poised to cut a fence budgets i $1 trillion during this decade. been there.t the navy is at a historical low level of ships. the air force the smallest in history. ground forces may fall to the level below the beginning of world war ii. use the termw hollow to describe their ability to defend the nation. last october general cody are now said he had two brigades and combat teams out of 40 that were ready for combat. secretary hagel, you said last week you said america -- american dominance on the skies

and seas and space can no longer be taken for granted. i appreciate your honesty. military's technological superiority is being challenged in ways i have not seen before. some in this town have accepted ist cutting our military necessary to rein in debt. defense spending is not what is driving our debt crisis. runaway entitlement spending is the real reiber. accountsty is defense for 16% of annual spending while entitlement spending accounts for more than 60%. if you look at the last two bars, that is 14 and 15 which shows that your benefits are increasing even more. that is

two percent more while our defense is going down from 17 to 16%. it is not getting any better. it is getting worse. over the last five years the president has chosen to ignore the facts. not once during his time in the -- in office has the president put forth any reform to entitlement spending. he has demonstrated that politics takes priority over our fiscal house and far too often it is our military men and women that are paying the price. this year's budget is no different. the growth and security initiative continues this troubling trend and holds necessary resources for our military that can be used to begin rebuilding readiness and capability. that is irresponsible. what is being done to our military is not new.

we have made the statement before. s werelitary drawdown budget driven. it left the country with the military too small to meet the stability -- and stability and rising threats of a dangerous world. today our forces are being asked to do more with less training, and equipment, and untimely less capability. lacks an increased assessment of the [inaudible] our servicemen and women are forced to make. as we have said, risk equals lives. thank you for this

opportunity to present our budget for fy 2015 and to address some of the specific questions that the chairman noted as well as ranking member hof.alf -- im how we made those decisions. i appreciate being here today to chairman =-- dempsey. hisve valued his counsel, leadership, his partnership. i appreciate his service. i know this committee appreciate his leadership and service to the country. i want to acknowledge bob hale

who is our current comptroller who will be involved in his last after fiveentation years of very distinguished service to this country and the department of defense. as secretary of defense and i suspect my would say the same, bob hale has been an end of the -- indispensable part of the process at a difficult time. hale and his people have worked tirelessly at a time when it is uncertain as we have been through maybe any time since world war ii. when we talked about government shutdowns for 16 days, furloughs, budget uncertainty, been his, it has

remark will leadership that has helped us. i do not think i ever state bob hale's value to our department in this country. suggest our focus budget, let me suggest [indiscernible] general dempsey for his comments. touche been in constant with our fellow administrators at nato as well as russia, ukraine.

i spoke saturday with the russian minister of defense about this. we have also constantly been in ourch as i said with collaborators on our side of .he atlantic, i was at nato last week where i regularlyhe

administered nato meeting. the minister of defense with us and spend some time with him. across the administration, our efforts as you now have been focused on de-escalating crisis. supporting the new ukrainian government with economic assistance, and reaffirming our commitments to allies in central and eastern europe. i strongly support the administration's approach to this de-escalation. secretary kerry was in kiev yesterday. he is in paris today.

there was a nato meeting yesterday and another nato osce is sending representatives. has had one security council meeting, i suspect there will be more. and other activities along the diplomatic and economic front. directed theweek i department of defense to suspend all not terry to military engagement and exercises with russia. , that includes two trilateral exercises that we had

scheduled with the russians, one with the canadians and russians and the other. the defense department is pursuing measures to support our allies including stepping up joint training through our aviation detachment in poland. it is an area that i visited a few weeks ago and augmenting our participation in nato's air policing mission on the baltic and insulin. [indiscernible] think everyone on this committee knows and i know senator mccain was in ukraine a few weeks ago. this is a time for wise and steady and firm leadership. it is a time for all of us to

stand with the ukrainian people and we're doing that. that in particular is what president obama continues to do as we pursue diplomatic and economic options. i would like to thank the committee for your role in this. aboutis another point supporting the administration's approach to how we are all coming at this, this crisis. this economic package that we know,oposing, as you all the osce has proposed a package with the imf.

ukraine is an important part of this and we will work those channels as well as the diplomatic channels. chairman, i think it is clear as you have noted, and the ranking member, the events of the past week underscore the need for america's continued global engagement in leadership. the president's defense budget reflects that reality. it helps sustain our commitment and leadership at a very defining moment. is farve this budget more than a set of numbers and a list of decisions. it is a statement of values and priorities. it is a budget grounded in reality. you noted some of that reality and -- in your remarks. prepareseality that

the u.s. military to defend our national security in a world that is becoming less predictable. more volatile and and in some ways more threatened -- threatening to our country and our interests as was noted in the ranking member statement. it is a plan that allows our military to meet america's future challenges and our future threats and it matches our research is to our strategy. and it is a product of collaboration. all of the military and civilian leaders were included. the chairman and vice chairman and service chiefs all of our people, we value their leadership and their input. input was enlisted important. as we all know, america has been at war for the last 13 years. our second war of the last decade, our longest ever, this budget adapts and adjusts

to new to tg realities and fiscal constraints while preparing for the future. .his is not a budget this is not a business as usual presentation. is the budget that makes the hard choices that will have to be made. the longer we differ these difficult decisions, the more risks we will have down the road. congress will have to face more complicated and difficult choices. you have outlined in your reflection of the kinds of cuts the department of defense is had to take over the last couple of years and what is out ahead of us. december is bipartisan budget act gave dod some temporary relief. it was really from sequestration and he gave us some certainty for planning for a year.

