receive their basic allowance for healthcare that takes care of the premium for that of their family. >> thank you very much, mr. chairman. >> mr. reed, if you don't mind i'd also like to have another member of our commission to speak to that, he's a reservist, please. commissioner kerney. >> thank you, mr. chairman. mr. reed, those of us who lived in rural areas, when we were on reserve duty, it wasn't tricare exactly, it was more like try to find care and this takes care of that. what we're offering now is a system that provides a network that is robust enough to care not only for the member when they are on their civilian side but also for the families when the member is deployed and that is exactly what we're trying to do here and do it in a way that is fiscally sustainable. medical readiness as well as dental readiness are critical aspects of the overall readiness mission and if we can do that with this kind of a system of a tricare choice system, then i think this is a good step

forward. >> thank you very much. >> thank you. >> thank you, mr. chairman. say to my good friend steve that i used to sit next on on the house armed services committee that i agree with you except i'm more concerned with today's war than i am with the war after next. right now is when we're having the problems that we're having and we had a hearing last week. we had schlesinger, george schultz, madeline albright. and they reminisced over what our abilities were, capabilities at that time, what is expected and even read the charge that president reagan had made at one time in determining what a defense budget should be and the reason i'm saying this is i look

and i agree with senator reid who talked about the inadequacy in meeting the threats. i agree that director clapper when he says looking back over my more than half century in intelligence, i've not experienced a time when we have been beset by more crises and threats around the globe than we are right now. that and in light of the fact that we also have the forestructure problems that i'm very proud of all of our chiefs. general odierno has been before us and all the rest of them, talking about how significant this is and it's unprecedented. the reason i bring this up, we got a quality group here, i say, mr. chairman, and i just think that after this is over, you should reconvene and get into this thing as to the current threat that's out there and the inadequacy that we're facing. it's one thing for the chiefs to come forward and talk about what's going to happen with sequestration but when you folks with your backgrounds come

forth, to me, that gives a different sense of meaning and i would hope we might consider that. i was a product of the draft and look at things a little bit differently than others. i was one of them who was not at all optimistic that the all-volunteer force would be the quality force that it is. i was wrong. although there are some advantages to the draft at that time. i think that when you are examining the charge that was given you, you would say, and i would ask you the question, what have you decided motivates the young people to serve in the all-voluntary force, and then why are so many of them leaving? what is -- if you could zero in on two or three reasons as to why they don't stay on. you know, quite often, we go back and talk about how much cheaper it is for us to retain than retrain. the extreme example is to get a pilot to the point where they

can do an f-22 quality and the re-enlistment bonus is $215,000 but the cost to retrain is $17 million. scale that down to whatever forces we have here. what is the major reason that they come in and then they leave? question, senator inhofe. we spent a lot of time looking at that specific issue that you address and it's a very important one. as we think about how to modernize the compensation programs compensation programs for tomorrow, we are thinking about exactly what is required for the military to be able to recruit and retain people and we have to think about the way the new generation think, what they value, what they prefer. those are the kind of things that we listen to and we heard

as we talked to people. and as it was already indicated the other day, 83% of the enlisted force actually wind up leaving without any kind of retirement benefits which is one of the reasons we made the recommendation that we did to be able to extend that, some of the retirement benefits, for those service members who will serve and then move on to do other things from 17% to 75%. and i'd also like to point out that a couple of things that we were told specifically about service members is that there's -- they're concerned about the service to the country and the g.i. bill. those were two of the things that were very important to them in terms of why they would come in, what they were looking for. get an education benefit, be able to take advantage of that, which is a strong recruiting tool, and then move on to something else. >> very good, thank you mr. chairman. >> thank you mr. chairman.

thank you all for being here. i guess this would be to anybody that wants to answer the question. but my thing is, is that it's very difficult position you're put into and we all are because i don't think anyone questions the commitment the service people and all military people are to the united states of america. in west virginia, we feel very strongly about that, people able to take a bullet so i would always explain when i was governor when they would explain or complain whether it be state police retirement or fireman's retirement, they're willing to put their life on the line to you. i'm saying, do you all look at that from the standpoint -- because most all state budgets or municipality budgets, the firemen and police retirements are out of whack and under water. we have to recognize the sacrifices they're making for us. how do you balance this out?

what would i tell the national guardsmen of my state deployed three and four times, and we're looking about changing some of the compensation and what type of literacy training are we giving them to help them on their retirement and why do we have so many that leave with 10 years of service in the military to go into private contracting for the extra pay overseas in afghanistan and iraq? what's the magic number of 10 years? because i find most of our soldiers of fortunes that leave our military that we've spent an awful lot of time and energy training them, leaving, going for the higher pay. can you give me that magic thing of 10 years what they lock in and what gives them the freedom to do that? whoever wants to chime in on this. >> thank you very much for that question.

>> i think you let have a very difficult time retraining men and women to serve in the military. look at what you have done with pay and compensation. it is better than market and it needs to be. the changes enacted have not been given enough praise. given the stress on families today, i a proud geezer father. am i've got a 13-year-old and if we think about having to move our son once every four or five years, it's like a traumatic thing inside of our household. that's way more stability than anybody in the military gets. the stress in the families has increased over the past 14 years

and thanks to congressional action, the paying benefits are quite strong and they need to be in my opinion otherwise we'll have a difficult time retaining men and women in spite of the fact the seconded thing has happened. senator, fellow draftee, referenced the good old days. the american people are quite proud of their military and they're quite confident that they're getting the kind of support that they need but americans are a lot more patriotic and care deeply about the men and women who are serving and i think that attitude makes a big difference to people's willingness to serve so i would say the combination patriotism and paying better make a big difference. when i looked at the recommendations, the questions i ask are, are we keeping faith with the men and women who have served and those of you who have understand what happens, you give up your freedom. if you get ordered to do something or go someplace, you do it.

so are we keeping faith with those who have served and who are serving and i answer emphatically, yes. and secondly, do the recommendations we make enable us to continue to recruit and retain in the all-volunteer force and again i answer emphatically yes but it is something i think you constantly have to pay attention to and i think there's a qualitative difference between the public pensions at the fire and police level than you have at -- as you know, the firemen and police can got ornery and they don't have a commander or chief to tell them exactly what to do. i have orders to report to so-and-so location, i say, yes sir, and go. in negotiations with the police union or fire union, you have serious negotiations with what they'll do. there's a qualitative difference in the relationship with the american people and the men and women who have sworn that oath and put their lives at risk. and put their lives at risk. >> it's not a hard sell. in my state and states around

the country are very committed to our military force and they want to make sure they're compensated and taken care of and given the care they need. they just want to make sure we're doing it in an efficient manner and if we're giving them the training and expertise and literacy training they need to make decisions. >> i would say i think the moment that ends no matter what you pay men and women, they're not going to sign up. the moment that that attitude changes, as it was in the 1970's, it's going to be difficult to recruit people to service. >> on our indian reservations, a lot of people serve three or four years and very rarely go for a career and i always had a difficult time getting our native americans to go to the military academies but it seems that aside from whatever we do, there is a tradition in our country of a lot of people wanting to serve three to five years and not -- of course we need those people -- and that's particularly true in rural areas

in states such as mine and with native americans. >> thank you, mr. chairman. >> thank you senator mccain. mr. chairman, you've mentioned flexibility a couple of times here in your statements, and in the report it says that the force may benefit from a flexible retirement system that incentivizes them to remain in service longer than other occupational specialties, with regard to doctors cyber personnel. do you have specific proposals? i'd like to dig down a little bit into this. do you have any specific proposals that the commission recommended? and do you see each service setting different requirement there? and if so, do you anticipate any problems? do you see competition among the services? >> thank you very much, senator, for the question. i'm going to ask commissioner

zikime to respond to the specific of your question first. >> thank you mr. chairman. senator, as you know, each of the services already has different types of bonuses to keep people on. for instance, nuclear engineers and specialists get special bonuses from the navy and so on. our proposal does not tell the services how they should do it. what we're trying to do here is give them maximum flexibility so if there are as you pointed out, certain specialties that frankly, like doctors, you actually get better with more time in your practice, then the services up front can decide that they want to recruit an individual and have that individual stay on longer than the normal term. essentially -- but it works both ways, actually. it's not just to keep people longer.