-- imposes more than $75 billion in cuts over the next two years. unless congress changes the law if you have -- as you have noted, sequestration the cut another 50 ilion dollars starting in fiscal year 2016. the five-year plan provides a realistic alternative to sequestration. morecting $150 billion than current law allows. dod requires that additional funding to update our defense strategy as outlined. the strategic priorities articulated represent america's highest security interest. defending the homeland, building security globally, deterring aggression, and being ready and capable to win against any adversary. the funding levels let us

execute the strategy. with some increased risk in clear inreas. i made my much longer written statement it is quite rare what the risks are. we have not held back on these risks. --y would be reduced whether [indiscernible] providing dod with an additional $26 billion in 2015. you have asked the question to improve readiness and monetization. the $26 billion represents an effort that would help dig us back out of the whole that we have been in the last two years on readiness and focused on modernization.

i submitted statement as i said contains details of this initiative which i strongly support. although our five-year budget plan exceeds the sequestration levels. dod has prepared detailed planning for cuts showing even harder choices we would have to make in order to comply. those two are laid out. even though we are requesting spending levels above sequestration, we have maintained flexibility in our budget. flexibility to respond immediately to the lower topline should sequestration be reimposed area and we did this by reprogramming some of the sequestration level for structure reductions that take longer to plan and longer to implement. ofh as the decommissioning the aircraft carrier the uss george washington. this was the responsible thing to do. it was responsible given the continuehat dod might

to experience a large -- the large cuts in budget and sequestration laws because of tong back reverting sequestration in 2016. that is why i have issued formal guidance to service leadership that these specific reductions will not be made if congress indicates it will make future appropriations at the top line levels of our five-year plan. dod has the responsibility to prepare for all eventualities. just as congress has the responsibility to provide dod with some budget predictability. my submitted statement explains our budget details and rationale behind those key decisions. i wanted to as a close -- as i closed really address some critical issues. the balance between readiness capability and capacity. to meet our national security needs under constrained budgets, we have focused on the balance,

the balance that will be required to defend this country going forward. of longre than a decade and large stability operations we've traded capacity to protect the readiness and modernization capabilities as we shift focus on future requirements. these are shaped by and during an emerging threats. we have to be able to defeat terrorist threats and deter adversaries with increasingly modern weapons and technological capabilities. we must assure that america's economic interests are protected through open sea lanes, freedom of the skies and space, and deal with one of the most urgent and real threats facing all nations, cyber attacks. that is why we protected funding for cyber and special operations forces. for the army we proposed drawing or 450,000ut 440 soldiers. less than 10% below its size

pre-9/11. i believe this is adequate for future demand. we will continue investing in high and ground capabilities to give our soldiers the most advanced honors. army national guard and reserve units will remain a vibrant part of our national defense and will draw down by five percent. who also streamline helicopter structure by reducing the fleet by eight percent. active army's fleet will be cut by 25% but we will still maintain and keep these helicopters modernized with the latest technology. as we move from a fleet of seven models to four models. these decisions including a recommendation to trade out for werefor the guard driven by strategic evaluations. guard units may prefer the apache but under constrained

budgets, high demand resources like apaches must be where they .an deploy fastest as our north com commander testified, homeland missions do not require armed attack helicopters. the navy will take a live and of its operational inventory but they will be modernized and returned to service with greater capability and longer lifespans. the ring core will continue its planned drawdown to 182,000 that will devote 900 more marines to increase embassy security. though smaller the marines will remain ready and postured for crisis response as they moved back to their expeditionary amphibious roots. the air force as you have noted , replacing the a-10 it with more modern and sophisticated aircraft. the specifics, numbers, and reasons for my recommendations

as i have noted are included in my statement. close, regarding compensation reform. taking care of our people means providing them with both fair compensation as well as the training and tools they need to succeed in battle at any time anywhere and return home safely. to meet those obligations under constrained budgets and achieve that balance, we need some modest adjustments to the growth and pay and benefits. all the savings will be reinvested in training and equipping our troops. there are no proposals to change retirement in this budget. let me clarify what these compensation adjustments are and what they are not. first, we will continue to recommend pay increases. they will not be as substantial as in past years, but they will continue. second, we will continue subsidizing off-base housing costs.

the 100% benefit of today will be reduced but only to 95%. overt will be phased in the next several years. third, we're not shutting down any commissaries. we recommend gradually phasing only forsubsidies. but domestic commissaries that are not in remote locations. since commissaries will continue to operate tax and rent free, they will still be able to provide more people with a very good deal as they should. we recommend simplifying and modernizing our three tri-care systems by merging them into one tri-care system with modest increases in co-pay and deductibles that encourage using the most affordable means of care. active duty personnel will still receive health care that is entirely free. this will be more effective and more efficient. it will let us focus more on quality.

overall, everyone's benefits will remain substantial, affordable, and generous as they should be. president's defense budget is responsible, it is balanced, and it is realistic. strategyts our defense and defense this country and keeps our commitments to our people. not only ensuring that they are well compensated, but they have the best training and equipment in the world. however, these commitments would be seriously jeopardized by a to sequestration level spending. my submitted testimony details how sequestration would compromise our national security. the result of sequestration level cuts would be a military that could not fulfill its defense strategy. putting at risk america's traditional role as a guarantor of global security and ultimately our own security. that is not the military the president and i want for america's future. i do not think that is the military this committee wants

for america's future. but is -- it is the path we're on. leaders and i look forward to working with you as we make these difficult choices, these hard decisions that will be required to ensure america's therity today and into future. and protect our national interests. thank you. >> thank you. general dempsey. >> thank you. it is a privilege to be back here to provide you an update on our armed forces and to discuss our defense budget for 2015. i want to add my appreciation to ale for hisary h service. i will begin by acknowledging the alarming progression of events in ukraine over the past few days. our senior leaders have made it clear that they wish to see russia's provocation resolved through diplomatic means with

coordination and collaboration with our allies. i have spoken with most of my nato counterparts. they are concerned are you take -- concerned. we committed to developing options to provide those assurances and to deter further russian aggression. we agreed that together we must past [inaudible] simply put the allies stand together. as you know, i recommended suspension of our military and military exchanges with the russian federation. the nature and extent of russia's actions left this little choice. european command to consult and plan with the construct of the north atlantic council. we want to provide nato's leaders with options that stabilize and not escalate tensions in the ukraine. we are one part of that

equation. i spoke this morning with my brush and counterpart and i conveyed to him that the degree which russia's territorial aggression has been repeated mobley, i urged restraint and to preserve room for a diplomatic solution. russia's actions reminds us that the world remains unpredictable, complex, and quite dangerous. we cannot think to nearly about future security challenges nor can we be too certain that we have it right. the world will continue to surprise us often in unpleasant ways. that was how my last week ended. it began in afghanistan. same -- addressing the security remain. challenges that inspired.re they remain fully engaged on the missions set before them. they continue to build the institution of the afghan national security forces which, given the right political structure along -- around them,

has the ability to sustain the fight. we will be prepared to support a variety of options as our relationship with that -- afghanistan moves forward. this includes the option to drawdown by the end of the year if that is the decision made i our elected leaders. our joint and nato team has much work to do this year and they're ready for it. the global commitments to the joint force are not shrinking. neither are our global security threats. the most likely threats emanate from violent extremist groups and from ungoverned spaces yet we can never discount the possibility of state on state conflict created force must remain postured to provide options across the full spectrum of potential conflicts. at the same time, the balance between our security demands and our available resources has rarely been more delicate. that brings me to the budget. yousecretary has walked through the major components of the fiscal year if teen budget proposal which is a pragmatic

way forward. in my view, it balances as best as he can our national security and fiscal responsibilities. it provides the tools for today's force to accomplish the missions we have been assigned. rebuilding readiness in areas that were deemphasized during the past decade. it modernizes the force for tomorrow ensuring that we are globally networked and we continue to provide options for the nation. and it assures that we are working to ensure it is in the , even whilee transitioning to a smaller and more affordable force overtime. year, we need time. we need certainty, and we need flexibility to allow us to meet the needs for the future. the funds allow us to buy back

some of our lost revenues and continue to make responsible investments in our nation's defense. -- change thedy short term. it does give us stability. the joint chiefs and i will never and our campaign to find every possible way to be affect them. we will do everything in line with fiscal reality. we will seek innovative approaches as an imperative, not just in technology but also how we develop our leadership and work with our partners. we will improve how we buy weapons and goods and services and invest that every level.

we ought to be able to reduce. systems,egacy weapons and with your support we ought to be able to retire. we have arsenal that has grown at a disproportionate rate and that we ought to be able to slow in a way that makes the all volunteer force sustainable over time. we faced cuts to modernization. we simply can't ignore the forcences that make the less effective than what the nation means. kicking the can down the road will set up our successors for an almost impossible problem. we have to take the long view here. i know these issues weigh heavily on the minds of men and women in uniform and their families. ofy are less understanding uncertainty and piecemeal solutions. they want and deserve predictability. i have said before we must be clear about what the joint force can achieve, how quickly it can

achieve it, and for how long. this means under certain circumstances we could be limited by capability, capacity, or readiness, and these are the risks we have to manage. i support this budget, but it was not without risks i conveyed in my assessment. more conventional sites. we must rely increasingly on allies and partners, and our global responsibilities will have to be placed in balance. if sequester level cuts return, or we cannot make good on the promise, then the risk will grow, and the options we can provide the nation will dramatically shrink. that's a gamble none of us should be willing to take because it is our coast guard, america's sons and daughters who

will face the challenge with whatever resources we develop. our most sacred obligation is to make sure they are never sent into a fair fight, which is to say they must remain the best trained, best equipped force on the planet. that objective is a guiding principle as this budget was prepared, and it is one the joint chiefs and i remain committed. your outstanding commitment to men and women in uniform, and i stand ready to answer your questions. >> thank you for your service. comments arehe very appropriate. have a sevento minute round. we are all going to have to stick to the seven minutes if we're going to get our time and by a quarter to one to 1:00.