they can sign up for somewhat less. we wanted to give them maximum flexibility so at the same time we're giving the individual choice, we're giving the services flexibility and again it goes back to the question about what kind of a force do you want to shape. the services are the ones who know that best, of course. >> when you looked at the surveys, were there any issues identified that the commission did not make recommendations on? i guess i'm thinking specifically of the housing allowance and that has been such a big issue in the past. the president has made proposals. but yet it was not addressed by the commission. are there other instances there? and really why didn't you address the housing? we hear about that a lot. >> senator, thank you so much for the question. we indeed, took a very, very hard look at the -- at housing b.a.h., and we actually looked at the pay table and we looked

at the structure of all of those programs and we clearly asked ourselves three questions. number one, were these programs delivering the benefits that they were intended to. number two, were the benefits being delivered in the most cost-effective way possible. and thirdly, could this commission design a clear path for modernization in terms of improving those programs and after looking at those, we did not feel that we could design a clear path to modernization for those programs and instead we could do -- provide a much better benefit to the service members and do it in a most cost-effective way by making the recommendations that we've made. >> would it be fair to say that the commission supports what the congress did, then, with the housing allowance? or do you support the

president's proposal? >> senator, again, thank you for the question. i'm going to ask commissioner higgins to respond to the specifics of that question. >> thank you. >> thank you mr. chairman, senator. clearly, b.a.h., in our view, is operating effectively to provide the housing that our service members need. there are a number of the elements of the compensation system that drew our attention very dramatically that we did not elect to meddle in, if you will, because we believe they are operating effectively. others would include the pay raise mechanism, the pay table itself, we believe is operating correctly. special pays and allowances, and b.a.h., i think, along with that.

now, on each, if you believe you need to save money then obviously the congress could act to produce programs. and that's your choice. we were targeting our objective was modernization and systemized modernization where we go into the structure of a program. we do not believe that the structure of those programs were deserving of modernization. if i could go back to your other question, as well, senator. the service chiefs asked for flexibility. one of the primary complaints about the retirement system as it exists today is that it is overtly rigid inflexible. service chiefs implored us to seek opportunities for greater flexibility. and we delivered that section

you're referring to. are there some potential frictions between the services? would it cause some concern? do we believe it's going to be used instantly? no. there will be uncertainty and i think that will keep that proposal in check perhaps for years but there will come a day when greater flexibility in the retirement system will be needed and that provision will be there to deliver that to the managers. >> and it would also allow the services then, to compete for the men and women that they need to perform in different areas correct? >> always a difficult issue controlling competition between the services. the service cultures are indeed incredibly strong. you always want to enduver --

endeavor to limit competition and create systems that operate for the best interests of the total force but there will be some insecurity there and i think that will cause this. as enticing as it may be to some people inside the pentagon, whether or not it rises to a level where it's implemented, is a serious question that's going to take time to resolve. >> thank you, sir. thank you, mr. chairman. >> senator gillibrand? >> thank you mr. chairman, for this hearing and thank you to all of you for your very hard work. one of the most important considerations for me in terms of potential changes to benefits and compensation is that the approach be holistic and we ensure the lower enlisted troops and families do not disproportionately feel the impact. can you please walk me through why you believe this is a holistic approach and how it

will impact lower enlisted troops and their families. >> thank you, senator, for your question. going to ask commissioner chirelly if he would respond to the question. >> i think we've done everything we possibly can to make it holistic and apply to everyone. we've got two charts that go into retirement. one listed e-7 to show what his retirement is under the current system and what it would be under the new system. and i think you can see that it's clear that he or she would do much better under our proposed system than they would under the current system. we have one per officers it shows the same thing. i think when it comes to -- and i don't think just the retirement system you should look at. i think you should look at what we're doing with healthcare. we're giving them the ability in healthcare to go out and immediately go to see a private

provider that's in their insurance network or if they would rather choose to go to the m.t.f. because that's where they feel they can get the best care, they can go to the military treatment facility. today, under most of the tricare programs it takes a period of time before you can get the tricare referral and it's up to 30 to 40 days from the time you want to see somebody until you can see them if you can find a provider. this applies not only to officers and warrant officers but to our enlisted soldiers so i think everything in our recommendations was geared to enis that your whatever we recommended was holistic and applied to both officer and non-commissioned officer in the same way. >> in a holistic sense, we included exceptional family provisions and childcare issues in our report which normally might not be in such a report

but a lot of the lower ranking service members have a hard time with waiting lists on childcare and so forth so we tried to be holistic in that sense. >> ma'am holistic was not only of the moment. we were reverent to the past for our military traditions and heritage. >> thank you. >> if i could -- >> please. >> there's one area where we're not talked about. you've completely destroyed me because i tried to get the chairman and the rest of the commissioners to stop using the word "holistic" and obviously i failed in that effort. among the things you really need to think about is all these men and women at some point are going to transition back into civilian life and the changes that we're recommending in the healthcare side and the changes we're making on the retirement side make it easier to do that because there isn't a differential between what we're recommending and the civilian population. >> i'd love to understand better the healthcare proposal. i understand part of the recommendation is to create a basic allowance for healthcare based on the average family's

out-of-pocket cost to cover the costs of premiums and co-pays. how do you account for families with extraordinary needs? will they pay more? and i'm especially concerned about families with special needs dependents, children with special needs specifically. >> senator, thank you for the question. we spent an inordinate amount of time talking to families across the country about the challenges that they had with exceptional family members, and i'm going to ask commissioner buyer to please speak to that question, the specifics of that question. >> two parts to the question. i'll do the healthcare and then the extraordinary families piece. to the basic allowance for healthcare you're correct. in order to take that determination, it will be decided by o.p.m.

o.p.m. of whom will manage the plans and they will take the average of those premiums of the plans that were selected in the prior year. they also then will look at the average to come up with the co-pays and the deductibles and then that will set that -- >> does o.p.m. help families navigate it? this is a new system for them. >> part of our recommendations with regard to literacy training literacy is not only for financial training because now as we move on to the thrift savings plan and government contribution there's a literacy piece but also a health piece pohelp -- to help people navigate going to more empowerment of the individual. we're used to our military being paternalistic so as we look at what's happening in society and how dynamic these -- i want to say the new generation is not

that they're the selfie generation. they are the generation, they want to make greater controls about themselves. they watch their peers making contributions in the 401-k. how about me? i'm in the military, i want to participate, too. so we've come up with that blended. but with regarded to healthcare we're making that empowerment of choice and educating them how important it is to make the best plan for themselves and their family. when we give them the financial literacy and the health literacy, when they leave the service, it is a better individual and it's a better family. >> senator if you don't mind, i'd like to have commissioner higgins to follow up on the latter part of the question. it was two pieces. >> my time's expired so it's up to the chairman. >> that's ok. go ahead mr. higgins. >> thank you, plantar mr. chairman. >> thank you, mr. chairman chairman mccain. senator, we had a great deal of concern about exceptional family members and how we would care for them. we have a proposal, of course,

that would add a new level of benefits for those families and we would -- one of those areas where we would increase costs so we were not all about cutting. we were about making life about making life better for service members. if you had a catastrophic situation in the family where you had extreme costs related to an exceptional family member there is also a fund that we would propose to ensure that those out-of-pocket costs did not get excessive. we plan on that for about 5% of the people. so there is help their. -- there. >> thank you, chairman. i want to thank all of you for the hard work and thoughtfulness that you put into this commission and for having this important discussion with us.