i think we can do it. stackeda series of votes at 11:45. we are going to have to work through those votes with some of us leaving, coming back, and so forth. we are used to managing that kind of situation. it may be a little trickier than usual, but if we stick to our seven minutes, i think we can do it. your statements will be made part of the record. ask -- i guess this would go to you, general dempsey. includesdget request numerous personnel related to -- proposals, which are intended to slow the growth of personnel cost. you mentioned a pay raise below , a rate of inflation reduction in the growth of basedg allowance

reduction and subsidies for seriesy commissaries, a of changes to the tri-care program, and reduction to the army particularly. hagel, you mention the savings achieved by these proposals was used to invest in readiness. do the joint chiefs including the national guard bureau agreed to these changes? >> yes, we spent about a year working comprehensively to come up with that package. i just want to mention one other thing. our goal here was to do this in --ay that we can particularly our purpose, which is to put it back in the services so they can apply to readiness counts -- the cap. thing our members suggest --

let's not do this every year. >> if congress rejects those proposals, is it not true we would have to find approximately $31 billion that those proposals provide for readiness and wouldization, that we have to find the 31 billion if we restore those cuts somewhere else in the budget. is that true? >> unless the comptroller has any other opinion on this, it's true. we try to articulate that in the statements. i want you to talk about the opportunity fund. add to the26 billion caps that are in law, and it requires congressional action. the budget believe you are requesting today if

approved by congress without the fyitional $26 billion in 2015 would enable our military forces to fulfill its assigned missions to meet our national security strategy? first, if we do not add the 26 billion, can we carry out the missions needed to achieve that strategy? >> we can fulfill our national security missions, but it will come at higher risk. >> it is an acceptable risk? risks as tot those what we would have to do, and they are pretty specific. mentioned some of them in your statement. soon will you be providing a specific list of what would be funded with the additional 26 billion dollars if

you were to get it? >> we have a general breakdown, withse i asked the chiefs the chair man to give me their list of how they would use that money. we have pretty good indications now, and we provide that. the comptroller may want to get into that. >> we will have that next week, a line item detail on the growth and security. >> i would add that both of it goes to modernization and readiness. then i think the last 10% or , 100% of the 26 billion would be to try to recapture a lot of the deferred maintenance over the last two or three readiness it's modernization. >> we will get the detailed list. assumes theplan statutory caps are going to be

modified and that the department will receive 100 $15 billion above sequestration levels for the four fiscal years after fy 2015. us and theent told public if they get that extra money, they would be able to , 440,000 orrriers 400 50000 and and army national guard of 330 5000. however, the budget documents were submitted by the department include the 115 but still andide for only 10 carriers strengthen the army of four hundred 20 thousand and national guard strength of 315,000 instead of what your statements have been, which is that with

that additional money, those numbers would be higher. my question is if you plan to spend the extra 115 billion as you request to maintain the 11 for the active army and army national guard, why is that not reflected in the budget? >> the direct answer to the question, and if you want to go is the specific areas you , we have got some time to make those decisions based on knowing with some certainty what sort of resources we are going to have. publicly in aaid letter i think yesterday, and

the comptroller talked about it in some of his briefings. we laid this out in our , toow-up documentation, too answer the question of why we would have to come back and make thecision planning for worst, planning for the reality of the law, which is sequestration, but if that $115 million would be funded, then we thed be able to have carrier because these are commitments that have to be made in the longer term. >> the documents we are going to get show the carriers would be retained? would they show the strength would be capped at 440 or 454 the army? would they show 345 or not? >> no. show 10 carriers.

>> there is a problem. >> i didn't say the budget would reflect that. i said the explanation. i sent letters out yesterday to the chiefs noting all this for the record. of whys an explanation we are doing what we are doing to give our services the time they need to adjust to this. you know, we have an air wing that would come with the carrier. these are longer-term obligations. if we do not believe we are -- g to have the resources >> i think there is a disconnect with public documents. chairman, the cutie are that that came- the qdr out spent a lot of time talking about the risks associated with it. it's very often the risks means

lives. discusses risk so much because this administration has put our national security at more risk than i have seen in the years i have been here. the direct or of national intelligence agrees that on february 12, looking over my now more than a half-century in intelligence, i have not experienced a time when we have been beset by more crises and threats around the globe. despite the fact the world is becoming more dangerous, this risk is growing as a direct result of the dismantling of our defense over the last five years. winter felt told the committee, for the first time in my career, there are instances where we may be asked to respond to a crisis and will have to say we cannot. general dempsey, i appreciate your assessment and couldn't agree with you more when you say, when we commit american sons and daughters into combat,

we must ensure they are the best forceed and best fighting on the planet. unfortunately, that's not a certainty anymore. said our aging combat systems are increasingly vulnerable to adversaries who are modernizing, and you discuss they diminish our present military advantage and compromise our ability to meet strategic objectives. the loss and deaths across the force could reduce our credibility and intimidate escalating conflict. i think that means we will have more events like ukraine. in georgia right before the winter olympics. georgia goes right to the area russia has confiscated by 20%. it goes right up to where the winter olympics were.

about the leaders in georgia. the same thing that happened in ukraine was going to happen there. what i see is serious. if you look at the chart on this side, it shows the entitlement again inare going up this fiscal year we are talking about now, and it's going down now. the wrongis going in direction. do either one of you want to comment on the continued decreasing the entitlement program as opposed to defense? >> senator in half, my job -- my job is to -- the defense department. i have presented the reality of

the budget. >> i understand that, because you are doing the best you can, as general dempsey within the confines of the budget you have to work with. is that what you feel? >> we are defined by budget caps. that's the reality. it's the budget cap congress , andd to that confines me i start from there. >> what i am talking about here advisable,that whether it's got budget caps or not? i want to get to a couple of other things. it goes beyond just the entitlement reform i referred to. that's very real, but i have a crs report that shows -- i have been working on this for quite some time -- that in the last five years between 2009 and

2014, the president has spent $120 billion on the environmental agenda, mostly global warming, climate, and that type of thing. i did a little bit of math talking about the crisis we are in, and i have appointed so many people saying this is a real serious crisis we are in. respect, if the amount was not authorized i congress. 1400 f 35actually buy , and people need to understand there's a price we are paying for these agendas that are rejected by congress. honesty, and the american people do also. i think secretary hagel, when you said american dominance on the season skies and space may no longer be taken for granted, the general said such reductions will not allow us to execute the

2012 defense strategic guidance. it will make it very difficult to conduct major combat operations. general dempsey said we are putting our military on a path where the forces so degraded and so unready that it would be immoral to use force. general amos that we will have arising, less trained, later to the fight. casualties.n that is how risk fits into this. the chief of technology under-secretary said on the third of january, we are cutting our budget to standley while some of the people we worry about are going in the opposite direction. we have had 20 years since the end of the cold where -- cold war and the presumption that we are technologically superior, militarily.

i don't think that's an assumption anymore. i have another chart over here. it's just kind of a reminder. i put one of these in place of each member -- the talks about the cuts in the fact that the defense consumes 16%, down from the total 16% of budget, yet is responsible on for 50% of thert cuts. about, and wealk talked about several times during the course of this presentation, that we are alleviating $26 billion to help at the same time it is being held hostage because there is another 30 billion more than that that will be given the same relief. that's my seven minutes. is that fair.

>> is your question is it fair? >> that's the question. i have a said, responsibility for this budget. every item you listed on your inventory as a risk of profits that is whye with we have come back with an additional 26 billion dollar request. that's why the president of the united states has asked for an additional $115 billion over the next five years. >> yes, but it's still disproportionate. you folks are given a budget. to the american people this itsn't look very realistic. needs to be articulated as to why we're in the situation we are in right now.

director is making a presentation. thank you. >> thank you, senator reid. i first want to begin by thanking the secretary for his distinguished service. can you give us an idea of the .ssumptions and ideas are twome level those different questions. what we deem to be an optimum presence of search capabilities

-- surge capability measured against war plans, so when we laid out this force against thee activities, and at request of this committee i asked us forus you many sessions to find a place where we think the risk becomes too high, and we see that point. it's called sequestration. the force we have gotten this budget can meet the requirements of the defense security guidance, which was the foundational document on which wascutie are -- the qdr developed. i think we have a discussion of what this force can do, there is higher risk in certain areas. one is conventional forces, which will take longer to generate. that's a much longer

conversation. the short answer is we have done that analysis. >> let me follow up with a quick question. we have to operate on the notion of rapid deployment of initial forces, the ratio andeen your active force your reserve components is based on the fact that you have to generate forces fairly quickly and have sufficient active forces to get to the point where reserve forces can be mobilized and effectively integrated and trained. is that the concept? >> it is. this is about balancing such that we have it immediately available. one of the other assertions is that conflict will generally occur faster and more predictable -- unpredictable ways with higher degrees of technology. we have to make sure to balance

the active components and rely upon reserves beyond that. >> thank you. it is a very fundamental issue we are struggling with. that is the commitments we have made to future generations and the resources we have available not only for the military but for education and investment. there is not a precise .omparison you are battling the same .imilar dynamic these are all earned benefits through sacrifice and service to the nation. if we don't accept or somehow ,ccommodate your suggestions the effect will be that you will have less resources and active