today, i am walking back and forth between this committee and the budget committee. as i look at where we are, to use the word holistic in a way that i think the point needs to be made here is if you look at where we are, for example, the president's budget which was just submitted, by 2021, what we are paying in interest will exceed the defense budget. as i look at the work that you have done on the bipartisan commission and we look at what the biggest drivers in our debt are overall, looking at the big-budget, mandatory spending, programs that we need to have similar looks at medicare, social security, very important programs to people, i appreciate that you have done all this work. we are looking at our military

stepping forward first and making many changes. i think we need to look across the entire budget, ytoo. where we are, we are going in 2016 two defense budget, only 3.1% of gdp and 14.3% of federal spending, which is the bottom of historic rates since 1950. the reason i want to put that in perspective in the big picture for everyone, we look at the sacrifices that our men and women in uniform make. this separation from family, the sacrifices they make putting their lives on the line, all of that. the work that you have done is very important and we look forward to delving into it more deeply. i hope it is a bigger congress as we scoot between here and the budget committee that we will look at the big picture and we will not be sitting in a situation where we will continue to shrink because we will not take on the other hard challenges that need to be taken

on for this nation. it would be great to see a group like you look at the bigger picture as well. i just wanted to say that and thank all of you for your work. in terms of a specific question i wanted to follow-up on the retention issue. obviously, that is important to all of us in terms of keeping the very best military in the world and wanting our best and brightest to join the military. as we look at your proposal on retention, what assumption does the commission use regarding economic commissions in the country and operational tempo? what did you assume would be the rest of the private economic growth? that always drives what opportunities are best and brightest have -- our best and brightest have. and also operational tempo. >> it took us quite a bit of time, looking at that and the

liberating over those issues. we have experts that come in and talk to us about the millennial's and what that means , the social environment and those kinds of societal changes that have taken place and how that would affect retention. i will ask the commissioner to speak to the specifics of your question. >> i would totally agree with the chairman. we did. we provided for its ability at the 12-year mark, continuation pay. that is not a fixed amount. we will allow the services to set that amount based on the economic conditions at the time. the retention rate that they need to continue past that 12-year mark. everything we did was based around and operational -- from peacetime to the fact that we would have to deploy the entire

force. if you told me when i was in the army operation center that we would be able to maintain the all-volunteer force at the tempo that we did for 13 years, i would have told you there is no way whatsoever. and we did. i had aviators that literally new that they were going to be back down range. they would stay down for a year and come back and get another year at home. that down range. why they did that, a lot of it is your patriotism, love of country, and admission that they believe in. i think it is critical that, in times when we do not have that operational tempo, we give the services the tools we need. you will find throughout our report that we have done that. everything we can to give that flexibility to maintain those retention rates.

i would argue, for the earlier question, as i live around washington today, the biggest issue today is uncertainty. they do not know whether they will have a job tomorrow. there is real concern in the force as you see folks how far the cuts are going to go. is there a future for me here? i think our retirement plan speaks to that and puts us in a much better position should we ever have to cut the force again to provide people who are leaving something when they leave. >> i want to thank all of you. i have some questions i will submit for the record. i would just say, general, to your point, that goes to the sequester issue in terms of continuing to diminish what we are going to spend on our overall force. that is something we need to do something about. thank you. >> thank you. there was a modeling component to your question. i would like to pick that up for

the record and get back to you. we do have some specific details for that. >> thank you. >> general, i wish that every member of the senate could have heard your last comment because as you know, we are in very significant trouble with regards to sequestration. you reflect the views that were expressed in this committee by our for service chiefs last week and i thank you for that. >> i want to thank all of you for your service to the country. you have all done so many extraordinary things for us. congressman blears -- thank you for all your work. i also want to say, the importance of the extended care you are providing for family members, what you have done in that area is really significant and will change lives for family after family.

general, i wanted to ask you about the unified drug formulary between dod nva -- and va. you have done exceptional work in trying to stop the scourge of suicide. you have worked scott -- you have worked tirelessly to provide solutions and answers here. if you would tell us, a little bit, the challenge when you transferred from dod to v.a., what that is causing. >> thank you very much, senator. i really appreciate that. when i was chief of staff in the army, i had new idea -- i had no idea there were two different formularies between dod and v.a.. i thought that everyone who was using drugs as they were supposed to and were taking off-labeled depressants, that

when they showed up in their v.a. on day one, they would provide that prescription to the doctor and he would automatically refill it. that is not the case. we have two different drug formularies. dod, just about anything the fda has approved, they do. when the if it -- when someone gets on the right drug at the right dosage and goes over to the v.a., many times they find themselves in a situation where the doctor looks at them and says, i am sorry. i cannot refill that prescription. you will hear a lot of different stories from folks. i continue to have soldiers come to me -- just last week, i met with one that had the exact same thing happened to him. if there is any -- if there is anything we can fix to get at this suicide problem it would be to make sure that once we get a kid on the right drug, have the right dosage, wherever he

goes in the system, he is able to get that same drug and not be told, i am sorry, that is not in our drug formulary. >> isn't there also a confidence factor for that person, that they feel comfortable with the drugs they are receiving and the treatment they are on and changing it up is like a life-changing experience? >> what they do is they go find a private doc to give them the prescription and they pay for it out-of-pocket. we have told them, we are going to take care of you. this is your benefit. they go and they say, i am sorry. you cannot have that drug. no one cares if we get saint joseph's aspirin in dod and bayer aspirin in the army. that is not the issue. but on this drug formulary issue, these things that you have to be weaned off of, we

should not put our servicemen and women in the situation when they transfer over to the v.a. if it is not in the drug formulary, someone should hand them a card and say, go to your local pharmacy and get the drug. >> we are losing 22 veterans the day -- a day to suicide. in the active-duty, we lost 132 young men and women to combat in 2013. we lost 470 52 suicide -- 475 to suicide. so your efforts are life-changing. as we transition from dod to v.a. for a number of our young men and women, obviously, there are electronic health record challenges. what is the next largest challenge we have to tackle and knockout? >> thank you very much for the question.

we spent a lot of time talking about dod and what effect that has on the health care for the veterans. i am going to ask commissioner boyer to speak to the specifics of that question first. >> when you look at our recommendation 8, we are asking that the joint executive committee has authority -- it just does not have power now. we are asking that you give statutory power to implement the recommendations. when we met with secretary mcdonald, two things we learned. we agree with the commission but can you also -- this was not in our recommendation and i brought this to you. the secretary would say, i would like to have parity. when the deputy of the v.a. meets with the undersecretary

personnel, it is not safe. if you raise that so that the deputy secretary of the v.a. and the deputy secretary of the dod meet and give them authority with the power to implement, the difference. -- big difference. in terms of the antidepressants or antipsychotics, let the experts make that decision with where the formulary should be blended. with regard to large capital products -- projects, never again should we have the scenario whereby we struggle trying to get the timelines for the building of an army hospital . that should not ever occur to us again. with regard to the specifics of your question, what do you really anticipate, the biggie that will happen next, it really is this challenge as the country

moves to set the standard for electronic health records. we have the scenario whereby you are responsive with regard to the v.a. and the scheduling debacle. we said we will move to this choice program. senator mccain, as you talked about, we will have this increase of more non-ba -- non- v.a. care. when you were in the veterans affairs committee, we were spending about $400 million for non-v.a.a care. today, it is only going up. dod has a contract to create their own new version of the electronic health records. v.a. is doing the evolution of this and they want to make sure, as they moved to their new programs, they have data standards so they can be bidirectional. the v.a. is doing more non-v.a.

-based care. they have to be able to communicate with the v.a.. we are talking about bidirectional so they can communicate. that is a huge challenge. in dod, as they moved to their electronic health record and we make recommendations to move towards the selection of plans meaning there will be a lot of care provided in the private sector, this setting of national standards with how the country will communicate is extremely important. that is what i see as the biggie that is about to come. it is about your leadership and setting those national standards. >> thank you to all of you and thank you for your extraordinary service across the board. >> thank you. i want to thank the members of the commission for the great

work you have been doing for the country. i first want to get a sense of the big macro issues, the competing issues that you have seen, mr. chairman, as part of your mandate. in particular, what i was interested in, is there a concern about the projected growth, the benefits of retirement that ultimately could be taking away from training and readiness? i think we all want to make sure we are taking care of our troops. sometimes, what gets lost is ultimately, the best way to take care of them is to make sure that when they go fight and come home alive, is that an issue that the commission has had to deal with, this tension between competing issues that we are looking at with regard to military expenditures?