resources will have to go in harms way. it affects the training. it affects everything. that's the fundamental trade-off you are trying to negotiate. is that fair? >> it is fair. part of the overall scope of the balance. strategy, any perspective on not just short-term but long-term responsibilities has to include the balance the chairman talked about, which we spent a lot of time on. your specific point about repairing our forces i noted in my statement. it would be the most irresponsible act of a commander in chief or his secretary of defense or any leader to send men and women into war not .repared

that is part of the balance. we have to assure that would continue. we would see degradation of that, but at the same time, the be earnednsation, benefits, that has to be balanced as well. what we are trying to do -- we think we are coming up with a reasonable balance. subject to analysis. balanced probe it. the is significant part of how we came to this. >> in regard to your colleagues for these proposals with benefits going forward, you have

had a dialogue with not only active-duty personnel but retired forces. you have talked to them about these issues. do you feel you have done an effective job, and have they responded terms of recognition of these issues and a sense that we do it right and it is acceptable? >> i cannot guarantee there will .e universal acclamation my senior adviser is sitting behind me. we had enlistment involved throughout the process.

>> they have the qualifications to be integral parts of what we do. thank you. >> thank you, mr. secretary, general dempsey, and thank you, secretary hale for your outstanding service. we come here for a budget today, and i appreciate your comments that you are doing your best under the budget constraints that you are forced to abide by, and certainly some of the challenges you face by inuestration, as senator out, but i don't

think it's in dispute that this would give us the smallest army and the smallest air force in that. of time. capable, butre smaller. >> there is more to it than that. there is capability. >> i'm sure there is much more to it. there are also things such as presence and others. those are not disputable. your timing is exquisite. with theoming here budget we agree on, at least on the numbers. time when the world is probably more unsettled than it has been since the end of world war ii.

the south china sea, china more and more aggressive. syrian forces turned into a regional conflict, and the list goes on. today or yesterday china announced its biggest rise in military spending in three years . they increased their defense budget by 12.2%. i am sure she was appropriately disciplined, but apparently katrina mcfarland, the secretary for acquisition, said right now .t is being looked at again she later was disappointed and retracted those remarks. you come here for a budget that constrains us in a way that is

unprecedented since serious times. are unnamed quotes. no more land wars. that is why we are reducing our forces. we have seen that before. you and i have. we saw it after world war ii. we weren't prepared for korea. we saw it after korea. we weren't prepared for vietnam. after vietnam we had a chief of staff who came and told the committee we had a hollow army. now we are going through the same, ignoring the lessons of and it'st again, really a shame, which brings me to crimea. it's widely reported in the media today that our intelligence sources did not predict the russian invasion would take place. is that true with your

intelligence sources as well? to get to going intelligence matters here at an open hearing, but -- >> i'm not asking for intelligence matters. i'm just wondering if you are made aware that it was going to take place. i don't know how classified that would be. >> i know i was at nato last week, and there was an nato ukraine commission meeting, and early last week we were made well aware of this threat. >> so despite all the media reports, our intelligence woulds predicted lavrov invade crimea? >> i don't get to the specifics in open hearing, but if you would like a briefing of your staff on the specifics of the question. >> how about commenting on news reports that say it? >> news reports are news reports.

not real intelligence. >> in other words, the fact is, secretary, it was not predicted by our intelligence, and it is already well-known known, which is another massive sell your because of our misreading of the intentions of vladimir putin -- massive salfailure because of te misreading of the intention of vladimir putin. he was not about to see it go into the hands of a government that was not his. now please a fact. go ahead. >> i said early last week we were well aware of the threats. was in nato again. there was a meeting about the threat with the nato-ukraine commission. i have been speaking over the last couple of weeks to the

ukraine defense ministers. to are now gone. this wasn't new that we didn't know what was going on. >> the president and the secretary of state said this is not east-west. this is not cold war rhetoric. do you agree with that statement -- cold war actions, when mr. putin denies there are troops in russia? says they cannot withdraw russian troops because there are no russian troops in crimea? those that have some echoes to you to the cold war? >> i think secretary kerry addressed this pretty clearly in his comments, specifically about your point, about no evidence -- >> i was asking for your views. >> i agree with secretary kerry.

we dod it all out that not accept anything president putin said as fact about why they had to protect the so-called ethnic minority in crimea, and the other reasons the russians have laid out as to why they took the action they did, i thought secretary kerry did a good job of directing his comments to president putin's and i agree with what secretary kerry said. >> i thank you mr. chairman. >> thank you very much. >> first of all, i want to thank you for your service, and next secretary, for making a valid effort of putting the budget together.

what would the defense look like, and why should it look differently from what it looks like today. all work within the recommendations you put forward. i thank you for that. as far as the defense budget being under extreme budgetary pressures to do more with less, we understand that they have always risen to the occasion, and i expect the same to be done. first of all, i appreciate the efforts. the defense budget reflects a number of savings. i am concerned about the plans for the 2016 fiscal year and beyond. appear to favor the realities of sequestration. i hope sequestration is going to go away, and i know you have talked about that briefly. if it doesn't, do you need that flexibility that was not in the previous ceqa are? >> thank you.

senator, we do need that. as i go intod greater detail in my written add onet, and i would other thing. i appreciate your comments about trying to prioritize budgets. governors probably know more about this than anyone. >> i have had concerns about afghanistan since i arrived here years ago. thatnot of the belief 10,000 troops being left in afghanistan will trade the direction. i have always said if money or military might would change that part of the world, we would have done so by now. knowing the unknown as far as elections coming up, do you truly have a plan for pulling

out of afghanistan? i know it has been said the president has been given the order to move in that direction. are we moving in that direction? >> first, i want to speak briefly. you mentioned if we go back to weuestration, does that mean need more flexibility? absolutely, but flexibility alone will not answer our problems. the draconian way it was being administered is not fair to anyone. >> on afghanistan, as you know, we are there as part of the nato mission. i always remind us of that. they have a plan that and ministerial development and so forth. 8000 to plan calls for

12,000. that includes a regional approach. a modest presence in the four corners of the country, in particular because during this period after the election there will be greater instability as possible, and we think it prudent to do that. in the meantime we have had a challenge of getting a bilateral security agreement and have been directed to make other plans. we have got options between 10,000 and zero. those options are being refined because every day that goes by some of them become more or less likely. our retrograde activities are ongoing. those will not be a limiting barring our officials from making a decision. i think bob graham, were we to consider increasing our presence were we toaghram,

increasing our presence, would be key. >> my concern, and i met with senator john campbell last week theerning the reposition of army as the budget was put forward. my concern is with the national guard. the guard is very crucial to all of our states. knew not the guard we growing up. i filled the guard can be used in a much more cost efficient matter. recommended of them . -- reduction. >> both of them recommended

reductions, although the recommendations we made were definitely less than the act of duty. start with this. the importance, the relevance of the guard and reserve continue. there is no question about that. accomplishments and what they have achieved over the last their teen years. noted, the guard today is a different guard. we don't want to lose that. absolutely. their mission is different from active duty. it goes back to the question senator reid asked me about balance. we have tried to balance this with all the forces. need?re we going to how are we going to merge all of our forces together, and the

guard and reserves are a critical component of that? >> the amount of private contractors we have are at a much higher cost, i have been critical about the amount of money and effort we put forth on the amount of contractors and should be back to the military. i know you're looking at long-term cost as far as legacy also, but i believe we are much stronger with those people in uniforms and we are with contractors we are using, and i know it is cost savings or you believe that. i cannot for the life of me understand why i had so much opposition for reducing the capital -- the cap on contractors salaries. they still believe it needs to be around 500. directive the first we have gotten from the congress

that came out of this committee has been very clear. significantade progress. we are not where we need to be yet, but we are making tremendous progress bringing that element of our workforce down. controls, restrictions. we got it. we are doing it. appreciate it. my time is up. >> general dempsey, the command and control, intelligence that form provides the it are with .ital ground surveillance the air force chief of staff general wells -- general welch has made it clear the top for the long-range strike bomber, but right behind that is the replacement of the

tee. stars as a top pirate the budget proposal calls for a 40% reduction. presumably to fund the acquisition of a replacement platform. can we meet requirements for the proposed reduction? what is the proposal to replace this platform? it,he proposal to replace that is to say the next generation capability is a question i will have to go back and get with the chief of staff for the air force, but i can say, you asked the right question. can we meet current demands with the current inventory of that that form? the answer is it is difficult. it is one of our low-density platforms. often we are faced with employing it in the korean peninsula or north africa. those are the trade-offs we make. what we try to do is meet

combatant commanders at times when they need them the most. it's hard to maintain a persistent presence globally. we have other assets that fill in the gaps. this is a valuable asset. isthe proposed replacement with a business gap. that platform was old when we got it. it has gotten older over the years. i tell you the folks under you in the army break out into big smiles and their eyes light up when i talk about joint stars in theater. we simply have no replacement weapon system i know about, and the number in the budget is far enough to even begin the gig about replacement. i would urge you to rethink this

and think about what we are going to do long term. does it need to be replaced? i agree with that. i think it's time. thatther options are not concrete and not that positive. as you think about that, i look forward to engaging with you. >> they are so useful, discounting its capabilities and forward air control roles. while there are other assets that can perform the mission, none can do so with the same maneuverability and targeting capability. i think it is wishful thinking to believe pilots of the other platforms will receive training necessary to be proficient in close air support. it not make sense -- we are

going to phase it out. it is an old platform, but it has done such a great job in the recent the editors we have been engaged in -- recent pa terror have beentheatres we engaged in. does it not make sense that is the point we phase out rather than arbitrarily cutting off. we are going to take those butlanes out at 15 or 16, we are not scheduled to even think about another f 35 being or 24.ted until 22 >> i am one of the few people come to my an a10 rescue. you don't have to convince me it has been an extruded early