>> can i take that question? >> thank you very much for your question. i knew that commissioner kerry would want to answer this question. so i going to ask him. >> i am notoriously holistic about thinking about such things. i argued and i think the commissions were persuaded that, for us to address this problem that you identified without addressing the big one -- the big one is social security-medicare. that is crushing all of these accounts. be unfair to identify military requirement -- retirement as the big problem. it is easy to address -- to address social security retirement without medicare is saying that we are going to balance it on the back of our

military retirees. that would be the wrong thing to do and would send a terrible signal. >> can i jump in here? i had to deal with exactly that question when i was comptroller. first of all, there is a huge misunderstanding as to how much is being spent on our military as part of the defense budget. people think it is 50%. it is not. it is 29%. we wrote about that in our report. if you add the civilians, that brings it up to about 40%. that is a whole other category. that is not something we focused on. the real issue is, can you modernize what you are monitoring to the military and what you are spending if you can spend less and modernize more, all the better. we started with modernizing choice, what my fellow commissioner does not like, holistic approaches. that is where we began. and then we learned at where

things fell out. it turned out that you could save money as well. you could do better by your people and still save the government money. which tells you how inefficient the current system is. not deliberately so. when the all-volunteer force started, who was in it? mostly young men, unmarried. now look what we have. a completely different kind of force. we have to be concerned about echo programs, childcare, a lot of different things that just were not paramount in 1975. that is how we approached it. that was not the driver and it should not be. >> i am not just talking about procurement. i am talking about hard training for our troops.

>> again, this is not the issue. the amount of spending on personnel has been at a level -- the real problem is there is not enough money going to defense full stop. that is the issue. >> and you hear that costs are unsustainable, the baseline used for that was year 2000. why was that choosing -- why was that chosen as the baseline to prove that costs were unsustainable? congress made a lot of decisions to improve the personnel system. we did redux reform. we did the v.a. formulary reform. we changed the pain tables and we did try care for life. we did the g.i. bill and the pay raises. there is a clever reason why the year 2000 was chosen.

>> i am telling on myself now. my staff used to tell me to come up here and if you look at my testimony, i always quoted the fully-burdened cost of a soldier. i learned through this commission work that the cost of a soldier has not really gone up . it is what you hang on that soldier. look at an m-16 rifle and what it looked like in vietnam and look at that same weapon system today. with all of the bells and whistles we are putting on it. when you look at the cost, you are rolling in the additional cost of other things and applying that to personnel which i was totally wrong in doing that and i apologize. >> one last point which is really important. general pointed out that he could not imagine and neither could i when i came in, that we would be at war for 13 years and be able to keep all of the people we kept.

if congress and the executive branch had not done what it had done, as the congress men said, do you think we would have kept them? >> let me add to that. this commission was created legislatively. we are limited in the sense that we had to assume a volunteer force and we would not take anything away from anybody who has it now in certain areas. a lot of the commissioners might have had great, grand ideas. we try to stay within the confines of our legislative directives. >> thank you. >> general, it is very rare that we get an apology from a general before this committee. we will mark this as an historic moment. i thank you. >> i am surprised balloons and confetti is not drop from the sky. [laughter] >> senator hinrich. >> i want to thank all of you for what a difficult charge this was.

coming from a state with incredibly high rates of volunteers i want to say how much i appreciate the fact that you came to these recommendations unanimously serving in this body right now. we do not hear that word, unanimously, as often as we would like to. i want to ask if you can elaborate a little more for everyone who is here and serving for this panel about the process that you used in terms of gathering feedback from our service members, from their families at military installations, and at the veteran service organizations. that was one of the things that i was concerned about in this rocks us -- in this process. i was concerned with the love -- i was impressed with the level of feedback as you move towards those recommendations. >> thank you so much for the question. we spent a lot of time traveling across the country, meeting with

different -- meeting at different military installations. we met with active service members, reserve component members, as well as retirees. we held town hall meetings with public hearings as we travel. -- traveled. we would spend a lot of time trying to really listen. we listened very carefully to the comments that the service members and their families shared with this commission about things that they really were concerned about. they talked about tempo, the challenges with that. they talked about the long waiting list, trying to get their child into a childcare center. they talked about not getting access to health care and the problems that they had with

trying to get specialty care and waiting to get through the referral system. all of those kinds of things are what we used and we received tens of thousands of comments that came into the office from service members about things they were concerned about. we also received many responses from the survey. the survey was a very instrumental part of this process. we sent out the survey to 1.3 million retirees. we sent it out to our active components and reserves and received over 150,000 responses back that said, here is what it is that is important to us. here is what we prefer. here is what we value. they basically stacked one benefit over the other. we have a good indication of what is important to them.

>> i want to thank you for that. i want to move my next centered -- my next question to the center. i appreciate your comments about the culture of service that exists in our native american communities. that is one of the reasons why new mexico has had such an enormous overall rate of volunteerism, military volunteerism, over the years. i wonder if you have looked at the recommendations in terms of having the sort of tsp model and a contribution portion, that if you serve as an enlisted person for four years at the beginning of your lifetime career and you build that early nest egg through this process, what that looks like at age 65 plus, whenever you actually retire. and what impact that would have

on travel communities as well as rural communities, where there are hybrids of volunteerism. >> excuse me. i have an allergy, not a cold, so you will not catch it. we do have a problem in the sense of our native americans -- i just could not get mine to go through the academies. but they do join the service for three or four years and they have a high rate of service and they are very proud. in the reservation in your state, they have the american legion of veterans and so forth. this is the component that they would take out, at least. most of them with no retirement. they would have at least 1% that the government would have contributed. after two years, they could contribute up to 6% or match. but they will have something.

it depends on how our stock markets work out. in our country, we have to depend on the citizen soldier. in my view, it is just to retain everybody for 20 years. it is to retain them for 3 5 6. in my case, i surge -- i served for three years and i got 2% a year for the time i was in the military. most do not get that. we also have the thing that most of them do not go back to careers. they go back to unemployment and they do have all of the problems. for them to have some connection to some small retirement benefit at the end i think would be a good thing for us to have in our country. >> i would like to have commissioner higgins follow up on that question.

>> i am out of time. would you be willing to indulge? thank you. >> thank you. >> thank you, senator. tapping into the economic power of the united states through the savings plan is indeed a really powerful financial incentive. we looked at your point about examining what kind of growth experience, when the individual arrived at retirement age say 67, and the individual had no personal contributions but still would have $18,000 available to them in their savings plan. if they contributed and received the full matching 5% of their base pay, they receive, at age 67 over $90,000 in benefit that

would be available to them. it is a pretty powerful mechanism and i think would serve any community including native american. >> thank you, mr. chairman. gentleman -- gentlemen, i echo the message from the rest of the committee. we have been on the campaign trail together for a couple of months in the last year and we have met a lot of numbers of the native american tribes. they truly are a warrior society and we respect what they have provided to our country in terms of service to the armed forces. my question to you today is that you are trying to put together a system that, while it is similar -- at least, you want similarities for services provided. you are trying to provide these services as benefits to a whole

lot of different groups. you have the folks that are over the age of 65 those between 60-65, retirees who have left the armed services after 20 years of services but have not yet reached retirement age. you are also looking at those individuals who are still within the military. then you are looking at those who are coming into the military. how do you transition this from what it is today? i got a letter from a man who had served in iraq. he had 20 years and came back. he says, after sequestration the message he gets is my retirement, because i have done my 20 years but i am not yet 60, is i get my retirement but instead of the inflation factor, i get the inflation factor -1%. the savings to us was $6 billion. he says, in the middle of sequestration, the first thing people do is come back to the

servicemen and women who have served to be the first to give back. why are we the first in line to get cut? today, i think the challenge that this commission has in the challenge that this committee is going to have is to go back to a lot of those same individuals and say, here is $12 million that is being reduced or relocated -- reallocated. those of us who came in and thought we knew what we had for retirement and health care, why is it -- how are we being taken care of? is there a transition plan that says, we get to choose a or b? i think the work that you are doing is important to do. the challenge that we have is, how do you convince these men and women who are serving or have served that they have options available? and is there a transition plan that you have thought about for those individuals?

>> thank you very much for the question. we do spend time talking about that very issue that you raised in your question. as we thought through all of the transition assistance kind of challenges that service members face when they are transitioning out, we took all of that into consideration. i am going to ask commissioner chris carter to talk to the specifics of that. >> thank you, mr. chairman. once again, with my colleague to my right, the holistic approach that we took -- senator, the retirement -- first of all, to make sure we did no harm was one of the mandates given to us. senator kerry also mentioned something important and that is that we do not try and balance the bank on the backs of the military. we tried to not do that. in terms of specifics, some of

the programs -- you know, we can talk about this later on if you want to, but we talk about ramp programs. we do not transition automatically into something that might cost a little more to a retiree or service member. one of the things we thought was vitally important in all the things we recommend is a sense of financial literacy. if our recommendations are adopted, it would be a very robust financial literacy component for all the troops. that starts when they are in boot camp, sailor or basic training, and at various points in their career so they can make good financial decisions going forward. what the federal government does often impacts them and that cannot always be counted for.

promises have been made. sometimes, promises have been -- i do not want to say broken, but perhaps bent a little bit. when you do the financial planning and enable the service member to have the tools at their disposal to make good financial decisions, the impact of the bending of the promise by the government may be reduced somewhat. so i have a son who is a corporal in the marine corps. he is making a little bit of money now and he came to me and said, dad, what do you know about ford f-250's? i say, i do not know much, but i know you cannot afford one. the kids are making those decisions. they are going ahead and buying that expensive vehicle so they do not have the money necessary later on. we want to have a robust

financial training system so they understand the value of money. they understand the value of money later in their careers. when they hit the 12-year mark and they are making the decision, do i want to stay and continue on or go off, the money is there to make a good financial decision for them. to try to reduce the financial impact of maybe a brand promise, -- maybe a bent promise we want , to empower the service member with the ability to make good financial decisions. we would want to reduce some of that. i would only add also that the specific thing you said about someone who served 20 and is retired is grandfathered into the current system. they will not be part of this system now. the benefits made fleshly and change and that could affect them. medical co-pays. but that is over a 50-year ramp. but that 20-year person is grandfathered into the current

system. it would not change. >> thank you, mr. chairman. i hope, when we are all done with this, that the thought of bending the promises is one that we tried to get away from. >> that was certainly our intent, senator. >> i think you should see the recommendations as a continuation of what congress has done for the last 13 years. our goal is to improve the quality of the -- of paying benefits for our military. that is the primary objective of the commission. we set up a group of holistic recommendations that we think accomplish that objective. >> senator, we really honest to god, we tried to keep the faith. >> let me just say that. it is just summarizing what my colleagues have said here, that everything that we did was solely done to protect the benefits, protect the interests of the service members.

i would not want anyone to get the impression that we were actually cutting benefits for the service members. quite the contrary. even though we yield savings as a result of the approach that we took, the reforming the structure of those programs, there is no interest on our part to reduce the benefits of service members. in fact, we want to support those and improve those benefits. i would just like to make that point. >> senator kaine. >> thanks to all of you for your service. this is an incredibly important topic and a very difficult one. maybe even a thankless one. i had a chance to look over the recommendations and i see a lot of positives. some of the focus on financial literacy, the transition from veteran status to civilian life in terms of employment training and assistance, these are . far-reaching recommendations. i appreciate your work. i will make an editorial comment

that has nothing to do with any of you. you all were asked to serve on this and you said yes and you have done a good job. i am not a particularly sensitive person, but when i walked in and it is a panel and we are supposed to talk about military compensation and there is not one woman sitting here, it is like, wow. really? one of the first things that happened when i got into the senate was secretary panetta opened up women to combat. we have so many women serving in the armed services. the role of military services and their thoughts on these things are critical. i have a youngster in the marine corps. as he is talking to his guys they are often talking about what their own families are saying to them about in-flight commissaries, exchanges, retirement, health care. it was probably on us or the executive, but it seems so obvious that if we were really trying to have a military that is open to women -- >> strike probably.

>> then i will make it as a point -- obviously not critical to any of you who said yes, but i am just stunned. >> i would invite you to actually meet the women who served on the staff. they are sharp -- >> i am 100% certain of that but it is no substitution for none of them sitting there. we have panels looking just like this, where the folks backing of the panel members are smart, incredibly confident when it. -- incredibly confident women. i just want to see some women at the table. let me ask about collaboration opportunities. i do not think this was gotten into when i was gone, but what are the collaboration opportunities that we can harvest between the dod health system and the v.a.? looking down the road, there have to be some economies of scale. there also haven't -- there also

have to be some improvements. on the quality of care. and collaboration. did you get into that at all or what thoughts would you have for us? >> senator kaine, thank you for the question. we spend a lot of time talking about the dod-v.a. collaboration. it was mentioned earlier by one of my colleagues that, as we talk about the formulary issues, we talked about shared services. we talked about the need to do better standardization, have standardized policies. we have had conversations with the secretary of the v.a. about that as well. we talked to people at the department of defense about that as well. i am going to ask commissioner to talk about the additional specifics as to how we respond to the challenge of that and what we did about it within our recommendations.

>> thank you. earlier, we talked about the real empowerment of the joint executive committee and it really lies at the heart of ensuring that two department of government work together seamlessly. as that soldier, sailor, marine transitions from their active status into the v.a., they should not feel it. as soon as they come over, they should feel that that medical record is there and that there is true continuity of that care. the executive committee that has the authority does not have the power to implement. they just create a lot of paper. we are recommending that you give the joint executive committee not only parity between the dod and v.a., who lead that committee, but give us the power to implement it. so the recommendations on

blending the formularies with regards to antipsychotics or antidepressants, let them set the classifications of the drugs and how it should be blended. extremely important. john gurley spoke to that earlier. the other would be on capital projects. whether it is building of military hospitals, avi hospital -- a v.a. hospital in close proximity, have some resource sharing. a lot of sharing initiatives you find when you go around, there are a lot of local agreements. it is personality-driven. a lot of things that work and are affected by those crucibles, the joint executive committee can centralize those decisions rather than being decentralized. with regard to the medical information, the joint -- the -- that is the i.t. issue. the executive committee can really drive how the electronic health record is developed

through its evolutionary process between the evolution of this stuff -- of vista and this new electronic health record about to come out at dod. and then we have the providers providing care to the dod. or if you adopt that we are recommending the civilian plans, , you have doctors out there providing that care. it is between your doctor at home and the doctor from the mtf. when they transition over -- you want to make sure the v.a. is interoperable, too. >> that is very helpful. my sense is that secretary mcdonald understands collaboration. there is a collaboration moment that is coinciding with the issuance of these recommendations. we ought to do what we can to take advantage.

>> when we get with the secretary and deputy secretary they had met with us previously and they had initiated the policy paper. we had a chance to talk to general gurley about it. they were asking the doctors of whom they default to the prescription that dod doctors had written. it is nice to put it on paper. i would feel more comfortable if it were something that the joint executive committee looked at and gave it the implementation ability to ensure that if you had a prescription on active duty, a mental health drug, when you go to dod to ensure that you are going to get that drug is extremely important. there are a lot of social ills that occur if it falls back. >> thank you, mr. chairman. >> could i just add, at the beginning, the chairman invited us to speak our minds, is

dangerous in my case. i think his collaboration idea is not going to work. i do not think he will get to where you want to go unless you start considering putting these two together. because of the readiness component, it is going to be dod that is going to be in charge of it. i think you have to go further. i would give this committee both authorizing and appropriating authority so they cannot rope a dope you. you need substantial change to get where you want. this is almost a seven-your -- seven year anniversary of the story about walter reed. what do we need to do? i spent a fair amount of time thinking about this. we have a good recommendation. you are going to improve collaboration. unless you consider putting these two systems together and changing the rules, this committee both authorizes and appropriates. it seems to me unless you at

least consider those two things, it will be difficult to get the kind of changes that you want. >> we have always agreed with that, but -- [laughter] >> i want to go back to the question or follow up on the question this senator asked about the perception. senator kerry, i think he responded to it. the perception that we are losing people because we are not competitive with the market. you made the comment that we are at or above market. did i understand you say that? can you expand on that? >> i did say it and i cannot expand on it. became from the analysis that we get on the commission. that we are at or above where we are in the private sector. it was congressional action that did it. we need to maintain that status. >> so the perception that people are leaving at year 10 days on the same pay or benefits may not be right. there may be other reasons they are leaving, but not paying

benefits? >> it is likely that you have individual cases. particularly technical individuals. earlier doug was talking about , one of the problems we have got. one of these new civilian companies forming up, they will pay for security costs. i think you will find exceptions to it, but in the aggregate, you will see that military pay is at or exceeds what is available to civilians and benefit package as well. and i am for that. i do not regard -- jenna crowley talked about it earlier. i came into this commission believing it is likely we have a problem with paying benefits. i do not believe we do. that is not the problem. the problem is with retirement issues. i think it would be grossly unfair to address military retirement without taking on social security and medicare. >> let me follow up my having commissioner higgins talk.