valuable tool on the battlefield. oft we are seeing is some the difficult budget decisions we have to make. the logistics trail is more .ffordable we are going from seven rotary platforms down to four. we have toecision make with current budget pressure. i support the chief of staff of the air force and the chief of staff of the army on their decisions. hegel, an issue are always raises concerns commissaries. they are a core benefit. they contribute greatly to recruitment and retention. i am one of those

who thinks you may get just as good a deal at some other retail outlets from around the country accessible, be as but the price may be better. you are going to be reducing the $1.4 billion in subsidy we pay by $1 billion over three years. at the same time, you are going to encourage them to act more like a business. we have a study that is going to be forthcoming in the early part of 2015. doesn't it make sense to see what the study recommends, which frankly may recommend a limitation of commissaries? i don't know what they might

recommend. doesn't it make sense to see what the study says before we go about reducing the subsidy in a significant way? >> senator, are you referring to the compensation retirement? that's an important question. we did look at that issue. we did not come forward with retirement suggestions based on let's wait. on the other compensation issues we did come forward with, commissaries being one of them, it was the feeling of our senior and significant analysis that we knew enough about where we will have to eventually go with commissaries that they felt they could make the decision now. we have about 250 commissaries

around the world. we think if you phase out the subsidies or the time we are , not unlike the way they are funded and self sustained, it makes sense, and very good deals will be given to servicemen and women. it was a consideration we did make as a set of overall recommendations. >> thank you, senator. senator hagan. >> thank you. welcome. thank you for being here. this budget would result in the in activation of the air force of 440th airlift

wing at fort bragg in north carolina. with it and acted there would be no airplanes stationed at pope airfield. the four 40th provides critical support to the 82nd airborne division and all the other major units. airliftludes the total for training missions. i just want to reiterate my strong disapproval of this recommendation to enact a great the 440th airlift wing. i want to go to my questions now. secretary hegel, last week i had to lead a bipartisan group of 51

about our congress concerns over sudden change in reimbursement policy for s.itical medical test as you consider your response i want you to think about the real .xamples this applies to service members and retirees. the first part, a military carrierss found to be of the gene. this testing was covered by tri-care at the time. the delivery of this couple's child was moved to a hospital with a neonatal intensive care facility. able to address a

life-threatening complication immediately. if these were to occur today the same cystic fibrosis test would not be covered by tri-care. if not the baby would not have been born in an appropriate setting. his civilian oncologist monitors special blood test for him every 100 10 days. this test is considered the most sensitive test available to track this type of cancer. -- special blood test for him every 110 days. they would consider it practice if he did not use tests to monitor his cancer. the alternative is for an invasive bone marrow biopsy. last summer this individual over $1000bill for for the blood test because tri-care no longer covered it. while appealing the charge he learned this would have been

covered if it had been ordered through a military treatment facility. .e are showing the dichotomy these tests truly provide useful information to help physicians determine the best course of treatment and are widely considered to the medical community to be the normal standard of care. needs to reverse this decision so those who sacrificed for this country are not forced to pay out of pocket or forgo these tests. secretary hegel, i just want to give you the background and say, would you promptly respond so we can fix the problem? >> of course i will. i am not aware of the specifics of what you are talking about. get the specifics and details, and we will find out. >> inc. you.

i want to give you real life examples of how this impacts military men and women. as part of the fiscal year budget request, the department is laying out a number of proposals that would negatively affect compensation. fiscal understand challenges, we cannot seek to balance the budget on the backs of our service members. includes a pay raise, increased cost for housing, increased tri-care fees. general dempsey, i am particularly concerned about the combined impact of all of these benefit cuts. how do you see these impacting our service members, especially younger members enlisted with families? >> first, i mentioned we spent every bit of the year working on and we have got

any number of programs and data management instruments that can lay out exactly what the affect ourand the cases we use e6, and weare project that to the 30 year point. we can project that information, but we think this is a reasonable approach to getting paid compensation health care back in balance. hear theme to characterization of balancing the budget on the backs of our servicemen and women. this weighs heavily on all of us. the fact is the manpower cost can be anywhere from a third to a half of our budget. we are trying to find about 10% of what we need to balance the budget out of that account. and 90% out of the rest of the

budget. we have been extraordinarily careful not to take some sort of template or approach to this. it has been carefully managed. >> thank you for your comment. secretary hegel, has the department considered the impact of these cuts it will have to , anditment and retirement with military compensation and retirement set to release their findings in less than a year, does it make sense to make sense across the board cuts before we see the results of that report? >> we did take into consideration all of these different scenarios, possibilities i think. the chairman laid out pretty quickly not just the balance but the responsibility we have to our men and women in uniform, the commitment they make to their families and the future.

that is the priority. have come up with a set of recommendations. we slow the growth of increases. i have laid out some of the specifics of that. we did not do this unilaterally, i took recommendations as the secretary of defense from the chief and the secretary and dempsey. i know we cannot continue to sustain the kind of growth we are on and still make certain that our men and women will be ready, are ready and equipped and especially in light of a number of whites made here earlier this morning about emerging threats and merging technologies. some of our adversaries are developing pretty significant capabilities and technologies that we have to stay ahe o