we did quite a bit of analysis and review around. -- around that. >> thank you, mr. chairman. senator, i believe, in a general sense, retention today is probably as good as the military has ever seen it. having said that, there are select skills that have always been, historically, very difficult to maintain. some of the stories that you hear often are, let's say, nuclear-skilled individuals are always difficult to retain. once they acquire those skills they are provided a lot of -- they are very lucrative opportunities on the outside. in the recent years, during the war years, what emerged was the 10-year departure of special

operators. those people acquired significant skills during their tenure in the military that now have very high values placed on them in the private sector. and the military responded to that with a significant bonus that turned the tide in that community. the navy has always struggled with additional bonuses and several of their high-demand skills. as a general, and this may rely mostly on the economy and the unemployment rate, but as we move through these last few years, retention has been quite good. >> one final question for the chairman or as directed by the chairman. the recommendations that you put forward, how have they been embraced by the stakeholder community? i have heard it said that we are providing more efficiency and

value. it sounds like there are winners and not a lot of users. -- not a lot of losers. are there areas where there are concern among some of the stakeholder groups? >> i think, at this point, the feedback that we have gotten from the mso's, vso's, stakeholders of that like, they were very simply, to what we have done at this point in time, it would be premature to say that they are 100% on board at this time because they are still looking at the details and they will do their analysis as well. i think the dod is doing the same kind of thing. though i think the general feedback, at this point, from the department of defense and the joint staff is that they totally understand the merits of our report, what we are recommending, and how those recommendations support fiscal sustainability of the compensation programs.

the fact that we have been able to achieve efficiencies by reforming the structures of those programs without taking away any benefits -- in fact adding benefits in most cases for service members. >> thank you, mr. chairman. >> thank you, mr. chairman. i want to commend senator kaine for his observation that it is always good to have women at the table, as well as on the committee. having said that, i looking at your retirement plan. i thank all of you for your service. i am looking at your retirement plan which significantly decreases the number of members who will receive benefits. i think that is commendable. the plan does require contributions, basically mandatory 3% deductions from service members' pay as well as, depending on investment return

so can you share with me what the current service members think about a mandatory 3% contribution and what concerns you have about volatility in the market that will probably arise and what assumptions did you make regarding market volatility in coming out with your charts regarding retirement benefits? >> thank you, senator, for the question. on each of those counts that you just mentioned, we looked at those. the response about regarding what service members think, we were informed that service members felt very strongly that

this is an increased benefit. that is kind of what they are wanting, what they are looking for. i think they told us that they really want choice. they want the flexibility of being involved in helping to design the kind of compensation package that they prefer and how they would receive pay. those things were very important to them and they mentioned it to us. i will ask commissioner zakheim to talk to those benefits. >> thank you, mr. chairman. first of all, in the united states, generally, 97% of those who are put automatically into a plan state in that plan. -- stay in that plan. that already gives you one indicator. another indicator is that right now, 40% of the military are voluntarily contributing. 4 out of 10 without any kind of automaticity, government without any kind of government

matching or anything like that are putting their money into ts t. if you take those figures and put them together, you are going to get an answer that tells you that they will all see the benefit of that. frankly, you can always opt out if you want. >> that part, i am reassured by your responses. on the markets? >> the volatility. what we have assumed is that the money would be invested in very conservative kinds of funds. obviously, again, you can choose from a variety of funds. in tsp. our assumptions were that this would be -- there is one particular fund that would follow people's life stocks. when you are you under -- younger, probably willing to take more risks. as you get older, you get more conservative. again i think the record of tsp

, itself and the fact that civilians stay in and that military voluntarily go in tells you that they trust the fund managers and they are making their own choices. i think we felt very comfortable with the recommendation in terms of market volatility. >> thank you. that is reassuring. i am looking at one of your other charts. it is chart 9, pregnancy and childbirth and newborn care are the top two procedures done in the military treatment facilities. if we move into the private sector insurance market, what kind of effects do you think will occur as a result of that in terms of costs and other impacts? these are huge numbers for these two procedures. >> thank you for the question. commissioner buyer, could you respond first. >> i am going to do a tag team with the general in response to

this. i think this chart, when you look at it, is surprising. it will be surprising to a lot of people when they look at this. there is this assumption that the medical providers are providing procedures that really hone the skills that make those doctors and nurses combat-ready. when you look at a chart like this, you go, well, i suppose building the cohesion of the medical team, that is an added plus. with regard to the skill sets that are needed, something is missing here. what i am going to do is tag team with the general here because there are two pieces of this. as we move to the selection of plans, we want the mtf to be part of the network.

because the procedures that the mtf needs are not these procedures that you see in the chart. the creation of the joint this -- jointness and essential medical capabilities, i am going to pass it over to the general. >> well, i think it is absolutely critical that you understand the concept of essential military capabilities. that is built into what we are doing here. those things, simply stated, transfer to the battlefield. when you are shown this chart, they are going to argue that hey, we get a lot of great training in taking care of those childbearing issues and childcare issues. all we are seeing is that, if there is a way we can rearrange your workload to give you more of the kinds of things you see in combat, i think it is essential. as you talk to different

interest groups, as a retired person, i am looking at how you are going to provide care for me in my golden years. if you get stuck on that, you will miss the essential piece of what we have to do in the medical area and that is care for our men and women when they are sent into harms way. and to make sure that we have people who are trained to do that based on the kinds of work -- kinds of loans they are going to get. >> thank you, mr. chairman. >> senator leahy. >> thank you, mr. chairman, and thanks to all of you who are appearing before us today and who have served this commission to make recommendations that are so important. this is something that will have a profound impact on the men and women who are currently serving or have previously served in our military. i hope that all americans, particularly those who are currently serving or who are foreign veterans, can take the

-- or who are veterans, can take the time to give these recommendations the thorough consideration they deserve and they can become part of a debate that we need to have. we will figure out how we can provide better for the needs of those who have served us in the past and serve us and simultaneously let us maintain the viability of our military. i will ask this question to anyone who would like to answer it. did the commission find that at current lack of retirement program similar to that one recommended by the commission, that that is having the absence of a plan like that right now, is having an impact on recruiting and retention? for example, currently we don't

have a plan in the military that provides benefits for anyone who serves less than 20 years, is that impacting recruiting? >> thank you for the question. we took a very strategic approach at designing the right kind of structure for the compensation program that would really support an all volunteer force for the future. as we designed that program, we took the structure, in terms of how we might make a recommendation, to modernize a current retirement system, and we wanted to make sure that we knew exactly what was of interest to the service members. the recommendations that we provided, we are absolutely convinced that they are the right set of recommendations here.

when having a blended retirement plans because it does two things. it supports the retention needs by the services and it also supports the recruiting challenges that the services would have. we believe that the recommendations that we have made will absolutely take care of all the recruiting, retention needs and it is very important that they also support the current force profiles which is among the services we are very interested in giving them tools so they could make those adjustments and continued to meet the recruitment and retention needs as we move into the future. >> so moving forward if we were , to adopt something like this you think it would help recruiting and retention? >> absolutely. >> let's talk about the

commission's finding -- let me quote this. commission found that " the current compensation system is fundamentally sound and does not require sweeping overhaul. " but it does recommend that service members ponied nutritional assistance be transferred into the snap program, formally known as food stamps. if service members are in need of snap benefits, and if the report is contemplating that some or many will need snap benefits, that would of course be in addition to the regular compensation, does that undermine your conclusion that the current compensation structure is adequate? >> when we talk about the current compensation structure we are talking about the pay

table itself. we did not see a need to change the pay table because it has supported the all volunteer force for the last 42 years and the last 13 years of war. but we also recognize that because there are constant changes that have taken place, a new generation in the requirements of the service members themselves -- snap there is an important purpose that the snap program served. we took a look and talked to that extensively. i will ask commissioner carney if he would respond, senator i would like to ask you to follow -- i would like to ask senator higgins to follow up as well. >> if i could, i have one very minor follow-up question. i would be curious to know how many people might be if you

would eliminate ffsa if we would -- how many service members would be enrolled in snap and what the increased the cost would be? >> the number of and rowley's in -- the number of enrollees from the department of agriculture is somewhere between 2000 and 22,000. that is the best information we have received. on the ffsa, it is 285 people altogether in the military. now ffsa is kind of restrictive. it is harder to get. there is a stigma attached with it as well. you have to get through your chain of command to get it. does that impact your career? these things make it less attractive and less useful certainly for the near territories. for overseas, it may still serve some useful purpose, but the snap program is the fact that it

needs to exist for some of our military. it is something easier to get and provides better nutritional value for the families that require it. so, phasing out or reducing the ffsa program is not a bad idea. because of snap those in the cap there we nicely. -- fills in the gap very nicely. >> thank you mr. chairman. >> senator mccaskill. >> first, i want to note that your recommendations were unanimous, is that correct? >> yes. >> that is quite an extraordinary thing for all of us on this side of the table. we don't see much that is unanimous, especially with the makeup of this particular commission. i have worked with many of you

and i know it is bipartisan and you come from different perspectives and i know you come to the commission with different viewpoints at the beginning and the fact that you worked this hard and came up with a proposal that was adopted unanimously -- and i hope before we get off to the races, that we pause a moment and realize that you might have got this right. this might exactly be what we need to be doing. i want to compliment you in that regard. first of all, i think our country needs to save more and our military always sets the example for our country in terms of the values and ethics -- so i think the way this plan and -- embraces savings is terrific. and i think most americans don't know that your match is not made in the military and the fact that we would move to match for members of the military makes

terrific sense. here is the tricky part. if we will reduce defined benefits to 40% and someone can retire with 20 at 38 -- they cannot access that tsp until they are 59.5. and of course eventually then , not to long after that they would be looking at social security. during that period of time assuming someone is retiring at 38 or 40 from the military with 20, was there any discussion about making a special rule or special circumstances with someone could access tft before they were 59.5?

>> these are the type of questions that these former comptroller's love to have. >> i have missed him. we had great work when i first arrived in from and it so i am happy to hear from you. >> thank you so much, chairman and senator. [laughter] right now, as you well know, you retire at 20 and then you start to get a monthly. -- a monthly payment. by definition, the 40% you are speaking about you will get. in addition to that, once you retire, you can get a lumpsum payment if you choose to do so. or you may say no, i do not want that i want to get it later on. so you in fact have given the individual much more choice than he or she has today. because you can choose the lump

sum payment and you will get that with reduced payment until full social security kicks in, or you can say, no, i am staying with my 40%, my monthly payments. so that you basically now are in much more control of your financial situation. now one other point as well, and this was mentioned by my commissioner -- my calling commissioner carney and others, we've put a huge premium on financial education. we spoke to some of the foreign militaries to see how they do it. right now, you take an 18-year-old, 19-year-old or 20-year-old and give him or her -- fire hose them for a few hours about financial management and it is in one year and out -- it is in one ear and out the other. what we are proposing to do is to have regular sessions at key points in their careers.

key promotions -- or something happens to your family life, you get married or have children, so they can learn the nuances of financial management in a way that when they hit the 20 or if they leave sooner, they can make an informed choice about what they want to do with the money. to answer your question, it seems to me that you are putting the person in uniform at a far greater advantage, even with the 40% because of the lump sum, because of the financial education they have today. >> i know my time is almost up and i thank you for that. i have some questions for the record on whether or not we should allow them to make contributions matched to the tft, and whether to make amendments to whether they are eligible to pull out before, whether that makes sense to the commission. some questions about why not just going to the fehpb instead

of creating another system, what is the advantage there and are they substantive or are they political -- and finally, i want to recognize the general for the trailblazing he worked, i am -- especially in the suicide area. i am familiar with how hard you have worked both while you are active and after your retirement, but i am a little worried about the most expensive recommendation you made which is about another command, standing up a three star. we have tried to work against having so many -- as you know, tried to do away with the forces command -- and i'm trying to think how this new $300 million or year stand up benefits what -- really as to what we have now because every branch -- i have

to be convinced that we need another group at the pentagon. i have a great deal of affection for all of our generals and what goes with them, but three stars are expensive, especially with everything that goes with them and what are we going to gain by adding this new command at the pentagon? i am over my time by one minute 48 seconds, so i don't know if the chairman once that to be answered now or whether you want that for the record. that is the only part i get skeptical about. >> thank you very much. let me just very quickly -- i know we are out of time, but i would like to take the opportunity to respond to that -- let me just say really quickly, the readiness command that was recommended, we really deliberated on that and we took a lot of time and spent on that. every recommendation we made in this report was made with that in mind -- the need for readiness.

there was a readiness implication to every recommendation that we made. when we propose the readiness command we did this in the , context of understanding that this is much bigger than the medical readiness component that it has oversight for. they are much larger in terms of an umbrella that fall under the terms of readiness. we were basically wanting to make sure that it would ensure success of medical readiness that we must have proper oversight. that means having the right person in charge with the right kind of ranking to be able to go to the budgeting meetings and those decision-making venues and hold the presence as the other service chiefs and have

influence with the certain generals. i will laugh commissioner corelli to speak to that more specifically, if you will? >> i will only say that it is essential that in this process we keep our mts a vital -- viable training ground. not only for the doctors and positions, but the entire medical teams to include our corpsman and medics. there will be a tendency -- we give dependency opportunity to get their healthcare on the outside, there could be a tendency in future agenda -- budget periods to draw down on what is left, with our eyes covered, not realizing that we may have to employ the people in that mts far away to support those individuals in combat.

to me, that is an absolute essential piece of this entire thing, to ensure that we do not allow that to atrophy, should we enter an extended period of time when those resources do not have to be deployed. every single one of our recommendations -- i went through them and i understand where i went for. without getting into great detail, i will tell you every one of our recommendations impact readiness in some way. someone from a joint readiness standpoint, and remember this is critical, someone to make joint readiness perspective has to look at the entire readiness portfolio, including medical, to make sure we maintain that. i will end by saying that 300 million is a conservative large number. we believe many of these

resources exist currently that when we took down jifcom, many of them were transferred and we could not totally put our hands on it and you will see a much smaller bill than the 300 million cited in our report. >> thank you. >> thank you all for a lot of hard work and a lot of good product. to those who want to suggest alternatives, we are welcome. we will take any new, good idea to make this better. to those who think we're wrong we will accept criticism but not demagoguery. we will not play that game. if you have a good idea, we will suddenly listen to you. congress requires you to do your job, do you understand what we

were asking you to do? were we trying to get you to fix a broken system? there is the attitude of, if it is not broken, do not exit, what -- if it is not broken, do not fix it. what was your mandate? >> thank you for that question. it was our understanding that our mandate was to modernize. >> so it wasn't your mandate from congress to go save money? >> absolutely not. >> so it was your understanding that congress wanted you to look at a 70-year-old system to make it better? >> right. >> do you agree we have the best combat medicine at any time in history of the modern military? >> after 13 years of war we do but i don't believe we had it going into this. we got better and better. >> we have got it now. >> we have to maintain it. >> that's right, don't lose it.

a core function of military health care is to make sure the verses are ready to fight you -- forces are ready to fight. and we have to hang onto that, right? >> that's right. >> i was reading that 25% of the deployment was disqualified for dental problems? >> true. >> that is true because your brother is a dentist. we have overcome that i don't want to go back to that system. of having a health care system that doesn't make you ready to fight and cannot keep you in the fight and save your life if you get injured. senator kerry probably knows more about that than anybody. those are my guidepost. i do not want to lose ground on the major functions. as to retirement, no one is suggesting that we are changing the retirement system to 40% for -- versus 50% for those on active duty, are you?

everybody is rent fathered? -- grandfathered? >> that's correct. >> if i just walked in not knowing the context i would think a 40% retirement change had been recommended for those not on act duty, that is not true? this chart, who did your polling? >> that was done by truechoice it has to do with a survey we. -- that we had conducted. >> i cannot imagine a survey were 80% would not prefer something new to something they have. you feel good about those numbers? >> we feel very good. unanimously. >> what about the retired community about the proposed changes? >> well, the feedback that we have gotten is -- >> you can pull retired military members to find out. >> we pulled retired as well as

active. >> what were the numbers on the retired community? >> let me take that question the record. >> fair enough. i want to take both sides of the spectrum here. it seems to me that the jury is in that people on active duty like what you are proposing and if they had enter option they would take the new system. what we need to understand as members of this committee is where is the retired force? the health care changes are not grandfathered, correct? >> that is correct. >> all right. so at the end of the day, your recommendations on health care are driven by the fact that we think we can provide at her choice, more efficient for the patient and department of defense and get more choice instead of coverage, correct? >> that is correct. >> if we do nothing, in terms of health care costs, it is exploding the dod overall budget.

and somebody needs to deal with that, is that correct? >> that is correct senator. >> because you have a situation we have to deal with retiree health care at the expense of fighting tomorrow and that is a choice we do not what to make. >> that is correct. >> thank you all for your hard work. >> thank you. thank you all for your service not just on this commission, but many of you have served us and other ways. i've questions for retirement proposals and if we have time at the end commissary proposals. could we get chart three up? as a way to provide discussions. i will direct my questions to you. this shows on the left, the current benefit system, 20 and half pay on the right, you show your blended plan of a defined benefit along with them tsp

contribution and government match. was there any consideration about moving to a pure defined contribution system? >> senator, we have a defined benefit system now, and to move to a complete defined country -- contribution system we , believe would not give us all of the retention benefits of the traditional military retirement . that's what we wanted to keep them because we can take care of our retention needs and recruiting needs. >> does anyone else want to elaborate? ok. so, i understand that trying to keep benefits roughly the same or in this example, a roughly better than one goal, gives

services and personnel flexibility another go and maintaining the force is one go, so the assessment of the commission is the 20 year defined benefit plan is important to maintain for the full 20 years? >> yes, senator. that is correct. >> any consideration of a stair steps approach? rather than saying it is the one at 12 years or another four year extension? maybe having two or three periods where you encourage people to reenlist or officers to remain? >> the current program as it is today, we have the senate page -- special pays and those bonuses that they are being paid. we have those programs already. this would be that career retention which would take the service member to a point of

having 12 years with a four-year obligation to get him to that 60 -- 16th year. which means they are close enough to retirement that the retention will keep them there. but so the thinking is that not many people leave after 12 and few leave after 16? >> that is correct. >> under this proposal, let's say a hypothetical e seven who served three tours downrange seven or eight years downrange three or four deployments, he would be leaving with his contributions to his defined contribution plans and the government matches that, right? >> if he elected to -- >> if he didn't reenlist in seven or eight years. >> yes. >> do we have any problem retaining this kind of

midcareer, senior nco, senior field grade officer in the six to nine year range? jenna carella looks like you want to -- >> it depends on the military occupational a shelti. -- specialty. it is one thing to maintain and infantrymen who hauled a 60 pound rock up the mountain in afghanistan, as opposed to some trained in i.t. skills and can one find work in other areas. that's why it is essential that continuation pay -- that we can apply different amounts depending on the military occupational specialty. i will tell you rather than stairstep, i believe our modeling showed this was the critical period. the critical. without this it was eight years 27 days. the model that was in place before was if i can keep someone under defined contributions of

60% past that magical mark, i had a better than average opportunity to maintain him longer. but our modeling for this particular plan told us that this 10 to 12 year mark is critical. >> i have been stationed at bases, fort campbell stands out in my mind that had a nice commissary and a better walmart supercenter right outside the gates. and there is a need to provide the choices our servicemembers have become accustomed to, is or -- is there any conversation about assessing local sites on bases and forts about whether or

not a commissary is needed? >> senator cotton, we spent quite a bit of time talking to servicemembers and family members across the country. the polling told it's the same thing. we had people in different places how they perceive the value of the commissary, overwhelmingly, the support was that people believe it is very unimportant to retention to have the commissary's there. there are people who would tell us we have the shops and we talked to some of the big shock warehouses in some of the stores, the walmarts and others about the benefits they would offer if they were to offer a benefit, at the end of the day no one was willing to stand behind the comments they made. our intention here was to make sure we could protect the benefits of the service members

and they believed that this was a big savings to them and they believed it was a retention tool. that is the way we went about moving forward. >> can i just add that several of the big changes talked about issuing a card. -- chains talked about issuing a card. you have probably heard about that too. when we asked the representatives point-blank, would you do it? we never got a straight answer. at the same time -- we did here, there are people who order food online, but by and large, people want that. they want it because it is convenient, it is near them, it is military. they understand it and it is responsive to their needs and so we looked at that and made our recommendations based on the feedback.

again different folks will have , different requirements. overwhelmingly, this is not something they wanted to go away. >> proclivity to use the commissary is based on a whole bunch of things. one of these is the size of family. and we talked about snap before. there are arguments about how much it saves. if you even cut the high number, a 31% in half, it is still a great savings that an e7 with four kids and a wife who made a decision to stay home and be an at home mom, it is an unbelievable place for them to save the money they need as part of the benefit we provided them. >> thank you all again for your service and this important report. we look forward to working on it and having dealt with junior invested men, the financial literacy proposals are important as well. maybe we should add that to our orientation as well.

>> thank you very much, senator. on behalf of german mccain, i would like to request consent to include written statements from outside groups for up to 30 days from the conclusion of the hearing, any objection? now awarded, i would also like to thank the witnesses for their excellent testimony and extraordinary competition -- contribution. >> thank you mr. chairman.

>> this sunday on qnb. david brooks collins -- columnist for "the new york times." >> the city towards are given for the best magazine essays of the year. they can be in journals, "the new yorker," "the atlantic." or even obscure literary magazines. the idea is that it is a good week to step back and not read tweets, newspaper articles, but to step back and had the time to read something deeper and longer. and to celebrate those longer pieces. i do believe magazines change history. in the republic, until its recent distraction, it was the most influential part. it has created a voice for model -- modern literalism.

beginning of voice. >> sunday night at eight, eastern, and pacific. >> live today on c-span "washington journal" is next. at 10:00 a.m., the u.s. house general speeches. at noon, u.s. house discusses federal government mandates. >> in 45 minutes, congressman gene green, democrat of texas discusses gop efforts to repeal the affordable care act. the president's proposed 2016 budget and childhood vaccinations. 8:30 a.m., republican of virginia is here to talk about the president $585 billion defense department budget requests. that is $38 billion over sequestration levels. at: 15 east, c-span is touring

historically black colleges and university kicks off at howard university in washington dc. our guest will be caller:♪ ♪ >> the senate will hold a confirmation hearing for president obama's choice to replace chuck hagel. the center will focus on the obama administration strategy for conflict zones in afghanistan, syria and ukraine. you can see that live here at 9:30 a.m. on c-span3. on the house, a bill passed for the complete overturn of the affordable care act. three republicans voted against the bill